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In the
United States Court of Appeals
For the Seventh Circuit
No. 11-3223
JOSE J. L OERA, JR.,
Petitioner-Appellant,
v.
U NITED S TATES OF A MERICA,
Respondent-Appellee.
Appeal from the United States District Court
for the Northern District of Indiana, Hammond Division.
No. 2:10-cv-00453-PPS—Philip P. Simon, Chief Judge.
A RGUED JANUARY 15, 2013—D ECIDED M AY 7, 2013
Before P OSNER, W OOD , and T INDER, Circuit Judges.
P OSNER, Circuit Judge. The petitioner, Jose Loera, asks
us to set aside his conviction on the ground that his trial
lawyer had been ineffective. See 28 U.S.C. § 2255. Loera
had been indicted back in 2005 on drug charges. In re-
sponse to a motion to suppress, the judge had forbid-
den the government to offer evidence of what the peti-
tioner had told DEA agents after he allegedly asked for
a lawyer. After repeated continuances the judge dis-
2 No. 11-3223
missed the indictment (though without prejudice), on
the ground that the delay resulting from the continu-
ances had violated the Speedy Trial Act, 18 U.S.C. §§ 3161
et seq. Loera was reindicted and again sought to sup-
press his statements to the agents. But this time the
judge—the same judge—denied the motion on the
ground that actually Loera had not told the DEA agents
he wanted a lawyer. So the statements were admitted
into evidence. The jury convicted Loera and the judge
sentenced him to 240 months in prison. We affirmed
the conviction and sentence. 565 F.3d 406 (7th Cir. 2009).
Loera faults his lawyer first for having failed to argue
to the district judge that the denial of the motion to sup-
press in the first round of the criminal proceeding
should be binding in the second round—the trial—by
virtue of the doctrine of collateral estoppel; and second
for having failed to argue in that first round that the
delay in the proceeding had violated not only the
Speedy Trial Act but also the speedy trial clause of the
Sixth Amendment; if so, the dismissal of that pro-
ceeding should have been with prejudice, Strunk v.
United States, 412 U.S. 434, 439-40 (1973); 3B Charles
Alan Wright & Peter J. Henning, Federal Practice & Proce-
dure § 803, p. 358 (4th ed. 2013), in which event Loera
could not be tried subsequently for the same offense.
Loera had been a passenger in a car that police
officers stopped because of traffic violations. The driver
consented to a search of the car and the police
searched and found cocaine in a hidden compartment.
Arrested, and questioned by DEA agents in an interview
No. 11-3223 3
room at the county jail, Loera told them he knew
nothing about the cocaine; he had simply been asked to
deliver the car to someone. He also said that he’d been
visiting family in Atlanta and that the driver of the car
had driven down and picked him up there. When
the agents told him he would remain in jail and would
probably be charged with cocaine trafficking in violation
of federal law, he said, according to one of the agents,
that he wanted “to help himself out if he can” by making
a controlled delivery of the car to assist the agents
in apprehending the intended recipient of the drugs.
The agent added: “he just continued to ask what can
I do to help myself out of the situation.”
Loera was indicted. His lawyer moved to suppress
the statements that he had made to the agents. They had
read him his Miranda rights and he had refused to sign
a waiver of them. The motion alleged that he had asked
for a lawyer but that the agents had not stopped ques-
tioning him. When the government told the judge, in
response to the motion to suppress, that it “was not
concerned with the statements,” the judge without
further ado suppressed “any statements [Loera] made
after his request for counsel.” But he did not suppress
all of Loera’s post-arrest statements, as the motion had
requested. Nor did he rule that Loera had actually
asked for a lawyer—in light of the government’s lack
of interest in the statements he had no need to decide
whether Loera had a legal right to their suppression.
It’s like when a party moves in limine to exclude some
piece of evidence and the other party replies that it
4 No. 11-3223
has no objection and so the judge grants the motion
without bothering to resolve the factual disputes that
would have arisen had the party that offered the evi-
dence objected.
Months passed without the case going to trial, owing
to repeated requests for continuances—which the judge
granted—made by the government, by Loera’s lawyer,
and by the lawyer for Loera’s co-defendant. In Novem-
ber 2006—19 months after the indictment had been
issued—Loera moved to dismiss it on the ground of
excessive delay, citing constitutional and statutory
grounds for dismissal. But in support of the motion his
lawyer argued only the statutory ground.
The following month the judge granted the motion
and dismissed the indictment without prejudice, a permis-
sible sanction for violation of the Speedy Trial Act. 18
U.S.C. § 3162(a)(2); Zedner v. United States, 547 U.S. 489,
499 (2006); United States v. Sykes, 614 F.3d 303, 309-10
(7th Cir. 2010). Two months later Loera was reindicted.
The case went to trial two months after that.
In the resumed proceeding the lawyer again filed a
motion to suppress all the statements his client had
made to the DEA agents after his arrest. The judge con-
ducted an evidentiary hearing. A DEA agent who had
questioned Loera testified that Loera had not asked for
a lawyer or sought to stop the questioning. Loera
testified to the contrary. The judge decided that the
agent was telling the truth and so ruled that Loera
had never asked for a lawyer and so the statements
should not be suppressed. The judge thus ruled on the
No. 11-3223 5
merits of the motion; for Loera’s lawyer had failed to
argue that the motion to suppress should be granted
regardless of its merit, by force of the doctrine of
collateral estoppel.
It is doubtful that the refusal to suppress the post-
arrest statements to the DEA agents, if it was an error,
was a harmful one. On the one hand the other evidence
of Loera’s guilt was powerful. The jury heard testi-
mony from the informant who had linked Loera to
the drug ring and had told the agents where and when
he would be traveling. And during the traffic stop Loera
and the driver had made inconsistent statements about
the purpose of their trip and Loera had been unable to
tell the police where his relatives in Atlanta lived,
even approximately and even though he said he’d been
staying with them. And on the other hand the state-
ments he made to the DEA agents, rather than
amounting to a confession, were consistent with his
position at trial; for he had denied to the agents knowing
there was cocaine in the car. It’s true that his offer to
“help himself out” by making a controlled delivery
of the cocaine suggested, at the least, a suspicious fam-
iliarity with the drug scene. But since he didn’t testify
at the trial, his denial to the DEA agents that he’d
known there was cocaine in the car at least got before
the jury a denial of guilt by the defendant. And even if
he was mixed up in some way in the illegal
drug scene, that didn’t mean he was involved in drug
dealing when the car in which he was a passenger
was pulled over.
6 No. 11-3223
But we needn’t rely on the doctrine of harmless error
in concluding that the admission of the statements is not
a basis for reversing Loera’s conviction.
The doctrine of collateral estoppel, an offshoot of res
judicata, teaches that a judge’s ruling on an issue of law
or fact in one proceeding binds in a subsequent pro-
ceeding the party against whom the judge had ruled,
provided that the ruling could have been (or was, but
unsuccessfully) challenged on appeal, or if not that at
least it was solid, reliable, and final rather than “intended
to be tentative.” Lummus Co. v. Commonwealth Oil
Refinery Co., 297 F.2d 80, 89 (2d Cir. 1961). And provided
also that the ruling was necessary to the validity of the
final judgment in the case, as otherwise there would be
little incentive to challenge it on appeal, and that it had
been made only after the party later complaining about
it had had an opportunity for a full and fair hearing
(not necessarily oral, however). Taylor v. Sturgell, 553
U.S. 880, 892 (2008); Dexia Crédit Local v. Rogan, 629 F.3d
612, 628-29 (7th Cir. 2010); Harris Trust & Savings Bank
v. Ellis, 810 F.2d 700, 705 (7th Cir. 1987); Restatement
(Second) of Judgments § 27 (1982).
The government rightly acknowledges the doctrine’s
applicability to criminal cases. Ashe v. Swenson, 397 U.S.
436, 443 (1970); United States v. Oppenheimer, 242 U.S. 85,
87 (1916); United States v. Salerno, 108 F.3d 730, 741 (7th
Cir. 1997); United States v. Harvey, 900 F.2d 1253, 1257
(8th Cir. 1990). So applied, it operates much like the
rule against double jeopardy—and indeed has been held
to be a component of the constitutional protection
No. 11-3223 7
against double jeopardy. Dowling v. United States, 493
U.S. 342, 347 (1990); Ashe v. Swenson, supra, 397 U.S. at 445-
46. But it is also a common law principle: “res judicata
[including collateral estoppel] is very much a common
law subject.” 18 Charles Alan Wright, Arthur R. Miller
& Edward H. Cooper, Federal Practice & Procedure § 4403,
p. 35 (2d ed. 2002) (footnote omitted). Criminal law is
suffused with such principles. Think of attempt, conspir-
acy, aiding and abetting, malice aforethought, reckless-
ness, entrapment, self-defense, and duress—all being
common law principles (often renamed) adapted to
fleshing out terse criminal statutes. Cf. Dixon v. United
States, 548 U.S. 1, 13-14 (2006); Morissette v. United States,
342 U.S. 246, 250-52 (1952). And so collateral estoppel is
applicable in a criminal proceeding without reference to
the double jeopardy clause, though of course in a federal
prosecution the applicable version of collateral estoppel
is the federal. See Semtek Int’l, Inc. v. Lockheed Martin
Corp., 531 U.S. 497, 507 (2001); Note, “The Due Process
Roots of Criminal Collateral Estoppel,” 109 Harv. L. Rev.
1729, 1742 (1996).
The significance for this case of the distinction
between common law collateral estoppel and collateral
estoppel as a component of the double jeopardy clause
is that Loera can invoke the common law doctrine
even though the dismissal of the first indictment—the
order that he says precluded revisiting in the second
criminal proceeding the admissibility of his post-arrest
statements—occurred before jeopardy attached. Jeopardy
doesn’t attach until the jury is sworn or, in a bench
trial, evidence is introduced. But jeopardy is not a condi-
tion of collateral estoppel.
8 No. 11-3223
Still, there must be a final judgment (in some
sense—a critical qualification, as we’re about to see); and
it can be argued that the dismissal of the first indictment,
following the ruling suppressing Loera’s statements,
wasn’t really a final judgment. It was without prejudice,
so that the trial following his re-indictment was really
just the continuation of the aborted first proceeding. But
Judge Friendly had pointed out the paradoxical effects
of being picky about the finality of the judgment sought
to be used as collateral estoppel. See United States ex rel.
DiGiangiemo v. Regan, 528 F.2d 1262, 1265-66 (2d Cir. 1975).
Imagine successive criminal proceedings against the
same person involving different crimes but a common
issue dependent on the same evidence of guilt. In the
first proceeding the judge rules at trial that the evidence
should be suppressed, and as a result the defendant
is acquitted. Although the trial ruling would not be
appealable (nor of course the acquittal), assume that
the ruling is rock solid and therefore, though unap-
pealable, entitled to collateral estoppel effect. Now
suppose the same scenario but the judge makes the
ruling pretrial, and rather than appeal the ruling, as it
could, 18 U.S.C. § 3731, the government, doubtful in
light of the ruling that it can win a conviction without
the evidence that the judge has suppressed, withdraws
the charges it had lodged against the defendant and
later files a new indictment, hoping for a favorable
ruling on the defendant’s motion to suppress the
evidence in this second round of litigation. The dif-
ference in the stage of the proceeding at which the
judge ruled shouldn’t affect whether the issue can be
No. 11-3223 9
revisited in the second proceeding. For these purposes,
then, the dismissal of the first indictment should be
treated as if it were a final judgment and the evidentiary
ruling that the judge made in that first proceeding
should be given collateral estoppel effect.
Nevertheless the doctrine of collateral estoppel was not
applicable in this case, and so Loera’s lawyer can’t be
faulted for not having invoked it. Not every ruling has
collateral estoppel effect in a subsequent proceeding in
which the issue resolved by the ruling pops up again.
Considering the number of rulings that a judge is apt
to make in a case, whether civil or criminal, we worry
that to give every ruling collateral estoppel effect would
make the doctrine proliferate excessively. As in this
case, many trial rulings are made casually, with little
attention to the merits of the issue ruled on and in this
case probably no attention, since the nonmoving party
had not opposed the motion that precipitated the ruling.
The government had not opposed the motion not
because it conceded that the agents had elicited state-
ments from the defendant after he asked for a lawyer,
but rather, so far as appears, because it wasn’t (at the
time) interested in using the statements at trial. So natu-
rally the judge granted the motion. That was a judicial
action, but it was not the resolution of a dispute (namely
over whether Loera had asked for a lawyer before an-
swering the agents’ questions). See United States v. Bruce,
109 F.3d 323, 327 (7th Cir. 1997); Truck Ins. Exchange v.
Ashland Oil, Inc., 951 F.2d 787, 792-93 (7th Cir. 1992). And
finally the grant of the motion to suppress had played
10 No. 11-3223
no role in the dismissal of the first indictment. The
only ground for that dismissal had been violation of
the Speedy Trial Act, a ground to which the motion
was irrelevant.
Let collateral estoppel be applicable to a case such as
this and the government will have an enhanced incentive
to take an interlocutory appeal from pretrial evidentiary
rulings in criminal cases, as it is permitted to do, 18
U.S.C. § 3731, but rarely does. Interlocutory appeals are
a burden to appellate courts and delay the finality of
litigation; they are not to be encouraged.
For completeness we mention a doctrine related to
collateral estoppel though the parties have not men-
tioned it: the doctrine of law of the case. Even if a ruling
is not made after opportunity for a full and fair hearing,
it is not to be lightly ignored in a later stage of the
same proceeding, Christianson v. Colt Industries Operating
Corp., 486 U.S. 800, 817 (1988); Tice v. American Airlines,
373 F.3d 851, 853-54 (7th Cir. 2004)—and “same proceed-
ing” is the practical description of a proceeding and of
its resumption following a dismissal without prejudice
before the same judge and involving the identical issues
and evidence. The reason we gave earlier for treating
the interim dismissal as “final” for collateral estoppel
purposes—that the stage at which a ruling is made is
not decisive on whether to give the ruling collateral
estoppel effect—is not applicable to law of the case.
But still the judge has to have addressed an issue for
his resolution of it to be treated as the law of the case.
FMS, Inc. v. Volvo Construction Equipment North America,
Inc., 557 F.3d 758, 762-63 (7th Cir. 2009); Universal Guarantee
No. 11-3223 11
Life Ins. Co. v. Coughlin, 481 F.3d 458, 462 (7th Cir.
2007); Feesers, Inc. v. Michael Foods, Inc., 591 F.3d 191, 208
(3d Cir. 2010); 18B Charles Alan Wright, Arthur R. Miller
& Edward H. Cooper, Federal Practice & Procedure § 4478,
pp. 649-64 (3d ed. 2005). And, as we have said, the judge
in this case in granting the motion to suppress in the
first proceeding had not decided whether the state-
ments should have been suppressed.
So there was no procedural violation relating to the
statements, and we turn to the second issue, concerning
the failure of Loera’s lawyer to have argued that his
client’s constitutional right to a speedy trial had been
violated, in which event Loera could not have been tried.
Like much of the Bill of Rights, the speedy trial clause
is cryptic. All it says is that a criminal defendant has a
right to a speedy trial. The critical question is how
“speedy.” To give some form to the question courts
focus on four considerations. They are the length of the
delay between indictment and trial, the reason for it,
whether the defendant complained about it, and whether
he was “prejudiced” by it. Doggett v. United States, 505
U.S. 647, 651 (1992); United States v. Wanigasinghe, 545
F.3d 595, 597 (7th Cir. 2008). “Prejudice” in turn can be
a lesser chance of an acquittal, the indignity and
discomfort of being jailed for a long period of time await-
ing trial, or the psychological or financial consequences
of finding oneself stuck between indictment and trial in
a limbo of anxiety and uncertainty. The first of these
three prejudice subfactors is the most important, Barker v.
Wingo, 407 U.S. 514, 532-33 (1972); West v. Symdon, 689
12 No. 11-3223
F.3d 749, 752-53 (7th Cir. 2012), because it protects against
the conviction of the innocent. The other two factors
are really just aspects of the length of delay, and thus
underscore the primacy of that, the first, factor in the four-
factor test. But realism requires recognition that given
the government’s heavy burden of proof in criminal
cases, delay in bringing a case to trial often works in
the defendant’s favor: if both prosecution and defense
witnesses, or a fortiori only prosecution witnesses,
suffer from fading memories, delay will reduce the like-
lihood of a conviction.
As we noted recently in Teed v. Thomas & Betts
Power Solutions, L.L.C., No. 12-2440, 2013 WL 1197861, at *3
(7th Cir. Mar. 26, 2013), “judges tend to be partial to
multifactor tests, which they believe discipline judicial
decisionmaking, providing objectivity and predictability.
But this depends on whether the factors making up
the test are clear, whether they are valid, whether each
is weighted so that the test can be applied objectively even
if the factors don’t all line up on one side of the issue in
every case . . ., and whether the factors are exhaustive
or illustrative—if the latter, the test is open-ended,
hence indefinite.” A model multifactor test—one not
subject to the criticisms suggested in the Teed case—is
Judge Learned Hand’s famous three-factor test (the
“Hand Formula”) for negligence: B < PL. B is the burden
of taking a precaution that would have avoided the
accident that injured the plaintiff, P is the probability of
the accident if the precaution wasn’t taken, and L is
the expected loss to the victim if an accident occurred
No. 11-3223 13
because the precaution had not been taken. United States
v. Carroll Towing Co., 159 F.2d 169, 173 (2d Cir. 1947).
Alas, the four-factor test (six-factor, if the fourth is
replaced by its three subfactors) for a violation of the
constitutional right to a speedy trial lacks the crispness
of the Hand Formula. But a usable compressed version
is “the longer the delay and the more vigorous the de-
fendant’s demand to be tried speedily, the more reason
the state must show for the delay and the less harm (of
whatever type) to himself the defendant need show.”
United States ex rel. Mitchell v. Fairman, 750 F.2d 806, 808
(7th Cir. 1984). The 19-month delay after Loera’s first
indictment was long, but there is no indication that
it impaired his defense at trial—no suggestion that evi-
dence favorable to his defense had become stale. As
for psychological or other harm from incarceration, the
relevant period is not 19 but 9 months, because Loera
was out on bond for 10 of those months; and 9 months
is not an unusual period of pretrial detention.
He didn’t complain about the delay, moreover, and
there is no indication that he was impatient for a trial—not
all defendants are, as we noted, and especially when
they’re not in jail. Seven months of the 19-month delay
were attributable to requests for continuances by Loera’s
lawyer or his co-defendant’s lawyer. Loera’s lawyer
objected to none of the government’s requests for con-
tinuances (and to none of the co-defendant’s requests
for continuances either) until he moved to dismiss
the indictment. Loera doesn’t argue that his lawyer ren-
dered him ineffective assistance in asking for or failing
to object to continuances.
14 No. 11-3223
With no prejudice from delay within the meaning
given “prejudice” by Doggett and other cases (no preju-
dice in part because of the defendant’s acquiescence
in the delay, see Doggett v. United States, supra, 505 U.S.
at 658), and no indication of any invidious or otherwise
improper ground of or motive for protracted detention,
there is no justification for vacating a conviction on con-
stitutional speedy trial grounds, which has the effect of
acquittal. The Speedy Trial Act, it is true, imposes
much tighter (though still porous) deadlines. But it
offsets them by allowing the judge to impose for their
violation only the mild sanction of dismissal without
prejudice, thus permitting retrial. Given the availability
of the Act, there shouldn’t be many cases in which
federal defendants successfully invoke the speedy trial
clause. The constitutional clause plays a greater role
in state prosecutions, to which the Act is inapplicable.
Loera has not shown that his lawyer was ineffective.
The denial of his section 2255 motion is therefore
A FFIRMED.
5-7-13
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775 F.2d 1271
11 Soc.Sec.Rep.Ser. 189, Unempl.Ins.Rep. CCH 16,374Larry R. BRANHAM, Appellant,v.Margaret M. HECKLER, Secretary of Health and Human Services, Appellee.
No. 84-2335.
United States Court of Appeals,Fourth Circuit.
Argued May 10, 1985.Decided Nov. 4, 1985.
J. Gorman Rosenberger, Jr., Kizer, Phillips & Petty, Lynchburg, Va., for appellant.
E. Montgomery Tucker, Asst. U.S. Atty., Roanoke, Va. (Joan A. Brown, Office of the Regional Atty., Dept. of Health and Human Services, on brief), for appellee.
Before WIDENER and HALL, Circuit Judges, and KNAPP, United States District Judge for the Southern District of West Virginia, sitting by designation.
WIDENER, Circuit Judge.
1
Branham appeals from an order of the district court that modified the decision of the Secretary of Health and Human Services (Secretary). The district court changed the onset date of disability found by the Secretary from January 15, 1983 to December 17, 1982. Branham contends that the onset date of his disability should be October 1979. For the reasons stated below, we modify the onset date to October 1979.
2
Branham is a thirty-six year old male who is married and has no children. He has a second grade education and is functionally illiterate. He is unskilled and has worked as a laborer and construction worker involving heavy manual labor. Branham is mildly mentally retarded, thin, and presents a generally poor physical appearance. His dental hygiene is poor, with many missing and rotten teeth. He is blind in his left eye, and has an extensive history of epilepsy since childhood. His grand mal seizures are under control, however, through medication.
3
Branham filed his claim for disability benefits following a work-related injury at Batt Masonry. He claims to have injured his back on October 24, 1979 when he jumped from a forklift and was unable to continue to work thereafter. He received Workmen's Compensation benefits for this injury. He claims great back, hip, and neck pain associated with this injury, which have a medical basis in fact, and he complains of chest pain, disorientation, and bronchitis. Branham has been diagnosed as having a generalized anxiety disorder. This impairment is manifested in panic attacks characteristic of agoraphobia. He is presently taking a variety of medications for all of his ailments.
4
Branham's claim for disability benefits was denied by the Secretary initially and on reconsideration. After a hearing before an Administrative Law Judge (ALJ), the ALJ found that his impairments were not disabling and did not prevent him from engaging in substantial gainful employment. The ALJ also found that, although he could not return to his past relevant work, he had the ability to engage in light work within the meaning of the Secretary's regulations. The ALJ, therefore, denied benefits, and the Appeals Council affirmed his decision.
5
Upon review in the district court, the plaintiff submitted additional evidence of his emotional problems and vocational abilities, including the results of a test reflecting an IQ of 63. Since the court found that the plaintiff had good cause for failing to submit this evidence before the conclusion of the administrative proceedings and that it could have had an effect on the Secretary's decision, it remanded the case to the Secretary for further proceedings.
6
On remand, an ALJ heard the plaintiff's claim and granted him benefits under section 12.05(C) of Appendix 1 of 20 C.F.R. subpart P. The ALJ found that Branham's IQ fit within this section, but, referring to the first ALJ's finding, he held that the claimant's physical problems presented no significant work-related limitation of function since he had the ability to do light work. The second ALJ did find, however, that his psychotic disorder, agoraphobia, significantly limited his ability to work, and was a mental impairment within section 12.05(C). The ALJ consequently awarded benefits as of January 15, 1983, the date he proved his agoraphobia.
7
The claimant challenged the onset date of his disability in district court, arguing that his back injury qualified him for benefits under section 12.05(C), and requested benefits based on an onset date of disability of October 1979 when he suffered his back injury. The plaintiff argued that this injury constituted a physical impairment under section 12.05(C), as evidenced by each ALJ's findings that he could not do his past relevant work and could only do light work. The Appeals Council adopted the second ALJ's decision awarding benefits on the basis of his IQ and agoraphobia as of January 15, 1983.
8
On review, the district court modified the Secretary's decision, accepted the claimant's back injury and IQ as meeting the section 12.05(C) requirements, and changed the onset date from January 15, 1983 to December 17, 1982, the date of the earliest evidence in the case of the plaintiff's intellectual capacity (IQ). The date used by the district court was the date plaintiff first took an IQ test. The court noted that, although intellectual limitations are usually lifelong in duration, the plaintiff has the burden of establishing all elements of his claim for entitlement which he did not meet until December of 1982 when he took his first IQ test. The court stated that it would be conjecture to assume the onset of this impairment any earlier.
9
In finding that the claimant satisfied the physical impairment requirement of section 12.05(C) on account of his back injury in October 1979, the court found as follows:
10
It is also beyond question that Mr. Branham has suffered from a significant physical impairment since the date of the work-related injury which led to his termination of employment in October of 1979. This fact is underlined by the first Administrative Law Judge's finding that plaintiff was disabled for his past relevant work. (Tr. 17). Obviously, if plaintiff cannot perform his past relevant work as a laborer, he experiences a significant work-related limitation of function.
11
A claimant is determined to be disabled and entitled to disability benefits when his impairment meets or equals a listed impairment in Appendix 1 of the Secretary's regulations. 20 C.F.R. Sec. 404.1520(d). The listing of section 12.05(C) of Appendix 1 is as follows:
12
12.05 Mental retardation. As manifested by:
13
C. IQ of 60 to 69 inclusive (see 12.00B4) and a physical or other mental impairment imposing additional and significant work-related limitation of function.
14
Keeping in mind that the issue in dispute is the onset date of impairment, we must determine the date upon which the claimant satisfied both the IQ and other impairment requirements. This, then, presents two questions:
15
(1) does a claimant's physical inability to perform his past relevant work establish the element of a "physical or other mental impairment imposing additional and significant work-related limitation of function" under section 12.05(C),
16
and
17
(2) is the onset date for mental retardation the date of the claimant's IQ test or should the claimant be assumed to have had such a mental impairment during his working life once he has produced evidence of its existence?
18
The plaintiff contends that a back impairment that precludes his past relevant work but not light work constitutes "a physical or other mental impairment imposing additional and significant work-related limitation of function" under section 12.05(C). The Secretary argues that the back impairment was not of itself disabling and did not preclude the claimant from engaging in substantial gainful employment.
19
A "significant" impairment is not defined in the Secretary's regulations. Accord Wright v. Schweiker, 556 F.Supp. 468, 476 (M.D.Tenn.1983); Jones v. Schweiker, 551 F.Supp. 205, 208 (D.Md.1982). The plaintiff's position is that the fact that he was limited to light work and is precluded from his past work, the only work he has ever done or knows how to do, is a significant limitation.
20
The plaintiff correctly argues that the significant limitation under section 12.05(C) need not be disabling in and of itself. If the plaintiff's physical impairment were required to be independently disabling, section 12.05(C) would be rendered meaningless. Therefore, something less than a preclusion from any substantial gainful employment must apply. Accord Kennedy v. Heckler, 739 F.2d 168, 172 (4th Cir.1984) ("[T]he inquiry is whether the claimant suffers from any additional physical or mental impairment significantly limiting work-related functions.")
21
We affirm the district court's finding that the claimant's back impairment is a significant work-related limitation of function. We find support in our recent decision in Rainey v. Heckler, 770 F.2d 408 (1985), in which we held that the fact that a claimant could not do his past relevant work alone established the other, significant work-related limitation of function required by the regulation. There is no dispute but that Branham's back injury precludes his former work. Therefore, provided he meets the IQ requirements of the regulation, the claimant's date of onset of disability should begin when his back injury precluded his former work, in October 1979.
22
The remaining question is whether or not the claimant met the mental retardation requirement of section 12.05(C) at the time he suffered his back injury.
23
The Secretary's regulations expressly define mental retardation as denoting "a lifelong condition." 20 C.F.R. subpart P, Appendix 1 Sec. 12.00(B)(4). Accord Mitchell v. Schweiker, 699 F.2d 185, 188 (4th Cir.1983). And we think that there may be many reasons why an individual would not have had the opportunity or need to have a formal intelligence quotient test until later in life. The fact that one was not earlier taken does not preclude a finding of earlier retardation. We must and do assume, therefore, that in the absence of any evidence of a change in plaintiff's intellectual functioning from the time of his back injury to the time of his IQ test, that he had the same or approximately the same IQ (63) at the time of his back injury on October 24, 1979 as he did at the time of his 1982 test.
24
Accordingly, the onset date of the claimant's disability should be modified. The case is remanded to the district court for the entry of an order directing the Secretary to award the claimant disability benefits using as an onset date of disability, October 24, 1979, the date of injury to Branham's back.
25
AFFIRMED IN PART, MODIFIED IN PART, AND REMANDED.
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493 F.Supp.2d 1367 (2007)
In re REMBRANDT TECHNOLOGIES, LP, PATENT LITIGATION.
No. 1848.
Judicial Panel on Multidistrict Litigation.
June 18, 2007.
*1368 Before WM. TERRELL HODGES, Chairman, D. LOWELL JENSEN, J. FREDERICK MOTZ, ROBERT L. MILLER, Jr.,[*] KATHRYN H. VRATIL DAVID R. HANSEN and ANTHONY J. SCIRICA, Judges of the Panel.
TRANSFER ORDER
WM. TERRELL HODGES, Chairman.
This litigation presently consists of the fifteen actions listed on Schedule A and pending in three districts as follows: seven actions in the Eastern District of Texas, six actions in the District of Delaware, and two actions in the Southern District of New York. Before the Panel is a motion, brought by CoxCom, Inc., pursuant to 28 U.S.C. § 1407, seeking centralization of all actions in the District of Delaware. The owner of the patents, Rembrandt Technologies, LP (Rembrandt), opposes centralization but, alternatively, suggests transfer to the Eastern District of Texas, if the Panel deems centralization appropriate. All other responding defendants expressing a position regarding centralization[1] support *1369 centralization in the District of Delaware. Two groups of defendants propose alternative transferee fora the Southern District of New York[2] or the Eastern District of Pennsylvania,[3] should the Panel decide against centralization in the District of Delaware.
On the basis of the papers filed and hearing session held, the Panel finds that the actions in this litigation involve common questions of fact, and that centralization in the District of Delaware will serve the convenience of the parties and witnesses and promote the just and efficient conduct of the litigation. The nine patents involved in these actions relate to the provision of high-speed internet and related services using certain cable modems and equipment and the receipt and transmission of certain digital broadcast signals. Each of the fifteen MDL-1848 actions involves allegations of infringement and/or invalidity of one or more of the patents; specifically, each action involves allegations that compliance with one of two technical standards relating to cable high-speed internet technology and digital broadcasting respectively, the Data-Over-Cable Service Interface Specifications and the Advanced Television Systems Committee Digital Television Standard infringes certain Rembrandt patents. All actions can thus be expected to share factual questions concerning such matters as the technology underlying the patents, prior art, claim construction and/or issues of infringement involving the patents. Centralization under Section 1407 is necessary in order to eliminate duplicative discovery, prevent inconsistent pretrial rulings, and conserve the resources of the parties, their counsel and the judiciary.
In opposing centralization, Rembrandt variously argues that inconsistent rulings are unlikely to arise in the actions, unique questions of fact relating to each patent will predominate over common factual questions among these actions, and that cooperation among the parties is a preferable alternative to centralization. We are not persuaded by these arguments. Transfer under Section 1407 does not require a complete identity or even a majority of common factual or legal issues as a prerequisite to transfer. Centralization will permit all actions to proceed before a single transferee judge who can structure pretrial proceedings in a streamlined manner to consider all parties' legitimate discovery needs, while ensuring that common parties and witnesses are not subjected to duplicative discovery demands. The transferee court will be able to formulate a pretrial program that allows any unique discovery in these actions to proceed concurrently on separate tracks with discovery on common issues, In re Smith Patent *1370 Litigation, 407 F.Supp. 1403, 1404 (Jud. Pan.Mult.Lit.1976). The Panel is aware that proceedings in the first-filed MDL-1848 action (Comacast I) are somewhat further advanced than those in the other actions. It may well be that Comcast I, or other MDL-1848 actions, may be ready for trial in advance of the remaining MDL-1848 actions. If such is the case, nothing in the nature of Section 1407 centralization will impede the transferee court, whenever it deems appropriate, from recommending Section 1407 remand. See Rule 7.6, R.P.J.P.M.L., 199 F.R.D. 425, 436-38 (2001); In re Acacia Media Technologies Corp. Patent Litigation, 360 F.Supp.2d 1377 (J.P.M.L.2005).
We are persuaded that this litigation should be centralized in the District of Delaware. By centralizing this litigation before Judge Gregory M. Sleet, who presides over all Delaware actions, we are assigning this litigation to a seasoned jurist in a readily accessible district with the capacity to handle this litigation.
IT IS THEREFORE ORDERED that, pursuant to 28 U.S.C. § 1407, the actions listed on Schedule A and pending outside the District of Delaware are transferred to the District of Delaware and, with the consent of that court, assigned to the Honorable Gregory M. Sleet for coordinated or consolidated pretrial proceedings.
SCHEDULE A
MDL-1848 In re Rembrandt Technologies, LP, Patent Litigation
District of Delaware
Rembrandt Technologies, LP v. Cablevision Systems Corp., et al., C.A. No. 1:06-635
CoxCom, Inc. v. Rembrandt Technologies, LP, C.A. No. 1:06-721
Rembrandt Technologies, LP v. CBS Corp., C.A. No. 1:06-727
Rembrandt Technologies, LP v. NBC Universal, Inc., C.A. No. 1:06-729
Rembrandt Technologies, LP v. ABC, Inc., C.A. No. 1:06-730
Rembrandt Technologies, LP v. Fox Entertainment Group, Inc., et al., C.A. No. 1:06-731
Southern District of New York
Rembrandt Technologies, LP v. Adelphia Communications Corp., et al., Bky. Advy. No. 1:06-1739
Rembrandt Technologies, LP v. Adelphia Communications Corp., C.A. No. 1:07-214
Eastern District of Texas
Rembrandt Technologies, LP v. Comcast Corp., et al., C.A. No. 2:05-443
Rembrandt Technologies, LP v. Sharp Corp., et al., C.A. No. 2:06-47
Rembrandt Technologies, LP v. Charter Communications, Inc., et al., C.A. No. 2:06-223
Rembrandt Technologies, LP v. Time Warner Cable, Inc., C.A. No. 2:06-224
Rembrandt Technologies, LP v. Time Warner Cable, Inc., C.A. No. 2:06-369
Rembrandt Technologies, LP v. Comcast Corp., et al., C.A. No. 2:06-506
Rembrandt Technologies, LP v. Charter Communications, Inc., et al., C.A. No. 2:06-507
NOTES
[*] Judge Miller took no part in the decision of this matter.
[1] The following debtor defendants expressed no opinion regarding whether the actions should be centralized: Adelphia Communications Corp.; Century-TCI California, LP; Century-TCI California Communications, LP; Century-TCI Distribution Co., LLC; Century-TCI Holdings, LLC; Parnassos, LP; Parnassos Communications, LP; Parnassos Distribution Co. I, LLC; Parnassos Distribution Co. II, LLC; Parnassos Holdings, LLC; and Western N.Y. Cablevision, LP (collectively the Adelphia defendants).
Nevertheless, if the Panel decides that centralization is appropriate, the Adelphia defendants support transfer to the District of Delaware as their primary preference, as do the following defendants: Cablevision Systems Corp. and CSC Holdings, Inc. (collectively Cablevision); Charter Communications, Inc., and Charter Communications Operating, LLC; Comcast Corp., Comcast Communications, LLP, and Comcast of Plano, LP; Sharp Corp. and Sharp Electronics Corp.; and ABC, Inc., CBS Corp., NBC Universal, Inc., Fox Broadcasting Co., and Fox Entertainment Group, Inc.
[2] Alternatively supporting transfer to the Southern District of New York are the Adelphia defendants and Cablevision.
[3] Cablevision alternatively supports transfer to the Eastern District of Pennsylvania.
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United States Court of Appeals
For the First Circuit
No. 13-2222
GUY GIUFFRE,
Plaintiff, Appellant,
v.
DEUTSCHE BANK NATIONAL TRUST COMPANY; HOMEWARD RESIDENTIAL, INC.,
Defendants, Appellees.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Joseph L. Tauro, U.S. District Judge]
Before
Lynch, Chief Judge,
Howard and Kayatta, Circuit Judges.
David G. Baker on brief for appellant.
Mark B. Johnson and Johnson & Borenstein, LLC on brief
for appellee Deutsche Bank National Trust Company.
Marissa I. Delinks, Maura K. McKelvey, and Hinshaw &
Culbertson LLP on brief for appellee Homeward Residential, Inc.
July 17, 2014
KAYATTA, Circuit Judge. Plaintiff Guy Giuffre alleges
that he fell victim to a fraudulent "foreclosure rescue" scheme in
which he allowed an attorney to take title to his home and strip it
of most or all of its equity by granting a new mortgage. When the
lawyer's scheme fell apart, Giuffre got his home back, but the
mortgage remained in place. Having made no payments on the loan
secured by the mortgage, and facing foreclosure as a result,
Giuffre filed this lawsuit in an effort to shift the burden of his
plight to the mortgagee. Finding no basis in Giuffre's pleadings
to hold the bank responsible for the harm the attorney inflicted on
him, the district court dismissed the lawsuit. We affirm.
I. Background
We describe the facts as they are alleged in Giuffre's
complaint, drawing all plausible inferences in his favor, and
borrowing from the district court's able summary.1 See Giuffre v.
Deutsche Bank Nat. Trust Co., 2013 WL 4587301 (D. Mass. Aug. 27,
2013). In 2006, struggling to pay the mortgage on his house in
Massachusetts, Giuffre filed for bankruptcy. On the advice of his
attorney, however, he voluntarily dismissed his bankruptcy to
pursue an alternative "foreclosure rescue" scheme.
Under the scheme, Giuffre sold his home to a different
attorney, Alec Sohmer, for $625,000, as reflected in a recorded
deed, and paid off his preexisting mortgage, on which he apparently
1
We also add some detail from public records and documents
that the parties treat as incorporated into the complaint. See,
e.g., Maloy v. Ballori-Lage, 744 F.3d 250, 251 n.1 (1st Cir. 2014).
-2-
owed slightly more than $400,000. Sohmer obtained a new mortgage
on the property in the amount of $500,000 from Option One Mortgage
Corporation (which later transferred the mortgage to Deutsche
Bank). At the same time, Sohmer transferred the property for a
nominal price to a trust of which he was the trustee and Giuffre
was the main but not sole beneficiary. Giuffre's complaint is
silent as to whether he ultimately received any funds from these
transactions.
Sohmer had assured Giuffre that although Giuffre no
longer owned the property he could reside there while paying rent
to Sohmer, which would presumably go to the mortgage, and obtain a
new mortgage in his own name after two years. This plan soon
failed, because Sohmer demanded rent payments that Giuffre could
not afford--and that exceeded the mortgage payments that drove
Giuffre into bankruptcy. Sohmer eventually initiated eviction
proceedings. Sohmer also failed to make payments on the new
mortgage, and the bank sought to foreclose.
Soon after, Sohmer filed for bankruptcy, putting the
foreclosure on hold. Meanwhile, reacting to Sohmer's mistreatment
of Giuffre and other homeowners, the Massachusetts Attorney General
pursued various legal remedies. Ultimately, the bankruptcy court
approved a settlement that aimed to "restore [Sohmer's victims], to
the extent possible, to the positions they occupied prior to the
Foreclosure Avoidance Transactions." See In re Sohmer, No. 06-
14073 (Bankr. D. Mass. 2006), Dkt. 716, at 3. In the settlement,
several lenders to which Sohmer gave mortgages, including Option
-3-
One, agreed to make certain efforts to mitigate the harm arising
from Sohmer's conduct.2
The trustee in Sohmer's bankruptcy eventually conveyed
Sohmer's interest in the home to Giuffre. In 2012, Deutsche Bank
sought relief from the automatic stay to pursue foreclosure
proceedings, but the bankruptcy court held that because the
property had been transferred out of the estate, the stay did not
apply. Giuffre's pleadings contain no suggestion that Deutsche
Bank has yet initiated a foreclosure.
Giuffre initiated this case in Massachusetts land court,
seeking to have the mortgage declared void. Deutsche Bank removed
it to federal court.3 The district court eventually granted the
defendants' motion to dismiss, holding that Giuffre had failed to
state a claim that the mortgage was void. Three weeks later,
Giuffre filed a motion captioned "Motion for Leave to File First
Amended Complaint," attaching an amended complaint that added
detail to his original complaint, lengthening it from thirty-eight
paragraphs to sixty-five paragraphs. The court denied the motion,
finding that it "lack[ed] the power to allow amendment of [the]
complaint" because Giuffre had "not moved for post-judgment relief
2
Giuffre does not argue that the settlement demonstrates any
wrongdoing by Option One. In the bankruptcy proceedings, he
opposed the settlement and chose not to opt in. He notes that he
does not expect to recover any money from Sohmer, as "it does not
appear likely that there will be any assets for distribution to
creditors such as Giuffre."
3
Defendant Homeward Residential adopts all of Deutsche
Bank's arguments, and we make no distinction between the two
defendants.
-4-
pursuant to Rule 59 or 60." On the same day, Giuffre filed his
notice of appeal, stating that he was appealing both the dismissal
of his complaint and the denial of his motion to amend.
II. Appellate Jurisdiction
We begin by considering the defendants' challenge to our
appellate jurisdiction. The defendants note that Giuffre filed his
notice of appeal thirty-four days after the district court
dismissed his complaint. A party seeking to appeal a district
court decision ordinarily must file a notice of appeal within
thirty days of the entry of the judgment or order being appealed,
lest we lack jurisdiction over the appeal. Fed. R. App. P.
4(a)(1)(A); Bowles v. Russell, 551 U.S. 205, 209 (2007).
But there are exceptions to the thirty-day limit. As
relevant here, when a party files a timely motion in the district
court to alter or reconsider an earlier judgment, the party can
then wait until the court decides that later motion (and up to
thirty days afterwards) before appealing the original judgment.
Fed. R. App. P. 4(a)(4)(A).
Our jurisdiction therefore turns on whether Giuffre filed
a motion to alter or reconsider the district court's order
dismissing his complaint. Giuffre points to his motion for leave
to amend, claiming that it also functioned in substance as a motion
to alter or amend the court's dismissal order. While the caption
of the motion does not help Giuffre's cause ("Motion for Leave to
File First Amended Complaint"), Giuffre asks us to focus on the the
body of the motion, specifically the portion challenging the
court's decision to dismiss the complaint. The motion noted that
-5-
between briefing on the defendants' motion to dismiss and the
court's order, the First Circuit released an important decision,
Culhane v. Aurora Loan Services of Nebraska, 708 F.3d 282 (1st Cir.
2013), which the district court relied on in dismissing the
complaint. Because the district court cancelled oral argument on
the motion to dismiss, Giuffre explained, he never had an
opportunity to address Culhane, and he thought "the court's
interpretation of Culhane [was] too narrow." Giuffre's motion also
pointed out that the district court's dismissal order was silent as
to whether an amendment was permitted. In seeking leave to amend
his complaint, therefore, Giuffre's misdirected and misbegotten
motion could be read, in part, as asking the court to alter its
earlier order to allow amendment.
In responding to Giuffre's motion below, Deutsche Bank
itself gave the motion just such a reading, volunteering that the
motion was "an amalgamation of a motion to amend and a motion for
reconsideration." The bank nevertheless argued, and maintains on
appeal, that the motion should be treated as solely a motion to
amend the complaint, not one qualifying as extending the time limit
for filing a notice of appeal.
We disagree. In characterizing motions for these
purposes, we focus on their substance, not their labeling. Perez-
Perez v. Popular Leasing Rental, Inc., 993 F.2d 281, 283 (1st Cir.
1993). In substance, Giuffre's motion challenged the legal
foundation of the dismissal order and called on the judge to either
revoke that order or alter it to allow him leave to amend. These
are "classic Rule 59 claim[s]," id., albeit ones presented in a
-6-
misleading manner. Given that even Deutsche Bank nevertheless
recognized the motion as serving in part as a request to alter the
earlier judgment, and so informed the district court, we find the
poorly presented request for relief to qualify, barely, as
extending the time limit for filing a notice of appeal. We
therefore deem Giuffre's appeal of the dismissal order timely.
III. Analysis
We review the district court's decision to dismiss de
novo and may affirm "on any basis available in the record."
Lemelson v. U.S. Bank Nat. Ass'n, 721 F.3d 18, 21 (1st Cir. 2013).
Giuffre concedes that he transferred title to his
property to Sohmer. He also concedes that Sohmer granted a
mortgage to Option One. Under Massachusetts law, when Sohmer
granted the mortgage, he transferred to Option One "legal title"
while retaining "equitable title," the right to eventually
reacquire legal title when the mortgage debt was paid in full.
Bevilacqua v. Rodriguez, 460 Mass. 762, 774-75 (2011). Giuffre
later reacquired equitable title from the trustee in Sohmer's
bankruptcy,4 and Deutsche Bank acquired legal title from Option
One.
In the words of Giuffre's brief on appeal, his complaint
"sought a declaration from the land court voiding the mortgage as
having been obtained by fraud, deceit and misrepresentation." Yet,
in the complaint's actual allegations, and in his brief on appeal,
Giuffre does not allege that the grant of the mortgage by Sohmer to
4
Giuffre cites this transfer as giving him ownership of the
property, but the bankruptcy trustee could not convey legal title
to the property because Sohmer's estate did not have it.
-7-
Option One was itself marred by any fraud, much less fraud that
would void the transaction. Instead, he attacks only the dealings
between himself and Sohmer, claiming that Sohmer fraudulently
induced him to transfer the property to Sohmer. Giuffre cites no
authority supporting the notion that a mortgage can be declared
void simply because it was granted by someone who previously
acquired the property through this kind of fraud. Such a rule
would have sweeping implications, opening any mortgage to question
based on conduct unknowable to the mortgagee. Unsurprisingly,
Massachusetts does not allow claims based on fraudulent inducement
against a subsequent purchaser for value, except if the plaintiff
establishes that the purchaser had notice of the fraud. See Somes
v. Brewer, 19 Mass. 184, 195 (1824) ("[W]here a grantee obtained a
deed of land by fraud . . . and afterwards conveyed the land to a
bona fide purchaser for a valuable consideration without notice of
the fraud, . . . such purchaser had a valid title against the first
grantor."); Bevilacqua, 460 Mass. at 777 n.11 (2011) (same); Altman
v. Stiegel, 349 Mass. 768, 768 (1965) (applying the same principle
to a mortgagee). A later transferee has notice for these purposes
if it "has actual knowledge," "received a notice," or "has reason
to know" based on "the facts and circumstances known to him at the
time." Demoulas v. Demoulas Super Markets, Inc., 424 Mass. 501,
547 (1997).
Giuffre's complaint did not allege that Option One knew
of Sohmer's fraud or had any reason to deduce that it had occurred.
Consequently, a factfinder accepting Giuffre's allegations as true
would conclude that Option One received legal title to Giuffre's
-8-
home without notice of fraud, and that Deutsche Bank now validly
holds it, allowing the bank to foreclose if the terms of repayment
in the mortgage are not satisfied.
Seeking to bypass this fundamental obstacle to his claim,
Giuffre asserts that the mortgage cannot be enforced because the
debt to Deutsche Bank is "nonexistent," because Giuffre "does not
owe Deutsche Bank any money," and because he "never signed and
never agreed to grant." These claims misunderstand and misconstrue
the situation. The debt certainly exists: Option One lent
$500,000 to Sohmer, and Giuffre concedes that this debt was not
discharged in Sohmer's bankruptcy. Because Sohmer granted a
mortgage, Option One (and later Deutsche Bank) acquired legal title
to the property, regardless of Giuffre's lack of consent. And in
practical terms Giuffre must indeed make loan payments if he hopes
to retain the property: Giuffre's interest in the property as a
holder of equitable title constitutes a right to "reacquire legal
title by paying the debt which the mortgage secures." Lemelson,
721 F.3d at 24 (internal quotation marks omitted).
Finally, Giuffre says that "[e]quity should intervene and
restore title to Giuffre," noting that "[i]t is hard to see that
Deutsche Bank would be harmed [as it] surely has recourse to title
insurance." While we are certainly sympathetic to Giuffre's
apparent mistreatment at the hands of his prior lawyer, his
complaint provides no legal basis for making Deutsche Bank (or its
insurer) pay for the lawyer's wrongdoing.
IV. Giuffre's Motion to Amend his Complaint
-9-
Giuffre's proposed amendments to his complaint do not
repair the fundamental problems described above with his attempt to
hold Deutsche Bank responsible for Sohmer's wrongdoing. We
therefore affirm the district court's denial of Giuffre's motion to
amend. See Glassman v. Computervision Corp., 90 F.3d 617, 623 (1st
Cir. 1996) (holding that a motion to amend should be denied as
futile if "the complaint, as amended, would fail to state a claim
upon which relief could be granted.").
Giuffre's amended complaint does gesture towards a claim
that Option One knew or should have known of Sohmer's fraud, but it
ultimately falls far short of supporting such a claim. Stripping
away several purely conclusory allegations, Giuffre's amended
complaint alleges only that Option One should have known that
Giuffre "was the individual who would be paying the mortgage"
because Giuffre was a beneficiary of the trust holding the
property, and that the bank nevertheless "conducted no due
diligence to determine whether Giuffre could afford the mortgage."
But the relevant fraud here is not that Giuffre had too little
financial capacity. Rather, the underlying fraud as alleged by
Giuffre is that Sohmer was lying and self-dealing. Giuffre's
allegations offer no hint as to how Option One should have
discovered that fraud, even if Giuffre were correct (which we
doubt) that Option One owed a duty to the beneficiaries of a trust
to which the bank's borrower intended to transfer the property.
Giuffre's amended complaint also includes two entirely
new counts raising issues unrelated to Sohmer's fraud, one
questioning whether Deutsche Bank holds the promissory note and the
-10-
other related to the securitization of the mortgage. Giuffre has
never claimed that he was unaware of the facts giving rise to these
new claims when he first filed the suit eighteen months before the
proposed amendment. We are confident that the district court would
have properly rejected Giuffre's last-ditch attempt to mutate the
case to avoid dismissal, pressed after more than a year and a half
of litigation. In short, this is a classic case of "undue delay."
See Nikitine v. Wilmington Trust Co., 715 F.3d 388, 390-91 (1st
Cir. 2013). In any event, Giuffre fails to adequately plead facts
supporting his new claims, and so they are also futile.
V. Conclusion
For the foregoing reasons, we affirm the dismissal of
Giuffre's complaint and the denial of his motion for leave to amend
his complaint. Double costs are awarded to the appellees.
So ordered.
-11-
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IN THE SUPREME COURT OF PENNSYLVANIA
EASTERN DISTRICT
COMMONWEALTH OF PENNSYLVANIA, : No. 296 EAL 2015
:
Respondent :
: Petition for Allowance of Appeal from
: the Order of the Superior Court
v. :
:
:
TERRANCE WASHINGTON, :
:
Petitioner :
ORDER
PER CURIAM
AND NOW, this 2nd day of December, 2015, the Petition for Allowance of Appeal
is GRANTED, LIMITED TO the issue set forth below. Allocatur is DENIED as to all
remaining issues. The issue is:
Are the mandatory sentences imposed upon petitioner illegal pursuant to
Alleyne v. United States[,133 S. Ct. 2151 (2013)]?
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UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
WASHINGTON METROPOLITAN AREA :
TRANSIT AUTHORITY, :
:
Petitioner & Counter-Defendant, : Civil Action No.: 12-136 (RC)
:
v. : Re Document Nos.: 13, 14
:
LOCAL 2, OFFICE AND PROFESSIONAL :
EMPLOYEES INTERNATIONAL UNION, :
AFL-CIO, :
:
Respondent & Counter-Claimant. :
MEMORANDUM OPINION
GRANTING IN PART AND DENYING IN PART RESPONDENT’S MOTION TO DISMISS; AND
GRANTING IN PART AND DENYING IN PART PETITIONER’S MOTION FOR SUMMARY JUDGMENT
I. INTRODUCTION
This matter comes before the Court following the parties’ negotiation impasse and
subsequent arbitration over the terms of a collective bargaining agreement. The petitioner is a
local, public mass transit authority formed pursuant to an interstate compact; the respondent is a
union of approximately 700 of the petitioner’s employees. After an extensive arbitration process
spanning over one year and a record of more than 400 exhibits, the three-member arbitration
board issued an award that included, among other things, general wage increases, new
subcontracting terms, and new pay bands. The transit authority filed a petition in this Court
seeking vacatur of three award provisions, and the union filed a counterclaim seeking
confirmation of the entire award. The parties have each filed motions to dispose of the case in
their favor. For the reasons discussed below, the Court will vacate the award’s peopling of the
new pay bands and confirm the remainder of the award.
II. FACTUAL BACKGROUND
A. The Parties and the Compact
Petitioner, the Washington Metropolitan Area Transit Authority (“WMATA” or the
“Authority”), is a mass transit facilitator in the Washington metropolitan area that operates the
Metrorail, Metrobus, and MetroAccess transportation services. WMATA was established as the
result of an interstate compact (the “Compact”) between the State of Maryland, the District of
Columbia, and the Commonwealth of Virginia in order to provide a coordinated approach to
transportation, growth, and development in the D.C. area. See generally Act of Nov. 6, 1966,
Pub. L. No. 89-774, 80 Stat. 1324 (codified as amended at Md. Code Ann., Transp. § 10-204
(Michie 2008), D.C. Code §§ 9-1103.01 to .02, 9-1107.01 (2001), and Va. Code Ann. §§ 56-529
to 56-530 (2003)) (granting congressional consent for the Compact).1 It operates within the
District of Columbia and various counties and cities within Maryland and Virginia (collectively
with the federal government, the “Compact Jurisdictions”).
The Compact sets forth WMATA’s powers and responsibilities. With respect to
financing, the Compact provides that “as far as possible, the payment of all costs shall be borne
by the persons using or benefiting from the Authority’s facilities and services . . . .” Compact
§ 16. Any remaining costs are to be “equitably shared” among the Compact Jurisdictions, with
the allocation “determined by agreement among them . . . .” Id. Evidence put forward by
WMATA suggests that, under this funding paradigm, the Authority uses complex formulas to
determine the amount each Compact Jurisdiction should contribute. See J.A. 511 (Arb. Tr.
1238:20–1239:20, July 16, 2010). In recent years, subsidies from the Compact Jurisdictions
1
All citations to the “Compact” in this Memorandum Opinion refer to the corresponding
section(s) of the current Compact, codified as amended at the above-listed sections of the
signatory jurisdictions’ codes.
2
have provided about 40 percent of the revenue for WMATA’s operating budget. See, e.g., J.A.
5356 (FY2009). WMATA’s infrastructure is supported by a separate budget, known as the
capital budget. See, e.g., Compact § 23; J.A. 211 (Arb. Tr. 539:1–540:1, July 12, 2010).
In addition to setting guidelines regarding WMATA’s financing, the Compact also
authorizes the Authority to exercise certain enumerated powers, including the ability to
construct, acquire, and sell real property; enter into and perform contracts; create and abolish
offices, employments, and positions; contract for or employ professional services; and hold
public hearings. See Compact § 12. The Compact also recognizes the role of labor unions and
requires the Authority to negotiate with such unions regarding “wages, salaries, hours, working
conditions, and pension or retirement provisions.” Id. § 66(b). Where negotiation of any “labor
dispute” does not result in a collective bargaining agreement (“CBA”), the parties must submit
the dispute to arbitration in which a three-member arbitration panel sets the terms to be included
in the CBA. See id. § 66(c). The arbitration process also applies to the interpretation or
application of existing CBAs. See id.
The Office and Professional Employees International Union, Local 2 (“Local 2” or the
“Union”) is a labor union of WMATA employees whose job responsibilities encompass a variety
of professional technical, clerical, and administrative duties, including engineering, inspection,
and communications. See generally J.A. 3 (Arb. Tr. 9:19–21, July 8, 2010); J.A. 1225–31. The
approximately 709 Local 2 members comprise about 7 percent of WMATA’s total workforce.
See J.A. 3810. Local 2 is an affiliate of the American Federation of Labor and Congress of
Industrial Organizations. See Pet. Vacate Arb. Award ¶ 3, ECF No. 1.
3
B. Collective Bargaining
The most recent CBA between WMATA and Local 2 expired on June 30, 2008. See J.A.
1052. As that CBA came to an end, the parties began the negotiations for the next contract but
made little progress. See J.A. 3 (Arb. Tr. 11:1–5, July 8, 2010). In May 2010, nearly two years
after the prior CBA had expired, the parties submitted their final offers to arbitration under the
terms of the Compact. See J.A. 1181–200.
1. The Kasher Arbitration (Local 689)
Before engaging in negotiations with Local 2, WMATA bargained with the
Amalgamated Transit Union Local 689 (“Local 689”), whose CBA had also expired on June 30,
2008. See WMATA v. Local 689, Amalgamated Transit Union (Local 689 I), 818 F. Supp. 2d
888, 892 (D. Md. 2011). Local 689 is the largest WMATA employee labor union, representing
approximately 7,700 employees comprising about 70 percent of WMATA’s workforce. See id.
Due to similarities between WMATA’s bargaining history with Local 689 and its bargaining
with Local 2, the Court finds it appropriate to begin with a discussion of the Local 689
negotiations, which, like the instant case, resulted in arbitration under the Compact and judicial
review in federal court.
After WMATA’s negotiations with Local 689 reached an impasse in August 2008, the
parties submitted the dispute to arbitration pursuant to the Compact. The arbitration board was
composed of three members: Thomas R. Roth as Local 689’s representative, R. Theodore Clark,
Jr. as WMATA’s representative, and Richard R. Kasher as Neutral Chairman (collectively, the
“Kasher Board”). See id. On November 4, 2009, the Kasher Board issued its award (the
“Kasher Award”), which included the following general wage adjustments: “a 2 percent lump-
sum payment effective July 1, 2008; and annual 3 percent general wage increases effective on
4
July 1 in the years 2009, 2010, and 2011.” Id. at 892–93. The two partisan board members each
issued partially dissenting opinions. See id. at 893.
Shortly after the Kasher Award was issued, the parties filed suit in the U.S. District Court
for the District of Maryland—Local 689 seeking judicial confirmation of the Kasher Award, and
WMATA seeking an order vacating the award’s provisions for general wage adjustments and
pension benefits. See id. WMATA’s challenge was based on the Kasher Award’s alleged failure
to comply with the National Capital Area Interest Arbitration Standards Act of 1995, tit. IV, Pub.
L. No. 104-50, 109 Stat. 463 (codified as amended at 40 U.S.C. §§ 18301–04 (2006)) (the
“Standards Act” or the “Act”), which had never been applied by any court but purportedly sets
forth procedures governing interest arbitrations between WMATA and its unionized employees.
See Local 689 I, 818 F. Supp. 2d at 893–94. On cross-motions for summary judgment, Judge
Peter J. Messitte remanded the award to the arbitration board with instructions to issue a
supplemental opinion based on his preliminary conclusion that, whatever the Standards Act
requires, the Kasher Award did not demonstrate full compliance with the Act. See id. at 893–94
& n.4. The written award “merely declared that the Neutral Chairman had ‘given full and
thorough consideration to the criteria’ outlined in the Standards Act, but failed to provide any
discussion or analysis applying the statutory factors to the evidence in the record.” Id. at 893.
The Neutral Chairman issued an 8-page supplemental opinion on June 22, 2010.
“Although [it] contained a brief additional discussion of the various statutory factors outlined in
the Standards Act, like its predecessor it contained no detailed analysis of those factors, nor did it
provide a roadmap that might direct the Court to the specific evidence the [Kasher] Board had
considered and weighed in reaching its conclusions.” Id. at 894. After setting forth his detailed
interpretation of the Standards Act’s requirements and finding that the supplemental opinion did
5
not comply, Judge Messitte again remanded the award to the Kasher Board with instructions to
issue a further supplemental opinion. See id. at 906–08. The Neutral Chairman submitted a
second supplemental opinion that this time mapped the submitted evidence to his conclusions,
and upon renewed cross-motions for summary judgment the Maryland court upheld the Kasher
Award. See WMATA v. Local 689, Amalgamated Transit Union (Local 689 II), 804 F. Supp. 2d
457, 476–79 (D. Md. 2011).
2. The Moffett Arbitration (Local 2)
After the negotiations between WMATA and Local 2 reached an impasse, the parties
established an arbitration panel pursuant to the Compact. The arbitration board was composed of
three members: Thomas R. Roth as Local 2’s representative, Robert G. Ames as WMATA’s
representative, and Kenneth E. Moffett as Neutral Chairman (collectively, the “Moffett Board”
or the “Board”).2 See Pet. Vacate Arb. Award ¶ 20, ECF No. 1. The proceedings generated a
large arbitral record, including more than 400 exhibits and over 2,300 pages of transcript. See id.
¶ 22.
After 11 days of hearings, the Board met for several days of executive session. On
January 13, 2012, the Board issued a 28-page written award (the “Moffett Award” or the
“Award”) outlining the awarded CBA terms and the reasoning for the Board’s decision, and
WMATA’s partisan board member submitted an opinion dissenting in part. The Award touches
upon many topics, but for purposes of this litigation its most disputed terms relate to general
2
The partisan nature of the arbitration process cannot be understated. Mr. Roth sat on
both the Kasher and Moffett Boards, and his law firm appeared as counsel of record presenting
labor’s case before both arbitral boards, Local 689’s case before the District of Maryland, and
Local 2’s case before this Court. Similarly, Mr. Ames sat on the Moffett Board and appeared as
counsel of record for WMATA before both arbitral boards, the District of Maryland, and this
Court.
6
wage adjustments, subcontracting, and new pay bands. The Award provides for the following
general wage adjustment:
Effective July 1, 2008—2% lump sum payment
Effective July 1, 2009—3% general wage increase
Effective July 1, 2010—3% general wage increase
Effective July 1, 2011—3% general wage increase
Award at 6 (footnote omitted). 3 The awarded subcontracting terms disallow the subcontracting
of work customarily performed by the Union if it would result in the layoff or reduction in
compensation of a Local 2 member, and the new terms also require the formation of a joint
labor–management committee to review current and future subcontracting practices and seek to
bring work in-house on a cost-neutral basis. See id. at 26. With respect to pay bands, the Board
awarded terms establishing two new bands comprising the highest pay grades. See id. at 27.
Under the Award, these new bands are to be occupied by Local 2 members whose compensation
has been “red circled” at salaries above the previously highest pay grade.4 See id.
Shortly after the Moffett Award became binding on the parties, WMATA petitioned this
Court for judicial review of the Award pursuant to section 18304 of the Standards Act. See 40
U.S.C. § 18304(c) (2006). Specifically, WMATA asks the Court to vacate the general wage
adjustments (and resulting pension benefit increase), the new subcontracting provisions, and the
new pay band provisions. See Pet. Vacate Arb. Award ¶ 1, ECF No. 1. The petition is based on
3
All citations to the “Award” in this Memorandum Opinion refer to the Moffett Board’s
written opinion, which was attached as Exhibit A to WMATA’s petition (ECF No. 1).
4
Such employees came about as a result of the earlier “Wolf” award, in which an
arbitrator had determined that these employees were performing Local 2 work and should be
placed within the bargaining unit. See Award at 27. Of these employees, those who were
already compensated at salaries above the then-highest pay grade were “red circled”—that is,
they continued to receive their higher salaries but would not receive increases or be assigned to a
Local 2 pay band.
7
three grounds: (1) that the Moffett Board failed to comply with section 18303 of the Standards
Act; (2) that the Board’s decision was arbitrary or capricious; and (3) that the Board exceeded its
authority in granting the Award. See id. ¶¶ 40–45. Local 2 filed a counterclaim seeking
confirmation of the entire Moffett Award. See Answer & Countercl., ECF No. 5.
On April 16, 2012, the parties filed cross-motions to dispose of this case. Local 2’s
motion to dismiss5 seeks confirmation of the entire Moffett Award, interest, and attorneys’ fees;6
WMATA’s motion for summary judgment seeks vacatur of the Award’s three challenged
provisions. The parties agree that “resolution of these motions should settle all issues remaining
in this case.” Joint Status Rep. 2, ECF No. 18.
III. COLLATERAL ESTOPPEL
Local 2 asserts that WMATA is collaterally estopped from challenging the validity of the
wage increases awarded to Local 2 unit members, including a 2 percent lump sum in 2008 and
annual 3 percent increases in 2009, 2010, and 2011, because the same increases were awarded to
5
Local 2 has styled its motion as a motion to dismiss, but the Court will evaluate the
parties’ dispositive motions as cross-motions for summary judgment. In the context of
challenges to agency actions, “there is no real distinction . . . between the question presented on a
12(b)(6) motion and a motion for summary judgment[,]” Marshall Cnty. Health Care Auth. v.
Shalala, 988 F.2d 1221, 1226 (D.C. Cir. 1993), but the D.C. Circuit has nonetheless suggested
that “[i]t is probably the better practice for a district court always to convert to summary
judgment” in such cases. Id. at 1226 n.5. Although the instant case is not a challenge to an
agency action, the limitation of this litigation to the arbitral record similarly requires the district
court to “sit[] as an appellate tribunal.” Am. Bioscience, Inc. v. Thompson, 269 F.3d 1077, 1083
(D.C. Cir. 2001). “The entire case on review is a question of law, and only a question of law.”
Marshall Cnty. Health Care Auth., 988 F.2d at 1226. The Court will therefore consider Local
2’s motion a motion for summary judgment pursuant to Federal Rule of Civil Procedure 12(d).
6
Local 2’s motion also raises a Tenth Amendment challenge to the Standards Act. See
Resp’t’s Mem. Supp. Mot. Dismiss Pet. & Conf. Arb. Award 12–20, ECF No. 13-1. The
constitutional challenge was certified to the Attorney General pursuant to 28 U.S.C. § 2403(a)
and Federal Rule of Civil Procedure 5.1. See Order, ECF No. 19. The United States has not yet
intervened, but the Court granted its request for an extension of time to do so. See Mot. Ext.
Time, ECF No. 20.
8
Local 689 in the Kasher Award and upheld by the Maryland court. Resp’t’s Reply Mem. Supp.
Conf. Arb. Award 5–10, ECF No. 17. Because the argument was raised in response, WMATA
did not have an opportunity to address it. Collateral estoppel is a threshold issue, see Graphic
Commc’ns Int’l Union, Local 554 v. Salem–Gravure Div. of World Color Press, Inc., 843 F.2d
1490, 1493 (D.C. Cir. 1988), and so the Court will address it at the outset.
“Under collateral estoppel, once a court has decided an issue of fact or law necessary to
its judgment, that decision may preclude relitigation of the issue in a suit on a different cause of
action involving a party to the first case.” Allen v. McCurry, 449 U.S. 90, 94 (1980) (citing
Montana v. United States, 440 U.S. 147, 153 (1979)). For collateral estoppel to apply, (1) the
issue being raised must have been contested by the parties and submitted for adjudication in the
prior case, (2) the issue must have been actually and necessarily determined by a court of
competent jurisdiction, and (3) preclusion in the second case must not work a basic unfairness to
the party bound by the first determination. See Yamaha Corp. of Am. v. United States, 961 F.2d
245, 254 (D.C. Cir. 1992). For example, in a case between two unions contesting whether
parties could submit to a tripartite arbitration instead of the contractually required bipartite
arbitration, the D.C. Circuit found the issue to be collaterally estopped by a Ninth Circuit opinion
since the court was asked by the “same three parties” to interpret the “same CBA” on the same
issue. Nat’l Post Office Mail Handlers Div. of the Laborers’ Int’l Union v. Am. Postal Workers
Union, 907 F.2d 190, 192 (D.C. Cir. 1990).
This suit fails the first factor of the test for collateral estoppel because the issue raised by
WMATA in this suit—namely, whether the Moffett Board’s arbitration award was arbitrary and
capricious in its award of wage increases to Local 2—was not raised before the Maryland court.
See generally Local 689 II, 804 F. Supp. 2d. That court was asked to review the Kasher Award
9
for compliance with the Standards Act, not to reweigh the evidence for itself and find that
WMATA could, in fact, afford to pay the awarded wage increases. See id. at 477. Moreover, in
reviewing the Kasher Award, the Maryland court reviewed an arbitral record and opinion that
was specific to Local 689 and encompassed party-specific factors, including the union’s
compensation as compared to others who employ similar services in the D.C. area, and the
special nature of the bargaining unit’s work. Id. at 475; see also 40 U.S.C. § 18303(b) (2006).
Though the court found that the Kasher Board did comply with the Standards Act when
awarding the wage increases, the court’s review was specific to the “7,700 bus drivers, train
operators, mechanics and other staff” comprising Local 689, Resp’t’s Mem. Supp. Mot. Dismiss
5, ECF No. 13-1, and does not speak directly to the Moffett Board’s evaluation and opinion
regarding the wage increases for Local 2’s 709 professional employees. While the terms
contested in Kasher and Moffett Awards are similar, WMATA is challenging a different written
arbitral opinion, which had not even been issued at the time, cites different evidence, and awards
a different contract to a different union. Moreover, while the Maryland court upheld the Kasher
Board’s determination that the Local 689 increases were affordable, it did not consider whether
WMATA could afford the additional dollar amounts addressed in the Moffett Award—estimated
at $18.7 million, see Resp’t’s Reply Mem. Supp. Conf. Arb. Award 13–14, ECF No. 17—on top
of the already large Kasher Award. WMATA is not collaterally estopped from challenging the
Moffett Board’s general wage adjustments.
IV. REVIEW OF THE MOFFETT AWARD
Having determined that WMATA is not collaterally estopped from bringing this action,
the Court proceeds to review the Moffett Award. The petition alleges that there are three main
grounds on which the Court must vacate the Moffett Award, all of which arise under the
10
Standards Act. First, WMATA alleges that the Moffett Award provisions granting pay increases
did not comply with section 18303 of the Standards Act, which requires that certain enumerated
factors be considered and factual findings be made. See 40 U.S.C. § 18303 (2006); see also id.
§ 18304(c)(7) (requiring a court to vacate an arbitration award if the arbitrator did not comply
with section 18303). Second, WMATA challenges the general wage adjustments and
subcontracting provisions on the ground that the Moffett Board’s decision was arbitrary or
capricious. See id. § 18304(c)(3). Finally, WMATA challenges the new subcontracting
provisions and pay bands as exceeding the arbitrator’s powers. See id. § 18304(c)(2).7 The
Court will address each legal challenge in turn.
A. Applicability of the Standards Act
The proper standard of review is a critical point of contention between the parties. As a
general matter, the standard by which federal courts review arbitral awards is “among the
narrowest known to the law.” Union Pac. R.R. Co. v. Sheehan, 439 U.S. 89, 91 (1978) (per
curiam); accord Local 689 I, 818 F. Supp. 2d at 895; see also Kurke v. Oscar Gruss & Son, Inc.,
454 F.3d 350, 354 (D.C. Cir. 2006) (“As we have repeatedly recognized, judicial review of
arbitral awards is extremely limited . . . .” (quoting Teamsters Local Union No. 61 v. United
Parcel Serv., Inc., 272 F.3d 600, 604 (D.C. Cir. 2001)) (internal quotation marks omitted)). It is
clear from the parties’ briefing that the central issue in this case is whether—and to what
7
To be specific, the petition alleges that each of the legal bases for vacating the
arbitration award applies to all three challenged provisions of the Moffett Award. See Pet.
Vacate Arb. Award ¶¶ 41, 43–45, ECF No. 1. However, WMATA’s motion for summary
judgment is limited to the legal challenges described above. Because the parties have jointly
represented that “resolution of these motions should settle all issues remaining in this case[,]”
Joint Status Rep. 2, ECF No. 18, the Court understands that WMATA no longer challenges the
general wage adjustments as exceeding the arbitrator’s powers, the new subcontracting
provisions as failing to comply with 40 U.S.C. § 18303, or the pay bands as arbitrary or
capricious or failing to comply with 40 U.S.C. § 18303.
11
extent—the Standards Act dictates that a more rigorous standard of review be applied to judicial
review of interest arbitration awards in which WMATA is the employer.
1. Common Law Review of Arbitral Awards
Before Congress enacted the Standards Act, the D.C. Circuit held that the common law
standard governed judicial review of arbitrations between WMATA and Local 2. See Office &
Prof’l Emps. Int’l Union, Local 2 v. WMATA, 724 F.2d 133, 139 (D.C. Cir. 1983). The Court
therefore opens, by way of background, with a discussion of that standard.
Ordinarily, “[a] principal characteristic of the common law of labor arbitration in the
United States is judicial deference to arbitral decisions.” Devine v. White, 697 F.2d 421, 435
(D.C. Cir. 1983), abrogated on other grounds by Cornelius v. Nutt, 472 U.S. 648 (1985). As the
Supreme Court has held:
[I]f an arbitrator is even arguably construing or applying the contract and acting
within the scope of his authority, the fact that a court is convinced he committed
serious error does not suffice to overturn his decision. It is only when the
arbitrator strays from interpretation and application of the agreement and
effectively dispense[s] his own brand of industrial justice that his decision may be
unenforceable. When an arbitrator resolves disputes regarding the application of
a contract, and no dishonesty is alleged, the arbitrator’s improvident, even silly,
factfinding does not provide a basis for a reviewing court to refuse to enforce the
award.
Major Baseball Players Ass’n v. Garvey, 532 U.S. 504, 509 (2001) (per curiam) (second
alteration in original) (citations omitted) (internal quotation marks omitted). The level of
deference is even greater when a federal court reviews arbitral decisions of a procedural nature.
See Teamsters Local Union No. 61 v. United Parcel Serv., Inc., 272 F.3d 600, 604 (D.C. Cir.
2001) (citing John Wiley & Sons, Inc. v. Livingston, 376 U.S. 543, 557 (1964)).
“This extraordinarily deferential standard is essential to preserve the efficiency and
finality of the labor arbitration process.” Nat’l Postal Mail Handlers Union v. Am. Postal
Workers Union, 589 F.3d 437, 441 (D.C. Cir. 2009); see also United Steelworkers of Am. v.
12
Enter. Wheel & Car Corp., 363 U.S. 593, 596 (1960) (“The federal policy of settling labor
disputes by arbitration would be undermined if courts had the final say on the merits of the
awards.”). With these principles in mind, courts “review an arbitral decision with the
presumption that the common law standard of deference applies.” Local 2, 724 F.2d at 137. The
D.C. Circuit has further noted that “[t]hese critical principles . . . can elude parties who
sometimes quixotically seek to overturn labor arbitration decisions . . . .” Nat’l Postal Mail
Handlers Union, 589 F.3d at 441. Up until at least the time the Standards Act went into effect,
these principles applied to arbitration under the Compact as well. The D.C. Circuit once noted
that, “[a]s in traditional arbitration, Compact arbitration is designed to preserve industrial peace.”
Local 2, 724 F.2d at 138. And in enacting the Compact, “Congress chose words which create the
expectation of finality, of decisions not subject to judicial second-guessing.” Id.
2. The Standards Act
When the D.C. Circuit originally held that the highly deferential common law standard of
judicial review applied to arbitrations under the Compact, it noted in dicta that, “[o]bviously,
Congress could have displaced the presumption that the standard of review be based on
deference . . . in either the Compact itself or in another enactment.” Id. In 1995, Congress
followed suit by enacting the Standards Act. The Act was part of a larger transportation
appropriations law, see generally Act of Nov. 15, 1995, Pub. L. No. 104-50, 109 Stat. 436
(codified as amended at scattered sections of U.S.C.), and was enacted with the express purpose
of “lower[ing] operating costs for public transportation in the Washington metropolitan area.”
40 U.S.C. § 18301(b) (2006). WMATA asserts that the Act “displaced the former deferential
standard of review and replaced it with a specific set of requirements governing the scope of
judicial review of arbitration decisions resolving the terms and conditions of employment
13
involving [WMATA].” Pet’r’s Resp. Mot. Summ. J. 4, ECF No. 16 (internal quotation marks
omitted). Local 2 argues that the deferential, common law standard survives Congress’s
enactment of the Standards Act in this context.8 See Resp’t’s Mem. Supp. Mot. Dismiss Pet. &
Conf. Arb. Award 10–11, ECF No. 13-1. WMATA’s argument hits closer to the mark, and the
Court joins the District of Maryland in finding “that Congress, through the Act, did abrogate the
common law of arbitration as it applies to the Compact . . . .” Local 689 I, 818 F. Supp. 2d at
903.
The Court notes at the outset that the Standards Act applies only to interest arbitrations
involving “an interstate compact agency operating in the national capital area . . . .” 40 U.S.C.
§ 18302(1) (2006). Two separate inquiries are bound up in this provision: first, whether the Act
applies to the parties; and second, whether this arbitration is the type of proceeding at which the
Standards Act is aimed. The Court finds—and the parties do not dispute—that both questions
are resolved in the affirmative. As discussed above, WMATA “provides public transit services
and . . . was established by an interstate compact to which the District of Columbia is a
signatory.” Id. § 18302(3). In fact, WMATA appears to be the only entity within the Act’s
purview. See also Local 689 I, 818 F. Supp. 2d at 899–900 n.8. The scope of the Standards Act
8
Local 2 also argues that the Standards Act violates the Tenth Amendment by amending
an interstate compact without the consent or ratification of the signatory states. See Resp’t’s
Mem. Supp. Mot. Dismiss Pet. & Conf. Arb. Award 12–20, ECF No. 13-1. But “prior to
reaching any constitutional questions, federal courts must consider nonconstitutional grounds for
decision.” Gulf Oil Co. v. Bernard, 452 U.S. 89, 99 (1981) (citing Ashwander v. Tenn. Valley
Auth., 297 U.S. 288, 347 (1936) (Brandeis, J., concurring)). Because the Court finds that the
Moffett Award meets even the heightened standard imposed by the Standards Act, the Court
need not reach the Union’s constitutional challenge. The Court’s decision to vacate the Board’s
peopling of the new pay bands similarly does not trigger Local 2’s constitutional challenge
because, as described more fully below, the Standards Act does not impose a sui generis
standard of review with respect to an arbitrator’s authority; the common law governing judicial
review of arbitral awards controls that component of the Court’s analysis. See infra Part
IV.B.3.a.
14
is further limited to exclude rights arbitrations—that is, arbitral proceedings relating to “the
interpretation and application of rights arising from an existing collective bargaining agreement.”
40 U.S.C. § 18302(1)(B) (emphasis added). Because the instant case arises out of an interest
arbitration—that is, a proceeding in which the arbitrator sets forth provisions to be included in a
renewed collective bargaining agreement, see W. Coast Sheet Metal, Inc. v. NLRB, 938 F.2d
1356, 1357 (D.C. Cir. 1991)—the exception does not apply.
Because the Standards Act applies on its face to this arbitration, the Court must next
determine whether the Act’s procedures are mandatory or permissive in their application.
Section 18303 of the Standards Act uses imperative language in setting forth specific factors and
guidelines for the arbitration board to follow in rendering an award. Subsection (b) provides that
“[a]n arbitrator rendering an arbitration award involving the employees of [WMATA] may not
make a finding or a decision for inclusion in a collective bargaining agreement governing
conditions of employment without considering” seven enumerated factors (the “Factors”). 40
U.S.C. § 18303(b) (2006) (emphasis added). Subsection (c) provides that the arbitrator “may
not . . . provide for salaries and other benefits that exceed the ability of [WMATA], or of any
governmental jurisdiction that provides subsidy payments or budgetary assistance to [WMATA],
to obtain the necessary financial resources to pay for wage and benefit increases . . . .” Id.
§ 18303(c) (emphasis added). And subsection (d) contains a number of mandates, requiring that
(1) “the arbitrator shall issue a written award that demonstrates that all the factors set forth in
subsections (b) and (c) have been considered and applied”; (2) the arbitrator “may grant an
increase in pay rates or benefits . . . only if the arbitrator concludes that any costs to the agency
do not adversely affect the public welfare”; and (3) “[t]he arbitrator’s conclusion regarding the
public welfare must be supported by substantial evidence.” Id. § 18303(d) (emphases added).
15
The Act’s judicial review provision contains similarly binding language. Section 18304
mandates that:
The court shall review the award on the record, and shall vacate the award or any
part of the award, after notice and a hearing, if—
(1) the award is in violation of applicable law;
(2) the arbitrator exceeded the arbitrator’s powers;
(3) the decision by the arbitrator is arbitrary or capricious;
(4) the arbitrator conducted the hearing contrary to the provisions of this
chapter or other laws or rules that apply to the arbitration so as to
substantially prejudice the rights of a party;
(5) there was partiality or misconduct by the arbitrator prejudicing the
rights of a party;
(6) the award was procured by corruption, fraud, or bias on the part of the
arbitrator; or
(7) the arbitrator did not comply with the provisions of section 18303 . . . .
Id. § 18304(c) (emphases added). The plain meaning of the statutory text thus demonstrates a
clear legislative intent that the Standards Act’s procedures are mandatory, not permissive. See
Zivotofsky v. Sec’y of State, 571 F.3d 1227, 1243 (D.C. Cir. 2009) (Edwards, J., concurring)
(“‘Shall’ has long been understood as ‘the language of command.’” (quoting Escoe v. Zerbst,
295 U.S. 490, 493 (1935))), vacated on other grounds sub nom. Zivotofsky ex rel. Zivotofsky v.
Clinton, 132 S.Ct. 1421 (2012).
The Court rejects Local 2’s assertion that the Standards Act is inapplicable because the
Compact provides for “final and binding” interest arbitration. See, e.g., Answer & Countercl.
¶ 1, ECF No. 5 (citing Compact § 66). In considering whether this Compact language limits the
scope of judicial review even before the Standards Act came into effect, the D.C. Circuit held
that “[t]he ‘final and binding’ clause had nothing to do with judicial review.” Local 2, 724 F.2d
at 138. According to the legislative history, “the clause was envisioned as a ‘no strike, no lock-
16
out’ provision.” Id. (citing H.R. Rep. No. 92-115, at 9 (1972)). Moreover, even if the “final and
binding” clause previously foreclosed heightened judicial scrutiny of arbitral awards, the D.C.
Circuit noted that Congress could displace the standard of review “in another enactment.” Id.
The Standards Act therefore governs this dispute, and application of the Act’s factors is
mandatory. This holding is consistent with the findings and purpose of the Standards Act, which
provide that “[t]he purpose of [the Act] is to adopt standards governing arbitration that must be
applied . . . in order to lower operating costs for public transportation in the Washington
metropolitan area.” 40 U.S.C. § 18301(b) (emphasis added).
B. Application of the Standards Act
Having determined that the Standards Act sets forth mandatory criteria by which a court
must review interest arbitration awards involving WMATA employees, the Court proceeds to
review the Moffett Award pursuant to the Act. WMATA asserts that there are three independent
bases on which the Court must vacate the Award: (1) that the Board failed to comply with
section 18303 of the Standards Act; (2) that the Award was arbitrary or capricious; and (3) that
the Board exceeded its authority. Local 2 argues that the Award complies with each of these
requirements.
Application of the Standards Act presents several issues of first impression in this district.
Indeed, the District of Maryland litigation involving the Kasher Award is the only case in any
jurisdiction in which the Standards Act has been applied—a case that, the Court further notes,
did not result in an appeal to the Fourth Circuit. Judge Messitte’s opinion in the Maryland case
synthesized the Standards Act’s arbitrary or capricious review with the section 18303
requirements to set forth the following “hybrid” standard:
[C]ompliance with the Standards Act requires that the panel issue a detailed
written explanation of its decision that, at a minimum: (1) discusses each of the
17
statutory factors in some detail; (2) applies each of the factors to the dispute at
issue; (3) points to specific evidence in the record—by making reference to
exhibits—relevant to each and every statutory factor; (4) weighs the applicable
evidence pro and con; (5) states the panel’s ultimate conclusions; and (6) provides
a clear explanation of the reasoning behind the panel’s ultimate conclusions.
Local 689 I, 818 F. Supp. 2d at 904. Further, under Judge Messitte’s test, “the presumption of
validity applied to the Board’s conclusions is more deferential than that which would apply in
the administrative law setting.” Local 689 II, 804 F. Supp. 2d at 476 n.40. This synthesis
“incorporates elements of both the exceptionally narrow standard that ordinarily applies when a
court reviews the decision of an arbitration panel and the somewhat broader—but still highly
deferential—standard that ordinarily applies to a court’s review of the decision of an
administrative agency.” Id. at 476. The Maryland court arrived at this “hybrid” standard after
reviewing case law setting forth the arbitrary or capricious and substantial evidence review
standards in the context of the Administrative Procedure Act (“APA”) along with the mandatory
factors set forth in section 18303 of the Standards Act. See Local 689 I, 818 F. Supp. 2d at 903–
04.
WMATA urges the Court to adopt the Maryland court’s “hybrid” standard. The Court,
however, departs slightly in its review. Rather than apply a “hybrid” standard that blends
arbitrary or capricious review, substantial evidence review, and scrutiny of the section 18303
factors in a single discussion, the Court finds that the Act’s enumeration of these requirements as
discrete grounds for judicial review dictates that the Award’s adherence to section 18303’s
technical and procedural requirements be analyzed apart from the Court’s arbitrary or capricious
review. See 40 U.S.C. § 18304(c)(1)–(7) (2006). In other words, the Standards Act’s judicial
review provision sets forth separate inquiries: first, whether the Board formally considered and
applied the factors set forth in section 18303; and second, whether the Board’s application of
those factors was arbitrary or capricious. See id. § 18304(c)(3), (7). The parties seem to agree
18
that WMATA’s third challenge—that the Board exceeded its power, see id. § 18304(c)(2)—
warrants a separate analysis as well.
1. Compliance with Section 18303
The Moffett Board awarded the following general wage adjustments: a 2 percent lump
sum payment effective July 1, 2008, and a 3 percent general wage increase effective July 1 in the
years 2009, 2010, and 2011. See Award at 6. WMATA challenges these adjustments both on
their own accord and to the extent that they incidentally raise prospective pension benefits for
employees by increasing deferred compensation. See Pet’r’s Mem. P. & A. Supp. Mot. Summ. J.
1, ECF No. 14-1. The asserted grounds for vacating the wage adjustments are twofold: first,
that the Board failed to comply with section 18303 of the Standards Act in awarding the
adjustments; and second, that the decision to award general wage adjustments was arbitrary or
capricious. The Court will first address WMATA’s section 18303 challenge.
a. Standard of Review
Under the Standards Act, the Court must vacate any part of the award for which “the
arbitrator did not comply with the provisions of section 18303 . . . .” 40 U.S.C. § 18304(c)(7)
(2006). WMATA argues that the Moffett Board failed to comply with five separate provisions
of section 18303, presenting each provision in its briefing as a discrete standard under which an
award may be vacated. See Pet’r’s Mem. P. & A. Supp. Mot. Summ. J. 15–36, ECF No. 14-1.
Local 2 does not devote a substantial amount of discussion to the section 18303 standard of
review. As discussed below, the Court disagrees with WMATA’s characterization of section
18303 and finds that the provision sets forth two requirements that are largely procedural in
nature.
Section 18303(d)(1) specifies the requirements of the written arbitral award:
19
In resolving a dispute submitted to arbitration involving the employees of
[WMATA], the arbitrator shall issue a written award that demonstrates that all the
factors set forth in subsections (b) and (c) have been considered and applied.
40 U.S.C. § 18303(d)(1) (2006). Notably, the provision does not set forth a substantive standard,
cf. id. § 18303(d)(3) (singling out the public interest factor for substantial evidence review), but
merely requires a written award that “demonstrates” that the mandatory factors have been
“considered and applied.” Id. § 18303(d)(1).
Sections 18303(b) and (c), which subsection (d)(1) references, similarly lack a
substantive standard. Section 18303(b) provides that an arbitrator
may not make a finding or a decision for inclusion in a collective bargaining
agreement governing conditions of employment without considering the
following factors:
(1) The existing terms and conditions of employment of the
employees in the bargaining unit.
(2) All available financial resources of the interstate compact
agency.
(3) The annual increase or decrease in consumer prices for goods
and services . . . .
(4) The wages, benefits, and terms and conditions of the
employment of other employees who perform, in other
jurisdictions in the Washington standard metropolitan statistical
area, services similar to those in the bargaining unit.
(5) The special nature of the work performed by the employees in
the bargaining unit . . . .
(6) The interests and welfare of the employees in the bargaining
unit, including—
(A) the overall compensation presently received by
the employees . . . ;
(B) all benefits received by the employees . . . ; and
(C) the continuity and stability of employment.
(7) The public welfare.
20
Id. § 18303(b). And section 18303(c) sets forth an additional requirement with respect to
increased salaries or benefits:
An arbitrator rendering an arbitration award involving the employees of
[WMATA] may not, with respect to a collective bargaining agreement governing
conditions of employment, provide for salaries and other benefits that exceed the
ability of [WMATA], or of any governmental jurisdiction that provides subsidy
payments or budgetary assistance to [WMATA], to obtain the necessary financial
resources to pay for wage and benefit increases . . . .
Id. § 18303(c). These provisions, incorporated by and read together with subsection (d)(1), set
forth the first procedural requirement of section 18303: that a board must consider the seven
factors enumerated in subsection (b), reach the conclusion that any awarded salary or benefit
increases do not exceed the ability of WMATA and the Compact Jurisdictions to obtain the
necessary funding, and issue a written opinion showing that these factors and conclusions have
been considered and applied. Section 18303 does not lay out a substantive measure by which the
factors are evaluated or evidence is weighed—that standard is found in section 18304(c)(3),
which separately requires the Court to vacate an award that is arbitrary or capricious. Compare
id. § 18304(c)(7) (requiring a court to vacate an award that fails to comply with section 18303),
with id. § 18304(c)(3) (requiring a court to vacate an award that is arbitrary or capricious). The
Court will therefore incorporate the substantive application of the section 18303 factors into its
arbitrary or capricious review. See infra Part IV.B.2. At this stage of the review, the Court will
look to the Board’s written opinion to determine whether it discusses the mandatory factors in
some detail and applies each to the parties’ dispute. See also Local 689 I, 818 F. Supp. 2d at 904
(setting forth, as factors (1) and (2) of the “hybrid” test, requirements that the award “discuss[]
each of the statutory factors in some detail” and “appl[y] each of the factors to the dispute at
issue”).
21
The remainder of section 18303 relates to the arbitrator’s consideration of the “public
welfare.” Section 18303(d)(2) provides that “[a]n award may grant an increase in pay rates or
benefits . . . only if the arbitrator concludes that any costs to the agency do not adversely affect
the public welfare.” 40 U.S.C. § 18303(d)(2). The provision merely requires that the arbitrator
“conclude” that the public welfare is not harmed; it sets no substantive guidance regarding the
weight or application of evidence. The substantive guidance on public welfare is found in
subsection (d)(3)—the only part of section 18303 to set forth such guidance. It requires that
“[t]he arbitrator’s conclusion regarding the public welfare must be supported by substantial
evidence.” Id. § 18303(d)(3).
To summarize, the Court interprets section 18303 as containing two requirements: first,
that a board issue a written arbitral award demonstrating that it has considered the factors and
conclusions set forth in subsections (b) and (c); and second, that it reach a conclusion, supported
by substantial evidence, that the public welfare is not adversely affected by any salary or benefits
increases issued in its award. Because section 18303 specifies an evidentiary standard for only
Factor 7, the public welfare, the Court will not substantively scrutinize the remaining factors at
this stage. It will instead incorporate the 18303 factors into its arbitrary or capricious review.
The Court’s interpretation is supported by WMATA’s own briefing. Despite casting its
challenges as arising under five different provisions of section 18303, its arguments repetitively
challenge the Board’s substantive application of evidence to the section 18303 factors and
conclusions—a component of arbitrary or capricious review—and for the most part do not
contend that the Board failed to address each of the mandatory factors or reach the necessary
conclusions. Indeed, WMATA’s arbitrary or capricious challenge merely echoes the same
arguments it offers under section 18303. Therefore, to give relevance to the Standards Act’s
22
separate enumeration of these bases for vacating an award, the Court finds it most appropriate to
view section 18303 as setting forth procedural requirements in the form of formal application of
mandatory factors and conclusions, while substantive review of the award—including scrutiny of
the Board’s application of the mandatory factors—falls within the Court’s arbitrary or capricious
review.
b. Analysis
Having reviewed the statute and having separated its requirements into two categories—
section 18303’s procedural requirements on the one hand, and substantive scrutiny of its factors
under arbitrary or capricious review on the other—the Court will now apply section 18303.
i. Sections 18303(b), (c), and (d)(1)
As explained above, the first procedural requirement of section 18303 mandates that the
Board issue a written award demonstrating that (1) the seven statutory factors enumerated in
subsection (b) were considered and applied; and (2) the Board concluded that any awarded salary
or benefit increases do not exceed the ability of WMATA and the Compact Jurisdictions to
obtain the necessary funding. See id. § 18303(b)–(d)(1). The Court will consider this
requirement satisfied as long as the Award discusses each factor in some detail and applies each
to the dispute between Local 2 and WMATA.
WMATA argues that the Award fails to show that the Board considered and applied any
of the seven statutory factors. But to the contrary, the Moffett Award’s general wage adjustment
discussion spans 15 pages, 13 of which specifically outline the seven factors listed in section
18303(b). See Award at 6–21. The Board discussed each factor in detail under its own heading9
9
The Board chose to address Factors 2 and 7 (respectively, WMATA’s financial
resources and the public welfare) within a single section because together they involved all
23
and described the impact each factor had on the Board’s adjudication of the dispute. The Award
states that Factors 2, 3, and 7 support modest wage increases, see id. at 12–15, while Factor 6
supports the status quo, see id. at 19. The Board determined that Factor 4 “does not weigh
heavily” in either party’s favor due to the insufficiency of the evidence presented. See id. at 18.
WMATA’s complaints about these factors relate to the Board’s reasoning and will therefore be
addressed under the Court’s section 18304(c)(3) arbitrary or capricious analysis.
WMATA does appear to take exception—on a procedural basis—to Factors 1 and 5 of
the Board’s analysis. As to Factor 1—the terms of the existing CBA—WMATA argues that
“there is no indication from the face of the Award as to the precise impact this mandatory factor
had on the Board’s decision.” Pet’r’s Mem. P. & A. Supp. Mot. Summ. J. 17, ECF No. 14-1.
But the Board’s discussion of that factor makes clear it considered the existing CBA to create a
presumption in favor of the status quo, placing the burden on the party advocating modification
of any terms to show good cause:
As Factor 1 suggests, the starting point for any interest [a]rbitration is the current
collective bargaining agreement and the terms and conditions established therein.
Those seeking structural change, or any change incompatible with the parties’
bargaining history, need to prove that special circumstances or intervening events
warrant the change.
Award at 7. Indeed, it found this burden met for several components of the Award. See id.
WMATA cannot close its eyes to the clear text of the Board’s application of Factor 1 and then
argue that the Board failed to state how it applied the factor.
The Board’s application of Factor 5—the “special nature” of Local 2 employees’ work—
is not quite as explicit but is nonetheless readily apparent from the text of the Award. The
Board’s decision states that the Chairman found the Local 2 employees’ duties “peculiar to
evidence and argument relating to WMATA and the Compact Jurisdictions’ ability to pay. See
Award at 7–13.
24
WMATA in the local area” and similar only to that of other WMATA employees. Id. at 18–19.
The decision then makes explicit reference to two other areas of the Award—Factor 4 and
WMATA’s internal patterns—which, respectively, address the terms and conditions governing
employment of employees who perform similar services at other companies and agencies in the
D.C. metropolitan area and within WMATA itself. See id. A review of those sections makes
plain that, because the Board found the nature of Local 2 employees’ duties to be comparable
only to those of other WMATA employees, the factor weighed in favor of tracking the Kasher
Award. See id. at 20–21.
WMATA also challenges the Moffett Award’s compliance with section 18303(c),
arguing that “the Board issued an award increasing salaries and benefits without demonstrating
that WMATA and the Compact Jurisdictions have the ability to obtain the funding necessary to
pay for those increases.” Pet’r’s Mem. P. & A. Supp. Mot. Summ. J. 30, ECF No. 14-1. But
WMATA’s argument is a substantive one—that the Board’s decision to award general wage
increases went against the record evidence. See id. at 30–36. That analysis falls not under
section 18304(c)(7), but under 18304(c)(3), and the Court will address it in due course. At this
stage, the Court is satisfied that the Board’s written decision includes a conclusion that WMATA
and the Compact Jurisdictions have the ability to pay the wage and benefit increases. See Award
at 12–13; see also infra Part IV.B.1.b.ii (discussing the Board’s “public welfare” conclusion).
ii. Sections 18303(d)(2) and (d)(3)
Section 18303(b)(7) requires the Board to consider “[t]he public welfare” in rendering an
award. 40 U.S.C. § 18303(b)(7). The Standards Act defines the term “public welfare” to
include:
(1) the financial ability of the individual jurisdictions participating in the compact
to pay for the costs of providing public transit services; and
25
(2) the average per capita tax burden, during the term of the collective bargaining
agreement to which the arbitration relates, of the residents of the Washington
metropolitan area, and the effect of an arbitration award rendered under that
arbitration on the respective income or property tax rates of the jurisdictions that
provide subsidy payments to the interstate compact agency established under the
compact.
Id. § 18303(a). Because the Award includes an increase in pay rates, the Act requires that “the
arbitrator conclude[] that any costs to the agency do not adversely affect the public welfare.” Id.
§ 18303(d)(2). This conclusion “must be supported by substantial evidence.” Id. § 18303(d)(3).
“Substantial evidence is more than a mere scintilla. It means such relevant evidence as a
reasonable mind might accept as adequate to support a conclusion.” Consol. Edison Co. v.
NLRB, 305 U.S. 197, 229 (1938) (citing Ballston–Stillwater Knitting Co. v. NLRB, 98 F.2d 758,
760 (2d Cir. 1938), Appalachian Elec. Power Co. v. NLRB, 93 F.2d 985, 989 (4th Cir. 1938), and
NLRB v. Thompson Prods., 97 F.2d 13, 15 (6th Cir. 1938)); see also FPL Energy Me. Hydro
LLC v. FERC, 287 F.3d 1151, 1160 (D.C. Cir. 2002) (“The ‘substantial evidence’ standard
requires more than a scintilla, but can be satisfied by something less than a preponderance of the
evidence.” (citing Whitmore v. AFIA Worldwide Ins., 837 F.2d 513, 515 n.4 (D.C. Cir. 1988))).
“When reviewing for substantial evidence, [the Court does] not ask whether the record could
support the petitioner’s view of the issue, but whether it supports the [arbitrator]’s ultimate
decision. The substantial evidence inquiry turns not on how many discrete pieces of evidence
the [arbitrator] relies on, but on whether that evidence adequately supports its ultimate decision.”
Fla. Gas Transmission Co. v. FERC, 604 F.3d 636, 645 (D.C. Cir. 2010) (citation omitted).
The procedural component of the public welfare analysis requires the Board to reach the
conclusion that the awarded wage and benefit increases do not adversely affect the public
welfare. See 40 U.S.C. § 18303(d)(2). WMATA argues that “[t]his required statutory finding
cannot be found anywhere in the award,” and that the Board’s statement that “the statutory
26
definition of ‘public welfare’ must be honored” is “devoid of application or analysis . . . .”
Pet’r’s Mem. P. & A. Supp. Mot. Summ. J. 21, ECF No. 14-1 (emphasis omitted). Again,
WMATA appears to overlook aspects of the Board’s written decision. The Award does not use
the exact language of the statute to conclude that “any costs to the agency do not adversely affect
the public welfare[,]” 40 U.S.C. § 18303(d)(2), but the Court will not require such exact wording
as long as it is clear that the Board found no harm to public welfare. The Board found that
“[i]ncluded in [WMATA’s] budgets are the sums necessary to fund” Local 2’s wage increases,
and that “the cost of the [A]ward will [not] cause an increase in subsidies, tax rates, or tax
burdens.” Award at 12–13. The Board also “reject[ed] the argument that no increases in labor
costs are affordable, or that the awarded increases will have an adverse effect on tax burdens or
rates.” Id. at 13. In the context of the statutory definition of public welfare, see 40 U.S.C.
§ 18303(a), the Court finds these statements equivalent to a conclusion that the public welfare is
not adversely affected. The Court finds further support for its conclusion in the Local 689 case,
in which Judge Messitte found subsections (c) and (d)(2) satisfied based on nearly identical
language contained within the Kasher Award. See Local 689 II, 804 F. Supp. 2d at 477 n.41.
The Court also finds that the Board’s public welfare conclusion is based on substantial
evidence. See 40 U.S.C. § 18303(d)(3). The Board addressed the public welfare factor in
conjunction with its discussion of WMATA’s financial resources, see id. § 18303(b)(2), (7),
finding that both factors relate to WMATA’s ability to pay the wage increases. See Award at 7.
As the Board noted, “[t]he parties devoted a great deal of evidence to this factor . . . .” Id. at 8.
WMATA presented evidence of the budgetary problems brought about by the recession, which
impacted both the Authority and the Compact Jurisdictions. The Award summarizes this
evidence, noting that WMATA had projected budget shortfalls over the next contract term while
27
the Compact Jurisdictions expected no increase in revenues over expenditures until at least 2012.
See id. at 9. To close its budget gap, WMATA increased fares, reallocated funds from its capital
budget to its operating budget, and obtained subsidies from the Compact Jurisdictions. See id. at
9–10. Local 2 put forward documentary evidence showing that the Authority had already
budgeted a 3 percent wage increase for unionized employees and that its budget assumed that
retirement, health, and welfare programs would be funded at present levels. See id. at 11; J.A.
3673 (“The average annual pay increased for FY2011 by $4,904 or 7.3 percent. This is due to a
1.1 percent increase in staffing levels and a 3.0 percent budgeted increase for unionized staff.”).
After summarizing both sides’ evidence—a summary that spans four pages of the written
opinion—the Board agreed with WMATA that the Authority could not afford the Union’s
proposed 4 percent across-the-board increase for each contract year. See Award at 12. After
crediting the Union’s evidence regarding WMATA’s budget, however, the Board did find that
the awarded increase was affordable, in part because WMATA had already budgeted for it. See
id. In finding that the increases were affordable and already accounted for, the Board also found
“no evidence that the cost of the award will cause an increase in subsidies, tax rates, or tax
burdens.” Id. at 13. As further evidence of its finding that tax burdens would not be affected,
the Board noted that “the annual cost of the award is negligible as a percent of the operating
budgets of the jurisdictions paying the subsidy.” Id. Thus, in finding that the public welfare was
not adversely affected by an increase within the amount WMATA had budgeted, the Board
relied upon more than a mere “scintilla” of evidence. See FPL Energy Me. Hydro LLC, 287 F.3d
at 1160. Indeed, the Board credited WMATA’s evidence as it applied to the Union’s proposed
wage increases. And although the Authority disputes the Board’s finding that the increases were
budgeted in FY2011 by pointing to oral testimony regarding FY2010’s budget, which may have
28
budgeted only a 1 percent lump sum payment for Local 2, FY2010 was closed and moot by that
point because the FY2011 budget, presuming “a 3.0 percent budgeted increase for unionized
staff[,]” J.A. 3673, was already compiled and entered in the arbitral record. See Pet’r’s Mem. P.
& A. Supp. Mot. Summ. J. 18 n.10, ECF No. 14-1 (“The only direct evidence as to what wage
adjustments, if any, were budgeted for the Local 2 bargaining unit for FY2009–FY2012 is
Ms. Kissal’s acknowledgement that the FY2010 budget included the 1% lump sum wage
payment proposed by WMATA.”); J.A. 505 (Arb. Tr. 1215:1–4, July 16, 2010) (acknowledging
that FY2010 is “a moot point because 2010 is closed”). Although the documentary evidence in
support of the FY2011 budget is not proof positive that 3.0 percent increases were budgeted for
all unionized staff, WMATA has not pointed to contradictory evidence for FY2011 or later, and
the Court will not reweigh the Board’s evaluation of the documentary evidence against oral
testimony concerning a prior year’s budget. See Ind. Mun. Power Agency v. FERC, 56 F.3d 247,
254 (D.C. Cir. 1995) (“Once assured the [agency] has engaged in reasoned decisionmaking, it is
not for us to reweigh the conflicting evidence or otherwise to substitute our judgment for that of
the [agency].”); Pub. Citizen Health Res. Grp. v. Tyson, 796 F.2d 1479, 1495 (D.C. Cir. 1986)
(“Our function . . . is only to search for substantial evidence, not proof positive. Furthermore,
we do not reweigh the evidence and come to our own conclusion; rather, we assess the
reasonableness of [the agency]’s conclusion.”).
WMATA argues that the Board “erroneously excluded fare increases, as well as other
financial measures necessary to fund the awarded increases, from its analysis of the impact its
award would have on the public welfare.” Pet’r’s Mem. P. & A. Supp. Mot. Summ. J. 21, ECF
No. 14-1. Although WMATA is correct that the use of the word “includes” in the statutory
definition of public welfare allows the Board to look beyond the tax and ability-to-pay
29
considerations, the Board did acknowledge the fare increase that the Authority had already
initiated. See Award at 11. However, the Board, as discussed above, found that the awarded
increases were already within WMATA’s budget, and WMATA has not demonstrated that the
Board failed to consider evidence showing that fares or subsidies would increase further as a
result of the Award.
Citing the same evidence discussed in the Board’s written opinion, WMATA also argues
substantively that WMATA and the Compact Jurisdictions lack the ability to fund the increases,
and so the wage adjustments will harm the public welfare. See Pet’r’s Mem. P. & A. Supp. Mot.
Summ. J. 21–36, ECF No. 14-1 (discussing sections 18303(c), (d)(2), and (d)(3) of the Standards
Act). The Authority essentially invites the Court to reweigh the evidence that was before the
Board, but that is not the Court’s role. See Ind. Mun. Power Agency, 56 F.3d at 254; Tyson, 796
F.2d at 1495. There was undoubtedly evidence on both sides of the issue as illustrated not just
by the arbitral record but also by the Award itself, which included an awarded increase in
between the parties’ two proposals. The Board’s conclusion that the increases were affordable—
and therefore not adverse to the public welfare—was reasonable based on the evidence cited.
The Court is particularly mindful of the deferential view it must take in light of the Maryland
court’s observation—with which this Court agrees—that
[a]ll projected funding sources cited by the Board must to a considerable extent be
speculative, since it can never be posited with certainty in advance precisely how
much each of the Compact [J]urisdictions will contribute to WMATA’s budget.
Those contributions will always be a function of what level of services the
jurisdictions (and their constituents) demand, and what they are prepared to pay
for.
Local 689 II, 804 F. Supp. 2d at 478. The Court will therefore not lightly intrude upon the
Board’s weighing of the various funding sources at issue.
30
The Court also notes that WMATA’s proposed analysis of the public welfare is so
expansive that it would virtually foreclose the possibility of wage increases under nearly any
circumstance. WMATA points to the diversion of funds from other potential expenditures, see
Pet’r’s Mem. P. & A. Supp. Mot. Summ. J. 26–29, ECF No. 14-1, yet any wage increase will
divert funds that could have been spent for some other purpose. Indeed, given WMATA’s
repeated implication that the recession prevented any increase in wages at all, it is unclear how
the Authority’s own proposed 1 percent lump-sum payment for each contract year, see J.A. 1193,
would have survived scrutiny under such a strict analysis of public welfare. As the Maryland
court noted, “[i]f there is an exhibit in the record that might somehow establish the precise point
at which a proposed compensation increase tips from being affordable to having an adverse
effect on the public welfare[,] neither party has brought it to the Court’s attention.” Local 689 II,
804 F. Supp. 2d at 478. Absent such evidence, the Court finds the Board’s public welfare
conclusion reasonable.
2. Arbitrary or Capricious Review
WMATA also challenges the Moffett Award to the extent that particular provisions are
arbitrary or capricious. Specifically, WMATA argues that the general wage adjustments and
new subcontracting provisions are invalid under this standard and must be vacated. The Court’s
authority to review the Award for arbitrariness and capriciousness arises under section
18304(c)(3) of the Standards Act. See 40 U.S.C. § 18304(c)(3) (2006).
a. Standard of Review
As noted above, Congress sought to displace the deferential common law standard of
review of arbitral decisions when it enacted the Standards Act. Under this revised standard, the
Court must vacate an arbitral award if “the decision by the arbitrator is arbitrary or
31
capricious . . . .” Id. During the litigation over the Kasher Award, Judge Messitte of the District
of Maryland applied the Standards Act’s arbitrary or capricious review as a matter of first
impression. The parties do not devote substantial discussion in their briefing to the meaning of
“arbitrary or capricious” and how it relates to similar language used elsewhere in the United
States Code, instead relying primarily on Judge Messitte’s “hybrid” standard—which is not
binding on this court—for their argument.
Judge Messitte’s opinion adopts in large part the standard of judicial review applicable to
agency actions under the APA—the context in which the “arbitrary or capricious” review is most
often applied—but slightly tweaks the standard by finding that under the Standards Act “the
presumption of validity applied to the Board’s conclusions is more deferential than that which
would apply in the administrative law setting.” Local 689 II, 804 F. Supp. 2d at 476 n.40. The
Court departs from this latter aspect of the Maryland court’s decision. The meaning of “arbitrary
or capricious” is well-settled through the application of administrative law—particularly in this
district—and the Supreme Court “ha[s] often observed that when ‘judicial interpretations have
settled the meaning of an existing statutory provision, repetition of the same language in a new
statute indicates, as a general matter, the intent to incorporate its . . . judicial interpretations as
well.’” Jerman v. Carlisle, McNellie, Rini, Kramer & Ulrich LPA, 130 S.Ct. 1605, 1616 (2010)
(second alteration in original) (quoting Bragdon v. Abbott, 524 U.S. 624, 645 (1998)). In the
absence of statutory text in the Standards Act that incorporates features of the deferential
common law standard, the Court understands Congress to have intended the words “arbitrary or
capricious” to signify what those words were well-known to have meant in 1995 when the Act
was signed into law. Therefore, the Court finds that the Standards Act supplies a sui generis
standard of review that does not enmesh with, but rather supplants, the deferential common law
32
standard. Because the Act uses the same language as the judicial review provision of the APA in
this respect, see 5 U.S.C. § 706(2)(A) (2012) (“The reviewing court shall . . . hold unlawful and
set aside agency action, findings, and conclusions found to be . . . arbitrary, capricious, an abuse
of discretion, or otherwise not in accordance with the law . . . .” (emphasis added)), the Court
will apply the already highly deferential “arbitrary or capricious” standard that governs judicial
review of most agency actions.
“Under the ‘arbitrary and capricious’ standard the scope of review is a narrow one.”
Bowman Transp., Inc. v. Ark.–Best Freight Sys., Inc., 419 U.S. 281, 285 (1974). On review, the
Court gives the arbitrator’s decision “significant leeway” and does not substitute its own
judgment for that of the arbitrator. Steel Mfrs. Ass’n v. EPA, 27 F.3d 642, 646 (D.C. Cir. 1994).
Instead, the Court will review the arbitrator’s award in order to determine the Board has
“articulate[d] a ‘rational connection between the facts found and choices made.’” Bowman
Transp., 419 U.S. at 285 (quoting Burlington Truck Lines v. United States, 371 U.S. 156, 168
(1962)); accord Kisser v. Cisneros, 14 F.3d 615, 619 (D.C. Cir. 1994). The arbitral board’s
decision must show that it “considered the relevant factors and explained the facts and policy
concerns on which it relied, and whether those facts have some basis in the record.” Nat’l
Treasury Emps. Union v. Horner, 854 F.2d 490, 498 (D.C. Cir. 1988). Furthermore, the
arbitrator’s decision is arbitrary or capricious if the arbitrator
relied on factors which Congress has not intended it to consider, entirely failed to
consider an important aspect of the problem, offered an explanation for its
decision that runs counter to the evidence before [it], or is so implausible that it
could not be ascribed to a difference in view or the product of [arbitrator]
expertise.
Motor Vehicle Mfrs. Ass’n of the U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43
(1983).
33
When a court applies the arbitrary or capricious standard of review, “the district judge
sits as an appellate tribunal.” Am. Bioscience, Inc. v. Thompson, 269 F.3d 1077, 1083 (D.C. Cir.
2001). The review is to be based on the record that was before the arbitrator at the time his
decision was made. See Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 420
(1971), abrogated on other grounds by Califano v. Sanders, 430 U.S. 99 (1977). The Court
“may not supply a reasoned basis” that the arbitrator himself has not given, but may “uphold a
decision of less than ideal clarity” if the arbitrator’s rationale may reasonably be discerned.
Bowman Transp., 419 U.S. at 285–86 (citing SEC v. Chenery Corp., 332 U.S. 194, 196 (1947),
and Colo. Interstate Gas Co. v. Fed. Power Comm’n, 324 U.S. 581, 585 (1945)). The Court is
merely to determine whether the Board’s decision was reasoned and supported by record
evidence, not to substitute its judgment for that of the Board. See State Farm, 463 U.S. at 43.
b. Analysis
WMATA challenges the general wage adjustments and new subcontracting provisions as
arbitrary or capricious under the Standards Act. The Court addresses each challenge in turn.
i. General Wage Adjustments
It is clear from the parties’ briefing that the primary dispute in this litigation is the
validity of the Award’s inclusion of a general wage increase. Although the plain language of
section 18303(b) requires the consideration of seven enumerated factors for any “finding or . . .
decision for inclusion in a collective bargaining agreement[,]” 40 U.S.C. § 18303(b) (2006), the
Board’s written opinion and WMATA’s motion for summary judgment both address the Factors
mostly in the context of the general wage adjustment. The Court will therefore review the
34
Board’s application of the Factors—as well as non-statutory considerations cited by the Board—
in a similar fashion.10
(A). The Prior CBA
The Court begins its arbitrary or capricious review by determining whether the Board
adequately considered the factors set out in section 18303(b) of the Standards Act. See Nat’l
Treasury Emps. Union, 854 F.2d at 498 (holding that an agency must “consider[] the relevant
factors”). Factor 1 requires that the Board consider “[t]he existing terms and conditions of
employment of the employees in the bargaining unit.” 40 U.S.C. § 18303(b)(1). WMATA
argues that, in addition to procedural deficiencies in applying Factor 1, see supra Part IV.B.1.b.i,
the Board failed to weigh and connect the record evidence to its conclusion. See Pet’r’s Mem. P.
& A. Supp. Mot. Summ. J. 17, ECF No. 14-1. The Award, though brief in its discussion of
Factor 1, points to the prior CBA and finds that it shall serve as the “starting point” for each of
10
The Court notes an apparent tension between the Standards Act’s arbitrary or
capricious review and its separate requirement in section 18303(d)(3) that the public welfare
findings be supported by substantial evidence. Because the standards are the same, see
Cablevision Sys. Corp. v. FCC, 597 F.3d 1306, 1310 (D.C. Cir. 2010) (“We will vacate an
agency’s decision as arbitrary and capricious if [its] factual determinations lack substantial
evidence . . . .” (first alteration in original) (internal quotation marks omitted)); Ass’n of Data
Processing Serv. Orgs., Inc. v. Bd. of Governors of the Fed. Reserve Sys., 745 F.2d 677, 683
(D.C. Cir. 1984) (“[I]n their application to the requirement of factual support the substantial
evidence test and the arbitrary or capricious test are one and the same.”), the division of these
two standards in the Act suggests that section 18303(d)(3) might be superfluous. However,
canons of statutory construction dictate that the Court avoid construing the text in such a fashion.
See Dole Food Co. v. Patrickson, 538 U.S. 468, 476–77 (2003) (“Absent a statutory text or
structure that requires us to depart from normal rules of construction, we should not construe the
statute in a manner that . . . would render a statutory term superfluous.” (citing United States v.
Nordic Village, Inc., 503 U.S. 30, 36 (1992), and Mertens v. Hewitt Assocs., 508 U.S. 248, 258
(1993))). The Court resolves this apparent tension by noting the existence of the arbitrary or
capricious standard’s “harmless error” doctrine. See Jicarilla Apache Nation v. U.S. Dep’t of the
Interior, 613 F.3d 1112, 1121 (D.C. Cir. 2010). If the public welfare findings are unsupported
by substantial evidence but do not render an overall award arbitrary or capricious, the award may
withstand scrutiny under section 18304(c)(3) but still fail under sections 18303(d)(3) and
18304(c)(7). In other words, there is no such thing as a “harmless error” in applying the public
welfare factor of the Standards Act.
35
the terms and conditions to be included in the new contract. See Award at 7. To support its
conclusion, the Board points to the fact that “[t]he existing agreement—including the structure of
compensation—is the product of years of collective bargaining and a reflection of terms and
conditions acceptable to the parties.” Id. The Board then proceeds, for the remainder of the
Award, to place the burden upon the party advocating a change from the prior CBA to show that
a change is warranted. See id. The Board’s analysis of this factor is further supported by its
observation that, customarily, “the starting point for any interest [a]rbitration is the current
collective bargaining agreement and the terms and conditions established therein.” Id. WMATA
does not dispute that observation, nor does it point to any probative record evidence relating to
Factor 1 that the Board failed to consider. As the Board’s discussion makes clear, pursuant to
Factor 1 the Board decided to treat the prior CBA itself as evidence creating a presumption in
favor of the status quo for all issues subject to the interest arbitration.
(B). WMATA’s Financial Resources, the Public Welfare, and Ability to Pay
Under Factor 2, the Board must consider “[a]ll available financial resources of the
interstate compact agency.” 40 U.S.C. § 18303(b)(2). Factor 7 requires consideration of “[t]he
public welfare.” Id. § 18303(b)(7). As described above, the Board considered these two factors
in conjunction, see supra Part IV.B.1.b.ii, and found that the awarded increases were affordable
and the public welfare would not be harmed. Award at 12–13. In this respect, the Board’s
application of Factors 2 and 7 also encompassed the mandatory finding required by section
18303(c)—that any wage increase does not exceed the ability of WMATA or the Compact
Jurisdictions “to obtain the necessary financial resources to pay for wage and benefit
increases . . . .” 40 U.S.C. § 18303(c).
36
In its discussion of these factors, the Board cited WMATA’s FY2011 budget, which
stated that the Authority had planned “a 3.0 percent budgeted increase for unionized staff.” J.A.
3673. WMATA argues that the Board’s application of these factors was flawed because it
“fail[ed] to identify precisely what record evidence conclusively supports [its] finding that the
necessary funding was budgeted.” Pet’r’s Mem. P. & A. Supp. Mot. Summ. J. 18, ECF
No. 14-1. But under the arbitrary or capricious standard of review, it is not the Court’s role to
look for “conclusive” evidence supporting the Board’s finding; it is to review for substantial
evidence. See Pub. Citizen Health Res. Grp. v. Tyson, 796 F.2d 1479, 1495 (D.C. Cir. 1986)
(“Our function . . . is only to search for substantial evidence, not proof positive.”). For the same
reasons described above with respect to the public welfare, see supra Part IV.B.1.b.ii, the Court
finds that the Board’s application of Factors 2 and 7, and its conclusion with respect to section
18303(c), satisfy that standard.
(C). The Consumer Price Index
Factor 3 requires the board to consider “[t]he annual increase or decrease in consumer
prices for goods and services as reflected in the most recent consumer price index [“CPI”] for the
Washington metropolitan area, published by the Bureau of Labor Statistics.” 40 U.S.C.
§ 18303(b)(3). With respect to this factor, the Board considered data spanning several years.
The Board first focused on the statistics for the years that would fall under the new contract,
using the CPI data and estimates published for July of each year. See Award at 13. As shown in
exhibits produced by WMATA, the CPI declined by 0.84 percent the first contract year,
increased by 1.06 percent the second contract year, and was estimated to increase 1.75 percent
37
and 1.9 percent in the third and fourth contract years, respectively. See id.; J.A. 3739.11 The
Board also considered Local 2’s position that, based on historical data, pay has not kept pace
with inflation over the long term. See Award at 14. According to the statistics provided in
Union exhibits, cited in the Award, real pay for Local 2 employees was 92.8 percent of what it
had been in September 1987. See J.A. 1287–94. Considering this record evidence, the Board
found that the historical decrease in real pay justified a “catch-up adjustment” while the most
recent data—particularly the CPI decline in 2008—“represents an historic economic event which
cannot be ignored . . . .” See Award at 14. With these two opposing considerations combined,
the Board found that a modest wage increase of 2.2 percent over the entire agreement coupled
with a wage freeze in the first contract year accounted for recent economic developments while
making incremental real wage progress. See id. at 14–15.
According to WMATA, the Board’s application of this factor was flawed because Factor
3, “[b]y its plain terms, . . . required the Board to limit its consideration of the annual increase or
decrease in consumer prices for goods and services to that contained ‘in the most recent
Consumer Price Index for the Washington metropolitan area . . . .’” Pet’r’s Mem. P. & A. Supp.
Mot. Summ. J. 18, ECF No. 14-1 (third alteration in original) (quoting 40 U.S.C. § 18303(b)(3)).
The Board did consider the most recent CPI data, which served as the basis for the wage freeze
in the first contract year. And while Factor 3 does require the Board to consider the most recent
data, the Board is not “limited” from considering relevant historical data. Under D.C. Circuit
case law, a decision is not arbitrary or capricious due to consideration of additional factors if
there is no congressional intent to preclude such consideration. See Natural Res. Def. Council,
Inc. v. U.S. EPA, 824 F.2d 1146, 1163 (D.C. Cir. 1987) (en banc) (“Since we cannot discern
11
Although WMATA’s exhibit shows a decline of 0.84 percent in the first contract year,
see J.A. 3739, the Award erroneously states that the figure is 0.88 percent. See Award at 13.
38
clear congressional intent to preclude consideration of cost and technological feasibility in
setting emission standards . . . , we necessarily find that the Administrator may consider these
factors.”). Because the Board rationally considered historical CPI data and real pay patterns in
determining the weight to give recent CPI data, the Court finds that the Board did not act
arbitrarily in discussing both sets of data in relation to Factor 3.
(D). Wages of Other Employees in the D.C. Area
Factor 4 requires the Board to consider “[t]he wages, benefits, and terms and conditions
of the employment of other employees who perform, in other jurisdictions in the Washington
standard metropolitan statistical area, services similar to those in the bargaining unit.” 40 U.S.C.
§ 18303(b)(4). The Board first considered a market study submitted by WMATA, which
compared Local 2 member salaries to the salaries of employees of ten other public sector
employers. See generally J.A. 3805–44. Because the Authority did not find it practical to collect
salary information on all job titles, it relied on data for 27 “benchmark” titles, which purportedly
represented 65 percent of the Local 2 population. See J.A. 3810. The study concluded that
Local 2 members already received a salary “premium” of 32 percent at the minimum rate, 24
percent at the midpoint, and 19 percent at the maximum. See J.A. 3833. WMATA also
submitted evidence showing that seven out of the ten selected governmental jurisdictions
provided zero across-the-board annual wage increases for the second contract year (ending June
30, 2010), and that nine12 out of ten had determined that they will provide zero increases for the
third contract year. See J.A. 3727. The Board also considered the Union’s evidence and
12
The written award and WMATA’s arbitration brief both state that all ten jurisdictions
determined that they will provide zero across-the-board wage increases for the third contract
year, see Award at 16; J.A. 6131–32, but the cited record evidence indicated that the jurisdiction
of Prince George’s County had not yet determined its pay structure for the third contract year.
See J.A. 3727, 6131.
39
argument, which posited that the only area employees comparable to Local 2—whose job
performance requires specialized computer support, mechanical and civil engineering, and
construction activities for the only transit railroad in the D.C. area—are the consultants and
contractors WMATA hires to perform Local 2 work. See Award at 16. Local 2 also pointed to a
survey by the Human Resources Association of the National Capital Area (“HRA-NCA”)
purportedly showing that pay increases were in the 4.0 to 4.5 percent range. See J.A. 1717–
1745.
But the Board found that the record evidence was insufficient to draw a conclusion in
either direction. First, the Board found that “true comparability is questionable” because
“numerous Local 2 classifications are peculiar to the Authority’s systems[,] and others outside
WMATA with similar job titles do not necessarily perform similar services . . . .” Award at 17.
The Board further observed that “salary levels among professionals within the same occupation
vary considerably . . . .” Id. The Board also noted that WMATA management itself controls the
categorization of job classifications into the established pay grades and that the existing salaries
therefore reflected WMATA’s own assessment of the pay necessary to recruit and maintain
individuals with satisfactory skills. See id. at 17–18. Finally, the Board found that WMATA’s
analysis was not representative of the local labor market, because it relied on a small sample size
of just ten employers, all of whom are public sector employers. See id. at 18. In the end, factor 4
“d[id] not weigh heavily” on the Award. Id.
The Court does not find that the Board acted arbitrarily or capriciously in its application
of Factor 4. The Board considered evidence put forth by each party and gave a reasoned basis
for concluding that the factor should not be given much weight in the Award. See also
ValueVision Int’l, Inc. v. FCC, 149 F.3d 1204, 1210 (D.C. Cir. 1998) (“When an agency
40
considers a particular factor and rationally concludes that it should not affect its decision, the
agency is not acting arbitrarily.”). WMATA points to no additional evidence that the Board
should have considered, but argues that the Board misapplied this factor because WMATA’s
market study was “unrefuted” and the Board’s decision to discount it was not supported by
substantial evidence. See Pet’r’s Mem. P. & A. Supp. Mot. Summ. J. 19, ECF No. 14-1. But as
is clear from the Board’s written opinion, WMATA’s study was refuted, both by competing data
contained in the HRA-NCA survey and by the Union’s (and Board’s) observation that the data
WMATA chose to sample was not representative of either the diversity of employers in the D.C.
area or “peculiar” job classifications applicable to Local 2. See Award at 16–18. In
summarizing the Union’s position, the Board cited Local 2’s post-hearing briefing in which it
argued that there are few other employees performing the same services as Local 2 members.
See id. at 16. The cited pages provide statistics and refer to exhibits showing the specialized and
professional nature of the Local 2 members’ work. See J.A. 6230–31. Although the Board’s
discussion would ideally have been clearer, it is apparent from the written opinion that the Board
credited the Union’s evidence in finding that many Local 2 jobs involved duties that are
exclusive to WMATA and are thus not comparable to others in the market. It is unreasonable for
WMATA to argue that its own evidence is “unrefuted” when the written opinion contained
several pages balancing evidence from both sides and offering a reasoned conclusion.
WMATA also argues that the Board’s application of Factor 4 was arbitrary because it
“cites no record evidence that would support a conclusion that annual wage increases of 3% for
fiscal years 2010–2012 were the norm within the [D.C.] area for employees performing similar
services to those performed by the employees in the Local 2 bargaining unit . . . .” Pet’r’s Mem.
P. & A. Supp. Mot. Summ. J. 19, ECF No. 14-1; see also id. at 38–39 (“The most telling fact,
41
which is fatal to the enforceability of the [Award], is that the Board was unable to cite a shred of
record evidence that would support a conclusion that the annual base wage increases of 3% . . .
for Fiscal Years 2010–2012 were the norm within the statutorily prescribed geographic
area . . . .”). But that is a straw man argument, as the Board did not conclude that such increases
were the norm and, in fact, found that the record evidence for Factor 4 was inconclusive. See
Award at 17–18. WMATA appears to misapprehend the Board’s duty under the Standards Act,
the Board’s actual findings, or both. The Act does not require the Board to make any particular
finding regarding wage comparisons, cf. 40 U.S.C. § 18303(d)(2) (requiring particular public
welfare findings as a prerequisite to a wage increase), and the Board does not need to support a
conclusion it did not in fact draw.
(E). The “Special Nature” of Local 2 Employees’ Work
Factor 5 requires the Board to consider “[t]he special nature of the work performed by the
employees in the bargaining unit, including any hazards or the relative ease of employment,
physical requirements, educational qualifications, job training and skills, shift assignments, and
the demands placed upon the employees as compared to other employees of the interstate
compact agency.” Id. § 18303(b)(5). The Board interpreted this requirement as “intended to
give weight to the ‘special nature’ or unique content of the jobs performed by the arbitrating
employees in connection with the Arbitrator’s determination of appropriate comparisons called
for by Factor 4 and others.” Award at 18. Under the Board’s reading, the phrase “as compared
to other employees of the interstate compact agency” qualifies only “the demands placed upon
the employees” and not the other elements listed in the factor.13 Id. With respect to this latter
13
Although the Board’s written opinion does not state the basis for this reading of the
statutory factor, the Court notes that it is consistent with the “last antecedent rule” of statutory
interpretation, because the two phrases are not separated by a comma. See also 2A Norman J.
42
element of Factor 5, the Board indicated that its discussion comparing Local 2 to other WMATA
employees would fall under its discussion of “internal patterns.” See id. at 18–19. For the
remaining elements, the Board cited its Factor 4 discussion and reiterated that it has “determined
that the bulk of WMATA’s Local 2 employees perform services which are peculiar to WMATA
in the local area—given their specialized job training and skills in maintaining and constructing a
railroad.” Id. at 18.
WMATA asserts that the Board violated the Standards Act in its application of this factor
“by folding its consideration of Factor 5 into its discussion of an improper non-statutory
consideration.” Pet’r’s Mem. P. & A. Supp. Mot. Summ. J. 19, ECF No. 14-1. In doing so,
WMATA argues that the Board failed to discuss and apply the factor, weigh the evidence, and
explain its reasoning. See id. at 19–20. As the Court describes in greater detail below in
reference to the “internal patterns” factor, see infra Part IV.B.2.b.i.(G), there is no legal basis to
find error in the Board’s discussion of a statutory factor alongside non-statutory factors. To the
extent that WMATA raises a substantive challenge to the Board’s application of evidence to
Factor 5, the written opinion’s incorporation of its Factor 4 discussion indicates that the Board
considered the same evidence—namely, the market study, HRA-NCA survey, and the
comparability of the jobs contained in those reports—in finding that the Local 2 employees’
work was of a “special nature” compared to others in the D.C. area labor market. The Board also
relied on the evidence cited in its “internal patterns” discussion. The Court finds that the Board
did not arbitrarily apply Factor 5.
Singer & J.D. Shambie Singer, Sutherland Statutes and Statutory Construction § 47:33 (7th ed.
2011) (“Evidence that a qualifying phrase is supposed to apply to all antecedents instead of only
to the immediately preceding one may be found in the fact that it is separated from the
antecedents by a comma.”).
43
(F). Employee Interests and Welfare
For Factor 6, the Board must consider “[t]he interests and welfare of the employees in the
bargaining unit . . . .” 40 U.S.C. § 18303(b)(6). This factor includes the employees’ overall
compensation and benefits, as well as the continuity and stability of their employment. See id.
The Board noted in its written opinion that its “review of the record does not reveal a specific
reference to Factor 6 in either parties’ [sic] case before the Board.” See Award at 19. In the
absence of specific evidence offered by the parties for the employee interest factor, the Board
turned to the prior CBA and found that “the employees’ interests are adequately served by the
current level of compensation and stability of employment” because “total compensation has
been established through voluntary agreement in recognition of mutual interests.” Id. The Board
also reasoned that this factor “permits the consideration of the employees’ interests and welfare
compared to employees in the local labor market and within WMATA.” Id. And in its closing
remarks on the wage adjustment issue, the Board determined that “common terms provide fair
treatment of all employees and promotes labor relations stability by preventing ‘leap-frogging.’”
Id. at 20.
On appeal, WMATA points to no specific probative evidence that the Board failed to
consider but nonetheless argues that the Board’s analysis of this factor was insufficient because it
failed to tie any evidence to its conclusion. See Pet’r’s Mem. P. & A. Supp. Mot. Summ. J. 20,
ECF No. 14-1. It is disingenuous for a party to decline to offer any evidence relating to a
particular factor and then complain on appeal that the Board’s application of that mandatory
factor does not cite to sufficient evidence. And to the contrary, in spite of the parties’ apparent
failure to offer evidence relating specifically to Factor 6, the Board did refer to what evidence it
could—the prior CBA, which was entered into voluntarily and serves as the starting point for the
44
new contract, see supra Part IV.B.2.b.i.(A)—in finding that the employees’ interests were
adequately served by the terms to which they had voluntarily agreed several years earlier. The
Court finds the Board’s application of Factor 6—though somewhat thin due in large part to the
parties’ own failure to create a sufficient record—adequate for purposes of arbitrary or
capricious review and consistent with the Board’s application of Factor 1.
(G). Internal Patterns
In addition to the seven factors mandated by the Standards Act, the Board considered a
factor it refers to as “internal patterns”—the terms and conditions governing Local 2 employees
as compared to other WMATA employees. See Award at 20–21. Under this factor, the Board
pointed to WMATA’s bargaining history with its unions and found that “for 25 years covering
all rounds of bargaining between WMATA and Local 2, the overall wage change for Local 2 has
been identical to Local 689.” Id. at 21 (emphasis omitted). In support of its finding, the Board
cited a Union exhibit that provides a side-by-side comparison of the two unions’ wages over
time. See J.A. 1316–17. Although the Board’s finding that the overall wage change was
“identical” was an overstatement because the increases differ by a small fraction, see J.A. 1317,
WMATA does not dispute that wage increases for the two unions have historically kept relative
pace with one another. The Board gave “considerable weight” to these internal patterns in
issuing a general wage increase that matched the Kasher Award for Local 689. See Award at 21.
Although it does not dispute the validity of the conclusion drawn from evidence of internal
patterns, WMATA argues that the Board’s reliance on a factor not enumerated in the Standards
Act renders the award arbitrary or capricious. See Pet’r’s Mem. P. & A. Supp. Mot. Summ. J.
45
29–30, ECF No. 14-1.14 Specifically, WMATA contends that the Board impermissibly went
beyond the Act’s statutory factors and “relied on factors which Congress had not intended it to
consider . . . .” Id. at 30 (quoting State Farm, 463 U.S. at 43).
A congressional mandate to consider particular factors does not preclude the
consideration of non-enumerated factors unless Congress intended so. In Natural Resources
Defense Council, Inc. v. United States Environmental Protection Agency, 824 F.2d 1146 (D.C.
Cir. 1987) (en banc), the D.C. Circuit convened en banc to determine whether the Clean Air
Act’s mandate that the Administrator of the Environmental Protection Agency set emissions
standards “at the level which in his judgment provides an ample margin of safety to protect the
public health” left room for the Administrator to consider factors other than the public health in
setting a standard. Id. at 1147 (quoting 42 U.S.C. § 7412(b)(1)(B) (1982)). The Administrator
had considered the additional factors of cost and technical feasibility. See id. at 1154. After
finding no congressional intent to preclude such factors on the face of the statute, its legislative
history, or in its structural coherence, the court concluded that it was not arbitrary or capricious
for the Administrator to consider them. See id. at 1155–63. Here, the Court finds no
congressional intent in the Standards Act—and WMATA cites no evidence of any—to preclude
consideration of internal patterns. Section 18303(b) merely requires that the Board “may not
make a finding or a decision for inclusion in a collective bargaining agreement governing
conditions of employment without considering” the seven enumerated factors. 40 U.S.C.
§ 18303(b). There is no exclusionary language in that section specifying that only consideration
of the seven factors is allowed, nor is consideration of additional factors inconsistent with the
14
Although WMATA does not use the terms “arbitrary” or “capricious” in challenging
the Board’s application of the internal patterns factor—nor is the precise statutory basis for the
Authority’s challenge clear from its briefing—the Court infers from WMATA’s citation to the
landmark State Farm case that the challenge falls under arbitrary or capricious review.
46
structure set forth by the Standards Act. Moreover, there is no evidence in the legislative history
to support a finding that the Board is precluded from considering internal patterns. As the
Maryland court noted, “[t]he statute’s legislative history is thin to the point of virtual non-
existence.” Local 689 I, 818 F. Supp. 2d at 901. And because the Standards Act reforms an
existing arbitral system in which internal patterns and other factors were routinely considered,
the Court finds the absence of exclusionary language particularly probative. If Congress knew
such factors were previously being considered and intended to foreclose the practice, the
statutory text would likely be clear in that regard. The Board’s consideration of internal patterns
was not erroneous.
(H). Overall Balancing of Factors
Finally, the Court also considers whether the Board’s overall conclusion is arbitrary or
capricious in light of the intermediate conclusions it reached as to the Standards Act’s seven
factors and other considerations. Although the Board did not find every factor to support an
increase in wages, such a burden is imposed by neither the statute nor reason. The overall
decision to award a wage increase was reasonable in light of the Board’s conclusions that some
increase was affordable and the Union’s real wages have decreased over time. And the 3 percent
number, which represents a downward departure from the Union’s requested increase, was
rational in view of the Kasher Award and the Board’s findings regarding internal patterns and the
Authority’s budgeting for some increase.
WMATA’s briefing does not frame its arguments in terms of whether a reasonable mind
would have arrived at the Board’s conclusion, instead opting to re-argue the appropriate
weighing of the evidence and make representations that the Board “ignored” certain key
evidence—or entire factors—that it did in fact address. If there is significant evidence that the
47
Board did not address, WMATA does not bring it to the Court’s attention. The arbitral record in
this case is voluminous, and courts need not consider unarticulated evidentiary theories at the
summary judgment stage “not only because judges are not like pigs, hunting for truffles buried in
briefs or the record, but also because such a rule ensures fairness to both parties.” Estate of
Parsons v. Palestinian Auth., 651 F.3d 118, 137 (D.C. Cir. 2011) (Tatel, J., concurring) (citations
omitted) (internal quotation marks omitted). Overall, based on the evidence cited by the Board
and the parties in their briefing, the general wage adjustment satisfies the arbitrary or capricious
standard.
That is not to say that the Court is not given pause by certain aspects of the Award. See
generally Bowman Transp., 419 U.S. at 286 (noting that, in certain circumstances, a court may
“uphold a decision of less than ideal clarity”). It does not escape the Court’s attention that the
language of the Board’s written opinion, in many instances, tracks almost verbatim the analysis
put forth by the Kasher Board in its second supplemental opinion. See generally Local 689 I,
818 F. Supp. 2d; Local 689 II, 804 F. Supp. 2d. Several Standards Act factors are party-specific,
and Local 689 is a very different union from Local 2 in terms of size, profession, and salary
level. Although the Board did address record evidence and connect the evidence to its
conclusions regarding Local 2, the Court expected greater assurance that the Board was
implementing its own critical view of the arbitral record and not merely adopting the result of a
different award that happened to survive judicial scrutiny. But absent a showing, based on the
record, that the Board acted arbitrarily or capriciously, the Court does not find it appropriate to
vacate the general wage adjustment under section 18304(c)(3).
48
ii. Subcontracting Provisions
WMATA devotes a mere footnote to its argument that the Board’s decision to grant new
subcontracting provisions was arbitrary or capricious. See Pet’r’s Mem. P. & A. Supp. Mot.
Summ. J. 42–44 n.31, ECF No. 14-1. In particular, WMATA challenges paragraph 3 of the
awarded subcontracting terms, which provides:
Within 30 days of the date of this Award, a permanent joint Labor/Management
Contracting Committee shall be established to review existing and proposed
subcontracting practices at the Authority, with the goal of bringing work in-house
on a cost saving or cost neutral basis. The committee shall have the authority to
appoint subcommittees as necessary to review specific contracts and/or categories
of work.
Award at 26. According to WMATA, the decision to award paragraph 3 was arbitrary or
capricious because the parties never bargained over those specific terms, and the decision
therefore “was made without the benefit of any record evidence as to the merits of the awarded
provision.” See Pet’r’s Mem. P. & A. Supp. Mot. Summ. J. 42 n.31, ECF No. 14-1.
The Court finds that the awarded subcontracting terms were neither arbitrary nor
capricious in light of the Board’s finding, based on the record, that WMATA did not fully
comply with the prior CBA’s subcontracting terms. The Board’s written opinion notes that
“[d]uring the course of the previous contract, the issue of ‘contracting out’ bargaining unit work
became contentious between the parties.” Award at 25. The prior CBA had provided that
“[w]ork which is normally or customarily performed by the bargaining unit shall not be
subcontracted by the Authority to any outside source or agency except after consultation with the
Union and after reasonable efforts to minimize the impact or necessity of any layoff.” J.A.
1069–70. The Board reviewed record evidence and found that WMATA laid off Local 2
members and later contracted out the work without ever consulting the Union. See Award at 25.
Although the written opinion cites only to evidence offered by Local 2, WMATA cites no
49
additional evidence on appeal and takes the position that there is no record evidence.15 See
Pet’r’s Mem. P. & A. Supp. Mot. Summ. J. 42 n.31, ECF No. 14-1. The creation of a joint
committee to review subcontracting practices is reasonably related to the Board’s evidence-
backed finding that WMATA did not fully comply with the prior CBA’s consultation
requirements.
3. Excess of Power
Under the Standards Act, a court must vacate an award provision if “the arbitrator
exceeded the arbitrator’s powers” in awarding it. 40 U.S.C. § 18304(c)(2) (2006). WMATA’s
remaining challenges to the Moffett Award relate to the new subcontracting provisions and pay
bands, which WMATA urges were outside the scope of the Board’s authority to award. Local 2
argues that courts generally defer to an arbitral board’s determination as to whether an issue is
arbitrable and within the scope of the submitted dispute. See Resp’t’s Mem. Supp. Mot. Dismiss
Pet. & Conf. Arb. Award 24, ECF No. 13-1. Because WMATA did not challenge the Kasher
Award under section 18304(c)(2) as part of the Maryland litigation, the Court applies this
provision of the Act not only as a matter of first impression in this jurisdiction, but in any
jurisdiction.
15
Notwithstanding WMATA’s assertion that there is no record evidence, the Court’s
review of the arbitral record reveals that WMATA did, in fact, cite evidence in its post-hearing
brief to counter Local 2’s accusations that WMATA breached the prior CBA. See J.A. 6202.
However, the Court finds that the Board’s omission of this evidence from its written opinion is
not fatal to the Award’s validity because WMATA’s evidence was not relevant to the Board’s
finding that there were enforcement problems with the prior CBA’s subcontracting provisions.
WMATA put forth evidence before the Board suggesting that the Local 2 members were laid off
as part of normal reductions in force and not as a result of a decision to subcontract out the work.
See, e.g., J.A. 786–90 (Arb. Tr. 1819:5–1835:21, Oct. 27, 2010). But WMATA’s duty to consult
the Union under the prior CBA was triggered when it made the decision to subcontract out work
customarily performed by Local 2, not merely when layoff decisions were made. See J.A. 1069–
70. WMATA cites no record evidence disputing the Union’s evidence by showing that
subcontractors were not performing Local 2 work, or that WMATA did consult with the Union
before contracting out the work.
50
a. Standard of Review
WMATA’s challenge under section 18304(c)(2) of the Standards Act encompasses two
issues: first, whether the language of the Compact itself allows the issue of subcontracting to be
submitted to arbitration; and second, whether the subcontracting terms and pay bands awarded
were within the scope of the dispute actually submitted for arbitration. These issues—
arbitrability and the scope of the submission to the arbitrator—constitute separate legal
questions, see Madison Hotel v. Hotel & Rest. Emps., Local 25, 144 F.3d 855, 857 n.1 (D.C. Cir.
1998) (en banc), and warrant separate consideration. While section 18304(c)(2) requires the
Court to vacate the Award if the Board exceeded its authority, it provides no explicit standard for
the Court to apply. The Court will thus look to the standards applied in judicial review of
arbitral awards outside of the Standards Act context.
With respect to arbitrability of the subcontracting terms, the parties agree that the analysis
is controlled by Section 66(c) of the Compact, which only grants the arbitration board
jurisdiction over “labor disputes.” However, the parties disagree over the deference a reviewing
court owes to an arbitrator’s determination of arbitrability. WMATA does not explicitly
advocate a standard of review but, by disputing the Board’s authority solely by reference to the
Compact itself, apparently supports a de novo standard. Local 2, quoting National Postal Mail
Handlers Union v. American Postal Workers Union, 589 F.3d 437, 441–42 (D.C. Cir. 2009),
argues that “[t]he Supreme Court’s deferential standard of judicial review applies not just to a
labor arbitrator’s determination on the merits, but also to the arbitrator’s threshold decision that
the dispute was arbitrable, at least so long as the parties agreed contractually or by consent to
present the question of arbitrability to the arbitrator.” See Resp’t’s Mem. Supp. Mot. Dismiss
Pet. & Conf. Arb. Award 24, ECF No. 13-1. But here, WMATA does dispute whether the
51
parties agreed that the topic of subcontracting is arbitrable, and the Compact does not explicitly
authorize the arbitrator to determine arbitrability.16 The Supreme Court has held that arbitrability
is an issue for judicial determination unless the parties express otherwise in the clearest of terms:
“[T]he question of arbitrability . . . is undeniably an issue for judicial determination. Unless the
parties clearly and unmistakably provide otherwise, the question of whether the parties agreed to
arbitrate is to be decided by the court, not the arbitrator.” AT&T Techs., Inc. v. Commc’ns
Workers of Am., 475 U.S. 643, 649 (1986). This is so because “arbitrators derive their authority
to resolve disputes only because the parties have agreed in advance” to arbitration of a particular
issue. Id. at 648. In the context of judicial review of labor arbitral awards, if “an arbitration
agreement does not say who is to decide the question of arbitrability and the parties do not
otherwise consent to arbitration of that question, then arbitrability is an issue for de novo judicial
determination.” See Nat’l Postal Mail Handlers Union, 589 F.3d at 442. Because there is no
clear evidence of consent here, the Court will therefore review arbitrability de novo.
Separate and apart from the issue of arbitrability under the Compact itself, the Court must
also consider the standard of review applicable to the arbitrator’s determination of the scope of
the issues submitted for arbitration. “[T]he scope of an arbitrator’s authority is limited to those
subjects the parties intend to submit to arbitration.” Madison Hotel, 144 F.3d at 860
(Henderson, J., concurring); accord Williams v. E.F. Hutton & Co., 753 F.2d 117, 119 (D.C. Cir.
16
Local 2 argues, without citation or analysis, that “[t]here is no doubt whatsoever that
‘arbitrability’ is a ‘labor dispute’ within the meaning of the WMATA Compact, Section 66(c)
and, thus, itself consigned to arbitration.” Resp’t’s Mem. Supp. Mot. Dismiss Pet. & Conf. Arb.
Award 24, ECF No. 13-1. The Court rejects the Union’s proposition, as the Compact language is
not explicit. Of the many issues described as subject to arbitration, arbitrability itself is not
identified as an issue for the arbitrator to decide. See Compact § 66(c); see also First Options of
Chi., Inc. v. Kaplan, 514 U.S. 938, 944–45 (1995) (holding that, where a contract is silent or
ambiguous as to who should determine arbitrability, the presumption favors independent judicial
review).
52
1985) (“There is no duty to arbitrate matters not subject to the arbitration agreement, and no
authority on the part of arbitrators to consider matters not necessary to the resolution of disputes
actually submitted.” (citations omitted)); Wash.–Balt. Newspaper Guild, Local 35 v. Wash. Post
Co., 442 F.2d 1234, 1236 (D.C. Cir. 1971) (“In determining the scope of an arbitrator’s authority
we look to two sources: the collective bargaining agreement, and the submission of the parties to
the arbitrator.”). However, in contrast to the arbitrability issue, courts have regularly held that
traditional deference applies to the arbitrator’s determination of the scope of the submission. See
Madison Hotel, 144 F.3d at 857 & n.1. The Court finds that the Standards Act’s mandates have
not changed the common law standard on this particular issue. As noted above, the Act does not
expressly abrogate the standard of review as it relates to an arbitrator’s determination of his
authority. Cf. 40 U.S.C. § 18304(c)(3) (setting an explicit arbitrary or capricious standard of
review for substantive review of the arbitrator’s decision).
The Court finds further support for its interpretation in cases applying the Federal
Arbitration Act (“FAA”). Under language nearly identical to the Standards Act, a reviewing
court will vacate an arbitration award under the FAA “where the arbitrators exceeded their
powers . . . .” 9 U.S.C. § 10(a)(4) (2012). Courts applying the FAA have adopted the same split
standard of review used in common law: arbitrability is reviewed de novo, and the scope of the
submission receives deference. See, e.g., Burlington N. & Santa Fe Ry. Co. v. Pub. Serv. Co. of
Okla., 636 F.3d 562, 569 (10th Cir. 2010) (“After the district court independently concluded the
parties’ rate dispute was arbitrable, it correctly applied a deferential standard of review to the
board’s determination of the scope of its authority.”). The Court will therefore apply this “split”
standard to its review of the Moffett Board’s authority under the Compact and the Standards Act.
53
b. Analysis
WMATA challenges the new subcontracting terms as not arbitrable under the terms of
the Compact, and both the subcontracting terms and new pay bands as outside the scope of the
parties’ actual submissions. The Court will first address the threshold issue of arbitrability, then
the scope of the submitted dispute.
i. Arbitrability
Section 66(c) of the Compact requires arbitration of “any labor dispute involving the
Authority and such employees where collective bargaining does not result in an agreement.”
Compact § 66(c). “The term ‘labor dispute’ shall be broadly construed and shall include any
controversy concerning wages, salaries, hours, working conditions, or benefits . . . , and includ[e]
any controversy concerning any differences or questions that may arise between the parties
including but not limited to the making or maintaining of collective bargaining agreements [and]
the terms to be included in such agreements . . . .” Id. Local 2 argues that subcontracting is a
component of job security and falls under the “working conditions” arbitrable under section
66(c). See Resp’t’s Mem. Supp. Mot. Dismiss 27, ECF No. 13-1. WMATA contends that
sections 12(g), (i) and (m) of the Compact grant WMATA core entrepreneurial powers that are
not subject to arbitration of labor disputes under section 66(c), including the right to contract for
professional services. See Pet’r’s Mem. P. & A. Supp. Mot. Summ. J. 42, ECF No. 14-1. In
order to resolve this dispute, the Court must determine whether the contractual language creating
a duty to arbitrate encompasses subcontracting terms. See John Wiley & Sons, Inc. v. Livingston,
376 U.S. 543, 547 (1964) (“The duty to arbitrate being of contractual origin, a compulsory
submission to arbitration cannot precede judicial determination that the collective bargaining
agreement does in fact create such a duty.”).
54
The Court is unaware of any case in which arbitrability of a dispute has been challenged
under section 66(c), and therefore resolves the issue as a matter of first impression. When
interpreting a statute or contract, courts first resort to the plain meaning of the text. See
Robinson v. Shell Oil Co., 519 U.S. 337, 340 (1997); United States v. Barnes, 295 F.3d 1354,
1359 (D.C. Cir. 2002). The Court applies the Compact’s plain meaning here, mindful of the
D.C. Circuit’s earlier observation that under section 66(c), “[b]ecause ‘labor dispute’ is so
broadly defined, a vast range of nontraditional issues are subject to arbitration.” Office & Prof’l
Emps. Int’l Union, Local 2 v. WMATA, 724 F.2d 133, 137 (D.C. Cir. 1983).
The Court finds that under the plain language of section 66(c), the mandate to submit
labor disputes to arbitration limits the powers granted to WMATA in section 12 to contract for
employment. In addition to mandating that labor disputes be submitted for arbitration, section
66(c) further explains that “‘labor dispute’ shall be broadly construed . . . including any
controversy concerning any differences or questions that may arise between the parties including
but not limited to the making or maintaining of collective bargaining agreements [and] the terms
to be included in such agreements . . . .” Compact § 66(c). Section 12 of the Compact, however,
begins with limiting language specifying that the Authority is empowered to engage in the listed
activities “except as limited in this Title . . . .” Id. § 12. While WMATA is correct that section
12 enables the Authority to “[c]reate and abolish offices, employments and positions” and
“[c]ontract for or employ any professional services[,]” the powers enumerated in section 12 are
“limited” by other provisions like section 66(c), which has no such limiting language.
Id. § 12(g), (i). Section 66(c)’s limiting power over section 12 is further evident when looking to
the section 12 powers WMATA omits from its briefing. Section 12 allows WMATA to “fix and
provide for the qualification, appointment, removal, term, tenure, compensation, pension and
55
retirement rights of its officers and employees . . . ,” a power that clearly encompasses arbitrable
subject matter. Id. § 12(g) (emphasis added). Section 12 therefore cannot be read as a list of
entrepreneurial powers immune from arbitrability.
WMATA has insisted that it is “not arguing that the matter of subcontracting generally is
beyond the scope of collective bargaining[,]” Pet’r’s Resp. Mot. Summ. J. 14 n.6, ECF No. 16,
and has bargained over and agreed upon subcontracting terms in the expired CBA, see J.A.
1069–70. If subcontracting is an acknowledged subject of collective bargaining during the
creation of labor agreements, then according to the definition of arbitrable labor disputes in
section 66(c), subcontracting is subject to arbitration. See Compact § 66(c) (“The term ‘labor
dispute’ shall be broadly construed and shall include . . . any controversy concerning any
differences or questions that may arise between the parties including but not limited to the
making or maintaining of collective bargaining agreements [and] the terms to be included in such
agreements . . . .”).
The Court notes that its reading of the Compact’s text aligns with the presumptions that
have been articulated in case law. The Supreme Court has ruled on the balance between
management rights and arbitration clauses and has found a presumption to arbitrate in the
absence of an express provision excluding the contested issue from arbitration. See United
Steelworkers of Am. v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582–83 (1960). (“An order
to arbitrate the particular grievance should not be denied unless it may be said with positive
assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted
dispute. Doubts should be resolved in favor of coverage.”). Following the presumption to
arbitrate, in that case, a subcontracting grievance was found arbitrable under a provision stating
“if ‘differences’ arise or if ‘any local trouble of any kind’ arises, the [arbitration] grievance
56
procedure shall be applicable” despite the language that “matters which are strictly a function of
management shall not be subject to arbitration.” Id. at 583. An explicit provision excluding
enumerated inherent management rights from collective bargaining contracts, like the one in
Local 589, Amalgamated Transit Union v. Massachusetts Bay Transportation Authority, 467
N.E.2d 87, 93 (Mass. 1984), may exclude subcontracting from arbitration procedures if
subcontracting is a clearly reserved inherent management right. Warrior & Gulf, 363 U.S. at
584. But there is no such exclusion or express reservation here.
The Court finds further support for its interpretation of the Compact in other areas of
labor law. In Fibreboard Paper Products Corp. v. National Labor Relations Board, 379 U.S.
203 (1964), when determining if contracting out for employment fell within the National Labor
Relations Act’s (“NLRA”) list of issues subject to collective bargaining, enumerated as “wages,
hours, and other terms and conditions of employment,” the Supreme Court found that
subcontracting work done by bargaining unit members—and, especially, terminating members as
a result of subcontracting—is a condition of employment. Id. at 204 & n.1, 210. With even less
guidance from the NLRA’s text determining the scope of “terms and conditions of employment”
than is given in the Compact regarding labor disputes, the Supreme Court found that “contracting
out” work performed by the established bargaining unit did fall under the scope of mandatory
collective bargaining. See id. at 210.
Finally, the Court finds further support for its reasoning by recognition of the fact that
WMATA is an administrative agency lacking the power to carry out any function that it is not
empowered by statute to do so. See Killip v. Office of Pers. Mgmt., 991 F.2d 1564, 1569 (Fed.
Cir. 1993) (“An agency is but a creature of statute. Any and all authority pursuant to which an
agency may act ultimately must be grounded in an express grant from Congress.”). That purpose
57
is still served after the Court’s finding that the listed powers are not immune from arbitration.
Rather than render section 12 meaningless, the Court recognizes that the provision authorizes a
government agency to carry out the listed functions subject to other restrictions enumerated in
the Compact. The Court therefore finds that subcontracting terms may be submitted to interest
arbitration under section 66(c) of the Compact.
ii. Scope of Submission to the Arbitrator
Having determined that the dispute is arbitrable, the Court now considers whether the
Moffett Board, in issuing its Award, exceeded the scope of the issues submitted for arbitration.
WMATA challenges two award provisions on this basis: the creation of a joint committee to
review subcontracting procedures, and the peopling of new pay bands. See Pet’r’s Mem. P. & A.
Supp. Mot. Summ. J. 39–44, ECF No. 14-1. At the onset of arbitration, WMATA’s counsel
stated, and Local 2 did not dispute, that the arbitrator is authorized to “pick and choose from
among the last best offers that have been presented by the parties and/or to modify those offers in
his judgment provided that the board does not either retreat or advance to a position beyond the
parameters that have been identified by the parties as being appropriate for resolution of the
continuing bargaining dispute.” J.A. 5–6 (Arb. Tr. 20:18–21:3, July 8, 2010). As noted above,
the Court views with deference the Board’s determination of the scope of issues submitted for
arbitration.
(A). Subcontracting Provisions
WMATA argues that the Board exceeded its authority by creating a joint committee to
review subcontracting practices because neither party’s best final offer included a request for the
“creation of a joint affirmative effort to displace existing subcontractor employees with
additional Local 2 personnel.” Pet’r’s Mem. P. & A. Supp. Mot. Summ. J. 40–41, ECF
58
No. 14-1. Local 2 argues that the Award’s subcontracting language supplements the existing
layoff and recall language in the previous agreement’s Article VIII, sections 8 and 9, which call
for “a recall list of laid off employees and certain recall rights before other hiring occurs.”
Resp’t’s Mem. Supp. Mot. Dismiss 28, ECF No. 13-1 (citing J.A. 1084–85). The Union argues
that the subcontracting language in the Award is more limited than the related Local 2 proposal,
which would have “required extensive prior dealings by the Authority with Local 2” before
subcontracting could proceed. Id. at 29.
As a general matter, an arbitrator’s discretion to modify the parties’ proposals is quite
wide. In American Postal Workers Union, Milwaukee Local v. Runyon, 185 F.3d 832 (7th Cir.
1999), an arbitration award was challenged for exceeding the arbitrator’s authority by going
beyond the scope of the parties’ submissions. Id. at 835. The parties asked the arbitrator to
either accept or deny the management’s proposed contract amendment, and the arbitrator
awarded a more limited provision “reflect[ing] the spirit” of the proposal without “utiliz[ing] its
precise language.” Id. at 836. Because neither party explicitly limited the arbitrator’s role to
adopting the proposal verbatim or denying it entirely, the court held that this modification of the
proposal was within the arbitrator’s authority. See id.
Here, Local 2 asked for a provision requiring the Authority to “provide written notice to
the Union not less than thirty (30) days prior to advertising for any consultant service contracts”
including “the scope of the work to be performed, a list of all of the positions or job titles and job
descriptions and hourly rate of those expected to do the work[,]” and would require all
subcontracted positions’ wages to be less than 150% of the wage of comparable bargaining unit
members. J.A. 1198. Local 2’s proposal would also have required that this process of written
59
notification be completed, including grievance and arbitration when necessary, before
subcontracting could occur. See id.
In addition to requiring qualified laid-off workers to be recalled prior to subcontracting,
the Award provides that “a permanent joint Labor/Management Contracting Committee shall be
established to review existing and proposed subcontracting practices at the Authority” with the
“authority to appoint subcommittees as necessary to review specific contracts and/or categories
of work.” Award at 26. The Award explains this joint committee would further the goal to keep
work “in-house on a cost saving or cost neutral basis.” Id.
Similar to the Local 2 proposal, the Moffett Award encourages Union input in
subcontracting decisions through an official mechanism in the form of a committee, rather than
written notice to the Union regarding each subcontracting position and the explicit cap on
subcontracting wage rates that Local 2 proposed. Given the great deference afforded the
arbitrator in determining the scope of the question submitted, see Madison Hotel, 144 F.3d at
857, especially regarding interest arbitrations, see Local 58, Int’l Bhd. of Elec. Workers v. Se.
Mich. Chapter, Nat’l Elec. Contractors Ass’n, Inc., 43 F.3d 1026, 1030 (6th Cir. 1995), and the
fact that neither party explicitly limited the scope of the arbitration to exclude the formation of a
joint committee regarding subcontracting practices, the Board was acting within its discretion by
modifying the proposed mechanism to review subcontracting procedures and did not exceed its
authority.
To the extent that WMATA challenges the institution of any “effort to displace existing
subcontractor employees” as being outside of the scope of the parties’ submissions, Pet’r’s Mem.
P. & A. Supp. Mot. Summ. J. 40–41, ECF No. 14-1, the Court notes that Local 2’s proposal
applied “to any renewals of existing subcontracting arrangements as well as all subsequent
60
subcontracting arrangements.” J.A. 1198. Although the Union explicitly acknowledged that its
proposal “shall not apply to existing subcontracting arrangements,” id., the Board’s requirement
that the joint committee merely “review existing and proposed subcontracting practices” still
falls within the parameters of the Local 2 proposal. The Award does not require the committee
to void existing subcontracts, but rather to review existing subcontracting practices. This falls
within the scope of the renewal language submitted by Local 2 and is therefore a valid exercise
of the arbitrator’s power.
WMATA’s fixation on the Board’s creation of a “permanent” joint committee, see Pet’r’s
Mem. P. & A. Supp. Mot. Summ. J. 43, ECF No. 14-1, is similarly misplaced. While it is
possible that WMATA is correct in asserting that no board is empowered to “permanently
maintain any provision of [its] collective bargaining agreement[,]” id., that is not what the Board
has done here. The Award was, by its plain terms, limited in duration and terminated on June 30,
2012. See Award at 28. From that point on, a new CBA would presumably take its place
containing its own subcontracting terms or none at all. The Union is correct in noting that the
Award’s use of the word “permanent” likely indicates that the Board envisioned a standing
committee—not an ad hoc committee created for each individual subcontracting decision—and
that the parties would be entitled to bargain or arbitrate the continuing existence of the
committee in the next round of negotiations. See Resp’t’s Mem. Supp. Mot. Dismiss Pet. &
Conf. Arb. Award 29 n.6, ECF No. 13-1. The Court therefore finds that the awarded
subcontracting terms are not outside the scope of the Board’s authority.
(B). New Pay Bands
WMATA also challenges the Board’s placement of specific individuals within the newly
created pay bands—a provision that neither party included in their final offers. See Pet’r’s Mem.
61
P. & A. Supp. Mot. Summ. J. 43–44, ECF No. 14-1. Local 2 argues that the Award created “the
lower two of the four proposed new TA pay scales, and directed the placement of [sic] therein of
certain specific ‘over scale’ employees” whose salaries were previously “red circled” as a result
of the Wolf award. Resp’t’s Mem. Supp. Mot. Dismiss 29, ECF No. 13-1; see also supra note 4
(describing the Wolf award).
The Moffett Award requires that “[i]ncumbents subject to paragraph 3 of the ‘Wolf’
award . . . shall be placed at the pay grade immediately above [their] current pay, unless such
individual’s current pay exceeds the newly created Grades 25 and 26 in which case the
individual shall continue to be red-circled in accordance with the Wolf award.” Award at 27.
The arbitral record reveals that the creation of new pay bands was intended in part to reflect the
higher salaries that Local 2 employees were already receiving, suggesting that the questions
presented to the Board implicitly included the peopling of the new pay bands. J.A. 6257.
However, because Local 2 explicitly stated in their arbitration brief that “Local 2 is not presently
asking the [Board] in this matter to place any job classifications or individuals in new higher pay
scales,” id., the Board exceeded the scope of the issues submitted by the parties. Although
peopling of the new pay bands might conceivably have fallen within the Board’s discretion if the
Union had remained silent on the issue, the Board disregarded Local 2’s express disclaimer in
moving the Wolf award incumbents into the new pay grades. Because this aspect of the Award
“advance[s] to a position beyond the parameters that have been identified by the parties as being
appropriate for resolution of the continuing bargaining dispute[,]” J.A. 5–6 (Arb. Tr. 20:22–21:3,
July 8, 2010), in the face of an express disclaimer, cf. Runyon, 185 F.3d at 836, the Court finds it
inappropriate to defer to the Board’s understanding of the scope of the issues submitted for
arbitration. Indeed, the Board even recognized that the Union’s pay band proposal was made “in
62
order to allow the parties, or subsequent panels, to seek agreement on placement of increasingly
expert and skilled specialized professional employees” in those bands. Award at 27 (emphasis
added).
However, the creation of the pay bands themselves was clearly within the scope of the
submitted dispute, as the Union proposed the creation of four new pay bands, and the Board
awarded the lower two bands. See J.A. 1200; Award at 27. In any event, it is not clear that
WMATA challenges the creation of the pay bands. See Pet’r’s Mem. P. & A. Supp. Mot. Summ.
J. 43–44, ECF No. 14-1 (focusing on peopling). Accordingly, the Court will vacate the peopling
of the pay bands, but not the creation of the pay bands themselves.
4. Other Award Provisions
WMATA’s Standards Act challenge related to only the three provisions of the Moffett
Award discussed above. The Award also contained several other provisions setting contract
terms relating to, among other things, pensions, health insurance, overtime compensation, and
the contract duration. Local 2’s counterclaim seeks confirmation of the entire Award, including
the provisions not challenged by WMATA, on the basis that it withstands scrutiny under the
common law review standard, the Federal Arbitration Act, and the Standards Act. See Answer &
Countercl. ¶¶ 31–35, ECF No. 5. For the reasons discussed above, the Standards Act sets forth
the applicable legal standard for the entire Moffett Award. See supra Part IV.A. Because
WMATA did not answer Local 2’s counterclaim or address the additional Award provisions in
its dispositive motion briefing, the Court will treat Local 2’s counterclaim to confirm parts B–C,
E–G, and I–N of the Moffett Award (i.e., those not challenged in WMATA’s petition) as
conceded. See Harris v. Koenig, 722 F. Supp. 2d 44, 62 n.11 (D.D.C. 2010). Accordingly, those
provisions are confirmed.
63
V. PRE-JUDGMENT AND POST-JUDGMENT INTEREST
Local 2 seeks both pre-judgment and post-judgment interest, arguing that WMATA, in
filing this lawsuit, “seeks to obtain a substantial interest-free loan from its employees.” See
Resp’t’s Mem. Supp. Mot. Dismiss Pet. & Conf. Arb. Award 31, ECF No. 13-1.
“[T]here is no . . . legislation regarding prejudgment interest. Far from indicating a
legislative determination that prejudgment interest should not be awarded, however, the absence
of a statute merely indicates that the question is governed by traditional judge-made principles.”
City of Milwaukee v. Cement Div., Nat’l Gypsum Co., 515 U.S. 189, 194 (1995). “[T]he court
orders the interest payments on its own authority. This is because interest compensates for the
time value of money, and thus is often necessary for full compensation. Even so, whether pre-
judgment interest is to be awarded is subject to the discretion of the court and equitable
considerations.” Motion Picture Ass’n of Am., Inc. v. Oman, 969 F.2d 1154, 1157 (D.C. Cir.
1992) (citation omitted).
The Court finds, based on equitable considerations, that an award of pre-judgment
interest is not appropriate here. First, the Moffett Award’s wage terms do not themselves include
any provision for pre- or post-Award interest, even though the Award related back to contract
years that had already ended. Second, WMATA did not act frivolously or in bad faith in
petitioning this Court for review of the Moffett Award. The Authority was well within its rights
under the Standards Act to appeal, and, as explained above, the Court did find particular aspects
of the Award invalid. Finally, it is not clear—nor has Local 2 affirmatively argued—that
confirmation of the Award is compensatory in nature. Cf. Caldwell v. Life Ins. Co. of N. Am.,
287 F.3d 1276, 1286 (10th Cir. 2002) (“The district court must first determine whether the award
of prejudgment interest will serve to compensate the injured party.” (quoting Eastman Kodak Co.
64
v. Westway Motor Freight, Inc., 949 F.2d 317, 321 (10th Cir. 1991))); Sheet Metal Workers Int’l
Ass’n Local Union No. 162 v. B.J. Heating & Air Conditioning, 695 F. Supp. 485, 491 (E.D. Cal.
1987) (granting pre-judgment in an interest arbitration dispute in which the court found that the
employer breached the awarded CBA). Because there has been no finding that WMATA
inflicted a judicially cognizable injury on the Union—for example, there is no breach of contract
claim in this case—the Court is not inclined to find that confirmation of the Award is sufficiently
“compensatory” to warrant an award of pre-judgment interest.17
The Court next turns to the issue of post-judgment interest. The Union’s briefing raises
the issue only in passing, in a single sentence without any citation to legal authority. See
Resp’t’s Mem. Supp. Mot. Dismiss Pet. & Conf. Arb. Award 32, ECF No. 13-1. Federal statute
provides that post-judgment interest “shall be allowed on any money judgment in a civil case
recovered in a district court.” 28 U.S.C. § 1961(a) (2006). Where applicable, an award of post-
judgment interest under section 1961(a) is mandatory, not discretionary. See Cont’l Transfert
Technique Ltd. v. Fed. Gov’t of Nigeria, 850 F. Supp. 2d 277, 287 (D.D.C. 2012). “[A] money
judgment consists of two elements: ‘(1) an identification of the parties for and against whom
judgment is being entered, and (2) a definite and certain designation of the amount which
plaintiff is owed by defendant.’” Ministry of Def. & Support for the Armed Forces of the Islamic
Republic of Iran v. Cubic Def. Sys., Inc., 665 F.3d 1091, 1101 (9th Cir. 2011) (quoting Penn
Terra Ltd. v. Dep’t Envtl. Res., 733 F.2d 267, 275 (3d Cir. 1984)).
17
Under the terms of the Standards Act, the Moffett Award became binding 10 days after
it was handed down, and the parties had a duty to implement it at that time. See 40 U.S.C.
§ 18304(a)–(b) (2006); see also id. § 18304(c) (providing for judicial review of arbitration
awards after the award becomes binding, but containing no explicit provision for a stay of
enforcement). The Court sees nothing that prevented the Union from seeking enforcement of the
Award at that time, which would have obviated the need to seek pre-judgment interest here.
Because the parties only filed claims seeking vacatur or confirmation of the Award, the question
of enforcement is not properly before the Court.
65
Although a judgment confirming an arbitration award may constitute a “money
judgment” under section 1961(a) even if the judgment merely confirms the award and does not
specify a dollar amount, see Cont’l Transfert Technique, 850 F. Supp. 2d at 287 & n.6, the case
law awards post-judgment interest in such situations where a “definite and certain designation of
the amount [owed] is readily discernible by looking to the arbitration award itself.” Ministry of
Def., 665 F.3d at 1101. The amount owed under the Moffett Award, however, is not “readily
discernible” on its face; the Award merely establishes a CBA that, in part, provides for general
wage increases. See Award at 6; cf. Cont’l Transfert Technique, 850 F. Supp. at 281, 288
(confirming an award of $250,522,787.84); Ministry of Def., 665 F.3d at 1101 (confirming an
award of $2,808,591). Neither the Award itself nor the Union’s cursory argument in favor of
post-judgment interest describes the staffing levels for each grade (which have undoubtedly
changed due to natural turnover during the pendency of this litigation) or the corresponding base
salaries. Without this information, it is unclear how the Court and the Clerk’s Office are
expected to calculate interest. The Court will therefore deny Local 2’s request for post-judgment
interest.
VI. ATTORNEYS’ FEES
Local 2 also seeks attorneys’ fees. See Resp’t’s Mem. Supp. Mot. Dismiss Pet. & Conf.
Arb. Award 32–33, ECF No. 13-1. Under the “American Rule,” each party bears its own fees
absent an express statutory authorization to the contrary. See Hensley v. Eckerhart, 461 U.S.
424, 429 (1983). The Standards Act contains no such authorization. Nonetheless, courts possess
an inherent power to award attorneys’ fees, unless explicitly forbidden by Congress, “when the
losing party has ‘acted in bad faith, vexatiously, wantonly, or for oppressive reasons . . . .’”
Alyeska Pipeline Serv. Co. v. Wilderness Soc’y, 421 U.S. 240, 258–59 (1975) (alteration in
66
original) (quoting F.D. Rich Co. v. U.S. for the Use of Indus. Lumber Co., 417 U.S. 116, 129
(1974)). A court may exercise this power if it finds “that the losing party’s actions were
‘frivolous, unreasonable, or without foundation, even though not brought in subjective bad
faith.’” Wash. Hosp. Ctr. v. Serv. Emps. Int’l Union, Local 722, 746 F.2d 1503, 1510 (D.C. Cir.
1984) (quoting Christiansburg Garment Co. v. EEOC, 434 U.S. 412, 421 (1978)).
The Union argues that WMATA initiated this litigation in bad faith in order to “re-
arbitrate,” under a very narrow standard of review, arguments that already failed before other
courts. See Resp’t’s Mem. Supp. Mot. Dismiss Pet. & Conf. Arb. Award 33, ECF No. 13-1.
That argument is unavailing for several reasons. First, for the same reasons explained above in
the context of collateral estoppel, the Maryland court considered a different factual basis, dealing
with a different union and written award, and WMATA was not foreclosed from raising
similar—or even identical—arguments in this case. See supra Part III. Second, as also noted
above, the Moffett Award does not satisfy the arbitrary or capricious standard of review by a
particularly wide margin. See supra Part IV.B.2.b. WMATA was therefore not acting
frivolously in challenging the general wage adjustments in this Court. Finally, the Court’s
finding that the Board exceeded its authority in peopling the new pay bands indicates that
WMATA’s section 18304(c)(2) argument was neither frivolous nor unreasonable. The Court
will deny Local 2’s request for attorneys’ fees.
VII. CONCLUSION
For the foregoing reasons, the Court will vacate the provision of the Moffett Award that
assigns Local 2 employees to the newly created pay bands, but will confirm the remainder of the
Award, including the creation of the new pay bands themselves. The Court will deny the
67
Union’s request for pre-judgment interest, post-judgment interest, and attorneys’ fees. An order
consistent with this Memorandum Opinion is separately and contemporaneously issued.
Dated: August 30, 2013 /s/ Rudolph Contreras
RUDOLPH CONTRERAS
United States District Judge
68
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83 Ariz. 392 (1958)
322 P.2d 372
Fred A. GALLO, Petitioner,
v.
The INDUSTRIAL COMMISSION OF ARIZONA, and Arizona Service Company, Respondents.
No. 6380.
Supreme Court of Arizona.
March 5, 1958.
*393 Alan Philip Bayham, Phoenix, for petitioner.
Robert K. Park, Phoenix, John R. Franks, Donald J. Morgan, and James D. Lester, Phoenix, of counsel, for respondent Industrial Commission of Arizona.
*394 JOHNSON, Justice.
On March 17, 1949, petitioner sustained personal injury arising out of and in the course of his employment which consisted of a brain injury, broken left shoulder blade and a wrenched back.
On August 30, 1950, the Commission entered a finding and award that petitioner had sustained a permanent partial disability of fifteen per cent loss of earning capacity, and awarded compensation in the monthly sum of $17.16. This award became final without protest. Thereafter, petitioner sustained twelve additional accidents while employed by various employers, all of which were accepted as compensable. Four of the twelve subsequent accidents resulted in compensable loss of time; and three times the Commission affirmed the award of August 30, 1950. But on the fourth, on June 15, 1956, the Commission entered an order terminating the benefits for permanent partial disability awarded on August 30, 1950. The Commission, on November 13, 1956, after rehearing, entered its order affirming the termination order of June 15, 1956, based on the following findings:
"1. That applicant's average monthly wage prior to said injury by accident on March 17, 1949, has previously been established at $208 and that said finding is final, res judicata and binding upon all parties hereto.
"2. That applicant's average monthly wage at the time of said injury by accident on March 7, 1956, was the sum of $280.13 and this Commission specifically finds that said average monthly wage was a true and accurate indication of applicant's earning capacity.
"3. That on March 7, 1956, applicant was no longer suffering any loss of earning capacity attributable to said accident of March 17, 1949.
"4. That said accident of March 7, 1956, did not result in any permanent residual disability.
"5. That on May 11, 1956, all benefits payable under the August 30, 1950 award, were suspended until final evaluation was held of Case No. AN 5277.
"6. That applicant is no longer suffering any loss of earning capacity attributable to injury by accident on March 17, 1949, and this Commission specifically finds that the compensation for permanent partial disability awarded on August 30, 1950, should be terminated.
"7. That said applicant was fully compensated from and after March 7, 1956, for all temporary disability suffered as a result of said injury on that date."
*395 This case is before us on a writ of certiorari.
At the time petitioner sustained the original injury § 56-957(c) and (d), A.C.A. 1939, A.R.S. § 23-1044, was in effect and provided:
"(c) In cases not enumerated in subsection (b), where the injury causes partial disability for work the employee shall receive, during such disability, compensation equal to fifty-five (55) per cent of the difference between his average monthly wages before the accident and the monthly wages he is able to earn thereafter, but the payment shall not continue after the disability ends, or the death of the injured person, and in case the partial disability begins after a period of total disability, the period of total disability shall be deducted from such total period of compensation.
"(d) In determining the percentage of disability, consideration shall be given, among other things, to any previous disability, the occupation of the injured employee, the nature of the physical injury, and the age of the employee at the time of the injury. In case there is a previous disability, as the loss of one eye, one hand, one foot, or otherwise, the percentage of disability for a subsequent injury shall be determined by computing the percentage of the entire disability and deducting therefrom the percentage of the previous disability as it existed at the time of the subsequent injury."
In 1949 Justice Phelps, speaking for a unanimous court, in Steward v. Industrial Commission, 69 Ariz. 159, 211 P.2d 217, 231, in order to clarify existing confusion concerning the powers and duties of the Commission in compensation cases, made certain pronouncements, inter alia:
"1. That the commission retains jurisdiction of all compensation cases for the purpose of altering, amending, or rescinding its findings and awards at the instance of either the workman, the insurer or the employer (a) upon showing a change in the physical condition of the workman subsequent to said findings and award arising out of said injury resulting in the reduction or increase of his earning capacity; (b) upon a showing of a reduction in the earning capacity of the workman arising out of said injury where there is no change in his physical condition, subsequent to said findings and award; (c) upon a showing that his earning capacity has increased subsequent to said findings and award." (Emphasis supplied.)
*396 The Commission's finding and award of August 30, 1950, incorporated the foregoing pronouncement from the Steward decision.
In 1953 the legislature amended § 56-957, A.C.A. 1939, now A.R.S. § 23-1044F, which provides:
"For the purposes of subsection C of this section, the commission shall, not later than nine months from the time the physical condition of the injured employee becomes stationary, determine the amount which represents the reduced monthly earning capacity, and upon such determination make an award of compensation which shall be subject to change only in the event of a subsequent change in the physical condition of the injured employee resulting from the injury and affecting his earning capacity." (Emphasis supplied.)
Section 56-957, supra, was in effect at the time the Commission entered the original award, and A.R.S. § 23-1044 F was in effect at the time the Commission entered the termination order on November 13, 1956. Petitioner contends the amending statute is procedural and should be construed as acting retroactively. We do not agree with this contention as the amendment affects vested rights and is substantive legislation. A.R.S. § 1-244 provides:
"No statute is retroactive unless expressly declared therein."
We have held a statute will have prospective operation only, unless it plainly indicates an intent that it have retroactive effect. Employment Security Commission of Arizona v. Arizona Citrus Growers, 61 Ariz. 96, 144 P.2d 682; cf. Rodriquez v. Terry, 79 Ariz. 348, 290 P.2d 248. Therefore, the jurisdiction of the Commission to alter, amend, or rescind awards for unscheduled permanent partial disabilities in cases where the injury occurred prior to the effective date of the 1953 amendment to the Workmen's Compensation Act, now A.R.S. § 23-1044F, is governed by the prior statute.
Petitioner further contends if the prior statute controls, and we so hold, then the Commission erred in entering its termination order of November 13, 1956, based solely on a finding that petitioner's average monthly wage was increased from $208 in March of 1949 to $280.13 in March of 1956, without evidence of a subsequent change in physical condition.
The Commission admits it was aware of the decision of this court in Whyte v. Industrial Commission, 71 Ariz. 338, 227 P.2d 230, 235, when it entered its order terminating the compensation benefits of petitioner. The Commission, prior to its decision upon rehearing and order terminating benefits entered on November 13 1956, entered a memorandum dated October *397 17, 1956, which set forth, inter alia, the following:
"A second matter to be considered, with respect to the decision whether or not the applicant in the present case is suffering any reduced earning capacity as a result of the 1949 injury, is of an economic nature. With a condition of spiralling wages it is not at all unusual to find injured claimants presently earning more that the average monthly wage established at time of injury solely because of the current economic trend. That problem is one of vital importance, and one which must be considered by the Commission in any decision on current earning capacity as compared to earning capacity in 1949, or in any other year subsequent to which wages have increased. The observation in this regard is not limited solely to the instant case, of course, but would apply to all cases of this nature."
The foregoing statement is a mere recitation by the Commission that it is cognizant of the fact that it is not unusual to find injured claimants presently earning more than the average monthly wage established at time of injury, solely because of the current economic trend, and it is not a compliance with the pronouncement of this court in the Whyte case, supra, where we stated:
"* * * The authorities seem to agree that the employee in common with all others must bear the loss resulting from a business depression. It follows as a necessary corollary thereto that the employee in common with all others is entitled to the enjoyment of benefits resulting from general wage increases due to eras of great prosperity in the nation. Therefore a reduction or increase in earning capacity occasioned by general business conditions and not due to the injury cannot be considered by the commission as a basis for fixing or adjusting the compensation of an injured employee.
"This interpretation is in complete harmony with the rule in Steward v. Industrial Commission, 69 Ariz. 159, 211 P.2d 217, to the effect that compensation may be adjusted upward when there is shown to be a loss in earning capacity due solely to the injury sustained or adjusted downward when the earning capacity has increased due solely to the increased efficiency or ability of the injured person. The use of the term `earning capacity' as used in the Steward case and as defined in the instant case excludes the consideration by the commission of any increase or decrease in wages due solely to business booms or depressions. The findings of the *398 commission as to the loss of earning capacity and the award based thereon is res judicata and can only be adjusted upward or downward when there is shown to be either a change in the physical condition of the injured employee or a change in earning capacity by reason of the conditions above mentioned."
The Commission's order terminating benefits entered on November 13, 1956, was based solely on the economic trend without any evidence being presented to support a finding of a change in earning capacity due to a change in physical capacity of the petitioner or that the increased earning capacity was due solely to the increased efficiency or ability of petitioner. In determining increased earning capacity the Commission must exclude any increase or decrease in wages due solely to business booms or depressions.
Although the Commission's order of November 13, 1956, terminating benefits awarded petitioner on August 30, 1950, was designated an "order" it had the legal effect of an award as defined in O'Neill v. Martori, 69 Ariz. 270, 212 P.2d 994.
For the foregoing reasons the order of November 13, 1956, terminating benefits, is set aside.
UDALL, C.J., and WINDES, PHELPS and STRUCKMEYER, JJ., concur.
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This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2014).
STATE OF MINNESOTA
IN COURT OF APPEALS
A15-0923
Gerald L. Rehbein, et al.,
Appellants,
vs.
City of Lino Lakes,
Respondent.
Filed March 28, 2016
Affirmed
Kalitowski, Judge
Anoka County District Court
File No. 02-CV-11-7762
Thomas J. Rooney, Larry W. Neilson, Rooney & Neilson, Ltd., White Bear Lake,
Minnesota (for appellants)
Joseph J. Langel, Christian R. Shafer, Ratwik, Roszak & Maloney, P.A., Minneapolis,
Minnesota (for respondent)
Considered and decided by Bjorkman, Presiding Judge; Halbrooks, Judge; and
Kalitowski, Judge.
Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to
Minn. Const. art. VI, § 10.
UNPUBLISHED OPINION
KALITOWSKI, Judge
This appeal involves a special assessment levied by respondent City of Lino Lakes
in 2011 against parcels owned by appellants Gerald L. Rehbein and Rehbein Properties
(Rehbein). After a bench trial following his challenge to the special assessment, Rehbein
argues that the district court erred in (1) determining that the project was an authorized
local improvement under Minn. Stat. § 429.021 (2014), (2) finding that the project
conferred a special benefit on Rehbein’s parcels, and (3) finding that a temporary access
road conferred a special benefit. We affirm.
DECISION
“A special assessment is a tax, intended to offset the cost of local improvements
such as sewer, water and streets, which is selectively imposed upon the beneficiaries.”
Dosedel v. City of Ham Lake, 414 N.W.2d 751, 755 (Minn. App. 1987). A city’s power to
impose special assessments is limited in three ways: (1) the land must receive a special
benefit from the new improvement, (2) the assessment must be uniform upon the same
class of property, and (3) the assessment may not exceed the special benefit. Carlson-Lang
Realty Co. v. City of Windom, 307 Minn. 368, 369, 240 N.W.2d 517, 519 (1976). An
assessment set higher than the special benefit conferred constitutes a taking without
compensation to the extent of the excess. Id. at 370, 240 N.W.2d at 519.
A “[s]pecial benefit is measured by the increase in the market value of the land
owing to the improvement.” Id. at 369, 240 N.W.2d at 519. An appraiser determines
market value by identifying “what a willing buyer would pay a willing seller for the
2
property before, and then after, the improvement.” Id. “[M]arket value may be calculated
on the highest and best use of the land.” Anderson v. City of Bemidji, 295 N.W.2d 555,
560 (Minn. 1980).
After an assessment is adopted, an aggrieved person, who makes a timely objection,
may appeal to the district court. Minn. Stat. § 429.081 (2014). At the district court, “the
city is presumed to have set the assessment legally, and thus introduction of the assessment
roll into evidence constitutes prima facie proof that the assessment does not exceed [the]
special benefit.” Carlson-Lang Realty, 307 Minn. at 370, 240 N.W.2d at 519. The
aggrieved person overcomes the presumption by introducing competent evidence that the
assessment is greater than the increase in market value of the property due to the
improvement. Id. “When evidence is also received that the assessment is equal to or less
than the increased market value, the district court must make a factual determination.” Id.
at 370, 240 N.W.2d at 519–20.
When reviewing the decision of the district court, this court conducts “a careful
examination of the record to ascertain whether the evidence as a whole fairly supports the
findings of the district court and whether these in turn support its conclusions of law and
judgment.” Id. at 373, 240 N.W.2d at 521. Testimony is considered in the light most
favorable to the prevailing party, and the district court’s findings “will not be reversed on
appeal unless they are manifestly contrary to the evidence.” G.C. Kohlmier, Inc. v. Albin,
257 Minn. 436, 442–43, 101 N.W.2d 909, 914 (1960).
The project at issue in this case involved the reconstruction of an interchange
between a major north-south corridor, I-35E, and the primary east-side corridor running
3
through Lino Lakes, County State Aid Highway 14 (CSAH 14). Lino Lakes has limited
access to the interstate, and CSAH 14 is the principle interchange for any development or
activity that takes place in that corridor. The project resulted in changing the interchange
at CSAH 14 and I-35E “from a two-lane undivided bridge and diamond interchange to an
interchange and bridge with expanded capacity.”
Lino Lakes commissioned an Alternative Urban Areawide Review to analyze
development, which found “degraded mobility” at the intersection between CSAH 14 and
the on/off ramps of I-35E. The study also analyzed the then-current on/off ramps and gave
them an E and F. F is the lowest “level of service” rating available. According to the
study, “transportation infrastructure can [generally] function at [levels of service] as low
as D or E and still be considered an acceptable operating condition during peak hours in
urban areas.” But a traffic engineer testified for the city that a level of service F “is
considered an extreme failure situation with extremely significant delay.” As found by the
district court, the “Interchange Project was considered nonessential for statewide
development purposes, according to the Minnesota Department of Transportation, but
necessary for local economic growth.”
The cost of the project, approximately $22 million, was shared between Lino Lakes,
Anoka and Washington Counties, the cities of Centerville, Hugo, and Forest Lake, and the
town of Columbus. Lino Lakes ultimately assessed its total share of the project,
$4,207,861, against 55 parcels of land near the interchange. Rehbein owns six of those
parcels, which were assessed a total of $500,951 for the project. Lino Lakes levied
$262,092 against the three and a half parcels comprising Clearwater Creek, which is
4
located on the southwestern quadrant of the interchange. $102,518 was assessed against
Acton, which is comprised of one and a half parcels immediately south of Clearwater
Creek; and $136,092 was levied against one parcel of land, Belland, which is in the
northwest quadrant of the interchange.
Beginning in August 2006, Rehbein entered into a series of purchase agreements
with Ryan Companies for the sale of property that included Clearwater Creek, which
expressly acknowledged the interchange project. As found by the district court,
The extended purchase agreement negotiations were
due, in part, to the City’s extensive search for project funding,
the recessionary market, as well as negotiations between the
City and Ryan Companies regarding the design of the
Interchange Project and potential impacts on the portion of the
Rehbeins’ property subject to the purchase agreement.
The district court also found that the Minnesota Department of Transportation had no plans
to improve the interchange before 2020.
Furthermore, the district court found that “[c]ontemporary correspondence shows
that development of Clearwater Creek was bound up with the Interchange Project” and that
the “Rehbeins were so assured of Ryan Companies’ purchase of Clearwater Creek that they
were ultimately absent from discussions with the City about the Interchange Project,
leaving all the details in the hands of Ryan Companies.”
The plans for the interchange project also included providing new access to
Clearwater Creek, which would improve access to the property directly from CSAH 14.
Northern Lights Boulevard was built as a temporary roadway to secure new access to
Clearwater Creek, with the understanding that a permanent road would be constructed
5
when and if Clearwater Creek was developed and the developer paid for the road.
Clearwater Creek was not developed, and Anoka County closed Northern Lights Boulevard
in 2012, restoring the original access point.
Rehbein appealed the special assessment to the district court and moved for
summary judgment, arguing that the special assessment was invalid as a matter of law
because (1) Lino Lakes lacked the statutory authority to assess the costs of an interregional
interchange because it is not a local improvement and because the relevant statute does not
include interchanges in its exhaustive list of authorized projects, and (2) the interchange
project confers only a general benefit to the public and not a special benefit that could be
financed by special assessments.
In a thorough, well-reasoned order, the district court denied the summary-judgment
motion, concluding that although the relevant statute does not expressly include freeway
interchanges, the interchange project was composed of a series of local improvements that
were either explicitly named in the statute or fall under the statutory category of street
improvements.
In response to Rehbein’s special-benefits argument, the district court determined
that the condemnation cases cited for the proposition that proximity to interchange projects
does not confer special benefits as a matter of law are not controlling. The district court
concluded that a special-benefits determination is fact-specific, requiring an inquiry into
whether the interchange project would result in a special benefit. Thus, at trial, the issue
was the amount of special benefit the subject properties received by virtue of the
6
interchange project, as compared to the amount assessed against each of the subject
properties.
Following the trial, in another detailed, well-reasoned order, the district court
concluded that each subject property received a greater special benefit than the amount
assessed against them. Specifically, the district court found that the appraisals, appraisal
methods, and appraisal witnesses provided by the city were more credible than those
provided by Rehbein. And the district court adopted the city’s appraisal conclusions, which
indicated that the project provided a special benefit to Rehbein’s parcels that exceeded the
special assessment. Specifically, the district court found that the project increased the value
of Acton by $652,145.48, the value of Belland by $415,305.40, and the value of Clearwater
Creek by $1,256,932.51.
Authorized Local Improvement
Rehbein argues that Lino Lakes was not authorized to impose special assessments
for the interchange project under Minn. Stat. § 429.021, subd. 1, because in imposing a
special assessment to fund a local improvement, a municipality is limited to “one of the
enumerated categories listed in Minn. Stat. § 429.021.” Rehbein notes that “the complete
replacement of a freeway interchange” is not listed in the statutes and, accordingly, argues
that the statute cannot properly be interpreted to authorize it. We disagree.
Minn. Stat. § 429.021, subd. 1, states, in relevant part:
The council of a municipality shall have power to make
the following improvements:
(1) To acquire, open, and widen any street, and to
improve the same by constructing, reconstructing, and
maintaining sidewalks, pavement, gutters, curbs, and vehicle
7
parking strips of any material, or by grading, graveling, oiling,
or otherwise improving the same, including the beautification
thereof and including storm sewers or other street drainage and
connections from sewer, water, or similar mains to curb lines.
The term “street” is defined for the relevant chapter as “any street, alley, or public way, or
any part thereof.” Minn. Stat. § 429.011, subd. 7 (2014).
Whether a statute has been properly construed is a question of law subject to de novo
review. Allen v. Burnet Realty, LLC, 801 N.W.2d 153, 156 (Minn. 2011). “[W]ords and
phrases are construed according to rules of grammar and according to their common and
approved usage” unless they have a technical or acquired special meaning. Minn. Stat.
§ 645.08(1) (2014). For evidence of common and approved usage, we turn to dictionary
definitions. Larson v. Nw. Mut. Life Ins. Co., 855 N.W.2d 293, 301 (Minn. 2014).
Lino Lakes relies on the definition of “street” found in the Oxford English
Dictionary, noting that the United States Supreme Court has recognized that dictionary as
“one of the most authoritative on the English language.” Taniguuchi v. Kan Pac. Saipan,
Ltd., 132 S. Ct. 1997, 2003 (2012). The Oxford English Dictionary, as cited by Lino Lakes,
defines “street” as: “a paved road, a highway.” Oxford English Dictionary 874 (2d ed.
2007). Moreover, Black’s Law Dictionary defines “street” as “a road or public
thoroughfare used for travel in an urban area, including the pavement, shoulders, gutters,
curbs, and other areas within the street lines.” Black’s Law Dictionary 1557 (9th ed. 2009).
Rehbein contends that “[t]he more logical analysis would be to compare the dictionary
definition of the word ‘interchange’ with the dictionary or the statutory definition of the
8
word ‘street,’” which he reports to be: “a road junction designed so that traffic streams do
not meet.”
Upon surveying the common usage and statutory definition of the word “street,” we
conclude that the interchange project at issue qualifies as an improvement to a street under
Minn. Stat. § 429.021, subd. 1. CSAH 14, the main east/west street stretching across Lino
Lakes, is a street. And it does not cease to be a street where it crosses I-35E at the
interchange. Thus, we conclude that the district court properly determined that: “To the
extent that bridge replacement or ramp construction is not specifically delineated by statute
does not prevent these improvements from being categorized according to their true
function, as street improvements.”
Moreover, Minnesota caselaw supports special assessments for larger street-related
projects. See, e.g., Vill. of Edina v. Joseph, 264 Minn. 84, 87, 102, 119 N.W.2d 809, 812,
820-21 (1962) (affirming assessment for street improvements along one of city’s “main . . .
traffic arteries”); EHW Props. v. City of Eagan, 503 N.W.2d 135, 138-39 (Minn. App.
1993) (affirming special assessment where city widened existing roadway to improve
access to “major arterial roadway”). Thus, even if a street-related project is regional in
scale or larger than a typical municipal street, it can be properly financed by special
assessments.
Because of the foregoing caselaw and in the absence of a persuasive reason to
exclude interchanges from the statutory category of “any street,” we conclude that Minn.
Stat. § 429.021, subd. 1, authorized Lino Lakes to finance the interchange project with a
special assessment.
9
Special Benefit
Rehbein argues that even if Lino Lakes was authorized to impose an assessment for
the interchange project, the district court erred in concluding that his parcels received any
special benefit from the project. He contends the district court erred because the benefits
conferred by the reconstruction of the freeway interchange are general, not specific in
nature. We disagree.
A local improvement confers a special benefit on private property if it “benefit[s]
the property on which the cost is assessed in a manner local in its nature, and not enjoyed
by property generally in the city.” In re Burnsville, 310 Minn. 32, 39, 245 N.W.2d 445,
449 (1976). A municipality may not impose a special assessment that exceeds the special
benefit. Carlson-Lang Realty, 307 Minn. at 369, 240 N.W.2d at 519. “Special benefit is
measured by the increase in market value of the land owing to the improvement.” Id.
Rehbein argues that the Minnesota Supreme Court expressly rejected a claim that a
freeway interchange confers special benefits on land in its vicinity in Mattson v. Colon,
292 Minn. 189, 194 N.W.2d 574 (1972). We disagree.
In Colon, the issue before the supreme court was:
Whether, when a portion of a farm is acquired by the state for
the construction of a diamond interchange forming a portion of
an interstate highway, absent evidence of an actual change in
the physical characteristics of the property remaining, evidence
as to the remaining property’s enhanced value occasioned by
its proximity to the interchange and its adaptability to a higher,
better, and more profitable use creates a question of fact for the
jury on the issue of special benefits.
292 Minn. at 190, 194 N.W.2d at 575 (quotations omitted).
10
The Colon court held that the freeway interchange at issue did not confer any special
benefits, so it need not determine whether the benefits should offset the condemnation
award. Id. at 199, 194 N.W.2d at 580. The supreme court reasoned that the condemnee
does not acquire any vested right in the increased traffic and that a subsequent traffic
diversion could deprive him of the gain without creating any right to compensation. Id. at
198, 194 N.W.2d at 579.
We conclude, as did the district court, that because Colon is not a special-
assessments case, it is not controlling here. Moreover, its persuasive value is limited
because, unlike the parcel in Colon, Rehbein’s parcels do not simply benefit because of the
increased traffic from an interchange project. Lino Lakes presented testimony that Rehbein
was pursuing development on the Clearwater Creek parcel that would have been stalled
until the failing interchange could be reconstructed, which the Minnesota Department of
Transportation did not have plans to do until 2020. Thus, although the interchange may
benefit the public at large, it conferred a special benefit to Rehbein’s parcels because of the
role it played in their potential development.
Rehbein also argues that, even if his parcels received a special benefit, the benefit
was less than the amount of the assessment. We disagree. In challenging the district court’s
findings regarding appraisal methods, Rehbein contends that the district court erred in
crediting the testimony of the city’s expert witnesses and by giving more weight to the
city’s evidence regarding whether further development would have been allowed without
the interchange project. But the weight and credibility of the expert testimony was for the
trier of fact to determine. DeSutter v. Twp. of Helena, 489 N.W.2d 236, 240 (Minn. App.
11
1992), review denied (Minn. Sept. 30, 1992). And this court does not reassess the experts’
opinions on appeal. Id. Rehbein has failed to show that the district court erred.
Temporary Access Road
We reject Rehbein’s argument that Northern Lights Boulevard could not be a special
benefit because it could be, and was, removed at the discretion of the county. In evaluating
a special assessment, a court must examine the impact that the specific project had on the
assessed properties and the value of those properties immediately before and immediately
after the project. Carlson-Lang Realty, 307 Minn. at 369, 240 N.W.2d at 519. Because on
the date of the evaluation Northern Lights Boulevard was in place providing access to
Clearwater Creek, the district court did not err in finding that it conferred a special benefit
to Rehbein’s properties.
Affirmed.
12
| {
"pile_set_name": "FreeLaw"
} |
302 F.3d 1104
NICOLE DAVIS; Brad Davis; Kent Player; Matt Arnett; Rick Taylor; Jan Sharp; Dennis Dalley, Plaintiffs-Appellants,v.Norman Y. MINETA, Secretary, Department of Transportation; Mary E. Peters, Administrator, Federal Highway Administration; David Gibbs, Division Administrator, Federal Highway Administration, Utah Division; Thomas R. Warne, Executive Director, Utah Department of Transportation, Defendants-Appellees.
No. 01-4129.
United States Court of Appeals, Tenth Circuit.
June 20, 2002.
COPYRIGHT MATERIAL OMITTED COPYRIGHT MATERIAL OMITTED COPYRIGHT MATERIAL OMITTED COPYRIGHT MATERIAL OMITTED Jeffrey W. Appel (James L. Warlaumont and Jennifer L. Crane with him on the brief), Salt Lake City, Utah, for Plaintiffs-Appellants.
Jeffrey C. Dobbins, Attorney, U.S. Department of Justice Environment & Natural Resources Division, Washington, D.C. (Clay Samford and Andrew Mergen, Attorneys, U.S. Department of Justice Environment & Natural Resources Division, Washington, D.C., and Helen Mountford, Federal Highway Administration, Office of the Chief Counsel, San Francisco, California, of Counsel, with him on the brief), for Defendants-Appellees Norman Y. Mineta, Secretary, Department of Transportation; Mary E. Peters, Administrator, Federal Highway Administration; and David Gibbs, Division Administrator, Federal Highway Administration, Utah Division.
Thomas A. Mitchell, Assistant Attorney General, Steven F. Alder, Assistant Attorney General, Mark L. Shurtleff, Attorney General, Salt Lake City, Utah, for Defendant-Appellee Thomas R. Warne.
Before SEYMOUR, EBEL, and LUCERO, Circuit Judges.
EBEL, Circuit Judge.
1
Plaintiffs seek to enjoin defendants from proceeding with the construction of a highway project (the "Project") located within the cities of Draper, Sandy and South Jordan in Salt Lake County, Utah. Plaintiffs argue that defendants violated the National Environmental Protection Act (NEPA), 42 U.S.C. § 4332(C) and § 4(f) of the Department of Transportation Act, 49 U.S.C. § 303(c) when they prepared an inadequate Environmental Assessment ("EA") and then proceeded to issue a Finding of No Significant Impact ("FONSI") rather than an Environmental Impact Statement ("EIS"). The Project under review includes several components: the creation of a new freeway interchange at Interstate 15 and 11400 South; the construction of a new bridge over the Jordan River at 11400 South; and the widening and extension of existing 11400 South.1 The proposed expansion and widening of 11400 South will create a new segment of five-lane highway where no road currently exists. A portion of the expanded 11400 South will affect publicly-owned parkland and will require the displacement or demolition of several historic structures.
2
As currently envisioned, the Project will proceed in two phases. Phase I includes the construction of the 11400 South interchange at I-15 and I-15 improvements. Phase II involves the expansion and extension of 11400 South, including the construction of a new bridge across the Jordan River. While completion of Phase I appears to involve a time horizon of approximately three to four years, there is no definitive timetable established for the completion of Phase II.
3
The proponents of the Project are the Utah Department of Transportation ("UDOT"), and Draper, Sandy and South Jordan. Due to its potential effects on the environment, parkland and historic structures, the Project implicates both the NEPA, and § 4(f). The Federal Highway Administration ("FHWA") was the federal agency responsible for approving the Project and for preparing the environmental analysis required by NEPA. However, the EA here was initially prepared by Horrocks Engineers under contract with Sandy City and then reviewed and adopted by the FHWA. The Secretary of Transportation was responsible for approving the Project based on the § 4(f) analysis.2
4
Here the FHWA's combined EA and § 4(f) analysis (EA/4(f)) led to a FONSI. Thus, the FHWA concluded that no EIS was required.
5
We have identified the following deficiencies with defendants' methodology and conclusions in this case:
6
1. The EA/4(f)'s consideration of alternatives to the Project is inadequate. Serious consideration was given only to the preferred alternative (i.e., the Project as proposed) and a no-build alternative.
7
2. The EA/4(f) fails to consider adequately the Project's impacts including cumulative impacts.
8
3. The EA/4(f) fails to address adequately issues relating to phasing of the Project, particularly given the many-year time frame between the beginning and prospective completion dates for the Project.
9
4. The § 4(f) analysis failed to satisfy the high burden imposed on projects that make use of a public park and/or historic sites.
10
5. The EA/4(f) is fatally flawed by its use of vague, unsupported conclusions and inadequate, incomplete analysis.
I. Standard of review
11
This court reviews a district court's grant or denial of a preliminary injunction for an abuse of discretion. Prairie Band of Potawatomi Indians v. Pierce, 253 F.3d 1234, 1243 (10th Cir.2001); Kikumura v. Hurley, 242 F.3d 950, 955 (10th Cir.2001). A district court abuses its discretion where it commits a legal error or relies on clearly erroneous factual findings, Prairie Band, 253 F.3d at 1242, or where there is no rational basis in the evidence for its ruling. Utah Licensed Beverage Ass'n v. Leavitt, 256 F.3d 1061, 1065 (10th Cir.2001). We examine the district court's underlying factual findings for clear error, and its legal determinations de novo. Water Keeper Alliance v. United States Dep't of Def., 271 F.3d 21, 30 (1st Cir.2001); see also United States v. Power Eng'g Co., 191 F.3d 1224, 1230 (10th Cir. 1999).
12
In order to receive a preliminary injunction, the plaintiff must establish the following factors: "(1) a substantial likelihood of prevailing on the merits; (2) irreparable harm unless the injunction is issued; (3) [that] the threatened injury outweighs the harm that the preliminary injunction may cause the opposing party; and (4) [that] the injunction, if issued, will not adversely affect the public interest." Fed. Lands Legal Consortium ex rel. Robart Estate v. United States, 195 F.3d 1190, 1194 (10th Cir.1999). If the plaintiff can establish that the latter three requirements tip strongly in his favor, the test is modified, and the plaintiff may meet the requirement for showing success on the merits by showing "that questions going to the merits are so serious, substantial, difficult, and doubtful as to make the issue ripe for litigation and deserving of more deliberate investigation." Id. at 1195.
13
Our analysis of likelihood of success on the merits necessarily implicates defendants' compliance with NEPA and § 4(f). At this point, a second layer of review comes into play, because defendants' agency actions are themselves examined under a highly deferential, "arbitrary and capricious" standard. This standard is rooted in the very nature of administrative review.
14
Judicial review of agency NEPA and § 4(f) decisions is made available through the Administrative Procedure Act ("APA"), 5 U.S.C. § 551 et seq. See All Indian Pueblo Council v. United States, 975 F.2d 1437, 1443 (10th Cir.1992) (NEPA); Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 410, 91 S.Ct. 814, 28 L.Ed.2d 136 (1971) (§ 4(f)). The APA sets forth a number of standards to be employed by courts reviewing administrative action. See 5 U.S.C. § 706(2). It has long been settled that an agency's decision to issue a FONSI is reviewed under the APA's deferential "arbitrary and capricious" standard. Id. § 706(2)(A); see, e.g., Utah Shared Access Alliance v. United States Forest Serv., 288 F.3d 1205, 1213 (10th Cir.2002); Comm. to Preserve Boomer Lake v. Dep't of Transp., 4 F.3d 1543, 1555 (10th Cir.1993). Although our standard of review of the § 4(f) analysis is somewhat more complex in this case, it generally implicates the arbitrary and capricious standard as well. Overton Park, 401 U.S. at 416, 91 S.Ct. 814.
15
Under NEPA regulations, an agency undertaking an action is required to determine whether its proposal is one that normally requires or normally does not require an EIS. 40 C.F.R. § 1501.4(a). If the answer to this question is not clear-cut, the agency should prepare an EA. Id. § 1501.4(b).3 If the agency determines, based on the EA, that no EIS is needed because its action would not significantly affect the environment, it may then prepare a FONSI. Id. §§ 1501.4(e), 1508.13. Otherwise, it must prepare an EIS.
16
When we review an EA/FONSI to determine whether an EIS should have been prepared, we must determine whether the agency acted arbitrarily and capriciously in concluding that the proposed action "will not have a significant effect on the human environment." Thus, our review of an EA/FONSI has a substantive component as well as a component of determining whether the agency followed procedural prerequisites. If the plaintiffs can demonstrate substantively that the FHWA's conclusion of non-significant effect on the environment represents a "clear error of judgment," then that conclusion must be reversed. Utah Shared Access Alliance, 288 F.3d at 1213.
17
As will be seen, here plaintiffs have demonstrated both procedural deficiencies in the EA as well as demonstrating that the Project will have a significant impact on the environment. Defendants propose to construct a five-lane highway through a park where no road currently exists. This five-lane highway will bisect the park, require the construction of a new bridge across the Jordan River, require the demolition or removal of several historic structures, and triple noise levels in portions of the park. By the year 2020, it is expected to carry at least 34,000 cars per day.
18
Furthermore, the record establishes here that the defendants prejudged the NEPA issues. This prejudgment diminishes the deference owed to the federal defendants in our review of their decision to issue a FONSI rather than an EIS. The addendum to the Engineering Services Agreement between Sandy City and Horrocks Engineers (Horrocks), a consultant on the Project, required Horrocks to distribute an EA no later than October 25, 1999, and further stipulated that a FONSI be signed and distributed by FHWA by February 25, 2000. In other words, Horrocks, the consultant employed to prepare the draft EA/4(f) for FHWA's review, was contractually obligated to prepare a FONSI and to have it approved, signed and distributed by FHWA by a date certain. The decision whether to prepare a FONSI should be based on the EA, of course, not the other way around. See 40 C.F.R. § 1501.4(c), (e). Horrocks thus had an inherent, contractually-created bias in favor of issuance of a FONSI rather than preparation of an EIS. See, e.g., Metcalf v. Daley, 214 F.3d 1135, 1143-44 (9th Cir. 2000).
19
We discern two ways in which this prejudgment is attributed to the federal decisionmakers in this case, who were not themselves parties to the Engineering Services Agreement. First, the district court found, and the record establishes, that "FHWA was involved throughout the NEPA process," Davis, 148 F.Supp.2d at 1218, thus implicating FHWA directly in Horrocks' "rush to judgment" on the environmental issues. The minutes of a meeting held October 12, 1999, between representatives of Sandy City, Horrocks and the federal defendants, indicate that "FHWA wants to advance the environmental documents and not issue a FONSI until they are checked against the new WFRC model."4 Significantly, this meeting occurred before the EA had been submitted to FHWA for formal review and approval. Additionally, the record contains a memo to UDOT's project manager dated August 7, 2000, including FHWA's recommendation to proceed with public review of the revised EA/4(f) document, subject to certain revisions. FHWA wanted the FONSI, which had already been prepared, removed "from the document to be circulated for public review." Id. This suggests that a FONSI had already been prepared prior to an evidently pro forma public opportunity to comment on the revised EA. FHWA's own regulations suggest that a FONSI not be prepared until FHWA has reviewed the public's comments concerning the EA. 23 C.F.R. § 771.121(a).
20
Second, the record establishes that the FHWA failed to conduct a sufficient independent review of Horrocks' work to insulate itself from the biases toward a FONSI reflected in Horrocks' draft EA. The district court concluded that FHWA made an independent investigation before issuing a FONSI. Its conclusion rests on two facts: (1) that FHWA was involved throughout the NEPA process, and (2) that it rejected the initial EA/4(f) document prepared by Horrocks. Davis, 148 F.Supp.2d at 1218.
21
However, as will be seen, the EA/4(f) prepared in this case is insufficient in many particulars. Although FHWA rejected an initial draft of the EA/4(f), this did not result in the correction of the many problems plaintiffs raise with the FONSI. This is true even though many of these problems were brought to FHWA's attention. Defendants employed a law firm to assist with draft responses to comments received concerning the EA/4(f) documentation. The law firm wrote a memorandum to defendants which is highly critical of the EA/4(f), echoing many of the complaints plaintiffs have raised in this appeal. For example, it notes that "[t]he Project EA addresses alternatives to the Project in a conclusory manner, and addresses only the preferred alternative and the no project alternative as alternatives subject to full analysis." It further notes that the EA does not adequately address phasing issues, in spite of frequent public comments on the issue. The memo warns that the failure to discuss alternatives adequately "appears to pose an appreciable litigation risk." The FHWA received a copy of the very critical evaluation of the EA and even agreed with many of the comments. Yet, in spite of this dire warning and critical appraisal of the deficiencies of the EA, FHWA did not fix the problems identified with the EA.
22
On this record it is apparent that FHWA failed to take sufficient steps to insulate the final resulting documentation from Horrocks' tainted analysis. See Assocs. Working for Aurora's Res. Env't v. Colo. Dept. of Transp., 153 F.3d 1122, 1129 (10th Cir.1998) (discussing the kind of independent review that might insulate the reviewing agency from the biases of the preparer of the underlying EA).
23
With regard to our review under § 4(f) of the Department of Transportation Act, there are some special rules pertaining to the standards we apply. That is because § 4(f) conditions approval of a transportation project through a park upon a finding 1) that there is no prudent and feasible alternative to using the land and 2) that the project includes all possible planning to minimize harm to the park. In the first step, the reviewing court must decide whether the Secretary of Transportation acted within the scope of his authority. Boomer Lake, 4 F.3d at 1549. This inquiry requires the district court to examine whether "the Secretary could have reasonably believed that in this case there are no feasible alternatives or that alternatives do involve unique problems." Id. (quotation omitted). The review of this issue centers on whether "there is no prudent and feasible alternative" to construction of the project over land protected by § 4(f). 49 U.S.C. § 303(c). Section 4(f) "requires the problems encountered by proposed alternatives to be `truly unusual' or [to] `reach extraordinary magnitudes' if parkland is taken." Boomer Lake, 4 F.3d at 1550 (quotation omitted).
24
In the second step, the reviewing court examines whether the Secretary's decision was arbitrary, capricious, an abuse of discretion or otherwise not in accordance with law. Id. at 1549. Here, the court asks whether the Secretary's decision was based on a consideration of the relevant factors and whether the Secretary made a clear error of judgment. Id. In assessing this factor, the reviewing court must conduct a careful and searching inquiry into the facts; however, once it becomes satisfied that the Secretary took a "hard look" at the relevant factors, the court should not substitute its judgment for that of the agency. Id. at 1551.
25
Finally, the reviewing court asks whether the Secretary followed the necessary procedural requirements in reaching his decision. Id. at 1549. This court reviews the district court's conclusions on all three of these issues de novo, according no deference to the district court's conclusions. Id.
26
II. Preliminary Injunction Factors of Harm to Plaintiffs; Balancing of Harm to Defendants; and Public Interest.
27
Having set out in some detail the standard by which we review both the decision of the district court and the underlying agency decisions, we move now to the merits of this appeal. As mentioned earlier, we examine four factors to determine whether plaintiffs have demonstrated their entitlement to a preliminary injunction: harm to the plaintiffs; harm to the defendants; the public interest; and plaintiffs' likelihood of success on the merits.
A. Irreparable harm to plaintiffs
1. NEPA
28
The district court concluded that plaintiffs had failed to demonstrate that construction of the Project would cause irreparable harm to their environmental interests. Davis, 148 F.Supp.2d at 1221. The district court relied on the insufficiency of plaintiffs' specific, tangible assertions of harm and the unlikelihood of their success on the procedural aspects of their claim.
29
In mandating compliance with NEPA's procedural requirements as a means of safeguarding against environmental harms, Congress has presumptively determined that the failure to comply with NEPA has detrimental consequences for the environment.5 See 42 U.S.C. § 4321 (congressional declaration of purpose); cf. Sierra Club v. Marsh, 872 F.2d 497, 500 (1st Cir.1989) (stating harm NEPA seeks to prevent is complete when agency makes decision without considering information NEPA seeks to place before decision-maker and public); Comm. to Save the Rio Hondo v. Lucero, 102 F.3d 445, 448-49 (10th Cir.1996) ("The injury of an increased risk of harm due to an agency's uninformed decision is precisely the type of injury the National Environmental Policy Act was designed to prevent."). For this reason, we hold that harm to the environment may be presumed when an agency fails to comply with the required NEPA procedure.6
30
Plaintiffs must still make a specific showing that the environmental harm results in irreparable injury to their specific environmental interests. They have done so here. Plaintiffs' property will be directly impacted by this Project and the size and scope of this Project supports a conclusion that the injury is significant. Amoco Prod. Co. v. Village of Gambell, 480 U.S. 531, 544, 107 S.Ct. 1396, 94 L.Ed.2d 542 (1987). See Marsh, 872 F.2d at 504 ("The difficulty of stopping a bureaucratic steam roller, once started ... seems to us ... a perfectly proper factor for a district court to take into account ... on a motion for preliminary injunction.").7 Thus, plaintiffs have established irreparable harm under NEPA.
2. Section 4(f)
31
The substantive harm contemplated by § 4(f) is the actual harm to parkland or historic sites that will occur if the Secretary of Transportation does not (1) consider every prudent and feasible alternative to using the land, and (2) make all possible plans to minimize the harm, if use is required. Plaintiffs have shown adequate proximity to and use of the parkland sufficient to establish injury flowing from degradation of the parkland. The proposed extension of 11400 South will make use of public parkland and historic sites thus causing the sort of harm that is protected against by § 4(f).
32
In Amoco Production Co., 480 U.S. at 544, 107 S.Ct. 1396 (1987), the Supreme Court gave some guidance to evaluating harm connected with violations of substantive environmental statutes. It stated that substantive "[e]nvironmental injury, by its nature, can seldom be adequately remedied by money damages and is often permanent or at least of long duration, i.e., irreparable." Amoco, 480 U.S. at 545, 107 S.Ct. 1396. That is certainly the case here. The § 4(f) statement concedes that construction of the Project will impair the aesthetic attributes associated with the Jordan River Parkway and "will disrupt the natural setting and feeling of the park." Noise levels are expected to increase at least ten decibels in both Willow Creek Park and Jordan River Parkway and perhaps as much as twenty decibels at times in Jordan River Parkway. This harm is irreparable in the sense that it cannot adequately be remedied by nonequitable forms of relief. See Sierra Club v. Hodel, 848 F.2d 1068, 1097 (10th Cir. 1988), overruled on other grounds by Vill. of Los Ranchos de Albuquerque v. Marsh, 956 F.2d 970, 972 (10th Cir.1992).8
33
Plaintiffs' property will be directly impacted by these environmental harms, and accordingly plaintiffs have also established irreparable harm under § 4(f) of the Department of Transportation Act.
B. Balance of harms
34
We must next balance the irreparable harms we have identified against the harm to defendants if the preliminary injunction is granted. Defendants allege that significant financial penalties will be incurred by UDOT if the Project is delayed. Defendants rely on the affidavit of Angelo Papastamos, UDOT's Senior Project Manager. This affidavit describes costs that will be incurred by UDOT based on the delays experienced and anticipated by this litigation. However, it appears that many of these costs may be self-inflicted. As we have previously concluded, the state entities involved in this case have "jumped the gun" on the environmental issues by entering into contractual obligations that anticipated a pro forma result. In this sense, the state defendants are largely responsible for their own harm. Cf. Pappan Enters., Inc. v. Hardee's Food Sys., Inc., 143 F.3d 800, 806 (3d Cir.1998) (stating, in context of franchise contract dispute, that "[t]he self-inflicted nature of [defendant's] harm ... weighs in favor of granting preliminary injunctive relief").
35
On this record, it appears that the environmental harms from proceeding with the Project without adequate NEPA review outweigh the legitimately incurred costs to defendants resulting from an injunction.
C. Public interest
36
Conflicting public interest values are involved here. Obviously, the public interest does not favor payment of construction-related penalties from the public fisc, and it does favor the construction of much-needed highways. On the other hand, plaintiffs assert a strong public interest in NEPA compliance.
37
This is not a case in which "any adverse effect upon the environment would appear to be negligible as compared with the obvious need for correcting a dangerous highway intersection." Pub. Interest Research Group of Mich. v. Brinegar, 517 F.2d 917, 918 (6th Cir.1975). First, the environmental dangers at stake in this case are serious, particularly where the effect on parkland and historic structures protected by § 4(f) is concerned. Second, the proposed highway construction has not yet begun, and so we are not confronted with equities in favor of completion of a partially-completed project.
38
We conclude that the public interest associated with completion of the Project must yield to the obligation to construct the Project in compliance with the relevant environmental laws. On balance, the public interest favors compliance with NEPA and § 4(f).
D. Sliding scale test
39
If plaintiffs have made a "strong showing" on the last three factors, the showing on the merits of their claim could be relaxed. While plaintiffs have satisfied the last three requirements for obtaining a preliminary injunction, we do not believe that this showing is sufficiently strong to entitle them to rely on the relaxed standard on the merits. Plaintiffs must therefore satisfy the traditional first criterion in full, by showing that they are likely to succeed on the merits of their claims.
III. Likelihood of success on the merits
40
We now arrive at the heart of our analysis. We must consider whether plaintiffs have shown that they are likely to succeed on the merits of their NEPA and § 4(f) claims. We begin with an overview of each statute, before discussing the specific statutory problems at issue here.
A. NEPA Overview
41
We have already provided a basic overview of the NEPA process. As mentioned, the basic issue is whether the Project will have a significant effect on the human environment such that an EIS, rather than a FONSI, should have been prepared. 42 U.S.C. § 4332(2)(C); 40 C.F.R. § 1508.13. Plaintiffs have the burden of showing that FHWA's decision not to prepare an EIS was arbitrary and capricious. Boomer Lake, 4 F.3d at 1555.
42
In this case, FHWA's own regulations implementing NEPA assist plaintiffs in meeting their burden of proof. The Council on Environmental Quality (CEQ) regulations require agencies to determine whether a project is one that "normally requires" an EIS. 40 C.F.R. § 1501.4(a)(1). Pursuant to this requirement, FHWA has adopted a regulation providing examples of actions that normally require an EIS. One of the actions that the FHWA determined "normally required an EIS" is "[a] highway project of four or more lanes on a new location." 23 C.F.R. § 771.115(a)(2). That, of course, precisely describes a portion of the Project: the expansion of 11400 South from 700 West to 1300 West.
43
We have held, it is true, that regulations of this type do not inevitably create a mandatory duty to prepare an EIS. Boomer Lake, 4 F.3d at 1554-55. The fact that there is no mandatory duty, however, does not mean that this regulation has no effect at all. This FHWA regulation presumes that an EIS will normally be prepared for highway projects of four or more lanes on a new location, thereby imposing on the FHWA the burden of establishing why that presumption should not apply in this particular case. If FHWA arbitrarily and capriciously failed to follow its own regulation, its decision must be reversed.
B. Section 4(f) Overview
Section 4(f) provides that:
44
The Secretary [of Transportation] may approve a transportation program or project ... requiring the use of publicly owned land of a public park, recreation area, or wildlife and waterfowl refuge of national, State, or local significance, or land of an historic site of national, State, or local significance (as determined by the Federal, State, or local officials having jurisdiction over the park, area, refuge, or site) only if —
45
(1) there is no prudent and feasible alternative to using that land; and
46
(2) the program or project includes all possible planning to minimize harm to the park, recreation area, wildlife and waterfowl refuge, or historic site resulting from the use.
47
49 U.S.C. § 303(c). There are two types of protected properties at issue here: parkland and historic sites.
48
Two publicly owned parks are planned within the APE: the Jordan River Parkway and Willow Creek Park. The Jordan River Parkway is currently owned partly by two private landowners and partly by the Utah Department of Natural Resources, Division of Parks and Recreation. The Willow Creek Park is included in the Draper City Master Plan, Id. at 7800, but it is currently owned by a private landowner in the vicinity of the proposed action. Id.
49
In order to qualify as § 4(f) property, parkland must be "publicly owned." Under these facts, Willow Creek Park does not qualify, in that it is owned by a private landowner. That portion of Jordan River Parkway which is owned by a private landowner is similarly disqualified. The fact that these properties may eventually be transferred to public ownership does not qualify them as § 4(f) properties. See Nat'l Wildlife Fed'n v. Coleman, 529 F.2d 359, 370 (5th Cir.1976). The remaining portion of Jordan River Parkway, however, currently owned by the State of Utah and designated as a public park, does qualify as § 4(f) property.9
50
Plaintiffs assert that the Project will affect the publicly-owned portion of the Jordan River Parkway. Our review of the record indicates that a part of the publicly-owned portion of this parkland will be directly impacted and likely even directly taken by the extension of 11400 South across the Jordan River. The FHWA believed the direct and cumulative impacts on publicly-owned parkland were sufficiently serious to apply a § 4(f) analysis to the park, and we will follow its lead on this point.
51
Historic structures qualify for § 4(f) consideration if they are either on the National Register of Historic Places, or eligible for inclusion on the National Register. 23 C.F.R. § 771.135(e). There are 29 historic properties located within the 11400 South APE; however, four of these are not recommended for inclusion on the National Register. The remaining 25 properties are subject to § 4(f) analysis.
52
Once the property is determined to be § 4(f) property, the Secretary of Transportation can approve the use of such publicly-owned parkland or historic sites for highway construction only if "there is no prudent and feasible alternative to using that land," 49 U.S.C. § 303(c)(1), and only after the Secretary has performed "all possible planning" in the project "to minimize harm to the park ... or historic site resulting from the use." Id. § 303(c)(2).
53
C. Specific problems with defendants' 4(f) and EA analysis under NEPA
1. Scope of Project
54
The EA/4(f) prepared in this case is inadequate for three reasons. First, it fails to consider reasonable alternatives to the Project. Second, it contains an inadequate discussion of the Project's impacts. Finally, the treatment of the issues is too vague, incomplete and inadequate to allow the decision-maker to decide if an EIS is required.
55
Plaintiffs argue that the EA/4(f) defines the scope of the Project so narrowly as to eliminate reasonable alternatives. Plaintiffs had argued for consideration of alternatives that would avoid altogether the construction of an additional crossing over the Jordan River at 11400 South. The district court, discussing this issue as it relates to the § 4(f) analysis, stated:
56
Because the articulated purpose and need for the Project is, in part, to provide another crossing point of the Jordan River, such an alternative [avoiding another Jordan River crossing] would be per se unfeasible and imprudent because any alternative addressing the purpose and needs articulated for the Project would necessarily have to cross the Jordan River Parkway.
57
Davis, 148 F.Supp.2d at 1219.
58
While it is true that defendants could reject alternatives that did not meet the purpose and need of the project, Boomer Lake, 4 F.3d at 1550, they could not define the project so narrowly that it foreclosed a reasonable consideration of alternatives. Colo. Envtl. Coalition v. Dombeck, 185 F.3d 1162, 1174-75 (10th Cir.1999); Simmons v. United States Army Corps of Eng'rs, 120 F.3d 664, 669 (7th Cir.1997). Although the scope of the Project certainly contemplates additional road capacity across the Jordan River, we do not believe that a fair reading of the Project purposes and needs requires that this additional capacity necessarily be achieved by extending 11400 South across the Jordan River.
59
The EA/4(f) lists the following purposes for the Project:
60
"Maintain I-15 mainline capacity, decrease existing and future congestion on I-15, and improve the level of service at adjacent interchanges by improving interchange spacing and eliminating the existing weave maneuver between the 12300 South interchange and the State Street off-ramp."
61
"Improve the functionality of the 11400 South corridor as an important local and regional travel corridor as identified in the local and regional master plans of Sandy, Draper, South Jordan, WFRC, and UDOT."
62
"Enhance access and mobility throughout the project area so that sufficient access opportunities are available for all properties and developments."
63
"Help accommodate the regional traffic demand for east-west travel across the southern end of the Salt Lake Valley."
64
"Improve the geometry and operation of the 11400 South/State Street intersection so that the efficiency of the intersection is increased, traffic flow is improved, travel time and other delays are decreased, and the frequency and lengths of backups is reduced."
65
Further, if the Project did narrowly express its purposes and needs as requiring a new crossing across the Jordan River at 11400 South, we would conclude that such a narrow definition of Project needs would violate NEPA given the more general overarching objective of improving traffic flow in the area. In Simmons v. United States Army Corps of Eng'rs, 120 F.3d 664, 669 (7th Cir.1997), the Seventh Circuit observed that:
66
the `purpose' of a project is a slippery concept, susceptible of no hard-and-fast definitions. One obvious way for an agency to slip past the structures of NEPA is to contrive a purpose so slender as to define competing `reasonable alternatives' out of consideration (and even out of existence). The federal courts cannot condone an agency's frustration of Congressional will.
67
Id. at 666. The record here suggests potentially viable alternatives of expanding east-west traffic capacity across the Jordan River at 9800 South, 10600 South, and 12300 South. Thus, if the purposes and needs of the Project were so narrowly construed as to mandate the extra capacity only at 11400 South, we would conclude that such a narrow definition would be contrary to the mandates of NEPA.
2. Consideration of alternatives
68
A properly-drafted EA must include a discussion of appropriate alternatives to the proposed project. 42 U.S.C. § 4332(2)(E); 40 C.F.R. § 1508.9(b). "An agency decision concerning which alternatives to consider is necessarily bound by a rule of reason and practicality." Airport Neighbors Alliance, Inc. v. United States, 90 F.3d 426, 432 (10th Cir.1996) (quotation omitted).
69
With even more force, § 4(f) requires the Secretary of Transportation to consider all "prudent and feasible alternatives." 49 U.S.C. § 303(c)(1). "Whether an alternative is `prudent' ... involves a common sense balancing of practical concerns, but § 4(f) requires the problems encountered by proposed alternatives to be truly unusual or to reach extraordinary magnitudes if parkland is taken. Nevertheless, an alternative that does not solve existing or future traffic problems ... may properly be rejected as imprudent." Assocs. Working for Aurora's Res. Env't, 153 F.3d at 1131 (quotation and citations omitted).
70
The § 4(f) document studied only two primary alternatives: a "no build" alternative, and the proposed alternative. The document concluded that the "no build" alternative was the only prudent alternative that would not impact § 4(f) properties within the APE. Naturally, the "no build" alternative was then rejected because it did not meet the purpose and need for the Project. Defendants summarily rejected, without a hard look, secondary avoidance alternatives such as "minor alignment shifts, a reduced typical section, and retaining structures." The EA similarly rejected without a hard look the Transportation System Management (TSM), mass transit, and various build alternatives, simply concluding that each, by itself, would not meet the purpose and need of the Project or was otherwise unfeasible. Defendants were then left with only two alternatives: the "Proposed Action Alternative" (the Project) and a no build alternative. Again, the no build alternative was rejected in favor of the proposed alternative.
71
Thus, in both the EA and § 4(f), only two alternatives were given serious consideration: build the Project as conceptualized, or adopt a "no build" approach. This summary treatment of alternatives must be measured against the standards in 42 U.S.C. § 4332(2)(E) and 40 C.F.R. § 1508.9(b) (requiring the agency to study, develop and discuss appropriate alternatives and to briefly describe those alternatives). Plaintiffs contend that this analysis was deficient for several reasons:
72
a. Additional Jordan River crossing
73
Plaintiffs argue that defendants should have given more detailed consideration to alternatives involving the extension or expansion of other roads that cross the Jordan River. In particular, they claim the crossings at 12300 and 10600 could be expanded as an alternative to constructing a new crossing at 11400 South. The EA summarily rejected various piecemeal options involving added lanes to other highways in the area. Each option was rejected because standing alone it would not meet the purpose and need of the Project.
74
FHWA relies on several traffic studies that purport to show that reasonable traffic volume can only be achieved by creating at least four lanes on 11400 South. Those studies, however, provide an insufficient basis for failing to consider additional lane configurations at existing crossings or other locations as a means of meeting the project's purpose and need.
75
Those studies, and particularly the Fehr & Peers report to USDOT dated September 7, 1999, show the obvious that construction of a four lane crossing over the Jordan River at 11400 South will increase traffic capacity in the area and will improve traffic flows. But that is not the test for whether alternatives should be studied in an EA. Tellingly, that Report also reveals that substantial traffic benefits could alternatively be obtained by expanding capacity over the Jordan River at 12300 South and 10600 South and by constructing a new crossing at 9800 South. Nothing in that report nor anywhere else in the record that we have seen justifies a conclusion that these alternatives are not practical, reasonable, and perhaps in some instances even preferable to a crossing at 11400 South. The Fehr & Peers report points out that these alternatives "must be further evaluated ... on [their] own merits" in order to make an adequate environmental appraisal of them, but it was precisely that further analysis that was eschewed in this EA.
76
Alternatives need not be studied if they are "remote, speculative ... impractical or ineffective." Airport Neighbors Alliance, Inc., 90 F.3d at 432 (quotation omitted). However, particularly in light of § 4(f)'s stringent mandates, we have seen nothing in the record to justify the failure of the EA to study the alternatives, separately or in combination, of expanded capacity over the Jordan River at 12300 South and 10600 South and a new crossing at 9800 South.
77
b. Alternative routing of 11400 South
78
The § 4(f) statement concludes that, once it is given that 11400 South will be extended across the Jordan River, there are no feasible and prudent alternative alignments of 11400 South that would avoid the Jordan River Parkway and Willow Creek Park altogether. However, those conclusions are so vague and unspecific as to be little more than platitudes. Defendants are required to use "all possible planning" to minimize the effect on parkland. 49 U.S.C. § 303(c)(2). The § 4(f) statement does not discuss whether the proposed alignment and bridge across the Jordan River have been placed at the least environmentally-sensitive location in the Jordan River Parkway, or whether an alignment shift north or south might minimize the effect of noise and other environmental effects on the Parkway.
79
As planned, the Project will also result in the complete use of five historic sites, with impacts on fifteen others. The § 4(f) document considers and rejects a number of minor alignment shifts in an effort to avoid these impacts. This discussion of alignment shifts, while site-specific, is qualitatively insufficient to address § 4(f) concerns. For example, certain alignment shifts are rejected in the § 4(f) evaluation because they may impact other structures; however, no discussion is presented of the comparative historic value of these other structures nor is there any quantitative comparison of the impact of various orientations of 11400 South even assuming it is expanded at some point over the Jordan River. This discussion of alignment alternatives is so vague and non-specific as to be essentially meaningless.
80
c. Cumulative alternatives
81
In addition to the possibility of expanding existing roads, options involving Transportation System Management (TSM) and mass transit were eliminated from study under the EA. The EA/4(f) rejected these options because, standing alone, they would not meet the purpose and need of the Project. However, no effort was made to consider TSM and mass transit together and/or in conjunction with alternative road expansion as a means of meeting Project goals.10 This represents one of the most egregious shortfalls of the EA. According to the various reports in the record, TSM could significantly contribute to traffic management in the area and mass transit in any number of iterations is apparently under active consideration in this area by a number of jurisdictions involved. Although mass transit in the area is apparently not a sure thing, neither is there anything in the record to establish that it is such a "remote, speculative, impractical or ineffective" alternative that it did not need to be studied as a viable alternative in the EA. There are no cost studies, cost/benefit analyses or other barriers advanced that would warrant a conclusion that mass transit alternatives are unreasonable, standing alone or in conjunction with other alternatives.
82
Again, because of the need of FHWA to engage in "all possible planning," the failure of the EA carefully to consider mass transportation, particularly in combination with other alternatives, is not justified. "[A]ll possible planning" requires consideration of whether reasonable resources currently planned for extension of 11400 South across the Jordan River might instead be effectively directed toward expansion of mass transit and other traffic management strategies that could adequately meet the needs and purpose of the Project in a way that avoids the adverse impact on parkland or historic structures.
83
d. Conclusion
84
The EA/4(f) does not contain an adequate discussion of alternatives. Many alternatives were improperly rejected because, standing alone, they did not meet the purpose and need of the Project. Cumulative options, however, were not given adequate study. Alternatives were dismissed in a conclusory and perfunctory manner that do not support a conclusion that it was unreasonable to consider them as viable alternatives in the EA. As a result, only two alternatives were studied in detail: the no build alternative, and the preferred alternative. FHWA acted arbitrarily and capriciously in approving an EA/4(f) that does not provide an adequate discussion of Project alternatives.
3. Significant impacts
85
We conclude that the EA/FONSI discussion of the impacts expected to result from the Project is also inadequate.
86
a. Induced growth
87
The problem of induced growth arises fairly frequently in NEPA cases. See Daniel R. Mandelker, NEPA Law and Litigation § 8.07[5] (2d ed.2001). NEPA requires agencies to consider the growth-inducing effects of proposed actions. 40 C.F.R. § 1508.8(b); City of Carmel-by-the-Sea v. United States Dep't of Transp., 123 F.3d 1142, 1162 (9th Cir.1997). A conclusory statement that growth will increase with or without the project, or that development is inevitable, is insufficient; the agency must provide an adequate discussion of growth-inducing impacts. Laguna Greenbelt, Inc. v. United States Dep't of Transp., 42 F.3d 517, 526 (9th Cir.1994).
88
Here, the EA/4(f) finds that "[i]ndirect and cumulative impacts of the [Project] to growth will be minimal because they do not include the impacts of development, which will occur with or without the [Project]." Admin. Rec. at 7786 (emphasis added). The EA/4(f) acknowledges, however, that "the rate of development on lands east of the Jordan River may increase as a result of the project." Id.11 The district court accepted the agency's conclusion that the Project would not significantly increase the rate of growth.
89
However, in a letter dated September 19, 2000, commenting on the draft EA/4(f), the Environmental Protection Agency (EPA) opined that "[e]nhanced transportation facilities will generate or enhance economic activity and development," and that "related federal, state, and private actions" may result in significant environmental impact. The EPA concluded that "because all direct impacts may not have been identified and assessed ... [it] believes there is not a reasonable basis for a finding of no significant impact (FONSI) for the preferred alternative." It does not appear these concerns were ever adequately addressed in the EA. The EPA's viewpoint on this issue is undeniably relevant. While it is true that NEPA "requires agencies preparing environmental impact statements to consider and respond to the comments of other agencies, not to agree with them," Custer County Action Ass'n, 256 F.3d at 1038, it is also true that a reviewing court "may properly be skeptical as to whether an EIS's conclusions have a substantial basis in fact if the responsible agency has apparently ignored the conflicting views of other agencies having pertinent expertise." Sierra Club v. United States Army Corps of Eng'rs, 701 F.2d 1011, 1030 (2d Cir.1983).
90
Defendants did provide a graphic analysis of socio-economic growth in the area bounded by State Street, 10200 South, 12600 South and 4800 West and the Provo Reservoir Canal during the period from 1970 through the present, extrapolated through 2020. See id. at 7329. This table shows that continued growth in this area is anticipated through 2020, albeit at a lesser rate than has existed since 1990. The graph, however, contains no discussion or comparison of the local effects in the area directly impacted by this Project of induced growth caused by the extension of 11400 South as compared to a no-build alternative or the use of other alternatives.
91
Defendants also point to a map in the record that shows regional development density as of the year 2000. That map, however, merely confirms plaintiffs' claim that the 11400 South corridor remains in large part an island of open space in a sea of development. Defendants' refusal to study the possibility that the relatively unspoiled nature of this local area might be due, at least in part, to the present lack of a major roadway through it is arbitrary and capricious, and the district court abused its discretion in ignoring this factor in its analysis.
92
b. Phasing
93
Plaintiffs claim that the EA does not adequately discuss the significant impacts associated with phasing the Project. "Phasing" refers to environmental impacts that occur because a project will not be constructed all at once.12 The Project here is to be constructed in two phases: the I-15 interchange will be constructed before 11400 South is expanded and extended across the Jordan River. Plaintiffs identify two significant impacts from phasing the project: (1) for an extended period, persons living along the proposed expansion of 11400 South may suffer from pollution, noise and safety impacts as the result of living with a planned, but unconstructed, five-lane highway project made necessary by the first phase of the Project; and (2) it is possible that the second phase of the Project will never be completed because of permitting issues, resulting in many environmental problems caused by a major interchange that dumps traffic onto an unimproved two-lane road.
94
The district court found that FHWA and the Secretary of Transportation had taken a "hard look" into the phasing question and had determined that the impacts from phasing would not be significant. Davis, 148 F.Supp.2d at 1209 n. 3. This determination appears to rest on a single traffic study. This study deals only with traffic volumes on 700 West. It does not assess impacts to persons who live along 11400 South during the time period after the interchange has been constructed, but before the extension and expansion have been completed, a time period which may span a decade or more.13 The potentially significant impacts from phasing have not been adequately studied in the EA. See 40 C.F.R. § 1508.8(b).
95
c. Noise
96
The EA/4(f) discloses a significant, and in some cases dramatic, increase in noise levels in the vicinity of the Project. The average noise level in the Project area is currently approximately 57 dBA. This level is defined in the UDOT noise abatement policy as an appropriate noise level for "[l]ands on which serenity and quiet are of extraordinary significance and serve an important public need." In other words, the Project area right now is a serene island of quiet. The Jordan River Parkway is even more placid, with noise levels ranging from 45 to 50 dBA.
97
Once the Project is constructed, noise levels are expected to jump to over 65 dBA in an area affecting 119 residences, churches, parks and businesses.14 Sound levels in the Jordan River Parkway are expected to jump from ten to twenty decibels, to 55 to 70 dBA. Since each ten decibel increase is equivalent to a doubling of the noise volume, this means the noise level in portions of the park may quadruple.
98
The EA/4(f) lists a number of proposed mitigation measures that might be used to decrease the effect of the noise pollution.15 The district court found these measures persuasive on the question of significant impact. Davis, 148 F.Supp.2d at 1217. However, most of the measures considered were rejected in the EA/4(f), and the remaining, recommended measures are speculative without any basis for concluding they will occur.
99
Defendants rejected the option of slowing down traffic on the road, even through the parkland section, because the Project's purpose and need requires a speed of at least 40 to 45 mph. Horizontal and/or vertical alignment shifts were rejected as impractical, as were landscaping and berms. Noise walls are mentioned for part of the roadway, but merely as a recommendation: "a final decision on the installation of the abatement measures will be made upon completion of the project design and the public involvement process." It was noted in the EA/4(f) that the noise walls are quite costly ($850,000) and the defendants made no commitment to build them.16
100
Mitigation measures may be relied upon to make a finding of no significant impact only if they are imposed by statute or regulation, or submitted by an applicant or agency as part of the original proposal. As a general rule, the regulations contemplate that agencies should use a broad approach in defining significance and should not rely on the possibility of mitigation as an excuse to avoid the EIS requirement.
101
Forty Most Asked Questions Concerning CEQ's National Environmental Policy Act Regulations ("Forty Questions"), 46 Fed.Reg. 18,026, 18,038 (Council on Envtl. Quality 1981) (emphasis added).17 In short, the EA/4(f) makes no firm commitment to any noise mitigation measures. We disagree with the district court's conclusion that the increase in noise levels associated with the Project is not a significant impact.
102
d. Cumulative impacts
103
The CEQ regulations require agencies to discuss the cumulative impacts of a project as part of the environmental analysis. 40 C.F.R. § 1508.7. The EA does not provide an adequate discussion of the cumulative impacts of the Project on the human environment. These cumulative impacts may be significant. This five-lane highway project, of a type that normally requires an EIS, bisects two parks, requires the demolition or moving of numerous historic structures and will affect others, may quadruple noise levels in one of the parks, will increase traffic to 34,000 cars per day, and will require the construction of a new bridge over the Jordan River. On the record before us, it appears that the cumulative environmental impact of the Project is significant and FHWA's contrary conclusion represents a clear error of judgment; at the least, the EA as presently drafted fails to provide an adequate basis for a FONSI conclusion that the Project "will not have a significant effect on the human environment."18
IV. Bond
104
Defendants contend that plaintiffs should be required to post a bond in order to obtain a preliminary injunction. The amount of a bond is a matter to be resolved by the district court on remand. Fed.R.Civ.P. 65(c). Ordinarily, where a party is seeking to vindicate the public interest served by NEPA, a minimal bond amount should be considered. See, e.g., Friends of the Earth, Inc. v. Brinegar, 518 F.2d 322, 322-23 (9th Cir.1975). Here, plaintiffs are private individuals rather than a public interest organization. Nevertheless, plaintiffs' strong showing on the merits and the defendants' apparent prejudgment to proceed prematurely with the Project before the required environmental studies were considered suggests that a large bond should not be required.
105
The order of the United States District Court for the District of Utah denying a preliminary injunction is REVERSED, and the case is REMANDED for entry of a preliminary injunction barring further road construction pending resolution of this case on the merits. NOTE: OPINION CONTAINING TABLE OR OTHER DATA THAT IS NOT VIEWABLE
Notes:
1
The reader will find attached to this opinion as Exhibit 1 a map of the area affected by the Project. This map has been prepared by this court from information in the record using a computer bitmap program. It is not drawn to scale, and is intended solely as a visual aid
2
Plaintiffs sought a preliminary injunction, which the district court deniedDavis v. Slater, 148 F.Supp.2d 1195 (D.Utah 2001). This court was initially asked to provide plaintiff with a stay pending appeal. We entered a temporary stay, which remains in effect, and we consolidated the request for stay with the merits of the appeal. On September 11, 2001, we conducted oral argument on the merits of the appeal, in which all parties participated. We now reverse the district court's order denying a preliminary injunction and we remand with instruction to the district court to enter a preliminary injunction upon a proper bond and for further proceedings consistent with this opinion. Where NEPA is implicated by a highway project in which state agencies are participating, the state agencies are also proper parties and we have the authority to instruct the district court to enjoin the state agencies from further construction on the highway project. Southwest Williamson County Community Ass'n v. Slater, 243 F.3d 270, 277 (6th Cir.2001).
3
An EA is a "concise public document" that "[b]riefly provide[s] sufficient evidence and analysis for determining whether to prepare an environmental impact statement or a finding of no significant impact." 40 C.F.R. § 1508.9(a)
4
The WFRC is the Wasatch Front Regional Council. WFRC prepared a traffic model, which modeled weekday traffic volume under certain scenarios. At the time of the October 12, 1999 meeting, the parties expected a revised WFRC model in January 2000
5
NEPA's intent is to "focus[ ] the agency's attention on the environmental consequences of a proposed project," to "guarantee[ ] that the relevant information will be made available to the larger audience that may also play a role" in forming and implementing the agency's decision, and to provide other governmental bodies that may be affected with "adequate notice of the expected consequences and the opportunity to plan and implement corrective measures in a timely manner."Robertson v. Methow Valley Citizens Council, 490 U.S. 332, 349-50, 109 S.Ct. 1835, 104 L.Ed.2d 351 (1989). "The thrust of [NEPA] is ... that environmental concerns be integrated into the very process of agency decision-making." Andrus v. Sierra Club, 442 U.S. 347, 350, 99 S.Ct. 2335, 60 L.Ed.2d 943 (1979).
6
The district court seemed to recognize this principle, but concluded that plaintiffs had not shown irreparable harm because they failed to demonstrate likelihood of success on the merits of their NEPA claimSee Davis, 148 F.Supp.2d at 1195 ("Plaintiffs have not demonstrated a likelihood of success on the merits and are therefore not entitled to a presumption of irreparable harm."). Since we disagree with the district court concerning the likelihood of plaintiffs' success on the merits, however, we are willing to apply the presumption it eschewed.
7
Defendants have also argued that plaintiffs will suffer no irreparable harm if construction begins on Phase I of the Project, because the harms plaintiffs fear arise principally from the more invasive construction associated with expansion of the highway in Phase II. If construction goes forward on Phase I, or indeed if any construction is permitted on the Project before the environmental analysis is complete, a serious risk arises that the analysis of alternatives required by NEPA will be skewed toward completion of the entire ProjectSee Marsh, 872 F.2d at 504; Md. Conservation Council, Inc. v. Gilchrist, 808 F.2d 1039, 1042 (4th Cir.1986). See generally 40 C.F.R. § 1506.1 (prohibiting an agency from taking action concerning a proposal that would limit the choice of reasonable alternatives, until the NEPA process is complete).
8
Here again, we are faced with defendants' assertion that the asserted harm is not imminent because it will occur only during the construction of Phase II. If construction were allowed on Phase I, however, there is a real risk that the § 4(f) analysis would be skewed toward completion of the entire Project, with the attendant harms we have noted. This risk is sufficient to make the alleged harm imminent
9
The State of Utah acknowledged that "the Jordan River Parkway falls within the purview of 4(f) and 6(f) protections for any conversion of uses from public recreation to non-public recreation uses." It further indicated that the Division of Parks and Recreation has assumed jurisdictional authority over these ParkwaysSee Admin. Rec. at 1442 (letter from Tharold Green of State of Utah Department of Natural Resources). This land is further designated as parkland on the South Jordan City Parks and Recreation Master Plan. None of the parties dispute that the publicly-owned portion of the Jordan River Parkway is parkland within the meaning of § 4(f). Accordingly, we accept as undisputed that this Project will impact parkland protected by § 4(f).
10
Additionally, the EA/4(f) opined that mass transit was not a feasible alternative, in part because there was only thepotential for commuter rail in the area. This vague statement without some analysis of the likelihood or feasibility of realizing that potential, was not an adequate one for rejecting mass transit as part of a cumulative solution to the purpose and need identified in the EA/4(f).
For example, this conclusion did not take into account a letter from the Utah Transit Authority (UTA) to Horrocks dated August 3, 1999. The letter begins by informing Horrocks that "a development in the South Salt Lake County Transit Corridor Studies has arisen that your firm should be aware of as it proceeds through the DEIS process." The letter states that UTA has been requested to explore the possibility of a light rail extension paralleling the I-15/300 East corridor from its current terminus point to 14600 South and notes that this alignment "do[es] warrant further consideration." Id. The letter suggests that light rail is more than a speculative possibility. It states that a "feasibility study has concluded that light rail is a viable alternative in South Salt Lake County."
11
The district court stated that it could even take judicial notice of the intense and rapid growth in the project area. Judicial notice is only appropriate where the issues are "not subject to reasonable dispute,"see Fed. R.Evid. 201(b). The factual issues surrounding growth here are the subject of a considerable amount of dispute between the parties.
12
"Phasing" should be distinguished from "segmentation," which refers to the agency's decision to break a project into smaller pieces in order to complete the environmental analysis. Although plaintiffs contend that defendants improperly segmented the Project, we believe defendants properly followed the regulatory criteria in selecting the scope of the project to be studiedSee 23 C.F.R. § 771.111(f).
13
To the extent that inconveniences resulting from construction can be characterized as "temporary" or construction-related, a finding of no significant impact from the phased construction could be upheldSee Sierra Club v. Slater, 120 F.3d 623, 635 (6th Cir. 1997). However, here, plaintiffs argue that the remainder of the Project may be delayed for a decade or more, or perhaps permanently. We could not find any definitive timetable for the completion of Phase II in the EA or in the administrative record other than the statement in the record that the Jordan River crossing at 11400 South "is not planned for the immediate future." Counsel for plaintiffs at oral argument said that Phase II will be built in "ten to twenty years, if at all." Counsel for FHWA disputed a twenty year time frame and suggested a three to eight year time frame. It is clear, from all of this, that there will be at the least a very substantial delay between Phase I and Phase II.
14
A noise level of 65 dBA or above will "significantly" disturb outdoor speechValley Citizens for a Safe Env't v. Aldridge, 886 F.2d 458, 467 (1st Cir.1989).
15
In their opening brief, plaintiffs argue that we may not take into account mitigation measures when assessing whether a significant impact exists. This is plainly wrongSee Nat'l Parks & Conservation Ass'n v. Babbitt, 241 F.3d 722, 733-34 (9th Cir.2001) (quotations and footnote omitted), cert. denied, 122 S.Ct. 903, 151 L.Ed.2d 872 (2002); Boomer Lake, 4 F.3d at 1556.
16
Defendants argue that UDOT has already committed to provide the mitigation. However, the cite to the record they provide does not establish a binding obligation to provide the proposed mitigation
17
We apply the "Forty Questions" here as persuasive authority offering interpretive guidance. "Although we recognize that we may rely on the interpretive guidance offered by the CEQ, the Forty Questions document is not owed the substantial deference afforded to administrative rules that are the product of notice and comment procedures."Ass'ns Working for Aurora's Residential Env't, 153 F.3d at 1127.
18
We have considered the other objections raised by plaintiffs to this EA but have concluded that the remaining objections are without merit
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NO. 07-03-0301-CR
IN THE COURT OF APPEALS
FOR THE SEVENTH DISTRICT OF TEXAS
AT AMARILLO
PANEL D
APRIL 29, 2004
______________________________
KENNON SHAW,
Appellant
v.
THE STATE OF TEXAS,
Appellee
_________________________________
FROM THE 137
TH
DISTRICT COURT OF LUBBOCK COUNTY;
NO. 2001-437,619; HON. CECIL PURYEAR, PRESIDING
_______________________________
Before QUINN, REAVIS and CAMPBELL, JJ.
Kennon Shaw (appellant) appeals his conviction for possession of a controlled substance, cocaine in a Drug Free Zone. Appellant pled not guilty and the case was tried to a jury. Upon finding appellant guilty of the charged offense, the jury assessed punishment at 50 years confinement. Appellant filed this appeal and counsel was appointed.
Appellant's counsel has now moved to withdraw, after filing a brief pursuant to
Anders v. California
, 386 U.S. 738, 87 S.Ct. 1396, 18 L.Ed.2d 493 (1967) and representing that she has searched the record and found no arguable grounds for reversal. The motion and brief illustrate that counsel notified appellant of his right to review the appellate record and file his own brief. So too did we inform appellant that any
pro se
response or brief he cared to file had to be filed by December 1, 2003. Appellant subsequently filed a response wherein he contended that 1) the evidence was insufficient to support his conviction, 2) he was denied “his fundamental right to a fair trial,” 3) the trial court abused its discretion when it admitted evidence regarding extraneous acts and gang affiliation and 4) his punishment “exceeds the statutory maximum.”
Regarding the argument that the evidence was insufficient to support his conviction, appellant contends that the State failed to prove a culpable mental state to “possess in a school zone.” Furthermore, he contends that the jury charge “authorized the court to discount the culpability of defendant to possess in a school zone and, instead allows the placement of the school zone allegation as a separate enhancement without a culpable mental state.” And, law enforcement “forced [appellant] into a school zone” through “their use of warning lights in their vehicles.” To these we say, the
mens rea
contemplated by the penal provision relates to the wrongful act,
i.e.
possessing the drug. The fact that it took place in a "drug-free zone" simply enhances the punishment. Thus, the State need not allege or establish that an accused had a particular
mens rea
regarding the location at which he possessed the contraband.
Fluellen v. State,
104 S.W.3d 152, 165 (Tex. App.--Texarkana 2003, no pet.). Thus, we overrule appellant’s first issue.
Next, appellant contends the evidence was factually insufficient to support his conviction. This is so because the officers lacked probable cause to stop his vehicle, and the officers’ description of his clothing he was wearing in which the drug was found was incorrect. In reviewing the evidence presented at the guilt/innocence phase, we find that the police officers were acting upon an arrest warrant for appellant when he was stopped. After placing appellant under arrest pursuant to the warrant, the officers searched him and found a substance which later tested positive for cocaine. Appellant, at trial, failed to contest the validity of the arrest warrant or the search as incident to a valid arrest. And, the officer’s incorrect description of appellant’s clothing did not cause the evidence to be insufficient to support appellant’s conviction. Therefore, we overrule the second proposition raised by appellant.
Next, appellant contends that he was denied his fundamental right to a fair trial. This was allegedly so because 1) he was denied ten days preparation for trial when the State brought in a witness to testify on the day of trial, 2) the trial court allowed hearsay evidence over objection and 3) the trial court admitted testimony regarding gang affiliation. As to the evidence about gangs, the trial court sustained the objection to which appellant alludes in his brief. Thus, it cannot be said that the trial court erred in admitting the evidence. As to the belated witness, appellant fails to identify him or her. Thus, we cannot assess the viability of his claim. And, as to all the complaints uttered, he also failed to proffer any argument in support of them. Thus, they are waived.
See Franklin v. Enserch, Inc
., 961 S.W.2d 704, 711 (Tex. App.--Amarillo 1998, no pet.) (holding that the failure to provide the court with any discussion of the facts and authorities relied on results in the waiver of the complaint).
Next, appellant contends that the trial court abused its discretion in admitting evidence regarding a fight while in jail and gang activity. Appellant contends that this was error because it violated Rule 404(b) of the Texas Rules of Evidence and was irrelevant to proving his commission of the charged offense. However, the evidence was offered during the punishment phase of the trial, not guilt/innocence. Furthermore, evidence of gang affiliation may be admitted during the punishment phase.
McDuffie v. State,
No
.
07-01-0190-CR, 2001
LEXIS
8342 (Tex. App.--Amarillo
December 14, 2001, no pet.) (not designated for publication);
see
Tex. Code Crim. Proc. Ann.
art. 37.07, §3(a)(1) (Vernon Supp. 2004) (allowing the admission of any evidence the trial court deems relevant to sentencing during the punishment phase). Similarly, evidence of appellant’s propensity to engage in fights with others may well come within the ambit of art. 37.07, §3(a)(1), or the trial court could so conclude via the exercise of its discretion. Moreover, each incident was not “unsubstantiated,” contrary to appellant’s suggestion. Thus
, we overrule this argument as well.
In his fifth issue, appellant contends that his punishment exceeded the statutory maximum. According to appellant, he was charged with a state jail felony which can be enhanced to a maximum of 20 years only. However, according to section 481.134 of the Texas Health and Safety Code, if appellant’s act occurred“ in, on, or within 1,000 feet of any real property that is owned, rented, or leased to a school or school board or the premises of a public or private youth center,” then the offense is elevated to a third degree felony.
See
Tex. Health & Safety Code Ann
. §§ 481.112(a), (b), 481.134(d)(1) (Vernon 2003). Thus, appellant simply was not charged with a state jail felony. Moreover, because the indictment alleged at least two prior felony convictions, appellant’s third degree felony was punishable by a range of not less than 25 years or more than 99 years or life in prison.
Tex. Penal Code Ann
. 12.42(d) (Vernon Supp. 2004). Therefore, the 50-year sentence he received was authorized by law. Accordingly, we overrule appellant’s fifth issue.
In compliance with the principles enunciated in
Anders
, appellate counsel discussed two possible grounds for appeal. First, counsel raised question about the evidence of possible gang affiliation presented during the punishment phase of trial. Then, counsel noted how we held such evidence admissible in
McDuffie v. State,
No
.
07-01-0190-CR, 2001
LEXIS
8342 (Tex. App.--Amarillo
December 14, 2001, no pet.) (not designated for publication).
Next, counsel discussed the range of punishment and the enhancement paragraphs. Specifically, appellate counsel addressed trial counsel’s argument that had the trial court charged the jury to consider appellant’s two prior convictions first before the “drug free zone” enhancement then the maximum punishment to which appellant could be subjected would be 20 years. However, appellate counsel explains why trial counsel’s argument was incorrect, and we agree with the explanation.
Finally, we also conducted an independent review of the record to determine whether there existed reversible error and found none.
See Stafford v. State
, 813 S.W.2d 503, 511 (Tex. Crim. App. 1991) (requiring us to conduct an independent review).
Accordingly, we grant counsel's motion to withdraw and affirm the judgment of the trial court.
Brian Quinn
Justice
Do not publish.
| {
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253 S.W.2d 184 (1952)
ALBERTSON
v.
WABASH R. CO. et al.
No. 42663.
Supreme Court of Missouri, Division No. 2.
November 10, 1952.
Motion for Rehearing or to Transfer to Denied December 8, 1952.
*185 E. E. Thompson, Eugene R. Brouse and Sam Mandell, Kansas City, for appellant Felix Albertson.
Popham, Thompson, Popham, Mandell & Trusty, Kansas City, of counsel.
Joseph H. Miller, St. Louis, David R. Hardy, Sam B. Sebree and Sebree, Shook, Hardy & Ottman, Kansas City, for appellant, Wabash R. Co., and respondent William E. Wolfe.
Motion for Rehearing or to Transfer to Court en Banc Denied December 8, 1952.
BARRETT, Commissioner.
Felix Albertson was a guest in William F. Elam's 1938 Plymouth sedan when it ran into an oil tank car standing on the Wabash crossing in Henrietta, a village in Ray County, about 11:20 p. m. on the 18th day of April 1947. To recover damages for his resulting injuries Albertson instituted this action against the Wabash Railroad and William E. Wolfe, a flagman. At the close of the plaintiff's evidence the trial court directed a verdict in favor of Wolfe, and the plaintiff has appealed from that judgment. A jury has found that Albertson's injuries were proximately caused by *186 negligence on the part of the railroad, and, accordingly, awarded him $15,000. The railroad has appealed from that judgment. Upon the railroad's appeal the primary question is whether there is evidence from which the jury could reasonably find the existence of special circumstances rendering the crossing peculiarly hazardous, if not Albertson, even though a guest, is not entitled to recover; and, conversely, if reasonable minds could differ as to the sufficiency and probative force of the evidence, the railroad's liability and Albertson's contributory negligence were questions for the jury to resolve. Three of the leading and contrasting cases in this jurisdiction are State ex rel. Thompson v. Cave, 358 Mo. 414, 215 S.W.2d 435; State ex rel. Kansas City Southern Ry. Co. v. Shain, 340 Mo. 1195, 105 S.W.2d 915, and Carson v. Baldwin, 346 Mo. 984, 144 S.W. 2d 134.
Elam and his brother-in-law, Vanderpool, lived on farms in the Cowgill community. On April 18th Elam was busy sowing oats. About 9:15 he and Vanderpool picked up their friend Albertson in Cowgill and the three of them started to Richmond, twenty-seven miles distant, so that Elam. could talk to a man by the name of Yates about renting some land. Just before they reached Richmond they picked up two young women "hitchhikers," and in Richmond they all stopped in the "restaurant taxicab stand" and drank coffee and cokes. Elam was unable to locate Mr. Yates by telephone, the girls were going to Lexington, and Albertson thought he might talk to a night watchman at the sales barn in Lexington about some posts his son-in-law had left there for sale, and Elam "got to talking about he ought to take the girls over there" and, everything considered, they decided to drive to Lexington. As they were leaving the village of Henrietta on Highway 13, about 11:20 p. m., the Plymouth sedan ran into an oil tank car, the sixth of fifty-nine cars in a freight train, standing on the Wabash crossing. The train had been stopped on the crossing about five minutes and was there for the purpose of "taking on water."
The oil tank car, 35 feet 6 inches long, was so stopped that its wheels were at the furthermost edges of the highway crossing. The cylindrical tank car was painted black and upon its sides, in white, were the letters "G A T X" followed by five numerals 7 inches in height and spaced 9 inches apart. The brake cylinder and reservoir for the brakes beneath the car were 1 foot and 4 inches and 1 foot and 8½ inches above the ground, and the running board around the tank was 3 feet 9½ inches above the ground, while the height of the tank was 11 feet and 1/3 inches from the top of the rail. The solid beam under the tank was 2 feet 3½ inches from the top of the rail.
Highway 13, a concrete roadway, goes directly through Henrietta and in its southern outskirts are the tracks of the Santa Fe Railroad. There are four or five of these tracks, a main track, a passing track and two or three switch tracks. Three hundred and sixty-one feet south of the Sante Fe tracks, at the southernmost limits of the town, a single track of the Wabash Railroad intersects the highway and there is a slight downward curve, four degrees, in the highway at this point. There are no warning or crossing signs or signaling devices on the north side of the Wabash tracks. There is a cross-armed signal on the south side of the track but that signal was obscured by the train. Between the Sante Fe tracks and the Wabash tracks there is an oil station and a hotel on the west side of the highway. There are no lights at the Wabash crossing. However, at the time of the collision, there was a light on the front of the hotel, sixty-four feet north of the crossing, and there was a street light on a pole still farther north of the hotel, and there was a light in the oil station nearer the Santa Fe tracks. Ten feet south of the Santa Fe tracks is a watchman's shanty used by the flagman, Wolfe. It was his duty to "flag" both the Santa Fe and the Wabash crossings.
The brakes on Elam's Plymouth had been recently overhauled and were in good condition. The seal beam headlights were also in good condition but on that night, because *187 of mist and fog, illuminated the highway "not much over 50 feet on brights" and on "dims wouldn't have reached out that far." As the freight train came into Henrietta Wolfe stood about twenty-five feet north of the Wabash tracks and flagged the crossing with his electric lantern until the train blocked or covered the crossing. As the train blocked the crossing he turned and walked back towards his shanty and was close to it when the Plymouth sedan passed him traveling at a speed of about twenty-five miles an hour. He heard the noise and turned around as the automobile crashed into the tank car 350 feet away. Elam, Vanderpool and Albertson testified that it had been raining and that at the time of the crash there was some moisture. Albertson said, "Some fog there," Vanderpool said, "It was misting and foggy," and Elam said, "It was misting and raining." (The railroad's witnesses testified that it was dark and "cloudy" but that there was no moisture or fog. There was also testimony that the three men in the automobile had been drinking mint flavored gin.) The driver and occupants of the automobile said that the one windshield wiper was working and that they were all looking straight ahead and could see for a distance of thirty to thirty-five feet. They were not familiar with the crossing, saw no lights or signals, slowed down and crossed the Santa Fe tracks at a speed of about twenty-five miles an hour and after they had traveled about 300 feet and were within ten feet of the crossing, some said two automobile car lengths, for the first time saw the tank car. It was then too late, after a quick application of the brakes, to avoid crashing into the tank car. Because of the downgrade the automobile lights were not focused directly upon the tank car, and there was testimony by an expert, an "illuminating engineer," that the black tank car reflected but a small percentage of the light.
The railroad analyzes the circumstances and insists that they do not constitute special circumstances rendering the crossing peculiarly hazardous and, therefore, there was no breach of duty or negligence upon the part of the railroad. A railroad has the right to stop its trains upon public crossings, and, in normal circumstances, the presence of the train upon the crossing is adequate notice to the traveling public that the crossing has been preempted and additional signals of warning are not required. Dimond v. Terminal R. Ass'n, 346 Mo. 333, 347, 141 S.W.2d 789, 795. The rationale of the rule is that a motorist is also required to exercise due care in approaching railroad crossings, and, if the conditions are such that a motorist, driving a properly equipped automobile and exercising due care for his own safety, should see and observe the obstructed crossing in time to avoid a collision, the railroad may assume that he will do so and is not required to take additional precautions. State ex rel. Kansas City Southern Ry. Co. v. Shain, supra. On the other hand, if there are circumstances rendering the obstructed crossing peculiarly hazardous so that a motorist even though exercising due care for his own safety may nevertheless collide with the standing car the railroad is obliged to take additional precautions to prevent a collision. Annotation 161 A.L.R. 115.
It has been determined that the mere downward slope of a public highway toward a crossing, naturally causing automobile lights to be deflected downward and beneath a standing boxcar, and the mere dark color of the surface of the road and the drab color of the boxcar are not such circumstances as to render an occupied crossing unusually hazardous within the meaning of the rule. State ex rel. Thompson v. Cave, supra. The mere fact that the driver and occupants of the automobile were unfamiliar with the crossing and that the highway was heavily traveled are not circumstances making an obstructed crossing peculiarly hazardous. Atchison, T. & S. F. Ry. Co. v. Templar, 204 Okl. 460, 230 P.2d 907; Bledsoe v. Missouri, K. & T. R. Co., 149 Kan. 741, 90 P.2d 9. It has been held that the presence of fog and mist, standing alone, were not such factors as to require additional precautions, that the motorist was under a duty to exercise care commensurate with the hazard to which he was exposed. Hicks v. Chicago, M., St. P. & P. R. Co., Mo.App., 233 *188 S.W.2d 787; O'Keefe v. Wabash R. Co., 7 Cir., 185 F.2d 241; Dilliner v. Joyce, 233 Iowa 279, 6 N.W.2d 275; Killion v. Chicago, M., St. P. & P. R. Co., 107 Ind.App. 527, 25 N.E.2d 647; Webb v. Oregon-Washington R. & Nav. Co., 195 Wash. 155, 80 P.2d 409. It would serve no useful purpose to attempt an analysis and reconciliation of all the cases, the general rules and principles are well known and have been applied in the particular circumstances to boxcars, coal cars, refrigerator cars and an oil tank car in a moving train. Bledsoe v. Missouri, K. & T. R. Co., supra. In all the cases in which liability has been denied the decisive factor has been that there was no illusion of safety to the motorist or his guest in the particular circumstances. It is not necessarily that the circumstances create "a trap" for the unwary motorist, or the mere presence or absence of one or more of these particularly detailed factors, fog, snow, topography of highway, lack of warning devices or type of railroad car that renders the crossing peculiarly hazardous so as to require precaution on the part of the railroad in addition to the mere presence of the standing train. The test of liability on the part of the railroad and of due care upon the part of the motorist is whether, all the circumstances considered, an illusion of safety is created. If the motorist is exercising the requisite care for his own safety but the particular circumstances nevertheless create an illusion of safety, it is for the jury to say whether the obstructed crossing is unusually hazardous and whether in the circumstances the railroad has likewise fulfilled its obligation to the traveling public.
To illustrate, in Carson v. Baldwin, 346 Mo. 984, 144 S.W.2d 134, 136, "the flat car which blocked the street saddled it squarely so that only the narrow edge of the platform of the car would be visible to persons coming along the street; the car was not in motion, but was at rest and silent; the crossing was unlighted on the side plaintiff was approaching; a boxcar standing on an adjoining track also blocked the view; the street was a heavily travelled one in Rich Hill; the surface of the street inclined down to the tracks which tilted the beam of the headlights away from the edge of the platform of the car; a light fog or mist reduced visibility to a slight degree." There was no warning to the public other than the presence of the flatcar and it was held that these facts constituted special circumstances from which the jury could find that the crossing was so unusually hazardous as to require the additional precautions of a watchman or a warning light. See also Homan v. Missouri Pac. R. Co., 334 Mo. 61, 64 S.W.2d 617; Elliott v. Missouri Pac. R. Co., 227 Mo.App. 225, 52 S.W.2d 448; Poehler v. Lonsdale & Kurn, 235 Mo. App. 202, 129 S.W.2d 59.
In this case we have the presence of the detailed facts of the standing oil tank car, black in color, a slightly curving downgrade highway, no warning signals of any kind, and a cloudy night, if not misty and foggy. But these are not the decisive factors upon which reasonable men might differ as to whether they constituted special circumstances rendering the crossing peculiarly hazardous. In addition to the presence of these important factors there are other compelling circumstances creative of the illusion of safety to motorists properly using the highway. As we have said, the Wabash crossing is at the southernmost edge of the town of Henrietta, it is in fact the "city limits" of the town, and the beginning of "open country." The motorist, in traveling Highway 13, and the highway is the principal street, crosses the streets and passes the houses and business buildings of the village, and then crosses the four or five tracks of the Santa Fe Railroad. Three hundred and sixty-one feet beyond the Santa Fe tracks, unexpected to the uninitiated, is the single, unlighted, unguarded Wabash crossing where even a careful driver might reasonably expect open country and an open road. Or, if the crossing is occupied by a black oil tank car on a cloudy or foggy night, a warning from a flagman or some member of the full train crew. All in all reasonable minds could certainly differ as to whether these special circumstances created an illusion of safety and thus rendered the occupied crossing peculiarly hazardous and, therefore, the railroad's negligence, including proximate *189 cause, and the plaintiff's due care were all questions for the jury to resolve. Carson v. Baldwin supra; Elliott v. Missouri Pac. R. Co., supra; Poehler v. Lonsdale & Kurn, supra; Homan v. Missouri Pac. R. Co., supra; annotations 15 A.L.R. 901; 99 A.L. R. 1454; 161 A.L.R. 115.
As indicated, the plaintiff's evidence, responsive to the requirements of the rule, tended to show special circumstances rendering the crossing "unusually" or "peculiarly" hazardous. Unusually or peculiarly hazardous crossing in the circumstances is the very essence of the plaintiff's cause of action and the essential, ultimate issue to be found by the jury. Carson v. Baldwin, supra; State ex rel. Thompson v. Cave, supra. The plaintiff's evidence consisted of photographs, plats, expert testimony, the testimony of the plaintiff and the occupants of the automobile as well as the testimony of others familiar with the crossing. In addition, the plaintiff called as a witness the Secretary of the Public Service Commission of Missouri and through him introduced in evidence as an "admission" an application filed with the Commission in 1941. The railroad insists that this evidence was improperly admitted, that it was prejudicial, and because of its reception in evidence that it is entitled to a new trial. The plaintiff contends that the application was an admission by the Wabash that its crossing was inadequate, unsafe and hazardous and therefore competent and admissible. The plaintiff also argues that if the document was not competent that it was merely cumulative and therefore harmless error.
The application before the Public Service Commission is styled "In the matter of the application of the State Highway Commission of Missouri, The Atchison, Topeka and Santa Fe Railway Company, and the Wabash Railway Company and Norman B. Pitcairn and Frank C. Nicodemus, Jr., Receivers thereof, for permission to effect an overhead crossing and for permission to close an existing grade crossing, Applicants, vs. City of Henrietta, Defendant." The application to the Commission recites that the State Highway Commission has charge of the highways of Missouri and that the two railroads operate railway systems, portions of which are in the vicinity of the proposed crossing and "That, pursuant to the `Rules and Regulations for Carrying Out the Provisions of Section 8 of the Act of June 16, 1936, (Public 686-74th Congress [23 U.S.C.A. § 24a,]) which Relate to the Elimination of Hazards to Life at Railroad Grade Crossings, in accordance with the Provisions of the Federal Highway Act,' the applicants propose to construct an overhead crossing in Ray County, in the City of Henrietta, where Route 13 crosses the tracks and right-of-way of the Railroads to replace an existing grade crossing which has become inadequate and unsafe for present-day traffic." The application then recites that the proposed crossing is feasible, practical, economical and that the parties had agreed upon the manner of the crossing and its expense, and "That proposed overhead crossing will replace and eliminate, in so far as public travel is concerned, a dangerous grade crossing located approximately three hundred (300) feet west of proposed overhead crossing, and that the safety and convenience of the traveling public require the closing and abandonment of said dangerous grade crossing upon completion of proposed overhead crossing and highway at said place." There was a prayer for consent to the construction of the overhead crossing and "that the Commission order said dangerous crossing closed and abandoned." The application was signed by the chief engineers of the two railroads and the Highway Department's engineer of grade separations.
Unless excluded by some rule of policy or principle of law, any evidence that is logically probative, including admissions, is competent and admissible. An admission, in general, is a conscious or voluntary acknowledgment by a party of the existence of certain facts relevant to the cause of the party's adversary, a statement against interest, unfavorable or inconsistent with the facts now claimed by the party making the statement. 31 C.J.S., Evidence, § 270, page 1022. The basis of the admissibility and competency of admissions is their character or quality of inconsistency. *190 4 Wigmore, Evidence, Sec. 1048, p. 2. The basic question here is whether the application introduced in evidence possesses the required quality of inconsistency.
The application involved here was not introduced in evidence for the purpose of showing knowledge upon the part of the railroad, whatever the condition of the crossing, with or without cars across it, the railroad admittedly had knowledge of the fact. Poe v. Chesapeake & O. Ry. Co., D.C., 64 F.Supp. 358. The application or any order based upon the application, were not relied upon as a pleaded basis of negligence or liability. Huckleberry v. Missouri P. R. Co., 324 Mo. 1025, 26 S.W.2d 980; Anderson v. Kraft, Mo.App., 129 S.W.2d 85. The application was offered here as an evidentiary, probative fact in support of or because it tended to prove the ultimate charge of unusually or peculiarly dangerous crossing. White v. Hasburgh, Mo.App., 124 S.W.2d 560. In the first place, it will be observed that there is no explicit admission in the application that the crossing was "unusually" or "peculiarly" hazardous in the sense required for liability in this action. There are no facts set forth in the application demonstrating that the crossing was unusually hazardous and the statement that it was "a dangerous grade crossing" is a mere conclusion made for the purpose of showing necessity of change and compliance with the Federal statute. Dimond v. Terminal R. Ass'n, 346 Mo. loc. cit. 352, 141 S.W.2d loc. cit. 798. The admission contained in the application that the crossing was "dangerous" is not necessarily inconsistent with or contradictory of the railroad's claim that the crossing, occupied by an oil tank car, was not "peculiarly" or "unusually" hazardous within the meaning of the rule of law peculiarly applicable to this case. Any fair minded person would certainly concede that a railroad crossing over a paved, traveled highway is dangerous but that is a characteristic common to railroad crossings in general and the substantive rule of law involved here requires more than proof of what is general and common. This is not to say that applications of this kind are not competent and inadmissible in evidence in any case, but it is to say that in this case, where the essence of the cause of action is "unusually" or "peculiarly" hazardous crossing in the detailed circumstances, that the application is not such an admission as should have been received as evidence for the jury's consideration upon this essential issue. Kitchell v. Chicago & I. M. Ry. Co., 285 Ill.App. 368, 2 N.E.2d 164; Stocker v. Boston & M. R. R. Co., 83 N.H. 401, 143 A. 68. The document was introduced in evidence through the Secretary of the Public Service Commission, it bore the stamp and dignity of official approval and was, no doubt, as impressive and forceful as intended and so prejudicial as not to be merely cumulative.
Upon the plaintiff's appeal as to the flagman, it is urged that the "Plaintiff's evidence showed defendant Wolfe was employed by the railroad to protect the public at the crossing, and although he saw the approaching automobile in which plaintiff was a passenger, he failed to give any warning and so was guilty of actionable negligence," and therefore the court erred in directing a verdict in his favor at the close of the plaintiff's evidence.
As to Wolfe, the petition set forth his employment and duty as a flagman, "of flagging with a lighted lantern or otherwise automobiles approaching and using said crossings and warning the drivers and occupants thereof of the approach of trains to said crossings and of danger from trains using said crossings." Specifically the petition pleaded that "on said occasion defendant Wolfe before said automobile reached said vicinity had flagged said Wabash crossing and the approach of said Wabash train, and thereafter negligently withdrew from said dark and unlighted crossing and said unlighted dark standing car thereon and walked toward said Santa Fe tracks and abandoned said Wabash crossing and the matter of the safety of persons in automobiles approaching the same and negligently and in violation of his duties failed to warn or apprise those in said automobile of the presence of said dangerous and dark obstruction on said unlighted crossing, although he and defendant railroad had undertaken and assumed said duty and customarily *191 performed the same, * * *." The jury could reasonably find from the evidence of both the plaintiff and the defendant that the facts of the occurrence and of Wolfe's conduct were as set forth in the petition. The only difference in point of view is that Wolfe took the position that "We were to protect the public when a train was approaching." He said that it was his duty, in accordance with his employer's instructions, "To protect the crossing until it was blocked, until the train blocked the crossing, covered, in other words." It was his interpretation of his instructions, once a train occupied the crossing, that his duties were at an end and so, as the train entered upon the crossing, he started walking towards his shanty, three hundred and fifty feet away, and the automobile passed him as he approached the "flag stand." In these circumstances his instructions, particularly as interpreted by him, were not the whole measure of his duty to the public. It was indeed his duty "to protect the public when a train was approaching the crossing," and it would not be unreasonable for the jury to say, since he was aware of the Plymouth automobile's approaching the occupied crossing at a speed of twenty-five miles an hour, that he was also under a duty to the occupants of the automobile to again signal with his lighted lantern even though, under his instructions, he could walk away and leave the standing train unguarded. Burrichter v. Chicago, M. & St. P. Ry. Co., D.C., 10 F.2d 165; 2 Restatement Agency, Secs. 350, 353, 354. Despite the distinctions between nonfeasance and misfeasance, Giles v. Moundridg Milling Co., 351 Mo. 568, 173 S.W.2d 745, 751; McGinnis v. Chicago, R. I. & P. Ry. Co., 200 Mo. 347, 98 S.W. 590, 9 L.R.A.,N.S., 880, it would be found in the circumstances that Wolfe also owed a duty, apart from his duty to his employer under his instructions, to the plaintiff and that he was guilty of active, as distinguished from passive, negligence. Annotations 20 A.L.R. 97, 139; 99 A.L.R. 408; 57 C.J.S., Master and Servant, § 577; 74 C.J.S., Railroads, § 370. Compare Lakin v. Chicago, R. I. & P. Ry. Co., 229 Mo.App. 461, 78 S.W.2d 481, 95 S.W.2d 1245. In the circumstances of this case the trial court erroneously directed a verdict for the flagman, Wolfe, at the close of the plaintiff's evidence.
The judgment against the Wabash Railroad Company is reversed and remanded and the judgment in favor of Wolfe is reversed and remanded.
WESTHUES and BOHLING, CC., concur.
PER CURIAM.
The foregoing opinion by BARRETT, C., is adopted as the opinion of the Court.
All concur.
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324 F.Supp.2d 1230 (2004)
UNITED STATES of America, Plaintiff,
v.
Brent CROXFORD, Defendant.
No. 2:02-CR-00302-PGC.
United States District Court, D. Utah, Central Division.
July 7, 2004.
*1231 *1232 Michele M. Christiansen, Esq., U.S. Attorney's Office, Robert L. Steele, Esq., Office of the Guardian AD Litem, Salt Lake City, UT, for Plaintiff.
David V. Finlayson, Esq., Salt Lake City, UT, for Plaintiff.
AMENDED MEMORANDUM OPINION AND ORDER FINDING APPLICATION OF THE FEDERAL SENTENCING GUIDELINES UNCONSTITUTIONAL
CASSELL, District Judge.
Defendant Brent Croxford is before the court for sentencing on the offense of sexual exploitation of a child in violation of 18 U.S.C. § 2251(a). For more than fifteen years, sentencings such as Croxford's have been governed by the federal sentencing guidelines. Last Thursday, however, the United States Supreme Court ruled that portions of the State of Washington's sentencing guidelines were unconstitutional. The Court held that Washington's guidelines scheme deprived a defendant of his Sixth Amendment right to a jury trial by increasing his presumptive sentence based on a judge's, rather than a jury's, factual findings regarding sentencing factors. Because the federal sentencing guidelines suffer from the same constitutional infirmity, the court holds that, as applied to this case, the federal sentencing guidelines are unconstitutional and cannot govern defendant Croxford's sentencing. Because of the potentially cataclysmic implications of such a holding, the reasoning underlying this conclusion will be set out at some length.
I. FACTUAL BACKGROUND
On November 21, 2001, a case worker, Lori Thomassen, from the Division of *1233 Family Services called detective Craig Ellertson of the South Jordan Police Department. Thomassen advised Ellertson that a young girl, who the court will refer to as "C.C.," had disclosed that her adoptive father was taking inappropriate photographs of her.[1] At the time of the hearing, C.C. was approximately eight or nine years old.[2] Shortly after this telephone conversation, Ellertson, along with Thomassen and another officer, went over to the Croxford residence to investigate the matter. Upon arriving at the Croxfords, Mr. and Mrs. Croxford granted Ellertson and Thomassen permission to interview C.C. alone.[3]
During the interview, C.C. told Ellertson and Thomassen that Croxford was taking nude photos of her with a digital camera. C.C. described the sexually explicit poses and the things that Croxford, her adoptive father asked her to do in the photographs.[4] C.C. also explained that she thought that Croxford was putting them on the Internet and that she thought Croxford had taken similar photos of another young girl who had previously been a foster child in the Croxford home.[5]
After Ellertson and Thomassen had interviewed C.C., Ellertson requested that Croxford accompany him to the police station for questioning. During an interview with Ellertson, Croxford explained that he had taken "bathtub" photographs of C.C.[6] Croxford also confirmed that he owned a Sony digital camera, was an Internet provider for certain customers, and that he repaired and worked on computers in his home. At the conclusion of the interview, in response to questions about taking sexually explicit pictures of C.C., Croxford did not deny that he had taken such pictures, and stated "I meant to delete all of those" and "You should take me out and shoot me."[7]
Ellertson obtained a search warrant for Croxford's home. During the execution of the search warrant, officers discovered several computer diskettes in a file cabinet which contained sexually explicit pictures of C.C.[8] Upon examination of Croxford's computer equipment it was discovered that Croxford had downloaded thousands of pornographic images, including child pornography.[9] It was further discovered that the defendant had DVD disks containing photographs of C.C. and a previous foster child of the defendant, "A.M.," posing in lewd positions.
On May 16, 2002, a federal grand jury returned a two-count indictment against Croxford. Count I charged sexual exploitation of a minor, in violation of 18 U.S.C. § 2251(a). Count II charged possession of child pornography, in violation of 18 U.S.C. § 2252A(a)(5)(B). The defendant was arraigned on May 30, and thereafter filed a motion to suppress the evidence against him. Following an evidentiary hearing and additional time for briefing requested by the parties, the court denied the motion to suppress in a memorandum decision on October 10, 2002. Thereafter, the defendant requested additional time in which to *1234 consider entering a guilty plea and to file additional motions challenging the indictment. Because a guilty plea would avoid the need for C.C. to testify, the court granted the additional time and set a new trial date of April 23, 2003. However, shortly before the trial was to begin, the court was notified by the probation office that the defendant had disappeared. On April 7, 2003, the court issued a warrant for the defendant's arrest. On April 15, 2003, the defendant was found in Knoxville, Tennessee, after an apparent suicide attempt. The defendant was placed in U.S. Marshal custody and transferred back to the District of Utah.
On May 16, 2003, based on the suicide attempt, the court ordered a psychological and psychiatric examination. The defendant was then transferred to Springville, Missouri, where he was detained until December 17, 2003. The psychiatric examination concluded that the defendant was competent to stand trial. After his return to Utah, on February 25, 2004, the defendant entered into a plea agreement with the government, pleading guilty to Count I of the indictment while Count II was dismissed. The parties apparently contemplated that Croxford's sentence would fall within a Guidelines range of 121 to 151 months. In the agreement, the government specifically agreed not to argue for any upward departures from the applicable Guideline range.
The probation office then prepared a pre-sentence report in the matter, including calculations under the federal sentencing guidelines. This court noticed that missing from the pre-sentence report was a recommendation for a two-level enhancement for obstruction of justice based upon Croxford's fleeing of the jurisdiction shortly before trial. After an amendment which added the obstruction of justice enhancement, the final pre-sentence report concluded that the defendant should be sentenced under the Guidelines at an offense level of 34 and a criminal history of I, which produces a Guidelines sentence of between 151-188 months.
The probation office arrived at this conclusion in four steps. First, the office calculated the guidelines for the sexual exploitation of the victim identified in the indictment: C.C. The base offense level for this offense was 27, increased by four levels because the victim was under the age of twelve, increased a further two levels because the defendant was a parent, relative, or legal guardian of the victim, and increased a further two levels because the defendant obstructed justice by absconding before trial.[10] This produced a total adjusted offense level of 35.
As a second step, the office calculated guidelines for another young victim the defendant had photographed: A.M. Although the defendant had not been charged in the indictment with exploiting A.M., his victimization of her was part of the "relevant conduct" for determining his sentencing guideline, as it was part of his common scheme or plan.[11] The guidelines calculation for the exploitation of A.M. was exactly the same as for C.C. base offense level of 27, increased by four levels because the victim was under the age of 12, increased by a further two levels because the defendant was a parent, relative, or legal guardian of the minor, and finally increased by a further 2 levels for obstruction of justice. This produced a total adjusted offense level of 35.
As the next step, the probation office applied the "grouping rules" for aggregating *1235 these two separate calculations. Under the applicable grouping rules,[12] the two separate victims produced two "units" of victimization, which requires an additional two-level enhancement above the highest base offense level previously calculated the level 35 was increased to a level 37.
As a final step, the defendant was given credit for accepting responsibility for his offense, producing a reduction of three levels to a level 34. Because the defendant had no prior criminal history, his sentencing guideline range is 151 to 188 months.
However, five days before sentencing, the United States Supreme Court struck down Washington's sentencing guidelines in Blakely v. Washington.[13] The defendant now argues that Blakely requires the same fate for the federal sentencing guidelines at least as to the two enhancements at issue in this case. This court reluctantly agrees.
II. UNITED STATES V. BLAKELY.
In Blakely v. Washington, the Supreme Court struck down the Washington State sentencing guideline scheme Blakely is the third in a line of cases that have cast serious doubts on the constitutionality of the federal sentencing guidelines. In the first of these cases, Apprendi v. New Jersey,[14] the Supreme Court struck down a New Jersey sentencing statute that allowed a judge to enhance a defendant's sentence based on the judge's finding that the crime was committed with a biased purpose. The holding of Apprendi was that "[o]ther than the fact of a prior conviction, any fact that increases the penalty for a crime beyond the prescribed statutory maximum must be submitted to a jury, and proved beyond a reasonable doubt."[15] This holding was based on the Court's understanding of the Due Process Clause and the Sixth Amendment's right to trial by jury. "These rights," the Court reasoned, "indisputably entitle a criminal defendant to `a jury determination that [he] is guilty of every element of the crime with which he is charged beyond a reasonable doubt.'"[16] The Court further ruled that a legislature's labeling of something as a "sentencing factor" rather than an "element" of the crime was not dispositive. "[W]hen the term `sentence enhancement' is used to describe an increase beyond the maximum authorized statutory sentence, it is the functional equivalent of an element of a greater offense than the one covered by the jury's guilty verdict," and therefore must be submitted to the jury.[17]
The majority in Apprendi explicitly reserved the question of the impact of its ruling on the federal guidelines.[18] However, Justice O'Connor's dissent, joined by Chief Justice Rehnquist and Justices Kennedy and Breyer, questioned the impact of the holding on guidelines schemes, including the federal guidelines. "[T]he Court does not say," Justice O'Connor wrote, "whether these schemes are constitutional, but its reasoning strongly suggests that they are not."[19] O'Connor suggested that *1236 after Apprendi sentences based on guidelines schemes "will rest on shaky ground."[20]
The federal sentencing guidelines were again called into question by the holding in Ring v. Arizona.[21] In that case, a jury found the defendant guilty of first-degree murder. Under the Arizona law in question, the maximum punishment was life in prison unless the judge made a finding that an aggravating factor was involved, in which case the death penalty could be applied. The Court struck down the statute based on its reasoning in Apprendi.
If a State makes an increase in a defendant's authorized punishment contingent on the finding of a fact, that fact no matter how the State labels it must be found by a jury beyond a reasonable doubt.... A defendant may not be "expose[d] ... to a penalty exceeding the maximum he would receive if punished according to the facts reflected in the jury verdict alone."[22]
The Court held that "[b]ecause Arizona's enumerated aggravating factors operate as the `functional equivalent of an element of a greater offense,' ... the Sixth Amendment requires that they be found by a jury."[23]
Following Apprendi and Ring, commentators began to question whether the federal sentencing guidelines were constitutional.[24] While the Court had explicitly reserved that question, many legal commentators agreed that Apprendi and Ring required invalidation of the federal sentencing guidelines.[25] One federal district court has also reached the same conclusion.[26]
The issue seemingly came to a head in Blakely v. Washington.[27] In Blakely, the Supreme Court had before it a determinate sentencing scheme much like the federal sentencing guidelines. Blakely pled guilty to kidnaping, which, standing alone, carried a maximum sentence of 53 months. However, under Washington's sentencing scheme, "[a] judge may impose a sentence above the standard range if he finds `substantial and compelling reasons justifying an exceptional sentence.'"[28] Before enhancing a sentence the judge is required to set forth findings of fact and conclusions of *1237 law. The Washington trial court determined that Blakely had acted with "`deliberate cruelty,' a statutorily enumerated ground for departure in domestic-violence cases,"[29] and enhanced his sentence to 90 months. Blakely appealed, arguing that this enhancement violated his right to trial by jury as set forth in Apprendi.
In a five-to-four decision, the Supreme Court agreed with Blakely. After briefly reviewing Apprendi and Ring, the Court stated, "In each case, we concluded that the defendant's constitutional rights had been violated because the judge had imposed a sentence greater than the maximum he could have imposed under state law without the challenged factual finding."[30] The State objected that the case was distinguishable from Apprendi and Ring because the statutory maximum in Washington for Class B felonies is ten years and Blakely received only 90 months. The Court rejected this argument:
Our precedents make clear ... that the "statutory maximum" for Apprendi purposes is the maximum sentence a judge may impose solely on the basis of the facts reflected in the jury verdict or admitted by the defendant ... In other words, the relevant "statutory maximum" is not the maximum sentence a judge may impose after finding additional facts, but the maximum he may impose without any additional findings. When a judge inflicts punishment that the jury's verdict alone does not allow, the jury has not found all the facts which the law makes essential to the punishment ... and the judge exceeds his proper authority.[31]
In a footnote, the Court noted that the United States was concerned that a ruling in favor of Blakely would call the federal guidelines into serious doubt. "The United States, as amicus curiae, urges us to affirm. It notes differences between Washington's sentencing regime and the Federal Sentencing Guidelines but questions whether those differences are constitutionally significant.... The Federal Guidelines are not before us, and we express no opinion on them."[32]
Four justices dissented. The lead dissent, authored by Justice O'Connor and joined in part by Chief Justice Rehnquist and Justices Kennedy and Breyer, predicted that the "practical consequences of today's decision may be disastrous...."[33] Justice O'Connor explained that "Washington's sentencing system is by no means unique" since "[n]umerous other States have enacted guidelines, as has the Federal Government."[34] She warned that "[t]oday's decision casts constitutional doubt over them all and, in so doing, threatens an untold number of criminal judgements." Justice O'Connor chided the majority for "ignor[ing] the havoc it is about to wreak on trial courts across the country."[35]
That a ruling in favor of Blakely would have such effects was argued to the Court by the United States in its amicus curiae brief.[36] The government pointed out that the federal sentencing guidelines contain a provision very much like the Washington *1238 State provision at issue. The federal guidelines allow the judge to impose a sentence above the prescribed range "if the judge finds `that there exists an aggravating ... circumstance of a kind, or to a degree, not adequately taken into consideration by the Sentencing Commission in formulating the guidelines that should result in a sentence different from that described.' "[37] The government further warned that "if the Court rules that Apprendi applies here based on petitioner's theory that the statutory maximum for purposes of Apprendi is the punishment that would be imposed without any findings of fact other than the `facts reflected in the jury verdict alone' or the guilty plea alone," the federal guidelines would be called into serious question since "facts other than the elements of the offense enter into almost all of the calculations under the Guidelines, beginning with the most basic calculations for determining the offender's presumptive sentencing range."[38] While the government did offer some possible distinctions, it was apparently of the view that a ruling in favor of Blakely could well invalidate the federal sentencing guidelines system.
Justice O'Connor concluded by explaining that "the `extraordinary sentence' provision struck down today is as inoffensive to the holding of Apprendi as a regime of guided discretion could possibly be" because "the State's `real facts' doctrine precludes reliance by sentencing courts upon facts that would constitute the elements of a different or aggravated offense."[39] In Justice O'Connor's view, "If the Washington scheme does not comport with the Constitution, it is hard to imagine a guidelines scheme that would."[40]
Justice Breyer also dissented. In concluding his dissent, he observed, "Until now, I would have thought the Court might have limited Apprendi so that its underlying principle would not undo sentencing reform efforts. Today's case dispels that illusion."[41] The Court's opinion, Justice Breyer concluded, would "at a minimum ... set[ ] aside numerous state efforts in that direction. Perhaps the Court will distinguish the Federal Sentencing Guidelines, but I am uncertain how."[42] As a result, thought Justice Breyer,
this case affects tens of thousands of criminal prosecutions, including federal prosecutions. Federal prosecutors will proceed with those prosecutions subject to the risk that all defendants in those cases will have to be sentenced, perhaps tried, anew.[43]
III. APPLICATION OF BLAKELY TO THIS CASE
While this court has searched diligently for a way to disagree with the warnings of the dissenters, the inescapable conclusion of Blakely is that the federal sentencing guidelines have been rendered unconstitutional in cases such as this one. The rule set forth by the Supreme Court in Blakely was that "the `statutory maximum' for Apprendi purposes is the maximum sentence a judge may impose solely on the basis of the facts reflected in the jury verdict or admitted by the defendant."[44] A sentence may not be enhanced *1239 when doing so requires the judge to make factual findings which go beyond the defendant's plea or the verdict of the jury. Given this rule, there is no way this court can sentence Croxford under the federal sentencing guidelines without violating his right to trial by jury as guaranteed by the Sixth Amendment.
Croxford pled guilty to violating 18 U.S.C. § 2251(a), which is governed by § 2G2.1 of the sentencing guidelines. That guideline establishes a Base Offense Level of 27.[45] The Guidelines also list some Specific Offense Characteristics which can adjust the base offense level. For example, when the victim is under 12 years of age, a four-level increase is mandated.[46] Where the defendant was a parent, relative, or legal guardian of the victim, another two-level increase is mandated.[47] Croxford admitted in his plea colloquy that he knew C.C. was under the age of 12. He also admitted that he was the legal guardian of C.C. Thus, given that these were facts "admitted by the defendant," the court could apply a six-level enhancement, raising Croxford's offense level to 33 (offset by a three-level reduction for accepting responsibility).
However, two additional provisions of the Guidelines are also at issue. Based on Croxford's fleeing of the jurisdiction prior to trial, the pre-sentence report recommended a two-level enhancement for obstruction of justice under § 3C1.1 of the Guidelines. In addition, there was evidence presented to the court that a second minor, A.M., had also been victimized by Croxford. Under the "relevant conduct" guideline, § 1B1.3 of the guidelines, the pre-sentence report recommended another two-level enhancement for this fact. Application of these two enhancements would require findings of fact by the court, increase Croxford's penalty by four levels, and lead to a penalty beyond the maximum permitted for the conduct admitted to by Croxford. Instead of facing an offense level of 30 (maximum penalty of 121 months), with the enhancements Croxford is facing an offense level of 34 (penalty range of 151 to 188 months). This appears to be not merely an increase in the minimum penalty that Croxford would otherwise face,[48] but an increase beyond the maximum penalty otherwise specified in the Guidelines. The government has not argued otherwise. The court accordingly concludes that application of these enhancements would violate the Sixth Amendment.
The obstruction-of-justice enhancement, located in § 3C1.1 of the Guidelines, was essentially addressed by both the dissent and majority in Blakely. Justice O'Connor cites it as an example of a provision that is undermined by the majority's reasoning.
Some facts that bear on sentencing either will not be discovered, or are not discoverable, prior to trial. For instance, a legislature might desire that defendants who act in an obstructive manner during trial or post-trial proceedings receive a greater sentence than defendants who do not. See, e.g., United States Sentencing Commission, Guidelines Manual, § 3C1.1 .... In such cases, the violation arises too late for the State to provide notice to the defendant or to argue the facts to the jury. A State wanting to make such facts relevant at sentencing must now either vest sufficient discretion in the judge to account *1240 for them or bring a separate criminal prosecution for obstruction of justice or perjury.[49]
The majority responded to this argument by agreeing with Justice O'Connor that its holding would require a jury to find the defendant guilty of obstruction:
Another example of conversion from separate crime to sentence enhancement that Justice O'Connor evidently does not consider going "too far" is the obstruction-of-justice enhancement.... Why perjury during trial should be grounds for a judicial sentence enhancement on the underlying offense, rather than an entirely separate offense to be found by a jury beyond a reasonable doubt (as it has been for centuries, see 4 W. Blackstone, Commentaries on the Laws of England 136-138 (1769)), is unclear.[50]
The fact that the obstruction of justice in this case occurred before the trial is irrelevant to the holding of Blakely. It is clear that after Blakely this court cannot impose additional time on a criminal defendant through a judicial finding that he is guilty of obstruction of justice.
Nor can the court impose an enhancement under the relevant conduct guideline for the crimes allegedly committed against A.M. This conduct was not charged in the indictment and was not admitted by the defendant. Thus, a factual finding by this court would be required to apply the enhancement. The clear command of Blakely is that such factual findings, unless admitted by the defendant, must be made by a jury. As the Supreme Court stated in Apprendi,"[T]rial by jury has been understood to require that `the truth of every accusation, whether preferred in the shape of indictment, information, or appeal, should afterwards be confirmed by the unanimous suffrage of twelve of [the defendant's] equals and neighbors...."'[51]
Additionally, while courts apply a preponderance of the evidence standard to the Guidelines,[52]Apprendi and its progeny make clear that the "companion right [to trial by jury is] to have the jury verdict based on proof beyond a reasonable doubt."[53] Further, judges are often privy to evidence that juries never hear. The federal sentencing guidelines allow judges to make their findings while considering "relevant information without regard to its admissibility under the rules of evidence applicable at trial, provided that the information has sufficient indicia of reliability to support its probable accuracy."[54] The Federal Rules of Evidence also specifically do not apply to sentencing.[55] Presumably, if sentence-enhancing facts must now be charged and proven to a jury beyond a reasonable doubt, constitutional evidentiary safeguards will apply. Thus, both the standard of proof required and the evidentiary procedures in applying the Guidelines violate the Supreme Court's holdings in Apprendi and its progeny.
In an effort to avoid these seemingly inevitable conclusions, the government half-heartedly offered several arguments for distinguishing the federal guidelines from the Washington guidelines in its amicus brief in Blakely. None of these arguments *1241 are persuasive, as the government itself seemingly recognized.
The government argued that "unlike the Washington system, the federal Guidelines are not enacted by a legislature but are promulgated by the Sentencing Commission, an independent commission in the judicial branch of the United States."[56] The government further claimed that the Washington system set a "sentencing range" as opposed to the "presumptive sentencing range" set in the federal guidelines. Neither of these distinctions is persuasive, as Justice O'Connor explained in her dissent:
It is no answer to say that today's opinion impacts only Washington's scheme and not others, such as, for example, the Federal Sentencing Guidelines.... The fact that the Federal Sentencing Guidelines are promulgated by an administrative agency nominally located in the Judicial Branch is irrelevant to the majority's reasoning. The Guidelines have the force of law, see Stinson v. United States, 508 U.S. 36, 113 S.Ct. 1913, 123 L.Ed.2d 598 (1993); and Congress has unfettered control to reject or accept any particular guideline, Mistretta [v. United States], 488 U.S. at 393-394, 109 S.Ct. 647.
The structure of the Federal Guidelines likewise does not, as the Government half-heartedly suggests, provide any grounds for distinction.... Washington's scheme is almost identical to the upward departure regime established by 18 U.S.C. § 3553(b) and implemented in USSG § 5K2.0. If anything, the structural differences that do exist make the Federal Guidelines more vulnerable to attack. The provision struck down here provides for an increase in the upper bound of the presumptive sentencing range if the sentencing court finds, "considering the purpose of [the Act], that there are substantial and compelling reasons justifying an exceptional sentence." Wash. Rev.Code Ann. § 9.94A.120 (2000). The Act elsewhere provides a nonexhaustive list of aggravating factors that satisfy the definition. § 9.94A.390. The Court flatly rejects respondent's argument that such soft constraints, which still allow Washington judges to exercise a substantial amount of discretion, survive Apprendi.... This suggests that the hard constraints found throughout chapters 2 and 3 of the Federal Sentencing Guidelines, which require an increase in the sentencing range upon specified factual findings, will meet the same fate. See, e.g., USSG § 2K2.1 (increases in offense level for firearms offenses based on number of firearms involved, whether possession was in connection with another offense, whether the firearm was stolen); § 2B1.1 (increase in offense level for financial crimes based on amount of money involved, number of victims, possession of weapon); § 3C1.1 (general increase in offense level for obstruction of justice).[57]
Finally, it is worth noting a passage in the Court's opinion in Blakely seemed to envision that the federal sentencing guidelines would end up being invalidated under Apprendi. The Blakely dissenters argued that the Apprendi approach was unfair to defendants. The majority responded: "Any evaluation of Apprendi's `fairness' to criminal defendants must compare it with the regime it replaced, in which a defendant, with no warning in either his indictment or plea, would routinely see his maximum potential sentence balloon from as *1242 little as five years to as much as life imprisonment."[58] The majority then cited the provision of the federal statutes dealing with drug sentences.[59] The majority's pointed example of a federal drug sentence as one that was most problematic clearly suggests that the opinion's reasoning extends to the federal Guidelines.
For all these reasons, to the extent that the Guidelines require an upward enhancement of the defendant's sentencing range without a jury determination, this court concludes that they do not satisfy the commands of Blakely. In reaching this conclusion, the court hastens to add that not all criminal defendants will be able to successfully mount such a challenge. Where the Guidelines can be applied without additional factual findings by the court beyond those found by a jury (or perhaps admitted as part of a plea proceeding), the Guidelines will still apply. The Court in Blakely made it clear that determinate sentencing schemes are not per se unconstitutional. "By reversing the judgment below, we are not, as the State would have it, `find [ing] determinate sentencing schemes unconstitutional.' ... This case is not about whether determinate sentencing is constitutional, only about how it can be implemented in a way that respects the Sixth Amendment."[60] This may suggest that for future guilty pleas, the government may wish to ensure that the "statement in advance of plea" signed by the defendant includes all the necessary facts for application of the Guidelines and that indictments include necessary facts for applying the Guidelines. Moreover, defendants are always free to waive any rights they might have under Blakely, a point discussed at some length in the majority and dissenting opinions in that case.[61] These issues can be sorted out in future cases. Here, however, additional facts beyond those contained in the indictment and the plea agreement are required to apply the enhancements, and Blakely does not permit use of such facts.
IV. REMEDY FOR THE UNCONSTITUTIONALITY OF THE GUIDELINES
In light of the fact that the court cannot constitutionally apply two upward enhancements to Croxford, the next question to be decided is the appropriate remedy for this constitutional problem. Blakely provides no guidance on this critical issue. Indeed, as Justice O'Connor asked about these "unsettling" consequences in her dissenting opinion: "How are courts to mete out guidelines sentences? Do courts apply the guidelines as to mitigating factors, but not as to aggravating factors? Do they jettison the guidelines altogether? The Court ignores the havoc it is about to weak on trial courts across the country."[62]
In an effort to avoid havoc, the court believes that three options for dealing with Blakely are worthy of consideration: (1) the court could convene a sentencing jury, which would determine (presumably by proof beyond a reasonable doubt) whether the facts underlying the enhancement could be proven; (2) the court could continue to follow the other sections of the Guidelines apart from the defective upward enhancement provisions; or (3) the court could treat the Guidelines as unconstitutional in their entirety in this case and sentence Croxford between the statutory minimum and maximum. The court believes *1243 that the third option is the only viable one.
As to the first option convening a sentencing jury a jury would be convened to "decide whether the government has proved any aggravating facts (other than prior conviction), beyond a reasonable doubt. Once a sentencing jury made its determination, the court could then determine an appropriate sentence within the range authorized by the jury's verdict."[63] This approach has been described in one detailed opinion as "Apprendi-izing" juries.[64]
The court finds that this approach is not legally authorized and not practical. As a legal matter, this solution is problematic because it effectively requires the courts to redraft the sentencing statutes and implementing Guidelines. In Blakely, the Court declined to revise the Washington scheme and here that appears to be a task uniquely left to Congress. It is settled doctrine that "[s]tatutes should be construed to avoid constitutional questions, but this interpretive canon is not a license for the judiciary to rewrite language enacted by the legislature."[65]
Currently the Guidelines contemplate a system in which the probation office gathers facts subject to the parties' objection and presents them to the judge for disposition. Based on the probation officer's report, the court then makes factual findings that can be reviewed on appeal. To say that some, but not all, of these duties are summarily transferred to a sentencing jury would upset the entire scheme. Furthermore, because the duties of probation officers and judges are specified in the Guidelines, any judicial redistribution of duties would necessarily involve a reworking of the statute. As one example of the reworking that would need to be done, the Federal Rules of Criminal Procedure currently provided that "the court" shall determine any disputed sentencing matter.[66]
As a practical matter, it would be impossible to simply confer upon the jury all of the judge's duties under the Guidelines statutes. The current regime requires judges to make extensive findings that affect the sentence.[67] While juries generally are adept at determining the guilt or innocence of a defendant, the list of findings contemplated by the Guidelines is extensive and nuanced, modified and interpreted regularly in numerous court opinions. Making such findings is a task much assigned to judges, not to juries.
An illustration from the obstruction of justice guideline applicable in this case will prove the point. It would be virtually impossible for application of that guideline to be determined by a jury. For starters, the guideline requires consideration of obstructive conduct with respect to information provided to the probation office.[68] This would require a jury to evaluate the process by which the court collects evidence for a pre-sentence report not an appropriate subject for jury determination. More serious, the guideline instructs that certain types of conduct "ordinarily do not warrant application of this [obstruction] adjustment but may warrant a greater sentence within the otherwise applicable *1244 guideline range or affect the determination of whether other guideline adjustments apply (e.g., Acceptance of Responsibility)."[69] The only way a jury could begin to decide whether a defendant's conduct amounted to obstruction (warranting an adjustment to the base offense level) as opposed to something less serious (warranting only a greater sentence within the applicable guideline range) would be to fully understand how the Guidelines system operates. It would be impossible to give lay jurors this kind of legal instruction.
Other problems exist as well. The Guidelines contemplate information being evaluated in the sentencing process that is not normally given to a jury. For example, could the jury order a psychiatric or psychological examination to determine the mental state of the defendant,[70] as the court ordered in this case? Furthermore, the Guidelines currently require the court to state its reasons for the sentence on the record.[71] It is a hard enough task to require twelve independent minds to agree on the question of guilt, let alone the Herculean task of getting them to unite behind each factual finding relevant to the sentencing and then put forth a single, representative voice to express their common will to provide a sufficient basis for appellate review. Additionally, the Guidelines and Rule 32 of the Rules of Criminal Procedure make room for ongoing dialogue between the court, the parties, and the probation office. For example, under certain circumstances, the court is required to notify the parties before it takes certain actions.[72] Also, the Guidelines contemplate that the probation officer will provide a pre-sentence report to the court before sentencing.[73] While such dialogue is feasible where the court, parties, and probation office have an ongoing relationship, if the jury were to don the judge's robe for sentencing, it might have to remain empaneled for weeks at a time just to determine a sentence.
In short, the idea of simply breaking off a number of judicial duties to give to juries cannot work without significant reforms to the Guidelines system, reforms that can only be implemented by Congress.
The second option is to follow the Guidelines, but only to the extent that the Guidelines do not require additional fact-finding about an enhancement for aggravating factors beyond that contained in the plea or in the jury's verdict. For instance, in this case the court might take the facts admitted in the plea agreement and apply these to the Guidelines, but not additional facts that aggravate the sentence i.e., not the facts regarding obstruction of justice and the exploitation of A.M. This approach would appear to solve the Sixth Amendment problem with the Guidelines in this case: the defendant seemingly cannot complain about applying a sentencing scheme to facts that he has sworn to in court, and Blakely allows a reduction in sentencing range without any jury findings.
Such an approach would be arguably permitted if the unconstitutional parts of the sentencing scheme (i.e., unconstitutional enhancements) could be severed from the other sections of the scheme. As the Supreme Court has explained, "[u]nless is it evident that the Legislature would not have enacted those provisions which are within its power, independently of that which is not, the invalid part may be dropped if what is left is fully operative as *1245 a law."[74] Here it is evident indeed, plainly evident that Congress would not have adopted the sentencing scheme without such enhancements.
For starters, the Sentencing Reform Act of 1984 contains no severability clause.[75] As a result, as the Ninth Circuit has explained in construing this very Act, the absence of such a clause "does suggest that Congress intended to have the various components of the sentencing reform package operate together or not all."[76] Moreover, the legislative history to the Act describes the reforms as a "comprehensive plan."[77] Thus, the Ninth Circuit when faced with how to deal with an unconstitutional portion of the Act explained, "Congress having chosen a `comprehensive' approach to making sentencing more determinate, we will not sever companion sections of the guidelines system that would introduce piecemeal reforms."[78]
Severing just the enhancements would also not square with the core purposes of the Sentencing Reform Act of 1984. In the opening section of the Act, Congress set forth its basic purposes: to insure that criminal sentences are structured "to reflect the seriousness of the offense, to promote respect for the law, and to provide just punishment for the offense" as well as to "afford adequate deterrent to criminal conduct ... [and] protect the public from further crimes of the defendant."[79]
Applying only the Blakely-proof portions of the Guidelines would hardly square with these goals. It would create a one-way street, in which the defendant would benefit from downward adjustments to the Guidelines, but would not face upward adjustments. In this case, for example, the defendant would presumably seek to have his offense level adjusted downward by three levels for accepting responsibility even though there has been no jury determination of that fact while at the same time opposing any upward adjustment for obstructing justice or exploiting A.M. on grounds that there has been no jury determination of these facts. Essentially the defendant would be arguing "what's mine is mine, what's yours is negotiable." The Guidelines, however, are a holistic system, calibrated to produce a fair sentence by a series of both downward and upward adjustments. As the Guidelines themselves explain, "The Guidelines Manual in effect on a particular date shall be applied in its entirety."[80] To look at only one half of the equation would inevitably tug downward on criminal sentences, perhaps producing sentences that do not provide just punishment or protect public safety. The Congress would never have adopted such a one-sided approach. Accordingly, the court cannot give effect to only the Blakely-proof parts of the Guidelines but not the other parts.
*1246 By default, then, in this case the court is left with only the third option treating the Guidelines as inapplicable. What this means is that the court will not follow the Guidelines in sentencing defendant Croxford. However, the constitutional defects in the Guidelines do not necessarily permeate other parts of the criminal code. The court must still adhere to the statutory commands setting statutory maximum (and, perhaps, minimum sentences). In this case, for instance, Congress has set a maximum possible penalty of twenty years in prison,[81] with which the court will comply. Congress has also set a mandatory minimum penalty of ten years in prison.[82] The defendant has not challenged the constitutionality of this penalty, seeking only a sentence at that minimum. Moreover, even if such a challenge had been raised, the court would find it unnecessary to consider it, as the court in exercising its judgment as to the appropriate sentence would clearly impose a sentence at or above the minimum term. Accordingly, any constitutional questions about whether defects in the Guidelines system further infect the mandatory minimum sentences can be left to another day. In sum, the court will handle the sentencing in this matter as the courts handled sentencings before the Guidelines by making a full examination of the relevant evidence and imposing an appropriate sentence within the statutory range set by Congress.
In reviewing the whole record, the next question is what kinds of evidence the court can review. In particular, is the court restricted to the narrow facts contained in the indictment and the statement in advance of plea? Or can the court look more broadly at a wide range of information, including in this case (for example) information that the defendant obstructed justice and exploited A.M. The court believes that it is free to examine all relevant information. This conclusion is supported by the Supreme Court's decision more than a half-century ago in Williams v. New York,[83] discussed in Blakely. In Williams a jury found Williams guilty of first-degree murder and recommended a sentence of life imprisonment. The judge disregarded the jury's recommendation and imposed a sentence of death. The judge based his decision both on evidence given in open court and evidence obtained from the Probation Department and other outside sources. Williams appealed, arguing that the use of evidence in sentencing which had not been submitted to an adversarial process including confronting witnesses, cross-examination, and rebuttal, violated his due process rights. The Supreme Court rejected Williams' contention:
Tribunals passing on the guilt of a defendant always have been hedged in by strict evidentiary procedural limitations. But both before and since the American colonies became a nation, courts in this country and in England practiced a policy under which a sentencing judge could exercise a wide discretion in the sources and types of evidence used to assist him in determining the kind and extent of punishment to be imposed within limits fixed by law.[84]
The Court further noted that "there are sound practical reasons for the distinction" between "evidentiary rules governing trial *1247 and sentencing procedures."[85] At trial, only "evidence that is strictly relevant to the offense charged" is admitted in order to "prevent a time consuming and confusing trial of collateral issues."[86] Evidentiary rules governing trial also protect criminal defendants by preventing the jury from finding the defendant guilty based on unrelated misconduct.[87]
A sentencing judge, however, is not confined to the narrow issue of guilt. His task ... is to determine the type and extent of punishment after the issue of guilt has been determined. Highly relevant if not essential to his selection of an appropriate sentence is the possession of the fullest information possible concerning the defendant's life and characteristics. And modern concepts individualizing punishment have made it all the more necessary that a sentencing judge not be denied an opportunity to obtain pertinent information by a requirement of rigid adherence to restrictive rules of evidence properly applicable to the trial.[88]
Most important for present purposes, the Court in Williams pointed out that "New York criminal statutes set wide limits for maximum and minimum sentences" and that "[i]n determining whether a defendant shall receive a one-year minimum or a twenty-year maximum sentence, we do not think the Federal Constitution restricts the view of the sentencing judge to the information received in open court."[89]
In Blakely, the Court specifically approved of the sentencing scheme set forth in Williams because it involved an "indeterminate-sentencing regime which allowed a judge (but did not compel him) to rely on facts outside the trial record."[90] Further Williams did not involve "a sentence greater than what state law authorized on the basis of the verdict alone."[91]
With the Guidelines out of play in this case, this court finds itself employing an indeterminate-sentencing scheme such as existed in Williams. The irony is that after Blakely, this court is free to consider the same evidence which, under the unconstitutional Guidelines scheme, would have had to be proven to a jury beyond a reasonable doubt including evidence of obstruction of justice and multiple victims. The only limitation placed on this court by Blakely is the prohibition against decreeing a sentence greater than the statutory maximum now twenty years. Some observers may conclude that this is paradoxical, inasmuch as Blakely's core goal is to insure jury fact-finding at sentencing. However, Blakely's constitutional requirement is that "the prosecutor prove to a jury all facts legally essential to the punishment."[92] Because the only "legally essential" fact to punishing Croxford in the statutorily-mandated range of ten to twenty years is the fact of conviction, there is no constitutional prohibition to the court considering the evidence surrounding these alleged facts.
At the same time, the court might also now be free to consider facts that the Guidelines would make irrelevant. In this case, for example, it appears based on a detailed, court-ordered psychiatric report *1248 that the defendant was sexually abused as a child on numerous occasions. Under the Guidelines, such facts are "ordinarily not relevant" in determining whether to depart from the guideline range.[93] Because the court is apparently now more free to consider this evidence, in order to avoid giving the defendant grounds to appeal (which, if successful, might further traumatize the young victim) the court has taken the evidence into consideration by slightly reducing the defendant's sentence.
A final question is whether the court can look at the Guidelines for guidance in determining the appropriate sentence in this case, even though the Sixth Amendment forbids giving them the force of law. The court will consider the Guidelines as providing useful instruction on the appropriate sentence. The Sentencing Commission has carefully developed the Guidelines over many years, and the Guidelines generally produce sentences that accord with the public's views of just punishment.[94] They are a valuable source of information, even though they are not binding in this case. Additionally, implementation of the Guidelines was based largely on the pre-sentence report compiled by a probation officer. As the Supreme Court noted as long ago as Williams, these reports "have been given a high value by conscientious judges who want to sentence persons on the best available information rather than on guesswork and inadequate information."[95]
In sum, the court concludes that Croxford must be sentenced between the statutorily-required terms of 10 to 20 years in prison, with the appropriate sentence to be determined after consideration of all relevant evidence.
V. DETERMINATION OF THE SENTENCE
A. The Prison Sentence.
The court must next determine the appropriate prison sentence for defendant Croxford. Any determination of the sentence must start with the fact that the defendant has gravely harmed C.C., the victim of the indicted offense. By forcing her to participate in the taking of sexually-explicit photographs, the defendant has caused untold psychiatric injury seriously damaged her potential for normal development.
The court also concludes, by a preponderance of the evidence, that Croxford has gravely harmed another victim, A.M. Here again, Croxford's acts are extremely serious. The harm to C.C. and A.M. is compounded by the fact that Croxford was these girls' adoptive father at the time, abusing this position of trust.
The court further concludes, by a preponderance of the evidence, that Croxford has impeded the proper administration of this case by absconding from Utah shortly before the trial in this matter. This delay was particularly serious because it delayed final resolution of this matter for a considerable period of time, undoubtedly aggravating the trauma felt by the victim C.C. by preventing a final resolution of this case.
The court believes that the proper sentence for someone who has acted in this fashion would be as the Guidelines specify in the range of 151 to 188 months. The Government originally recommended a sentence no higher 151 months in this case by not objecting to the original pre-sentence *1249 report which placed the guideline range at 121-151 months and by agreeing in the plea agreement not to urge an upward departure from the Guidelines.[96] At the sentencing hearing, the government was understandably disappointed at the court's ruling announcing the possible demise of the Guidelines and appeared to respond harshly in its sentencing allocution by urging that the defendant be sentenced at the statutory maximum of 20 years. The record should be clear that the court has totally ignored the government's recommendation and has instead proceeded as though the government was vigorously urging a sentence of no more than 151 months. A sentence of 20 years is far beyond what the government initially recommended as part of its plea agreement, and as defendant's counsel argued at the sentencing hearing, such a government recommendation may very well violate the plea agreement. The defendant is entitled to have the government comply with its obligations under the plea agreement. The court wishes to avoid any additional questions on appeal. Because of the young age and vulnerability of the victim, finality is essential in this case. C.C.'s court-appointed attorney specifically argued at the sentencing hearing that C.C. simply would not understand if the case ended up in this court again and urged the court to eliminate as many appellate issues as possible. Because of this, the court will exercise an overabundance of caution to attempt to ensure finality of the sentence. The court will impose a sentence of 148 months, slightly below the government's initial recommendation and below the applicable but unconstitutional Guideline range.
B. Restitution.
The court must also consider restitution. C.C. will apparently require extensive therapy because of Croxford's crime, and the pre-sentence report recommends the court impose restitution in the amount of $79,968 to cover the costs of this therapy. Under Tenth Circuit case law interpreting the restitution statutes, such restitution is appropriate.[97] The court must also consider, however, whether these restitution statutes are called into question by Blakely.
Congress has mandated restitution for crimes of violence generally[98] and for sexual exploitation offenses in particular.[99] The purpose of these statutes "is to force offenders to `pay full restitution to the identifiable victims of their crimes.' "[100] The statutes require the court to impose restitution for crimes such as the one at issue here.[101] Most important for present purposes, the restitution statutes specify judicial fact-finding rather than jury fact-finding. Under the statutes, the court is required to resolve any factual dispute by a preponderance of the evidence.[102] If Blakely applies to restitution issues, then those issues must be submitted to a jury.
*1250 The Sixth Amendment does not extend to restitution issues for the simple reason that restitution is not a penalty for a crime. The Tenth Circuit has squarely held that the Mandatory Victims Restitution Act (MVRA) does not impose punishment. In United States v. Nichols,[103] the Circuit faced the issue of whether to apply the MVRA (adopted in 1996) retroactively to crimes committed by Terry Nichols in 1995. The Circuit concluded that the Constitution's prohibition of ex post facto laws did not bar retroactive application of the new restitution statute because the statute was not punitive. The Circuit explained that the purpose of restitution" `is not to punish defendants ... but rather to ensure that victims, to the greatest extent possible, are made whole for their losses.'"[104] The Circuit therefore concluded that the MVRA could apply to Nichols because it did not "inflict criminal punishment" upon him and thus was not punitive.[105]
Under the holding of Nichols, the Sixth Amendment is not applicable to restitution issues. As Blakely itself explains, the Sixth Amendment requires jury determinations where any fact "`increases the penalty for a crime.' "[106] Because restitution is not a penalty, the jury trial right is not implicated and the court will order full restitution in the amount of $79,698.
The court will also order that this amount is due in full immediately.[107] Having considered the relevant factors surrounding the defendant's ability to pay, the court orders that the restitution is payable on a schedule of $25 per quarter or 50% of his income (whichever is greater) while in prison and for sixty days after his release. Thereafter, restitution shall be paid at a rate of $100 per month. At the time of the defendant's release, the probation officer shall take into consideration defendant Croxford's economic status as it pertains to his ability to pay the restitution ordered and shall notify the court of any changes that may need to be made to the payment schedule. The defendant shall advise the court and the Attorney General, through the probation office, of any material change in his financial circumstances.[108]
VI. MOTION FOR CONTINUANCE TO PERMIT ADDITIONAL BRIEFING
The United States Attorney's Office for the District of Utah has capably handled this case throughout its long course. With respect to the constitutional issues discussed in this case, the Office has asserted the constitutionality of the Guidelines, but at the same time has acknowledged that future guidance on this issue may be forthcoming in the near future from the Attorney General. The Office has also moved for a continuance of this sentencing until it receives such guidance. The defense has joined in this motion to continue.
*1251 The court denies the parties' motion for a continuance. While the parties may be willing to stipulate to further delay, the continuance is opposed by the victim, C.C., represented in this action by a court-appointed guardian.[109] As the guardian argued in opposition to the motion to continue, C.C. has prepared herself for this sentencing hearing and has appeared in person to allocute regarding the appropriate sentence. To delay this already-protracted case even longer could cause serious psychiatric harm to C.C. (C.C. later found enough courage to whisper in her father's ear to allocute to the court about the terrible things Croxford had done to her.)
There is a statutory ground for denying the continuance. Congress has commanded that in cases involving child victims "[t]he court shall ensure a speedy trial in order to minimize the length of time the child must endure the stress of involvement with the criminal process."[110] The government apparently takes the view that this statutory command does not apply to its motion to continue on the ground that a sentencing hearing is not implicated in a speedy trial guarantee. The court disagrees. In 1957 the Supreme Court assumed "arguendo" that sentencing is part of the trial for purposes of Sixth Amendment speedy trial protection.[111] Since then, the Tenth Circuit and all others which have addressed the issue "have either treated the subject as established law or have perpetuated the Court's assumption in Pollard."[112] At least eighteen states have reached the same conclusion.[113] Given that criminal defendants have a "speedy trial" guarantee that embraces sentencing, the court believes that the victims' protection should be equally expansively construed.
Even if the speedy trial provision does not cover this sentencing hearing, Congress has also adopted the (often-overlooked) Victims of Crime Bill of Rights. Placed somewhat awkwardly in Title 42 of the United States Code,[114] the Victims of Crime Bill of Rights requires that the government give victims the right "to confer with [the] attorney for the Government on the case" and also to be "treated with fairness and with respect for the victim's dignity and privacy."[115] In this case, the government apparently did not consult with the victim's guardian before seeking a delay of the sentencing although given the speed with which events have moved in *1252 the wake of Blakely, this action is understandable. Nonetheless, the court believes that in the circumstances of this long-delayed case, the victim's statutory right to be "treated with fairness" requires that it move forward with the sentencing as scheduled.
Entirely apart from the victim's interest in a speedy resolution, the court has its own significant reasons for proceeding expeditiously to resolve Blakely's implications even before the Department of Justice has fully formulated its position. It does not appear to be a realistic option to wait. During this week alone, the court has on its calendar six criminal cases set for sentencing. More than a thousand criminal defendants currently have cases pending in the District of Utah. Indeed, as the dissenting justices warned in Blakely, there are perhaps tens of thousands of federal cases that are implicated by questions surrounding the constitutionality of the Guidelines. It is important that these cases not be stalled; the questions that Blakely raises must be addressed as rapidly as possibly. The motion to continue is therefore denied.
Nonetheless, because the Department may have additional arguments to provide shortly, the court believes that United States should be given an opportunity to file a motion to reconsider this ruling once the Attorney General has formulated a position on these questions. Accordingly, the court directs that, if the United States believes that any of the foregoing conclusions are incorrect, it shall file a motion to reconsider the court's decision as soon as practicable and, in any event, not later than July 9, 2004. The defendant shall file any response one week following any motion to reconsider filed by the United States. In the meantime, the court will withhold final judgment in this case.
VII. PROCEDURES FOR FUTURE SENTENCINGS
The court realizes that its holding today may apply in many other cases pending before the court. Moreover, the court recognizes that the Supreme Court has yet to speak definitively on the implications of Blakely on the federal guidelines and that the Court might somehow find a way next term to validate the Guidelines. If so, this court then might be forced to resentence numerous defendants who, like Croxford, avoided sentencing under the Guidelines.
This potential problem can perhaps be mitigated. Until the constitutionality of the federal sentencing guidelines has been definitively resolved by the Supreme Court, the court will plan to announce two sentences at each sentencing hearing: (1) the sentence the court will impose if application of the Guidelines is unconstitutional; and (2) as a backup, the sentence the court would impose if the Guidelines are later determined to be constitutional. Thus, regardless of how the Supreme Court ultimately resolves the question, no further protracted sentencing hearings need occur. To facilitate the entry of a backup sentence, the court plans to include in its future judgments the following additional boilerplate language:
[] The court finds that the application of the sentencing guidelines to this defendant is not permitted by Blakely v. Washington. Therefore, the sentence in this judgment is a non-guideline sentence. Should the sentencing guidelines later be found to be constitutional, it will be judgment and order of the Court that the defendant be committed to the custody of the United States Bureau of Prisons for a term of ______.
All other terms and conditions of the judgment will remain the same.
[] The court finds that the application of the sentencing guidelines to this *1253 defendant is permitted by Blakely v. Washington. Therefore, the sentence in this judgment is a guideline sentence. Should the sentencing guidelines later be found to be unconstitutional in their entirety, it will be the judgment and order of the Court that the defendant be committed to the custody of the United States Bureau of Prison for a term of ________.
All other terms and conditions of the judgment will remain the same.
[] The defendant has waived any rights under Blakely v. Washington.
In this case, the court will impose a backup sentence under the Guidelines of 151 months, at the low end of the applicable Guideline range and within the applicable Guideline range as agreed to initially by both the government and the defendant when neither raised any objection to the first pre-sentence report in this matter.
For future cases, to ensure that the information for such backup sentences is available, the court directs the probation office to continue preparing pre-sentence reports as it has done in the past, with full Guidelines calculations. The court also directs the parties in all criminal cases to continue handling guidelines issues as they have in the past.
For all future criminal sentencing, the court also directs the United States Attorney's Office to file an additional pleading addressing the appropriate sentence to be imposed in the event that the Guidelines cannot be constitutionally applied to the defendant at issue. Where feasible, this pleading shall be filed 14 days in advance of sentencing. The defendant shall file any response three days in advance of sentencing.
If the United States Attorney's Office has any concerns about the foregoing, it should feel free to raise them as soon as possible or in any motion to reconsider the court's ruling filed as described in the previous section.
VIII. CONCLUDING OBSERVATIONS
Because of the significance of the court's holding today, a few concluding observations may be in order.
The court takes no joy in finding serious constitutional defects in the federal guidelines system. To the contrary, the court believes that the federal sentencing guidelines have ensured that federal sentences achieve the purposes of just punishment and deterring future crimes.[116] But the issue before the court today is not the desirability of the Guidelines, but their constitutionality. In the wake of Blakely, the court has no choice but to decline to enforce them here.
The court also understands that there will be those who will applaud this ruling, including in particular advocates for the rights of criminal defendants. But while today's ruling may appear to strengthen constitutional protections for defendants, the long run consequences may not be so propitious. If the court is correct that the Guidelines cannot be constitutionally applied in cases such as Croxford's, Congress will obviously be forced to correct the problem. Congress has only a limited number of choices,[117] all of which seem less *1254 desirable for criminal defendants and the public than the Guidelines system.
One option would be to return to the indeterminate sentencing scheme that pre-dated the Guidelines.[118] It seems unlikely that Congress will move in this direction. After all, the very purpose of the Sentencing Reform Act, which created the Guidelines, was to eliminate such judicial discretion. Congress was concerned about creating a system where prison sentences "appeared to depend on `what the judge ate for breakfast' on the day of the sentencing."[119] More recent events, such as passage of the PROTECT Act,[120] suggest that Congress is distrustful of giving judges greater sentencing discretion.
Another option open to Congress would be to replicate the Guidelines system, but with the addition of jury (rather than judicial) fact-finding. This approach, too, seems highly unlikely to be adopted. It is improbable that Congress will elect to create a system where a sentence for robbery, for example, requires a jury to determine factors regarding the nature of the offense such as (1) the nature of the institution robbed; (2) the presence of, brandishing of, or other use of, a firearm; (3) the making a death threat, (4) the presence of ordinary, serious, or permanent or life threatening bodily injury; (5) any abduction; (6) any physical restraint; (7) the taking of a firearm, (8) the taking of drugs, and (9) and the value of property taken; and further factors regarding the defendant's role in the offense such as (10) aggravating role; (11) mitigating role; (12) abuse of a position of trust; (13) use of a special skill; and (14) use of minor; and further factors regarding the victim such as (15) hate crime motivation; (16) vulnerable victim; (17) official victim; (18) terroristic motivation; and further factors concerning (19) obstruction of justice; and (20) acceptance of responsibility not to mention another dozen or so grounds for departing upward or downward from the general guidelines calculations.[121] As explained earlier, juries may be poorly suited to making these kinds of determinations, which for decades have been within the province of trial judges. Jury trials also require considerable time and expense for prosecutors and the courts, which Congress may well wish to avoid.
By default, then, Congress may be forced to select a third option: Congress might replace the carefully-calibrated Guidelines with a series of flat mandatory minimum sentences covering not just sexual offenses at issue here but all criminal cases. There is every reason to expect that those mandatory minimum sentences will be quite high, as Congress will understandably give precedence to concerns about public safety rather than to concerns about fine-tuning culpability between various offenders. Indeed, if the experience with mandatory minimum sentences in the areas of drug and firearms offenses is any guide, the mandatory minimum sentences may be extraordinarily tough.
*1255 Such mandatory minimum sentences pose significant problems for a system of criminal justice.[122] As one architect of the Guidelines has commented:
Whereas the guidelines permit a degree of individualization in determining the appropriate sentence, mandatory minimums employ a relatively narrow approach under which the same sentence may be mandated for widely divergent cases. Whereas the guidelines provide for graduated increases in sentence severity for additional wrongdoing or for prior convictions, mandatory minimums often result in sharp variations in sentences based on what are often only minimal differences in criminal conduct or prior record. Finally, whereas the guidelines incorporate a "real offense" approach to sentencing, mandatory minimums are basically a "charge-specific" approach wherein the sentence is triggered only if the prosecutor chooses to charge the defendant with a certain offense or to allege certain facts.[123]
The court agrees that the Guidelines are far better than a system of mandatory minimum sentences. But given the constitutional straitjacket imposed by Blakely, Congress may decide that it has no choice other than to adopt a determinate sentencing system that creates tough fixed sentences across the board an outcome that will protect neither the interests of criminal defendants nor, paradoxically, the very right to a jury trial that Blakely sought to protect.
Given this bleak prediction about the future, the court hopes that it has overlooked something and that the Guidelines can be constitutionally applied to defendants like Croxford. But the court's fundamental obligation is to support, obey, and defend the Constitution. As interpreted in Blakely, the Sixth Amendment forces the court to find the Guidelines unconstitutional in this case.
CONCLUSION
The court holds the Federal Sentencing Guidelines cannot be constitutionally applied in determining defendant Croxford's sentence. Proceeding without the Guidelines, the court finds that a sentence of 148 months imprisonment and $79,698 is appropriate in this case. Should an appellate court later hold that the Guidelines can be constitutionally applied in this case, the court would impose a Guideline sentence of 151 months.
SO ORDERED.
NOTES
[1] See Transcript of Hearing on Motion to Suppress, August 8 and 9, 2002 at 8 ("Transcript").
[2] See id. at 12.
[3] See id. at 9-11.
[4] See id. at 12-13.
[5] See id. at 13-14.
[6] Transcript at 20.
[7] Id. at 20-21.
[8] See id. at 26.
[9] See Government's Memorandum in Opposition to Defendant's Motion to Dismiss at 4.
[10] See U.S.S.G. §§ 2G2.1, 3C1.1.
[11] See generally U.S.S.G. § 1B1.3 (describing relevant conduct); see also U.S.S.G. § 2G2.1(c)(1) (requiring consideration of multiple victims when sentencing for sexual exploitation of a minor).
[12] See U.S.S.G. 2G2.1(c)(1) (requiring application of § 3D1.2).
[13] ___ U.S. ___, 124 S.Ct. 2531, 159 L.Ed.2d 403 (2004).
[14] 530 U.S. 466, 120 S.Ct. 2348, 147 L.Ed.2d 435 (2000).
[15] Id. at 490, 120 S.Ct. 2348.
[16] Id. at 477, 120 S.Ct. 2348 (citations omitted).
[17] Id. at 494 n. 19, 120 S.Ct. 2348.
[18] Id. at 497 n. 21, 120 S.Ct. 2348 ("The Guidelines are, of course, not before the Court. We therefore express no view on the subject beyond what this Court has already held.").
[19] Id. at 550-51, 120 S.Ct. 2348 (O'Connor J. dissenting).
[20] Id. at 552, 120 S.Ct. 2348.
[21] 536 U.S. 584, 122 S.Ct. 2428, 153 L.Ed.2d 556 (2002).
[22] Id. at 602, 122 S.Ct. 2428 (citation omitted).
[23] Id. at 609, 122 S.Ct. 2428 (citation omitted).
[24] See Rachel E. Barkow, Recharging the Jury: The Criminal Jury's Constitutional Role in an Era of Mandatory Sentencing, 152 U.PA. L. REV. 33, 40 (2003); Jane A. Dall, Note, "A Question for Another Day": The Constitutionality of the U.S. Sentencing Guidelines Under Apprendi v. New Jersey, 78 NOTRE DAME L. REV. 1617 (2003).
[25] See, e.g., Andrew M. Levine, The Confounding Boundaries of "Apprendi-Land": Statutory Minimums and the Federal Sentencing Guidelines, 29 AM. J. CRIM. L. 377, 435 (2002) ("Under [the principles set forth in Apprendi] the Guidelines, as currently constituted, violate a defendant's constitutional rights to due process rights, notice, and trial by jury."); Note, The Unconstitutionality of Determinate Sentencing in Light of The Supreme Court's "Elements" Jurisprudence, 117 HARV. L. REV. 1236, 1252 (2004) ("Under ... the plain language of Apprendi and its progeny, the sentencing system created by the Sentencing Reform Act is unconstitutional.").
[26] United States v. Green, 2004 WL 1381101 (D.Mass. June 18, 2004).
[27] ___ U.S. ___, 124 S.Ct. 2531, 159 L.Ed.2d 403, 2004 WL 1402697.
[28] Id. at 2536 (quoting Wash. Rev.Code Ann. § 9.94A.120(2)).
[29] Id. (citing Wash. Rev.Code Ann. § 9.94A.390(2)(h)(iii)).
[30] Id.
[31] Id.
[32] Id. at 2536 n. 9.
[33] Id. at 2543 (O'Connor, J., dissenting).
[34] Id. at 2549 (O'Connor, J., dissenting) (citing 18 U.S.C. § 3553 & 28 U.S.C. § 991 et seq., in addition to statutes in nine states).
[35] Id. at 2549 (O'Connor, J., dissenting).
[36] Brief for the United States as Amicus Curiae Supporting Respondent at 25-30.
[37] Id. at 25 (quoting 18 U.S.C. § 3553(b)(1)).
[38] Id. at 25-26.
[39] Blakely, ___ U.S. at ___, 124 S.Ct. 2531, 2550 (O'Connor, J., dissenting) (citing Wash. Rev.Code Ann. § 9.94A.370(2) (2000) (codifying "real facts" doctrine)).
[40] Id. at 2550 (O'Connor, J., dissenting).
[41] Id. at 2561 (Bryer, J., dissenting).
[42] Id. at 2561 (Breyer, J., dissenting).
[43] Id. (Breyer, J., dissenting).
[44] Id. at 2536.
[45] U.S.S.G. § 2G2.1(a).
[46] U.S.S.G. § 2G2.1(b)(1).
[47] U.S.S.G. § 2G2.1(b)(2).
[48] Cf. Harris v. United States, 536 U.S. 545, 122 S.Ct. 2406, 153 L.Ed.2d 524 (2002) (finding no Apprendi problem with enhanced mandatory minimum sentences).
[49] Blakely, ___ U.S. at ___, 124 S.Ct. 2531, 2546 ___ L.Ed.2d at ___ (O'Connor, J., dissenting).
[50] Id. at 2540 n. 11.
[51] Apprendi, 530 U.S. at 477, 120 S.Ct. 2348 (quoting 4 W. Blackstone, Commentaries on the Laws of England 343 (1769)).
[52] U.S.S.G. § 6A1.3 cmt.
[53] Apprendi, 530 U.S. at 478, 120 S.Ct. 2348.
[54] U.S.S.G. § 6A1.3.
[55] See Fed.R.Evid. 1101(d)(3).
[56] Blakely, ___ U.S. at ___, 124 S.Ct. 2531, 2549, ___ L.Ed.2d at ___ (O'Connor, J., dissenting).
[57] Id. (O'Connor, J, dissenting).
[58] Id. at 2541.
[59] Id., citing 21 U.S.C. § 841(b)(1)(A), (D).
[60] Id. at 2540.
[61] See id. at 2541, 2552-53 (Breyer, J., dissenting).
[62] Id. at 2549 (O'Connor, J., dissenting).
[63] United States v. Green, ___ F.Supp.2d ___, 2004 WL 1381101 (D.Mass.2004).
[64] Id.
[65] Salinas v. United States, 522 U.S. 52, 59-60, 118 S.Ct. 469, 139 L.Ed.2d 352 (1997) (citation omitted), cert. denied, 522 U.S. 1014, 118 S.Ct. 599, 139 L.Ed.2d 487 (1997).
[66] Fed. R.Crim. Pro. 32(i)(3).
[67] See 18 U.S.C. § 3553(a).
[68] See U.S.S.G. § 3C1.1, Application Notes 1, 4(e), 4(f), 5(e).
[69] See id., Application Note 5.
[70] See 18 U.S.C. 3552(c).
[71] See 18 U.S.C. § 3553(c).
[72] See 18 U.S.C. § 3553(d).
[73] U.S.S.G. § 6A1.1; see also Fed. R.Crim. Pro. 32(g).
[74] Buckley v. Valeo, 424 U.S. 1, 108, 96 S.Ct. 612, 46 L.Ed.2d 659 (1976).
[75] P.L. 98-473 (Oct. 12, 1984); see also Gubiensio-Ortiz v. Al Kanahele, 857 F.2d 1245, 1267 (9th Cir.1988) ("The [Sentencing Reform] Act [of 1984] does not contain any severability clause."), judgment vacated on other grounds, 488 U.S. 1036, 109 S.Ct. 859, 102 L.Ed.2d 984 (1989).
[76] Gubiensio-Ortiz, 857 F.2d at 1267.
[77] S.Rep. No. 225 at 46, 98th Cong., 2d Sess., 1984 U.S.C.C.A.N. 3229, 3228; see also id. at 38 (quoting Attorney General William French Smith that the reforms "introduce a totally new and comprehensive sentencing system that is based on a coherent philosophy"); id. at 39 ("sentencing legislation should contain a comprehensive and consistent statement of the Federal law of sentencing").
[78] Gubiensio-Ortiz, 857 F.2d at 1268.
[79] 18 U.S.C. § 3553(a)
[80] U.S.S.G. § 1B1.11 (emphasis added).
[81] 18 U.S.C. § 2251(d)(2000), amended in 2003 by Pub. L. No. 108-21, 18 U.S.C. § 2251(e).
[82] 18 U.S.C. § 2251(d)(2000), amended in 2003 by Pub. L. No. 108-21, 18 U.S.C. § 2251(e).
[83] 337 U.S. 241, 69 S.Ct. 1079, 93 L.Ed. 1337 (1949).
[84] Id. at 246, 69 S.Ct. 1079.
[85] Id.
[86] Id. at 247, 69 S.Ct. 1079.
[87] Id.
[88] Id.
[89] Id. at 251, 69 S.Ct. 1079.
[90] Blakely, ___ U.S. at ___, 124 S.Ct. 2531, 2538, ___ L.Ed.2d at ___.
[91] Id.
[92] Blakely, ___ U.S. at ___, 124 S.Ct. 2531, 2542, ___ L.Ed.2d at ___ (emphasis added).
[93] See U.S.S.G. § 5H1.3.
[94] See PETER H. ROSSI & RICHARD A. BERK, JUST PUNISHMENTS: FEDERAL GUIDELINES AND PUBLIC VIEWS COMPARED (1998).
[95] Williams, 337 U.S. at 249, 69 S.Ct. 1079.
[96] Plea Agreement, ¶ 13(2)(C).
[97] See United States v. Julian, 242 F.3d 1245 (10th Cir.2001).
[98] 18 U.S.C. § 3663A.
[99] 18 U.S.C. § 2259.
[100] United States v. Reano, 298 F.3d 1208, 1211 (10th Cir.2002) (quoting S.Rep. No. 104-179, at 12 (1996), reprinted in 1996 U.S.C.C.A.N. 924, 925); see also United States v. Bedonie, 317 F.Supp.2d 1285 (D.Utah 2004).
[101] See 18 U.S.C. 2259 (the court "shall order" restitution for offenses under chapter 110 dealing with sexual exploitation of children).
[102] 18 U.S.C. § 3664(e), made applicable to this case by 18 U.S.C. § 2259(b)(1) & (2).
[103] 184 F.3d 1169 (10th Cir.1999).
[104] Id. at 1269 (quoting United States v. Arutunoff, 1 F.3d 1112, 1121 (10th Cir.1993), cert. denied, 510 U.S. 1017, 114 S.Ct. 616, 126 L.Ed.2d 580 (1993)) (citing United States v. Diamond, 969 F.2d 961, 968 (10th Cir.1992), and United States v. Rochester, 898 F.2d 971, 983 (5th Cir.1990)).
[105] Id. at 1279-80; accord United States v. Bach, 172 F.3d 520 (7th Cir.1999), cert. denied, 528 U.S. 950, 120 S.Ct. 372, 145 L.Ed.2d 290 (1999).
[106] Blakely, ___ U.S. at ___, 124 S.Ct. 2531, 2536, ___ L.Ed.2d at ___, quoting Apprendi, 530 U.S. at 490, 120 S.Ct. 2348.
[107] See United States v. Bedonie, 317 F.Supp.2d 1285, 1329-31 (D.Utah 2004) (discussing reasons for amount to be due in full immediately).
[108] See 18 U.S.C. § 3664(k).
[109] See 18 U.S.C. § 3509(h) (authorizing appointment of guardian ad litem for child victims); Order for Guardian Ad Litem, Docket # 62-2 (appointing guardian).
[110] 18 U.S.C. § 3509(j).
[111] Pollard v. United States, 352 U.S. 354, 361, 77 S.Ct. 481, 1 L.Ed.2d 393 (1957).
[112] Perez v. Sullivan, 793 F.2d 249, 253 (10th Cir.1986), cert. denied, 479 U.S. 936, 107 S.Ct. 413, 93 L.Ed.2d 364 (1986) (citing United States v. Sherwood, 435 F.2d 867, 868 (10th Cir.1970), cert. denied, 402 U.S. 909, 91 S.Ct. 1381, 28 L.Ed.2d 649 (1971); Whaley v. United States, 394 F.2d 399 (10th Cir.1968); United States v. Campisi, 583 F.2d 692, 694 (3rd Cir.1978); United States v. Reese, 568 F.2d 1246 (6th Cir.1977); United States v. Campbell, 531 F.2d 1333, 1335 (5th Cir.1976), cert. denied, 434 U.S. 851, 98 S.Ct. 164, 54 L.Ed.2d 121 (1977); United States v. Tortorello, 391 F.2d 587 (2nd Cir.1968)).
[113] See Jolly v. State, ___ S.W.3d ___, ___, 2004 WL 1406091 at *5 (Ark.2004).
[114] Cf. The Scott Campbell, Stephanie Roper, Wendy Preston, Louarana Gillis, and Nila Lynn Crime Victims' Rights Act, S. 2329, 108th Cong., 2d Sess. (April 26, 2004) (moving the Crime Victims Bill of Rights to Title 18, where presumably it would be more easily accessible to criminal lawyers).
[115] 42 U.S.C. § 10606(b)(5) & (1); see also United States v. Serawop, 303 F.Supp.2d 1259, 1268 (D.Utah 2004) (discussing the enforcement of Crime Victims Bill of Rights).
[116] See generally Paul G. Cassell, Too Severe? A Defense of the Federal Sentencing Guidelines (and a Critique of the Federal Mandatory Minimums), 56 STAN. L. REV. 1017 (2004); MICHAEL GOLDSMITH & JAMES GIBSON, THE FEDERAL SENTENCING GUIDELINES: A SURPRISING SUCCESS? (N.Y.U Law Sch. Ctr. for Research in Crime and Justice 1999).
[117] See Blakely, ___ U.S. at ___-___, 124 S.Ct. 2531, 2552-58, ___ L.Ed.2d at ___-___ (Breyer, J., dissenting) (discussing options available).
[118] See generally KATE STITH & JOSE A. CABRANES, FEAR OF JUDGING: SENTENCING GUIDELINES IN THE FEDERAL COURTS 9-37 (1998).
[119] Blakely, ___ U.S. at ___, 124 S.Ct. 2531, 2553-54 ___ L.Ed.2d at ___ (Breyer, J., dissenting).
[120] See United States v. Van Leer, 270 F.Supp.2d 1318, 1322-1323 (D.Utah 2003) (discussing legislative history of the PROTECT Act).
[121] See id. (Breyer, J., dissenting) (citing U.S.S.G. § 2B3.1 which requires analysis of these factors); Brief for the U.S. as Amicus Curiae, Blakely v. Washington, ___ U.S. at ___, 124 S.Ct. at 2553-54, ___ L.Ed.2d at ___ (2004). See generally U.S.S.G. chapters 2, 3 and 5 (listing various factors that apply to Guidelines calculations).
[122] See Harris v. United States, 536 U.S. 545, 570-71, 122 S.Ct. 2406, 153 L.Ed.2d 524 (2002) (Breyer, J., concurring in part and concurring the judgment).
[123] Orrin G. Hatch, The Role of Congress in Sentencing: The United States Sentencing Commission, Mandatory Minim Sentences, and the Search for a Certain and Effective Sentencing System, 28 WAKE FOREST L. REV. 185, 194 (1993).
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NO. 07-12-00061-CR
IN THE COURT OF APPEALS
FOR THE SEVENTH DISTRICT OF TEXAS
AT AMARILLO
PANEL A
--------------------------------------------------------------------------------
AUGUST 29, 2012
--------------------------------------------------------------------------------
BYRON WADE COOK, APPELLANT
v.
THE STATE OF TEXAS, APPELLEE
--------------------------------------------------------------------------------
FROM THE 64TH DISTRICT COURT OF HALE COUNTY;
NO. A18923-1109; HONORABLE ROBERT W. KINKAID JR., JUDGE
--------------------------------------------------------------------------------
Before CAMPBELL and HANCOCK and PIRTLE, JJ.
MEMORANDUM OPINION
Appellant, Byron Wade Cook, pleaded guilty to possession of a controlled substance, methadone, in an amount of less than one gram. Appellant opted to have punishment set by a jury, and the jury, after hearing the evidence, sentenced appellant to two years confinement in a State Jail Facility and assessed a fine of $2,000. Appellant has appealed. We will affirm.
Appellants attorney has filed an Anders brief and a motion to withdraw. Anders v. California, 386 U.S. 738, 87 S.Ct. 1396, 18 L.Ed. 2d 498 (1967). In support of his motion to withdraw, counsel certifies that he has diligently reviewed the record, and in his opinion, the record reflects no reversible error upon which an appeal can be predicated. Id. at 744 - 45. In compliance with High v. State, 573 S.W.2d 807, 813 (Tex.Crim.App. 1978), counsel has candidly discussed why, under the controlling authorities, there is no error in the trial courts judgment. Additionally, counsel has certified that he has provided appellant a copy of the Anders brief and motion to withdraw and appropriately advised appellant of his right to file a pro se response in this matter. Stafford v. State, 813 S.W.2d 503, 510 (Tex.Crim.App. 1991). The Court has also advised appellant of his right to file a pro se response. Appellant has filed a response.
By his Anders brief, counsel reviewed all grounds that could possibly support an appeal, but concludes the appeal is frivolous. We have reviewed these grounds and made an independent review of the entire record to determine whether there are any arguable grounds which might support an appeal. See Penson v. Ohio, 488 U.S. 75, 109 S.Ct. 346, 102 L.Ed.2d 300 (1988); Bledsoe v. State, 178 S.W.3d 824 (Tex.Crim.App. 2005). We have found no such arguable grounds and agree with counsel that the appeal is frivolous.
Appellant contends in his response that he received ineffective assistance of counsel. We have reviewed the totality of the record and find that any issue contending that appellant received ineffective assistance of counsel is not supported by the record, and it is frivolous. See Salinas v. State, 163 S.W.3d 734, 740 (Tex.Crim.App. 2005).
Accordingly, counsels motion to withdraw is hereby granted, and the trial courts judgment is affirmed.
Mackey K. Hancock
Justice
Do not publish.
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13-3592-cv
Victory v. Pataki et al.
13‐3592‐cv
Victory v. Pataki et al.
1 UNITED STATES COURT OF APPEALS
2 FOR THE SECOND CIRCUIT
3 ____________________
4
5 August Term, 2014
6
7 (Argued: November 14, 2014 Decided: February 1, 2016)
8
9 Docket No. 13‐3592
10
11 ____________________
12
13 ALBERT LOPEZ VICTORY,
14
15 Plaintiff‐Appellant,
16
17 v.
18
19 GEORGE PATAKI, Former Governor of the State of New York in his official
20 capacity, BRION D. TRAVIS, Ex‐Chair, Board of Parole, New York State Division
21 of Parole, THOMAS P. GRANT, Special Assistant to the Chair of the Board of
22 Parole, MIKE HAYDEN, Acting Director of the Division of Parole, RONALD P.
23 WHITE, Director of Upstate Field Operations for the Division of Parole,
24 TERRANCE X. TRACY, Chief Counsel to the Chair of the Board of Parole,
25 KENNETH E. GRABER, Commissioner of the Board of Parole, GEORGE
26 CHARD, Senior Parole Officer, Utica Parole Office, DOUGLAS C. SMITH, Ex‐
27 Supervising Parole Officer, Utica Parole Office, PERRITANO, “JOHN,” First
28 Name Unknown, Parole Officer, Utica Parole Office, KEVIN MCCARTHY, Head
29 of the Special Services Bureau for the Division of Parole, Central New York Area,
30 THOMAS MURFITT, Syracuse Police Officer, GILHOOLEY, “JOHN,” first name
31 unknown, Syracuse Police Officer, TIMOTHY FOODY, Ex‐Police Chief, Syracuse
32 Police Department, John Does, 1, 2, 3, etc., Jane Does 1, 2, 3, etc., (whose identities
1 are unknown but who are believed to be either employees of the Division of
2 Parole, the Governor’s Office, and/or the Syracuse Police Department); all such
3 individual defendants being sued both in their individual and official capacity,
4 THE CITY OF SYRACUSE, New York, DENNIS DUVAL, Chief of Police of the
5 Syracuse Police Department, GEORGE ALEXANDER, Chair, Board of Parole, in
6 his official capacity, GOVERNOR DAVID PATERSON, RORY D. GILHOOLEY,
7 Syracuse Police Officer, JOHN FALGE, Ex‐Police Chief, Syracuse Police
8 Department, GARY MIGUEL, Police Chief, Syracuse Police Department, ELIOT
9 SPITZER, Governor of the State of New York in his official capacity,
10
11 Defendants‐Appellees.
12
13 ____________________
14
15 Before: POOLER and PARKER, Circuit Judges.1
16
17 Appeal from the United States District Court for the Western District of
18 New York (Skretny, C.J.) granting summary judgment for defendants and
19 dismissing former inmate’s claims that various New York State officials and
20 employees violated and conspired to violate his right to due process in
21 connection with the rescission of his grant of parole release. Because we conclude
22 that genuine issues of material fact remain with respect to the personal
1 The Honorable Richard C. Wesley of the United States Court of Appeals for
the Second Circuit was originally assigned as a member of the panel, but recused
himself prior to oral argument and did not participate in the appeal. The appeal
is being determined by the remaining members of the panel, who are in
agreement. See 2d Cir. Local Rules, Internal Operating Procedure E(b); Murray v.
Nat’l Broad. Co., 35 F.3d 45, 46 (2d Cir. 1994).
2
1 involvement of certain Defendants in rescinding the parole, we vacate the district
2 court’s dismissal of the due process claim and remand for further proceedings.
3 Affirmed in part, vacated in part, and remanded.
4 ____________________
5 MYRON BELDOCK, Beldock Levine & Hoffman LLP,
6 New York, NY, for Plaintiff‐Appellant Albert Lopez
7 Victory.
8
9 ANDREW B. AYERS, Assistant Solicitor General, Office
10 of the Attorney General (Eric T. Schneiderman,
11 Attorney General of the State of New York; Nancy A.
12 Speigel, Senior Assistant Solicitor General, on the brief),
13 for Barbara D. Underwood, Solicitor General, Albany,
14 NY, for New York State Defendants‐Appellees.
15
16 SHANNON T. O’CONNOR, Assistant Corporation
17 Counsel, for Robert P. Stamey, Corporation Counsel for
18 the City of Syracuse, Syracuse, NY, for Syracuse
19 Defendants‐Appellees.
20
21 POOLER, Circuit Judge:
22 Plaintiff‐appellant Albert Lopez Victory, a former inmate of the New York
23 Department of Corrections and Community Supervision (“DOCCS”), appeals
24 from the August 27, 2013 order of the United States District Court for the
25 Western District of New York (Skretny, C.J.), granting summary judgment for
3
1 Defendants and dismissing his complaint in its entirety. See Victory v. Pataki, No.
2 02‐cv‐0031, 2013 WL 4539296 (W.D.N.Y. Aug. 27, 2013). On appeal, Victory
3 challenges the dismissal of those claims brought pursuant to 42 U.S.C. § 1983
4 against various New York State officials and employees (“Defendants”) for
5 violating and conspiring to violate his right to due process in connection with the
6 rescission of his grant of parole.2 Because we conclude that genuine issues of
7 material fact remain with respect to the personal involvement of certain
8 Defendants in rescinding Victory’s parole, we vacate the district court’s dismissal
9 of the due process claim and remand for further proceedings.
2 We initially disposed of this appeal in a summary order issued on April 17,
2015. See Victory v. Pataki, 609 Fed. App’x 680 (2d Cir. 2015). Because we conclude
that publication is warranted, we now withdraw our original order for the
purposes of converting a portion of its holding into an opinion. Though this
opinion provides greater detail with respect to the reasoning underlying our
original disposition—particularly with regard to Victory’s liberty interest—our
holding on the merits of this issue is substantially the same as the original order.
In an accompanying order, we address and reject Victory’s remaining arguments
that the district court erred in dismissing his equal protection and Fourth
Amendment claims.
4
1 BACKGROUND
2 I. Incarceration
3 In 1970, Victory entered DOCCS custody to serve a sentence of twenty‐five
4 years to life upon his conviction of felony murder, stemming from his
5 involvement in the 1968 shooting death of a police officer. See People v. Bornholdt,
6 305 N.E.2d 461 (N.Y. 1973) (upholding conviction); Victory v. Bombard, 570 F.2d
7 66, 70 (2d Cir. 1978) (reversing grant of writ of habeas corpus). In 1978, while
8 away from Greenhaven Correctional Facility for dental treatment, Victory’s
9 guards permitted him to enter a hotel room with his girlfriend, unshackled. See
10 Tremarco v. N.Y. State Bd. of Parole, 450 N.Y.S.2d 544, 545 (2d Dep’t 1982). Victory
11 escaped and remained at large for three years until he was apprehended in
12 California in 1981.3 See Victory v. Coughlin, 568 N.Y.S.2d 186, 186‐87 (3d Dep’t
13 1991).
3 Victory was listed among the Federal Bureau of Investigation’s “Ten Most
Wanted Fugitives” for approximately one year, between 1980 and 1981. During
his time as a fugitive, Victory married his wife, and a child was born to them in
1980. See Victory, 568 N.Y.S.2d at 186‐87.
5
1 Defendants do not dispute that Victory behaved as a model prisoner
2 throughout the 21 years he was incarcerated following his return to DOCCS
3 custody. Victory obtained three college degrees, participated in numerous
4 educational programs, and received commendations from DOCCS on four
5 occasions.
6 II. Parole Release Hearings
7 Victory first became eligible for parole release in 1997. After his first
8 application was denied, Victory appeared on two more occasions before a two‐
9 member panel of the Board of Parole, but neither panel could reach a consensus
10 and the decision was deferred. At each of these hearings, Victory’s escape from
11 Greenhaven was briefly discussed.
12 On January 11, 1999, Victory was considered for parole release for a fourth
13 time by a two‐member panel consisting of Commissioners Kenneth Graber and
14 Lawrence Scott. The record before the Parole Board included the unequivocal
15 recommendations of eight correctional officers, with no letters in opposition.
16 Although the Board of Parole had solicited letters from the District Attorney’s
17 office in 1995, before Victory became eligible for parole, no letters from the judge
6
1 or prosecutors in his criminal case had been received. At that hearing,
2 Commissioner Graber assured Victory that the panel had reviewed all the
3 documents in his file, stating:
4 We have reviewed your documents. We’re familiar with everything. We
5 may not refer to every single thing, but that doesn’t mean we’re not aware
6 of it. There is quite a lot here. We could spend a whole day with you,
7 which we can’t do. We have reviewed everything. Our questioning is so
8 we can clear up any questions we have.
9
10 App’x at 934‐35. The information before the panel contained numerous
11 prominent references to Victory’s 1978 escape, including a notation in blue
12 stating “escaped and returned,” App’x at 859, the statement: “ESCAPE FROM
13 GHCF, 5/5/78, DURING WHICH . . . SUB[J]ECT WAS AT LARGE, FOR 2 ½ YR
14 PERIOD PRIOR TO BEING RETURNED FROM CALIFORNIA,” App’x 1227,
15 and a newspaper article about the escape. Although the January 11, 1999 panel,
16 unlike the prior panels, did not explicitly mention Victory’s escape, it did
17 address Victory’s disciplinary record and it noted that Victory—who had
18 originally been incarcerated for the present offense 27 years earlier in 1968—got
19 married “[t]wenty‐one years ago, [in] 1978,” App’x at 941, and had “one
20 daughter who is now eighteen,” App’x at 943.
7
1 Following the January hearing, Graber and Scott granted Victory parole.
2 The Board of Parole’s decision assigned him an open release date of March 11,
3 1999 “or earlier.”4 App’x at 1290.
4 III. Rescission
5 The core of Victory’s due process claim concerns the events precipitating
6 the parole rescission hearing that followed. “The Board’s broad discretion to
7 rescind parole is limited only by the requirement that there be substantial
8 evidence of significant information not previously known by the Board.” Diaz v.
9 Evans, 935 N.Y.S.2d 224, 225 (3d Dep’t 2011) (citations omitted); see 9 N.Y.C.R.R.
10 § 8002.5(b)(2)(i) (2002). According to Victory, upon learning that the Board of
4 Although New York regulations do not currently define the term “open release
date,” the regulations in effect at the time that Victory was granted parole
provided:
Where a decision to release an inmate to parole supervision has been
rendered, but a satisfactory program has not been developed, an inmate
may receive an ODOP (open date own program). Release shall occur as
soon after such date as a satisfactory program is available. If a program is
not developed within six months of the parole release hearing, the inmate
will again appear before the board for a reconsideration of his status.
9 N.Y.C.R.R. § 8002.3(f) (emphasis added); see also De Zimm v. N.Y. State Bd. of
Parole, 524 N.Y.S.2d 851, 851 n.1 (3d Dep’t 1988) (“An open parole release date
means an inmate may be released as soon after that date as a satisfactory parole
program becomes available.” (citation omitted)).
8
1 Parole had granted Victory parole status, Defendants violated and conspired to
2 violate his right to due process by depriving him of an unbiased panel at his
3 rescission hearing and fabricating a false basis for rescission premised on
4 Commissioner Graber’s purported ignorance of Victory’s escape. As Defendants
5 acknowledged, Victory’s submissions to the district court included “copious
6 allegations” regarding how the rescission process was initiated. State Appellees
7 Br. at 8. Unless otherwise noted, the following allegations are undisputed.
8 A. Decision To Convene a Rescission Hearing
9 On January 12, 1999, the day after the January panel granted Victory
10 parole, Thomas P. Grant, the Special Assistant to the Chairman of the Board of
11 Parole, received a media inquiry from Court TV requesting the outcome of
12 Victory’s parole hearing. Grant then called Terrance X. Tracy, Chief Counsel to
13 Brion D. Travis, Chairman of the Board of Parole, to inform him that Victory had
14 been granted release. Grant testified that he also notified Travis of the parole
15 determination because the case was noteworthy, and that Travis suggested that
16 Grant notify non‐party Katherine Lapp, who at that time served as the
17 Governor’s Director of Criminal Justice. Grant then called Lapp and conveyed
9
1 the panel’s determination along with the nature of Victory’s offense and his
2 history as an escapee. Five minutes later, Lapp called Grant back to request that
3 he immediately send the file that had been before the January 11, 1999 panel to
4 her in Albany via overnight mail. Grant testified that Travis said that Lapp could
5 see the file because of the position she held, and also noted that he wanted Tracy
6 to review the file. Michael Hayden, Deputy Chief of Operations of the Division of
7 Parole, and Ronald White, a Regional Director, arranged for the file to be sent to
8 Lapp.
9 Throughout the period Victory was eligible for parole release, then‐
10 Governor George Pataki espoused a “very strong belief that parole should not be
11 granted to violent felons,” of which belief at least everyone in Governor Pataki’s
12 “inner circle” was aware. App’x at 785. Defendants concede that Governor Pataki
13 heard about the decision to grant Victory parole, possibly as a result of a call
14 from a reporter. State Appellees Br. at 8. Governor Pataki testified that, upon
15 learning of Victory’s grant of parole release, he “made it obvious to people in
16 [his] office [that he] was unhappy with that decision.” App’x at 783.
10
1 Lapp had never previously been involved in an individual inmate’s parole
2 decision. Nonetheless, on January 13, 1999, the day after Grant informed Lapp of
3 the decision, Lapp met with Tracy and Grant to address whether proper
4 procedures had been followed during the parole hearing and noted that the
5 transcript of the January 11 hearing did not mention the escape. In that
6 conversation, Lapp, Tracy, and Grant allegedly discussed Commissioner
7 Graber’s ignorance of the 1978 escape as a potential basis for rescission.5
8 According to some testimony, during that meeting, Lapp requested that service
9 of the parole decision to Victory be postponed. That instruction was
10 implemented by Hayden. Although Travis knew that Tracy was meeting with
11 Lapp about the parole decision, there is no evidence that Travis knew what was
12 discussed at the meeting.
13 Also on January 13, Lapp called Assistant District Attorney James Kindler
14 to solicit support for opposing Victory’s parole. Kindler testified that Lapp “was
5 It is not clear whether Lapp, Tracy, and Grant investigated whether Scott, the
other commissioner at the parole hearing, knew about Victory’s escape at the
time of the hearing.
11
1 seeking information to oppose [Victory’s] parole” and he understood that the
2 panel “would need new information.” App’x at 896, 902.
3 Documentary evidence reveals that, early the next day, Kindler researched
4 Victory’s escape and then wrote a letter that discussed the escape and strongly
5 opposed Victory’s parole.6 Indeed, although Kindler stated that Lapp did not tell
6 him what was discussed at the parole hearing, his file exclusively contained
7 research about the escape.
8 However, according to Victory, phone records reveal that no one spoke to
9 Graber until the following day, on January 14, after Graber’s purported oversight
10 had already been identified as grounds for rescission. Victory therefore alleges
11 that Lapp, Tracy, and Grant concocted a plan at the January 13 meeting to
12 suggest to Graber that he had not previously been aware of the escape, and to
13 use that oversight as grounds for rescinding the January panel’s decision to grant
14 Victory parole.
6 Kindler sent a second letter on March 5, providing additional details about
Victory’s underlying crime. He also notified the lead prosecutor at Victory’s trial,
District Court Judge John Keenan, of the Board’s decision. On March 8, Judge
Keenan sent a letter to Governor Pataki opposing Victory’s parole, which letter
Victory received the next day, on the morning of the March 9 rescission hearing.
12
1 Around January 19, Tracy informed Travis that Graber had not been aware
2 of Victory’s escape when he granted parole and that Kindler had subsequently
3 sent a letter opposing Victory’s release. According to Tracy’s deposition
4 testimony, Travis first proposed the rescission hearing. Tracy and Grant then met
5 with Hayden, who testified that he made the decision to convene the rescission
6 hearing. Later that day, a parole officer provided Victory with both a “Certificate
7 of Release to Parole Supervision,” marked as void, and a “Notice of Temporary
8 Suspension of Parole Release.” App’x at 1097‐98.
9 The initial notice did not inform Victory of the precise grounds for
10 suspension, indicating only that his release was temporarily suspended pending
11 an investigation of new information, pertaining to:
12 Information which existed or behavior which occurred prior to the parole
13 release decision, but was not known at the time the Board rendered the
14 decision or had not been verified at the time the Board rendered the
15 decision.
16
17 App’x at 1097. On February 3, 1999, the Division of Parole prepared a rescission
18 hearing report, which informed Victory of the “charges” against him. But, as
19 stated in that report:
13
1 There [were] no charges involving post‐decision behavior by the inmate.
2 Rather, after the Board granted an Open Date of 3/11/99 Or Earlier, a letter
3 was received from the New York County District Attorney’s Office, the
4 office that prosecuted the inmate for the Instant Offense, containing
5 information that was not available to the Board at the time it made the
6 release decision. The recommendation of the office of the prosecutor had
7 not been received prior to the Board’s January, 1999 decision.
8
9 App’x at 1126.
10 B. Rescission Hearing
11 On March 9, 1999, a parole rescission hearing was held before a three‐
12 member panel, which included Commissioner Graber. Board assignments were
13 made by the secretary to the Board of Parole. White knew that Graber had been
14 assigned to the panel roughly a month before the rescission hearing was held.
15 However, there is no evidence that White either had the power to change the
16 assignment or knew that Graber was to testify at the hearing.
17 Graber began by explaining that the rescission hearing was a “due
18 process . . . hearing” with a limited right to counsel, App’x at 809, and which
19 would be more formal than Victory’s prior “interviews” for parole release. App’x
20 at 818. Graber further noted, and on several occasions repeated, that the Kindler
21 and Keenan letters and recommendations would not themselves provide
14
1 grounds for rescission; only the information contained in the letters would be
2 relevant.
3 The only evidence offered at the rescission hearing on the issue of whether
4 Victory’s escape was known to the January panel was Graber’s own unsworn
5 statements to this effect:
6 I’ll make it very clear. The January Panel did not know about this escape.
7 Whether we should have known and whether we somehow missed it and
8 we’re bereft in our duty in not finding it is sort of irrelevant. The Panel did
9 not know it. . . . I, for one, did not know it and I can not speak at this point,
10 because Commissioner Scott is not here, however in our conversation it
11 never came up. I know he was the interviewing Commissioner, but I did
12 review as best I could.
13
14 App’x at 858.7
15 The panel then unanimously voted to rescind Victory’s parole, reasoning
16 that the prosecutors’ letters were “new materials” and that the 1978 escape
17 constituted new information “not actually known” by the prior panel:
18 The letters from the prosecutors are new materials not available to the
19 prior Panel. [Those letters], together with information in the file actually
20 reviewed by this Panel, indicate that there was information not known by
21 the January 1999 panel in regard to subject’s leaving custody for a thirty‐
22 four month period between 1978 and 1981. Upon review of the record, this
7 Commissioner Scott testified at his deposition that he reviewed everything in
the file and confirmed that, based on the documents contained in that file, he
would have been aware of the escape.
15
1 information was not actually known. The rescission of the prior Board
2 decision is warranted.
3
4 App’x at 888‐89. Upon reconsideration of the entire record, the panel then
5 determined that release “would be contrary to the safety and well‐being of the
6 community.” App’x at 889.
7 C. Administrative Appeal of Parole Rescission
8 On November 8, 1999, the Board of Parole Appeals Unit reversed the
9 March panel’s rescission determination, concluding that “[t]he conduct of
10 Commissioner Graber acting as unsworn witness, prosecutor and judge at the
11 rescission hearing so tainted the proceeding that the rescission hearing must be
12 deemed constitutionally insufficient in violation of Mr. Victory’s right to due
13 process.” Appʹx at 1215. The Appeals Unit noted that Graber’s commentary
14 regarding the prior panel’s lack of knowledge of the escape might have supplied
15 substantial evidence to support rescission if it had been entered as proper sworn
16 testimony. However, the Appeals Unit concluded, Graber “was not a sworn
17 witness when he made these pronouncement of ‘proof,’” and it was “plainly
18 improper for him to assess his own credibility in rendering a decision.” App’x at
19 1214. Moreover, because “[t]he institutional file contain[ed] numerous references
16
1 to the escape” and “[t]he escape was also discussed by Mr. Victory with prior
2 Boards[,] [t]he record cannot substantiate a finding that the escape was new
3 information not available to the Board at the January 11, 1999 hearing.” App’x at
4 1214. Critically, the Appeals Unit confirmed that the Kindler and Keenan letters
5 would not constitute “substantial new information” absent evidence that these
6 letters contained factual information that was unavailable to, or possibly
7 unknown by, the prior board. App’x at 1214.
8 The Appeals Unit therefore remanded for a new rescission hearing to be
9 convened immediately before a panel of three commissioners who lacked any
10 prior involvement in Victory’s case.
11 Before any rehearing transpired, on December 15, 1999, the Wyoming
12 County Supreme Court granted Victory’s state habeas petition on the ground
13 that the January panel’s decision afforded Victory a protected liberty interest in
14 parole release, of which he had been deprived without the requisite procedural
15 protections and in the absence of any evidence of significant new information.
16 People ex rel. Victory v. Herbert, No. 31141 (Sup. Ct. Wyoming Cnty. Dec. 16, 1999)
17 (Dadd, J.). The court therefore ordered Victory’s immediate release to parole
17
1 supervision. Victory was released on December 28, 1999—more than nine
2 months after the latest date for his scheduled release.
3 The Fourth Department subsequently reversed the superior court’s order
4 as exceeding its authority. See People ex rel. Victory v. Herbert, 716 N.Y.S.2d 254,
5 255 (4th Dep’t 2000) (holding habeas relief inappropriate). Without disturbing
6 the determination that the rescission hearing was procedurally unsound, the
7 Fourth Department reinstituted the Board of Parole’s direction to conduct a new
8 rescission hearing. See id. at 256. A second hearing was rendered unnecessary,
9 however, by Victory’s reincarceration during his intervening release. See People ex
10 rel. Victory v. Travis, 734 N.Y.S.2d 749, 751 (4th Dep’t 2001).
11 During his four months on parole, Victory was subjected to “an
12 extraordinarily high level of official scrutiny of his action.” People ex rel. Victory v.
13 Travis, No. 03‐1115, at *18 (Sup. Ct. Clinton Cnty. Mar. 9, 2005) (Feldstein, J.). On
14 April 7, 2000, Syracuse police officers arrested Victory for violating a condition of
15 his parole mandating that he not enter any establishment in which alcohol is
16 consumed or served. Victory admitted that he had consumed alcohol at such an
17 establishment, his parole was revoked, and he was sentenced to 60 months’
18
1 imprisonment. The Clinton County Supreme Court upheld the revocation
2 decision, but determined that the punishment was excessive. People ex rel. Victory,
3 No. 03‐1115, at *22. Because Victory had already served the majority of this term,
4 the court ordered that Victory be immediately considered for re‐release to parole
5 supervision.
6 On October 18, 2005, Victory was released to parole supervision.
7 DISCUSSION
8 Victory alleges that Defendants violated and conspired to violate his right
9 to due process by depriving him of a neutral decision‐maker at his rescission
10 hearing and fabricating a false basis for rescinding his parole. The district court
11 concluded that the rescission hearing implicated Victory’s right to not be
12 deprived of liberty without due process and acknowledged that the rescission
13 hearing was “problematic on a due process level.” Victory, 2013 WL 4539296, at
14 *17. It nonetheless granted Defendants’ motion for summary judgment on the
15 grounds that Victory had not raised a genuine issue of material fact as to the
16 personal involvement of anyone other than Commissioner Graber, who was
17 protected by absolute immunity. Id. Because the district court did not construe all
19
1 inferences in Victory’s favor in assessing personal involvement, we vacate its
2 grant of summary judgment.
3 I. Standard of Review
4 The principles governing summary judgment are well established. We
5 review the district court’s grant of summary judgment de novo. Summa v. Hofstra
6 Univ., 708 F.3d 115, 123 (2d Cir. 2013). In assessing the record to determine
7 whether there is a genuine dispute as to any material fact, we resolve all
8 ambiguities and draw all reasonable inferences in favor of the party against
9 whom summary judgment is sought, with the burden on the moving party to
10 demonstrate the absence of any material fact genuinely in dispute. Hathaway v.
11 Coughlin, 841 F.2d 48, 50 (2d Cir. 1988).
12 “In deciding a summary judgment motion, a court must not ‘weigh the
13 evidence, or assess the credibility of witnesses, or resolve issues of fact.’” Kulak v.
14 City of New York, 88 F.3d 63, 71 (2d Cir. 1996) (quoting Rodriguez v. City of New
15 York, 72 F.3d 1051, 1061 (2d Cir. 1995)). “If, as to the issue on which summary
16 judgment is sought, there is any evidence in the record from which a reasonable
17 inference could be drawn in favor of the nonmoving party, summary judgment is
20
1 improper.” Rodriguez, 72 F.3d at 1061. Our review of the record demonstrates
2 that the district court did not correctly apply this standard when it dismissed
3 Victory’s complaint.
4 II. Analysis
5 A. Protectable Liberty Interest
6 The first issue before us is whether a New York parole grantee, like
7 Victory, has a liberty interest in his open release date of which he may not be
8 deprived without due process. Consistent with this Court’s holding in Green v.
9 McCall, 822 F.2d 284 (2d Cir. 1987), we conclude that he does.
10 The Fourteenth Amendment’s Due Process Clause protects persons against
11 deprivations of life, liberty, or property without due process of law, and “those
12 who seek to invoke its procedural protection must establish that one of these
13 interests is at stake.” Graziano v. Pataki, 689 F.3d 110, 114 (2d Cir. 2012) (quoting
14 Wilkinson v. Austin, 545 U.S. 209, 221 (2005)). “[S]tandard analysis under that
15 provision proceeds in two steps: We first ask whether there exists a liberty or
16 property interest of which a person has been deprived, and if so we ask whether
17 the procedures followed by the State were constitutionally sufficient.” Swarthout
21
1 v. Cooke, 562 U.S. 216, 219 (2011) (citing Ky. Dep’t of Corrs. v. Thompson, 490 U.S.
2 454, 460 (1989)).
3 Liberty interests may arise directly from the Due Process Clause itself or
4 from statutes, regulations, or policies enacted by the state. Wilkinson, 545 U.S. at
5 221‐22.8 “[I]n order to have a protectable liberty interest, a prisoner must have
6 more than a hope or a unilateral expectation of release. ‘He must, instead, have a
7 legitimate claim of entitlement to it.’” Green, 822 F.2d at 288 (some internal
8 quotation marks omitted) (quoting Greenholtz v. Inmates of Neb. Penal & Corr.
9 Complex, 442 U.S. 1, 7 (1979)). In distinguishing between those with “a protectible
10 expectation of parole,” and those with a “mere hope,” Berard v. State of Vt. Parole
11 Bd., 730 F.2d 71, 72 (2d Cir. 1984) (internal quotation marks omitted), that is “too
12 ephemeral, contingent or speculative” to warrant constitutional protection,
13 “[c]onsiderable weight is given to whether the alleged liberty interest is in the
14 nature of ‘a bird in the hand’ rather than one in the bush,” Pugliese v. Nelson, 617
8 Consistent with the Supreme Court’s guidance in Sandin v. Conner, our inquiry
does not hinge on “the search for a negative implication from mandatory
language in prisoner regulations.” 515 U.S. 472, 483 (1995). Here, we focus
instead on whether the deprivation involved is “sufficiently like” the deprivation
at issue in Green, see Kim v. Hurston, 182 F.3d 113, 118 (2d Cir. 1999), in that it
involved a state‐created right of “real substance,” Wolff v. McDonnell, 418 U.S.
539, 557 (1974).
22
1 F.2d 916, 922 (2d Cir. 1980). As Judge Friendly observed, “there is a human
2 difference between losing what one has and not getting what one wants.”
3 Greenholtz, 442 U.S. at 10 (quoting Henry J. Friendly, “Some Kind of Hearing,” 123
4 U. Pa. L. Rev. 1267, 1296 (1975)).
5 Thus, for a state prisoner who has not been granted parole, “[n]either the
6 mere possibility of release, nor a statistical probability of release, gives rise to a
7 legitimate expectancy of release on parole.” Barna v. Travis, 239 F.3d 169, 171 (2d
8 Cir. 2001) (citations omitted). Rather, a protectable liberty interest arises only if
9 he has “a legitimate expectancy of release that is grounded in the state’s statutory
10 scheme.” Graziano, 689 F.3d at 114 (2d Cir. 2012) (quoting Barna, 239 F.3d at 170);
11 see also Swarthout, 562 U.S. at 219‐20; Bd. of Pardons v. Allen, 482 U.S. 369, 377‐81
12 (1987) (holding Montana prisoners had protectable liberty interest in parole
13 created by Montana statute requiring that a prisoner “shall” be released when
14 certain conditions are met). By contrast, once a state prisoner has been released
15 on parole, it is well established that his parole may not be revoked without due
16 process. See Young v. Harper, 520 U.S. 143 (1997); Morrissey v. Brewer, 408 U.S. 471
17 (1972). As we explained in Green:
23
1 We perceive a continuum that includes the liberty interests attributable to,
2 in descending order, the parolee, the parole grantee, and the inmate
3 without a parole date (“nongrantee”). Since the [Supreme Court] . . .
4 accepted the proposition that inmates for whom no parole date had been
5 set could have some protectable interest, we are hard pressed to believe
6 that that Court would not also find that a protectable interest is possessed
7 by an inmate whose release date has already been set and is less than six
8 months away.
9
10 822 F.2d at 289 (emphasis added); see also Klos v. Haskell, 48 F.3d 81, 87 (2d Cir.
11 1995) (describing a continuum ranging from the “denial of a ‘unilateral hope’ of
12 early conditional release (which does not implicate a liberty interest) and
13 revocation of already‐granted release status (which does)” (internal citations
14 omitted) (emphasis added)).
15 We find this reasoning equally applicable in the present context. Unlike a
16 mere applicant for parole, a New York inmate who has been granted an open
17 parole release date has a legitimate expectancy of release that is grounded in
18 New York’s regulatory scheme. We therefore conclude that a New York “parole
19 grantee has a protectable liberty interest that entitles him to due process in the
24
1 [Board of Parole’s] parole rescission hearings.” Green, 822 F.2d at 287; see Lanier v.
2 Fair, 876 F.2d 243, 252‐53 (1st Cir. 1989).9
3 While Defendants do not dispute that Victory was a parole grantee, they
4 assert that he did not have a protectable liberty interest because New York
9 We note that it appears that every New York court to have addressed the issue
has likewise concluded that the grant of an open release date, under New York
law, is sufficiently similar to the federal “early release date” at issue in Green, 822
F.2d at 285, to give rise to a liberty interest entitled to due process protection. See
Blanche v. Dennison, 805 N.Y.S.2d 497, 497‐98 (4th Dep’t 2005) (holding grantee of
“open parole release date” was “not afforded the process he was due” where
rescission procedures were not observed); Pugh v. N.Y. State Bd. of Parole, 798
N.Y.S.2d 182, 184 (3d Dep’t 2005) (“[W]here, as here, the Board is considering
rescission [of an “open release date”], an inmate’s rights to due process are
adequately protected if the procedures outlined in 9 NYCRR 8002.5(b)(5) are
followed.” (citation omitted)); Brooks v. Travis, 797 N.Y.S.2d 183, 184 (3d Dep’t
2005) (holding due process rights of grantee of open parole release date were not
violated where he knowingly and voluntarily waived his right to counsel); see
also Rizo v. N.Y. State Bd. of Parole, 674 N.Y.S.2d 180, 181 (4th Dep’t 1998)
(“Although petitioner possessed a liberty interest in his parole release after
respondent’s original determination, ‘the rescission of parole did not violate the
due process rights of petitioner’ because he ‘was represented by counsel and the
procedures provided in the parole rescission proceedings were constitutionally
sufficient.’” (quoting Ortiz v. N.Y. State Bd. of Parole, 668 N.Y.S.2d 823, 827 (4th
Dep’t 1998)). While persuasive, these cases do not relieve us of our obligation to
determine Victory’s due process rights under the federal Constitution for
ourselves. See Holcomb v. Lykens, 337 F.3d 217, 222 n.5 (2d Cir. 2003); see also
Vincent v. Yelich, 718 F.3d 157, 169 (2d Cir. 2013) (“Federal constitutional
standards rather than state law define the requirements of procedural due
process . . . .” (alteration omitted)), cert. denied sub nom. Annucci v. Vincent, 135 S.
Ct. 948 (2015).
25
1 regulations confer more discretion on the Board of Parole to rescind a prior grant
2 of parole status than did the federal regulations at issue in Green. This argument
3 is without merit.
4 Under 9 N.Y.C.R.R. § 8002.5(b)(2), “parole release may be temporarily
5 suspended or rescinded based upon ‘significant information which existed . . .
6 where such information was not known by [the Board of Parole],’” Raheem v.
7 N.Y. State Bd. of Parole, 888 N.Y.S.2d 631, 633 (3d Dep’t 2009) (first alteration in
8 original) (quoting 9 N.Y.C.R.R. § 8002.5(b)(2)(i)), or “substantial evidence that an
9 inmate has committed ‘significant misbehavior’ including the violation of a
10 prison disciplinary rule,” Bishop v. Smith, 751 N.Y.S.2d 82, 83 (3d Dep’t 2002)
11 (quoting 9 N.Y.C.R.R. § 8002.5(b)(2)(i)).10 Although the Board of Parole retains
12 “broad discretion” to rescind a grant of parole, that discretion is limited “by the
13 requirement that there be substantial evidence of significant information not
10 The New York regulations in effect when Victory’s parole was rescinded
provided that “[e]vents which may cause the temporary suspension and
rescission of a parole release date shall include, but not be limited to: (i)
significant information which existed, or significant misbehavior which occurred
prior to the rendition of the parole release decision, where such information was
not known by the board; or (ii) case developments which occur subsequent to the
board’s rendition of its decision to grant release,” such as, inter alia, “significant
misbehavior or a major violation of facility rules.” 9 N.Y.C.R.R. § 8002.5(b)(2)
(2002).
26
1 previously known by the Board.” Diaz , 935 N.Y.S.2d at 225; accord Raheem, 888
2 N.Y.S.2d at 634 n.1; Pugh v. N.Y. State Bd. of Parole, 798 N.Y.S.2d 182, 183 ( 3d
3 Dep’t 2005); see also Costello v. N.Y. State Bd. of Parole, 994 N.Y.S.2d 39 (2014)
4 (memorandum) (reinstating grant of parole and holding Board of Parole
5 improperly rescinded open release date based on victim impact statements that
6 were first requested after media outcry).
7 New York regulations provide robust procedural protections “[a]fter an
8 inmate has received a parole release date,” which mandate that, before
9 rescinding a prior grant, the Board of Parole must provide the inmate with, inter
10 alia, notice of “the specific allegations which will be considered” as a basis for
11 rescission and a hearing at which the grantee is afforded the right to be
12 represented by counsel, the right to present witnesses and introduce
13 documentary evidence, and, ordinarily, the right to cross‐examine adverse
14 witnesses. 9 N.Y.C.R.R. § 8002.5 (2002). Furthermore, “[i]f a majority of the
15 members of the board conducting the hearing are not satisfied that substantial
16 evidence exists to form a basis for rescinding the grant of release, the board shall
17 cancel the suspension and reinstate the inmate’s original release date or, if that
27
1 date has past, release shall occur as soon thereafter as is practicable.” 9
2 N.Y.C.R.R. § 8002.5(d)(2) (2002).11
3 These restrictions are not meaningfully different from those at issue in
4 Green, 822 F.2d at 289. In Green, federal parole regulations permitted the
5 Commissioner to “reconsider any case prior to release,” and to rescind a parole
6 grantee’s release date based on “disciplinary infractions and allegations of new
7 criminal conduct occurring after the setting of a parole date,” or “receipt of new
8 and significant adverse information.” 28 C.F.R. § 2.28(b), (e) (1986); see also Iuteri
9 v. Nardoza, 732 F.2d 32, 35 n.3 (2d Cir. 1984); Drayton v. McCall, 584 F.2d 1208,
10 1210 n.3 (2d Cir. 1978). Here, as in Green, the legislature vested the Board of
11 In light of these detailed regulatory guidelines, the Supreme Court’s decision
in Jago v. Van Curen, 454 U.S. 14 (1981), is inapt. In Jago, the Court ruled that an
Ohio state prisoner who had been granted an early parole date did not have a
protectable liberty interest based on “mutually explicit understandings.” Critical
to the outcome of that case was the Sixth Circuit’s acknowledgement that Ohio
parole authorities retained unbridled discretion to rescind parole up until the
time of release and that “‘[t]he statutes which provide for parole do not create a
protected liberty interest for due process purposes.’” Id. at 16 (alteration in
original) (quoting Van Curen v. Jago, 641 F.2d 411, 414 (1981)); see also State ex rel.
Van Curen v. Ohio Adult Parole Auth., 345 N.E.2d 75, 75 (Ohio 1976) (“The Adult
Parole Authority has no regulation requiring a hearing prior to rescinding the
grant of a parole before release.”). The wholly discretionary nature of the Ohio
parole board’s rescission authority is no more analogous to the authority of the
New York Board of Parole than it was to the authority of the federal
Commissioner in Green, 822 F.2d at 289‐90. See also Lanier, 876 F.2d at 252.
28
1 Parole with broad discretion to reconsider a prior grant of a parole release date.
2 But in both cases, that discretion is guided by the requirement that release must
3 be granted under given scenarios. “[T]he presence of official discretion in this
4 sense is not incompatible with the existence of a liberty interest in parole
5 release.” Allen, 482 U.S. at 376.
6 “[B]oth the concreteness of the parole grantee’s liberty expectation and the
7 objective nature of the findings that must be made before that expectation may
8 be eliminated are characteristics that . . . must be viewed as supporting the
9 existence of a protectable liberty interest.” Green, 822 F.2d at 289. Because the
10 Board must reinstate a parole grantee’s prior release status unless there is
11 substantial evidence of significant new information that forms a basis for
12 rescission, a New York parole grantee possesses a liberty interest protected by
13 the Due Process Clause.12
12 Our conclusion is not altered by the fact that an inmate with an “open release
date” shall be released “as soon after such date as a satisfactory program is
available.” 9 N.Y.C.R.R. § 8002.3(f) (2002); see De Zimm v. N.Y. State Bd. of Parole,
524 N.Y.S.2d 851, 851 n.1 (3d Dep’t 1988). To the extent that the approval of a
satisfactory program imposes an additional condition on a parole grantee’s
release, it renders his expectation of release no more contingent than that of the
parole grantees in Green, 822 F.2d at 287‐88, whose release date was “conditioned
upon continued satisfactory conduct by the prisoner.” 28 C.F.R. § 2.34 (1986).
29
1 B. Process Due
2 Victory does not contest that, in general, the robust procedures established
3 by the New York regulations are constitutionally adequate to protect the liberty
4 interests of parole grantees. Rather, he asserts that Defendants deliberately
5 sought to circumvent New York’s procedural protections by depriving him of a
6 neutral decisionmaker at his rescission hearing and entering into an agreement to
7 unlawfully rescind his parole using a fabricated ground for rescission. If proven,
8 these allegations would suffice to establish a violation of his right not to be
9 deprived of liberty without due process.13
13 We have held that “there is no constitutional violation (and no available § 1983
action) when there is an adequate postdeprivation procedure to remedy a
random, arbitrary deprivation of property or liberty,” and an Article 78
proceeding is just such a procedure. Hellenic Am. Neighborhood Action Comm. v.
City of New York, 101 F.3d 877, 881‐82 (2d Cir. 1996) (emphasis omitted).
Petitioners may bring Article 78 proceedings to challenge the procedurally
improper rescission of an open parole release date. See, e.g., Diaz, 935 N.Y.S.2d at
224; Blanche v. Dennison, 805 N.Y.S.2d 497 (4th Dep’t 2000). However, we are not
required on this appeal to consider whether the availability of an Article 78
proceeding bars Victory’s claims because defendants failed to raise such an
argument. See DiBlasio v. Novello, 344 F.3d 292, 302 (2d Cir. 2003).
30
1 1. Denial of Impartial Decision‐Maker
2 “The fundamental requirement of due process is the opportunity to be
3 heard at a meaningful time and in a meaningful manner.” Holcomb v. Lykens, 337
4 F.3d 217, 223 (2d Cir. 2003) (quoting Mathews v. Eldridge, 424 U.S. 319, 333 (1976)).
5 Even the most minimal guarantees of procedural due process require that the
6 decision be issued by “a neutral and detached hearing body such as a traditional
7 parole board” and supported by at least “some evidence.” Friedl v. City of New
8 York, 210 F.3d 79, 85 (2d Cir. 2000) (internal quotation marks omitted). Indeed,
9 “the essence of a fair hearing is an impartial decisionmaker.” Surprenant v. Rivas,
10 424 F.3d 5, 16 (1st Cir. 2005) (citing Wolff v. McDonnell, 418 U.S. 539, 570‐71
11 (1974)). A parole grantee facing rescission is therefore entitled to “a de novo
12 hearing before a neutral and detached hearing body.” Green, 822 F.2d at 287.
13 It is undisputed that this right was denied to Victory through the
14 concededly “improper involvement of a Parole Board Commissioner” in
15 Victory’s rescission hearing. Victory, 716 N.Y.S.2d at 256. Indeed, although they
16 differed as to the proper remedy, the Board of Parole Appeals Unit and two New
17 York courts that reviewed the rescission determination agreed that the decision
31
1 issued following the rescission hearing could not stand “because of the improper
2 involvement of a Parole Board Commissioner acting as unsworn witness,
3 prosecutor and judge at the rescission hearing.” Victory, 716 N.Y.S.2d at 256
4 (internal quotation marks omitted).14 The district court below likewise
5 recognized, “as the state courts have repeatedly pointed out, that the conduct of
6 [Victory’s] rescission hearing is problematic on a due process level.” Victory, 2013
7 WL 4539296, at *17.
8 The rescission hearing—and the panel’s ultimate grounds for rescission—
9 hinged entirely on whether Victory’s 1978 escape from Greenhaven was
10 “actually known” by the January panel. App’x at 888‐89. Because the only
11 evidence on this issue was Commissioner Graber’s repeated unsworn testimony
14 Victory’s partially successful appeal of the rescission determination does not
defeat his due process claim. See Walker v. Bates, 23 F.3d 652, 657 (2d Cir. 1994)
(holding successful administrative appeal did not cure procedural defect in
prisoner’s disciplinary hearing or preclude Section 1983 action for damages
against hearing officer). A claim for denial of procedural due process accrues
once an inmate is deprived of his constitutional procedural rights and is
deprived of liberty as a result. See id. “Once a cause of action for a constitutional
violation accrues, nothing that the state does subsequently can cut off the § 1983
claim.” Patterson v. Coughlin, 761 F.2d 886, 893 (2d Cir. 1985). Here, Victory
remained incarcerated for more than nine additional months after his open
release date elapsed solely on the basis of the March 1999 rescission panel’s
decision.
32
1 to this effect, it was impossible for Victory to dispute the facts purported to
2 justify rescission of his grant of parole without impeaching the credibility of the
3 commissioner heading his rescission panel. This procedural infirmity therefore
4 deprived Victory both of his right to an impartial decision‐maker and to a
5 decision based on some evidence.
6 2. Fabricated Evidence
7 Furthermore, “[i]t is firmly established that a constitutional right exists not
8 to be deprived of liberty on the basis of false evidence fabricated by a
9 government officer.” Zahrey v. Coffey, 221 F.3d 342, 355 (2d Cir. 2000). “No
10 ‘reasonably competent officers could disagree,’ that a parole officer can not
11 properly rely on evidence he knows to be false.” Scotto v. Almenas, 143 F.3d 105,
12 113 (2d Cir. 1998) (citations and alteration omitted) (quoting Ricciuti v. N.Y.C.
13 Transit Auth., 124 F.3d 123, 128 (2d Cir. 1997)). Indeed, we have held that Section
14 1983 liability attaches for knowingly falsifying evidence even where there
15 simultaneously exists a lawful basis for a deprivation of liberty. See Ricciuti, 124
16 F.3d at 130 (“No arrest, no matter how lawful or objectively reasonable gives an
33
1 arresting officer or his fellow officers license to deliberately manufacture false
2 evidence against an arrestee.”).
3 New York regulations afford parole officials broad discretion, but they
4 plainly do “not authorize state officials to rely on knowingly false information in
5 their determinations.” Monroe v. Thigpen, 932 F.2d 1437, 1442 (11th Cir. 1991)
6 (considering Alabama law). Although the procedural protections attached to
7 parole rescission hearings “are in many respects less demanding than those for
8 criminal prosecution, . . . they are not so lax as to let stand the decision of a
9 biased hearing officer who dishonestly suppresses evidence . . . .” Edwards v.
10 Balisok, 520 U.S. 641, 647 (1997).
11 Victory proffered sufficient evidence to raise a triable dispute as to
12 whether he was knowingly deprived of liberty on the basis of fabricated
13 evidence. As the district court at one point recognized, “there arguably exist
14 issues of fact with regard to whether Graber knew of the escape.” Victory, 2013
15 WL 4539296, at *17.15 Given that the record conclusively establishes that Graber
15 Somewhat contradictorily, the district court later concluded that “all of the
testimony corroborates that Graber’s failure to note the escape in the parole file
when it was readily available was nothing more than a mistake.” Victory, 2013
WL 4539296, at *20. That characterization hardly views the facts in the light most
34
1 stated that he did not know of the escape, and that this statement provided the
2 grounds for rescission, it follows that a factual dispute exists as to whether
3 Graber lied, and consequently, whether Victory’s parole was rescinded on the
4 basis of this lie.
5 It is undisputed that Graber was not aware of any procedural defects at the
6 January hearing at least until after learning that a high‐ranking member of
7 Governor Pataki’s administration was investigating his decision, an event that
8 was to his knowledge unprecedented. Furthermore, according to Graber’s
9 deposition testimony, the possibility that he failed to consider the escape was
10 first proposed by Tracy, who, in informing Graber about Lapp’s investigation,
11 inquired whether Graber knew about Victory’s escape. Considering these facts in
12 conjunction with the undisputed evidence that the escape was prominently
13 noted throughout the file that Graber had claimed at the January hearing to have
14 reviewed in its entirety, there is sufficient evidence for a jury to conclude that
favorable to the non‐moving party as is required on a motion for summary
judgment. Of course, a jury evaluating the evidence could find, as the district
court suggested, that Graber testified truthfully in denying any awareness of the
escape at the January hearing. But for the reasons explained herein, we do not
constrain our review to those allegations that are substantiated by the direct
testimony of Defendants and other alleged members of the conspiracy.
35
1 Graber lied in denying any prior knowledge of Victory’s escape. Because a
2 reasonable jury could find against Defendants, there is a genuine issue of
3 material fact on this issue.
4 Accordingly, Victory proffered admissible evidence, at a minimum, to
5 raise a triable dispute as to whether he was deprived of liberty without due
6 process, in violation of the Fourteenth Amendment.
7 C. Personal Involvement
8 The district court’s primary reason for granting summary judgment on
9 Victory’s due process claim was that he had not proffered sufficient evidence to
10 show personal involvement in the alleged due process violation by any of the
11 named Defendants. After holding that Graber was entitled to absolute immunity,
12 the district court concluded that Victory could not “maintain a constitutional
13 claim arising out of his actions.” Victory, 2013 WL 4539296, at *17. According to
14 the district court, Victory could not establish personal liability of any Defendant,
15 as required to support a Section 1983 suit for damages, unless he could show that
16 the Defendant “directly participate[d] in the rescission hearing” or entered into a
17 conspiracy to deprive Victory of his constitutional rights. Id. As to the
36
1 conspiracy, the district court concluded that the evidence established that
2 Defendants agreed to no more than reviewing Victory’s parole file. Id. at *20.
3 1. Absolute Immunity
4 We affirm the district court insofar as it concluded that Graber was entitled
5 to absolute immunity for any actions taken while performing the quasi‐judicial
6 function of deciding whether to rescind Victory’s parole. We reject, however, the
7 contention that Graber’s absolute immunity automatically serves to shield any
8 other individual who may have been involved in the sequence of events
9 precipitating the initiation of the rescission proceedings.16
10 When determining whether an official receives qualified or absolute
11 immunity, we take “a functional approach,” where “the level of immunity ‘flows
12 not from rank or title or location within the Government, but from the nature of
13 the official’s responsibilities.’” Scotto, 143 F.3d at 110 (alteration omitted)
16 Defendants have not asserted that absolute immunity attaches to the functions
performed by any of the other named Defendants. Accordingly, we do not opine
on whether absolute immunity would bar claims against the individual who
possessed the discretionary authority over whether to initiate rescission
proceedings, see Scotto, 143 F.3d at 112, or to the individual who performed what
might be characterized as the quasi‐judicial function of assigning Graber to the
panel that presided over Victory’s rescission hearing, see Rodriguez v. Weprin, 116
F.3d 62, 66‐67 (2d Cir. 1997).
37
1 (quoting Cleavinger v. Saxner, 474 U.S. 193, 201 (1985)). “[B]ecause absolute
2 immunity detracts from section 1983’s broadly remedial purpose, the
3 presumption is that qualified rather than absolute immunity is sufficient to
4 protect government officials in the exercise of their duties.” Id. (alteration,
5 citation, and internal quotation marks omitted). Most executive officials receive
6 only qualified immunity, Cleavinger, 474 U.S. at 201, and “the official seeking
7 absolute immunity bears the burden of showing that such immunity is justified
8 for the function in question.” Burns v. Reed, 500 U.S. 478, 486 (1991). Thus, “[t]he
9 court must conduct ‘some factual inquiry’ to determine if the duties of the
10 defendants were judicial or prosecutorial, which entitles them to absolute
11 immunity, or administrative, which may entitle them to qualified immunity.”
12 King v. Simpson, 189 F.3d 284, 288 (2d Cir. 1999) (alteration omitted) (quoting
13 Stewart v. Lattanzi, 832 F.2d 12, 13 (2d Cir. 1987)); see Scotto, 143 F.3d at 110‐11.
14 It is well established that “parole board officials, like judges, are entitled to
15 absolute immunity from suit for damages when they serve a quasi‐adjudicative
16 function in deciding whether to grant, deny or revoke parole.” Montero v. Travis,
17 171 F.3d 757, 761 (2d Cir. 1999). “Parole officers also receive absolute immunity
38
1 for their actions in initiating parole revocation proceedings and in presenting the
2 case for revocation to hearing officers, because such acts are prosecutorial in
3 nature.” Scotto, 143 F.3d at 111‐13. However, absolute immunity does not extend
4 to parole officials and employees when they perform functions outside these
5 narrowly delineated roles, such as “scheduling or making a recommendation.”
6 King, 189 F.3d at 288; see Scotto, 143 F.3d at 112 (holding that state parole officer’s
7 conduct was not protected by absolute or qualified immunity when he prepared
8 false parole violation report and recommended arrest warrant issue and parole
9 revocation proceedings be initiated against parolee based on fabricated parole
10 violation); see also Kalina v. Fletcher, 522 U.S. 118, 131 (1997) (holding that
11 prosecutor not entitled to absolute immunity when functioning as “complaining
12 witness”); Buckley v. Fitzsimmons, 509 U.S. 259, 275‐76 (1993) (prosecutor not
13 entitled to absolute immunity when acting in investigative capacity).
14 We agree with the district court that Graber was entitled to absolute
15 immunity for any actions taken while performing the quasi‐judicial function of
16 adjudicating whether to rescind Victory’s parole. Cf. King, 189 F.3d at 288
17 (distinguishing Anton v. Getty, 78 F.3d 393 (8th Cir. 1996), where the Eighth
39
1 Circuit held that a parole commissioner’s decision to delay a prisoner’s
2 presumptive parole date was adjudicative, and therefore entitled to absolute
3 immunity). However, Graber’s absolute immunity does not extend to the alleged
4 fabrication of evidence when performed outside that adjudicatory role, before
5 the initiation of rescission proceedings. See Scotto, 143 F.3d at 112. Nor does it
6 protect alleged wrongdoers who, while not performing the function of an
7 adjudicator or an advocate, enlist themselves in a scheme to deprive a person of
8 liberty by rescinding his parole based on grounds known to be fabricated. See
9 Zahrey, 221 F.3d at 353; see also Ricciuti, 124 F.3d at 130 (holding that there was no
10 protection by immunity for police officer who conspired to fabricate a known
11 false confession and forward that confession to prosecutor); Coggins v. Buonora,
12 776 F.3d 108, 113‐14 (2d Cir. 2015) (holding that a police officer who perjured
13 himself before grand jury was not entitled to absolute immunity for lying to the
14 district attorney and knowingly falsifying and omitting material facts from police
15 reports), cert. denied, 135 S. Ct. 2335 (2015).
16 A government official cannot immunize for Section 1983 purposes all
17 unlawful conduct performed prior to and independent of a later immunized act,
40
1 merely by subsequently engaging in conduct entitled absolute immunity.
2 Coggins, 776 F.3d at 113. This Court explained long ago that the doctrine of
3 absolute immunity does not permit “relating back” absolute immunity afforded
4 for certain subsequent acts to acts of fabrication performed at earlier stages of the
5 proceedings where absolute immunity did not attach. See Zahrey, 221 F.3d at 353
6 n.10.
7 Accordingly, we reject the district court’s categorical conclusion that, due
8 to Graber’s absolute immunity, Victory could not maintain a Section 1983 claim
9 arising out of the procedural infirmities at the rescission hearing unless he
10 showed that another Defendant had “directly participate[d] in the rescission
11 hearing” or participated in a conspiracy to deprive him of his rights. Victory, 2013
12 WL 4539296, at *17.
13 2. Direct Participation of Other Defendants
14 “[A] defendant in a § 1983 action may not be held liable for damages for
15 constitutional violations merely because he held a high position of authority.”
16 Black v. Coughlin, 76 F.3d 72, 74 (2d Cir. 1996). Rather, the “personal involvement
17 of defendants in alleged constitutional deprivations is a prerequisite to an award
41
1 of damages under § 1983.” Farrell v. Burke, 449 F.3d 470, 484 (2d Cir. 2006)
2 (internal quotation marks omitted). “Because vicarious liability is inapplicable
3 to . . . § 1983 suits,” Victory must raise a genuine dispute as to whether “each
4 Government‐official defendant, through the official’s own individual actions, has
5 violated the Constitution.” Ashcroft v. Iqbal, 556 U.S. 662, 676 (2009) (emphasis
6 added). “[P]ersonal involvement is a question of fact,” Farrell, 449 F.3d at 484
7 (internal quotation marks omitted), which may preclude summary judgment, see,
8 e.g., Ricciuti, 124 F.3d at 129.
9 Personal involvement may be shown by “direct participation,” which
10 requires in this context “intentional participation in the conduct constituting a
11 violation of the victim’s rights by one who knew of the facts rendering it illegal.”
12 Provost v. City of Newburgh, 262 F.3d 146, 155 (2d Cir. 2001) (footnote omitted).
13 Although we reject the district court’s conclusion that no one other than Graber
14 directly participated in the procedurally defective rescission of Victory’s parole,
15 we hold that there is insufficient evidence that any Defendant who directly
16 participated in the parole rescission process knew of the facts making the process
17 illegal.
42
1 In particular, Hayden and White arranged for Victory’s file to be sent to
2 Lapp, and there is evidence that Hayden participated in the decision to initiate a
3 rescission hearing. Thereafter, White was involved in arranging the procedural
4 aspects of the rescission hearing. For instance, White received and reviewed the
5 names of the three commissioners assigned to the panel in advance of the
6 rescission hearing. However, there is no evidence that either Hayden or White
7 knew that the basis for the rescission was allegedly false, nor is there evidence
8 that White knew that Graber would have to testify before the very panel on
9 which he was serving, as there is no evidence that White knew the specific basis
10 for the rescission hearing. We therefore conclude that the district court did not
11 err in holding that Victory had not proffered sufficient evidence to support a
12 finding that any Defendant other than Graber directly participated in the alleged
13 due process violation.
14 3. Conspiracy
15 We agree with Victory that the district court erred in concluding that no
16 rational jury could find that any of the other defendants conspired to violate his
17 right to due process. Although the district court acknowledged that Defendants
43
1 admittedly participated in multiple conversations regarding the potential
2 rescission of Victory’s parole, the district court found that Victory could not
3 establish the agreement necessary to sustain a conspiracy claim due to lack of
4 direct evidence “that these individuals agreed to anything other than reviewing
5 Plaintiff’s parole file.” Victory, 2013 WL 4539296, at *20. It is axiomatic, however,
6 that “conspiracies are by their very nature secretive operations that can hardly
7 ever be proven by direct evidence.” Rounseville v. Zahl, 13 F.3d 625, 632 (2d Cir.
8 1994); see also United States v. Downing, 297 F.3d 52, 57 (2d Cir. 2002) (“[I]t is a rare
9 case where all aspects of a conspiracy can be laid bare in court with the precision
10 of a surgeon’s scalpel.” (internal quotation marks omitted)). Therefore, in
11 assessing the evidence supporting Victory’s allegations, the district court was not
12 permitted to rely solely on Victory’s failure to show that any of the alleged co‐
13 conspirators had admitted to impropriety.
14 The district court did not draw all reasonable inferences in Victory’s favor
15 when it concluded that “Graber’s failure to note the escape in the parole file
16 when it was readily available was nothing more than a mistake” and that no
17 nexus existed “between Lapp, Kindler, Keenan, Grant, Travis, and Tracy
44
1 discussing Plaintiff’s parole file and Graber depriving Plaintiff of an impartial
2 hearing.” Victory, 2013 WL 4539296, at *20. Crucially, at no point did the district
3 court address the phone records corroborating Victory’s contention that the
4 conversation between Lapp, Tracy, and Grant that allegedly identified Victory’s
5 escape as a basis for rescission preceded Graber’s own purported realization that
6 he had overlooked the escape. Whereas the State Defendants asserted that
7 Graber first became aware of Victory’s escape on January 13, 1999, during a
8 phone conversation between Graber, Tracy, and Grant, Victory pointed to phone
9 records indicating that this call could not have occurred until January 14, 1999,
10 the day after admissible evidence suggests that Lapp was already soliciting
11 letters emphasizing the escape and potentially that Lapp requested that service
12 of the parole decision to Victory be postponed. As the district court at one point
13 acknowledged, Victory raised a genuine dispute as to whether Graber lied about
14 his awareness of the escape to the rescission panel. Considering these facts in
15 conjunction with the State Defendants’ inconsistent testimony regarding the
16 chain of events preceding the rescission hearing, a reasonable juror could
17 conclude that there was an agreement among Lapp, Tracy, and Grant, who
45
1 together prematurely set in motion rescission procedures with this allegedly false
2 pretext in mind. See Ricciuti, 124 F.3d at 129. These “inference[s] of impropriety”
3 distinguish Victory’s conspiracy allegations from those that we have dismissed
4 on the basis that they are supported only by “unsubstantiated speculation” with
5 no evidence “to suggest anything untoward took place.” Scotto, 143 F.3d at 115.
6 Accordingly, we conclude that the district court erred in dismissing Victory’s
7 due process conspiracy claim against Tracy and Grant.
8 The district court also dismissed former Governor Pataki and Travis for
9 lack of personal involvement. While the opinion below failed to draw all
10 inferences in Victory’s favor in this respect, we nonetheless agree with its
11 ultimate determination that Victory failed to come forth with evidence that
12 would permit a jury to reasonably find that Governor Pataki or Travis were
13 personally involved in depriving Victory of due process or participated in a
14 conspiracy to that effect.
15 As an initial matter, the undisputed involvement of two high‐ranking
16 members of Governor Pataki’s staff in the events preceding the rescission
17 hearing is insufficient to establish Governor Pataki’s liability because, as noted,
46
1 “vicarious liability is inapplicable to . . . § 1983 suits.” Iqbal, 556 U.S. at 676
2 (“Government officials may not be held liable for the unconstitutional conduct of
3 their subordinates under a theory of respondeat superior.” (italics omitted)).
4 Moreover, while Victory suggests that these staff members were acting pursuant
5 to Governor Pataki’s instruction or request, the evidence proffered shows at most
6 that the Governor was aware of and displeased by the Board of Parole’s decision
7 to grant Victory release. Based on this evidence alone, a jury would be left to rely
8 only “on mere speculation or conjecture as to the true nature” of Governor
9 Pataki’s involvement in his staff’s subsequent alleged misconduct, for which the
10 Governor was indisputably not present. Knight v. U.S. Fire Ins. Co., 804 F.2d 9, 12
11 (2d Cir. 1986); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249‐50 (1986).
12 Victory has similarly failed to show that Governor Pataki fostered a policy
13 or custom that deprived him of due process during his rescission hearing.
14 Undeniably, there is evidence in the record to suggest that Governor Pataki
15 promoted a blanket policy opposing parole for violent offenders, but this does
16 not support the inference that he “created a policy or custom under which
17 unconstitutional practices occurred.” Colon v. Coughlin, 58 F.3d 865, 873 (2d Cir.
47
1 1995); see also Scott v. Fischer, 616 F.3d 100, 110 (2d Cir. 2010). Victory does not
2 allege that Governor Pataki generally encouraged his staff to intervene in parole
3 decisions or ratified the rescission procedures employed by the Board of Parole.
4 In fact, Victory repeatedly argued that his treatment was anomalous and that
5 Lapp’s involvement in the process was unprecedented. Accordingly, we affirm
6 the district court’s dismissal of Governor Pataki for lack of personal involvement.
7 Similarly, although Victory has set forth evidence that Travis knew of
8 Lapp, Grant, and Tracy’s involvement in the rescission process, there is no
9 evidence suggesting that Travis knew of the alleged falsity of the basis for
10 rescission. That is, while Tracy told Travis that the basis for rescission was that
11 Graber did not know about Victory’s escape, a jury would be left to improperly
12 speculate that Travis knew this was false. And as with Governor Pataki, even as
13 Tracy’s superior, Travis cannot be held liable for Tracy’s actions through a
14 respondeat superior theory.
15 We do not preclude the possibility that there may be some further
16 impediment to Victory’s recovery against some of the named Defendants. On
17 remand, the district court may address whether any individual other than Graber
48
1 was entitled to absolute immunity. We hold only that Victory has proffered
2 admissible evidence making out the elements of a cognizable due process
3 violation, and that he raised a triable dispute as to the personal involvement of
4 Board of Parole officials Tracy and Grant in that deprivation.
5 CONCLUSION
6 We conclude that it was error for the district court, in reliance on the
7 reasons it gave, to grant the Defendants’ motion for summary judgment on
8 Victory’s claim that his due process rights were violated in connection with his
9 rescission hearing.
10 For the foregoing reasons, we REMAND for further proceedings consistent
11 with this opinion.
49
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Filed 8/31/10 by Clerk of Supreme Court
IN THE SUPREME COURT
STATE OF NORTH DAKOTA
2010 ND 168
Fred M. Hector, Jr., Petitioner and Appellant
v.
City of Fargo, a political subdivision of the
State of North Dakota, Respondent and Appellee
No. 20100061
Appeal from the District Court of Cass County, East Central Judicial District, the Honorable Steven E. McCullough, Judge.
AFFIRMED.
Opinion of the Court by Maring, Justice.
Jonathan T. Garaas, DeMores Office Park, 1314 23rd Street South, Fargo, N.D. 58103-3796, for petitioner and appellant.
Jane L. Dynes (argued) and Ronald H. McLean (on brief), P.O. Box 6017, Fargo, N.D. 58108-6017, for respondent and appellee.
Hector v. City of Fargo
No. 20100061
Maring, Justice.
[¶1] Fred M. Hector, Jr., appeals from a district court judgment affirming the Fargo Board of City Commissioners’ decision approving the amount of assessments against his property located in four separate special assessment districts in south Fargo. We affirm, concluding Hector has failed to meet his burden of showing that the Commissioners acted arbitrarily, capriciously, or unreasonably, or that there is not substantial evidence supporting its decision.
I
[¶2] The Fargo Board of City Commissioners created four improvement districts on the southern edge of Fargo primarily for the construction of street improvements and the installation of sanitory sewers, water mains, and storm sewers. Hector objected to the amount the Fargo Special Assessment Commission assessed against his unplatted properties for the improvements. Hector appeared through counsel before the Special Assessment Commission to voice his objections, and the Special Assessment Commission lowered the amount of the assessment on property located in one of the assessment districts. Hector appealed the assessments to the Board of City Commissioners and appeared through counsel before the Commissioners to voice his objections. The Commissioners approved assessments of $297,739.91; $25,261.87; $247,361.60; and $38,643.40 for his property in the four special assessment districts. Hector entered into agreements with the City of Fargo which defer, without interest, payment of all assessments for a period of ten years.
[¶3] Hector appealed to the district court, which affirmed the Board of City Commissioners’ decision to approve the assessments. The court also denied his motion for reconsideration.
II
[¶4] On appeal, Hector argues the district court’s decision affirming the assessments should be reversed for numerous reasons.
[¶5] Our review of a decision on special assessments is very limited:
The special assessment commission is in essence a legislative tribunal created by legislative authority to “(1) determin[e] the benefits accruing to the several tracts of land in an improvement district by reason of the construction of an improvement and (2) assess[ ] the costs and expenses thereof against each tract in proportion to the benefit received.” Accordingly, judicial review is limited to assuring that local taxing authorities do not act arbitrarily, capriciously, or unreasonably. Courts are not to act as a super grievance board, and we do not try special assessment cases anew or reweigh the evidence. Rather, we begin with the presumption that assessments for local improvements are valid, and the burden is on the party challenging the validity of the assessments to demonstrate they are invalid.
Bateman v. City of Grand Forks
, 2008 ND 72, ¶ 10, 747 N.W.2d 117 (quoting
Serenko v. City of Wilton
, 1999 ND 88, ¶ 20, 593 N.W.2d 368 (citations omitted)). We must affirm the decision of a local governing body unless it acted arbitrarily, capriciously, or unreasonably, or there is not substantial evidence supporting the decision.
Hagerott v. Morton County Bd. of Comm’rs
, 2010 ND 32, ¶ 7, 778 N.W.2d 813. A decision is not arbitrary, capricious, or unreasonable if the exercise of discretion is the product of a rational mental process by which the facts and the law relied upon are considered together for the purpose of achieving a reasoned and reasonable interpretation.
Id.
The record is adequate to support a local governing body’s findings and conclusions if it allows us to discern the rationale for the decision.
Hector v. City of Fargo
, 2009 ND 14, ¶ 9, 760 N.W.2d 108. A local governing body’s failure to correctly interpret and apply controlling law constitutes arbitrary, capricious, and unreasonable conduct.
Hagerott
, at ¶ 7.
[¶6] Two issues raised by Hector warrant discussion.
A
[¶7] Hector argues he is being illegally assessed for his real property located outside Fargo city limits.
[¶8] Generally, in the absence of statutory authority, a municipality cannot create a special assessment or improvement district that includes land outside the municipality’s limits.
See
70C Am. Jur. 2d
Special or Local Assessments
§ 109 (2000); 64 C.J.S.
Municipal Corporations
§ 1204 (1999). There is statutory authority in North Dakota allowing the creation of special improvement districts by a municipality that include land outside the municipality’s limits.
[¶9] Under North Dakota law, a special improvement district must be created before property may be lawfully assessed.
See
Dakota Land Co. v. City of Fargo
, 224 N.W.2d 810, 814 (N.D. 1974), and cases collected therein. Section 40-23-19, N.D.C.C., provides in pertinent part:
Any property that was outside the corporate limits of the municipality at the time of contracting for an improvement, which is benefited by the improvement and is subsequently annexed to the municipality, may be assessed for the improvement subject to the same conditions and by the same procedure as provided in section 40-23-18. The property that is benefited may also be assessed for any improvement, within or outside the corporate limits, which is determined by the governing body and the special assessment commission to benefit property that was outside the corporate limits at the time of contracting for the improvement, whether or not an improvement district was previously created for the improvement. For this purpose, the governing body may create one or more improvement districts comprising all or part of the annexed territory. . . . The governing body may use a reasonable depreciation schedule for the improvement in determining the amount of any special assessment subsequently levied under this section.
[¶10] Because creation of a special improvement district must precede any assessments, it follows that N.D.C.C. § 40-23-19, by allowing the assessment of property that is subsequently annexed to a municipality, necessarily authorizes the creation of special improvement districts that include land outside the limits of a municipality. Section 40-23-25, N.D.C.C., further supports this conclusion:
The special assessment commission shall prepare and file with the city auditor a list of estimated future assessments on property located outside the corporate limits of the city at the time of contracting for an improvement but which the special assessment commission determines is potentially benefited by the improvement and likely to be annexed to the city.
One of the purposes of N.D.C.C. § 40-23-25 was to give notice to potential property purchasers that “specials are then pending on that land that will be annexed into the city.”
Hearing on S.B. 2368 Before the House Political Subdivisions Comm.
, 58th N.D. Legis. Sess. (March 20, 2003) (testimony of Connie Sprynczynatyk). Under N.D.C.C. § 40-23-17, “[a]ny municipality that pays or provides for the payment of part or all of the cost of an improvement may subsequently levy special assessments for the cost of the improvement upon properties benefited by the improvement.” This statutory scheme “allow[s] for the city to put the money up front but then to recapture it when the property is annexed or when there are actual benefits to that resident.”
Hearing on S.B. 2338 Before the House Finance and Taxation Comm.
, 53rd N.D. Legis. Sess. (Feb. 16, 1993) (testimony of Rep. Glassheim).
[¶11] Hector’s argument that it is illegal to include property in a special improvement district that is located outside city limits is based on this Court’s decision in
Dakota Land Co.
, 224 N.W.2d 810. The “sole issue” in
Dakota Land Co.
was “whether or not the City of Fargo can create a special improvement district and thereafter enlarge and extend such district to include property subsequently annexed to the City.”
Id.
at 812. The Court held that
since the improvement project was substantially completed, the improvement warrant was issued, and the improvement bonds were sold before the adoption of the resolution which purportedly included the appellee’s property in the special improvement district, the City of Fargo has failed to establish jurisdiction over the property in question, and that any special assessments against said property resulting from said resolution are null and void.
Id.
at 814. The Court did not hold a special assessment district cannot be created that includes property located outside city limits. Indeed, the Court pointed out that “if the Legislature had intended to permit the inclusion of subsequently annexed property in existing special improvement districts, the Legislature would have specifically authorized assessment of such property, as it did in § 40-23-19, N.D.C.C.”
Dakota Land Co.
, at 813.
[¶12] Here, Hector did not contest the creation of the improvement district, and the evidence reflects that the special assessments have not been implemented or levied on Hector’s property located outside city limits. We conclude the creation of a special improvement district including Hector’s land located outside Fargo city limits was authorized by law.
B
[¶13] Hector claims he was improperly assessed for 28 acres of land owned by the City of Fargo.
[¶14] At the Board of City Commissioners meeting on October 20, 2008, the special assessment coordinator for the City of Fargo described a “problem” with the legal status of what the parties refer to as the “school lands” and its effect on the City’s computer system. To support his argument that he was improperly assessed for the school lands, Hector relies on material in the record indicating the Fargo Public School District owns the school lands. However, this material sheds no light on whether Hector was assessed for the school lands.
[¶15] The special assessment coordinator explained at the meeting that, because of the “problem,” a special assessment notice for the school lands was not sent to Hector, but was sent to the school district. The record contains a special assessment notice for improvement district #575900 which was sent to Hector for parcel 01-
3500-04931-000, but it did not include the school lands. A special assessment notice for improvement district #575900 was sent to Fargo Public School District 1 for parcel 01-3500-04930-000. The district 575900 hearing notice register lists Fargo Public School District 1 as the owner of parcel 01-3500-04930-000. Hector has pointed to nothing indicating he was assessed for the school lands.
[¶16] Upon our review of the record, we agree with the district court that Hector has failed to establish that he was improperly assessed for the school lands.
C
[¶17] We have considered the other arguments raised by Hector and conclude they are without merit or do not affect our decision. We conclude Hector has failed to establish that the Fargo Board of City Commissioners acted arbitrarily, capriciously, or unreasonably, or that there is not substantial evidence supporting its decision.
III
[¶18] The judgment is affirmed.
[¶19] Mary Muehlen Maring
Daniel J. Crothers
Dale V. Sandstrom
Carol Ronning Kapsner
Gerald W. VandeWalle, C.J.
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196 F.2d 937
SOUTHWEST AIRWAYS CO.v.CIVIL AERONAUTICS BOARD.
No. 13288.
United States Court of Appeals Ninth Circuit.
May 19, 1952.
Kramer, Morrison, Roche & Perry and Walter Roche, Phoenix, Ariz., for petitioner, Southwest Airways Co.
G. Robert Henry, Las Vegas, Nev., for Intervener, Bonanza Air Lines, inc.
H. G. Morison, Asst. Atty. Gen., J. Roger Wollenberg, Sp. Asst. to the Atty. Gen., John H. Wanner, Associate Gen. Counsel, Civil Aeronautics Board, Emory T. Nunneley, Jr., Gen. Counsel, Civil Aeronautics Board, James L. Highsaw, Jr., Chief, Litigation and Research Division, Civil Aeronautics Board, Washington, D.C., for respondent.
Before DENMAN, Chief Judge, and STEPHENS and BONE, Circuit Judges.
DENMAN, Chief Judge.
1
This is a petition by Southwest Airways Co. to review another aspect of the same Civil Aeronautics Board order of January 17, 1952, involved in Western Air Lines, Inc., v. Civil A.B., 9 Cir., 196 F.2d 933. As stated in the other case, the Board inter alia denied Southwest's application for award of an air route from Los Angeles to Phoenix via certain way points; and Southwest attacks this order insofar as it reaffirms a previous Board order on March 10, 1950, which had rescinded a temporary certificate, granted to Southwest but not yet effective, which covered this route.
2
The only additional fact that should be stated is that the Board, as part of the California-Nevada Service Case, had issued a temporary certificate to Southwest covering the Los Angeles-Phoenix route on December 19, 1949. The order of that date granting this certificate was in final form, but the temporary certificate appended to the order had the following condition attached to it:
3
'This certificate, as amended, shall be effective on February 17, 1950: Provided, however, that prior to the date on which the certificate, as amended, would otherwise become effective the Board, either on its initiative or upon the filing of a petition or petitions seeking consideration of the Board's order of December 19, 1949 (Order Serial No. E-3727), insofar as such order authorizes the issuance of this certificate, as amended, may by order or orders extend such effective date from time to time.'
4
Western Air Lines and others did petition the Board for reconsideration of its December 19, 1949 order and accordingly the effective date of Southwest's certificate was changed to March 31, 1950. Prior to that time, on March 10, 1950, the Board, acting on the various petitions for reconsideration and the answers of Southwest thereto, rescinded Southwest's temporary certificate for the Los Angeles-Phoenix route. It was this rescission which was reaffirmed on January 17, 1951.
5
The first challenge of the rescission order is that it was not based on findings in accordance with 49 U.S.C.A. § 645(f). The Board made a finding that the need for local air service proposed by Southwest could best be determined by reopening the California-Nevada Service Case and consolidating Southwest's application with that of Western for the Yuma-Phoenix route and with the Board proceedings to determine if Western and Arizona Airways should be suspended from routes in that area. This was a sufficient finding on which to base the conclusion that Southwest's temporary certificate should be rescinded so that a fresh look could be taken of the local air service problem.
6
Southwest also argues that the rescission of a still ineffective certificate must be done in accordance with the revocation provisions of 49 U.S.C.A. § 481(h). We do not agree. The certificate was by its terms in a state of suspension totally dependent on the Board's order which had sired it. The Board points to its administrative practice of postponing certificates of this character so that time may be allowed for petition for reconsideration of the parent orders. See Kansas City-Memphis-Florida case, 9 C.A.B. 401 (1948). The Board certainly has the power to reconsider its orders and set them aside, 49 U.S.C.A. § 645(a) and (d), and if certificates not yet effective are dependent on those orders, they will also be extinguished. The situation is totally different from that in which a certificate has become effective.
7
The order of the Board is affirmed.
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833 P.2d 1127 (1992)
STATE of Montana, Plaintiff and Respondent,
v.
Terry Allen LANGFORD, Defendant and Appellant.
No. 92-098.
Supreme Court of Montana.
Submitted on briefs June 11, 1992.
Decided July 9, 1992.
Michael Donahoe, Donahoe & Yeshe Law Offices, Helena, for defendant and appellant.
Marc Racicot, Atty. Gen., John Paulson, Asst. Atty. Gen., Helena; and Christopher G. Miller, Powell County Atty., Deer Lodge, for plaintiff and respondent.
TURNAGE, Chief Justice.
Terry Allen Langford (Langford) appeals an opinion and order dated December 12, *1128 1991, from the Third Judicial District, Powell County, which denied as moot his motion to declare hanging a cruel and unusual method of execution. We affirm.
We rephrase the issue as follows:
Did the District Court properly deny as moot Langford's motion to declare hanging a cruel and unusual method of execution in violation of the Eighth Amendment to the United States Constitution?
On June 4, 1991, this Court affirmed Langford's convictions and death sentences imposed by the District Court following his guilty pleas to two counts of deliberate homicide, two counts of aggravated kidnapping, one count of aggravated burglary, one count of robbery, and one count of theft regarding the July 1988 deaths of Edward and Celene Blackwood in Ovando, Montana. State v. Langford (1991), 248 Mont. 420, 813 P.2d 936.
On July 1, 1991, this Court denied Langford post-conviction relief. State v. Langford (1991), 249 Mont. 385, 819 P.2d 151. On July 3, 1991, the District Court set September 24, 1991, as his execution date.
On September 10, 1991, this Court vacated Langford's September 24, 1991 execution date following Langford's filing of a second petition for post-conviction relief. This Court denied this second petition for post-conviction relief on November 14, 1991. State v. Langford (1991), 250 Mont. 542, 822 P.2d 1092.
On November 26, 1991, the District Court set January 17, 1992, as Langford's execution date. Langford stated to the District Court that he elected hanging as the method of execution. The District Court issued a death warrant specifying hanging as the method of execution and allowed Langford until December 10, 1991, to file any further motions pertaining to his fitness to proceed.
On December 10, 1991, Langford filed consolidated motions to declare hanging unconstitutional, to certify the qualifications of the hangman, and to vacate the execution date. Following a hearing on December 10, 1991, the District Court issued its December 12, 1991 opinion and order denying as moot his motion to declare hanging unconstitutional, granting his motion to have the hangman's qualifications certified, and denying his motion to postpone the execution date.
On December 13, 1991, Langford petitioned for writ of habeas corpus in the United States District Court, and requested a stay of execution. On December 18, 1991, the United States District Court granted his stay of execution and allowed him additional time to file an amended petition. The amended petition, filed on January 31, 1992, included a claim that hanging is an unconstitutional method of execution.
On February 10, 1992, Langford filed a notice of appeal from the state District Court's opinion and order denying as moot his motion to declare hanging unconstitutional. On April 1, 1992, the United States District Court stayed the habeas corpus proceeding during the pendency of his appeal to this Court.
Did the District Court properly deny as moot Langford's motion to declare hanging a cruel and unusual method of execution in violation of the Eighth Amendment to the United States Constitution?
The District Court heard Langford's motion on December 10, 1991. Langford, his counsel, and the Powell County Attorney were present at the hearing. All parties waived the presence of a court reporter and the District Court instructed the clerk of court to take detailed minutes of the proceeding.
The minutes of the hearing and the District Court's subsequent written order indicate that the District Court inquired about Langford's previous decision to elect hanging as the method of execution. Langford advised the District Court that he wanted to affirm his original election to be executed by hanging. Notwithstanding Langford's previous election to die by hanging and the statutory mandate that he make the election for lethal injection at the hearing setting the execution date, the District Court informed him that it would allow him to elect lethal injection at that time. Langford informed the District Court that he still wished to be executed by hanging. *1129 Thereafter, the District Court held that Langford's election to be executed by hanging rendered moot his argument that hanging was a cruel and unusual method of execution.
Section 46-19-103(3), MCA, provides Langford the opportunity to elect between lethal injection and hanging as a method of execution. Clearly, Langford had ample opportunity to elect lethal injection over hanging, but chose not to do so. Accordingly, he rendered moot any claim concerning the constitutionality of hanging as a method of execution. See DeShields v. State (Del. 1987), 534 A.2d 630. We therefore decline to discuss Langford's argument further.
In conclusion, we affirm the District Court's opinion and order dated December 12, 1991, denying as moot Terry Allen Langford's motion to declare hanging a cruel and unusual method of execution in violation of the Eighth Amendment to the U.S. Constitution.
HARRISON, HUNT, GRAY, McDONOUGH, TRIEWEILER and WEBER, JJ., concur.
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RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit I.O.P. 32.1(b)
File Name: 18a0125p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
SHARON EARLEY, ┐
Plaintiff-Appellee, │
│
> No. 17-4007
v. │
│
│
COMMISSIONER OF SOCIAL SECURITY, │
Defendant-Appellant. │
┘
Appeal from the United States District Court
for the Southern District of Ohio at Dayton.
No. 3:15-cv-00166—Sharon L. Ovington, Magistrate Judge.
Argued: June 5, 2018
Decided and Filed: June 27, 2018
Before: BOGGS, SILER, and SUTTON, Circuit Judges.
_________________
COUNSEL
ARGUED: Weili J. Shaw, UNITED STATES DEPARTMENT OF JUSTICE, Washington,
D.C., for Appellant. Michael A. Rake, HORENSTEIN, NICHOLSON & BLUMENTHAL,
LPA, Dayton, Ohio, for Appellee. ON BRIEF: Weili J. Shaw, Alisa B. Klein, UNITED
STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Appellant. Michael A. Rake,
HORENSTEIN, NICHOLSON & BLUMENTHAL, LPA, Dayton, Ohio, for Appellee.
_________________
OPINION
_________________
SUTTON, Circuit Judge. In 2010, Sharon Earley applied for disability benefits. In 2012,
an administrative law judge rejected the application on the ground that Earley did not have a
covered disability. She applied again for a new period of time. The same administrative law
No. 17-4007 Earley v. Comm’r of Soc. Sec. Page 2
judge denied her benefits, in part because he thought that one of our cases, Drummond v.
Commissioner of Social Security, 126 F.3d 837 (6th Cir. 1997), required him to give preclusive
effect to the work-capacity finding he had made during the first proceeding absent “new and
material evidence documenting a significant change in the claimant’s condition.” A.R. 30. The
district court reversed, concluding that the “principles of res judicata” announced in Drummond
apply only when they favor an individual applicant, not the government, in a subsequent
proceeding. That was wrong. The key principles protected by Drummond—consistency
between proceedings and finality with respect to resolved applications—apply to individuals and
the government. At the same time, they do not prevent the agency from giving a fresh look to a
new application containing new evidence or satisfying a new regulatory threshold that covers a
new period of alleged disability while being mindful of past rulings and the record in prior
proceedings. We reverse and remand the case to the agency for reconsideration of Earley’s
application.
I.
Sharon Earley applied for disability benefits starting on June 25, 2010. Administrative
Law Judge David Redmond considered the application. He found that she suffered from a host
of physical and mental impairments, including fibromyalgia, mild carpal tunnel syndrome, panic
disorder, degenerative disk disease, and major depression. Even so, he found that she remained
capable of holding jobs that demanded only light physical exertion and denied the application for
the period between June 25, 2010 and May 15, 2012.
Earley applied again in July 2012, arguing that she became disabled after the decision on
her last application. The application went to Judge Redmond again. Invoking Drummond, he
thought he was precluded from revisiting his earlier finding that Earley was not disabled unless
she offered new and material evidence of a changed condition. See SSAR 98-4(6), 63 Fed. Reg.
29,771, 29,773 (June 1, 1998). Because Earley failed to do that, he denied her benefits on
September 18, 2014.
A magistrate judge, hearing the case by the consent of the parties, reversed. She
construed Drummond to apply in just one direction—if it leads to a favorable outcome for the
No. 17-4007 Earley v. Comm’r of Soc. Sec. Page 3
applicant but not if it leads to an unfavorable outcome for the applicant. So configured, the case
did not apply here, she ruled, as any preclusive effect of the prior ALJ finding would make it
more difficult for Earley to receive a disability rating and the benefits that accompany it. In this
instance, she found the evidence in favor of a disability finding so strong that she ordered the
agency to award benefits to Earley immediately.
II.
The Social Security Administration pays benefits to people who have become disabled.
See 42 U.S.C. §§ 423(a) (Title II benefits), 1382 (Title XVI benefits). To obtain benefits, the
applicant must convince the agency that her ailments render her “unable to do [her] previous
work” and stop her from “engag[ing] in any other kind of substantial gainful work.” Id.
§§ 423(d)(2)(A), 1382c(a)(3)(B).
A “five-step sequential evaluation process” guides efforts to implement these two
requirements. 20 C.F.R. § 404.1520 (authorized by 42 U.S.C. § 405(a)); 20 C.F.R. § 416.920(a)
(authorized by 42 U.S.C. § 1383(d)(1)); see Barnhart v. Thomas, 540 U.S. 20, 24 (2003). The
Administration checks (1) if the person is not engaged in gainful activity, (2) if she has a severe,
medically verifiable physical or mental impairment, and (3) if she has a qualifying impairment
that leads to a disability finding by default. 20 C.F.R. § 404.1520(a)(4). If this does not resolve
her application, the Administration calculates her residual functional capacity, id., which reflects
what sorts of work she can do despite her impairment, id. § 404.1545(a)(1). If (4) she has held a
job that someone with her residual functional capacity can still do or if (5) someone of her age,
education, work experience, and residual functional capacity can adjust to other work available
in the national economy, then she is not disabled. Id. §§ 404.1520(a)(4), 416.920(a)(4). An
unsuccessful applicant may appeal the decision through the administrative review process and
eventually to an Article III court. At that point, the inquiry on that application ends.
All of this does not prevent an individual from applying for benefits again. See 42 U.S.C.
§§ 401 et seq., 1381 et seq. The individual may bring a separate application that claims a later
disability-onset date. See Procedures for Handling Requests to File Subsequent Applications for
Disability Benefits, SSR 11-1p, 76 Fed. Reg. 45,309 (July 28, 2011). A second application starts
No. 17-4007 Earley v. Comm’r of Soc. Sec. Page 4
the process anew and potentially permits the applicant to obtain benefits through it for this new
period of time. In each event, the question before the ALJ is whether a preponderance of the
evidence supports a decision to award benefits under the five-step inquiry, 20 C.F.R.
§ 404.953(a), and on review whether substantial evidence supports that finding, 42 U.S.C.
§ 405(g).
The administrative law judge, David Redmond, started down this road and held to it—for
a time. Earley applied for benefits in 2010. In 2012, Judge Redmond marched through the five-
step analysis, found her capable of light work, and decided she was not disabled because a
sufficient number of light-work jobs were available to her.
In 2012, Earley filed a new application for benefits, seeking benefits for a new period,
namely from May 16, 2012 forward. Judge Redmond reviewed her case again. Instead of
asking whether the evidence supported Earley’s new application, Judge Redmond thought he
was precluded by the first ruling. In his view, he was “bound by the findings of [the] previous
Administrative Law Judge” because Sixth Circuit case law gave those findings “preclusive
effect.” A.R. at 22.
That is not how it works. An individual may file a second application—for a new period
of time—for all manner of reasons and obtain independent review of it so long as the claimant
presents evidence of a change in condition or satisfies a new regulatory threshold.
In Judge Redmond’s defense, we must acknowledge, some language in Drummond
supports his approach. In that case, an administrative law judge denied the application of a forty-
nine-year-old applicant who was capable of “sedentary” work. Drummond, 126 F.3d at 838.
After receiving that decision, Drummond filed a second application for a new period of time.
Because she had turned fifty by the relevant time of the second application, the administrative
law judge found her to be a “person approaching advanced age” under the relevant regulation.
Id. at 839. A fifty-year old capable only of sedentary work under certain circumstances would be
considered disabled and receive benefits. See 20 C.F.R. pt. 404, subpt. P, app. 2. Instead of
granting the application on the ground that Drummond now met the test, the second
administrative law judge switched gears and found that she could carry out “medium,” not just
No. 17-4007 Earley v. Comm’r of Soc. Sec. Page 5
sedentary, work, thus making her ineligible for benefits on this new ground. Drummond,
126 F.3d at 838–39.
That was too much for our court to accept. “When the Commissioner has made a final
decision concerning a claimant’s entitlement to benefits,” we said, “the Commissioner is bound
by this determination absent changed circumstances.” Id. at 842. Nothing had changed between
the end of the first application and the beginning of the second one—other than the advancement
of one year in the applicant’s age. In that setting, we explained, “principles of res judicata”
prevented the ALJ from revisiting the applicant’s capacity to handle anything more than
sedentary work in the absence of “new and additional evidence” showing a change in her
condition. Id.
Unusual facts, it seems to us, led to some overstatement in Drummond but not to an
incorrect outcome. Drummond correctly held that substantial evidence did not support the ALJ’s
decision. And Drummond correctly held that res judicata may apply to administrative
proceedings. United States v. Utah Constr. & Mining Co., 384 U.S. 394, 422 (1966). If an
individual, say, files a second application for the same period of time finally rejected by the first
application and offers no cognizable explanation for revisiting the first decision, res judicata
would bar the second application. And res judicata would apply in both directions: to bar the
government and individuals from relitigating a past final decision for no reason other than to
take a second bite at the same apple. See 20 C.F.R. § 404.957(c)(1).
But res judicata does not apply in today’s case. “Res judicata bars attempts to relitigate
the same claim, but a claim that one became disabled in 1990 is not the same as a claim that one
became disabled in 1994.” Groves v. Apfel, 148 F.3d 809, 810 (7th Cir. 1998). Just so here.
Had Earley filed a second application for disability benefits for June 25, 2010 to May 15, 2012,
the same period covered by her first application, the ALJ could have correctly rejected it on res
judicata grounds and the principles of finality that it supports. But Earley did not do that. She
filed a new application for a new period of time. When an individual seeks disability benefits for
a distinct period of time, each application is entitled to review. There is nothing in the relevant
statutes to the contrary. And res judicata only “foreclose[s] successive litigation of the very
same claim.” New Hampshire v. Maine, 532 U.S. 742, 748 (2001).
No. 17-4007 Earley v. Comm’r of Soc. Sec. Page 6
While we are at it, we should point out that issue preclusion, sometimes called collateral
estoppel, rarely would apply in this setting. That doctrine “foreclos[es] successive litigation of
an issue of fact or law actually litigated and resolved.” Id. at 748–49. But human health is rarely
static. Sure as we’re born, we age. Sometimes we become sick and sometimes we become
better as time passes. Any earlier proceeding that found or rejected the onset of a disability
could rarely, if ever, have “actually litigated and resolved” whether a person was disabled at
some later date.
All of this helps to explain why Drummond referred to “principles of res judicata”—with
an accent on the word “principles.” 126 F.3d at 841–43. What are those principles? Finality,
efficiency, and the consistent treatment of like cases. An administrative law judge honors those
principles by considering what an earlier judge found with respect to a later application and by
considering that earlier record. Id. at 842; see Albright v. Comm’r of Soc. Sec., 174 F.3d 473,
478 (4th Cir. 1999). That is why it is fair for an administrative law judge to take the view that,
absent new and additional evidence, the first administrative law judge’s findings are a legitimate,
albeit not binding, consideration in reviewing a second application.
At the same time, an applicant remains free to bring a second application that introduces
no new evidence or very little new evidence after a failed application. But she should not have
high expectations about success if the second filing mimics the first one and the individual has
not reached any new age (or other) threshold to obtain benefits. What’s past likely will be
precedent in that setting—as indeed it should be in a system designed to apply the law
consistently to similarly situated individuals.
Cementing our conclusion is a defect that arises from a broad reading of Drummond—a
defect that would do far more harm than good for social security applicants. Drummond
involved a black swan—the unusual situation in which the individual wanted the administrative
law judge to make the same finding on one issue that he had made in a prior ruling. Most
applicants reapply only because the Administration found them not to be disabled. Just ask
Sharon Earley. All applicants in that setting want the next administrative law judge to examine
the new record and make a new, more favorable finding. See Albright, 174 F.3d at 476–77. But
if res judicata applied here, it would prevent the Commissioner and the individual from seeking
No. 17-4007 Earley v. Comm’r of Soc. Sec. Page 7
fresh review of a new application for a new period of time. Some of our unpublished decisions
seem to have done just that, to the misfortune of the individual seeking disability benefits for a
new period of time. See, e.g., Lester v. Soc. Sec. Admin., 596 F. App’x 387, 389 (6th Cir. 2015)
(per curiam); Haun v. Comm’r of Soc. Sec., 107 F. App’x 462, 464 (6th Cir. 2004). No such
requirement exists.
This approach, as we see it, accords in the main with the approach taken by our sister
circuits. See Albright, 174 F.3d at 473 (4th Cir. 1999); Groves, 148 F.3d at 810 (7th Cir. 1998);
Buckley v. Heckler, 739 F.2d 1047, 1048–49 (5th Cir. 1984). In fact, one of them faced a
problem almost identical to the one we face—the need to correct an overreading of a prior
decision with respect to this precise issue. In Lively v. Secretary of Health & Human Services,
the Fourth Circuit confronted a similar set of facts to those we addressed in Drummond.
820 F.2d 1391, 1391–92 (4th Cir. 1987). The court referred to the “principles of res judicata”
and the “principles of finality and fundamental fairness” before holding for the applicant. Id. at
1392. In fact, our Drummond opinion cited Lively several times. See Drummond, 126 F.3d at
840–42. But the Fourth Circuit later clarified that, “[a]t its essence, Lively really has very little to
do with preclusion.” Albright, 174 F.3d at 477. Instead, it was “best understood as a practical
illustration of the substantial evidence rule” in which the prior factual finding was “such an
important and probative fact as to render the subsequent finding to the contrary unsupported by
substantial evidence.” Id. at 477–78. Albright is to Lively what this case is to Drummond.
The Administration asks us to go further. In reviewing a second application by the same
individual, it thinks the administrative law judge should completely ignore earlier findings and
applications. But it overstates the difference between our standard and the standard in other
circuits. Fresh review is not blind review. A later administrative law judge may consider what
an earlier judge did if for no other reason than to strive for consistent decision making. That’s
why we strongly suspect that the other circuits would reach the same outcome as our court did in
Drummond and the Fourth Circuit did in Lively and why our current description of the standard
is no different in the main from what any other circuit is doing today.
All roads in the end lead to this destination: The ALJ should have another opportunity to
review the application under the correct standard. See SEC v. Chenery Corp., 318 U.S. 80, 87,
No. 17-4007 Earley v. Comm’r of Soc. Sec. Page 8
93–95 (1943). In the interim, Earley asks us to enter an award of immediate benefits. But such a
ruling “is proper only where the proof of disability is overwhelming or where the proof of
disability is strong and evidence to the contrary is lacking.” Faucher v. Sec’y of Health &
Human Servs., 17 F.3d 171, 176 (6th Cir. 1994). That is not this case.
For these reasons, we reverse the district court and remand with instructions to send the
case to the Administration to reconsider Earley’s application for benefits.
| {
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Filed 3/12/15 Hamilton Court v. East Olympic CA2/5
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION FIVE
HAMILTON COURT, LLC et al., B253511
Plaintiffs and Appellants, (Los Angeles County
Super. Ct. No. BC437727)
v.
EAST OLYMPIC, L.P. et al.,
Defendants and Respondents.
APPEAL from an order of the Superior Court of Los Angeles County, Susan
Bryant-Deason, Judge. Affirmed.
Vivoli Saccuzzo, Michael W. Vivoli and Jason P. Saccuzzo, for Plaintiffs and
Appellants.
Troygould PC, Jeffrey W. Kramer, Annmarie Mori and Jacob M. Harper, for
Defendants and Respondents.
I. INTRODUCTION
Plaintiffs, Hamilton Court, LLC and 3650 Olympic, LLP appeal from an order
imposing attorney’s fees against them. Defendants, East Olympic, L.P. and Jack Wilder,
prevailed on appeal against plaintiffs in a dispute regarding a quiet title cause of action
for an easement. We issued a published decision in favor of defendants in Hamilton
Court, LLC v. East Olympic, L.P. (2013) 215 Cal.App.4th 501, 505-506 (Hamilton
Court). Following remittitur issuance, defendants successfully moved for attorney’s fees
incurred during the trial and on appeal. We affirm the order granting defendants their
attorney’s fees.
II. BACKGROUND
A. Factual and Procedural Background Prior to the Pending Appeal
The prior factual and procedural background in this case is summarized in our
prior published opinion. We recite the background necessary for purposes of our appeal.
East Olympic, L.P. once owned an entire city block in Los Angeles, including two
parcels of adjacent real property; the Angelus (lot 35) and the Wilder (lot 36) properties.
East Olympic, L.P. had a three-story building on the Angelus property. The three-story
building encroached on the Wilder property lot line. The Wilder property consisted of: a
one-story building; a two-story building; and an adjacent yard and shed. The yard and
shed encroached on the Angelus property.
East Olympic, L.P. sold the three-story building on the Angelus property to the
Angelus Building Partnership in 1983. East Olympic, L.P. retained ownership of the
yard and shed on the Wilder property. Rather than legally split the lots, East Olympic,
L.P. and Angelus Building Partnership entered into an easement agreement in 1994. The
easement agreement was recorded on May 12, 1994.
2
The easement agreement described the two easements, which we refer to as the
East Olympic easement and the Angelus easement. The East Olympic easement
consisted of the area on lots 35 and 36. This is where the yard and shed belonging to East
Olympic, L.P. encroached on the Angelus property. The Angelus easement was the area
where the three-story building encroached on the Wilder property.
On March 29, 2005, plaintiffs acquired the Angelus property as tenants in
common subject to the easement agreement. On May 16, 2005, East Olympic, L.P. sold
the Wilder property to Hamilton Court, LLC and Venice National Group, LLC as tenants
in common. This sale was memorialized by a February 22, 2005 purchase contract.
East Olympic, L.P. sold the Wilder property for $3.8 million, consisting of $800,000 in
cash and a $3 million promissory note. The $3 million promissory note was payable to
East Olympic, L.P. The purchasers executed a first deed of trust in favor of East
Olympic, L.P. The trust deed created a security interest in the Wilder property and the
East Olympic easement. Before the close of escrow, East Olympic, L.P. approved adding
language to the promissory note and trust deed. This additional language created a
priority in terms of the trust deed. The proviso states, “[If] such transfer is made subject
to the Trustor’s promissory note and this Deed of Trust and does not affect the priority of
this Deed of Trust in any manner whatsoever.”
In July 2005, Venice National Group, LLC quitclaimed its interest in the Wilder
property to 3650 Olympic, LLP. In 2008, plaintiffs ceased making payments due under
the promissory note. East Olympic, L.P. foreclosed under the trust deed and reacquired
the Wilder property in a 2009 foreclosure sale.
On May 14, 2010, plaintiffs filed a complaint against defendants alleging:
contract breach; fraud in inducement; implied covenant breach; and to quiet title. The
quiet title claim concerned whether the East Olympic easement still existed after
plaintiffs owned both the Wilder and Angelus properties. The first three causes of action
concerned the purchase contract involving the Wilder property.
3
Plaintiffs filed their second amended complaint on February 9, 2011. Plaintiffs
alleged as their first three causes of action contract breach, fraud in inducement and
rescission. On March 10, 2011, defendants filed a cross-complaint. Defendants asserted
that if plaintiffs prevailed to quiet title as to the East Olympic easement, then the Angelus
easement should likewise be extinguished. On August 11, 2011, plaintiffs dismissed
their first three causes of action pertaining to the purchase contract without prejudice.
On October 4-5, 2011, trial was held. Thereafter, the trial court ruled the merger doctrine
under Civil Code section 811 applied so as to extinguish the East Olympic easement.
The trial court entered judgment in favor of plaintiffs and against defendants.
On appeal, we held the merger doctrine was inapplicable because “plaintiffs in
effect stipulated that there would be no merger under Civil Code section 811” so long as
the trust deed remained in effect. (Hamilton Court, supra, 215 Cal.App.4th at p. 506.)
We instructed the trial court to quiet title over the East Olympic easement in favor of East
Olympic, L.P. As a result, the judgment was reversed.
B. Defendants’ Attorney’s Fees Motion
Following the reversal, defendants filed their attorney’s fees motion on October 7,
2013. In their moving papers, defendants argued contractual attorney’s fees were
authorized pursuant to Code of Civil Procedure section 1033.5, subdivision (a)(10)(A).
Defendants relied upon provisions in both the easement agreement and the trust deed.
Section 13.4 of the easement agreement provides, “Should it be necessary for either party
to commence any legal action or arbitration proceeding to enforce the terms or conditions
hereof, the prevailing party in such action or arbitration shall be entitled to recover from
the unsuccessful party reasonable legal fees, costs and expenses incurred by the
prevailing party in the prosecution, defense, or arbitration of such action.” Section A(3)
of the trust deed states: “To protect the security of the Deed of Trust, Trustor [plaintiffs]
agrees: [¶] . . . [¶] (3) To appear in and defend any action or proceeding purporting to
4
affect the security hereof . . .; and to pay all costs and expenses, including . . . attorney’s
fees in a reasonable sum, in any action or proceeding in which Beneficiary [East
Olympic, L.P.] . . . may appear, and in any suit brought by Beneficiary to foreclose this
Deed.” Defendants argued both provisions provided independent bases to recover
attorney’s fees from plaintiffs.
Plaintiffs opposed defendants’ attorney’s fees motion. They argued the easement
agreement provision did not apply because they did not commence a legal action to
enforce the terms of the contract. Plaintiffs asserted the trust deed provision did not
apply under the anti-deficiency rule of Code of Civil Procedure section 580d. Code of
Civil Procedure section 580d bars a creditor who has foreclosed on a trustee from seeking
any deficiency or additional compensation under the instrument. Alternatively, plaintiffs
argued defendants’ requested attorney’s fees were unreasonable. Plaintiff contended a
large percentage of fees incurred by defendants were unrelated to the quiet title cause of
action.
In reply, defendants asserted a third contractual basis for recovering attorney’s
fees, the purchase contract for the Wilder property. Paragraph 16 of the purchase
contract provides, “If any Party or Broker brings an action or proceeding (including
arbitration) involving the Property whether founded in tort, contract or equity, or to
declare rights hereunder, the Prevailing Party (as hereafter defined) in any such
proceeding, action, or appeal thereon, shall be entitled to reasonable attorneys’ fees.”
“Property” includes the shed on the East Olympic easement. Defendants also argued
apportionment of fees was unnecessary. Defendants expressly argued the three dismissed
causes of action and the quiet title claim in the second amended complaint were
inextricably intertwined.
5
C. Trial Court’s Ruling
On November 6, 2013 defendants’ attorney’s fees motion was granted. The trial
court ruled defendants were entitled to recover attorney’s fees pursuant to both the
easement agreement and trust deed. The trial court awarded as fees $291,355.62 to
defendants for work performed by defense counsel at trial and on appeal. Plaintiffs
appealed the order.
III. DISCUSSION
A. Defendants Were Entitled to Recovery of Attorney’s Fees by Contract
Attorney’s fees based upon a contract, incurred in litigation, may be recovered as
costs pursuant to Code of Civil Procedure section 1033.5, subdivision (a)(10)(A).
(Kaufman v. Diskeeper Corp. (2014) 229 Cal.App.4th 1, 7; Maynard v. BTI Group, Inc.
(2013) 216 Cal.App.4th 984, 993-994.) Judgments of the trial court are presumed to be
correct. (In re Marriage of Arceneaux (1990) 51 Cal.3d 1130, 1133; Conservatorship of
Rand (1996) 49 Cal.App.4th 853, 841.) Generally, we review a trial court’s order
awarding attorney’s fees for an abuse of discretion. (Nemecek & Cole v. Horn (2012)
208 Cal.App.4th 641, 651; Cruz v. Ayromloo (2007) 155 Cal.App.4th 1290, 1274.) But,
we review a determination of the legal basis for an attorney’s fees award de novo. (Toro
Enterprises, Inc. v. Pavement Recycling Systems, Inc. (2012) 205 Cal.App.4th 954, 957;
Sessions Payroll Management, Inc. v. Noble Construction Co. (2000) 84 Cal.App.4th
671, 677.) An issue of apportionment of fees though is a matter of discretion. (In re
Tobacco Cases I (2013) 216 Cal.App.4th 570, 586; Acree v. General Motors Acceptance
Corp. (2001) 92 Cal.App.4th 385, 405.)
Plaintiffs assert none of the three provisions cited by defendants permit defendants
to recover attorney’s fees in this action. As we have explained, we first examine the
6
purchase contract’s attorney’s fees provision de novo. The purchase agreement was
submitted with plaintiffs’ second amended complaint and was a part of the record before
the trial court. As noted, paragraph 16 of the purchase contract provides attorney’s fees
to the prevailing party, “If any Party . . . brings an action or proceeding (including
arbitration) involving the Property whether founded in tort, contract or equity . . . .”
Plaintiffs and defendants are parties to the purchase contract. “Property” includes the
yard and shed on the East Olympic easement for which the plaintiffs attempted to quiet
title. The plain language of the attorney’s fees provision in the purchase agreement
applies to plaintiffs’ unsuccessful quiet title cause of action. The quiet title cause of
action was an action founded in equity involving the yard and shed on the East Olympic
easement. Defendants, as the prevailing party, are entitled to recover attorney’s fees
under paragraph 16 of the purchase contract against plaintiffs. We need not discuss
defendants’ rights to attorney’s fees under the trust deed or the easement agreement.
B. The Trial Court Did Not Abuse Its Discretion by Not Apportioning Fees
As previously stated, generally, an attorney’s fees award is reviewed for an abuse
of discretion. Plaintiffs assert the trial court should have apportioned attorney’s fees and
the failure to do so was an abuse of discretion. Under Civil Code section 1717,
subdivision (b)(2), “Where an action has been voluntarily dismissed . . . , there shall be
no prevailing party for purposes of this section [recovery of attorney’s fees in action on
contract].” As previously mentioned, plaintiffs had brought four causes of action, three
based on the purchase contract, and one premised on a quiet title. Plaintiffs dismissed
without prejudice the first three causes of action.
The trial court has broad discretion to apportion fees. (Zintel Holdings, LLC v.
McLean (2012) 209 Cal.App.4th 431, 443; Amtower v. Photon Dynamics, Inc. (2008) 158
Cal.App.4th 1582, 1604.) Division One for the Court of Appeal of the Fourth Appellate
District has explained: “[A]pportionment [of attorney’s fees] is not required when the
7
claims for relief are so intertwined that it would be impracticable, if not impossible, to
separate the attorney’s time into compensable and noncompensable units. [Citations.]”
(Bell v. Vista Unified School Dist. (2000) 82 Cal.App.4th 672, 687; accord, Akins v.
Enterprise Rent-A-Car Co. (2000) 79 Cal.App.4th 1127, 1133.) Our Supreme Court
held, “Attorney’s fees need not be apportioned when incurred for representation on an
issue common to both a cause of action in which fees are proper and one in which they
are not allowed.” (Reynolds Metals Co. v. Alperson (1979) 25 Cal.3d 124, 129-130; see
Holguin v. DISH Network LLC (2014) 229 Cal.App.4th 1310, 1322.) A trial court’s
exercise of discretion is abused when its ruling exceeds the bounds of reason after
considering all the circumstances before it. (Amtower v. Photon Dynamics, Inc., supra,
158 Cal.App.4th at p. 1604; Pellegrino v. Robert Half Internat., Inc. (2010) 182
Cal.App.4th 278, 289.)
Plaintiffs allege in their three dismissed causes of action that: defendants breached
the purchase contract; defendants did so by refusing to permit plaintiffs to demolish the
buildings on the Wilder property, including the yard and shed on the East Olympic
easement; defendants fraudulently induced plaintiffs to purchase the Wilder property by
falsely claiming improvements could be constructed on the East Olympic easement; and
rescission should be granted because there was a material failure of consideration due to
defendants’ misrepresentations about plaintiffs’ right to demolish the buildings on the
Wilder property. Plaintiffs’ quiet title cause of action sought to extinguish the East
Olympic easement by reason of the merger doctrine.
All three dismissed causes of action involve claims that defendants had wrongfully
prevented plaintiffs from demolishing the buildings on the Wilder property, including the
shed on the East Olympic easement. Plaintiffs allege in the second amended complaint:
“In or about August of 2005, following the close on their purchase of the Wilder
property, Plaintiffs informed Defendants that they wished to take the first step towards
unlocking the true value of the [Angelus property]. To that end, Plaintiffs informed
Defendants they planned to demolish two dilapidated structures located on the Wilder
8
Property to create additional parking to service the [Angelus property], which Defendants
knew was Plaintiffs’ plan all along. Plaintiffs also informed Defendants that Plaintiffs
wished to install an elevator to service their own [Angelus property]. Installing this
elevator would require demolishing a small shack structure within the [East Olympic
easement]. . . .” The fourth cause of action for quiet title was another means of
accomplishing plaintiffs’ purpose of claiming property rights over the shed on the East
Olympic easement. The trial court’s award of attorney’s fees did not exceed the bounds
of reason. The trial court could reasonably have found the three dismissed causes of
action to be so intertwined with the fourth cause of action that no apportionment of fees
was practicable.
9
IV. DISPOSITION
The November 6, 2013 order awarding attorney’s fees is affirmed. Defendants,
East Olympic, L.P. and Jack Wilder, are to recover their appellate costs from plaintiffs,
Hamilton Court, LLC, and 3650 Olympic, L.P. Any request for attorney’s fees incurred
on appeal may be recovered pursuant to California Rules of Court, rules 3.1702(c) and
8.278(c)(1).
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
TURNER, P. J.
We concur:
MOSK, J.
GOODMAN, J.*
*
Judge of the Los Angeles Superior Court, assigned by the Chief Justice pursuant to
article VI, section 6 of the California Constitution.
10
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846 F.2d 77
Unpublished DispositionNOTICE: Federal Circuit Local Rule 47.8(b) states that opinions and orders which are designated as not citable as precedent shall not be employed or cited as precedent. This does not preclude assertion of issues of claim preclusion, issue preclusion, judicial estoppel, law of the case or the like based on a decision of the Court rendered in a nonprecedential opinion or order.Jonathan J. CHRISTIAN, Plaintiff-Appellant,v.Verne ORR, Secretary of the United States Air Force,Defendant-Appellee.
No. 87-1463.
United States Court of Appeals, Federal Circuit.
March 2, 1988.
Before FRIEDMAN and DAVIS, Circuit Judges, and JACK R. MILLER, Senior Circuit Judge.
FRIEDMAN, Circuit Judge.
1
This is an appeal from a judgment of the United States District Court for the Central District of California dismissing, for failure to state a claim upon which relief could be granted, a suit challenging the Air Force's refusal to reenlist the appellant because his mustache did not meet the applicable grooming standards. We affirm.
2
* This case grows out of the refusal of the Air Force to allow the appellant, T. Sgt. Christian, to reenlist in the Air Force Reserve because it concluded that Sgt. Christian's handlebar mustache did not comply with the applicable Air Force Regulations governing mustaches.
3
A. On December 31, 1979, two days before his enlistment would expire on January 2, 1980, Sgt. Christian attempted to reenlist. A sergeant in the Reenlistment Section denied reenlistment because Sgt. Christian's mustache did not comply with the requirement of Air Force Regulation 35-10 governing mustaches. Upon checking, the reenlistment sergeant ascertained that Lt. Col. McCoy, Sgt. Christian's commanding officer, confirmed that Sgt. Christian was not to be reenlisted. Although there is a dispute whether Sgt. Christian was told that he could reenlist in civilian clothes or if he trimmed his mustache to bring it into compliance with the regulations, it is clear that if Sgt. Christian had trimmed or shaved his mustache he would have been allowed to reenlist.
4
There was considerable discussion and disagreement among the military personnel involved whether Sgt. Christian's mustache did or did not comply with the regulation. Eventually the Air Force Headquarters Office that had charge of such matters in January 1980, sixteen days after Sgt. Christian's enlistment had expired and he had been separated, stated that because the regulation was unclear, it should be left to the discretion of the unit's commander (Lt. Col. McCoy) to interpret the directive.
5
Christian petitioned the Air Force Board for Correction of Military Records (Board). He sought reenlistment, backpay, and reinstatement of lost time for both grade and service. He contended that Lt. Col. McCoy had improperly denied reenlistment because he required Christian to conform to "his own personal grooming standards."
6
The Board rendered three opinions, each of which rejected Sgt. Christian's claims. In the first opinion, the Board accepted the Air Force's version of the facts contained in advisory opinions the Air Force had given to the Board. In the second opinion, the Board acknowledged that the Air Force advisory opinions it had previously relied on had been "unconscionable" for misstating certain facts. The Board, however, followed the first decision because
7
[i]nsufficient relevant evidence has been presented to demonstrate the existence of probable error or injustice.... By regulation, commanders are granted certain prerogatives in the application of portions of regulations which are open to interpretation. In this regard, we believe it of note that, while there was some question as to the propriety of applicant's mustache, in their message authorities at AFMPC supported the commander's determination that the applicant's mustache did not conform under the provision of the regulation which prohibits unusual facial hair. What is most clear in this case is that applicant is suffering from his own voluntary decision.... There has been no evidence presented which would cause us to believe the commander abused the discretionary authority which was his by nature of his command position. Therefore, the earlier findings in this case are affirmed and applicant's petition is not favorably considered.
8
The Board further held that because Christian's denial of reenlistment resulted from his own actions, the procedures under Air Force Regulation 35-16 governing denial of reenlistment were not applicable.
9
Christian filed another petition with the Board alleging new evidence. After careful consideration of all the evidence and several more advisory opinions by the Air Force staff, the Board again denied relief. It stated:
10
The primary focus of this application is, and has always been, whether or not applicant's mustache was in violation of Air Force grooming standards. It is a well established concept that commanders' [sic] and other individuals in a member's chain of command have responsibility for enforcing and interpreting grooming standards for Air Force members under their control.... In the instant case, although there was some disagreement between base level authorities, applicant's commander determined that applicant's mustache was in violation of the provision of the regulation which prohibited unusual facial hair. From the evidence, it appears that appropriate authorities at the command and AFMPC were queried on the matter and the commander's judgment was confirmed. Nothing in the evidence submitted causes us to believe that the commander abused his discretionary authority
11
* * *
12
* * *
13
The Board again ruled that the procedures governing nonselection for reenlistment were inapplicable.
14
On December 11, 1980, after the Air Force had amended its regulation to prohibit handlebar mustaches and Christian had modified (or eliminated) his mustache, he reenlisted without incident. He is now a Master Sergeant in the Air Force Reserve.
15
B. Christian filed suit in the district court in December 1984. He sought (1) correction of his military records to show that he had been reenlisted on January 3, 1980, and had served from then to December 11, 1980, (2) the award of "retirement points" for the period from January 3 to December 11, 1980, during which he was "unlawfully separated" from the Air Force, and (3) the "lost pay" he would have earned during the period of separation, which he stated was approximately $7,000.
16
On the government's motion, the district court dismissed the complaint pursuant to rule 12(b)(6) of the Federal Rules of Civil Procedure because it failed to state a claim upon which relief could be granted. The court stated that its grant of summary judgment was based on the " 'doctrine of limited reviewability of certain military regulations' " (citation omitted). The court pointed out that the "complaint itself deals with the Air Force's grooming and appearance regulations," and that "[t]he courts have declined review in other cases relating to the military's appearance code...." The court further stated that "this is an area where the court should refrain from interfering with military functions[,]" and that "[j]udicial interpretation of the military's appearance regulations would unduly interfere with the military's goals."
17
Finally, the court ruled that Sgt. Christian's contention that the Air Force had failed "to comply with non-selection procedures is not sufficient to merit granting review. The problem with this allegation is one of redressibility [sic]. Assuming the proper paperwork had been filed, it is unclear whether the outcome would have been different."
II
18
A. The Board reviewed this case three times, and each time it held that a legal error or injustice had not been shown. The Board properly recognized that commanding officers had discretion in interpreting and applying the Air Force's grooming regulations. Although there was disagreement within the Air Force whether Sgt. Christian's mustache complied with the regulation, his commanding officer concluded that it did not, and the Air Force Headquarters that had the final say in this matter ultimately agreed with the commander. The Board twice held that the evidence did not show that the commander "abused his discretionary authority" to interpret and apply the mustache regulation, and thus necessarily rejected Sgt. Christian's contention that Lt. Col. McCoy's denial of reenlistment reflected only that officer's "own personal grooming standards." Moreover, there is no question that, if Sgt. Christian had modified his mustache instead of challenging his commanding officer's interpretation of the mustache regulation, he could have obtained reenlistment.
19
We have carefully reviewed the record, and we cannot say that the Board erred in concluding that no legal error or injustice had been shown and therefore that Sgt. Christian was not entitled to have his records corrected to show that he was a member of the Air Force Reserve from January 3 to December 11, 1980. For this reason we affirm the judgment of the district court dismissing his suit seeking such relief.
20
B. Our decision of this question also undermines the basis and compels rejection of Sgt. Christian's claim for "lost pay" for the period during which he was not a member of the Air Force Reserve. His pay claim is subject to the further infirmity that because he had not been a member of the Reserve during that period for which he sought pay, he was not entitled to the pay that members of the Reserve receive. See United States v. Testan, 424 U.S. 392, 402 (1976) ("[t]he established rule is that one is not entitled to the benefit of a position until he has been duly appointed to it").
21
The judgment of the United States District Court dismissing the complaint is affirmed.
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315 F.Supp.2d 1057 (2004)
Mubarak MUBARAK, Plaintiff,
v.
CALIFORNIA DEPARTMENT OF CORRECTIONS, et al., Defendants.
No. 02CV1615-DMSJFS.
United States District Court, S.D. California.
May 3, 2004.
*1058 Mubarak Mubarak, Corcoran, CA, pro se.
G. Michael German, Deputy Attorney General, San Diego, CA, for Defendants.
AMENDED ORDER: (1) ADOPTING-IN-PART MAGISTRATE JUDGE'S REPORT AND RECOMMENDATION; (2) GRANTING DEFENDANTS' MOTION TO DISMISS; AND (3) DISMISSING ACTION WITHOUT PREJUDICE
SABRAW, District Judge.
Currently pending before this Court is a motion by Defendants to dismiss Plaintiff Mubarak Mubarak's Third Amended Complaint, pursuant to Fed.R.Civ.P. 12(b). Because Plaintiff is a state prisoner bringing claims for relief under 42 U.S.C. § 1983, the Prison Litigation Reform Act of 1997 ("PLRA"), applies to this case. The Court holds that the PLRA requires "total exhaustion" of administrative remedies before bringing suit. The Court also finds that Plaintiff has failed to exhaust his available administrative remedies in relation to his third claim. Consequently, the action is DISMISSED without prejudice.
I.
FACTUAL AND PROCEDURAL SUMMARY
On March 6, 2003, Plaintiff Mubarak Mubarak, a state prisoner proceeding pro se and in forma pauperis, filed his Third Amended Complaint ("TAC") pursuant to 42 U.S.C. § 1983, alleging civil rights violations against Defendants. Plaintiff's first two claims concern events that occurred on July 9, 2000, when Defendant Flores allegedly beat Plaintiff in his cell. After the alleged beating, Plaintiff avers Defendants Hewitt and Ketcham slammed his face into the floor when he refused to remove his pants in front of a female medical technician because of his Islamic faith. Plaintiff also complains Defendants Hewitt, Ketcham and Vogt all filed false reports to cover up these physical attacks.
Plaintiff's third cause of action involves the events of September 22, 2000, when Defendant Sosa purportedly beat Plaintiff's arm while Defendant Aboytes watched. The fourth cause of action is essentially a reiteration of Plaintiff's first two claims, providing an overview of the alleged constitutional violations.
On August 19, 2003, Defendants responded with a Motion to dismiss the TAC for failure to exhaust administrative remedies and to strike the TAC and its prayer for punitive damages and non-monetary relief. Plaintiff did not file an Opposition. The Motion was referred to a United States Magistrate Judge pursuant to 28 U.S.C. § 636(b)(1)(B) and Civ. L.R. 72.3, for a Report and Recommendation ("Report").
In compliance with Wyatt v. Terhune, 315 F.3d 1108, 1120 n. 14 (9th Cir.2003), the Honorable James F. Stiven, United States Magistrate Judge, issued an Order on September 30, 2003, giving Plaintiff notice of his possible failure to exhaust his *1059 third cause of action, and requiring Plaintiff to submit affidavits to that effect. Originally, Plaintiff had until October 24, 2003, to respond to this Order. Plaintiff after receiving two extensions on this deadline responded on February 18, 2004.
On February 23, 2004, Magistrate Judge Stiven issued his Report, recommending that the Court grant-in-part and deny-in-part Defendants' motion to dismiss and to strike. Judge Stiven recommended the Court dismiss the third cause of action in the TAC without prejudice for failure to exhaust administrative remedies pursuant to the PLRA, as set forth in 42 U.S.C. § 1997e. Judge Stiven further recommended the Court deny the motion to dismiss Claims One, Two, and Four, and deny the motion to strike Plaintiff's prayer for punitive damages, injunctive relief, and declaratory relief. In addition, Judge Stiven recommended Plaintiff's request for transfer to federal custody and transfer closer to his home be stricken, and that judicial notice should be taken of the exhibits attached to Defendants' Motion. Finally, as Plaintiff returned a signed affidavit verifying his TAC on February 18, 2004, Judge Stiven recommended the Motion to strike the TAC be denied as moot.
Defendants objected to the Report on March 12, 2004. Plaintiff objected on March 15, 2004.
Based on this Court's review of Judge Stiven's Report, the pleadings, and relevant authorities, the Court ADOPTS Judge Stiven's recommendation regarding Plaintiff's failure to exhaust his administrative remedies for his third claim. However, as to Judge Stiven's further conclusion that Plaintiff be allowed to proceed with the remaining three claims, the Court declines to follow this recommendation. The Court holds that the PLRA requires "total exhaustion" of administrative remedies before bringing suit. For this reason, the TAC is DISMISSED without prejudice in its entirety. In light of this ruling, the Court declines to address the other issues raised by Defendants' Motion to dismiss and to strike.
II.
DISCUSSION
The Court reviews a Magistrate Judge's Report and Recommendation, if objected to, de novo. See Hunt v. Pliler, 336 F.3d 839, 844 (9th Cir.2003) (quoting McKeever v. Block, 932 F.2d 795, 798 (9th Cir.1991)). As discussed below, the Court DISMISSES Plaintiff's action without prejudice for failing to totally exhaust his administrative remedies.
A. Failure to Exhaust Third Claim
The Court agrees with Judge Stiven's conclusion that Plaintiff has failed to exhaust his third cause of action, as required by 42 U.S.C. § 1997e(a). Nowhere in his TAC or his Objections to the Motion to Dismiss did Plaintiff submit any documentation or evidence that this claim had been considered by CDC officials at any level of administrative review. Accordingly, Plaintiff's TAC raises both exhausted and unexhausted claims, i.e., a "mixed complaint."
B. "Total Exhaustion" Requirement of the PLRA
Ordinarily, a plaintiff bringing Section 1983 claims is not required to exhaust all available administrative remedies as a prerequisite to filing suit. See Patsy v. Bd. of Regents, 457 U.S. 496, 516, 102 S.Ct. 2557, 73 L.Ed.2d 172 (1982). However, under the PLRA, prisoners bringing such claims do have an administrative exhaustion requirement. See 42 U.S.C. § 1997e(a). Defendants maintain that strict adherence to this exhaustion requirement mandates an inmate plaintiff exhaust *1060 all the claims he seeks to litigate before commencing the action. According to Defendants, the Court must dismiss a mixed complaint in its entirety.
Defendants ask this Court to follow the "total exhaustion" approach of the Eighth Circuit in Graves v. Norris, 218 F.3d 884, 885 (8th Cir.2000) ("plain language of § 1997e(a) requires that all available prison grievance remedies must be exhausted as to all of the claims."). After briefing in this matter concluded, the Tenth Circuit, in Ross v. County of Bernalillo, 365 F.3d 1181 (10th Cir.2004), followed the rationale set forth in Graves. See id. at *6, 1188 ("We agree that the PLRA contains a total exhaustion requirement, and hold that the presence of unexhausted claims in [plaintiff's] complaint required the district court to dismiss his action in its entirety without prejudice.").
The Ninth Circuit has not addressed this issue, and the district courts of this Circuit are split on whether "total exhaustion" of a mixed complaint is required by the PLRA. Compare Lira v. Dir. of Corr., No. C-00-905 SI (PR), 2002 WL 1034043, at *3 (N.D.Cal. May 17, 2002) (requiring "total exhaustion"), and Ellison v. Cal. Dep't of Corr., No. C-02-1393 CRB (PR), 2003 WL 21209659, at *2 (N.D.Cal. May 19, 2003) (same); with Cooper v. Garcia, 55 F.Supp.2d 1090, 1094 (S.D.Cal.1999) (noting that there is "[n]othing in the language or legislative history of the PLRA's amendments to section 1997e(a) [that] supports a `total' exhaustion requirement") (citation omitted), and Blackmon v. Crawford, No. CV-01-0111, 2004 WL 369883, at *3-6 (D. Nev. Feb 25, 2004) (finding that "total exhaustion" is contrary to congressional intent and public policy).
This Court concludes the "total exhaustion" approach is supported by the plain language of the PLRA's exhaustion provision and strong policy interests. The PLRA states: "No action shall be brought ... until such administrative remedies as are available are exhausted." 42 U.S.C. § 1997e(a) (emphasis added). Use of the term "action" instead of "claim" evidences an intent to disallow mixed complaints. The Legislature could have chosen the phrase: "No claim shall be brought ...," but instead elected to use broader language and to disallow unexhausted actions. See Graves, 218 F.3d at 885; Smeltzer v. Hook, 235 F.Supp.2d 736, 744 (W.D.Mich.2002). Reference to other provisions within the PLRA itself makes the distinction between "claim" and "action" even clearer. See Rivera v. Whitman, 161 F.Supp.2d 337, 341 (D.N.J.2001) (contrasting § 1997e(c)(1) with § 1997e(c)(2)), abrogated on other grounds by Ray v. Kertes, 285 F.3d 287, 293 n. 6 (3rd Cir.2002).
In a related context, the Ninth Circuit has held that exhaustion of administrative remedies under the PLRA is a prerequisite to filing suit where none of the claims in the complaint are exhausted. In McKinney v. Carey, 311 F.3d 1198 (9th Cir.2002), the court noted that a "suit filed by a prisoner before administrative remedies have been exhausted must be dismissed; the district court lacks discretion to resolve the claim on the merits, even if the prisoner exhausts intra-prison remedies before judgment." Id. at 1200 (quoting Medina-Claudio v. Rodriguez-Mateo, 292 F.3d 31, 36 (1st Cir.2002) (citation omitted)). Accordingly, the court made clear that exhaustion of administrative remedies is a prerequisite to filing a lawsuit. A stay of the suit pending exhaustion does not satisfy the plain language of the statute. See McKinney, 311 F.3d at 1199. Total exhaustion of all claims is therefore contemplated before a prisoner may file a Section 1983 action in a federal court.
As reflected in its title, the clear import of the PLRA is to deter meritless *1061 prisoner lawsuits and alleviate the caseload burden on federal courts. To this end, mandating "total exhaustion" would deter prisoners from filing mixed complaints. Upon dismissal of the entire mixed complaint, the prisoner could either: (1) file a new complaint and bring only the exhausted claims; or (2) exhaust all claims and then file a new (fully exhausted) complaint. Either way, having to "pay the full amount of a filing fee" twice in accordance with 28 U.S.C. § 1915(b)(1) encourages prisoners to determine before bringing suit whether all claims raised in a Section 1983 complaint are in fact exhausted. See Blackmon, 305 F.Supp.2d at 1179 ("If the only penalty for bringing a mixed complaint were dismissal of the unexhausted claims, there would be nothing to deter prisoners from continuing to bring these suits.") (citation omitted). See also Ross, 2004 WL 902322, at *7, 365 F.3d at 1189-90 (noting that the "policies underlying the PLRA point toward a requirement of total exhaustion."). Moreover, allowing a mixed complaint could result in an unexhausted claim "holding up" the dismissal of a frivolous action of otherwise exhausted claims. See Smeltzer, 235 F.Supp.2d at 744 (citation omitted).
Finally, the principals of comity dictate "total exhaustion" is the proper approach. Requiring total exhaustion will afford prison officials full opportunity to address prisoners' claims before they are raised in a federal court. By making total exhaustion the standard, federal courts will not only promote comity, but will reap the benefits of more focused complaints and more developed evidentiary records. See Scott v. Gardner, 287 F.Supp.2d 477, 486-87 (S.D.N.Y.2003) (citing Hattley v. Goord, No. 02Civ.2339 (WHP)(RLE), 2002 WL 1700435, at *6 (S.D.N.Y. March 27, 2003)). See also McKinney, 311 F.3d at 1200 ("Beyond doubt, Congress enacted § 1997e(a) to reduce the quantity and improve the quality of prisoner suits; to this purpose, Congress afforded corrections officials time and opportunity to address complaints internally before allowing the initiation of a federal case.") (citing Porter v. Nussle, 534 U.S. 516, 524-25, 122 S.Ct. 983, 152 L.Ed.2d 12 (2002)).
Based on the foregoing, this Court adopts the "total exhaustion" approach discussed above. Because Plaintiff's third claim is unexhausted, the entire action is DISMISSED without prejudice.
III.
CONCLUSION AND ORDER
For these reasons, Defendants' Motion to dismiss is GRANTED. Plaintiff's Third Amended Complaint is DISMISSED without prejudice in its entirety. The Clerk shall enter judgment accordingly.
IT IS SO ORDERED.
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952 So.2d 1205 (2007)
WATSON
v.
STATE
Nos. 5D06-2343, 5D06-2344, 5D06-2392.
District Court of Appeal of Florida, Fifth District.
March 27, 2007.
Decision without published opinion. Affirmed.
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Fourth Court of Appeals
San Antonio, Texas
JUDGMENT
No. 04-16-00760-CV
Yolanda RAMOS,
Appellant
v.
Anthony NICOSIA,
Appellee
From the 166th Judicial District Court, Bexar County, Texas
Trial Court No. 2014-CI-03447
Honorable Charles E. Montemayor, Associate Judge Presiding
BEFORE CHIEF JUSTICE MARION, JUSTICE CHAPA, AND JUSTICE RIOS
In accordance with this court’s opinion of this date, this appeal is DISMISSED. We
ORDER that appellant, Yolanda Ramos, bear all costs of this appeal.
SIGNED February 1, 2017.
_________________________________
Luz Elena D. Chapa, Justice
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711 F.2d 1062
Christino, Matter of
83-5834
UNITED STATES COURT OF APPEALS Ninth Circuit
5/31/83
1
C.D.Cal.
AFFIRMED
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54 F.3d 697
63 USLW 2791, 32 Fed.R.Serv.3d 660
Owen F. SILVIOUS, Plaintiff-Appellant,v.Ghaith R. PHARAON, Defendant-Appellee.
No. 94-8592.
Non-Argument Calendar.United States Court of Appeals, Eleventh Circuit.
June 9, 1995.
Owen F. Silvious, New Market, VA, pro se.
Appeal from the United States District Court for the Southern District of Georgia.
Before ANDERSON, BIRCH and CARNES, Circuit Judges.
PER CURIAM:
1
This case requires us to determine whether the 1993 revision of Federal Rule of Civil Procedure 4 eliminated the practice of allowing an agent in the United States to accept service of process for a foreign defendant. The district court concluded that service could not be effected on a foreign defendant by serving his putative agent in the United States. We REVERSE and REMAND.
I. BACKGROUND
2
Plaintiff-appellant Owen F. Silvious filed suit against defendant Ghaith R. Pharaon1 in May, 1992, and alleged a cause of action under the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. Sec. 1964(c), ("RICO"). Silvious charged that Pharaon, as owner and operator of the Bank of Credit & Commerce International ("BCCI"), defrauded Silvious of money deposited with BCCI in 1985 and due to be repaid to Silvious in October, 1990. Allegedly, Pharaon has left the United States and is in Saudi Arabia.2
3
In May, 1992, Silvious began his unrelenting effort to serve Pharaon in Richmond Hill, Georgia3 and in Saudi Arabia. Despite the InterRedec attorney's notifying the United States Marshal's office that Pharaon did not reside at the Richmond Hill plantation, Silvious attempted to serve Pharaon at the Richmond Hill address several times.
4
In August, 1992, Silvious moved for a court order for service for the second time. He requested that the district court approve one of the following methods of service for Pharaon: (1) delivery of the complaint, summons and amended pleadings to an employee of Pharaon's, as requested in the earlier motion; (2) physical attachment of the documents to the Richmond Hill structure itself;4 or (3) publication of notice in either the International Herald Tribune or the Economist, publications distributed in France and Saudi Arabia, where it was thought Pharaon might be located. The magistrate judge consequently directed that the U.S. Marshal
5
attempt service upon the defendant at any place that he may be found within the United States [as allowed by the RICO statute, 18 U.S.C. Sec. 1965(d) ]. Additionally, the Marshal may leave a copy of the summons and complaint at Cherry Hill Plantation ... with a person of suitable age and discretion residing therein or with an agent authorized by appointment or by law to receive service of process. Fed.R.Civ.P. 4(d)(1) [ (1992) ]. If the Marshal is unable to perfect service using these methods, the plaintiff may then urge the Court to consider other methods of service.
6
R1-15-1 to 2. The court, however, denied Silvious's request for service by publication and determined that Silvious had not complied with Georgia's long-arm statute for service by publication. In September, 1992, Dooley E. Culbertson, purportedly the Chairman of the Board and Chief Executive Officer of InterRedec, wrote the court a letter stating that
7
Pharaon is not a resident of Sterling Bluff Plantation nor has he ever been a legal resident. Furthermore, Dr. Pharaon owns no real property in Bryan County and has never been an employee, officer or director of InterRedec.
8
In light of the above, it is useless for the court to attempt to serve papers on Ghaith Pharaon at the InterRedec offices at Sterling Bluff Plantation. Dr. Pharaon is represented by the firm of Whitman and Ransom, 200 Park Avenue, Suite 2800, New York, New York 10166, attention Mr. Berge Setrakian. I do not know, however, whether that law firm or any of its members serve in the capacity of agent of record for Dr. Pharaon and doubt whether they can accept service for him.
9
R1-18-2.5 The magistrate judge promptly issued another order indicating its belief that "further efforts to serve the defendant at the Cherry Hill Plantation would be futile." R1-19-1 to 2. The court instead directed that a copy of the summons and complaint be mailed to Pharaon's counsel at the address provided by Culbertson. A copy of the summons and complaint were mailed, but counsel never responded.
10
Silvious then endeavored to serve Pharaon by mail in Saudi Arabia, and he again moved for a determination of sufficiency of process. In June, 1993, the magistrate judge concluded that despite Silvious's numerous attempts to effect mail service, Pharaon had not been served properly yet. By order dated November 1, 1993, the magistrate judge ruled that none of the attempts at service had been successful but that, because Silvious was attempting service in a foreign country, the 120 day time limit of Fed.R.Civ.P. 4(j) (1992) did not apply to this action. Therefore, instead of dismissing the action pursuant to Rule 4(j), the magistrate judge allowed Silvious thirty additional days to complete service. The magistrate judge stated that, if Silvious failed to effect service, the judge would recommend that the case be dismissed without prejudice.
11
On January 21, 1994, the Bryan County Sheriff's Department delivered the summons, complaint and amended complaint to Kethesparan Srikanthan, allegedly an agent of Pharaon, at Sterling Bluff Plantation. The affidavit and certificate of service were filed with the district court on January 24, 1994. When Pharaon failed to answer, Silvious moved for a default judgment.
12
On March 21, 1994, the magistrate judge entered a Report and Recommendation to the district court finding that the newly amended Rule 4 did not allow Silvious to use substituted service on Pharaon because Pharaon was physically outside of the United States.6 Silvious objected to the magistrate judge's report and recommendation; he argued inter alia that Pharaon's agent authorized by law was properly served and, therefore, substituted service had occurred.7 After de novo review of the magistrate judge's report and recommendation, the district court dismissed Silvious's action for failure to effect service successfully. This appeal followed.
II. DISCUSSION
13
"The starting point for an analysis of amenability to service of process in federal court is Federal Rule of Civil Procedure 4." Brink's Mat, Ltd. v. Diamond, 906 F.2d 1519, 1521 (11th Cir.1990). In 1993, during the pendency of Silvious's case, the Federal Rules of Civil Procedure were amended; Rule 4 was revised. Our review of this case focuses upon the district court's conclusion that revised Federal Rules of Civil Procedure 4(e) and (f) eliminated the practice of allowing an agent in the United States to receive service of process on behalf of a principal who was located in a foreign country. See Volkswagenwerk Aktiengesellschaft v. Schlunk, 486 U.S. 694, 705, 707, 108 S.Ct. 2104, 2111, 2112, 100 L.Ed.2d 722 (1988). We review the district court's interpretation of the Federal Rules of Civil Procedure de novo. Burns v. Lawther, 44 F.3d 960, 963 (11th Cir.1995) (per curiam); McBride v. Sharpe, 25 F.3d 962, 968 (11th Cir.) (en banc), cert. denied, --- U.S. ----, 115 S.Ct. 489, 130 L.Ed.2d 401 (1994).
14
The Supreme Court's order amending the Rules stated in pertinent part "[t]hat the foregoing amendments to the Federal Rules of Civil Procedure shall take effect on December 1, 1993, and shall govern all proceedings in civil cases thereafter commenced and, insofar as just and practicable, all proceedings in civil cases then pending." Supreme Court Order of April 22, 1993, reprinted in Federal Civil Judicial Procedure and Rules 17 (West ed. 1994). The plain language of the Supreme Court's order indicates that the district court may apply either the rule in effect when the complaint was filed and the case thereby commenced pursuant to Rule 3, or the rule in effect when service was attempted last in 1994.8 See Elkay Mfg. Co. v. Ebco Mfg. Co., No. 93 C 5106, 1995 U.S. Dist. LEXIS 473, at * 18 (N.D.Ill. Jan. 13, 1995); Eskofot A/S v. E.I. Du Pont De Nemours & Co., 872 F.Supp. 81, 86 (S.D.N.Y.1995); Lowe v. Hart, 157 F.R.D. 550, 551 (M.D.Fla.1994). For analysis, we assume that the district court considered application of the revised Rule 4 to Silvious's attempts at service occurring after December 1, 1993, just and practicable.
15
The district court held that because Pharaon personally could not be found and served within the United States, Silvious must serve Pharaon pursuant to revised Rule 4(f), which provides for service abroad. Revised Rule 4(e), however, clearly provides for substituted service.9 Prior to the revisions to Rule 4, substituted service did not fail merely because the principal was outside of the United States. Volkswagenwerk Aktiengesellschaft, 486 U.S. at 705, 108 S.Ct. at 2111 ("Under [the Due Process] Clause, foreign nationals are assured of either personal service, which typically will require service abroad ... or substituted service that provides 'notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections.' " (emphasis added) (quoting Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 314, 70 S.Ct. 652, 657, 94 L.Ed. 865 (1950))). "Personal service has not in all circumstances been regarded as indispensable to the process due to residents, and it has more often been held unnecessary as to nonresidents." Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 314, 70 S.Ct. 652, 657, 94 L.Ed. 865 (1950).
16
Substituted service on an agent of the party to the action is a common practice. We find no indication that the amendments to Rule 4 were intended to alter this method of service for individual foreign defendants. The committee notes indicate that the changes in the Rule were intended to widen the reach of service of process, not to restrict it. See Fed.R.Civ.P. 4 advisory committee's note on 1993 amendment (subdivision (e) and subdivision (f)) ("Together with subdivision (f), [subdivision (e) ] provides for service on persons anywhere, subject to constitutional and statutory constraints.... [Subdivision (f) ] facilitate[s] the use of federal long-arm law in actions brought to enforce the federal law against defendants who cannot be served under any state law but who can be constitutionally subjected to the jurisdiction of the federal court.").
17
Moreover, revised Rule 4(e) makes no reference to where the defendant or individual is "found." We interpret the words "in any judicial district of the United States" in Rule 4(e) to describe the place where the personal or substituted service is "effected" rather than the location, at the precise moment of service, of the individual being served. The individual and the agent need not be in the same place. For example, in the case of an individual who is located in a foreign country but whose legal agent is located in a judicial district of the United States, a plaintiff may either personally serve the individual, per Rule 4(f), or effect substituted service through the individual's agent, per Rule 4(e). In deciding which subsection applies, the focus is upon the place where service is effected, not the location of the defendant at the time of service. This reading of Rule 4(e)(2) is consistent with the language of subdivisions (g) and (h) which alternately refer to service within a judicial district and to service "in a place not within any judicial district of the United States." Fed.R.Civ.P. 4(g), 4(h)(2) (emphasis added). A plaintiff may effect proper service on an agent in the United States pursuant to Rule 4(e)(2) so long as that service complies with requirements of the Due Process Clause and the relevant statute, even though the individual party to be served may not be "found" personally in the United States at the time of service.
III. CONCLUSION
18
Silvious has appealed the district court's dismissal of his claim for failure to effect proper service on Pharaon per Rule 4(f). We conclude that the amendments to Rule 4 did not abolish the practice of effecting service on an individual who resides outside of the United States by delivering a copy of the summons and complaint in the United States to an agent authorized by appointment or by law to receive service of process for that individual. Because we conclude that the district court misinterpreted the effect of the Rule 4 amendments in this case, we REVERSE and REMAND to the district court to determine whether Silvious properly served Pharaon under Rule 4(e)(2).
1
Pharaon has never filed an answer or motion with the district court and has not filed any briefs or other documents with this court regarding this matter
2
Although Pharaon has been indicted in the Southern District of Florida for RICO violations, in September of 1993 he remained outside the jurisdiction of the court, "at large." United States v. Paul, 150 F.R.D. 696, 697 (S.D.Fla.1993); accord Accused BCCI Front Man Hit with $37 Million Fine, USA Today, Sept. 18, 1991, at 2A [hereinafter Front Man Hit with $37 Million Fine ]; Fed Freezes Assets of Financier Accused of Fronting for BCCI, Investor's Bus. Daily, Sept. 18, 1991, at 25 [hereinafter Fed Freezes Assets ]
3
The Richmond Hill property is alternatively known as the old Henry Ford Plantation, Cherry Hill Plantation and Sterling Bluffs Plantation. InterRedec, Inc., a company reputed to be owned or controlled by Pharaon, see Maritime Transp. Overseas, Inc. v. Saudi Research & Dev. Corp., 507 F.Supp. 701, 704-05 (S.D.Tex.1981); Front Man Hit with $37 Million Fine; Fed Freezes Assets, has been headquartered there, and InterRedec representatives can still be contacted at the plantation, see R1-18-2. Pharaon reportedly owns the plantation. InterRedec also has become involved in litigation against Pharaon. Board of Governors of Fed. Reserve Sys. v. Pharaon, 140 F.R.D. 642, 643 (S.D.N.Y.1991)
4
Several days prior to this motion being filed, the Bryan County Sheriff's Department attempted service by leaving the complaint, summons and amended pleadings "attached to [the] door on the fountain side of the residence." R1-13-1. Additionally, a copy again was mailed. Upon learning of the attempted service, Silvious amended his motion to request that this latest attempt at service be deemed effective under Georgia law and that, additionally, publication be allowed. Silvious apparently contends that this service was proper under O.C.G.A. Sec. 9-11-4(d)(6). However, because service in this manner is limited to actions in which the amount in controversy is less than $200.00, Silvious could not have complied with Georgia's process statute in this manner. See O.C.G.A. Sec. 9-11-4(d)(6)
5
Contrary to these statements, Silvious points out several publications in which Pharaon is listed as or referred to as the Chairman or owner of InterRedec, Inc. See R1-36 (United States Commercial Center, Letter from American Consulate General, Jeddah, Saudi Arabia, to Owen F. Silvious (undated)); The International Who's Who 1992-93, at 1278 (56th ed. 1992); Principal International Businesses 1993: The World Marketing Directory, 972-73 (1992)); see also Front Man Hit with $37 Million Fine; Fed Freezes Assets
6
The magistrate judge stated:
The provisions for service of an individual found within a judicial district of the United States, and individuals in foreign countries, are found in separate parts of new Rule 4. Service upon individuals found within a judicial district of the United States may be effected "pursuant to the law of the state in which the district court is located, or in which service is effected, for the service of a summons upon the defendant in an action brought in the courts of general jurisdiction of the State[.]"
R1-46-3 to 4 (citations omitted) (emphasis added) (alteration in original) (quoting Fed.R.Civ.P. 4(e)(1)).
7
Silvious's additional claims lack merit, and therefore we need not consider them here
8
The magistrate judge wrote:
This is not a situation in which a procedural rule was changed during the service attempt and service was commenced when the former Rule was in force and completed after the new one took effect. Service had been attempted in several different ways pursuant to former Rule 4. By act of Congress, Rule 4 was changed. The Court has no choice but to enforce the new Rule for all new attempts at service.
R1-46-5 (emphasis added). The district court made no statement regarding its decision to apply the revised rule. We note, however, that the court clearly may apply former rules if the case is commenced thereunder.
9
Revised Rule 4(e) reads in pertinent part as follows:
(e) Service Upon Individuals Within a Judicial District of the United States. ... [S]ervice upon an individual ... may be effected in any judicial district of the United States:
(1) pursuant to the law of the state in which the district court is located, or in which service is effected, for the service of a summons upon the defendant in an action brought in the courts of general jurisdiction of the State; or
(2) by delivering a copy of the summons and of the complaint to the individual personally or by leaving copies thereof at the individual's dwelling house or usual place of abode with some person of suitable age and discretion then residing therein or by delivering a copy of the summons and of the complaint to an agent authorized by appointment or by law to receive service of process.
Fed.R.Civ.P. 4(e) (emphasis added); see also 2 James W. Moore et al., Moore's Federal Practice Sec. 4.10, at 4-183 (2d ed. 1995) ("Rule 4(e) permits personal service upon a defendant to be made by delivering a copy of the summons and complaint to a person deemed by the common or general law, federal and probably state, to be authorized to accept service of process on behalf of the defendant.").
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This opinion is subject to administrative correction before final disposition.
Before
KING, STEPHENS, and BAKER,
Appellate Military Judges
_________________________
UNITED STATES
Appellee
v.
Lexa A. LEE
Aviation Electronics Technician Third Class (E-4), U.S. Navy
Appellant
No. 201900249
Decided: 19 March 2020
Appeal from the United States Navy-Marine Corps Trial Judiciary
Military Judges:
Warren A. Record (arraignment)
James A. Talbert (trial)
Sentence adjudged 12 June 2019 by a general court-martial convened
at Naval Air Station Pensacola, Florida, consisting of a military judge
sitting alone. Sentence in the Entry of Judgment: reduction to E-1,
confinement for 20 months, 1 bad-conduct discharge.
For Appellant:
Lieutenant Commander Erin L. Alexander, JAGC, USN
For Appellee:
Brian K. Keller, Esq.
1 The convening authority suspended confinement in excess of 18 months pursu-
ant to a pretrial agreement.
United States v. Lee, NMCCA No. 201900249
_________________________
This opinion does not serve as binding precedent under
NMCCA Rule of Appellate Procedure 30.2(a).
_________________________
PER CURIAM:
After careful consideration of the record, submitted without assignment of
error, we have determined that the findings and sentence are correct in law
and fact and that no error materially prejudicial to Appellant’s substantial
rights occurred. Articles 59 and 66, UCMJ, 10 U.S.C. §§ 859, 866.
The findings and sentence are AFFIRMED.
FOR THE COURT:
RODGER A. DREW, JR.
Clerk of Court
2
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767 F.2d 915
U.S.v.Thompson
84-5281
United States Court of Appeals,Fourth Circuit.
6/4/85
1
E.D.Va.
AFFIRMED
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590 So.2d 354 (1991)
Ex parte State of Alabama.
Ex parte Jerry W. BAILEY.
(Re Jerry W. Bailey v. State of Alabama).
89-1663, 89-1676.
Supreme Court of Alabama.
February 22, 1991.
Rehearing Denied April 5, 1991.
*355 Don Siegelman, Atty. Gen., and Yvonne A. Henderson, Asst. Atty. Gen., for petitioner/cross-respondent.
Debbie Lindsey Jared and G.A. Lindsey, Elba, for respondent/cross-petitioner.
HORNSBY, Chief Justice.
Jerry Bailey was convicted for the murder of his wife (see Ala.Code 1975, § 13A-6-2) and was sentenced to life in prison. The Court of Criminal Appeals reversed his conviction on the ground that the expert witness, Dr. Alfredo Paredes, had improperly based his opinion on facts and conclusions contained in an autopsy report prepared by another expert. Bailey v. State, 590 So.2d 351 (Ala.Crim.App.1990). In light of this holding, the Court of Criminal Appeals did not address Bailey's argument that the State had not presented sufficient evidence to convict him. The State of Alabama petitioned this Court for a writ of certiorari pursuant to Rule 39, A.R.App.P., on the ground that the Court of Criminal Appeals had incorrectly reversed the conviction on the expert opinion issue. Also, Bailey petitioned this Court for a writ of certiorari, arguing that the Court of Criminal Appeals had improperly failed to address his sufficiency-of-the-evidence argument. We granted both petitions and issued the writs. We set aside the judgment of the Court of Criminal Appeals, reverse the conviction, and render a judgment of acquittal for the defendant.
In its opinion, the Court of Criminal Appeals stated:
"The state's evidence tended to show that on August 27, 1981, Mary Bailey, the appellant's wife, was found face down in a pond in Covington County, Alabama. She had over a liter of water in her lungs. The victim was a school teacher. On the date that she drowned, she had planned to ride home from school with one of her co-workers. As they walked to the parking lot, she saw the appellant waiting for her.
"The appellant testified that he drove to Sellers Pond so that he could take his daily walk. He said that the victim sat at a bench by the pond reading a paper while he walked. He testified that his wife was gone from the bench when he finished his walk. In his statement to the police, the appellant said that he looked around and saw his wife face down in the pond. Appellant further stated that he tried to revive her, but was unsuccessful. He said he then went to call the Red Level police station. At the time he made a statement to the police, the appellant had scratches on his neck. Appellant stated at trial that the reason he had the scratches was that he got them from trying to help the victim.
"Several witnesses testified that the appellant and the victim were having marital problems. Evidence revealed that the appellant periodically sent flowers *356 to a Sue Champion while the victim was still alive. The notes read, `love you' or `love you forever.'
"Dr. Alfredo Paredes, a forensic pathologist, testified as to the cause of death. He also stated that the victim took medication for dizziness and that if a person fainted he would fall where he was standing. Dr. Paredes's testimony, however, was based on an autopsy report prepared by Dr. Thomas Gilchrist. This report, when reviewed by Dr. Paredes, contained Dr. Gilchrist's conclusion as to the victim's cause of death.
"Police Investigator Robert Johns testified that he arrived at Sellers Pond shortly after the appellant called the police. Johns searched the area and checked the road that the appellant said he had walked. That witness said that the road was sandy dirt, which would tend to leave distinctive footprints; however, he said no footprints were present. The victim's shoes and glasses were never found, even after the pond was drained.
"There were four insurance policies on the victim's life. The appellant received a payment of $27,406 in 1981 and $21,729 in 1982. The appellant also received $12,211 from the State Teachers' Retirement System.
"Since the appellant's conviction must be reversed, we will address only that issue which requires reversal."
Expert Testimony
In its opinion, the Court of Criminal Appeals determined that Dr. Paredes's testimony as an expert was based partly on conclusions made by another expert in the autopsy report. The court relied upon this Court's decision in Salotti v. Seaboard Coast Line R.R., 293 Ala. 1, 299 So.2d 695 (1974), and on its own decision in Wesley v. State, 575 So.2d 108 (Ala.Crim.App.1989). However, this Court has reversed the judgment in that case. Ex parte Wesley, 575 So.2d 127 (Ala.1990); see also Nash v. Cosby, 574 So.2d 700 (Ala.1990). In Nash and Ex parte Wesley, we enunciated the rule that a medical expert may give opinion testimony based in part on the opinions of others when those other opinions have been admitted into evidence.
In the present case, the expert witness, Dr. Paredes, relied on the autopsy report prepared by another expert. The autopsy report was in evidence at the time of Dr. Paredes's testimony. Therefore, because the Court of Criminal Appeals relied on a case that we subsequently reversed in Ex parte Wesley, and because of our decision in Nash, we reverse the Court of Criminal Appeals' holding on this issue.
Sufficiency of the Evidence
In a murder case, the state must prove the corpus delicti beyond a reasonable doubt:
"`In the prosecution of an accused for the offense of murder, the State must prove the corpus delicti which includes: (1) the death of the victim named in the indictment, and (2) that the death was caused by the criminal agency of another. See Johnson v. State, 378 So.2d 1164 (Ala.Crim.App.), cert. quashed, 378 So.2d 1173 (Ala.1979). The State must further show that the defendant caused the death of the victim and the intent to cause such death. Section 13A-6-2, Code of Alabama 1975. Intent may be inferred from the use of a deadly weapon. [Citations omitted.] Further, circumstantial evidence alone may be sufficient in conjunction with other facts and circumstances which tend to connect the accused with the commission of the crime to sustain a conviction.'"
Breeding v. State, 523 So.2d 496, 500 (Ala. Crim.App.1987) (quoting Scanland v. State, 473 So.2d 1182, 1185 (Ala.Crim. App.), cert. denied, 474 U.S. 1035, 106 S.Ct. 602, 88 L.Ed.2d 581 (1985)).
Bailey asserts that the evidence presented does not establish: (1) that his wife was killed; (2) that she was killed by him; or (3) that he caused her death. Further, he argues that there was no evidence of a struggle or foul play. In denying Bailey's motions for directed verdict and for acquittal, the trial court stated that although the State's case was "shaky," it would allow the jury to decide. Bailey, *357 however, argues that the circumstantial evidence presented by the State supports an inference of innocence and that he was therefore entitled to a judgment of acquittal.
Much of the evidence in this case is circumstantial, but circumstantial evidence does not preclude the jury from determining a defendant's guilt or innocence. In Ex parte Davis, 548 So.2d 1041 (Ala.1989), we stated that either circumstantial evidence or direct evidence may be used to prove the guilt of a defendant. Further, in reviewing the sufficiency of the evidence, we must view the circumstantial evidence in the light most favorable to the prosecution to determine whether the jury might reasonably have found that the evidence excluded every reasonable hypothesis except guilt. Ex parte Mauricio, 523 So.2d 87 (Ala. 1987); Robinette v. State, 531 So.2d 682 (Ala.Crim.App.1987); Barnes v. State, 429 So.2d 1114 (Ala.Crim.App.1982); Cumbo v. State, 368 So.2d 871 (Ala.Crim.App.1978), cert. denied, 368 So.2d 877 (Ala.1979).
The general standard by which we review the evidence is as follows:
"The action of the trial court in denying a motion for acquittal, in denying a motion to exclude the evidence, ... and in denying a motion for a new trial, must be reviewed by determining whether there existed legal evidence before the jury, at the time the motions were made, from which the jury by fair inference could have found the defendant guilty [beyond a reasonable doubt]. Thomas v. State, 363 So.2d 1020 (Ala.Crim.App.1978)."
Robinette v. State, supra, at 687.
The more specific test to be applied in reviewing the sufficiency of circumstantial evidence is not whether the evidence excludes every reasonable hypothesis except that of guilt, but whether the jury might reasonably so conclude. Ex parte Mauricio, supra; Robinette v. State, supra; St. John v. State, 473 So.2d 658 (Ala. Crim.App.1985); Jones v. State, 432 So.2d 5 (Ala.Crim.App.1983); German v. State, 429 So.2d 1138 (Ala.Crim.App.1982); Cumbo v. State, supra. Under this test, a jury verdict of guilt based solely on circumstantial evidence cannot be affirmed where the evidence reasonably supports an inference of innocence.
Applying these legal standards to the facts in this case, we conclude that the circumstantial evidence presented by the State was insufficient to allow the jury to fairly infer, beyond a reasonable doubt, that Bailey murdered his wife. Further, the evidence presented does not allow the jury to reasonably conclude that no reasonable hypothesis of innocence exists. The evidence presented tended to support an inference that Mrs. Bailey, while standing on the edge of the pond, became dizzy and fell forward into the pond and drowned.
The record reveals that Bailey picked his wife up from school on the day of her death. Bailey's testimony indicated that on the days that he took his walks his wife usually stopped at their house to change her clothes before accompanying him to the pond where he walked. Bailey, however, testified that on the day of her death Mrs. Bailey did not appear well and that she did not go into the house to change her clothes. Because of this, Bailey said, he went into the house and got his wife a cup of coffee and the newspaper. Although the Court of Criminal Appeals stated otherwise, the record reveals that Bailey testified that Mrs. Bailey let him out of the car for his walk and that she proceeded to the pond, and that when he arrived he did not see her immediately but eventually he did see her in the water.
Bailey testified that he jumped into the water to save his wife. He further testified that when he jumped into the water to get his wife, he might have hit her with his foot. He testified that he tried to get her out and that he thought her head was caught under some pine tree roots. He testified that he scratched his neck on these tree roots while getting his wife out of the water. He said that he finally got her to shore, where, he said, he tried to revive her. Not being able to revive her, he said, he went to the police station, where he appeared visibly upset and was crying. The record also reveals that Bailey told *358 several persons that he wished he had known how to save his wife.
The autopsy report listed the cause of death as drowning. The report showed no evidence of trauma on the body other than a contusion to the left shoulder. Toxicologic studies were negative, but the record reveals that the body had been embalmed before it was sent to the Department of Forensic Sciences. Dr. Paredes testified that the embalming of the body would not create any major changes with a body in cases of drowning except possibly in the rendering of the toxicologist's report.
Autopsy evidence also indicated chronic disease of the heart and lungs that may have contributed to Mrs. Bailey's death. In fact, Dr. Paredes testified that although Mrs. Bailey's heart and lung disease were not advanced, she had a narrowing of the arteries that could have caused her to become dizzy. Dr. Paredes, however, did not testify that Mrs. Bailey took medication for dizziness. He was unaware of her prior medical history. He further testified that a person who fainted would fall where he or she was standing. In his opinion, he thought that Mrs. Bailey was alive when she entered the water, because of the amount of water in her stomach and lungs. The autopsy report concluded that the manner of her death was undeterminable, because it depended on how she came to be in the water.
Investigation of the area of the accident revealed no evidence of a struggle or scuffle at the pond, and the body showed no evidence of a struggle. The autopsy report stated that there was no evidence of trauma except for the contusion on Mrs. Bailey's left shoulder. Mrs. Bailey's clothing was not torn, but was stained by water and mud. Consistent with the defendant's testimony that he found his wife face down in the pond, these stains appeared only on the front side of her clothing.
Police investigator Robert Johns testified that he searched the road that Bailey allegedly took his walk on, but that he found no signs of footprints in the sandy dirt. Johns, however, further testified that by the time he made this investigation four or five automobiles had travelled along this public road and 15 or more people had arrived at the scene. He admitted that this activity could have erased the footprints. Johns also testified that he searched the area where Mrs. Bailey's body was found but that he found no evidence of a struggle or scuffle.
The record reveals that a search was made for Mrs. Bailey's shoes and glasses (she wore her glasses all the time), the coffee cup, and the newspaper. The Court of Criminal Appeals incorrectly stated in its opinion that Mrs. Bailey's shoes and glasses were not found. One shoe was recovered, as well as her glasses and the newspaper. However, one shoe was not recovered and the coffee cup was not recovered. There was testimony that the shoe could have been sucked through a drain pipe which led into a dammed area that was not searched.
There was evidence that Bailey received $12,211.11 from the Alabama Teachers' Retirement System. Mrs. Bailey had been enrolled as a member of the Retirement System since 1966 and she had retained control over the beneficiary designation throughout that period. The evidence also indicated that Bailey received $49,135.99 in insurance proceeds from policies that were purchased in 1971 and 1978. Mrs. Bailey had also retained control over the beneficiary designation for the insurance policies.
The record reveals that several witnesses testified that Mrs. Bailey had been suffering from and complaining about dizziness prior to the time of her death. In fact, one of the witnesses had given Mrs. Bailey some medication, Antivert (a medication for inner ear problems), to help control her loss of balance. The record also reveals that one of Mrs. Bailey's co-workers had seen Mrs. Bailey stumble on some stairs and fall. There was other testimony that Mrs. Bailey appeared to be ill before her death. There was testimony that she had complained about being dizzy, that she was pale, and that she had lost weight.
The record reveals that Mrs. Bailey was not a proficient swimmer, but that she could "dog paddle." Also, she generally *359 would not go into deep water. Evidence showed that the pond where Mrs. Bailey drowned was man-made and that it sloped from the bank. The water in the pond where Bailey said he found Mrs. Bailey was approximately three feet deep.
In addition, Bailey's daughter, Diane Knox, testified that on the day of her mother's death, her mother had told her that she was going for a walk with her father and would be home later to go to a birthday party. Both of the Bailey children, who were living with their parents at the time of Mrs. Bailey's death, testified that, aside from normal marital disputes, their parents appeared to be getting along well together. Diane Knox additionally testified that her mother was aware that Bailey knew Sue Champion and knew that he had purchased some gasoline for her six months prior to Mrs. Bailey's death.
The nature of the circumstantial evidence presented in this case requires the jury to speculate as to whether Mrs. Bailey was murdered by her husband. We stated in Ex parte Mauricio, supra, at 94 (citations omitted):
"A finding of guilt from circumstantial evidence is based on the `inference of a fact in issue which follows as a natural consequence according to reason and common experience from known collateral facts.' This is to be distinguished from a supposition, which is `a conjecture based on the possibility or probability that a thing could have or may have occurred without proof that it did occur.' `Mere possibility, suspicion, or guesswork, no matter how strong, will not overturn the presumption of innocence.'"
Although the jury in the present case could consider circumstantial evidence and draw permissible inferences from such evidence, an inference beyond a reasonable doubt that Mrs. Bailey was murdered by her husband does not arise from the evidence presented in this case. Further, the evidence before us supports an inference that Mrs. Bailey, while standing on the edge of the pond, became dizzy and fell forward into the pond and drowned, without any involvement by Bailey. In addition to this, we note that Mrs. Bailey drowned in August 1981, but that Mr. Bailey was not tried for her alleged murder until April 1989approximately 8 years after her death. The record does not reveal the reason for the delay.
Our law is structured so that the guilty, not the innocent, shall be punished; therefore, if circumstantial evidence permits an inference consistent with innocence, such evidence will not support a conviction. See Tanner v. State, 291 Ala. 70, 277 So.2d 885 (1973). In the present case, the circumstantial evidence presented by the State raised a strong inference of innocence; thus, a jury could not reasonably conclude that no inference of innocence existed. Consequently, the issue became a question of law for the trial court. See Ex parte Mauricio, supra. We conclude that the trial court improperly denied Bailey's motions for a directed verdict and for an acquittal at the close of the evidence. The Court of Criminal Appeals reversed the conviction, but did so on an improper ruling. That court's judgment is set aside, and, for the reasons herein stated, the conviction is reversed and a judgment of acquittal is rendered.
89-1663HOLDING AS TO EXPERT TESTIMONY REVERSED.
89-1676JUDGMENT OF REVERSAL SET ASIDE; CONVICTION REVERSED; AND JUDGMENT OF ACQUITTAL RENDERED.
MADDOX, SHORES, ADAMS, HOUSTON and STEAGALL, JJ., concur.
KENNEDY and INGRAM, JJ., concur in 89-1663, and dissent in 89-1676.
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518 So.2d 707 (1987)
Beverly OLIVER
v.
STATE.
3 Div. 518.
Court of Criminal Appeals of Alabama.
November 24, 1987.
*708 Raymond Johnson, Montgomery, for appellant.
Charles A. Graddick, Atty. Gen., and Robert B. Rinehart, Asst. Atty. Gen., for appellee.
ON REMAND FROM ALABAMA SUPREME COURT
TYSON, Judge.
This cause is reversed and remanded on authority of Ex parte Oliver, 518 So.2d 705 (Ala.1987), rehearing overruled November 6, 1987.
REVERSED AND REMANDED.
All the Judges concur.
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670 P.2d 953 (1983)
Anna Tasso CHRONIS, et al., Plaintiffs-Appellants and Cross-Appellees, and
G.W. Carson, et al., Plaintiffs-in-Intervention-Appellants and Cross-Appellees,
v.
STATE of New Mexico, ex rel. Abe RODRIGUEZ, Director, Alcoholic Beverage Control Department, et al., Defendants-Appellees and Cross-Appellants, and
Carl A. TOTI, et al., Intervenors-Defendants-Appellees,
v.
WALGREEN CO. and Walgreen Hastings Co., Intervenors-Appellees and Cross-Appellants.
No. 14130.
Supreme Court of New Mexico.
October 13, 1983.
*954 David L. Norvell, Albuquerque, for plaintiffs-appellants and cross-appellees.
Kegel & Montez, Sarah M. Singleton, Santa Fe, for plaintiffs-in-intervention-appellants and cross-appellees.
Paul Bardacke, Atty. Gen., Arthur J. Waskey and Denise D. Fort, Asst. Attys. Gen., Lawrence A. Barela, Albuquerque, for defendants-appellees and cross-appellants.
Paul F. Becht, Albuquerque, for intervenors-defendants-appellees.
Sutin, Thayer & Browne, Jonathan B. Sutin, Albuquerque, for intervenors-appellees and cross-appellants.
OPINION
STOWERS, Justice.
This appeal arises from the trial court's finding that certain sections of the Liquor *955 Control Act, 1981 N.M. Laws, chapter 39 are unconstitutional. At trial, the plaintiffs alleged that Sections 36, 103, 110, 113, and 114 of the Act were unconstitutional and that the entire Act was therefore void because it was unseverable. The trial court's holdings on Sections 110 and 113 were not challenged on appeal.
On appeal, the issues presented to this Court are the severability of the Act and the constitutionality of Sections 36, 103, and 114.
Plaintiffs and plaintiffs-in-intervention in this action are owners-operators and owners-lessors of liquor licenses, and taxpayers who have paid and expect to pay gross receipts taxes to the State of New Mexico for the general operation of state government. Various people operating under canopy licenses were permitted to intervene as party defendants. Walgreen Co. and Walgreen Hastings Co. were allowed to intervene by order of this Court dated March 3, 1982. Plaintiffs and plaintiffs-in-intervention are the appellants and cross-appellees herein. The State is the appellee and cross-appellant. Walgreen Co. and Walgreen Hastings Co. are the appellees-in-intervention and cross-appellants in intervention.
On June 12, 1981, prior to the Liquor Control Act's effective date of July 1, 1981, the plaintiffs-appellants brought an action for a declaratory judgment challenging the constitutionality of the Act. They requested a preliminary injunction enjoining the defendants, the Director of the Alcoholic Beverage Control Department and the Secretary of the Taxation and Revenue Department, from enforcing the provisions of the Act until the issues raised had been judicially resolved. The trial court issued a temporary restraining order on June 23, 1981, and modified it on June 26, 1981. It then entered a preliminary injunction on July 17, 1981. After a hearing, the trial court issued findings of fact and conclusions of law, and a memorandum opinion and judgment. The trial court held that the Liquor Control Act was operative and constitutional except for Sections 103 and 114. It also held that the entire Act was not affected by the plaintiffs' successful attack on Sections 103 and 114 despite the Governor's veto of a severability clause. The trial court concluded that the Act was severable because other precepts of statutory construction permitted the severance of the unconstitutional sections.
I. Severability of the Act
The trial court found that the Governor's veto of Section 129, the severability clause, was constitutionally permissible. It also found that Chapter 39 does not appropriate money. Although the trial court found the Governor's veto to be valid, it concluded that the Governor's action did not affect the severability of the law.
N.M. Const. art. IV, Section 22 (emphasis added), provides in pertinent part:
The governor may in like manner approve or disapprove any part or parts, item or items, of any bill appropriating money, and such parts or items approved shall become a law, and such as are disapproved shall be void unless passed over his veto, as herein provided.
The trial court was correct in holding that the Governor's action did not affect the severability of the law. However, because the Act does not appropriate money, we hold that the Governor's veto power was invalidly exercised in violation of Article IV, Section 22. See State ex rel. Sego v. Kirkpatrick, 86 N.M. 359, 524 P.2d 975 (1974); State ex rel. Dickson v. Saiz, 62 N.M. 227, 308 P.2d 205 (1957); see also AG Op. No. 81-12 (1981). The language of the Constitution is clear. The Governor's power of partial veto is limited to bills appropriating money.
II. Section 36
The trial court held that Section 36 of the Act was constitutional because the plaintiffs had no vested property right in a liquor license as against the State. The plaintiffs allege, however, that the Liquor Control Act is unconstitutional because it takes existing licensees' property interests without due process. However, we can find no persuasive authority for us to differentiate *956 in this case between the terms "property right" as used in Section 36 and in prior New Mexico cases and the term "property interest" as used by the appellants.
Section 36 provides that:
The holder of any license issued under the Liquor Control Act or any former act has no vested property right in the license which is the property of the state; provided that until June 30, 1991, licenses issued prior to the effective date of the Liquor Control Act shall be considered property subject to execution, attachment, a security transaction, liens, receivership and all other incidents of tangible personal property under the laws of this state, except as otherwise provided in the Liquor Control Act.
(codified at NMSA 1978, § 60-6A-19 (Repl. Pamp. 1981)).
This Court has consistently held that as between a licensee and the State, a liquor license is a privilege and not a right. As early as 1914, this Court determined that a person has no interest in a license and that the license is neither a property right nor a right of contract, but a mere license, revocable under certain conditions. In re Everman, 18 N.M. 605, 139 P. 156 (1914). Subsequently, we reaffirmed that a liquor license is a mere permit which may be modified or annulled at the pleasure of the Legislature. Floeck v. Bureau of Revenue, 44 N.M. 194, 100 P.2d 225 (1940); Ex parte Deats, 22 N.M. 536, 166 P. 913 (1917). Moreover, in Chiordi v. Jernigan, 46 N.M. 396, 400, 129 P.2d 640, 642 (1942), this Court specifically held:
The liquor control act is a police regulation * * * The state has prescribed the terms under which it will grant such license and likewise the terms under which it may be revoked. It may give and it may take away through its constituted authority * * * * Such license is a privilege and not property within the meaning of the due process and contract clauses of the constitutions of the State and the nation, and in them licenses have no vested property rights. (Citations omitted.)
In Chiordi, this Court upheld the authority to give communities the option to be dry and prohibit all licenses.
This Court has repeatedly held that a liquor license is a privilege subject to regulation and not a property right. For example, this Court has held that a citizen has no inherent power to sell intoxicating liquors, stating that "[a]s it is a business attended with danger to the community it may be entirely prohibited or be permitted under such conditions as will limit to the utmost its evils." Yarbrough v. Montoya, 54 N.M. 91, 95, 214 P.2d 769, 771 (1950). In Valley Country Club v. Mender, 64 N.M. 59, 323 P.2d 1099 (1958), we again noted that the owner of a liquor license had no vested rights in the license as against the State. Id. at 63, 323 P.2d at 1101. In Nelson v. Naranjo, 74 N.M. 502, 395 P.2d 228 (1964), this Court stated that "as between the State and the licensee, a liquor license is a mere revocable privilege vesting no property rights in the licensee * * * *" Id. at 507, 395 P.2d at 231.
Finally, we also note that under the provisions of the prior liquor law there was no vested property right in a liquor license as against the State. NMSA 1978, Section 60-7-18(F) was formerly compiled as NMSA 1953, Section 46-5-15(F), and provided as follows:
The holder of a retailer's, dispenser's or club license has no vested property right in the license as against the state, but as against creditors of the licensee the license shall be considered property subject to execution, attachment, security transactions, liens, receivership and any and all other incidents of tangible personal property under the laws of this state, except as otherwise provided herein.
We continue to hold that liquor license holders have no property right in their license as against the State, and accordingly find that Section 36 is constitutional.
We also address whether the enactment of the Liquor Control Act effects a taking of property without due process as argued by the plaintiffs. In order to answer this, we must determine whether the Act constitutes *957 a reasonable exercise of police power by the State.
Under N.M. Const. art. IV, Section 1, the Legislature is granted power to promulgate laws providing for the preservation of the public peace, health or safety. Section 2 of the new Liquor Control Act (codified at NMSA 1978, § 60-3A-2(A) (Repl.Pamp. 1981)) specifically states that it is the policy of the Act that "the sale, service and public consumption of alcoholic beverages in the state shall be licensed, regulated and controlled so as to protect the public health, safety and morals of every community in the state * * * *" This Court has recognized that the State has broad police power to regulate the liquor business. The Legislature has the power not only to regulate the sale of alcoholic beverages, but to suppress it entirely. Drink, Inc. v. Babcock, 77 N.M. 277, 421 P.2d 798 (1966). Furthermore, the Legislature may impose on the liquor industry more stringent regulations than on other businesses. Id. at 280, 421 P.2d at 800; see also Kearns v. Aragon, 65 N.M. 119, 333 P.2d 607 (1958).
As long as the regulation is reasonably related to a proper purpose and does not unreasonably deprive the property owner of all or substantially all of the beneficial use of his property, it does not constitute a taking of private property pursuant to the state's police power. Stuckey's Stores, Inc. v. O'Cheskey, 93 N.M. 312, 600 P.2d 258 (1979), appeal dismissed, 446 U.S. 930, 100 S.Ct. 2145, 64 L.Ed.2d 783 (1980). Under the new Act, current liquor license holders have the continued right to engage in the alcoholic beverage business. See §§ 41 and 113(J). Moreover, license holders may also transfer the location of licenses (§§ 39(B) and 113(D)), devise licenses (§ 44(B) and (C)), use the license away from the licensed premises for special occasions (§ 29), and temporarily suspend the operation of the licenses (§ 43(C)). Therefore, we do not find that the new regulation unreasonably deprives the owner of all or substantially all of the beneficial use of his license, namely the ability to engage in the business of selling alcoholic beverages.
III. Section 103
The trial court held that Section 103 entitled "Summary Suspension" was unconstitutional. Section 103 states that:
[w]here the director has reasonable grounds to believe and finds that a licensee has been guilty of a deliberate and willful violation of the Liquor Control Act or any regulation or order of the department or that the public health, safety or welfare requires emergency action, the director may summarily suspend the license without notice or hearing for a period of three days. Immediately thereafter, the director shall comply with the provisions of Section 100 of the Liquor Control Act.
(codified at NMSA 1978, § 60-6C-7 (Repl. Pamp. 1981)).
The appellants allege that the provision for summary temporary suspension of a license for three days without prior notice or hearing lacks procedural due process of law. They also contend that the clause which states that "public health, safety, and welfare requires emergency action" is vague and therefore denies substantive due process of law. The trial court found that Section 103 was a substantive violation of the due process clause because there is no proper standard set forth for the director to exercise his power. Moreover, because the director may exercise this power without notice or hearing, the trial court also found Section 103 to be a violation of procedural due process.
In Drink, Inc. v. Babcock, 77 N.M. at 280, 421 P.2d at 800, this Court stated that "when the manufacture and sale of liquor is lawful, as it is under our laws, statutes providing for the regulation of the business are limited by constitutional guaranties * * *" This was also noted by the California appellate court in Irvine v. State Board of Equalization when they stated:
[U]nder the American system of justice it is the policy of our law that a person should not be deprived even of a "permit" *958 to engage in a legitimate business without a fair and impartial hearing and without an opportunity to present competent evidence for consideration by the licensing authority in opposition to the proposed revocation of his permit. (Citations omitted.)
40 Cal. App.2d 280, 284-285, 104 P.2d 847, 850 (1940).
Under the summary suspension provision, the director is given power to summarily suspend a license and shut down a business without giving notice or requiring a hearing. We agree with the trial court that this provision violates procedural due process guarantees under the New Mexico Constitution and therefore hold that Section 103 is unconstitutional.
The State argues, however, that the plaintiffs lack standing to challenge this section of the Act. The State contends that in the current case, none of the plaintiffs alleged, testified, or put on other evidence that they are injured in fact by or actually threatened with enforcement or the exercise of Section 103.
The plaintiffs' attack upon the summary suspension provision was brought pursuant to the Declaratory Judgment Act, NMSA 1978, Sections 44-6-1 through 44-6-15. In order for a court to assume jurisdiction under the Declaratory Judgment Act, it must be presented with an "actual controversy." § 44-6-2. The prerequisites of an "actual controversy" are:
a controversy involving rights or other legal relations of the parties seeking declaratory relief; a claim of right or other legal interest asserted against one who has an interest in contesting the claim; interests of the parties must be real and adverse; and the issue involved must be ripe for judicial determination. (Citations omitted.)
Sanchez v. City of Santa Fe, 82 N.M. 322, 324, 481 P.2d 401, 403 (1971).
The purpose of the Act is "to settle and to afford relief from uncertainty and insecurity with respect to rights * * * and [the Act] is to be liberally construed and administered." § 44-6-14. To compel the licensees to await a summary suspension of their licenses before judicial review would frustrate the purpose of the Declaratory Judgment Act. Furthermore, it could cause irreparable injury to the reputations of these businesses and result in a loss of business and livelihood. We find that the legal interests of the parties are sufficiently adverse and that the issues are ripe for judicial determination. The trial court was correct in allowing these plaintiffs to seek a declaratory judgment.
We also find appellees' contention that the plaintiffs' complaint should have been dismissed because of failure to join indispensable parties to be without merit.
IV. Section 114
The trial court found that Section 114 of the Act constitutes an unconstitutional legislative diminishment of an obligation owed to the State. Section 114 of the Act provides in pertinent part:
A. During the period of economic adjustment * * * every retailer or dispenser who owns a license initially issued prior to the effective date of the Liquor Control Act may claim a credit against his liability to the state for gross receipts tax * * * on retailer's or dispenser's receipts from the sale of alcoholic beverages in an amount not to exceed thirty thousand dollars ($30,000.00) for each twelve-month period ending June 30 * * if the license is leased in its entirety, the licensee may claim the credit specified herein in an amount equal to the gross receipts tax paid by the lessee upon receipts from the sale of alcoholic beverages * * * in an amount not to exceed thirty thousand dollars ($30,000.00) for each twelve-month period ending June 30. The licensee may claim the credit against any income tax, gross receipts tax, compensating tax or withholding tax due to the state from the licensee.
(codified at NMSA 1978, § 7-9-80.1 (Repl. Pamp. 1983)).
*959 The trial court found this provision to be a violation of N.M. Const. art. IV, Section 32, which states:
No obligation or liability of any person, association or corporation held or owned by or owing to the state, * * * shall ever be exchanged, transferred, remitted, released, postponed or in any way diminished by the legislature, nor shall any such obligation or liability be extinguished except by the payment thereof into the proper treasury, or by proper proceeding in court.
Although the trial court found Section 114 to be a constitutional violation of Article IV, Section 32, it also based its judgment on this Court's analysis of two cases which construed legislative enactments in light of N.M. Const. art. IX, Section 14. Article IX, Section 14 provides in pertinent part that:
Neither the state nor any county, school district, or municipality, except as otherwise provided in this constitution, shall directly or indirectly lend or pledge its credit, or make any donation to or in aid of any person, association or public or private corporation * * *
In State ex rel. Mechem v. Hannah, 63 N.M. 110, 314 P.2d 714 (1957), this Court held unconstitutional a legislative enactment which granted to ranchers and farmers public funds to be used to purchase feed for livestock. The program was enacted to assist the livestock industry in overcoming severe drought conditions. In holding that the law enacting the program was unconstitutional, this Court noted that it attempted to give public money to private individuals. Furthermore, this Court stated that the fact that the program assisted the livestock industry, thus benefitting the economy of the state, was not sufficient to save the appropriation.
Moreover, the State was later allowed to recover those appropriated funds in State ex rel. Callaway v. Axtell, 74 N.M. 339, 393 P.2d 451 (1964). In Axtell this Court said:
We realize, as was said in Hannah, that, basically, the payments to the fund for the benefit of the ranchers and farmers was for the general benefit of the state; but, unfortunately, it was and is unconstitutional as a donation of funds to private individuals who are neither indigents nor paupers.
Id. at 348, 393 P.2d at 457.
In the present case, the trial court noted that every dealer in alcoholic beverages owes the State of New Mexico a gross receipts tax that must be and should be paid. Furthermore, the trial court stated that the gross receipts tax on the sale of alcoholic beverages is an obligation that is owed to the State which cannot be excused by the Legislature.
We agree with the trial court that Section 114 is unconstitutional. However, we find that Section 114 is unconstitutional because the reduction in payments of gross receipts taxes in this case constitutes an unconstitutional subsidy to the liquor industry in violation of Article IX, Section 14.
Conclusion
For the foregoing reasons, we reverse the trial court's finding that the Governor's veto of the severability clause is constitutionally permissible and hold that the Act is severable and that the Governor's veto of the severability clause was invalid. We affirm the trial court and hold that Section 36 is constitutional but that Sections 103 and 114 of the Liquor Control Act are unconstitutional. Accordingly, the opinion of the trial court is affirmed in part and reversed in part.
IT IS SO ORDERED.
PAYNE, C.J., and RIORDAN, J., concur.
SOSA, Senior Justice, and FEDERICI, J., specially concurring and dissenting.
SOSA, Senior Justice, and FEDERICI, Justice, specially concurring and dissenting.
We concur in the results reached as to the severability of the Act and as to the unconstitutionality of Section 114. However we would have premised these results on an analysis substantially different from the majority opinion. We concur in both the rationale and result of the majority opinion *960 discussion as to Section 103. However as to this latter section, we would affirm on the additional ground that procedural due process should be accorded where there is a deprivation of a property interest.
We respectfully dissent as to the majority's conclusion that Section 36 is constitutional. We would hold this section unconstitutional as a taking of property interests without due process of law.
Section 36
In our view, the liquor licenses in this case were in the nature of property interests which therefore merited some form of compensation under the Fifth and Fourteenth Amendments to the United States Constitution and Sections 18 and 20 of Article II of the New Mexico Constitution. A liquor license is clearly a property interest for some purposes. "Broadly defined, property includes every interest a person may have in a thing that can be the subject of ownership, including the right to enjoy, use, freely possess and transfer that interest." Muckleroy v. Muckleroy, 84 N.M. 14, 15, 498 P.2d 1357, 1358 (1972). New Mexico has consistently held that although a license is not property as between a licensee and the State, between a licensee and "creditors and for purposes of secured transactions, executions, liens, receiverships and other similar transactions, a liquor license is to be considered as tangible personal property." State ex rel. Clinton Realty Co. v. Scarborough, 78 N.M. 132, 135, 429 P.2d 330, 333 (1967); Nelson v. Naranjo, 74 N.M. 502, 395 P.2d 228 (1964); see Valley Country Club Inc. v. Mender, 64 N.M. 59, 323 P.2d 1099 (1958). In none of these cases was there an attempt by the Legislature to entirely deprive license holders of certain property interests in their licenses.
The Legislature recognized that the Act takes away certain interests which licensees have possessed until now. Section 36 states that licenses issued prior to the effective date of the Act retain certain property interests until 1991. Legislative acknowledgement of licensees' property interests is also found in Section 114 which attempts to pay licensees in tax credits for the deprivation of these interests. It is clear that the Legislature felt some remuneration would be warranted for the taking of the property interests involved. It is highly unlikely the Act would have passed in its present form if the legislators felt that the proprietary interests taken did not merit some form of remuneration.
Although prior cases have held that a liquor license is a mere permit which may be modified or annulled at the pleasure of the legislature, Floeck v. Bureau of Revenue, 44 N.M. 194, 100 P.2d 225 (1940); Ex parte Deats, 22 N.M. 536, 166 P. 913 (1917); In re Everman, 18 N.M. 605, 139 P. 156 (1914), the distinction between a privilege and a right has been eroded in the area of governmentally generated property interests. Increasingly, due process rights have been afforded governmental licensees. Rights regulated under various types of licenses have been considered property rights. Roberts v. State Board of Embalmers & Funeral Directors, 78 N.M. 536, 434 P.2d 61 (1967); see Muckleroy v. Muckleroy; L. TRIBE, AMERICAN CONSTITUTIONAL LAW § 10-9 (1978). The United States Supreme Court has stated "this Court now has rejected the concept that constitutional rights turn upon whether a governmental benefit is characterized as a `right' or as a `privilege.'" Graham v. Richardson, 403 U.S. 365, 374, 91 S.Ct. 1848, 1853, 29 L.Ed.2d 534 (1971). The traditional "rights-privilege" distinction is no longer viable. See O'Bannon v. Town Court Nursing Center, 447 U.S. 773, 796, 100 S.Ct. 2467, 2481, 65 L.Ed.2d 506 (1980) (Blackmun, J., concurring); Perry v. Sindermann, 408 U.S. 593, 92 S.Ct. 2694, 33 L.Ed.2d 570 (1972); Goldberg v. Kelly, 397 U.S. 254, 90 S.Ct. 1011, 25 L.Ed.2d 287 (1970).
Even though the State could, through the exercise of its police power, significantly curtail or abolish the right to sell alcoholic beverages, where it does not do so but merely regulates, such regulation is subject to constitutional limitations. This Court has recognized that liquor control regulations must conform to constitutional strictures and that the State's regulatory powers *961 are limited. "But when the manufacture and sale of liquor is lawful, as it is under our laws, statutes providing for the regulation of the business are limited by constitutional guaranties * * * *" Drink, Inc. v. Babcock, 77 N.M. 277, 280, 421 P.2d 798, 800 (1966).
Today it is clear that when regulation goes too far it must be treated as a taking and deemed invalid unless compensation is provided. L. TRIBE, § 9-2. This recognized principle has been historically followed, being enunciated by Justice Holmes in Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 43 S.Ct. 158, 67 L.Ed. 322 (1922). Adhering to this proposition the United States Court of Claims stated:
When the effect of a governmental regulation on a citizen's property is so pervasive that the property is greatly depreciated in value or that the owner's right to use the property is substantially interfered with, the citizen is entitled to compensation * * * * "The general rule at least, is that while property may be regulated to a certain extent, if regulation goes too far it will be recognized as a taking... . We are in danger of forgetting that a strong public desire to improve the public condition is not enough to warrant achieving the desire by a shorter cut than the constitutional way of paying for the change."
Pete v. United States, 531 F.2d 1018, 1034, 209 Ct.Cl. 270 (1976) (quoting Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 415-16, 43 S.Ct. 158, 160, 67 L.Ed. 322 (1922)). Justice Rehnquist clarified this concept by asserting
[a] taking does not become a noncompensable exercise of police power simply because the government in its grace allows the owner to make some "reasonable" use of his property. "[I]t is the character of the invasion, not the amount of damage resulting from it, so long as the damage is substantial, that determines the question whether it is a taking."
Penn Central Transportation Co. v. New York City, 438 U.S. 104, 149-50, 98 S.Ct. 2646, 2672-2673, 57 L.Ed.2d 631 (1978) (Rehnquist, J., dissenting), reh'g denied, 439 U.S. 883, 99 S.Ct. 226, 58 L.Ed.2d 198 (1978) (quoting United States v. Cress, 243 U.S. 316, 328, 37 S.Ct. 380, 385, 61 L.Ed. 746 (1917)).
This Court has stated that "[t]he general rule is that a regulation which imposes a reasonable restriction on the use of private property will not constitute a `taking' of that property if the regulation * * * does not unreasonably deprive the property owner of all, or substantially all, of the beneficial use of his property." Temple Baptist Church v. City of Albuquerque, 98 N.M. 138, 144-145, 646 P.2d 565, 571-72 (1982). We believe that the Act does deprive licensees of substantially all their beneficial use of certain property interests in the licenses. As of July 1, 1991, the licensees will be without capacity to convey, encumber or devise the liquor licenses they own. The fair market value of the licenses has dropped due to the inter-county transfer provision, Section 113, and due to expected losses of other rights later. Their value for use as collateral is diminishing. By 1991, this value will be diminished to zero. We believe that this is the taking of a property interest which must be declared compensable.
Comparable property interests are now in jeopardy under the reasoning of the majority opinion. The majority opinion, when carried to its conclusion, would subject personal, professional, and business licenses held by the citizens of this State to confiscation without remuneration. For these reasons, we would hold that Section 36 violates the constitutional guarantees of due process.
Section 114
While we agree with the majority holding that Section 114 is unconstitutional, we would hold it unconstitutional on the grounds that there is little demonstrated relation between the tax credit benefits and the fair market value of the individual licenses involved. Where there is a taking of property interests, as we believe there has been in this case, compensation should be coincident to the time of taking, and there *962 is a constitutional right to interest from the time of taking until payment is made. 3 J. SACKMAN, NICHOLS' THE LAW OF EMINENT DOMAIN § 8.63 (rev. 3d ed. 1981); see State ex rel. State Highway Commission v. Peace Foundation, Inc., 79 N.M. 576, 446 P.2d 443 (1968). In addition, compensation must be fixed at the "actual value" of the property taken. See NMSA 1978 § 42A-1-24, (Repl. Pamp. 1981). It is well settled that the amount of compensation to be paid an owner for a taking under the power of eminent domain cannot be decided by a legislative body. 3 NICHOLS', § 8.9.
Section 114, by providing a flat credit against gross receipts tax up to $30,000 per year for ten years, violates these concepts. In many cases, the credit bears no relation to the actual fair market value of the license.
The State's expert stated that ten years of maximum present-day value of the use of the tax credit is approximately $150,000. This amount has no relationship to the market values of the licenses. Under the formula which provides for gross receipts tax credit compensation, some licensees could receive a much greater amount than the actual value of their licenses, while other licensees could receive a much smaller amount than the actual value of their licenses. In no case will the owner be compensated at the appropriate time. No provision has been made for payment of interest on the compensation. The legislative attempt to compensate for the loss suffered by the licensees is inadequate to meet the requirements of just compensation. We would thus hold that Section 114 violates the constitutional guarantee of just compensation.
Section 103
While we do not disagree with the majority rationale or holding as to Section 103, we believe that the summary provisions of this section also violate due process since property interests are involved in this case.
Governmental procedures which result in depriving individuals of property interests within the meaning of the due process clauses of the Fifth or Fourteenth Amendments to the United States Constitution must provide the individual with procedural due process. Because we would hold that license holders are deprived by this Act of a property interest, we would also conclude that they are clearly entitled to procedural due process. Mathews v. Eldridge, 424 U.S. 319, 96 S.Ct. 893, 47 L.Ed.2d 18 (1976). The United States Supreme Court has consistently held that some form of hearing is required before an individual is finally deprived of a property interest. Id. In determining the type of process which is due prior to initial termination of benefits, pending review, the Court held that the following three factors should be weighed:
First, the private interest that will be affected by the official action; second, the risk of an erroneous deprivation of such interest through the procedures used, and the probable value, if any, of additional or substitute procedural safeguards; and finally, the Government's interest, including the function involved and the fiscal and administrative burdens that the additional or substitute procedural requirement would entail.
Id. at 335, 96 S.Ct. at 903.
The private interest that will be affected by an official action under Section 103 would be the licensees' business reputation and livelihood. The risk of an erroneous deprivation of a property right may demean constitutional rights. The risk in the instant case is that the licensee will be unable to operate under a license for an unspecified time without an opportunity to be heard. While Section 103 requires the director of the department of alcoholic beverage control to comply with Section 100 of the Act immediately, Section 100 does not require the director to file charges against a licensee or request that the Governor appoint a hearing officer within a reasonable time. The Government's interest in the three-day summary suspension is small. The administrative burden of providing notice and an informal hearing would be minimal. We would thus find Section 103 unconstitutional on these additional grounds.
*963 Severability
We agree that the Governor had no power to veto the severability provisions of the Act. We would point out in addition that in determining if an act is severable, New Mexico courts have established a three-pronged test:
First, the invalid portion must be able to be separated from the other portions without impairing their effect. Second, the legislative purpose expressed in the valid portion of the act must be able to be given effect without the invalid portion. And, thirdly, it cannot be said, on a consideration of the whole act, that the legislature would not have passed the valid part if it had known that the objectionable part was invalid.
State v. Spearman, 84 N.M. 366, 368, 503 P.2d 649, 651 (Ct.App. 1972); Bradbury & Stamm Construction Co. v. Bureau of Revenue, 70 N.M. 226, 372 P.2d 808 (1962); see Nall v. Baca, 95 N.M. 783, 626 P.2d 1280 (1981). We would find that the force and effect of the remainder of the Liquor Control Act is not impaired by severance of any unconstitutional sections. The other sections of the Act can stand independently from the severed sections. For example, the elimination of Section 103 creates no textual anomalies in any of the remaining portions of the Liquor Control Act. Paragraphs (F) and (G) of Section 113 render certain licensees ineligible for the tax credit provided by Section 114. Elimination of Section 114 will not impair the effect of these paragraphs.
We do not believe that the Legislature would have passed any of the Act had it intended that the invalidity of any one section would render the entire Act invalid. The Legislature specifically included a severability clause in the Act. 1981 N.M. Laws, ch. 39, § 129. Section 129 stated that "[i]f any part or application of this act is held invalid, the remainder, or its application to other situations or persons, shall not be affected." We consider this an indication of legislative intent. See State ex rel. Maloney v. Sierra, 82 N.M. 125, 477 P.2d 301 (1970).
Where, as here, a [severability clause], has been incorporated expressly stating the legislative intent that the valid portion of the enactment should stand even though other parts may be determined to be invalid, there can be no question of legislative intent and if possible the portion of the legislation free from objection should be given effect.
Clovis National Bank v. Callaway, 69 N.M. 119, 129, 364 P.2d 748, 755 (1961).
The Legislature's intent that the Act be severable is also shown by the fact that the application of the other sections is not impaired by the elimination of Sections 36, 103 and 114. Statutes carry with them a presumption of validity and any court must be well satisfied as to their invalidity before striking them down. State ex rel. Dickson v. Saiz, 62 N.M. 227, 308 P.2d 205 (1957).
CONCLUSION
For the foregoing reasons, we would hold that Sections 36, 103 and 114 of the Liquor Control Act are unconstitutional but that the Act is severable and operative except for Sections 36, 103 and 114.
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690 So.2d 712 (1997)
Kenneth R. LEVINE, Steven J. Milgrom and Carol Milgrom, his wife d/b/a Levine & Milgrom Joint Venture, Appellants,
v.
FIENI McFARLANE, INC., a Florida corporation, Appellee.
No. 96-1138.
District Court of Appeal of Florida, Fourth District.
April 2, 1997.
*713 Stuart E. Soff of Lavalle, Brown, Ronan & Soff, P.A., Boca Raton, for appellants.
Sheldon R. Rosenthal, Miami, for appellee.
KLEIN, Judge.
Plaintiff, anticipating that it would enter into a lease for restaurant space based on representations of the owners of a building, expended substantial sums renovating the space. When the restaurant was nearly complete the parties were not able to agree on terms, and plaintiff brought this suit against the owners, who knew that the improvements were being made, for unjust enrichment. The owners appeal a judgment entered against them, arguing that the court erred in awarding damages based on plaintiff's costs. We affirm.
In Arey v. Williams, 81 So.2d 525 (Fla. 1955), the defendant and her son, who thought they owned a parcel of land, made improvements, but subsequently lost a quiet title action. The trial court held that they should be reimbursed for the improvements, but used language in the judgment which indicated that it might have based its award on the cost of the improvements. The supreme court reversed, holding that under those circumstances compensation was to be measured by the amount by which the improvements enhanced the value of the property. The owners argue in the present case that plaintiff proved damages only by establishing the cost to plaintiff to construct the improvements, and therefore plaintiff's recovery for unjust enrichment should be reversed.
Plaintiff cites two cases which it claims stand for the proposition that the cost to the improver of the property can be recovered in an unjust enrichment case. Although there were statements to that effect in Stevens v. Crowder, 273 So.2d 793 (Fla. 3d DCA 1973), and Horton v. O'Rourke, 321 So.2d 612 (Fla. 2d DCA 1975), the method of determining compensation did not appear to be in issue in those cases. One of the cases, Horton, was impliedly overruled in Coffee Pot Plaza Partnership v. Arrow Air Conditioning and Refrigeration, Inc., 412 So.2d 883 (Fla. 2d DCA 1982), in which the court recognized that it was the benefit to the owner, not the cost to the improver, which would be the basis for an award in an unjust enrichment case. In any event, the statements in Stevens and Horton are contrary to the supreme court's holding in Arey, as well as the general rule. See 41 Am.Jur.2d Improvements § 28 (1995); see also Miceli v. Gilmac Developers, Inc., 467 So.2d 404 (Fla. 2d DCA 1985).
Although we agree with the owner that the damages for unjust enrichment in this case would have to be based on enhancement to the property from the standpoint of the owner, we do not agree that this requires reversal. While it is true that plaintiff presented evidence of its costs of making the improvements, it also presented the testimony of an architect who testified that the improvements enhanced the value of the property by an amount which was greater than the amount awarded in the final judgment which contained no findings of fact. We thus conclude that there was evidence to support damages based on enhancement to the property. We have considered the other *714 arguments raised and find them to be without merit.
Affirmed.
GUNTHER, C.J., and WARNER, J., concur.
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NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 19a0630n.06
Case No. 18-2040
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
FILED
Dec 19, 2019
UNITED STATES OF AMERICA, ) DEBORAH S. HUNT, Clerk
)
Plaintiff-Appellee, )
) ON APPEAL FROM THE
v. ) UNITED STATES DISTRICT
) COURT FOR THE EASTERN
ROGER MAX AUSTIN, ) DISTRICT OF MICHIGAN
)
Defendant-Appellant. )
OPINION
BEFORE: COLE, Chief Judge; MERRITT and LARSEN, Circuit Judges.
COLE, Chief Judge. Defendant-Appellant Roger Max Austin was convicted by a jury of
three counts related to his involvement in a methamphetamine-manufacturing conspiracy and was
sentenced by the district court to 255 months in prison. Austin appeals his convictions and
sentence. We affirm.
I. BACKGROUND
Roger Max Austin and 19 co-defendants were indicted for their involvement in a
conspiracy to manufacture and distribute methamphetamine. Austin, the only defendant who
proceeded to trial, was alleged to have joined the conspiracy in 2015 after it had been ongoing for
several years. By 2015, the hub of the conspiracy’s manufacturing operations was in a house on
Stewart Street in Warren, Michigan (referred to as the “Stewart house”). A tarp was set up in a
Case No. 18-2040, United States v. Austin
tent-like structure in the Stewart house’s garage to facilitate meth production, and meth was cooked
at the house on numerous occasions.
At trial, witnesses testified regarding Austin’s friendship with occupants of the Stewart
house. William Cornacchia, a meth producer, testified that one of the Stewart house’s residents
encouraged Cornacchia to meet Austin and had implied to Cornacchia that Austin also cooked
meth. Cornacchia’s girlfriend testified that another occupant of the house told her that Austin
could get a lot of boxes of Sudafed to be used as an ingredient for meth production.
Austin, a member of the Devils Diciples [sic] Motorcycle Club, vehemently denied having
joined the conspiracy, arguing at trial that he was instead in a buyer-seller relationship with the
relevant individuals. Austin argued that he bartered Sudafed to obtain drugs, but that did “not
make [him] involved in a conspiracy.” (Def. Closing, Trial Tr., R. 520, PageID 4455.) According
to Austin, bartering Sudafed for methamphetamine was cheaper than using cash because in
exchange for one $10 box of Sudafed, he could receive an amount of methamphetamine worth $80
to $100.
A police investigation began in August 2015 in response to an informant’s tip regarding
methamphetamine production at the Stewart house. While conducting surveillance on September
10, 2015, police observed Austin at the house and smelled odors indicating methamphetamine was
cooking. The next day, police observed Austin stop at Walgreens and CVS pharmacies and then
return to the Stewart house.
Officers arrested Austin later that day as he was leaving a bar, as he had an outstanding
felony warrant. On Austin’s person, police found a loaded firearm and an Altoids tin containing
baggies of crystal methamphetamine. In a pouch on Austin’s motorcycle, police located
prescription pills and a box of Sudafed.
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The officers later searched the Stewart house, where they found methamphetamine and
evidence of its manufacture. The house’s detached garage contained evidence that it had served
as a methamphetamine laboratory, including a “one-pot methamphetamine lab” in a plastic bottle,
and two bottles with acid used for cooking meth. (Off. Bradshaw Testimony, Trial Tr., R. 337,
PageID 2506–09.) Behind the garage was a burn pit containing burned bottles and battery shells.
Austin was indicted by a grand jury on September 29, 2015. Several superseding
indictments were brought as additional co-defendants were added. An attorney was appointed to
represent Austin, but the district court allowed him to withdraw in July 2016 after a breakdown in
attorney-client communication.
Attorney Michael McCarthy was then appointed to represent Austin. On June 22, 2017,
Austin attended an arraignment before a magistrate judge on his Third Superseding Indictment.
At the end of the hearing, Austin indicated his desire to dismiss McCarthy and represent himself
pro se. The magistrate judge responded, “I’m going to let you take that up at a later time and not
at this moment, but that’s between you and Mr. McCarthy.” (Arraignment Tr., R. 517, PageID
4270.)
On September 15, 2017, Austin attended a pretrial conference before the district court, at
which time he was also arraigned on the Fourth Superseding Indictment. At that conference,
Austin told the court, “I want to continue on pro se.” (Pretrial Hr’g Tr., R. 518, PageID 4283.)
The court responded by asking McCarthy if this had been raised before, at which time McCarthy
alerted the court to what Austin had told the magistrate judge at the arraignment on the Third
Superseding Indictment.
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Austin stated that he wanted to represent himself because he “believe[d]” he knew his “case
well” and was “prepared to defend” himself. (Id. at PageID 4286.) The court then asked Austin a
series of questions about his education, knowledge of the rules of evidence and criminal procedure,
mental health history, and his understanding of his rights and the potential sentence he might face
if convicted. The court also asked, “You understand I’m not going to change the schedule of this
case if you decide to represent yourself?” (Id. at PageID 4291.) Austin replied, “Yes, your honor.”
(Id.)
The court declined to rule on Austin’s request at the hearing, explaining it “need[ed] to
think about this.” (Id. at PageID 4292.) As “far as the Court [was] concerned,” Austin was now
raising his request “for the first time.” (Id.) The court indicated that it “need[ed] to go over the
case law,” and “it may well be the case that [Austin was] too late to advance this request” given
that the trial was approximately three weeks away. (Id. at PageID 4292–93.) On the other hand,
the court indicated that it had “no interest in depriving . . . [Austin] of his Sixth Amendment right
to self-representation.” (Id. at PageID 4293.)
On October 3, 2017, the district court held a status conference. At that conference, the
court asked Austin if he was “ready to defend” and “represent” himself, to which Austin replied,
“Yes sir, I am.” (Hr’g Tr., R. 367, PageID 3018.) The court asked Austin if he was “asking for a
delay” or trying to “upset[] the schedule,” to which Austin said, “No.” (Id. at PageID 3025.) The
court then stated that “the weight of the case authority” indicated that the court should permit
Austin to represent himself. (Id.) The next day, the court entered an order formally granting
Austin’s request to proceed pro se, finding that Austin had knowingly and intelligently waived his
right to counsel and remarking that Austin’s request was not seeking to “upset or delay . . . the
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court’s trial schedule.” (Self-Rep. Order, R. 327, PageID 1847–48.) The court appointed
McCarthy as standby counsel.
The next day, October 5, a jury was impaneled. Austin was also arraigned on the Fifth
Superseding Indictment, which outlined the three charges for which Austin was tried: 1) being a
felon in possession of a firearm in violation of 18 U.S.C. § 922(g)(1) (Count I); 2) carrying a
firearm during a drug trafficking crime in violation of 18 U.S.C. § 924(c) (Count II); and 3)
conspiring to manufacture, distribute, and possess with intent to distribute controlled substances
in violation of 21 U.S.C. § 841(a)(1) and 21 U.S.C. § 846 (Count III).
The trial began with opening statements on October 10, 2017. In Austin’s opening, he
admitted that he was guilty of the first charge against him, being a felon in possession. However,
he denied that he was guilty of Counts II and III. Austin told the jury, “I did buy Sudafed, and I
used it to purchase meth, but I did not join no conspiracy or sell methamphetamine to nobody.”
(Def. Opening, Trial Tr., R. 332, PageID 1927.)
The jury returned a verdict on October 18, finding Austin guilty on all three counts on
which he was tried. The jury’s verdict as to the conspiracy count also made a specific finding
regarding the quantity of methamphetamine that Austin agreed would be involved in the
conspiracy: 50 grams of methamphetamine or 500 grams or more of a mixture containing
methamphetamine.
Austin’s sentencing hearing took place on August 21, 2018. Just like at his trial, Austin
represented himself with McCarthy serving as standby counsel. Austin made several objections
to the sentencing guidelines calculations articulated in the probation department’s presentence
report. Of particular relevance to his appeal, Austin stated an objection to the application of a
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three-point enhancement under § 2D1.1(b)(13)(C)(ii) for creating a substantial risk of harm to
human life or the environment, which the district court overruled.
Austin also stated a narrow objection to the application of a two-point enhancement for
maintaining a drug house under U.S.S.G. § 2D1.1(b)(12). He made a factual objection to the
notion that he had extensive personal ties to the Stewart house. The prosecutor responded that the
drug-house enhancement could nonetheless apply because Austin could be held responsible for
the reasonably foreseeable conduct of his co-conspirators. Austin did not object to this
proposition, and the district court, in turn, applied the drug-house enhancement on the basis that
Austin was responsible for his co-conspirators’ maintenance of the Stewart house.
Austin also requested a two-point offense level reduction for acceptance of responsibility
under U.S.S.G. § 3E1.1. The court rejected this request given that Austin had consistently denied
having participated in the conspiracy and had required the government to prove its case at trial.
The district court calculated Austin’s offense level under the sentencing guidelines at 33.
The number 33 was determined as follows: The base offense level was calculated at 30 under
U.S.S.G. § 2D1.1(a)(5) due to the quantity of drugs found by the jury. The two-point drug-house
enhancement under U.S.S.G. § 2D1.1(b)(12) and the three-point substantial-risk-of-harm
enhancement under § 2D1.1(b)(13)(C)(ii) brought the offense level up to 35. Then the court
applied a two-point reduction for the defendant having been a “minor participant” in the criminal
activity under § 3B1.2, resulting in a final offense level calculation of 33.
Given the defendant’s criminal history category of III, his guidelines range was 168–210
months for Counts I and III, which were grouped pursuant to § 3D1.2(c). In addition, the
conviction on Count II under 18 U.S.C. § 924(c) required an additional 60-month mandatory
consecutive sentence. The court imposed a sentence within the guidelines range, sentencing
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Austin to 120 months on Count I, 195 months on Count III to run concurrent with Count I, and 60
months on Count II to run consecutive to Counts I and III.
After imposing the sentence, the district court inquired of the defendant whether he had
“any objections, misstatements, corrections, or anything of that nature that [he] need[ed] to bring
to the Court’s attention,” to which Austin replied, “No, your honor.” (Sentencing Hr’g Tr., R. 522,
PageID 4596.) Austin filed a timely notice of appeal.
II. ANALYSIS
Austin raises one argument on appeal to challenge his convictions, asserting that the district
court erred by delaying its grant of Austin’s request to represent himself pro se until the eve of
trial, thereby depriving him of sufficient time to prepare. Because this argument is without merit,
we affirm Austin’s convictions.
Austin also appeals his sentence, raising three challenges to the district court’s calculation
of his offense level under the 2016 sentencing guidelines—the version of the guidelines that
governed his sentence and govern this appeal. See 18 U.S.C. § 3553(a)(4)(A)(ii) (providing that a
court shall consider the sentencing range set forth in the guidelines that are “in effect on the date
the defendant is sentenced”). Austin contends that the district court erred when it: 1) applied a
three-level enhancement for creating a substantial risk of harm to human life or the environment
under U.S.S.G. § 2D1.1(b)(13)(C)(ii) because the court failed to address all four factors required
by Application Note 18(B); 2) applied a two-level enhancement for maintaining a premises for the
purpose of manufacturing or distributing a controlled substance under U.S.S.G. § 2D1.1(b)(12),
given that Austin did not personally maintain the premises; and 3) declined to apply a two-point
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reduction for acceptance of responsibility under U.S.S.G. § 3E1.1. As explained below, we reject
Austin’s challenges and affirm.1
A. The Defendant’s Self-Representation Request
Austin first argues that the district court violated his Sixth Amendment rights by delaying
the grant of his self-representation request until the eve of jury selection and nearly three weeks
after it was made, thereby depriving Austin of adequate time to meaningfully prepare for trial.
While the parties dispute which standard of review should govern the court’s consideration of this
claim, we need not decide which standard governs, as Austin’s claim is meritless even under de
novo review. See United States v. Powell, 847 F.3d 760, 774 (6th Cir. 2017).
The Sixth Amendment provides the accused with “the right to self-representation—to make
one’s own defense personally.” Faretta v. California, 422 U.S. 806, 819 (1975). However, this
right is “not absolute.” Martinez v. Ct. of Appeal of Cal., Fourth Appellate Dist., 528 U.S. 152,
161 (2000). A criminal defendant may only represent himself at trial if he “knowingly and
intelligently waive[s] his right to counsel,” United States v. McBride, 362 F.3d 360, 366 (6th Cir.
2004), and makes his self-representation request “in a timely manner,” United States v. Martin, 25
F.3d 293, 295–96 (6th Cir. 1994).
Austin’s argument relies on the Ninth Circuit’s decision in United States v. Farias, in
which the defendant made his self-representation request one day before trial. 618 F.3d 1049,
1050–51 (9th Cir. 2010). The district court in Farias told the defendant that the trial would not be
1
After briefing in this appeal was completed, Austin filed a pro se motion to file a supplemental brief raising additional
arguments. We typically deny litigants’ requests to file a supplemental pro se brief when they are represented by
counsel who has already filed a brief on their behalf, as Federal Rule of Appellate Procedure 31(a) allows litigants “a
single brief, not two.” United States v. Fontana, 869 F.3d 464, 472–73 (6th Cir. 2017); see also, e.g., United States
v. Williams, 641 F.3d 758, 770 (6th Cir. 2011) (“Because [the defendant] was represented by counsel on this appeal,
we decline to address these pro se arguments.”). We denied Austin’s motion in an order on November 13, 2019.
Austin then filed a pro se motion to reconsider this order, which we deny for the same reason. We therefore decline
to reach Austin’s additional pro se arguments.
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continued, and thus he would only have one day to prepare to represent himself. Id. As a result,
the defendant proceeded to trial with counsel. Id. The Ninth Circuit vacated the defendant’s
conviction, finding that the lower court had committed structural error by “foreclosing any
possibility of a continuance” and thereby “effectively den[ying the defendant] the right to
meaningfully represent himself.” Id. at 1055. The Ninth Circuit proclaimed that “a right to
proceed pro se without adequate time to prepare renders that right ‘meaningless.’” Id. at 1054.
Contrary to Austin’s argument, the facts in Farias are not comparable to the case at hand.
Here, there was no suggestion to the district court that Austin lacked sufficient time to prepare to
represent himself. To the contrary, Austin repeatedly told the court that he was prepared to proceed
to trial while representing himself. On September 15, he told the district court that he “believe[d]”
he knew his “case well” and was “prepared to defend” himself, (Pretrial Hr’g Tr., R. 518, PageID
4286), and on October 3, when the court asked Austin if he was “ready to defend” and “represent”
himself, Austin responded, “Yes sir, I am,” (Hr’g Tr., R. 367, PageID 3018). Not only did Austin
never imply that he wanted a continuance, he affirmatively indicated to the court that one was not
needed.
Austin asserts that the district court’s error was not in failing to sua sponte grant a
continuance, but in the court’s taking until October 4 to issue an order granting his request,
nineteen days after Austin made his request on September 15. Yet Austin’s criticism of the district
court’s delay is unavailing. The district court indicated on September 15 that it needed time to
research the caselaw before making the consequential decision to grant Austin’s request to
represent himself. We are reluctant to demand district courts rush their decisions and rule from
the bench on self-representation requests instead of prudently taking the time to review caselaw,
as the district court chose to do here.
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There may be cases where a district court’s delay in ruling is sufficiently extreme that a
defendant could reasonably argue he was unfairly prejudiced, or where a court abuses its discretion
in denying a continuance after issuing a delayed ruling. See, e.g., United States v. Gallo, 763 F.2d
1504, 1524 (6th Cir. 1985) (explaining the district court abused its discretion in denying a
reasonable request for a continuance that resulted in defense counsel only having ten days after
arraignment to prepare for a complex trial). This is not such a case. Austin repeatedly represented
to the court that he was prepared to represent himself, on the regularly scheduled trial date, without
any need for a continuance. We thus reject Austin’s contention that the district court committed
reversible error in delaying its grant of his self-representation request.
B. The Substantial-Risk-of-Harm Sentencing Enhancement
Section 2D1.1(b)(13)(C)(ii) of the 2016 sentencing guidelines provides a three-level
enhancement if “the offense involved the manufacture of amphetamine or methamphetamine and
the offense creates a substantial risk of harm to (I) human life . . .; or (II) the environment.”
Application Note 18(B) provides four factors that a court must consider in applying this
enhancement, which is often referred to as the “substantial-risk-of-harm enhancement.” See
U.S.S.G. § 2D1.1 cmt. n.18(B); United States v. Layne, 324 F.3d 464, 469 (6th Cir. 2003)
(describing that “consideration of the factors set out in the Application Note[] . . . [is] mandatory”).
Austin argues that the court erred when it applied the substantial-risk-of-harm
enhancement. He asserts that: 1) the district court’s findings “were procedurally deficient”
because the court failed to address all four factors required by Application Note 18(B), and 2) its
“substantive conclusions” were also “erroneous” and “warrant reversal.” (Austin Br. 34.) Austin
objected at sentencing to the general applicability of this enhancement, but he did not specifically
object to the court’s procedural failure to address each of the four factors required by Application
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Note 18(B). For the reasons described below, we reject Austin’s argument that the district court
reversibly erred in its application of this enhancement.
1. The Factors Applicable to the Substantial-Risk-of-Harm Enhancement
Application Note 18(B) provides that in determining “whether the offense created a
substantial risk of harm to human life or the environment, the court shall include consideration of
the following factors:
(I) The quantity of any chemicals or hazardous or toxic
substances found at the laboratory, and the manner in which
the chemicals or substances were stored.
(II) The manner in which hazardous or toxic substances were
disposed, and the likelihood of release into the environment
of hazardous or toxic substances.
(III) The duration of the offense, and the extent of the
manufacturing operation.
(IV) The location of the laboratory (e.g., whether the laboratory
is located in a residential neighborhood or a remote area),
and the number of human lives placed at substantial risk of
harm.”
U.S.S.G. § 2D1.1 n.18(B)(i) (emphasis added). At Austin’s sentencing hearing, the court did not
explicitly address each factor. The court’s analysis focused on the fourth factor and emphasized
that the conspiracy’s meth manufacturing took place in “a residential area in close proximity to
where people are residing,” not a “commercial or industrial area away from human habitation.”
(Sentencing Hr’g Tr., R. 522, PageID 4508–09.) The court also addressed the second factor
regarding disposal, commenting that the burn pit associated with the methamphetamine production
was a “place where undesired chemical by-products are disposed of, dumped on the ground and
potentially leach into the environment.” (Id. at PageID 4508.)
In regard to the first factor—concerning the quantity and storage of chemicals—the court
did not make any explicit finding at sentencing. However, during the government’s argument, it
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asserted to the court that “in some of the photographs taken at the time the search warrant was
executed, there were two, two or three pop bottles in varying degrees of the manufacturing
process.” (Id. at PageID 4506.) Neither the parties nor the court discussed the third factor, the
duration or extent of the operation, during the court’s consideration of the substantial-risk-of-harm
enhancement. However, later in the sentencing hearing, the defendant said he had known his co-
conspirators “for less than two weeks” when he was arrested, and the court considered the duration
and extent of his participation in the conspiracy in applying a two-level reduction for his being a
“minor participant” under U.S.S.G. § 3B1.2. (Id. at PageID 4528, 4534–35.)
2. Review of the District Court’s Conclusions Regarding Factors Two and
Four
The district court concluded that two of the factors described in Application Note 18(B)
supported application of the enhancement. We accept the district court’s factual findings unless
clearly erroneous and apply de novo review to the mixed question of law and fact regarding
whether factors two and four support the enhancement in Austin’s case. See United States v.
Davidson, 409 F.3d 304, 310 (6th Cir. 2005). A de novo review leads us to conclude that factors
two and four both support application of the substantial-risk-of-harm enhancement.
The district court did not make specific factual findings regarding the other two factors—
numbers one and three—thus preventing this court from conducting de novo review of them. See,
e.g., Brown v. Marshall, 704 F.2d 333, 334 (6th Cir. 1983) (“[T]he court of appeals is not equipped
to . . . function as a fact-finder.”). We will later discuss whether a remand to the district court is
necessary for consideration of factors one and three, ultimately concluding it is not.
a. Factor Two: The Manner of Chemical Disposal
Application Note 18(B)’s second factor concerns the manner in which chemicals were
disposed of and their likelihood of release into the environment. The district court found that the
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“burn pit” at the Stewart house that was “within a couple feet of [the] methamphetamine
production facility” was “a place where undesired chemical by-products” of meth production
“[we]re disposed of, dumped on the ground and potentially leach into the environment.”
(Sentencing Hr’g Tr., R. 522, Page ID 4508.)
Austin argues that the “district court just noted that the chemicals could potentially leach
into the environment” and “[s]peculation is specifically prohibited as a basis for the enhancement.”
(Austin Br. 35.) However, such an argument is misplaced. The district court here was presented
with photograph evidence of a burn pit, which specifically showed the method of disposal. No
speculation regarding the manner of disposal was necessary. Cf. Davidson, 409 F.3d at 313–14.
Although the court did not conclusively find that the chemicals in fact had leached into the
environment, the second factor, which asks the court to assess the “the likelihood of release into
the environment,” does not require such a finding. U.S.S.G. § 2D1.1 cmt. n.18(B)(i)(II). The
district court found that the chemicals were likely to release into the environment, just as the
application note describes. Given the photographic evidence of the burn pit, such a factual
determination was not clearly erroneous. And in light of such a finding, the second factor supports
application of the substantial-risk-of-harm enhancement.
b. Factor Four: The Location of the Methamphetamine Laboratory
As the district court found, the methamphetamine laboratory that was maintained at the
Stewart house was located in “a residential area in close proximity to where people are residing.”
(Sentencing Hr’g Tr., R. 522, PageID 4508–09.) Where a laboratory is located in a residential
neighborhood, in contrast to a remote area, the fourth factor “strongly militates in favor of the
application” of the substantial-risk-of harm enhancement. Layne, 324 F.3d at 471; cf. Davidson,
409 F.3d at 314. Thus, this factor strongly supports application of the enhancement.
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3. The District Court’s Failure to Consider Factors One and Three
Austin argues for the first time on appeal that the district court erred by failing to
specifically address the two other factors dictated by Application Note 18(B): the quantity of the
chemicals, and the duration and extent of the manufacturing operation. Because the district court
did not plainly err by failing to expressly address these two factors, we reject Austin’s argument.
a. Standard of Review
Where a defendant fails to object below, the court of appeals traditionally reviews for plain
error. United States v. Gardiner, 463 F.3d 445, 459 (6th Cir. 2006). However, in United States v.
Bostic, this court “exercise[d] [its] supervisory powers over the district courts and announce[d] a
new procedural rule, requiring district courts, after pronouncing the defendant’s sentence but
before adjourning the sentencing hearing, to ask the parties whether they have any objections to
the sentence just pronounced that have not previously been raised.” 371 F.3d 865, 872 (6th Cir.
2004). “If the district court fails to provide the parties with this opportunity, they will not have
forfeited their objections and thus will not be required to demonstrate plain error on appeal.” Id.
“A district court can satisfy the requirements of the Bostic rule only by clearly asking for objections
to the sentence that have not been previously raised.” United States v. Clark, 469 F.3d 568, 570
(6th Cir. 2006).
After announcing Austin’s sentence, the district court asked:
Mr. Austin, are there any objections, misstatements, corrections, or
anything of that nature that you need to bring to the Court’s
attention? You don’t have to agree with the sentence, but if you
have anything specific to say now that [the] sentence has been
imposed with respect to the manner in which it was imposed, this is
the time to point that out, so that if some mistake I have made in
articulating the sentence, it can be corrected now instead of later. Is
there anything of that sort, or any other generalized objection you
may have to make?
(Sentencing Hr’g Tr., R. 522, PageID 4596.) Austin responded, “No, your honor.” (Id.)
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Austin argues that the district court’s question does not satisfy Bostic’s requirements, but
we disagree. This court has found similar questions satisfactory under Bostic. See, e.g., United
States v. Taylor, 800 F.3d 701, 708 (6th Cir. 2015) (holding that “any other objections as far as
sentencing, or any other matters I failed to address on behalf of the defendant,” qualified as the
Bostic question).
Because the district court asked the Bostic question, Austin’s newly-raised objection is
subject to plain error review. “To establish plain error, a defendant must show that: (1) an error
occurred in the district court; (2) the error was obvious or clear; (3) the error affected defendant’s
substantial rights; and (4) this adverse impact seriously affected the fairness, integrity, or public
reputation of the judicial proceedings.” Gardiner, 463 F.3d at 459 (citation omitted). A district
court’s error affects substantial rights where there is “a reasonable probability that the error
affected the outcome” of the sentencing. United States v. Marcus, 560 U.S. 258, 262 (2010).
b. Factors One and Three
Contrary to Austin’s assertion, a district court’s failure to explicitly address each and every
mandatory factor at sentencing does not always necessitate reversal. See, e.g., United States v.
Vonner, 516 F.3d 382, 388 (6th Cir. 2008) (en banc) (describing that the district court did not
plainly err where it only mentioned the 18 U.S.C. § 3553(a) mandatory sentencing “factors that
were directly relevant” to the defendant). When the Eighth Circuit was confronted with the same
argument that Austin now brings—whether the district court had erred by failing to expressly
address the application note’s factors in applying an enhancement for substantial risk of harm—it
“decline[d] to [remand for] a rote recitation of the . . . factors when . . . the sentencing record makes
clear that their substance has been adequately considered.” United States v. Patterson, 481 F.3d
1029, 1034 (8th Cir. 2007).
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In contrast, the Ninth Circuit—in a case heavily cited by Austin—reversed the district court
in United States v. Staten, where the district court failed to adequately consider the application
note’s factors in applying the substantial-risk-of-harm enhancement. 466 F.3d 708, 717 (9th Cir.
2006). In Staten, the lower court had improperly relied on generic factors that would be common
to any methamphetamine manufacture, instead of making factual findings specific to the case. Id.
at 716–17. Such an approach would similarly be inappropriate in this circuit, as the Sixth Circuit
has said that “[n]either the language of [the enhancement] nor its commentary suggests that the”
substantial-risk-of-harm enhancement “should be applied any time methamphetamine is
manufactured in anything less than professional laboratory conditions.” Davidson, 409 F.3d at
314.
While it would have been prudent for the district court here to have addressed all four
factors more explicitly in its sentencing, we do not conclude that the district court committed plain
error by failing to do so. A court need not find that every factor listed in Application Note 18(B)
applies in order to apply the enhancement. See Layne, 324 F.3d at 471 (affirming application of
the enhancement where only three of the four factors supported its applicability). The district court
here addressed the two factors that were particularly relevant to Austin’s case, both of which the
court concluded—correctly—strongly supported application of the enhancement.
Furthermore, plain error did not occur given that it does not appear that the district court’s
failure to address these two other factors affected Austin’s substantial rights. To start, there is no
indication that consideration of the first factor, the quantity and storage of the chemical substances
found at the laboratory, would have moved the needle in favor of Austin. The government argued
at sentencing “that two or three pop bottles in varying degrees of the manufacturing process” were
found when the search warrant was executed at the Stewart house. (Sentencing Hr’g Tr., R. 522,
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PageID 4506.) The district court did not make any express findings in relation to the government’s
representation. However, there was testimony presented at trial to support the government’s
assertion. A police officer who helped execute the search warrant testified that in the Stewart
house’s detached garage police found a green two-liter bottle that served as a “one-pot
methamphetamine lab” and two bottles that were “active gas generators” that were full of “a very
strong acid.” (Off. Bradshaw Testimony, Trial Tr., R. 337, PageID 2506–09.) Moreover, while
Austin’s brief argues that “the government presented no information at sentencing that the offense
involved a particularly large quantity” of chemicals, (Austin Br. 32), this court has held that even
a “minimal amount” can support application of the enhancement under this factor, given the
“inherent dangers of methamphetamine manufacturing” that the guideline provision is “designed
to address,” United States v. Whited, 473 F.3d 296, 299–300 (6th Cir. 2007) (internal citation
omitted). Given the evidence presented at trial, there is no reason to believe that consideration of
the first factor would have militated against application of the enhancement.
In regard to the third factor, the government mistakenly urges the court to consider the
duration and extent of the operation since 2012, the year when it appears Austin’s co-conspirators
began cooking methamphetamine. This argument ignores the directive that “a defendant cannot
be held accountable under [the relevant conduct provision] for ‘the conduct of [other] members of
a conspiracy prior to the defendant joining the conspiracy.’” Donadeo, 910 F.3d at 895 n.4
(quoting U.S.S.G. § 1B1.3 cmt. n.3(B)) (emphasis added). Yet even focusing on the
manufacturing operation during the period when Austin participated, this factor supports
application of the enhancement.
- 17 -
Case No. 18-2040, United States v. Austin
In Layne, we held that the third factor supported application of the enhancement where the
methamphetamine laboratory had been operating for “at least two weeks” and had “manufactured
several batches of methamphetamine.” 324 F.3d at 470. Here, Austin approximated at sentencing
that he had known his co-conspirators for slightly less than two weeks, and the jury found that
Austin had personally agreed that at least 50 grams of meth (or 500 grams of a mixture containing
meth) would be involved in the drug-manufacture conspiracy. While the duration of Austin’s
involvement was slightly shorter than the duration in Layne, the extent of the operation appears
larger given the sizeable drug quantity found by the jury. The third factor therefore seems to
support application of the enhancement.
In short, there is no indication that consideration of factors one and three would have
militated against application of the enhancement. The district court’s failure to explicitly address
factors one and three did not affect Austin’s substantial rights, and accordingly does not constitute
plain error. See Marcus, 560 U.S. at 262.
C. The Drug-House Sentencing Enhancement
Section 2D1.1(b)(12) of the sentencing guidelines provides that “[i]f the defendant
maintained a premises for the purpose of manufacturing or distributing a controlled substance,
increase by 2 levels.” Austin argues that the district court erred by applying the drug-house
enhancement in his case because he did not personally maintain a drug house, and § 2D1.1(b)(12)’s
text and accompanying commentary “require[] the defendant to maintain the premises.” (Austin
Br. 28.) The government appears to concede that the house was “maintained not by [the] defendant
but by co-conspirators,” but argues that the district court’s decision to apply the enhancement was
correct because Austin is held responsible for the reasonably foreseeable conduct of his co-
conspirators under the relevant conduct provision of the sentencing guidelines. (Gov’t Br. 1, 20.)
- 18 -
Case No. 18-2040, United States v. Austin
The sentencing guidelines’ relevant conduct provision dictates:
Unless otherwise specified, . . . specific offense characteristics . . .
in Chapter Two . . . shall be determined on the basis of . . . all acts
and omissions of others that were—
(i) within the scope of the jointly undertaken criminal activity,
(ii) in furtherance of that criminal activity, and
(iii) reasonably foreseeable in connection with that criminal
activity;
that occurred during the commission of the offense of conviction, in
preparation for that offense, or in the course of attempting to avoid
detection or responsibility for that offense[.]
U.S.S.G. § 1B1.3(a)(1)(B) (emphasis added). Austin avers that the guidelines “otherwise
specif[y]” an exception to the application of the relevant conduct provision in the context of the
drug-house enhancement.
Austin, however, made a different objection to the district court. At the sentencing hearing,
Austin’s objection regarding this enhancement was on a narrow factual basis. He did not object
to the application of the relevant-conduct provision to the drug-house enhancement, and thus he
did not “apprise[]” the district court of the “basis for his objection” that he now raises on appeal.
See Bostic, 371 F.3d at 871 (internal citation and quotation marks omitted). Because the district
court asked the Bostic question, see supra, we review for plain error.
The Sixth Circuit has not directly ruled on the appropriateness of applying the drug-house
enhancement based solely on the conduct of co-conspirators, and other circuits appear to have
expressed differing viewpoints. Compare United States v Miller, 698 F.3d 699, 706 (8th Cir. 2012)
(“[U.S.S.G.] § 2D1.1(b)(12), like the 21 U.S.C. § 856(a)(1) offense that it parallels, requires proof
that the specific defendant being sentenced maintained the premises ‘for the purpose of’ drug
manufacture or distribution.”) with United States v. Holmes, 767 F. App’x 831, 839 (11th Cir.
- 19 -
Case No. 18-2040, United States v. Austin
2019) (“Nothing in § 2D1.1(b)(12) prohibits a sentencing court from imposing the premises
enhancement based on the jointly undertaken criminal activity of co-conspirators.”). For an error
to be “plain,” it must, “at a minimum,” be “clear under current law.” United States v. Al-Maliki,
787 F.3d 784, 794 (6th Cir. 2015) (internal citation omitted). Because the district court “lack[ed]
. . . binding case law” from the U.S. Supreme Court or the Sixth Circuit on this question, we are
“preclude[d]” from “finding of plain error.” Id. We thus hold that the district court did not plainly
err in applying the drug-house sentencing enhancement, and we decline to opine in dicta on the
appropriateness of this enhancement had the objection been preserved. See Cataldo v. U.S. Steel
Corp., 676 F.3d 542, 551 (6th Cir. 2012) (describing that it is prudent for this court to “decline to
opine unnecessarily”).
D. Acceptance of Responsibility
Austin argues that the district court erred by denying his request at sentencing for a two-
point offense level reduction for acceptance of responsibility under U.S.S.G. § 3E1.1. Austin
asserts that he accepted responsibility by “admitt[ing]” at trial to “possessing the gun and drugs at
issue” and “merely challenged the applicability of the [conspiracy] statute to his conduct.” (Austin
Br. 37.) Austin’s argument is without merit.
Section 3E1.1 provides a two-point offense level reduction “[i]f the defendant clearly
demonstrates acceptance of responsibility for his offense.” The defendant bears the burden of
demonstrating that he accepted responsibility. United States v. Chalkias, 971 F.2d 1206, 1216 (6th
Cir. 1992). Application Note 2 instructs that proceeding to trial “does not automatically preclude
a defendant from consideration,” as there are “rare situations” where a defendant “clearly
demonstrate[s] acceptance of responsibility” despite proceeding to trial. U.S.S.G. § 3E1.1 cmt.
n.2. By way of example, the note describes a situation “where a defendant goes to trial to assert
- 20 -
Case No. 18-2040, United States v. Austin
and preserve issues that do not relate to factual guilt (e.g., to make a constitutional challenge to a
statute or a challenge to the applicability of a statute to his conduct).” Id.
“[A] defendant must accept responsibility for all counts before he is entitled to a reduction
in sentence for acceptance of responsibility.” United States v. Chambers, 195 F.3d 274, 278–79
(6th Cir. 1999) (affirming a district court’s denial of the reduction where the defendant admitted
to being a felon in possession but denied his guilt as to another offense). “Generally a question of
fact, the [district] court’s determination of whether a defendant has accepted responsibility
normally enjoys the protection of the clearly erroneous standard.” United States v. Morrison,
983 F.2d 730, 732 (6th Cir. 1993).
The district court did not clearly err in denying Austin’s request for this reduction, as he
repeatedly asserted his factual innocence during trial. In his opening statement, he explained,
“I did buy Sudafed, and I used it to purchase meth, but I did not join no conspiracy or sell
methamphetamine to nobody.” (Def. Opening, Trial Tr., R. 332, PageID 1927.) In his closing
statement, he asserted, “I’m not . . . connected to the overall drug distribution conspiracy itself.”
(Def. Closing, Trial Tr., R. 520, PageID 4460.) He continued, “So on Count 1 . . . I’m guilty of it.
. . . Now as far as Count 2 and 3 go, I’m not guilty.” (Id.) Austin persisted in maintaining his
innocence as to the conspiracy charge through sentencing, explaining at the sentencing hearing,
“I still stand by my innocence that I was not involved with the conspiracy with these people.”
(Sentencing Hr’g Tr., R. 522, PageID 4510.)
Austin’s assertions of innocence were not simply, as appellate counsel now claims, legal
arguments challenging the applicability of the conspiracy statute to the defendant’s conduct.
Austin emphatically denied that he had committed a key element of the conspiracy charge—that
he entered into any agreement with his co-conspirators to manufacture, distribute, and possess with
- 21 -
Case No. 18-2040, United States v. Austin
intent to distribute methamphetamine. The district court, “in a unique position to evaluate [the]
defendant’s acceptance of responsibility,” U.S.S.G. § 3E1.1 cmt. n.5, observed at sentencing that
Austin had “contested the facts at every turn, put[ing] the [g]overnment to its proofs,” (Sentencing
Hr’g Tr., R. 522, PageID 4510.)
We have repeatedly affirmed denial of this reduction where defendants attempted to
minimize their role in a conspiracy or admitted to some incriminating facts but not to each factual
element of the crime charged. See, e.g., Chalkias, 971 F.2d at 1216 (affirming a district court’s
refusal to give the two-point reduction where the defendants “attempted to minimize their roles in
the drug conspiracy”); United States v. Sloman, 909 F.2d 176, 182 (6th Cir. 1990) (affirming a
district court’s refusal to grant a two-level reduction where the defendant “never admitted [to] any
fraudulent intent”). A defendant is not entitled to a reduction where he denies guilt on at least one
count and does “no more than admit an offense with which he was not charged and admit conduct
which he could not deny.” United States v. Head, 927 F.2d 1361, 1374 (6th Cir. 1991). Here,
Austin admitted to possessing drugs and a gun, which were facts that would have been difficult
for him to deny. His admission to mere possession of methamphetamine was an admission to a
crime with which he was not charged. On the other hand, he strongly contested any involvement
in drug trafficking or the larger drug conspiracy, thus requiring the government to prove this at a
jury trial. The district court was correct to reject Austin’s request for this reduction.
III. CONCLUSION
For the foregoing reasons, we affirm.
- 22 -
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5 F.3d 1500
U.S.v.Brown*
NO. 92-9047
United States Court of Appeals,Eleventh Circuit.
Sept 20, 1993
1
Appeal From: S.D.Ga.
2
AFFIRMED.
*
Fed.R.App.P. 34(a); 11th Cir.R. 34-3
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11th
Court of Appeals
Eastland,
Texas
Opinion
Stephen Barton Chasteen
Appellant
Vs. Nos.
11-02-00250-CR & 11-02-00251-CR B Appeals from Erath County
State of Texas
Appellee
In one
trial involving two indictments, a jury convicted appellant of sexual assault
of a child[1]
and aggravated assault with a deadly weapon.[2] The trial court assessed punishment for the
sexual assault of a child at 20 years confinement and a $10,000 fine. The trial
court assessed punishment for the aggravated assault with a deadly weapon at 10
years confinement. We affirm.
Appellant
brings one point of error in each appeal.
Appellant contends that the trial court erred when it sustained two
objections made by the State during appellant=s closing argument and then instructed the jury to disregard appellant=s arguments.
In closing
arguments, defense counsel attempted to define reasonable doubt before the
jury. He first stated, AIf you say, I wonder about that, that=s reasonable doubt.@ The
trial court sustained the State=s objection to the statement and, pursuant to the State=s request, instructed the jury that Athat is not a correct statement of the law.@
Defense counsel further argued, AIf you don=t feel
comfortable about finding him guilty, then there=s a reasonable doubt in your mind.@ The State objected to this statement also; and, after the trial court
sustained the objection, it instructed the jury to disregard the
statement.
Beginning
in 1991, a trial court was required to define Areasonable doubt@ in the jury charge. Geesa v.
State, 820 S.W.2d 154, 162 (Tex.Cr.App.1991).
The charge required by Geesa stated in relevant part:
A Areasonable doubt@ is a doubt based on reason and common sense
after a careful and impartial consideration of all the evidence in the
case. It is the kind of doubt that
would make a reasonable person hesitate to act in the most important of his own
affairs.
Proof
beyond a reasonable doubt, therefore, must be proof of such a convincing
character that you would be willing to rely and act upon it without hesitation
in the most important of your own affairs.
Nine years later, the
Court of Criminal Appeals overruled that portion of Geesa requiring the
definition. The court held that Athe better practice is to give no definition
of reasonable doubt at all to the jury.@ Paulson v. State, 28 S.W.3d
570, 573 (Tex.Cr.App.2000). In Paulson,
it was noted that the first definition was useless and that the second
definition was ambiguous. Paulson v.
State, supra at 572. Further, the third
definition was a fallacious application of the second definition. Paulson v. State, supra at 572.
An
argument similar to that made in this case was made in Billy v. State, 77
S.W.3d 427 (Tex.App. B
Dallas 2002, pet=n ref=d). In Billy, the
defendant=s attorney attempted to argue the Ahesitation@ type argument condemned in the jury charge in Paulson. The trial court refused to allow the
argument. The court in Billy v. State,
supra at 430, quoted the following language from Paulson:
If a
conscientious juror reads the Geesa charge and follows it literally, he
or she will never convict anyone.
Considerations utterly foreign to reasonable doubt might make a person
hesitate to act. The gravity of the
decision and the severity of its consequences should make one pause and
hesitate before doing even what is clearly and undoubtedly the right thing to
do. Judgments that brand men and women
as criminals, and take their money, their liberty, or their lives are deadly
serious. They are decisions that make
us hesitate if we have any human feelings or sensitivity at all. So to convict, a juror must either ignore
the definition, refuse to follow it, or stretch it to say something it does not
say.
Here,
following the reasoning in Paulson relating to the jury charge, there
are many reasons other than a reasonable doubt why a person might feel Auncomfortable@ in finding a person guilty or Awonder@ about something or the other. We agree with the reasoning in Paulson
and Billy and find that the arguments were misleading. An argument that misstates the law or is
contrary to the court=s
charge is improper. Melendez v. State,
4 S.W.3d 437 (Tex.App. B Houston [1st Dist.] 1999, no pet=n). Defense counsel may not
make statements about the State=s burden of proof that are inaccurate or misleading. Loar v. State, 627 S.W.2d 399, 401
(Tex.Cr.App.1981). Because the
statements made by defense counsel were misstatements and misleading, the trial
court did not err when it sustained the State=s objections to the statements.
Further, because defense counsel=s statements were erroneous, the trial court=s instruction to the jury was appropriate to
cure the effect of the erroneous statements.
See Martinez v. State, 17 S.W.3d 677 (Tex.Cr.App.2000). We overrule appellant=s sole point of error in each appeal.
The
judgments of the trial court are affirmed.
JIM
R. WRIGHT
JUSTICE
January 30, 2003
Do not publish. See TEX.R.APP.P. 47.2(b).
Panel consists of: Arnot, C.J., and
Wright, J., and McCall, J.
[1]Cause No. 11-02-00250-CR.
[2]Cause No. 11-02-00251-CR.
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324 S.W.2d 428 (1959)
ZURICH INSURANCE COMPANY, Ltd., Appellant,
v.
Mrs. Catherine C. REIDER, Appellee.
No. 16010.
Court of Civil Appeals of Texas, Fort Worth.
May 15, 1959.
Rehearing Denied June 5, 1959.
Fulbright, Crooker, Freeman, Bates & Jaworski and Newton Gresham, Houston, for appellant.
*429 Patterson, McDaniel & Moore, and Louis M. Moore, Houston, for appellee.
RENFRO, Justice.
Deuah E. Reider died on June 4, 1957, as a result of an accidental injury sustained in the course of his employment. His widow, Catherine C. Reider, on behalf of herself and minor children claimed statutory benefits under the Workmen's Compensation Act. On September 13, 1957, the Industrial Accident Board entered its award directing the carrier, Zurich Insurance Company, Ltd., to pay Mrs. Reider and children the sum of $25 per week for a period of 360 weeks from the date of death of Reider. No appeal was taken from the order. Zurich has paid all weekly payments from June 4, 1957.
In February, 1958, attorneys for Mrs. Reider wrote Zurich requesting that Zurich bring a third party suit against Houston Lighting & Power Company, or, in the alternative, that Zurich agree that Mrs. Reider might bring such suit without constituting an election as contemplated by Section 6a of Article 8307, Vernon's Ann.Civ.St.
Zurich declined to bring third party suit and advised plaintiff's attorneys it would reserve any rights it might have.
Mrs. Reider then brought this suit against Zurich for declaratory judgment. The trial court entered judgment as follows:
"It is therefore ordered, adjudged, decreed and declared that, inasmuch as the Industrial Accident Board of the State of Texas on the 13th day of September in IAB Cause No. R-58446, made a final award, and no party to said cause filed suit in a court of competent jurisdiction to set aside said award, and the time for the filing of said suit has expired, Section 6a of Article 8307 of the Texas Workmen's Compensation Act will not require a further election on the part of Mrs. Catherine C. Reider in the event she files suit against a third party tort feasor; that Mrs. Catherine C. Reider was required to make only one election under Section 6a of Article 8307, which election she has already made; that notwithstanding Defendant's failure and refusal to bring a third party action, Plaintiff may bring such action without waiving any rights or losing any rights to receive the unaccrued payments under said award; and that Defendant Zurich Insurance Company, Ltd. has assumed to pay the entire amount of compensation awarded to Mrs. Catherine C. Reider by the Industrial Accident Board of the State of Texas on the 13th day of September, 1957, as a matter of law."
Zurich appealed from said judgment.
Article 8307, Section 6a, provides that the compensation insurer, in the event compensation is claimed by the beneficiaries of the injured employee, shall be subrogated to the rights of the employee, and that it may enforce same against the negligent third party. Under the authorities, in the event the compensation insurer refuses to bring the third party suit, the injuried employee of his representatives may bring such suit. Houston Gas & Fuel Co. v. Perry, 127 Tex. 102, 91 S.W.2d 1052. If the employee or his representatives bring the suit then the compensation carrier is entitled to reimbursement. Fort Worth Lloyds v. Haygood, 151 Tex. 149, 246 S.W.2d 865.
The defendant in this case contends that under the terms of Article 8307, § 6a, Mrs. Reider will waive "future" compensation if she brings suit against the third party.
Neither party has cited authorities directly in point and we have found none.
In Otis Elevator Co. v. Allen, Tex.Civ. App., 185 S.W.2d 117, 120, where the third party filed plea in abatement on ground the compensation payments made to Thrash were voluntarily made and the payments had not matured, this court held: "* * * we are of opinion that Thrash is not compelled to wait until all compensation that is due him under the Workmen's Compensation Laws has been paid to him before he *430 may sue the third party whom he asserts was guilty of negligence in causing his injuries." The Supreme Court reversed as to one of the plaintiffs in said case, but affirmed the judgment in favor of Thrash and his compensation carrier. Otis Elevator Co. v. Allen, 143 Tex. 607, 187 S.W.2d 657.
In Texas Employers' Ins. Ass'n v. Fish, Tex.Civ.App., 266 S.W.2d 435, Id., Tex. Civ.App., 276 S.W.2d 907, the injured party prosecuted his compensation claim to successful judgment. While motion for new trial was still pending he filed a third party suit. This court held he did not void his election and his judgment in the compensation suit by the mere filing of the third party suit.
In the instant case no appeal was taken by the defendant from the award of the Industrial Accident Board. Plaintiff's claim was a death claim. Defendant owed all or nothing. The Board made its award on that basis. The defendant has complied with the award order. It has at no time taken any steps to deny its obligation to pay the full amount awarded by the Board. "`The final award of the board unappealed is entitled to the same faith and credit as a judgment of a court.'" 45 Tex.Jur., pp. 752-3, sec. 269.
Article 8307, § 6a, provides in part, "and in case the association recovers a sum greater than that paid or assumed (emphasis ours) by the association to the employé * * *." When the award to pay death benefits to plaintiff became final, with no appeal having been made by defendant, and defendant continued to make the weekly payments, we think defendant "assumed", as contemplated by the statute, the obligation to pay the full amount of the award to the plaintiff. The cases of Brooks v. Lucky, Tex.Civ.App., 308 S.W. 2d 273, and Buss v. Robison, Tex.Civ. App., 255 S.W.2d 339, lend some support to our conclusion. In our opinion the defendant could have instituted the third party suit any time after the award became final.
The plaintiff elected to proceed under the compensation statute. She filed her claim with the Industrial Accident Board. The Board made its award. The defendant did not appeal but has continued to comply with the orders made.
Bearing in mind that the compensation statute should be construed liberally with a view to accomplish its purpose and to promote justice, we agree with the trial court that plaintiff, in view of defendant's refusal, may bring the third party suit without waiving her rights to the unaccrued payments under the Board's award.
Judgment affirmed.
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523 F.Supp.2d 361 (2007)
SECURITIES AND EXCHANGE COMMISSION, Plaintiff,
v.
Moises Saba MASRI and Albert Meyer Sutton, Defendants.
No. 04 Civ. 1584(RJH).
United States District Court, S.D. New York.
November 20, 2007.
*362 Alan M. Lieberman, Nina B. Finston, Paul R. Berger, Ryan Farney, U.S. Securities and Exchange Commission, Washington, DC, for Plaintiff.
Roger Ryan Crane, Jr., Nixon Peabody LLP, New York City, for Defendants.
MEMORANDUM OPINION AND ORDER
RICHARD J. HOLWELL, District Judge.
The Securities and Exchange Commission ("SEC") brings this action against Moises Saba Masri ("Saba") and Albert Meyer Sutton ("Sutton") for violating Section 10(b) of the Securities Exchange Act and Rule 10b-5 thereunder. The SEC alleges that Saba and Sutton manipulated *363 the closing price of a security, T.V. Azteca S.A. de C.V. American Depositary Receipts (TZA), on August 20, 1999. Defendants move for summary judgment under Rule 56 of the Federal Rules of Civil Procedure dismissing plaintiff's complaint in its entirety. For the reasons stated below, defendants' motion is granted in part and denied in part.
BACKGROUND
The following facts, drawn from the parties' Rule 56.1 statements, affidavits, depositions, and other exhibits, are undisputed. The inferences and conclusions drawn from these facts, however, are not. Defendant Saba is a Mexican citizen and resides in Mexico. He is an active trader of securities and makes thousands of trades each year. Beginning in 1998, Saba began trading securities in accounts held at Middlegate Securities Limited, a brokerage firm located in New York City. Sutton is an Executive Vice President of Middlegate, and was the registered representative handling Saba's brokerage accounts at all relevant times. Tentafin Limited ("Tentafin"), an Irish company, owned an account at Middlegate through 1999 with total assets measuring in the hundreds of millions of dollars. (Decl. of David A. Feldman ("Feldman Decl."), Exs. 5-12.) Saba opened and directed trades in this account, which were handled, without discretion, by Sutton. Sutton and Saba had an informal understanding that, in the absence of contrary instructions, allowed Sutton to fill an order at an average price within approximately one-eighth of the price that prevailed at the time the order was placed by Saba. (Reply Decl. of Moises Saba Masri ("Saba Reply") ¶ 3.)
TZA is a security traded on the New York Stock Exchange. On December 15, 1998, Saba deposited 1,301,100 TZA shares into the Tentafin account from another account owned by Saba and his father at Middlegate. Between December 15, 1998 and August 31, 1999, through the Tentafin account at Middlegate, Saba sold and bought back TZA put[1] and call[2] options as well as TZA shares. Between February 24 and March 3, 1999, Saba sold 8,600 TZA August 5 put options,[3] earning a net premium of $765,883.88. Between February 24 and their expiration on August 21, there were thirty-two days on which the TZA August 5 put options were "in the money." (Feldman Decl., Ex. 25.) However, no TZA August 5 put options were assigned to Tentafin. (Defs.' Rule 56.1 Statement ¶ 48.) In addition, Saba sold 8,150 TZA August 7.5 put options, earning a net premium of $1,060,536.10.[4] These options were "in the money" every day from sale *364 to expiration and each one was assigned to Tentafin by the settlement date on August 23, requiring Tentafin to purchase 815,000 TZA shares at $7.50 per share plus commissions, for a total cost of $6,136,962. (Id. ¶¶ 53, 78.) In addition to TZA options, Saba had sold put options for a number of other securities set to expire on August 21, 1999. Finally, Saba sold a total of 11,500 TZA November 5 call options, earning a net premium of $1,151,948.82.
Between August 17 and August 19, 1999, Tentafin's cash account had a positive balance ranging from roughly $58,000 to $670,000. Between those same dates, Tentafin had a fed call[5] ranging from roughly $590,000 to $7,500,000. Saba could have satisfied the fed call by liquidating any of a number of positions in the Tentafin account. On August 20, 1999, Tentafin had a net worth of roughly $292 million, its cash account had a balance of roughly $670,000, and it had a fed call of roughly $4 million. After all assignments and expirations of options took place in connection with Tentafin's positions with an August 21, 1999 expiration date, the fed call was satisfied. (Defs.' Rule 56.1 Statement ¶ 80.)
At the start of the trading day on August 20, 1999, Saba controlled over two million TZA shares in the Tentafin account and over ten million TZA shares in another account at Middlegate. In the afternoon of August 20, 1999, Saba called Sutton and requested that Sutton purchase TZA shares for the Tentafin account. After placing the order with Sutton, Saba left his office for the day and had no further communications with Sutton. The parties dispute the size of the order placed by Saba because the original order ticket indicated that amounts of 100,000 and 150,000 had been written on the ticket and crossed out before 200,000, the number of TZA shares ultimately purchased, was written in below. (Decl. of Ryan Farney ("Farney Decl."), Ex. 8.) Sutton executed Saba's order by effecting seven discrete orders through a floor trader, Ira Sabin, for an average price of $5.1369 during the final ten minutes of trading that day. One unrelated trader also executed one order for 3,000 TZA shares during those ten minutes. The following table summarizes these trades:
Best bid
Limit (best ask[6] immediately
Time Quantity Price at time of trade) after trade
3:51:43 4,400 $5.00 $5.0625 ($5.0625) $4.9375
3:51:57 45,600 $5.0625 $5.0625 ($5.0625) $4.9375
3:54:51 18,700 $5.0625 $5.1875 ($5.1875) $5.125
3:55:09 31,300 $5.1875 $5.1875 ($5.1875) $1.125
3:57:34 25,000 $5.1875 $5.1875 ($5.1875) $5.0625
3:58:16 3,000 $5.125 Unknown ($5.125) $4.9375
(unaffiliated order)
3:59:00 20,000 $5.125 $5.125 ($5.125) $5.125
4:00:02 55,000 $5.1875 $5.375 ($5.1875) Market close
*365 At the close of the market on August 20, 1999, the price and the best bid for TZA were both above $5. Saba's purchases constituted approximately 94% of all TZA buy-side activity during the last hour of trading on August 20, 1999, and 75% of all buy-side activity for the day. The 200,000 share purchase exceeded by 20,000 the average daily volume of shares traded over the preceding thirty trading days.
On August 25, 1999, $27,399,980 was transferred into the Tentafin account. No fed call existed at the time of this transfer. On August 31, 1999, Saba transferred 1,301,100 TZA shares but of the Tentafin account and back into another account at Middlegate (the same number originally transferred in late 1998). By their expiration date on November 20, 1999, all 11,500 TZA November 5 call options were assigned to Valleygreen Ltd., the Saba account to which Tentafin had transferred its position on these options, and Saba was required to deliver 1,150,000 TZA shares at $5 per share. The 200,000 TZA shares that Saba purchased on August 20, 1999 were sold at this time.
STANDARD OF REVIEW
Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). The moving party bears the burden of demonstrating that no genuine issue exists as to any material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323-25, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). In reviewing the record, the district court must assess the evidence in "the light most favorable to the non-moving party," resolve all ambiguities, and "draw all reasonable inferences" in its favor. Am. Cas. Co. v. Nordic Leasing, Inc., 42 F.3d 725, 728 (2d Cir.1994); see Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).
The moving party can satisfy its burden by showing that the opposing party is unable to establish an element essential to that partys case and on which that party would bear the burden of proof at trial. See Celotex, 477 U.S. at 321, 106 S.Ct. 2548; Gallo v. Prudential Servs., 22 F.3d 1219, 1223-24 (2d Cir.1994) ("[T]he moving party may obtain summary judgment by showing that little or no evidence may be found in support of the nonmoving partys case."). Indeed, summary judgment is "mandated" when the evidence is insufficient to support "the non-moving partys case." Distasio v. Perkin Elmer Corp., 157 F.3d 55, 61 (2d Cir.1998).
If the moving party meets its burden, the "non-movant may defeat summary judgment only by producing specific facts showing that there is a genuine issue of material fact for trial." Samuels v. Mockry, 77 F.3d 34, 36 (2d Cir.1996); Celotex, 477 U.S. at 322-23, 106 S.Ct. 2548. An alleged factual dispute between the parties will not by itself defeat a motion for summary judgment, since "the requirement is that there be no genuine issue of material fact." Anderson, 477 U.S. at 247-48, 106 S.Ct. 2505 (emphasis in original). Specifically, the non-moving party cannot rely on mere allegations, denials, conjectures, or conclusory statements, but must present affirmative and specific evidence showing that there is a genuine issue for trial. See id. at 256-57, 106 S.Ct. 2505; Gross v. Natl Broad. Co., 232 F.Supp.2d 58, 67 (S.D.N.Y.2002).
DISCUSSION
The SEC contends that defendants purchased 200,000 TZA shares on August 20, *366 1999, in order to push the price of TZA above $5, thus causing the TZA August 5 put options to expire worthless and avoid the required purchase of 860,000 shares at $5 per share. The SEC's complaint alleged that Tentafin had "limited buying power," making it a serious drain on Saba's resources to pay the roughly $4.3 million to purchase the shares that might have been put to him had the TZA share price remained below the $5 strike price. (Compl.¶ 23.) However, discovery has shown that Saba had an adequate cash balance to satisfy the put options, without requiring him to liquidate any of his valuable holdings. In its moving papers, the SEC abandons this contention and states only that Saba did not want to spend the money to buy 860,000 TZA shares at $5. (Pl.'s Mem. of L. in Opp'n ("Pl.'s Opp'n") at 17.) Saba instead asserts that he had legitimate economic motives for purchasing 200,000 TZA shares. He argues that the purchase was made to average down the cost of the TZA shares that he stood to be put from the remaining August 7.5 put options[7] and also to ensure a sufficiently low average price of TZA shares to allow him to make a profit if the TZA November 5 call options were assigned (which they were).
Defendants make two principal arguments in moving for summary judgment. First, they argue that regardless of intent, an open-market transaction (such as end-of-day stock purchases) unaccompanied by other deceptive or fraudulent conduct cannot, as a matter of law, support a finding of market manipulation under Section 10(b) of the Securities Exchange Act. Second, they argue that even if the transaction could constitute manipulative conduct for purposes of securities law, the SEC has failed to demonstrate a genuine issue of material fact exists as to whether they had the requisite manipulative intent. The Court now turns to defendants' first argument.
I. Manipulative Conduct
Several statutes and regulations proscribe manipulation of securities markets. Section 10(b) of the Securities Exchange Act prohibits the use "in connection with the purchase or sale of any security" of "any manipulative or deceptive device or contrivance" as defined by the S.E.C. 15 U.S.C. § 78j(b). Further, Rule 10b-5 thereunder makes it unlawful: "(a) to employ any device, scheme, or artifice to defraud," or "(c) To engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person, in connection with the purchase or sale of any security." Section 9(a)(1) explicitly forbids several common types of market manipulation, known as matched orders[8] and wash sales,[9] that involve fictitious transactions and do not result in any change of beneficial ownership. 15 U.S.C. § 78i(a)(1). Finally, Section 9(a)(2) more broadly prohibits securities transactions that "creat[e] actual or apparent active trading in such security, or rais[e] or depress [] the price of such security, for the purpose of inducing the *367 purchase or sale of such security by others." 15 U.S.C. § 78i(a)(2).
The Supreme Court has found the use of the word "manipulative" in Section 10(b) to be "virtually a term of art when used in connection with securities markets. It connotes intentional or willful conduct designed to deceive or defraud investors by controlling or artificially affecting the price of securities." Ernst & Ernst v. Hochfelder, 425 U.S. 185, 198, 96 S.Ct. 1375, 47 L.Ed.2d 668 (1976). "The gravamen of manipulation is deception of investors into believing that prices at which they purchase and sell securities are determined by the natural interplay of supply and demand, not rigged by manipulators." Gurary v. Winehouse, 190 F.3d 37, 45 (2d Cir.1999). Market manipulation "refers generally to practices, such as wash sales, matched orders, or rigged prices, that are intended to mislead investors by artificially affecting market activity." Santa Fe Indus., Inc. v. Green, 430 U.S. 462, 476, 97 S.Ct. 1292, 51 L.Ed.2d 480 (1977). Such conduct, closely resembling fraud, is patently manipulative, serving no purpose other than to transmit false information to the market and artificially affect prices. The defendant's manipulative intent can be inferred from the conduct itself.
However, market manipulation can also be accomplished through otherwise legal means, such as short sales and large or carefully timed purchases or sales of stock. In these cases, the transaction is real, to the extent that beneficial ownership is changing and the volume of trading is reflective of market activity. The difficulty in such "open-market" cases, where the activity in question is not expressly prohibited, is to "distinguish between legitimate trading strategies intended to anticipate and respond to prevailing market forces and those designed to manipulate prices and deceive purchasers and sellers." GFL Advantage Fund, Ltd. v. Colkitt, 272 F.3d 189, 205 (3d Cir.2001). The question arises whether manipulative intent alone is enough to make open-market transactions manipulative and in violation of securities laws.
One appellate court has held that it is not. The Third Circuit in GFL Advantage Fund, Ltd. affirmed the lower court's rejection of 4 defense based on the claim that plaintiff had manipulated the market through open-market activities. Plaintiff allegedly undertook large-scale short selling to depress stock prices and allow conversion of credit into a larger number of shares. Id. at 194-97. Reluctant to find that legal conduct could violate securities laws based only on manipulative intent, the court additionally required "that the alleged manipulator injected inaccurate information into the market or created a false impression of market activity." Id. at 205. Such evidence could include, inter alia, unauthorized placements and parking of stock, secret sales without disclosing the real party in interest, guaranteeing profits to encourage short selling by others, fraudulently low appraisals, painting the tape,[10] and matched orders. Id. at 207-08. This reluctance may be explained by the fact that it is unusual in American law to impose liability based solely only on the intent of the actor.[11] There may also be a *368 concern that because of the ambiguity and difficulty in establishing intent, prohibition of otherwise legal conduct based only on an actor's intent might chill and deter socially desirable conduct. See Daniel R. Fischel and David J. Ross, Should the Law Prohibit "Manipulation" in Financial Markets?, 105 Harv. L.Rev. 503, 523 (1991).
Despite these considerations, another circuit has accepted the possibility that open-market transactions can constitute market manipulation if done with manipulative intent. In Markowski v. SEC, defendants argued that they could not be convicted of market manipulation based on otherwise legal transactions involving "(1) maintaining high bid prices . . . and (2) absorbing all unwanted securities into inventory" because their bids and trades were "real." 274 F.3d 525, 527-28 (D.C.Cir.2001). In rejecting their argument, the Court of Appeals for the District of Columbia Circuit found reasonable an SEC order sustaining a disciplinary action based on this conduct "in light of what appears to be Congress's determination that `manipulation' can be illegal solely because of the actor's purpose." Id. at 529; cf. Chris-Craft Indus., Inc. v. Piper Aircraft Corp., 480 F.2d 341, 383 (S.D.N.Y. 1973) ("The securities laws do not proscribe all buying or selling which tends to raise or lower the price of a security. . . . So long as the investor's motive in buying or selling a security is not to create an artificial demand for, or supply of, the security, illegal market manipulation is not established."). There is also some support in the legislative history of the Securities Exchange Act that Congress envisioned liability for market manipulation where the conduct was entirely legal, but the intent was manipulative. See H.R. REP. NO. 1383, 73rd Cong., 2d Sess. 20 (1934) (stating that under the Securities Exchange Act, "if a person is merely trying to acquire a large block of stock for investment, or desires to dispose of his holdings, his knowledge that in doing so he will affect the market price does not make his action unlawful. His transactions become unlawful only when they are made for the purpose of raising or depressing the market price").
However, as Judge Sand has noted, "the law of the Second Circuit on so-called open-market manipulation where the alleged manipulator has made otherwise legitimate trades, yet with the subjective intent to affect the stock price thereby is not yet fully settled." Nanopierce Techs., Inc. v. Southridge Capital Mgmt. LLC, No. 02 Civ. 767(LBS), 2002 U.S. Dist. LEXIS 24049, at *21 (S.D.N.Y. Oct. 10, 2002). Only two Second Circuit cases have even tangentially addressed the issue. In United States v. Regan, the Second Circuit affirmed the conviction under Section 10(b) of a trader who arranged for another firm to heavily short sell a stock on a single occasion, without disclosing to the broker-dealer either the identity of the actual seller or the fact that his firm had conversion rights in the stock at issue. 937 F.2d 823, 829 (2d Cir.1991). The court found, with little discussion, that the trader's conduct had "artificially depressed" the market price, and fit "comfortably within [the] full range of wrongful acts" proscribed as manipulative. Id. The court did not make clear whether its finding of liability rested on the trader's nondisclosure and purchases through a proxy, or whether, instead, the court believed that manipulative intent alone (as evidenced by those features of the transaction) could support a finding of market manipulation based on open-market trading.
*369 In United States v. Mulheren, which was decided one month after Regan but which did not mention the earlier opinion, the government accused the defendant of making large purchases of a stock in the middle of a trading day for the purpose of artificially increasing the price (and triggering a prior agreement benefiting an acquaintance, Ivan Boesky). 938 F.2d 364, 366-68 (2d Cir.1991). The court assumed, explicitly without deciding and despite "misgivings," that an investor could lawfully be convicted of market manipulation for an open market transaction where the sole intent of such transaction was to artificially affect the price of a security. Id. at 368. It then proceeded to dismiss the case on the grounds that the government had failed to prove beyond a reasonable doubt that the defendant's sole intent in making the purchases was to raise the stocks price, rather than for investment. Id. at 369-72; see also In re College Bound Consolidated Litigation, No. 93 Civ. 2348(MBM), 1995 WL 450486, at *5, 1995 U.S. Dist. LEXIS 10684, at *14 (S.D.N.Y. July 31, 1995) (declining to decide whether manipulative intent is itself sufficient to support liability because plaintiff failed to plead the necessary elements of market manipulation). Thus, the Second Circuit has explicitly declined to answer the first question presented in this case whether manipulative intent alone can support liability for otherwise legal open-market transactions.
Lower courts in this district have, at least on first blush, come out on different sides of the issue. In Nanopierce Technologies, Inc. v. Southridge Capital Management LLC, Judge Sand expressed reluctance to find market manipulation based on open-market trading alone. 2003 U.S. Dist. LEXIS 21854, at *23-*27. He dismissed a complaint that lacked allegations of "deceptive practices" suggesting the open-market transaction was manipulative. Id. Such allegations may include suspicious timing, transactions comprising a high percentage of trading volume, sales through a non-market maker, or a pattern of prior manipulation. Id.; see also SEC v. Martino, 255 F.Supp.2d 268, 287 (S.D.N.Y.2003) (listing price leadership, exercise of dominance in market for the security, attempts to reduce floating supply, and collapse of market after manipulator's activities cease as factors indicating market manipulation); SEC v. Resch-Cassin & Co., 362 F.Supp. 964, 976 (S.D.N.Y.1973) (same).
In contrast, Judge Scheindlin in In re Initial Public Offering Securities Litigation, found no authority in case law or academic literature supporting any additional requirements in "so-called open-market" cases. 241 F.Supp.2d 281, 391 (S.D.N.Y.2003). Instead, she described those cases as merely "involving conduct that stands near the line between illegal and legal activity because their resolution turns less on conduct and more on the intent of the defendants." Id. However, the distinction between these cases may be more illusory than real. The additional "requirements" found in cases such as Nanopierce are not (at least exclusively) clear examples of deceptive or fraudulent conduct. Rather, they include features of open-market transactions themselves that give rise to an inference of manipulative intent for example, timing, size, or repetition of a transaction.
This case involves a specific type of conduct that sets it apart from a bare purchase or sale of stock on the open market. End-of-day transactions or "marking the close" is defined as "the practice of repeatedly executing the last transaction of the day in a security in order to affect its closing price." SEC v. Schiffer, No. 97 Civ. 5830(RO), 1998 WL 226101, at *1 (S.D.N.Y. May 5, 1998); see also In the Matter of Kocherhans, 52 S.E.C. 528 (Dec. *370 6, 1995) (defining "marking the close" as "the practice of attempting to influence the closing price of a stock by executing purchase or sale orders at or near the close of the market.").[12] It should be stated clearly that stock transactions made at the close of the day are not prohibited. Indeed, studies have shown that trading in organized securities is heaviest just before the market closes, as traders monitor activity and their positions throughout the day before conducting their trades.[13] Fischel and Ross, supra, at 520. Nonetheless, the timing of these transactions is more capable of artificially affecting the price of the security, and for this reason, the SEC argues they are more likely to be manipulative.
While perhaps the timing of these transactions provides some limited evidence of manipulative intent, the SEC goes too far in arguing that end-of-day transactions, by themselves, have, long been actionable as market manipulation and that Congress "clearly intended" such conduct to fall within the ambit of Section 10(b). (Pl.'s Opp'n at 5, 15.) Several of the cases it cites do not even involve such transactions.[14] Of the two that do, one involved significant additional deceptive conduct. In SEC v. Martino, the defendant actively sought to control the supply of stock entering the marketplace, made formal agreements to avoid driving down stock prices, implemented self-imposed sale restrictions with others, insured market makers, and along with her partners, was the high bidder on thirty-one out of thirty-two consecutive trading days. 255 F.Supp.2d at 275-79.
The SEC does find limited support in THC, Inc. v. Fortune Petroleum Corp., where the court found that allegations that defendant, over a two month period, timed transactions to occur at the close of the market to set the closing price with the intent of lowering the price stated a cause of action for market manipulation. 96 Civ. 2690(DAM), 1999 WL 182593, at *4, 1999 U.S. Dist. LEXIS 4039, at *11-*12 (S.D.N.Y. Mar. 31, 1999). In doing so, the court apparently assumed that "marking the close" by itself could constitute market manipulation. However, the court did not even discuss the obviously unsettled state of the law in the Second Circuit with regards to market manipulation through open-market transactions. Defendants are thus correct when they assert that none of the cases cited by the SEC[15] clearly hold *371 that "marking the close" by itself, if done with manipulative intent, can constitute market manipulation.
This uncertainty, however, is not reflected in SEC settlement orders,[16] which regularly base liability for market manipulation on "marking the close" alone. See, e.g., IN THE MATTER OF MYRON S. LEVIN, 1992 WL 213989, 50 S.E.C. 1245 (Sept. 1, 1992) ("marking the close" during four separate periods from three weeks to two months duration on two ex-, changes in order to satisfy margin calls); IN THE MATTER OF ANDREW DOHERTY, 50 S.E.C. 624 (Aug. 12, 1991) (placing final order of day to ensure closing price was based on higher ask price for a period of four and a half months to satisfy margin calls); Kocherhans, 52 S.E.C. 528 (effecting forty-seven purchases over six months within fifteen minutes of market close in the accounts of family members and customers to satisfy margin calls); In the Matter of Jacob Schaefer, and Evans & Co., 1977 SEC LEXIS 1302 (July 11, 1977) (successfully causing stock to close at a price higher than the prior sale price on approximately 253 days out of a total of approximately 424 trading days in order to increase value of holdings). Thus, the SEC initiates enforcement proceeding based on its understanding that "marking the close," at least over a stretch of consecutive days, can by itself constitute market manipulation given the requisite manipulative intent. Even so, such an interpretation has not been endorsed by any Article III court, nor is it binding on this Court.
The foregoing discussion of the legal landscape unfortunately does not readily provide an answer. The Court must approach the question keeping in mind the purpose of securities law to "prevent practices that impair the function of stock markets in enabling people to buy and sell securities at prices that reflect undistorted (though not necessarily accurate) estimates of the underlying economic value of the securities traded." In re Global Crossing, Ltd. Sec. Litig., 322 F.Supp.2d 319, 337 (S.D.N.Y.2004) (quoting Sullivan & Long, Inc. v. Scattered Corp., 47 F.3d 857, 861 (7th Cir.1995) (Posner, C.J.)); see also H.R.Rep. No. 1382, 73d Cong., 2d Sess. 11 (1934) (securities laws designed to "give to investors markets where prices may be established by the free and honest balancing of investment demand with investment supply.").
On balance, the Court declines to adopt defendants' proposed per se rule that open-market activity cannot be considered manipulative based solely on manipulative intent, that is, without additional deceptive or fraudulent conduct. GFL Advantage Fund, Ltd. appears to have created a new requirement in market manipulation cases that is neither found in the governing statutes and regulations, nor supported by any *372 other precedent in the Second Circuit or elsewhere. See 272 F.3d at 205 (requiring allegations of deceptive practices that "injected inaccurate information into the market or created a false impression of market activity"). Such a requirement would unnecessarily and improperly place conduct that intentionally distorts prices outside the scope of Section 10(b).[17]
The Court concludes, therefore, that if an investor conducts an open-market transaction with the intent of artificially affecting the price of the security, and not for any legitimate economic reason, it can constitute market manipulation. Indeed, "the only definition [of market manipulation] that makes any sense is subjective it focuses entirely on the intent of the trader." Fischel and Ross, supra, at 510.[18] Allegations of other deceptive conduct or features of the transaction are only required to the extent that they render plausible allegations of manipulative intent. In this case, the SEC alleged that (1) defendants conducted activity within several minutes of the close of trade; (2) the transactions constituted a large majority of the purchases that day; (3) Saba had outstanding put options expiring that day that he did not wish to be assigned; and (4) by purchasing 200,000 shares, he was able to avoid being assignment, of these options. The Court finds that these allegations are sufficiently indicative of manipulative intent so as to state a claim for market manipulation.
II. Manipulative Intent
Having found that the SEC has adequately alleged market manipulation based on manipulative intent, the Court must next consider whether they have proffered sufficient circumstantial evidence[19] of defendants' intent to survive a motion for summary judgment. Before turning to the evidence presented by the parties, the Court must decide the related question of whether an open-market transaction unaccompanied by deceptive or fraudulent conduct can support liability for market manipulation where the defendant has both a manipulative and non-manipulative intent, whether it requires that the sole intent be to artificially affect the price of the stock, or whether some other standard is appropriate.
The Court holds that in order to impose liability for an open market transaction, the SEC must prove that but for the manipulative intent, the defendant would not have conducted the transaction. The Court reaches this conclusion based on *373 three considerations. First, in Mulheren, the Second Circuit accepted, with "misgivings," the government's theory that an open-market transaction could violate Section 10(b) where it was done with the "sole intent" to affect the price of securities, and not for any "investment purpose." 938 F.2d at 368.[20] Because the Second Circuit accepted the government's theory only with "misgivings," then a fortiorari, it would find problematic a theory under which an investor could be found liable for market manipulation when only one of the investor's purposes was to alter the price. Second, if a transaction would have been conducted for investment purposes or other economic reasons, and regardless of the manipulative purpose, then it can no longer be said that it is "artificially" affecting the price of the security or injecting inaccurate information into the market, which is the principal concern about manipulative conduct. See Ernst & Ernst, 425 U.S. at 198, 96 S.Ct. 1375 (manipulative "conduct [is] designed to deceive or defraud investors by controlling or artificially affecting the price of securities."). Finally, given the inherent ambiguity in determining intent, the concerns about imposing liability for otherwise legal activity based solely on intent, and the potential for chilling such legal activity, the Court finds it wise to err on the side of caution.
A. Evidence of Manipulative Intent
In general, the question of whether a plaintiff has established the requisite intent for a Section 10(b) violation is a factual question "appropriate for resolution by the trier of fact." Press v. Chem. Inv. Servs. Corp., 166 F.3d 529, 538 (2d Cir. 1999). The SEC lists a number of factors that it believes are sufficiently indicative of Saba's manipulative intent to raise a genuine issue of material fact. These include (a) the timing, size, and incremental execution of the transaction, (b) the unorthodox nature of the order ticket and (c) Saba's allegedly inconsistent and irrational explanations as to why he purchased the shares on August 5. The SEC's theory is quite simple: concerned that his August 5 puts would expire "in the money," forcing him to purchase over 800,000 TZA shares, Saba placed a large TZA order in the closing minutes on the day before expiration in order to artificially drive the price over $5 per share, thereby insuring that the options would expire worthless.
Saba argues, with some force, that none of this purported evidence of manipulative intent stands up to scrutiny. First, the fact that this transaction was executed at the end of the trading day provides little indication of manipulative intent, as trading is heavily concentrated at the end of the day.[21] Saba plausibly contends that he *374 waited until the end of the day in order to see whether or not he would be put 860,000 TZA shares as a result of the August 5 put options. Only after he became convinced that he would not be put these shares did he purchase TZA shares on the open market. Second, the considerable size of the transaction, 200,000 shares (75% of the TZA buying activity on that day), actually cuts against a theory of manipulative intent. There is uncontradicted testimony that a smaller purchase would have satisfied Saba's alleged goal of driving the closing price of TZA shares above $5. (See Feldman Decl., Ex. 27 (Nothnagel Rep.) at 15); Mulheren, 938 F.2d at 370 (evidence that investor purchased more shares than necessary to artificially raise price undermined theory of manipulative intent).
Third, while the SEC notes that the trade was executed in discrete segments with the price limit set at (and in one instance above) the prevailing "best ask" price, the floor trader conducting the transaction testified that the trade was a "best execution" transaction, that is, an attempt to place a large market order in a thinly traded stock with the least impact on the price of the stock. (Feldman Decl., Ex. 31 (Sabin Tr.) at 12-16, 80); see also (Feldman Decl., Ex. 27 (Nothnagel Rep.) at 16-17.) In particular, the final executed trade had a limit of $5 3/8, not $5 1/8, the amount that would have been necessary to ensure that the price of TZA would close above $5; instead, a limit of $5 3/8 is consistent with an attempt to fill an order of 200,000 shares before market close. However, the SEC also points to the order ticket that Sutton filled out after receiving Saba's order, which had the quantities 100,000 and 150,000 crossed out, and 200,000 written in. Apparently, the SEC's theory is that Saba told Sutton to purchase up to 200,000 shares in order to keep the price artificially inflated above $5. But both Sutton and the then-president of Middlegate offer a competing and reasonable explanation. They assert that because of the size of the transaction and the time of day, Sutton thought that he would be unable to fill the full order, and so he raised the order number as he completed the transaction in increments. (Feldman Decl., Ex. 29 (Sutton Tr.) at 120-121; Farney Decl., Ex. 6 (Verdiger Tr.) at 45-46.)
Finally, the SEC contends that Masri's explanations for the transaction are inconsistent and economically irrational. Saba has offered two explanations for his purchase of TZA shares in the closing minutes of August 20, 1999. First, during initial investigations in 2002 and throughout this lawsuit, Saba has contended that he purchased the 200,000 TZA shares to average down the cost of the nearly 500,000 TZA shares he was assigned on the same day at $7.50 per share. In his 2005 deposition, Saba additionally suggested that his purchase was a hedge against the November 5 call options, to make sure he had TZA shares purchased at a low enough price that he would still make a profit if the options were assigned. A fair reading of Masri's entire testimony could indicate that he was not offering an inconsistent reason but rather a supplemental reason why his 200,000 share purchase at $5/share made sense. In the SEC's view, neither reason makes economic sense. If Saba really wanted to average down the 7.5 puts, they argue, Saba should have brought the shares before August 21 when the price was below $5, or waited to see if the August 5 puts were exercised on August 21 and, if necessary, purchase shares *375 the following trading day to average down the position. The SEC further argues that if Saba wanted to cover the November 5 call options, why wouldn't he use the 2.1 million TZA shares already held in the Tentafin account (or the 2.5 million TZA shares held in a joint account with Saba's father) as opposed to buying shares on August 21 at a price in excess of $5. Saba proffers reasonable replies to the SEC's rhetorical questions, but drawing all reasonable inferences in favor of the SEC, the Court finds that the SEC has successfully raised a genuine issue of material fact as to whether Saba would have conducted the transaction but for his alleged manipulative intent. The Court may find the SEC's evidence of intent to be weak, but it is not so unconvincing as to allow the Court to encroach on the province of the fact-finder at this stage of the proceeding. Therefore, the Court denies defendant Saba's motion for summary judgment.
III. Albert Meyer Sutton
The SEC correctly asserts that a broker "can be primarily liable under § 10(b) for following a [principal's] directions to execute stock trades that [he] knew, or was reckless in not knowing, were manipulative, even if [he] did not share the [principal's] specific overall purpose to manipulate the market for that stock." SEC v. U.S. Envtl., Inc., 155 F.3d 107, 108 (2d Cir.1998). However, the conduct in the quoted case was blatantly deceptive and fraudulent, including insuring others if they conducted trades, effecting trades through undisclosed nominees, and performing wash sales and matched orders. Although the defendant in that case might not have known the principal's specific purpose for the manipulative transactions, the only possible purpose for such transactions was to artificially affect the price of the security and thus he must have known that they were manipulative.
In contrast, Sutton merely purchased 200,000 shares, without discretion, at the end of a day after being directed to do so by his principal. There is no evidence that he was even aware of the August 5 put options. There is certainly no direct evidence that Saba told him to drive up the price of TZA shares. On this record, it would be complete and impermissible speculation for a jury to find that he did. Nor is the circumstantial evidence concerning the execution of the transaction the increasing bids, the crossed-out amounts on the order ticket, or the alleged exceeding of his discretion (by under $0.02 per share) sufficient to create a genuine issue as to whether Sutton knew, or was reckless in not knowing, that the trades were being conducted by his principal for a manipulative purpose. Sutton managed to purchase 200,000 shares in a thinly traded stock and drive up the price less than $0.15 per share. This is simply not evidence of a broker's intent to artificially increase the price of the shares; nor does it establish a broker's knowledge of any manipulative intent of his principal. Indeed, to hold otherwise would be to put brokers at risk of liability for market manipulation every time they executed a sizeable order in a thinly traded stock at the end of the day. The SEC's reference to Saba and Sutton's long-standing relationship, during which neither had ever been accused or convicted of securities violation, similarly creates no genuine issue as to any material fact. Therefore, the Court grants Sutton's motion for summary judgment.
CONCLUSION
For the foregoing reasons, defendants' motion for summary judgment [34] is GRANTED in part and DENIED in part. The complaint is dismissed as against defendant *376 Sutton and the Clerk of the Court is directed to remove him from the caption.
SO ORDERED.
NOTES
[1] A put option gives the buyer an option to "put" to the seller 100 shares of stock at a strike price at any time up until expiration. If assigned, the seller of the option is obligated to purchase the shares at the strike price. A put option is "in the money" when the trading price of the security drops below the strike price.
[2] A call option gives the buyer an option to "call" from the seller 100 shares of stock at a strike price at any time up until expiration. If assigned, the seller of the option is obligated to sell the shares at the strike price. A call option is "in the money" when the trading price of the security rises above the strike price. One means of hedging against a call option, or reducing the risk to the seller of the call option, is to purchase the underlying security at a price at or below the strike price so that it is available for delivery should the call option be assigned.
[3] The TZA August 5 put option expired on August 21, 1999, and allowed the buyer of the option to sell 100 TZA shares to the seller at a strike price of $5.
[4] The TZA August 7.5 put options also expired on August 21, 1999, and allowed the buyer of the option to sell 100 TZA shares to the seller at a strike price of $7.50.
[5] A "federal call" or "fed call" requires an account holder to deposit funds or securities in the amount of the call, or to liquidate positions sufficient to meet the fed call.
[6] On the NYSE, trades are generally executed at a price between the prevailing "best ask" and the prevailing "best bid." Buy orders are commonly executed closer to best ask and sell orders are commonly executed closer to best bid.
[7] That is, by purchasing TZA shares around $5 in addition to purchasing TZA shares at $7.50 that were put to him, Saba was able to bring down the average cost of his TZA share purchased during July and August 1999.
[8] A matched order is an "order to buy and sell the same security, at about the same time, in about the same quantity, and at about the same price." Black's Law Dictionary 1124 (7th ed.1999).
[9] A wash sale is a "sale of securities made at about the same time as a purchase of the same securities . . . resulting in no change of beneficial ownership." Black's Law Dictionary 1339 (7th ed.1999).
[10] "`Painting the tape signifies creating an appearance of trading activity without an actual change in beneficial ownership.'" Nanopierce Techs., Inc. v. Southridge Capital Mgmt. LLC, No. 02 Civ. 767(LBS), 2002 WL 31819207, at *5 n. 8, 2002 U.S. Dist. LEXIS 24049, at *18 n. 8 (S.D.N.Y. Oct. 10, 2002).
[11] For example, it is hornbook criminal law that one is not punished solely for a criminal state of mind (mens rea), but only where one's action is prohibited as well (actus rea).
[12] This can include: (1) making extensive and successive purchases or sales in an attempt to move the price and lock in a higher price at close or (2) ensuring the last transaction of the day is a purchase or sale, which moves the closing price either up to the higher ask price or down to the lower bid price (typically a very small spread).
[13] In this case, in fact, an independent party purchased TZA stock less than two minutes before the close of trading on August 20, 1999.
[14] In SEC v. Resch-Cassin & Co., there were no allegations of "marking the close," but instead market manipulation was based on defendant's "aggressive campaign" to maintain an artificially high stock price over an extended period by making extensive above-market purchases, generating phony trading activity, and maintaining control over floating supply of stock. 362 F.Supp. at 976-79. Likewise, in Markowski, there were no allegations of "marking the close," but instead the SEC alleged that defendants had supported the price of a security by publishing non-bona fide quotations and absorbing all the unwanted securities into their inventory. 274 F.3d at 527.
[15] The SEC also cites to IN THE MATTER OF CHARLES C. WRIGHT, 1938 WL 34042, 3 S.E.C. 190 (Feb. 28, 1938), rev'd on other grounds sub nom. Wright v. SEC, 112 F.2d 89 (2d Cir.1940), as suggesting that open-market purchases made to push up the price of stock, in that case to make options profitable, are actionable as market manipulation. However, in that case, the transactions at issue occurred over five days and increased the price of the security by 67%, the defendant used a number of fictitious names and phony accounts to complete the transactions, and the defendant bought 18,500 shares and sold 52,800 shares of an equity with an average daily volume of trading in the preceding three months of only 730 shares. The commission had no difficulty finding that the transactions, with deceptive features and accompanied by deceptive conduct, were manipulative. See also In the matter of J. Newman & Co., 1978 SEC LEXIS 2403 (Jan. 17, 1978) (ten days of Massive short selling to depress prices and render call options worthless and failure to notify broker that some sales were short sales as required by securities regulations).
[16] In a settlement order, the respondent neither admits nor denies liability, and the order (including the theory of liability asserted therein) is not reviewed by any Article III court. Thus, their value as authority is limited.
[17] While the GFL Advantage Fund court would not likely accept the rationale, it may be argued that an open-market transaction made with manipulative intent in fact injects inaccurate information into the marketplace. That is, transactions in a properly functioning market reflect participants' judgments as to the value of a traded security; however, a transaction entered with manipulative intent distorts the functioning of the market and sends a false message to its participants.
[18] The commentators further define manipulative trades as "profitable trades made with `bad' intent-in other words, trades that meet the following conditions: (I) the trading is intended to move prices in a certain direction; (2) the trader has no belief that the prices would move in this direction but for the trade; and (3) the resulting profit comes solely from the trader's ability to move prices and not from his possession of valuable information." Fischel and Ross, supra, at 510.
[19] Not surprisingly, there is no direct evidence, such as statements by Saba or Sutton that they purchased TZA shares at the end of the day on August 20, 2007 to artificially inflate its price. See In re The Federal Corp., 25 S.E.C. 227, 230 (1947) ("Since it is impossible to probe into the depths of a man's mind, it is necessary in the usual case . . . that the finding of manipulative purpose be based on inferences drawn from circumstantial evidence.").
[20] The government's theory, as further explained by the court, was that where "the transaction is effected for an investment purpose . . . there is no manipulation, even if an increase or diminution in price was a foreseeable consequence of the investment." Mulheren, 938 F.2d at 368.
[21] In contrast, when a trader conducts end-of-day trading on numerous consecutive days, or on a number of particularly timed but nonconsecutive dates, such timing provides stronger circumstantial evidence of manipulative intent. See Schiffer, 1998 WL 226101, at *1 (defining "marking the close" as "the practice of repeatedly executing the last transaction of the day in a security in order to affect its closing price." (emphasis added)). Indeed, all but one of the settlement orders cited by the SEC or found by the Court involve "marking the close" on multiple days. See, e.g., In the Matter of Harry S. Pack, 1993 WL 183820, 1993 SEC LEXIS 1364 (May 27, 1993) (basing prosecution on the placement of 127 buy orders at or near the end of the day, all but two of which were the minimum order necessary to affect the closing price); In the Matter of Schultz Investment Advisors, Inc., 2005 WL 3543078, 2005 SEC LEXIS 3331 (Dec. 28, 2005) (basing prosecution of broker on repeatedly "marking the close" on the last trading day of the quarter for funds whose performance was tied to broker's fees). No evidence of repeated end-of-day transactions has been presented in this case.
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IN THE COURT OF CRIMINAL APPEALS
OF TEXAS
NO. AP-75,630
EX PARTE GLENN LEE HOWE Applicant
ON APPLICATION FOR A WRIT OF HABEAS CORPUS
CAUSE NO. F-88-631-BWHC3 IN THE 158TH JUDICIAL DISTRICT COURT
FROM DENTON COUNTY
Per curiam.
O P I N I O N
Pursuant to the provisions of Article 11.07 of the Texas Code of Criminal Procedure, the
clerk of the trial court transmitted to this Court this application for writ of habeas corpus. Ex parte
Young, 418 S.W.2d 824, 826 (Tex. Crim. App. 1967). Applicant was convicted of unauthorized use
of a motor vehicle and sentenced to twenty-five years' imprisonment. The Second Court of Appeals
affirmed his conviction. Howe v. State, No. 02-92-00142-CR (Tex. App. - Forth Worth 1993, no
pet.)
Applicant contends, inter alia, that he is being denied time credit for two periods he was
confined pending motions to revoke his parole in this cause. Specifically, Applicant contends that
he was confined pending motions to revoke his parole from March 4, 1998 to May 12, 1998, and
from February 11, 1999 to June 2, 1999. This cause was remanded to the trial court on December
7, 2005, to determine the dates Applicant was in custody pursuant to any pre-revocation warrants,
and whether he received time credit toward the expiration of his sentence for the periods of time he
spend in confinement pursuant to any such pre-revocation warrants.
On February 15, 2007, this Court received a supplemental record from the trial court. The
trial court has filed findings of fact and conclusions of law, supported by the record, which indicate
that Applicant is entitled to partial relief. The trial court's review of Applicant's parole records reveal
that Applicant was confined pending a motion to revoke parole in this cause from September 22,
1999 until October 29, 1999, and that Applicant has been credited for only 28 days of this 32-day
period. Applicant is entitled to relief. See Ex parte Price, 922 S.W.2d. 957 (Tex. Crim. App. 1996);
Ex parte Canada, 754 S.W.2d 660 (Tex. Crim. App. 1988).
Relief is granted in part. If Applicant's records have not already been corrected, the officials
at the Texas Department of Criminal Justice, Correctional Institution Division and Paroles Division
are hereby ordered to amend Applicant's records to reflect an additional four days' jail time credit.
Applicant's remaining claims are without merit, and are hereby denied.
Copies of this opinion shall be sent to the Texas Department of Criminal Justice, Correction
Institution and Paroles Divisions.
Delivered: March 7, 2007
Do Not Publish
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IN THE
ARIZONA COURT OF APPEALS
DIVISION ONE
DAVID C., KIM C., Appellants,
v.
ALEXIS S., A.C., Appellees.
No. 1 CA-JV 14-0311
FILED 8-27-2015
Appeal from the Superior Court in Maricopa County
No. JA47249
The Honorable Annielaurie Van Wie, Judge Pro Tempore
AFFIRMED
COUNSEL
Robert D. Rosanelli, Attorney at Law, Phoenix
By Robert D. Rosanelli
Counsel for Appellants
David W. Bell, Attorney at Law, Higley
By David W. Bell
Counsel for Appellee Alexis S.
Law Office of Kennedy & West, Phoenix
By Jean W. West
Counsel for Appellee A.C.
DAVID C., KIM C. v. ALEXIS S., A.C.
Opinion of the Court
OPINION
Judge Kent E. Cattani delivered the opinion of the Court, in which
Presiding Judge Patricia K. Norris and Judge Patricia A. Orozco joined.
C A T T A N I, Judge:
¶1 David C. and Kim C. (collectively, “Adoptive Petitioners”)
appeal the juvenile court’s ruling granting Alexis S. (“Biological Father”)’s
motion to set aside their adoption of A.C. Although Biological Father did
not file a notice of claim of paternity with Arizona’s putative fathers
registry, see Ariz. Rev. Stat. (“A.R.S.”) § 8-106.01,1 he timely filed and
actively pursued a paternity action after Adoptive Petitioners served notice
of the adoption proceedings. Accordingly, we affirm.
FACTS AND PROCEDURAL BACKGROUND
¶2 Biological Father began a relationship with A.C.’s birth
mother (“Biological Mother”) in October 2012, and they moved in together
two months later. In January 2013, the couple learned that Biological
Mother was pregnant. In early March, however, Biological Mother moved
out. Biological Father tried to stay in touch with her and asked for updates
about the pregnancy, but Biological Mother cut off all contact within days
of leaving. Biological Father contacted Biological Mother’s relatives to
inquire about the pregnancy and stated he was “not letting it go,” but the
relatives did not respond.
¶3 A.C. was born on September 23, 2013. Biological Mother
signed an affidavit of paternity falsely stating that A.C.’s biological father
was unknown, and four days after the birth, she also signed a consent to
adoption in favor of Adoptive Petitioners. A.C. was released from the
hospital into Adoptive Petitioners’ care.
¶4 On October 8, 2013, one of Biological Mother’s relatives
informed Biological Father of A.C.’s birth, and another relative informed
him of Biological Mother’s address in Las Vegas, Nevada later that month.
Meanwhile, Adoptive Petitioners requested a search of Arizona’s putative
1 Absent material revisions after the relevant date, we cite a statute’s
current version.
2
DAVID C., KIM C. v. ALEXIS S., A.C.
Opinion of the Court
fathers registry; the Office of Vital Records returned a certification stating
that, as of October 23, 2013 (30 days after A.C.’s birth), there were no notices
of claims of paternity associated with A.C.
¶5 On November 7, 2013, Biological Father visited Biological
Mother in Nevada and asked about the child. Biological Mother refused to
disclose any information about A.C. other than falsely stating she had given
the child to another man who had proven paternity. Biological Father
checked with several Nevada hospitals, but did not find any information
about A.C.’s birth.
¶6 Less than one week later, on November 12, 2013, Adoptive
Petitioners filed a petition to adopt A.C. Given Biological Mother’s affidavit
stating she did not know the name of any potential father and in the absence
of any putative father filing, Adoptive Petitioners served a John Doe notice
of the pending adoption by publication beginning on November 25, 2013.
¶7 That same day, without knowing about the John Doe notice,
Biological Father filed a paternity suit in family court seeking a finding of
paternity and custody of the child. See A.R.S. tit. 25, ch. 6, art. 1. Biological
Father’s petition listed as “unknown” the child’s name, address, and place
of birth, and listed her date of birth simply as “September 2013.” Biological
Father personally served Biological Mother two days later, but she never
informed Adoptive Petitioners of the paternity suit. On January 6, 2014,
Biological Father sought a default judgment after Biological Mother failed
to respond to the petition, but the family court continued the case on the
inactive calendar because the petition did not contain sufficient information
about the child.
¶8 On January 15, 2014, the juvenile court granted A.C.’s
adoption by Adoptive Petitioners. Adoptive Petitioners had not searched
family court paternity filings, and there is no indication that they knew of
Biological Father’s paternity suit.
¶9 On February 26, 2014, Biological Father learned of the John
Doe notice by publication, and he immediately filed a request for
information in the adoption case. He also used the information in the John
Doe notice to amend his petition in the paternity case. In the following
months, Adoptive Petitioners intervened in the paternity case and moved
to dismiss, Biological Father intervened in the adoption case and moved to
set aside the adoption, and the juvenile court took temporary jurisdiction
over the paternity case pending resolution of the motion to set aside the
3
DAVID C., KIM C. v. ALEXIS S., A.C.
Opinion of the Court
adoption. Paternity testing showed that Biological Father was in fact A.C.’s
father.
¶10 After briefing and argument, the juvenile court granted
Biological Father’s motion to set aside the adoption and ordered the parties
to initiate A.C.’s transition to his care. The court acknowledged that
Biological Father had not filed a notice of claim of paternity with the
putative fathers registry as required by A.R.S. § 8-106.01. Nevertheless, the
court concluded that, because Biological Father had filed a paternity action
and timely served Biological Mother while the adoption was pending, he
was entitled to notice of the adoption proceedings under A.R.S. § 8-111(5),
and that the lack of this statutory notice violated his due process right to
seek to parent his child and deprived the court of jurisdiction to issue the
adoption order.
¶11 Adoptive Petitioners timely appealed from the order setting
aside the adoption, and we have jurisdiction under A.R.S. § 12-2101(A)(2).
DISCUSSION
¶12 We generally review a juvenile court’s decision in an
adoption proceeding for an abuse of discretion. Marco C. v. Sean C., 218
Ariz. 216, 218, ¶ 4, 181 P.3d 1137, 1139 (App. 2008). We similarly review an
order setting aside a judgment for an abuse of discretion, although we
review de novo a decision to set aside a judgment as void. See Martin v.
Martin, 182 Ariz. 11, 14–15, 16, 896 P.2d 11, 14–15, 16 (App. 1994); Duckstein
v. Wolf, 230 Ariz. 227, 231, ¶ 8, 282 P.3d 428, 432 (App. 2012). We review de
novo the interpretation of statutes and rules. Kent K. v. Bobby M., 210 Ariz.
279, 282 n.6, ¶ 8, 110 P.3d 1013, 1016 n.6 (2005).
¶13 Under A.R.S. § 8-106(F)–(G), the mother of a child placed for
adoption must provide for filing with the court a notarized affidavit listing
all potential fathers; each potential father must then be served with notice
of the adoption proceedings. Because Biological Mother falsely swore that
A.C.’s father was unknown, however, the notice of the adoption
proceedings required by A.R.S. § 8-106(G) was served on Biological Father
only by publication as a John Doe notice. That notice, as required by statute,
informed any potential father that he had a right to withhold consent to the
adoption, and that if he chose to withhold consent, it was his responsibility
to initiate and serve Biological Mother with a paternity action within 30
days of completion of service of the John Doe notice, and then to proceed
to a judgment of paternity. A.R.S. § 8-106(G), (I). As required by the statute,
the notice also warned the potential father that if he failed to file a paternity
4
DAVID C., KIM C. v. ALEXIS S., A.C.
Opinion of the Court
action and serve the biological mother as required, he would be “bar[red] .
. . from bringing or maintaining any action to assert any interest in the
child.” See A.R.S. § 8-106(G)(7), (I)(8); see also A.R.S. § 8-106(J) (stating that
failure to timely file and serve a paternity action “waives [a potential
father’s] right to be notified of any judicial hearing regarding the child’s
adoption or the termination of parental rights and his consent to the
adoption or termination is not required”).
¶14 Even though he did not actually know of the John Doe notice
until months later, Biological Father complied with the statutory
requirements set forth in that notice by filing a paternity action the same
day the notice was published and serving Biological Mother two days later,
well within the 30-day time limit. He diligently pursued the paternity
action, and although he had not obtained a judgment of paternity by the
time the adoption was finalized, his inability to do so cannot fairly be
attributed to his actions, but rather to Biological Mother’s refusal to give
him any information about the child. In short, Biological Father did
everything required under § 8-106(G) to assert his parental rights.
¶15 Although Adoptive Petitioners were not aware of the
paternity suit, it was not Biological Father’s obligation to inform them. See
A.R.S. § 8-106(G) (requiring father to file and serve a paternity suit, but
making no mention of contacting adoptive petitioners). Biological Mother
had actual knowledge of both the paternity suit and the adoption
proceedings. Her false swearing in the affidavit of paternity, and her failure
to inform Adoptive Petitioners that she had been served with a paternity
action should not be countenanced and should not be deemed to have
expanded Biological Father’s responsibilities. Adoptive Petitioners
understandably relied on the absence of any filing relating to A.C. in the
putative fathers registry, but they could have searched paternity filings
and, had they done so in this case, likely would have found Biological
Father’s paternity action (naming Biological Mother as the Respondent)
filed in the same county as the adoption proceedings. See A.R.S. § 8-111(5)
(requiring service of notice of any adoption hearing on “[a]ny person who
has initiated a paternity action” under Arizona law); Ariz. R.P. Juv. Ct.
83(A)(3) (requiring that, prior to finalizing an adoption, an adoptive
petitioner must file an affidavit certifying that paternity filings have been
searched “if applicable”).
¶16 Adoptive Petitioners acknowledge that Biological Father
“took certain actions,” but argue that his failure to file a notice of claim of
paternity with Arizona’s putative fathers registry invalidated his efforts to
assert his parental rights through a paternity action. We disagree because
5
DAVID C., KIM C. v. ALEXIS S., A.C.
Opinion of the Court
the putative fathers registry supplements and does not supplant a father’s
right to pursue a paternity action.
¶17 The putative fathers registry allows “[a] person who is
seeking paternity, who wants to receive notice of adoption proceedings and
who is the father or claims to be the father of a child” to independently
ensure that he will receive notice of adoption proceedings without relying
on the biological mother’s statement (or even, as here, outright lies)
regarding the child’s paternity. Compare A.R.S. § 8-106.01(A) (self-reporting
putative fathers) with A.R.S. § 8-106(F) (biological mother’s statement of
potential fathers). The registry must be searched before an adoption can
proceed, see A.R.S. § 8-106.01(H); Ariz. R.P. Juv. Ct. 83(A)(3)–(4), and each
individual who timely files a notice of claim of paternity must be served
with the notice specified in § 8-106(G), see A.R.S. § 8-106.01(G). The registry
thus supplements the notice provisions of § 8-106 as part of a
comprehensive scheme to ensure that biological fathers receive timely
notice of potential adoptions.
¶18 Adoptive Petitioners rely on a single provision of the putative
fathers registry statute stating that a putative father who fails to file with
the registry within 30 days after the child’s birth “waives [the putative
father’s] right to be notified of any judicial hearing regarding the child’s
adoption and his consent to the adoption is not required,” absent a showing
of impossibility to comply with the registry requirements. A.R.S. § 8-
106.01(E); see also Marco C., 218 Ariz. at 219–20, ¶¶ 9–10, 181 P.3d at 1140–
41. But the statute does not vitiate the rights set forth in § 8-106(G).
¶19 Moreover, unlike other provisions in the adoption statutes, §
8-106.01(E) does not restrict a biological father’s right to bring a paternity
action and thus become the child’s legal father as reflected in § 8-
106(A)(2)(c). See, e.g., A.R.S. § 8-106.01(G) (requiring timely-registering
putative father to file a paternity action within 30 days after service of § 8-
106(G) notice of the adoption proceedings or be “barred from bringing or
maintaining any action to assert any interest in the child”); A.R.S. § 8-
106(G)(7) (stating that a potential father’s failure to file, serve, and proceed
to judgment in a paternity action after receiving § 8-106(G) notice “bars the
potential father from bringing or maintaining any action to assert any
interest in the child”). Accordingly, once a potential father receives service
of notice of the adoption proceedings—even if only via John Doe notice by
publication—and complies with the requirements enumerated in that
notice by timely filing, serving, and diligently pursuing a paternity action,
the § 8-106.01(E) waiver provision no longer applies.
6
DAVID C., KIM C. v. ALEXIS S., A.C.
Opinion of the Court
¶20 We recognize that in Marco C., a different panel of this court
reached a contrary conclusion, holding that registering a notice of claim of
paternity one day late rendered a putative father’s consent to his child’s
adoption unnecessary under § 8-106.01(E). 218 Ariz. at 218, 221, ¶¶ 3, 18,
181 P.3d at 1139, 1142. The Marco C. court held that the putative father
could not be excused from strictly complying with the terms of the registry
statute, despite his demonstration of his desire to assert his rights and
establish a relationship with the child by filing a notice with the registry
(albeit one day late) and by filing a paternity action. Id. at 219, ¶ 7, 181 P.3d
at 1140.
¶21 We note that the putative father in Marco C. failed to timely
serve the paternity action on the mother. Thus, even if he had timely filed
with the putative fathers registry, he would have been barred from
pursuing the paternity action and establishing paternity. See 218 Ariz. at
218, 221, ¶¶ 3, 18, 181 P.3d at 1139, 1142; A.R.S. § 8-106(G)(7). Accordingly,
the outcome in Marco C. would have been the same even if the court had
not relied on the putative fathers waiver provision. Nevertheless, as
explained above, we respectfully disagree with the reasoning of Marco C.
insofar as it holds that filing with the putative fathers registry is a necessary
precondition in all cases in which a father asserts his parental rights.
CONCLUSION
¶22 Biological Father was served by John Doe publication with §
8-106(G) notice of the adoption proceedings and, within two days, filed and
served a paternity action on Biological Mother. He diligently pursued the
paternity suit and established that A.C. is his biological child. Under the
circumstances, Biological Father retained the right to assert his parental
rights under § 8-106(G) notwithstanding his failure to register with the
putative fathers registry, and the juvenile court appropriately set aside
A.C.’s adoption. Accordingly, we affirm the juvenile court’s decision
setting aside A.C.’s adoption.
:ama
7
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937 P.2d 1360 (1997)
Frank JONES, Sr., as the Natural Parent and Guardian of Frank Jones, Jr., Appellant,
v.
HORACE MANN INSURANCE COMPANY, a Florida Corporation, Appellee.
No. 4821.
Supreme Court of Alaska.
May 16, 1997.
*1361 Richard G. Haggart, Maloney & Haggart, Anchorage, for Appellant.
Larry Z. Moser, Pletcher, Weinig, Moser & Merriner, Anchorage, for Appellee.
Before COMPTON, Chief Justice, RABINOWITZ, MATTHEWS, EASTAUGH and FABE, JJ.
OPINION
RABINOWITZ, Justice.
I. INTRODUCTION
This appeal arises from the superior court's grant of summary judgment in favor of Horace Mann Insurance Company. The superior court held that a homeowner's policy issued by Horace Mann did not cover a snowmachine accident, which occurred on a public road.
II. FACTS AND PROCEEDINGS
On November 24, 1991, Frank Jones, Jr. was struck by a snowmachine operated by ten-year-old Christopher Chezik and sustained serious injuries to his right leg. Chezik had been giving rides to friends on the machine that day. The accident occurred on Ridgeway Road, a public road about four-tenths of a mile from the Chezik home. Ridgeway Road is the access road to Georges Drive, which abuts the Cheziks' property.
At the time the Cheziks purchased their home on Georges Drive, they also purchased a homeowners' policy from Horace Mann Insurance Company. Subsequent to the accident the Cheziks informed Horace Mann of the event. After an investigation, Horace Mann notified the Cheziks that it declined coverage.[1]
Thereafter Frank Jones, Sr. sued the Cheziks on his son's behalf. He sued Christopher Chezik for negligent operation of the snowmachine, and the parents for negligent supervision of Christopher. The Cheziks settled the lawsuit by paying $25,000 to Jones, assigning to him any claims they may have had against Horace Mann or its agents, and permitting a judgment to be entered against them. Following an uncontested damage presentation, the judgment amount was determined to be $333,547.78.
Frank Jones, Sr. then sued Horace Mann and Curtis Bates, an insurance broker, requesting specific performance and damages for negligence and breach of contract.[2] The Superior Court granted Horace Mann's subsequent motion for summary judgment. The linchpin of the ruling was its conclusion that the homeowners' policy issued to the Cheziks did not cover the snowmachine accident because it did not occur on "insured premises."
Frank Jones, Sr. now brings this appeal from the superior court's grant of summary judgment in favor of Horace Mann.
III. DISCUSSION
A. Standard of Review
This court will uphold summary judgment if no issues of material fact are in dispute and the moving party is entitled to judgment as a matter of law. Bishop v. Municipality of Anchorage, 899 P.2d 149, 153 (Alaska 1995). Interpretation of contract language is a question of law, subject to de novo review. Cox v. Progressive Casualty Ins. Co., 869 P.2d 467, 468 n. 1 (Alaska 1994) (citations omitted). "This court interprets insurance contracts by looking to the language of the disputed policy provisions, the *1362 language of other provisions of the policy, and to relevant extrinsic evidence. In addition, we also refer to case law interpreting similar provisions."[3]Id.
B. The Cheziks' Homeowners' Insurance Policy Does Not Cover the Snowmachine Accident.
1. The accident did not occur on insured premises.
Horace Mann denied coverage because in its opinion the accident did not occur on the "insured premises." The following policy provisions are relevant to resolution of this issue:
Coverage L Personal Liability We pay, up to our limit, all sums for which an insured is liable by law because of bodily injury or property damage caused by an occurrence to which this coverage applies. We will defend a suit seeking damages if the suit resulted from bodily injury or property damage not excluded under this coverage....
....
INCIDENTAL LIABILITY COVERAGES
....
5. Motorized Vehicles We pay for the bodily injury or the property damage which:
a. occurs on the insured premises and is a result of the ownership, maintenance, use, loading or unloading of:
1) a motorized vehicle if it is not subject to motor vehicle registration because of its type or use; or
2) a recreational motor vehicle;
b. results from:
...
3) a motorized vehicle which is designed only for use off public roads and which is used mainly to service the insured premises. ...[[4]]
DEFINITIONS
....
b. Under Coverages L and M, insured premises also includes:
...
6) premises used by you in connection with the described location;
7) all access ways immediately adjoining the insured premises. ...
Jones contends that Ridgeway Road is an access way and that the situs of the accident on Ridgeway Road immediately adjoins the Cheziks' insured premises. More particularly, Jones argues the accident site was an "insured premises" because it is "immediately adjacent" to land used by the Cheziks in *1363 connection with their home.[5] Charles Chezik testified that the Chezik family used the land immediately adjacent to the scene of the accident for snowmobiling. Jones notes that "it is uncontested that Chezik's testimony and diagram show the Chezik family used the area immediately adjacent to the accident site on Ridgeway Road for snow machining and that such use occurred as a result of recreational snow machine rides initiated at the Chezik's home and returning to [it]." (Emphasis added.)
Horace Mann asserts that the situs of the accident, some four-tenths of a mile from the Cheziks' residence, does not fall within the policy definition of "insured premises." It argues the accident is excluded because it did not happen on the Cheziks' property, or on any adjacent premise used by the Cheziks in connection with their property, or on an access way immediately adjoining the insured premises.
In rejecting Jones's contentions the superior court stated, "While the policy contains no express geographical limit on the expansive definition of the insured premises, ... plaintiffs' reasonable expectations would have included such a limit."[6] Having studied the provisions in question and the relevant case law, we hold that the superior court correctly interpreted and applied the relevant policy provisions in concluding the accident did not occur on "insured premises."
In United States Fire Insurance Co. v. Schnackenberg, 88 Ill.2d 1, 57 Ill.Dec. 840, 429 N.E.2d 1203, 1207 (1981), the Illinois Supreme Court was called upon to interpret the phrase "ways immediately adjoining" the insured premises. The court found that "[i]f [Schnackenberg's] interpretation of the coverage clause were adopted, the `insured premises' definition would be rendered meaningless for there would be no geographical limit to coverage and liability for conduct which originated on the premises and could be said to be incidental thereto." Therefore the Supreme Court of Illinois concluded that a bicycle accident which occurred on a public road two and one half blocks from the insured's dwelling was not covered. Id.
The Schnackenberg court quoted with approval an annotation on premises liability:
"It is generally agreed that the term `adjacent' means `near' or `close to'; that the term `adjoining,' although more restrictive than the term `adjacent,' has often been loosely used interchangeably with it; but that when the word `immediately' modifies `adjacent' or `adjoining,' definite contact is meant, allowing no intervening space. In the application of these definitions, the courts have held injuries on sidewalks bounding the particularly described property to be covered by the policy, except when there is a clear indication to the contrary. And although there is authority to the contrary, a policy purporting to cover certain named premises and `ways immediately adjoining' covers injury on the street bounding the premises, that is, injury sustained within the roadway directly in front of the property." Annot., 23 A.L.R.3d 1230, 1232-33 (1969).
Id. 57 Ill.Dec. at 843, 429 N.E.2d at 1206.
If Jones's arguments were accepted, there would be no "logical geographical limit" to *1364 coverage under the homeowners' policy. See id. at 843-44, 429 N.E.2d at 1206-07 ("If bicycle riding 2 1/2 blocks away from the insured premises is a use incidental to those premises because it originated there, it is just as incidental if the rider is 2 1/2 miles or any greater distance from home."). A number of courts have accepted the Schnackenberg rationale. See, e.g. Herzog v. National American Ins. Co., 2 Cal.3d 192, 84 Cal. Rptr. 705, 465 P.2d 841, 844 (1970) (homeowner's policy that disclaimed liability for accidents "away from the premises or the ways immediately adjoining" did not cover an accident on a freeway, three to five miles from the insured's premises); Safeco Ins. Co. v. Brimie, 163 Ill. App.3d 200, 114 Ill.Dec. 422, 516 N.E.2d 577, 581 (1987) (homeowner's policy did not cover accident occurring on school grounds on which insured regularly rode where accident site was separated from residence by playground, public street, and fence); Farm Bureau Mut. Ins. Co. v. Sandbulte, 302 N.W.2d 104, 109 (Iowa 1981) (for policies with the "ways immediately adjoining" language, claims arising from accidents "on ways not actually contiguous to or touching the insured premises have been uniformly held, as a matter of law, to be excluded from coverage"). Cf. Huggins v. Yoshiwara, 2 Cal.3d 200, 84 Cal. Rptr. 709, 465 P.2d 845, 846 (1970) (homeowner's policy that provides coverage for automobile accidents in certain limited instances does not become a motor vehicle insurance policy).
Based on the terms of the Horace Mann policy and the reasoning of these authorities, we agree with the superior court's ruling that the accident did not occur on insured premises. A construction of the relevant provisions that included coverage for an accident occurring on a public road, four-tenths of a mile from the Cheziks' residence, would be contrary to the intent and reasonable expectations of both the insurer and the insured. Land used by the Cheziks on a snowmachine four-tenths of a mile from their residence cannot be reasonably viewed as "premises used . .. in connection with" their property. As the Herzog court stated:
While we agree that the phrase "ways immediately adjoining" is somewhat imprecise, we do not believe that it is so ambiguous as to defy reasonable construction in the context of a particular case. Such construction in the instant case leads us to conclude without hesitation that the accident in question, which took place on [a freeway], occurred "away from the premises [of the insured] or the ways immediately adjoining...." Thus, coverage of that accident is not provided by the policy.
Herzog v. National Am. Ins. Co., 84 Cal. Rptr. at 708, 465 P.2d at 844 (citations and footnotes omitted).
2. The snowmachine was not used mainly to service the Chezik residence.
Jones next contends that because the snowmachine was used mainly to service the insured premises, coverage exists since there is no geographical limitation on the policy's coverage of such use. Jones relies on Section 5(b)(3) of the Incidental Liability Coverage section of the Horace Mann policy which states:
5. Motorized Vehicles We pay for bodily injury or the property damage which:
...
b. results from:
...
3) a motorized vehicle which is designed only for use off public roads and which is used mainly to service the insured premises[.]
Jones further notes that Charles Chezik testified that servicing the premises includes giving snowmachine rides and that the snowmachine was used at least once to haul a Christmas tree to the residence.[7]
In rejecting this theory of coverage, the superior court found "that the snowmobile was not used `mainly to service the insured premises' because neither the plain meaning of the phrase nor the reasonable expectation of the insured party could lead to such a conclusion." In our view the superior court *1365 correctly analyzed this issue and properly concluded that summary judgment should be granted to Horace Mann on this theory of coverage.
Although the term "service" is not defined in the policy, it has been defined as meaning "to repair or provide maintenance for." Nationwide Mut. Ins. Co. v. Prevatte, 108 N.C. App. 152, 423 S.E.2d 90, 93 (1992) (citing The Meriam Webster Dictionary (3d ed. 1968)). Study of the record reveals an absence of any genuine issue of material fact concerning whether or not the snowmachine was used mainly to service the insured premises. Apart from one isolated instance of hauling wood and one Christmas tree hauling, it is undisputed that the vehicle was used for recreational purposes. We agree with Horace Mann that it is unreasonable to interpret the term "used mainly for service of the insured premises" as including recreational use of a snowmachine. Thus the Cheziks had no reasonable expectation of coverage based upon section 5(b)(3) of the Incidental Liability section of the Horace Mann policy.
Jones further argues that the accident is covered under this provision because Horace Mann has waived any right to argue that the vehicle was not used "mainly to service the insured premises." Jones asserts that this defense was waived because Horace Mann failed to raise it in its original "denial of coverage letter" to the Cheziks.
An insurer must give the insured "such notice of its intention to deny liability and of its refusal to defend as will give the insured a reasonable time to protect himself." Sauer v. Home Indem. Co., 841 P.2d 176, 182 (Alaska 1992) (quoting 7C John A. Appleman, Insurance Law and Practice § 4686 (1979)). This notice must also "provide a reasonable explanation of the basis in the insurance policy in relation to the facts or applicable law for denial of a claim." Id. (quoting AS 21.36.125). Notice is necessary to avoid prejudice to the insured "which may result from delays in the insured undertaking its own defense or from delays in gathering evidence essential to successfully challenge the denial of coverage or a defense." Id. (citation omitted). "Thus, an insurance company which wrongfully refuses to defend is liable for the judgment which ensues even though the facts may ultimately demonstrate that no indemnity is due." Id. at 184 (citation omitted). Jones contends that Horace Mann failed to state all bases for denial and thus waived them.
As the superior court noted, twenty-seven days after the accident Horace Mann sent a denial letter that "put plaintiffs on notice of the grounds for denial and did not hinder them in gathering evidence to challenge the denial of coverage."[8] The instant case is thus distinguishable from Sauer, where the plaintiff did not learn of the insurance company's denial of coverage until nearly five years after the event. Sauer, 841 P.2d at 179. In that case, the lack of any communication precluded the insurance company from arguing that coverage under the policy did not exist once a judgment had been entered. Id. at 183. Here, the insurance company determined that coverage did not extend to the Cheziks' claim and so informed them. See also Intel Corp. v. Hartford Acc. & Indem. Co., 952 F.2d 1551, 1559 (9th Cir.1991) (waiver not found where there was no evidence that insurance company attempted to mislead or prejudice insured by belated announcement of a new ground for denying liability); Waller v. Truck Ins. Exchange, 11 Cal.4th 1, 44 Cal. Rptr.2d 370, 387, 900 P.2d 619, 636 (1995) (only one state, out of the thirty-four to have considered the issue, has held that an insurer waives coverage defenses not stated in its initial denial letter; the overwhelming majority do not term this a waiver). Thus we conclude the superior court correctly ruled in the factual context of this case that Horace Mann did not waive the defense that the snowmachine was not used "mainly to service the insured premises."
3. Medical payments coverage does not extend to this accident under the Horace Mann policy.
Jones argues that regardless of where the accident occurred, the medical payment provisions of the policy obligated *1366 Horace Mann to pay Jones' medical expenses. This policy provision states:
Coverage M Medical Payments to Others We pay the necessary medical expenses if they are incurred or medically determined within three years from the date of an accident causing bodily injury covered by this policy.... This applies only to:
...
2. a person away from the insured premises if the bodily injury:
...
b. is caused by an activity of the insured[.]
Jones argues that "the injuries to Frank Jones, Jr. were caused by the activity of Christopher Chezik and therefore are covered under the medical payment liability coverage without regard to the location where the injury occurred." Horace Mann counters that the operative language in this provision is the phrase "an accident causing bodily injury covered by this policy." They contend that "[i]f the bodily injury suffered by Frank Jones, Jr., is not covered by this policy, then the medical payments provision does not come into effect." In our opinion this argument has merit. Since we upheld the superior court's ruling that the accident in question did not take place on "insured premises" as that term is defined in paragraphs 7(b)(6) and b(7) of the Horace Mann policy, we find no error in the superior court's rejection of Jones' claim for medical payments coverage.[9]
4. The Chezik policy excludes negligent entrustment and supervision claims.
Jones contends that, under AS 21.36.235,[10] the provisions of the renewed Horace Mann homeowners' policy do not apply, as the law requires notice to the insured of all changes in coverage. The renewal policy reads in relevant part:
EXCLUSIONS THAT APPLY TO COVERAGES L AND M
This policy does not apply to bodily injury or property damage which results directly or indirectly from:
...
3. the ownership, operation, maintenance, use, occupancy, renting, loaning, entrusting, supervision, loading or unloading of motorized vehicles ... owned or operated by or rented or loaned to an insured.
The original language stated in relevant part:
This policy does not apply to liability:
...
c. resulting from the ownership, maintenance, use, loading or unloading by an insured of motorized vehicles ... except as provided under Incidental Liability and Medical Payments Coverages[.]
We conclude that it is unnecessary to construe AS 21.36.235. As the superior court correctly observed, the original policy issued by Horace Mann also restricts coverage.
*1367 The superior court, persuaded by the reasoning of Farmers Insurance Group of Oregon v. Nelsen, 78 Or. App. 213, 715 P.2d 492 (1986), concluded that a "claim of negligent supervision is subject to the restrictions surrounding coverage of the underlying accident." In Nelsen, the court held that a policy insures "not against theories of liability, but against liability for certain injuries or damage and that injuries caused by motor vehicles off the premises of the insured are not covered by a homeowners's policy." Id. 715 P.2d at 494 (citations omitted). Thus the superior court reasoned, "Because the policy does not cover the accident itself, a change in the legal theory of liability does not give rise to coverage."
The superior court further observed that "[b]ecause an insured party contracts for coverage of certain types of accidents and injuries, the reasoning in Nelsen is more compelling" under the reasonable expectations approach to interpreting insurance contracts. We agree. Further support is supplied by the Ninth Circuit's construction of Alaska law. That court concluded that it was proper to deny negligent entrustment recovery where an aircraft exclusion in a homeowner's policy otherwise precluded recovery; to do otherwise would ignore the "clear language" of the clause. Allstate Ins. Co. v. Ellison, 757 F.2d 1042, 1045 (9th Cir.1985). We therefore hold that the superior court properly granted summary judgment as to this theory of liability.[11]
IV. CONCLUSION
The superior court's grant of summary judgment in favor of Horace Mann is AFFIRMED.
NOTES
[1] On December 19, 1991, Ted Webber, of Horace Mann, wrote to Charles Chezik stating in relevant part:
As I had indicated previously there is no coverage for ownership, maintenance, use, loading or unloading of a snowmobile type recreational motor vehicle while used off the insured premises.
[2] Bates is not a party to this appeal because the claims against him were dismissed by stipulation of the parties.
[3] Generally, the obligations of insurers are determined by the terms of the policy at issue. Bering Strait Sch. Dist. v. RLI Ins. Co., 873 P.2d 1292, 1294-95 (Alaska 1994). The following rules of construction also apply:
Insurance contracts are contracts of adhesion, and as such "will be construed according to the `principle of reasonable expectations.'" The reasonable expectation doctrine has been stated as follows:
The objectively reasonable expectations of applicants and intended beneficiaries regarding the terms of insurance contracts will be honored even though painstaking study of the policy provisions would have negated those expectations.
In order to determine the reasonable expectations of the parties,
we look to the language of the disputed policy provisions, the language of other provisions of the insurance policy, and to relevant extrinsic evidence. In addition, we refer to case law interpreting similar provisions.
Id. at 1294-95 (citations omitted).
[4] The terms "Motor Vehicle," "Motorized Vehicle," and "Recreational Motor Vehicle" as used in the Horace Mann policy are defined as follows:
9. Motor vehicle means a motorized vehicle, a trailer or a semi-trailer, and all attached machinery or equipment, if:
a. it is subject to motor vehicle registration; or
b. it is designed for use on public roads.
10. Motorized Vehicle means a self-propelled land or amphibious vehicle regardless of method of surface contact. This includes parts and equipment.
....
14. Recreational Motor Vehicle means a motorized vehicle, a trailer or attached equipment that is designed or is used for leisure time activities and which is not a motor vehicle.
[5] Jones states the argument as follows: "If the land immediately next to Ridgeway Road constitutes an `insured premises,' because of its use in connection with the Cheziks' residence, then access-ways immediately adjacent to such land are also insured."
[6] In Herzog v. National Am. Ins. Co., 2 Cal.3d 192, 84 Cal. Rptr. 705, 707, 465 P.2d 841, 843 (1970), the court said:
The reasonable expectations of the insured in a homeowner's policy as additionally manifested in the type of information sought upon application for such a policy and the relatively small premiums charged clearly do not contemplate coverage for automobile-related accidents which occur beyond this limited area. Nor do the reasonable expectations of the insured contemplate that his homeowner's policy will provide such extended automobile coverage; other insurance, with a premium commensurate to the increased risks, is available for that purpose, and, as in the case at bench, is customarily obtained by the homeowner. From the foregoing it clearly appears that neither the intent of the parties nor their reasonable expectations contemplate that the personal liability provisions of a homeowner's policy should provide coverage for automobile accidents occurring away from the immediate vicinity of the home. Thus, any construction of the policy which would provide such extended coverage would be contrary to the intent and reasonable expectations of both insurer and insured.
[7] Carol Chezik further testified the snowmachine was used on one occasion to haul wood to the residence.
[8] For the text of the letter see note 1, supra.
[9] In regard to Jones's argument that Horace Mann waived all other defenses to medical payments coverage, the superior court correctly determined that
[c]oncerning Jones argument that Horace Mann waived the right to raise any other defenses to this suit which were not stated in its "denial of coverage" letter, this Court finds that argument moot in that all other theories of coverage require the accident to have occurred "on the insured premises." In other words, other defenses potentially affected by the waiver theory would only be asserted if the Court determined that the accident occurred "on the insured premises." Since the Court determined that the accident did not occur on the insured premises, the potential waiver of other arguments is moot.
[10] AS 21.36.235 provides:
Notice of premium or coverage changes upon renewal. (a) Except as provided in AS 21.36.305, if the renewal premium is increased more than 10 percent for a reason other than an increase in coverage or exposure base, or if after renewal there will be a material restriction or reduction in coverage not specifically requested by the insured, written notice shall be mailed to the insured and to the agent or broker of record as required by AS 21.36.260.
(1) at least 20 days before expiration of a personal insurance policy; or
(2) at least 45 days before expiration of a business or commercial policy.
(b) If notice before expiration of the policy is not given as required by (a) of this section, the existing policy shall continue until the insurer provides notice for the time period required by (a) of this section for that policy.
(c) This section does not apply to workers' compensation insurance.
[11] Given our discrete holdings in section III.B.1, 2, and 3 of this opinion, it is unnecessary to address the remaining arguments advanced by the parties in this appeal.
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STATE OF MICHIGAN
COURT OF APPEALS
ELSAYED AFIFY, Individually and as Next UNPUBLISHED
Friend of ABDELRAHMAN AFIFY, ABDULLA February 22, 2018
AFIFY, and MOUSTAFA AFIFY,
Plaintiffs-Appellants,
v No. 335780
Wayne Circuit Court
AAA INSURANCE COMPANY, LC No. 14-010613-NI
Defendant,
and
KEITH D. CERMAK, Guardian Ad Litem for
TROY VINCENT DONAHUE, a minor,
Defendant-Appellee.
Before: JANSEN, P.J., and SERVITTO and SHAPIRO, JJ.
PER CURIAM.
Abdelrahman Afify (“Abdelrahman”) and Moustafa Afify (“Moustafa”), by and through
their Next Friend, Plaintiff Elsayed Afify (“Plaintiff”), appeal the trial court’s order granting
summary disposition in favor of defendant, Keith D. Cermak, guardian ad litem for Troy Vincent
Donahue, a minor.1 We affirm. 2
1
For purposes of this appeal, the minor defendant will be referred to as “Donahue,” while his
guardian ad litem will be referred as “defendant.”
2
Decisions on motions for summary disposition are reviewed de novo. Maiden v Rozwood, 461
Mich 109, 118; 597 NW2d 817 (1999). A MCR 2.116(C)(10) motion tests the factual
sufficiency of the complaint. Maiden, 461 Mich at 120. The court evaluates the documentary
evidence and other materials submitted by the parties in the light most favorable to the
nonmovant. Id. Consequently, the court must draw all reasonable inferences in favor of the
nonmovant. Dextrom v Wexford Co, 287 Mich App 406, 415-416; 789 NW2d 211 (2010). A
-1-
This is a third party auto negligence claim. On January 1, 2014, plaintiff’s vehicle was
involved in an accident with a vehicle driven by the minor, Troy Donahue, as it tried to proceed
through an intersection. At the time of the accident, both Abdelrahman and Moustafa, who were
minors, were passengers in a car driven by plaintiff. Although they did not sustain any apparent
injuries at the time of the accident, Abdelrahman and Moustafa subsequently began to experience
pain and physical limitations after the accident. Plaintiffs brought a complaint against Donahue,
and the Court appointed defendant Cermak as guardian ad litem for Donahue. Thereafter,
defendant brought a motion for partial summary disposition pursuant to MCR 2.116(10) (no
genuine issue of material facts), arguing that Abdelrahman and Moustafa did not suffer serious
impairments of a bodily function that affected their ability to live a normal life. The trial court
agreed and granted defendant’s motion. The court also denied defendant’s motion for
reconsideration.
Tort liability is limited under the Michigan no-fault act. McCormick v Carrier, 487 Mich
180, 189; 795 NW2d 517 (2010). “A person remains subject to tort liability for noneconomic
loss caused by his or her ownership, maintenance, or use of a motor vehicle only if the injured
person has suffered death, serious impairment of a body function, or permanent serious
disfigurement.” MCL 500.3135(1). Serious impairment of a body function means “an
objectively manifested impairment of an important body function that affects the person’s
general ability to lead his or her normal life.”3 MCL 500.3135(5). To prove a serious
impairment of a body function, a plaintiff must show:
(1) an objectively manifested impairment (observable or perceivable from actual
symptoms or conditions) (2) of an important body function (a body function of
value, significance, or consequence to the injured person) that (3) affects the
person’s general ability to lead his or her normal life (influences some of the
plaintiff’s capacity to live in his or her normal manner of living). [McCormick,
487 Mich at 215.]
“However, there is no bright-line rule or checklist to follow in making that evaluation.”
Chouman v Homeowners Ins Co, 293 Mich App 434, 441; 810 NW2d 88 (2011). “Whether
trial court must grant the motion if it finds “no genuine issue as to any material fact” and
determines that “the moving party is entitled to judgment or partial judgment as a matter of law.”
MCR 2.116(C)(10).
3
Our Supreme Court provided the following guidance for determining whether a plaintiff has
made a sufficient showing of a threshold injury to survive summary disposition:
To begin with, the court should determine whether there is a factual
dispute regarding the nature and extent of the person’s injuries, and, if so, whether
the dispute is material to determining whether the serious impairment of body
function threshold is met. If there is no factual dispute, or no material factual
dispute, then whether the threshold is met is a question of law for the court.
[McCormick, 487 Mich at 215(citation omitted).]
-2-
someone has suffered a serious impairment is ‘inherently fact-and circumstance-specific and [the
analysis] must be conducted on a case-by-case basis.’ ” Id., quoting McCormick, 487 Mich at
215. Additionally, a plaintiff’s impairments need not be permanent. Id. at 203.
For purposes of this appeal, only the third prong of the McCormick test is at issue, i.e.,
that the serious impairment affected the “person’s general ability to lead his or her normal life.”
McCormick, 487 Mich at 202. According to McCormick,
[T]he common understanding of to affect the person’s ability to lead his or her
normal life is to have an influence on some of the person’s capacity to live in his
or her normal manner of living. By modifying ‘normal life’ with ‘his or her,’ the
Legislature indicated that this requires a subjective, person-and fact-specific
inquiry that must be decided on a case-by-case basis. Determining the effect or
influence that the impairment has had on a plaintiff’s ability to lead a normal life
necessarily requires a comparison of the plaintiff’s life before and after the
incident. [Id. at 202.]
The inquiry “necessarily requires a comparison of the plaintiff’s life before and after the
accident.” Id.
Plaintiff claims that Abdelrahman’s ability to lead a normal life was significantly affected
based solely on the fact that he had to quit the school’s wrestling team and withdraw from
football after the accident. However, even with giving the benefit of doubt to plaintiff, it does
not appear that there is a genuine issue of material fact whether Abdelrahman’s injuries affected
his general ability to lead a normal life. While there was record and deposition testimony that
Abdelrahman stopped wrestling because of too much back pain, there was evidence that shortly
after the accident, he continued with the school’s wrestling team. Moreover, after the accident,
he participated on the school’s football team, began boxing in a private gym, joined the track
team throwing shotput and discus, and started weight lifting classes, where he lifted weight every
day, and achieved an “A” grade in wrestling.
We also conclude that Moustafa failed to produce evidence to support his claims. There
was evidence that he completed the basketball season after the accident, ran track in the spring of
2014 specializing as a long distance sprinter, participated in gym activities in school without any
restrictions, and began playing on the football team, playing defensive tackle, linebacker, safety,
and cornerback. As for his claims that he suffered from regular headaches and exacerbated anger
issues, he has failed to explain how they affected his ability to lead a normal life. Further,
headaches and anger issues cannot be considered relevant impairments where there is little, if
any, medical evidence establishing the accident as the cause of these infirmities. To the degree
that he is asserting that the headaches and anger issues are due to a prior closed-head injury, he
failed to provide any medical report or deposition testimony from “a licensed allopathic or
osteopathic physician who regularly diagnoses or treats closed-head injuries” to testify about any
“serious neurological injury.” See MCL 500.3135(2)(a)(ii).
Given Abdelrahman’s and Moustafa’s young ages and active life styles, it cannot be said
that their life before the accident was more active, in any material way, than it was after the
accident. Nelson v Dubose, 291 Mich App 496, 499; 806 NW2d 333 (2011). Therefore, when
-3-
viewing the facts in the light most favorable to plaintiff, the evidence does not establish a
genuine issue of material fact that Abdelrahman’s and Moustafa’s injuries affected their general
ability to lead their normal lives after the accident.
Affirmed.
/s/ Kathleen Jansen
/s/ Deborah A. Servitto
/s/ Douglas B. Shapiro
-4-
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UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
_____________________
No. 91-6261
_____________________
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
VERSUS
DOUGLAS JAMES HORD,
Defendant-Appellant.
____________________________________________________
Appeal from the United States District Court
for the Southern District of Texas
_____________________________________________________
(October 22, 1993)
Before KING and BARKSDALE, Circuit Judges, and PARKER, District
Judge.1
BARKSDALE, Circuit Judge:
This appeal concerns, inter alia, multiplicious convictions
for bank fraud, and turns, once again, on the question of when a
"scheme" is "executed" for purposes of the bank fraud statute, 18
U.S.C. § 1344(a)(1). Douglas James Hord was convicted on 19
counts: nine for executing and attempting to execute a scheme to
defraud a federally insured bank, in violation of § 1344(a)(1); and
ten for making false statements to the bank, in violation of 18
U.S.C. § 1014. He was sentenced, inter alia, to 19 concurrent six-
1
Chief Judge of the Eastern District of Texas, sitting by
designation.
month terms of imprisonment. We AFFIRM IN PART and REVERSE and
VACATE IN PART.
I.
Hord's convictions arose from a series of bank transactions
involving bogus checks,2 in which he participated in 1988.3 The
transactions for which Hord was indicted began in April 1988.4
2
The parties variously refer to the checks as "fake", "forged",
"counterfeit", "phony" and "bogus". We will use the term "bogus".
3
In 1987, Hord, an attorney with a history of financial
problems, became friends with John David Williams, an employee of
the Federal Deposit Insurance Corporation. Although Hord did not
testify at trial, he gave his probation officer the following
account of the scheme he and Williams developed: Williams
suggested to Hord that he knew a way to make a lot of money without
being caught. Williams had bought blank stock checks and a
routing/transit coder (with which to imprint checks with routing
numbers) at an FDIC auction; these could be used to print bogus
checks. Williams told Hord that he knew in advance which banks
were scheduled to be closed by the FDIC. Hord would open an
account in a bank scheduled for closing, using the bogus checks the
two had printed, signed, and endorsed. Once the bank closed, Hord
would immediately withdraw the funds from the account; Williams's
job was to "pull" the returned checks once the FDIC became
involved, thus covering up the evidence of the transactions.
4
Pursuant to Fed. R. Evid. 404(b), the government also
presented evidence of other similar transactions, beginning early
in 1988. In late March 1988, Hord deposited 16 counterfeit checks,
each for $950, into his business account at MBank. The checks were
payable to Coleman Construction and were signed, "Martin Van
Clark". In fact, however, Hord had signed the checks, forging Van
Clark's name. Hord was given credit for these checks, and withdrew
the money (approximately $15,000). MBank later learned the checks
were bogus because, although they purportedly were drawn on the
account of Van Clark Construction at Texas Commerce Bank, they had
routing and account numbers from an account at U.S. Bank and Trust
in New York. Hord's parents made restitution to MBank for these
funds.
In April 1988, Hord opened a "trust account" at Cy-Fair Bank
in Houston, and deposited a bogus check, payable to the Winifred
Mae Hunter estate. Hord quickly withdrew $2,438.45, the full
amount of the check, from this account. Cy-Fair was closed by the
FDIC shortly thereafter.
- 2 -
Using a $300 check drawn on his account at First Interstate Bank,
Hord opened a checking account at National Bank of Texas (NBT) in
Houston on April 20, 1988. He explained to the account
representative that he was an attorney, and would be using the
account as a trust account to probate the estate of a Florida
client.
Between April 21 and 26, 1988, five deposits were made to the
account. Hord first deposited three bogus checks into the NBT
account. The checks, accompanied by a deposit slip and totalling
$9,634.96, were made payable to the estate of Winifred Mae Hunter.
Later, Hord deposited another bogus check for $4,138, again using
a deposit slip. Again, the check was payable to the Hunter estate.
Bank employees immediately suspected a problem with the checks;
they were poorly printed on poor-quality paper, and had incorrect
routing numbers. Bank management notified the FBI, and told the
employees to continue accepting the checks, but to refuse to clear
them or tell Hord that he was under suspicion.
A few days later, Hord deposited three more bogus checks,
totalling $68,549.70, with a deposit slip. Three additional bogus
checks were also deposited into the account that day, by Hord or
someone else: one check for $82,500 in the first transaction; two,
totalling $57,425, in the second.5
Hord tried to make three withdrawals from the NBT account. On
April 22, he deposited a check for $16,000, drawn on the NBT
5
Hord's fingerprint was on the deposit slip submitted with the
$82,500 check; the signatures on the checks that day were forged by
Hord.
- 3 -
account, into his account at MBank. It was later returned unpaid.
And, on or about April 26, he tried first to withdraw $1,000; he
was told the funds had not yet cleared. Later, he requested $250
at the drive-in window. Again, the bank refused to allow him to
make a withdrawal.
NBT was insured by the FDIC, which closed NBT in May 1988.
Sometime after this, First Interstate Bank returned to NBT the $300
check Hord had used to open the NBT account, because there were
insufficient funds in Hord's First Interstate account. Hord
received notice of a "charge back" for $300, as well as a charge
back for a $8,100 check drawn on a Florida bank, and payable to
Winifred Mae Hunter, estate trustee. NBT also advised Hord by
letter that his account had been closed and his records subpoenaed
by the FBI.
Hord was indicted in July 1990 on nine counts of executing and
attempting to execute a scheme to defraud NBT, in violation of 18
U.S.C. § 1344(a)(1); and ten counts of making false statements to
NBT, in violation of 18 U.S.C. § 1014. A jury convicted him on all
19 counts. After the verdict, the government moved for a downward
departure in sentencing, based on Hord's assistance in the
investigation and possible prosecution of Williams. See U.S.S.G.
§ 5K1.1(a). The trial court overruled Hord's objections to the
presentence report, but agreed to depart downward in accordance
with the government's recommendation. The applicable guidelines
range for sentencing was a term of imprisonment of 18-24 months.
After the downward departure, Hord was sentenced to six months in
- 4 -
prison on each of the 19 counts, running concurrently. He was also
ordered to pay $2,438.45 in restitution,6 and a special assessment
of $50 per count (totalling $950). Finally, Hord was sentenced to
a two-year term of supervised release following his imprisonment on
counts one-nine, to run concurrently with a one-year term of
supervised release for counts ten-19.
II.
Hord contends that the nine bank fraud charges under § 1344
were multiplicious, with the sentences imposed as a result
violating the double jeopardy clause of the Fifth Amendment; and
that his convictions on the ten false statement counts must be
reversed, and those counts dismissed, because the government failed
to allege or prove a violation of § 1014.7
A.
Count one of the indictment charged that Hord had executed the
scheme by opening a trust account at NBT; counts two-six, that he
had executed the scheme by making the five deposits, or causing
them to be made; and counts seven-nine, that he had attempted to
6
The amount that Hord withdrew from Cy-Fair Bank, see supra
note 4.
7
Hord also appeals the restitution order. Because he
volunteered to pay restitution, any error in imposition of the
restitution order was invited, and cannot be raised on appeal.
See, e.g., Howell v. Gould, Inc., 800 F.2d 482, 487 (5th Cir.
1986); Farrar v. Cain, 756 F.2d 1148, 1151 (5th Cir. 1985), aff'd,
___ U.S. ___, 113 S. Ct. 566 (1992). Further, we find no plain
error in the restitution order. See United States v. Gaudet, 966
F.2d 959, 964 (5th Cir. 1992) (where defendant made no objection in
district court, restitution order will be reviewed only "under the
weak plain error lens"), cert. denied, ___ U.S. ___, 113 S. Ct.
1294 (1993).
- 5 -
execute the scheme by attempting to withdraw funds from the account
on three occasions (on or about April 22 and 25).
Hord contends that all nine counts relate to the same offense
-- a single scheme to defraud a single financial institution.
Before trial, he moved, as required, to consolidate all nine counts
on the ground that they were multiplicious; the district court
denied the motion. Because, as hereinafter discussed, we agree
that counts one and seven-nine were multiplicious, we reverse those
convictions and vacate the sentences imposed pursuant to them.8 We
8
We note that, as a rule, an appeal cannot be based on
multiplicity where sentences are to be served concurrently. See,
e.g., United States v. Galvan, 949 F.2d 777, 781 (5th Cir. 1991).
However, in cases such as Hord's, where a monetary assessment is
also involved, a multiplicity claim still is viable. Id.; see also
Ray v. United States, 481 U.S. 736 (1987) (per curiam).
Normally, for convictions on multiplicious counts, "the remedy
is to remand for resentencing, with the government dismissing the
count(s) that created the multiplicity." United States v. Moody,
923 F.2d 341, 347 (5th Cir.), cert. denied, ___ U.S. ___, 112 S.
Ct. 80 (1991), quoted in United States v. Lemons, 941 F.2d 309, 317
(5th Cir. 1991) (per curiam). Generally, on remand, the government
elects which count(s) to dismiss, and the court resentences the
defendant on the remaining count(s). United States v. Brechtel,
997 F.2d 1108, 1112 (5th Cir. 1993) (per curiam); United States v.
Heath, 970 F.2d 1397, 1402 (5th Cir. 1992), cert. denied, ___ U.S.
___, 113 S. Ct. 1643 (1993); United States v. Saks, 964 F.2d 1514,
1526 (5th Cir. 1992). Here, however, we hold that counts one and
seven-nine created the multiplicity. Therefore, there is no need
for the government to make an election.
The government, which concedes multiplicity, does not request
resentencing. Furthermore, Hord has served his six-months'
imprisonment, and is on supervised release. And, the district
judge apparently relied heavily on the government's recommendation
for downward departure in calculating Hord's sentence. Based on
the record, we think the district court would impose the same
sentence on remand. Therefore, we see no need to remand for
resentencing on the counts we affirm. Cf. United States v.
Johnson, 961 F.2d 1188, 1189 (5th Cir. 1992) (citing Williams v.
United States, ___ U.S. ___, 112 S. Ct. 1112, 1120-21 (1992))
(remand for resentencing under guidelines unnecessary if the
- 6 -
affirm the convictions and sentences imposed pursuant to counts
two-six.
Following Hord's conviction, we have had occasion to review
the issue of multiplicity under the bank fraud statute. See, e.g.,
United States v. Lemons, 941 F.2d 309 (5th Cir. 1991) (per curiam).
An indictment that charges a single offense in more than one count
is multiplicious. Id. at 317. The primary danger created by such
an indictment is that the defendant may receive more than one
sentence for a single offense, in violation of the double jeopardy
clause. Id. (quoting United States v. Swaim, 757 F.2d 1530, 1537
(5th Cir.), cert. denied, 474 U.S. 825 (1985)). We review such
issues de novo. See, e.g., United States v. Brechtel, 997 F.2d
1108, 1112 (5th Cir. 1993) (per curiam).
The crux of any argument that convictions are multiplicious
is, of course, what constitutes the offense charged. "`Whether a
continuous transaction results in the commission of but a single
offense or separate offenses ... is determined by whether separate
and distinct prohibited acts, made punishable by law, have been
committed.'" Swaim, 757 F.2d at 1536 (quoting United States v.
Shaid, 730 F.2d 225, 231 (5th Cir.), cert. denied, 469 U.S. 844
(1984)), quoted in Lemons, 941 F.2d at 317. Therefore, our first
task is to review what constitutes the offense of bank fraud under
§ 1344.9
"district court would have imposed the same sentence").
9
Hord was charged and convicted under former § 1344(a)(1). At
the time, § 1344(a) provided:
- 7 -
In Lemons, we noted that "the bank fraud statute imposes
punishment ... for each execution of the scheme" to defraud, rather
than for each act in execution of the scheme. 941 F.2d at 318
(emphasis added). Lemons involved a fraudulent scheme to, inter
alia, procure $212,000 from a single financial institution;
however, the defendant received the money in a series of
transactions occurring over the course of several months. Id. We
held that the incremental movement of the benefit to the defendant
was "only part of but one performance, one completion, one
execution of that scheme." Id. Similarly, in United States v.
(a) Whoever knowingly executes, or attempts to
execute, a scheme or artifice --
(1) to defraud a federally chartered or
insured financial institution; or
(2) to obtain any of the moneys, funds,
credits, assets, securities or other property
owned by or under the custody or control of a
federally chartered or insured financial
institution by means of false or fraudulent
pretenses, representations, or promises, shall
be fined not more than $10,000, or imprisoned
not more than five years, or both.
18 U.S.C. § 1344(a) (1988), amended by 18 U.S.C. § 1344 (Supp. I
1989).
Former § 1344(b) defined "federally chartered or insured
financial institution" as used in § 1344(a). Id. at § 1344(b). In
1989, § 1344 was amended by, inter alia, deleting former part (b).
Former part (a) simply became § 1344. 18 U.S.C. § 1344, as amended
by Pub. L. No. 101-73, Title IX, § 961(k), 103 Stat. 500 (1989).
"Financial institution" is now defined in 18 U.S.C. § 20. Pub. L.
No. 101-73, Title IX, § 962(e), 103 Stat. 523 (1989). The amended
§ 1344 also changes the penalties for a violation of the section to
a fine of not more than $1,000,000 or imprisonment for not more
than 20 years, or both. 18 U.S.C. § 1344 (Supp. 1993); see also
United States v. Medeles, 916 F.2d 195, 196-97 and 197 n.1
(discussing amendments to § 1344).
- 8 -
Heath, 970 F.2d 1397, 1402 (5th Cir. 1992), cert. denied, ___ U.S.
___, 113 S. Ct. 1643 (1993), we found a single execution of a
scheme to defraud, although the scheme involved procuring two
separate loans from a single financial institution. A critical
factor in our holding in Heath that there had been but a single
execution of the scheme was the fact that the two loans were
integrally related; neither could have succeeded without the other.
Id.
In Hord's case, the scheme to defraud, as stated in the
indictment,
consisted essentially of a plan to deposit forged
and counterfeited checks in a trust account opened
in the name of ... HORD and to withdraw the money
credited to that account as a result of those
deposits.
The government concedes, and we agree, that opening the account
(count one) did not constitute an execution of the scheme, but was
instead only a necessary act in preparation of the scheme. We,
therefore, hold that count one is multiplicious.
The transactions for which Hord was indicted are five deposits
(counts two-six), and three attempts to withdraw part of those
deposits (counts seven-nine). As stated, counts seven-nine
(withdrawal attempts) are multiplicious. It is the deposits, not
Hord's withdrawal attempts, that constitute executions of the
scheme. The attempted withdrawals were integrally related to the
deposits, and could not have succeeded without them. See Heath,
970 F.2d 1397. Further, the deposits, without more, satisfy §
1344's prohibition against "execut[ing], or attempt[ing] to
- 9 -
execute, a scheme or artifice" to defraud the bank. 18 U.S.C. §
1344. While the term "scheme to defraud" in § 1344 is not "capable
of precise definition", United States v. Goldblatt, 813 F.2d 619,
624 (3d Cir. 1987), cited in Lemons, 941 F.2d at 315, we have no
doubt that Hord's making deposits using bogus checks with forged
signatures and in the name of a fictitious payee, satisfies the
requirements of the statute.10 Accord, United States v. Schwartz,
899 F.2d 243, 248 (3d Cir.) (holding that "in making each deposit
[defendant] was executing his scheme to defraud" bank), cert.
denied, 498 U.S. 901 (1990). In sum, the counts concerning Hord's
attempts to withdraw funds are multiplicious to those involving his
deposits.
Admittedly, the argument that a bogus check scheme of the sort
in issue is not executed until a withdrawal is attempted has
considerable force. The withdrawal is the final step -- it is to
place the funds in the defendant's hands. And, Lemons is strong
support for the rule that the scheme must be completed or performed
in order for it to be executed. 941 F.2d at 318.
On the other hand, Lemons also counsels that "the question in
each case is what constitutes an `execution of the scheme'". 941
F.2d at 317 n.5. On the facts in this case, the scheme was
executed with the deposit of each bogus check, because that was the
event that triggered possible instant credit being given to the
10
We have previously defined the term "scheme" to include using
"fraudulent pretenses or misrepresentations intended to deceive
others to obtain something of value, such as money, from the
institution to be deceived." See Lemons, 941 F.2d at 314.
- 10 -
account and therefore available to Hord. How, and when, Hord
decided to use that hoped-for credit -- either by direct withdrawal
of cash or by drawing a check against it -- was up to him.
The deposits best gauge the extent of the possible loss, for
it may well be, as in this case, that the withdrawals will be for
a lesser amount. Moreover, it was the deposits that put the bank
at risk. And, risk of loss, not just loss itself, supports
conviction. United States v. Barakett, 994 F.2d 1107, 1111 (5th
Cir. 1993), petition for cert. filed (U.S. Sept. 22, 1993) (No. 93-
6128); Lemons, 941 F.2d at 316 n.3. No matter that, in this case,
the bank quickly discovered the scheme and avoided loss. With each
deposit, it was put at risk. Even after the scheme was discovered
and the bank was taking affirmative action to protect itself,
credit could have still been given through mistake or oversight.
In this case, to equate withdrawal (or its attempt) with
execution is to allow the bank to have been placed at risk five
times, but for Hord to have only executed the scheme three times.
What if Hord had not even attempted a withdrawal; surely it cannot
be said that he had not put the bank at risk? If, in a case of
this sort, a withdrawal must be attempted, even though the fraud is
known, the danger of additional loss builds while awaiting the
withdrawal attempt and, therefore, the occasion to charge fraud.
Section 1344 does not require that.
As noted supra, and as stated in Lemons, the question in each
case brought under § 1344 "is what constitutes an `execution of the
scheme'". 914 F.2d at 317 n.5. We cautioned there that we did
- 11 -
"not hold that the execution of a scheme cannot result in the
imposition of multiple liability under § 1344". Id. at 318 n.6.
Hord asserts that he can be convicted for only one execution; at
most, for three (the withdrawal attempts). We do not agree that
the transactions constituted but a single execution of the scheme.
Instead, as stated, we conclude that each deposit constituted a
separate execution of it. Unlike the situations in Heath and
Lemons, the deposits were not integrally related to one another,
such that none could have succeeded without the others. Proof of
Hord's intent to defraud NBT with each fraudulent deposit does not
require proof of any of the other deposits. See United States v.
Farmigoni, 934 F.2d 63 (5th Cir. 1991), cert. denied, ___ U.S. ___,
112 S. Ct. 1160 (1992) (involving a single scheme, executed two
times, in which two banks were defrauded).
Nor does the fact that a single bank was the victim
necessarily prove a single execution of the scheme. See Schwartz,
899 F.2d at 248 (holding each deposit of worthless checks into
account at single bank to be separate execution of single scheme),
cert. denied, ___ U.S. ___, 111 S. Ct. 259 (1990); United States v.
Poliak, 823 F.2d 371, 372 (9th Cir. 1987) (holding writing of ten
separate checks in check-kiting scheme to be ten separate
executions of scheme to defraud three banks), cert. denied, 485
U.S. 1029 (1988), cited with approval in Lemons, 941 F.2d at 317 &
n.5. As noted, a single scheme, if executed more than once, may
support multiple convictions. Lemons, 941 F.2d at 317. We hold
that each deposit constituted a separate execution of a single
- 12 -
scheme to defraud NBT; and, therefore, we affirm Hord's convictions
and sentences on counts two-six of the indictment.11
B.
"To sustain a conviction under 18 U.S.C. § 1014, the
Government must demonstrate that (1) the defendant made a `false
statement or report,' and (2) the defendant did so `for the purpose
of influencing in any way the action of [a described financial
institution] ... upon any application, advance, ... commitment or
loan.... '" United States v. Bowman, 783 F.2d 1192, 1197 (5th Cir.
1986).12 For counts ten-19, Hord asserts that the government failed
11
As stated, we find Hord's behavior at NBT to have been
multiple executions of a single scheme. Hord used a single trust
account, representing that it was for the purpose of handling the
estate of a Florida client. In accordance with that
representation, each of the separate deposits contained similar
bogus checks payable to the same fictitious payee.
We note, however, that similar behavior, engaged in on
separate occasions, may sometimes constitute several separate
schemes to defraud a financial institution. See Barakett, 994 F.2d
1107. There, our court held that the defendant had engaged in four
separate schemes, pursuant to which he defrauded two banks.
Crucial to that holding was the fact that the defendant in Barakett
could
identify no linkage between the conduct charged in
counts one and two [i.e., to defraud the first
bank], or between that of counts three and four
[i.e., to defraud the second bank] other than
victim and modus operandi. Because counts one
through four involved separate fraudulent schemes,
separate sentencing present[ed] no multiplicity
problem.
Id. at 1111.
12
18 U.S.C. § 1014 makes it a crime to
knowingly make[] any false statement ... for the
purpose of influencing in any way the action of ...
any institution the accounts of which are insured
- 13 -
to either charge or prove an offense under § 1014, contending that
it failed to either allege in the indictment or prove at trial that
he made a false statement, or that he did so for the purpose of
influencing the bank in a lending activity. Hord maintains, first,
that checks are not "false statements" for § 1014 purposes; and
second, that he made no representation for the purpose of obtaining
an advance, loan, or similar commitment from the bank. We
disagree. We address these contentions initially as they concern
the indictment, and then as they concern the proof.
1.
Hord contends that the government did not sufficiently allege
in the indictment that he made any "false statement" under the
terms of § 1014. He also contends that the government failed to
allege in the indictment that he had acted with the purpose of
influencing the bank's action with respect to one of the
transactions specified in § 1014. The indictment stated, in counts
ten through 19, that Hord
did knowingly make a false statement ... for the
purpose of influencing the action of the National
Bank of Texas, the deposits of which were then
insured by the [FDIC] ... in that [Hord] submitted
forged and counterfeited checks ..., in order to
induce the bank to credit his account
accordingly[.]
(Emphasis added.)
Before trial, Hord moved unsuccessfully to dismiss the
indictment for failing to allege a violation of law. Because Hord
by the ... Federal Deposit Insurance Corporation,
... upon any ... advance, ... commitment, or
loan....
- 14 -
objected in district court to the sufficiency of the indictment, we
review the indictment de novo, to determine whether it alleges
sufficiently the elements of the offense charged. United States v.
Aguilar, 967 F.2d 111, 112 (5th Cir. 1992) (citing United States v.
Shelton, 937 F.2d 140, 142 (5th Cir.), cert. denied, ___ U.S. ___,
112 S. Ct. 607 (1991)).
The indictment expressly charges that Hord made a "false
statement" by "submit[ting] forged and counterfeited checks". At
least as to this element of § 1014, then, the indictment was
sufficient. Accordingly, we proceed to the contention that the
indictment does not sufficiently allege that Hord made those false
statements with the intent to induce the bank to make an advance,
commitment, or loan.
Section 1014 does not include in its list of prohibited
actions the act of inducing a bank to "credit an account".
However, acting to induce a bank to "credit an account" can, under
certain circumstances, be equivalent to acting to induce it to make
an advance, commitment, or loan. We realize, of course, that a
depositor ordinarily stands in the position of a creditor of the
bank, rather than the other way around. See, e.g., In Re Texas
Mortgage Servs. Corp., 761 F.2d 1068, 1075 n.11 (5th Cir. 1985);
Uniform Commercial Code § 4-201, cmt. 4. As Hord asserts, this
ordinarily would mean that inducing the bank to "credit" Hord's
account would not constitute inducing it to make an advance, loan,
or commitment, because the bank would merely be making available to
its creditor, Hord, his "own" deposited funds. Usually, this does
- 15 -
not occur until after the deposited check has cleared. See Uniform
Commercial Code § 4-215(e) (stating when funds become available for
withdrawal as of right); Federal Reserve Regulation CC:
Availability of Funds and Collection of Checks, 12 C.F.R. § 229
(1992). In fact, this was NBT's policy. But, under the language
of both § 1014 and the indictment, in issue is Hord's intent to
induce NBT to advance funds to him without waiting for the checks
to clear, not NBT's policy against doing so.
In situations where the bank gives a customer access to funds
without waiting for deposited checks to clear, it is making an
advance on the security of the checks it holds for collection. See
Uniform Commercial Code § 4-210(3), cmt. 1 ("A collecting agent may
properly make advances on the security of paper held for
collection, and acquires at common law a possessory lien for these
advances." (emphasis added)). In this situation, we think, the
language "in order to induce the bank to credit [Hord's] account"
is sufficiently equivalent to stating that Hord acted "in order to
induce the bank to make an advance, loan, or commitment". See
Price, 763 F.2d at 643 & n.4 (depositing false credit card sales
receipts constituted attempt to "obtain cash from the bank to which
[defendants] were clearly not entitled"). Therefore, we hold that
the indictment was sufficient to charge an offense under both
elements of § 1014.
More importantly, although Williams v. United States, 458 U.S.
279 (1982), discussed infra, holds that presenting checks drawn
against insufficient funds is not a "false statement" for § 1014
- 16 -
purposes, it does not address what constitutes "influencing in any
way the action of ... any bank ... upon any ... advance ... or loan
...." 18 U.S.C. § 1014. Our court held long ago in United States
v. Payne, 602 F.2d 1215, 1218-19 (5th Cir. 1979), cert. denied, 445
U.S. 903 (1980), that "[t]he essence of check kiting is the
obtaining of credit in the nature of an advance or loan, however it
may be characterized"; that it "was a device for fraudulently
obtaining credit sufficiently in the nature of an advance or loan
to come within the scope of 18 U.S.C. § 1014." The Supreme Court's
holding in Williams does not displace this aspect of proof
necessary for the latter part of the statute. See Williams, 458
U.S. at 300-01 (Marshall, J. dissenting) ("The banks that extended
funds on the basis of Williams' worthless, and not yet collected,
checks made an `advance,' a `loan,' and a `commitment' within the
ordinary meaning of these terms.") The above language from Payne
is still good law.
2.
Hord also contends that the government failed to prove the
substantive elements of § 1014 (whether he made any "false
statement", and if so, whether it was to induce the bank to engage
in a specified action). This contention is essentially a
sufficiency of the evidence claim. We will affirm a conviction if
the evidence, viewed in the light most favorable to the verdict and
with all reasonable inferences and credibility choices made in
support of it, is such that any rational trier of fact could have
found the elements of the crime beyond a reasonable doubt. Heath,
- 17 -
970 F.2d at 1402 (citing Jackson v. Virginia, 443 U.S. 307 (1979),
and United States v. Kim, 884 F.2d 189, 192 (5th Cir. 1989)).
a.
In support of his contention on the "false statements" issue,
Hord relies principally on Williams, 458 U.S. 279, for the
proposition that checks are not false statements. We find his
reliance misplaced, however. In Williams, the defendant engaged in
a check-kiting scheme, knowing that his accounts did not contain
sufficient funds to cover the checks. Id. In reversing his
conviction under § 1014, the Court held that a check drawn on
insufficient funds is not "a `false statement,' for a simple
reason: technically speaking, a check is not a factual assertion at
all, and therefore cannot be characterized as `true' or `false.'"
Id. at 284.
This was so, the Court stated, because a check drawn on
insufficient funds does not, "in [its] terms, make any
representation as to the state of [the drawer's] bank balance."
Id. at 284-85. The Court also noted that "`false statement' is not
a term that, in common usage, is often applied to characterize `bad
checks.'" Id. at 286. Finally, the Court also reasoned that to
hold that a "bad check" (i.e., a check drawn on insufficient funds)
is a "false statement" under § 1014 would "make a surprisingly
broad range of unremarkable conduct a violation of federal law."
Id.13
13
Williams' narrow construction of § 1014 prompted Congress to
enact § 1344, discussed supra, because Williams and other cases
"`underscored the fact that serious gaps now exist in Federal
- 18 -
The obvious and basic difference between the checks in
Williams and those here is that the checks in issue were bogus
rather than drawn against insufficient funds.14 We think this
difference crucial, however, and precisely what makes Hord's
behavior culpable under § 1014. We cannot agree with Hord's
conclusion that, like checks drawn on insufficient funds, bogus
checks such as the ones he deposited at NBT are not "false
statements" under Williams and its progeny. Instead, we find this
situation more similar to that presented in United States v.
Falcone, 934 F.2d 1528 (11th Cir.) (per curiam), reh'g granted &
opinion vacated, 939 F.2d 1455 (11th Cir. 1991), opinion reinstated
on reh'g, 960 F.2d 988 (11th Cir.) (en banc), cert. denied, ___
U.S. ___, 113 S. Ct. 292 (1992). In a case involving the
presentation of checks bearing a signature stamp made without
authorization, the Eleventh Circuit held that Williams did not
apply.15 The court found, rather, that the unauthorized use of the
jurisdiction over frauds against banks and other credit
institutions....'" S. Rep. No. 98-225, 98th Cong., 2d Sess. 377,
reprinted in 1984 U.S. Code Cong. & Admin. News 3182, 3517, quoted
in United States v. Bonnett, 877 F.2d 1450, 1454 (10th Cir. 1989).
14
We agree with Hord that the use of deposit slips does not
alone provide a way to distinguish his case from Williams. As Hord
points out, the defendant in Williams presumably also used a
deposit slip to deposit his insufficient funds checks; but, like
the Williams Court, we are concerned with the checks, not with
their deposit slips. See Williams, 458 U.S. at 281.
15
Although the defendants also had been charged with violations
of § 1014, we note that the appeal in Falcone was taken from a
conviction under former § 1344(a)(2) (for text, see supra note 9),
for making false representations to a federally-insured bank.
Falcone, 934 F.2d at 1539. The court in Falcone, however, defined
"false representations" under § 1344 by referring to Williams and
its discussion of "false statements" under § 1014. Id.
- 19 -
signature stamp constituted an affirmatively false representation
that the signatures so made were authorized; and that such use was
tantamount to forgery. Id. at 1542.
The Eleventh Circuit held, and we agree, that "Williams does
not govern a situation in which some information on the check, such
as a false signature, or a fictitious bank, is itself a false
statement...." Id. at 1541 (internal citations omitted) (citing
Bonnett, 877 F.2d at 1454 ("massive" scheme to defraud not covered
by Williams, despite use of insufficient-funds checks); United
States v. Worthington, 822 F.2d 315, 319 (2d Cir.) (fictitious
drawee bank a false statement, false representation that bank
actually existed), cert. denied, 484 U.S. 944 (1987); United States
v. Price, 763 F.2d 640 (4th Cir. 1985) (false names, amounts,
account numbers, and signatures on credit card slips presented for
deposit were false statements); Prushinowski v. United States, 562
F. Supp. 151, 156-58 (S.D.N.Y.) (drafts with unauthorized,
illegible or fictitious drawer signatures were false statements),
aff'd mem., 742 F.2d 1436 (2d Cir. 1983)).
As Falcone and the above listed cases cited by it indicate, we
are not alone among the federal circuits in applying Williams
narrowly, to "the simple presentation of a check drawn on an
account with insufficient funds, without other evidence that the
defendant made some false representation to the bank...." Falcone,
954 F.2d at 1540. See also United States v. Haddock, 956 F.2d
1534, 1543 (10th Cir.) (altered entries in checkbook in advance of
audit were "false statements"), cert. denied, ___ U.S. ___, 113 S.
- 20 -
Ct. 88 (1992); United States v. Swearingen, 858 F.2d 1555 (11th
Cir. 1988) (per curiam), cert. denied, 489 U.S. 1083 (1989) (sight
drafts representing fictitious sales of automobiles used to obtain
credit held violative of § 1014); United States v. Rafsky, 803 F.2d
105, 107 (3d Cir. 1986) (scheme to defraud based on numerous
insufficient funds checks held violative of § 1344), cert. denied,
480 U.S. 931 (1987); United States v. Glanton, 707 F.2d 1238 (11th
Cir. 1983) (signing false name to signature card and counter check,
and in endorsement, held to violate § 1014). As the court in Price
noted, "there is nothing in Williams that equates the passing of
checks drawn on accounts with insufficient funds with fraudulently
making or altering a document", as Hord did. 763 F.2d at 643 &
n.3.
This reading accords with the policy behind Williams as well.
Williams, as the Court intended, has the salutary effect of
ensuring that a "broad range of unremarkable conduct", i.e., the
relatively commonplace drawing of checks against insufficient
funds, is not "a violation of federal law". Williams, 458 U.S. at
286. Needless to say, Hord's conduct "does not strike us as
similarly unremarkable." Worthington, 822 F.2d at 318-19. As the
Second Circuit has noted, "[i]nsufficient funding may have a
perfectly innocent explanation". Id. On the other hand, we cannot
conceive of any innocent explanation for presenting bogus checks,
not issued by the banks named as drawee, with forged signatures and
incorrect routing numbers, and payable to a client whose existence
is doubtful at best. We hold that Hord's use of forged signatures,
- 21 -
false drawee bank and payee information, and inaccurate routing and
account information on the checks he deposited, constituted "false
statements" under § 1014, and is not saved by Williams' limitation
of that term.
b.
Because the checks in issue contained false statements, we
next examine Hord's contention concerning the final element of §
1014 -- whether the government presented sufficient evidence that
Hord made these false statements with the purpose of influencing
the action of the bank "upon any application, advance, ...
commitment, or loan." 18 U.S.C. § 1014.
Hord maintains that the government failed to prove that he
acted with the intent to influence the bank to lend its funds or
the funds of its depositors. To the contrary, the government
presented Rule 404(b) evidence that Hord previously had succeeded
in just such a scheme at other area banks, see supra note 4.16 At
both MBank and Cy-Fair, Hord had successfully withdrawn funds
against checks that he had deposited, before the collection process
had been completed.
16
Rule 404(b) provides that
Evidence of other crimes, wrongs, or acts is not
admissible to prove the character of a person in
order to show action in conformity therewith. It
may, however, be admissible for other purposes,
such as proof of motive, opportunity, intent,
preparation, plan, knowledge, identity, or absence
of mistake or accident.
Fed. R. Evid. 404(b).
- 22 -
Hord next asserts that the fact that NBT did not credit his
account is evidence that he did not intend to influence the bank.
Again, we fail to see the connection between Hord's intent (the
crucial factor under the statute), and NBT's action. Obviously,
just because NBT did not credit Hord's account does not mean that
Hord did not intend for it to do so.17 Furthermore, the bank's
action in response to Hord's attempt to defraud it is irrelevant.
It is undisputed that a § 1014 offense is "`a crime of subjective
intent that requires neither reliance by the lending institution
nor an actual defrauding for its commission.'" Bowman, 783 F.2d at
1199 (quoting United States v. Davis, 752 F.2d 963, 969 (5th Cir.
1985)); United States v. Huntress, 956 F.2d 1309, 1317-18 (5th Cir.
1992), cert. denied, ___ U.S. ___, 113 S. Ct. 2330 (1993); Shaid,
730 F.2d at 232.18 A rational trier of fact could have found that
17
In fact, we cannot see what else Hord could have intended. By
making deposits of the bogus checks, he surely intended that the
bank credit his account in the face amounts of the checks. His
withdrawal attempts reflect this. And, he must have intended that
NBT make the credit before the checks cleared through the
collection process, i.e., that NBT make him an advance. Once the
bank put the checks into the collection system, discovery of the
faked routing numbers, etc. was inevitable; and Hord surely would
not have been allowed to withdraw funds after the checks were
returned to NBT unpaid.
18
Hord's reliance on United States v. Krown, 675 F.2d 46 (2d
Cir.), cert. denied, 459 U.S. 839 (1982), is misplaced. In Krown,
the Second Circuit held that the mere deposit of fraudulent
instruments, followed by a "bookkeeping entry showing the checks
credited" to the account of a third party, did not violate § 1014.
Id. at 51. We are presented with different facts here.
In Krown, the defendant "paid" for purchases from his supplier
with certified checks drawn on a fictitious offshore bank. The
defendant's intent was only "to have the bank accept the certified
checks for deposit and carry out collection procedures". Id. As
noted, the fictitious bank on which the checks was drawn was
- 23 -
Hord was attempting to influence NBT to advance him funds against
the security of the checks he had deposited, before the checks
cleared.
Because we conclude that the checks deposited in Hord's
account at NBT were false statements, and that Hord's intent was
that NBT credit his account pursuant to them, thus making an
advance, we affirm his convictions and sentences on counts ten-19
of the indictment.
III.
For the foregoing reasons, the convictions and sentences are
AFFIRMED as to counts two-six and ten-19, and REVERSED and VACATED
as to counts one and seven-nine.
AFFIRMED in Part, REVERSED and VACATED in Part
offshore; after the checks failed to clear through the normal
collection process, and pursuant to the defendant's instruction,
the collecting bank attempted to collect on the checks by mailing
them directly to the bogus bank in the West Indies. Id. at 49.
The purpose of this scheme was not to induce the bank to make an
advance, loan, commitment, etc., but to give the defendant more
time to buy goods on credit from the payee of the checks. Id. at
50. Indeed, rather than attempting to induce the collecting bank
to credit the payee's account, the defendant himself deposited a
legitimate certified check in the payee's account, in order to make
it appear that one of the bogus checks had been honored. Id. at
49.
- 24 -
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748 F.2d 563
1986 A.M.C. 276
PHILIP MORRIS, Plaintiff-Cross-Defendant-Appellee,v.AMERICAN SHIPPING CO., INC., Defendant-Appellant,Maritime Terminal, Inc., Defendant-Cross-Plaintiff-Appellant,M/V CRUZ DEL SUR, Defendant-Appellant.
No. 83-5461.
United States Court of Appeals,Eleventh Circuit.
Dec. 10, 1984.
Arthur Roth, Miami, Fla., for Maritime Terminal, Inc.
Thomas E. Fotopulos, Fowler, White, Gillen, Boggs, Villareal & Banker, Jacob J. Munch, Tampa, Fla., for American Shipping.
Smathers & Thompson, Christian D. Keedy, Miami, Fla., for Philip Morris.
Appeals from the United States District Court for the Southern District of Florida.
Before FAY and VANCE, Circuit Judges, and MACMAHON*, District Judge.
PER CURIAM:
1
Appellants American Shipping Company ("American") and Maritime Terminals, Inc. ("Maritime") appeal the district court's finding of liability in favor of appellee Philip Morris Incorporated ("Philip Morris"). Two separate matters are raised by the appellants. American contends that the district court erred in concluding that American was not entitled to limit its liability to $500 per package pursuant to 46 U.S.C. Secs. 1300-1315, the Carriage of Goods by Sea Act ("COGSA"). We find that the COGSA limitations incorporated in American's bills of lading were inapplicable to the post-discharge period and American was unable to meet its burden of proof regarding when the cargo was damaged; consequently, the Harter Act, 46 U.S.C. Secs. 190-196, controls the question of liability, and the decision of the district court is affirmed. Maritime contends that the district court erred in requiring the remission of certain storage costs to Philip Morris. We disagree, and the decision of the district court regarding this issue is likewise affirmed.
I. BACKGROUND
2
This dispute arose as the result of damage sustained by a cargo of tobacco owned by Philip Morris. In 1979, Philip Morris had agreed to repurchase from its former franchisee Compania Columbiana de Tobaco, S.A. ("Coltabaco") certain material, consisting mostly of tobacco. In June and September of 1979, two Philip Morris employees inspected the material at the Coltabaco warehouses in Columbia and found no damage to the tobacco, but some damage to the hogshead staves.
3
In late September, 1979, American was contacted regarding the carriage of the cargo from Baranquilla to Miami. American's agent thereupon issued "clean" bills of lading, which represented that the cargo was not damaged. The cargo, however, was not loaded on to the CRUZ DEL SUR until December 3rd and 4th, 1979. At that time, Captain Navas, the master of the ship, observed some damage to the cargo, including signs of waterstaining. As a result, he registered a formal Master's Protest on December 5, 1979. The district court made a finding that except for the broken hogshead staves, the cargo was generally in good condition in late September 1979, when last inspected by Philip Morris. Therefore, since this factual finding is not clearly erroneous, Terman Foods, Inc. v. Omega Lines, 707 F.2d 1225, 1228 (11th Cir.1983), we must accept the conclusion that the cargo was damaged between late September and the time when it was actually loaded on the CRUZ DEL SUR. During that period of time, the cargo was in the custody of American's agents.
4
The district court found that the cargo was not damaged any further during the voyage to Miami. Upon arrival in Miami, however, Maritime unloaded the cargo and stored it in its unprotected yard. The unloading was completed on December 12, 1979, but the cargo was not removed from Maritime's premises until mid-January, 1980. Between January 21 and 24, 1980 Central Truck Lines Cargo picked up the cargo and eventually transported it to Richmond, Virginia. The district court found that the cargo sustained additional damage while in Maritime's possession.
II. THE LAW
5
A. American Shipping and the COGSA $500 Limit
6
American contends that the district court erred in concluding that it was not entitled to limit its liability to $500 per package, pursuant to the provisions of COGSA. American's bill of lading extends the COGSA provisions to the entire period of time in which the cargo is in the custody of the carrier. The district court held, however, that the COGSA provisions were not applicable to the period of time after the cargo was unloaded in Miami and American had not met its burden of proof regarding when the cargo was damaged.1 We agree. Under these particular circumstances, the Harter Act controls, and American is liable for the total amount of damages sustained while the cargo was in its custody.2
7
By its terms, COGSA applies to the carrier only "in relation to the loading, handling, stowage, carriage, custody, care and discharge of" goods, and not to those periods unrelated to loading and unloading. 46 U.S.C. Sec. 1302. The Harter Act applies to the entire period of the contract of carriage, except for those periods covered by COGSA. 46 U.S.C. Sec. 1311. In effect, then, the Harter Act applies to those extended periods of time before and after the loading of the cargo on and off the vessel. The parties may agree to extend the COGSA limitation provisions to cover the entire period of time in which the carrier has custody of the cargo. 46 U.S.C. Sec. 1307. See Brown & Root, Inc. v. M/V Peisander, 648 F.2d 415, 420 (5th Cir.1981); Baker Oil Tools, Inc. v. Delta Steamship Lines, 562 F.2d 938, 940 n. 3 (5th Cir.1977), modified, 571 F.2d 978 (1978). However, such stipulations limiting the carrier's liability under the Harter Act will be strictly construed against the carrier. Cabot Corp. v. S.S. Mormacscan, 441 F.2d 476, 478 (2d Cir.), cert. denied, 404 U.S. 855, 92 S.Ct. 104, 30 L.Ed.2d 96 (1971). The carrier in the instant case included the following language in the terms and conditions of the bill of lading:
8
The provisions stated in said Act [COGSA] shall ... govern before the goods are loaded on and after they are discharged from the ship and throughout the entire time the goods are in the custody of the carrier.
9
Despite this language extending the liability limitations of COGSA, the district court held that the COGSA limitations were inapplicable to the post-discharge period.
10
To establish a prima facie case of liability against the carrier, the shipper must show that the cargo was received in good condition by the carrier and the cargo was unloaded at its destination in a damaged condition. Blasser Brothers v. Northern Pan-American Line, 628 F.2d 376, 381 (5th Cir.1980). Accord, Terman Foods, Inc. v. Omega Lines, 707 F.2d 1225, 1227 (11th Cir.1983). A clean bill of lading is prima facie evidence that the carrier received the cargo in good condition. Blasser, 628 F.2d at 381. Philip Morris has clearly established a prima facie case here. A clean bill of lading was issued by American, and there was no finding by the district court that the bill of lading was issued with an intent to misrepresent the condition of the cargo. As the trial court correctly concluded, American's proffered evidence of the damaged cargo--the Master's Protest--was not relevant to the question of the condition of the cargo when received by American's agents, but rather was relevant to the condition of the cargo in December, 1979, when it was loaded on to the CRUZ DEL SUR. Therefore, the cargo sustained some damage between the time that the cargo was received by American's agents in late September and December when the cargo was finally loaded on to the ship.
11
Once the shipper has established a prima facie case, the burden of proof shifts to the carrier to prove that the loss or damage falls within one of the COGSA exceptions or that the carrier exercised due diligence in preventing damage to the cargo. Terman Foods, 707 F.2d at 1227. Cf. Maggard Truck Line v. Deaton, Inc., 573 F.Supp. 1388, 1394 (N.D.Ga.1983) (once prima facie case is established, carrier must show that it was both free from negligence and that the damage was due to an excepted cause). There were no findings by the district court as to the existence of any applicable exceptions.
12
The district court properly found that delivery by American to Philip Morris was not effected until the cargo was picked up by Central Truck Lines on January 21, 1980. Limitations on the carrier's liability are inapplicable if damage occurs due to negligence in the proper delivery of the cargo. F.J. Walker Ltd. v. M.V. "Lemoncore", 561 F.2d 1138, 1143 (5th Cir.1977). "Mere delivery to a wharf is insufficient." Id. Proper delivery occurs when the carrier places the cargo upon a fit wharf. Id.; Goya Foods, Inc. v. S.S. Italica, 561 F.Supp. 1077, 1085 (S.D.N.Y.1983). To determine whether a wharf is "fit", the court looks to the custom and usage of the port. F.J. Walker, 561 F.2d at 1144. In the instant case, the district court expressly found that Maritime, as American's agent, had not stored the cargo in a warehouse from the time it was unloaded to the time it was picked up on January 21; this was contrary to the custom and practice in the Port of Miami. Because the cargo was not properly delivered to a fit wharf, the Harter Act, not the limitation provisions contained in the bills of lading, controls the question of liability. See Goya Foods, 561 F.Supp. at 1085.
13
With regard to the lengthy period of time which elapsed between discharge and procurement of the cargo, the district court noted the late arrival of the bills of lading in Philip Morris' offices. Though it was unclear when copies of them were received, the court found that the original bills of lading were not received until December 28, 1979. Without those bills of lading, Philip Morris was unable to clear the cargo through customs. Thus, Philip Morris could not have picked up its cargo until at least this time, even if it had been aware of the damage sustained by the cargo. And, of course, the bills of lading did not reflect any damage to the cargo. Moreover, the delay in the procurement of the cargo was not the cause of the damage. See Insurance Co. of North America v. S/S "Italica", 567 F.Supp. 59 (S.D.N.Y.1983). The district court found that much of the damage was caused by the inadequate storage provided by American's agent. As the district court stated, "American was negligent in allowing the cargo to be stored unprotected from moisture." (R.Vol. 1 at 318). Therefore, we affirm the district court's conclusion that the COGSA limitations incorporated in American's bills of lading were not applicable to the period of time after the cargo was unloaded in Miami.3
14
Furthermore, the district court found that American did not exercise due diligence to prevent damage to the cargo after it was received by American's agents in Columbia and prior to the time it was loaded on to the ship. Because American was unable to separate what damage occurred during the pre-loading period when the COGSA limitations may have been applicable from the damage which occurred during the post-discharge period when the COGSA limitations were not applicable, it failed to sustain its burden of proof. Failing in its burden of proof, American was chargeable with the entire loss. See Blasser, 628 F.2d at 382; Vana Trading Co. v. S.S. "Mette Skou", 556 F.2d 100, 105 (2d Cir.), cert. denied, 434 U.S. 892, 98 S.Ct. 267, 54 L.Ed.2d 177 (1977). See also EAC Timberlane v. Pisces, Ltd., 580 F.Supp. 99, 115 (D.P.R.1983) ("If after all the evidence is presented the carrier leaves doubts as to the cause of the damage, they must be resolved against it.").
15
To permit American the benefit of the $500 limitation, despite the finding of the district court that American did not exercise due diligence in preventing damage to the cargo, both before it was loaded on to the CRUZ DEL SUR and after it arrived in Miami, would immunize the carrier from the adverse consequences of the negligent handling of cargo. Cf. Nemeth v. General Steamship Corp., 694 F.2d 609, 613 (9th Cir.1982) ("To hold [the] liability limitation is absolute, regardless of the carrier's actions, would permit a carrier to violate the terms of the bill of lading at will, knowing that its liability will be limited to $500 per package."). The district court's award of damages to Philip Morris is AFFIRMED.
B. Maritime and the Storage Costs
16
Maritime contends that the district court erred in ordering it to remit the excessive storage charges Philip Morris was forced to pay. The district court held that "Maritime fraudulently obtained payment of storage charges in the amount of $11,688.98 by representing that charges in excess of $20,000 were owed and by failing to disclose that the actual storage charges due were only $935 according to the terms of American's tariff." (emphasis added). (R.Vol. 1 at 296). As the district court correctly stated, 46 U.S.C. Sec. 820, and the rules promulgated thereto, require that any person engaged in the business of "furnishing wharfage, dock, warehouse or other terminal facilities" must file terminal tariffs with the Federal Maritime Commission ("FMC"). 46 CFR Sec. 533.3 (1983). The district court specifically found that Maritime acted as the terminal operator for the handling and storage of the cargo at issue here. There was no dispute over the fact that Maritime had never filed the required tariff. Due to Maritime's failure to comply with the law and the fact that Maritime acted as American's agent in the disposition of this cargo,4 we agree with the district court that Maritime is therefore subject to the rates contained in American's tariff, which was properly filed with the FMC.
C. Frivolous Appeals and Attorney's Fees
17
Philip Morris asserts that it is owed attorney's fees, pursuant to a Florida statute which allows the prevailing party to recover attorney's fees when the court finds "there was a complete absence of justiciable issue of either law or fact raised by the losing party." Fla.Stat.Ann. Sec. 57.105. We conclude that Philip Morris is not entitled to attorney's fees for several reasons. In the first place, a serious question exists as to whether this Florida statute can even be invoked, as this is an admiralty case and not a diversity case where the federal court sits as a state court and applies state law. Blasser, 628 F.2d 376, upon which appellee relies, is inapposite, as the statute in Blasser had been specifically held to be applicable in federal courts. See Coblentz v. American Surety Co., 421 F.2d 187, 188 (5th Cir.1969).
18
Moreover, even if the Florida statute was applicable, the issues contested at bar are undoubtedly not frivolous. The case law construing the Florida statute suggests that parties claiming entitlement to attorney's fees must meet a very high standard. See, e.g., Fireman's Fund Insurance Cos. v. Rojas, 447 So.2d 1023 (Fla.Dist.Ct.App.1984); Ferm v. Saba, 444 So.2d 976, 977 (Fla.Dist.Ct.App.1983) ("An award of fees ... is proper only where the action is so clearly devoid of merit both on the facts and the law as to be completely untenable."). That standard was not met here. Philip Morris' request for attorney's fees is DENIED.
*
Honorable Lloyd F. MacMahon, U.S. District Judge for the Southern District of New York, sitting by designation
1
Philip Morris argued that the $500 per package limitation was denied to American because it fraudulently misrepresented the condition of the cargo when it was received. There is no finding, however, by the district judge to support this assertion by Philip Morris
2
At oral argument, Philip Morris made two additional arguments in support of the result reached by the district judge: first, that deviation by American results in the avoidance of the COGSA limitations, and second, that lack of reasonable notice by American to Philip Morris regarding the latter's choice of a higher or lower liability provisions also results in the avoidance of the COGSA limitations. There were no findings of fact made on these two points, and therefore, without anything to base them on, we are unable to draw any conclusions of law
3
We note additionally that because of the strict construction placed upon limitations of liability in bills of lading, see Cabot, 441 F.2d at 478, we express some doubt as to whether the limitation provision here would extend over the extraordinarily long period of time in which the cargo was in the custody of the carrier's agent
4
At oral argument, Maritime's attorney conceded that the cargo was taken off the ship by Maritime, as agent for American
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786 F.2d 1146
Cola, Appeal of
85-1420
United States Court of Appeals,Third Circuit.
2/24/86
E.D.Pa.,
Cahn, J.
AFFIRMED
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490 F.2d 1406
McKailv.Cargo Ships & Tankers, Inc.
73-1917
UNITED STATES COURT OF APPEALS Second Circuit
2/1/74
1
S.D.N.Y.
AFFIRMED
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IN THE COURT OF CRIMINAL APPEALS
OF TEXAS
NOS. AP-75,979 & AP-75,980
EX PARTE FRANKLIN ELOY MADRID, Applicant
ON APPLICATIONS FOR WRITS OF HABEAS CORPUS
CAUSE NOS. W-55127-01-C AND W-55427-01-C IN THE 251ST DISTRICT
COURT FROM POTTER COUNTY
Per curiam.
OPINION
Pursuant to the provisions of Article 11.07 of the Texas Code of Criminal Procedure, the
clerk of the trial court transmitted to this Court these applications for writs of habeas corpus. Ex
parte Young, 418 S.W.2d 824, 826 (Tex. Crim. App. 1967). Applicant was convicted possession
of a controlled substance with intent to deliver and possession of a controlled substance and
sentenced to twenty-eight (28) years’ imprisonment and seven (7) years’ imprisonment, respectively.
Applicant contends that counsel rendered ineffective assistance because he failed to timely
file notices of appeal.
The trial court has determined that appellate counsel failed to timely file notices of appeal.
MADRID -- 2
We find, therefore, that Applicant is entitled to the opportunity to file out-of-time appeals of the
judgments of conviction in Cause Nos. W-55127-01-C and W-55427-01-C from the 251st Judicial
District Court of Potter County. Applicant is ordered returned to that time at which he may give
written notices of appeal so that he may then, with the aid of counsel, obtain meaningful appeals.
All time limits shall be calculated as if these sentences had been imposed on the date upon which
the mandates of this Court issue. We hold that, should Applicant desire to prosecute appeals, he
must take affirmative steps to file written notices of appeal in the trial court within 30 days after the
mandates of this Court issue.
Delivered: September 10, 2008
Do Not Publish
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DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT
WILLIE JOE JONES,
Appellant,
v.
STATE OF FLORIDA,
Appellee.
No. 4D17-1410
[July 12, 2018]
Appeal from the Circuit Court for the Fifteenth Judicial Circuit, Palm
Beach County; Cheryl Caracuzzo, Judge; L.T. Case No.
502012CF002290AXXXMB.
Carey Haughwout, Public Defender, and Jessica A. De Vera, Assistant
Public Defender, West Palm Beach, for appellant.
Pamela Jo Bondi, Attorney General, Tallahassee, and Mitchell A. Egber,
Assistant Attorney General, West Palm Beach, for appellee.
PER CURIAM.
Affirmed.
DAMOORGIAN, LEVINE and KUNTZ, JJ., concur.
* * *
Not final until disposition of timely filed motion for rehearing.
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Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
10/26/2018 12:13 AM CDT
- 94 -
Nebraska Supreme Court A dvance Sheets
301 Nebraska R eports
CHAFIN v. WISCONSIN PROVINCE SOCIETY OF JESUS
Cite as 301 Neb. 94
K athleen Chafin, appellant, v. Wisconsin Province
of the Society of Jesus and the Catholic
A rchdiocese of Omaha, appellees.
___ N.W.2d ___
Filed September 21, 2018. No. S-17-1059.
1. Appeal and Error. To be considered by an appellate court, an alleged
error must be both specifically assigned and specifically argued in the
brief of the party asserting the error.
2. Motions to Dismiss: Pleadings: Appeal and Error. An appellate court
reviews a district court’s order granting a motion to dismiss de novo,
accepting the allegations in the complaint as true and drawing all rea-
sonable inferences in favor of the nonmoving party.
3. Limitations of Actions: Fraud. An action for fraud does not accrue
until there has been a discovery of the facts constituting the fraud, or
facts sufficient to put a person of ordinary intelligence and prudence on
an inquiry, which, if pursued, would lead to such discovery.
4. Limitations of Actions: Pretrial Procedure. Discovery, as applied to
the statute of limitations, occurs when one knows of the existence of an
injury or damage and not when he or she has a legal right to seek redress
in court.
5. Limitations of Actions: Pleadings: Proof. If the complaint on its face
shows that the cause of action is time barred, the plaintiff must allege
facts to avoid the bar of the statute of limitations and, at trial, has the
burden to prove those facts.
6. Fraud: Estoppel: Limitations of Actions: Proof. In order to success-
fully assert the doctrine of fraudulent concealment and thus estop the
defendant from claiming a statute of limitations defense, the plaintiff
must show the defendant has, either by deception or by a violation of a
duty, concealed from the plaintiff material facts which prevent the plain-
tiff from discovering the misconduct.
7. Fraud: Pleadings: Time. Allegations of fraudulent concealment for
tolling purposes must be pleaded with particularity.
- 95 -
Nebraska Supreme Court A dvance Sheets
301 Nebraska R eports
CHAFIN v. WISCONSIN PROVINCE SOCIETY OF JESUS
Cite as 301 Neb. 94
8. Motions to Dismiss: Fraud: Pleadings: Proof. In order to survive a
motion to dismiss, a complaint alleging fraudulent concealment must
plead with particularity how material facts were concealed to prevent
the plaintiff from discovering the misconduct and how, through due
diligence, the plaintiff failed to discover his or her injury.
9. Pleadings: Words and Phrases. Pleading facts with particularity means
the who, what, when, where, and how: the first paragraph of any news-
paper story.
Appeal from the District Court for Douglas County: Shelly
R. Stratman, Judge. Affirmed.
Thomas C. Dorwart and Benjamin E. Maxell, of Govier,
Katskee, Suing & Maxell, P.C., L.L.O., for appellant.
James J. Frost, of McGrath, North, Mullin & Kratz, P.C.,
L.L.O., for appellee Wisconsin Province of the Society of
Jesus.
Patrick M. Flood and Lisa M. Meyer, of Pansing, Hogan,
Ernst & Bachman, L.L.P., for appellee Catholic Archdiocese
of Omaha.
Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke,
Papik, and Freudenberg, JJ.
Cassel, J.
INTRODUCTION
Kathleen Chafin sued two religious organizations, alleging
that when she gave birth, these organizations kidnapped her
newborn son and fraudulently concealed his adoption. Based
upon the statute of limitations, the district court dismissed her
amended complaint. Chafin contends that her allegation of
fraudulent concealment tolled the statute. Because a pleading
rule requires the facts of fraudulent concealment to be stated
with particularity and because Chafin pled mere legal conclu-
sions, dismissal was correct. Therefore, we affirm.
- 96 -
Nebraska Supreme Court A dvance Sheets
301 Nebraska R eports
CHAFIN v. WISCONSIN PROVINCE SOCIETY OF JESUS
Cite as 301 Neb. 94
BACKGROUND
1969 A doption
Because of the procedural posture, we state facts as alleged
in the amended complaint. And at this stage, we are required
to assume that these allegations are true. Chafin gave birth to
a son in 1969, who was then put up for adoption through the
Wisconsin Province of the Society of Jesus and the Catholic
Archdiocese of Omaha (collectively the Church). Chafin alleges
that her son was fraudulently adopted without her consent and
that the Church concealed this fraud over 40 years, until Chafin
reunited with her son in 2015.
In 1968, Chafin discovered she was pregnant and left col-
lege to return home to Omaha, Nebraska. After the discovery
of the pregnancy, Father Thomas A. Halley “forced” Chafin to
sign a contract for room and board in a residence for young
unmarried pregnant women. The complaint alleges that “the
end-game in this process was to provide babies for compliant
couples in good standing with the [Church] under for-profit
fraudulent adoptions.”
While at the residence, Chafin arranged for her grandmother
“to rescue her from this nightmare” of the residence. Before
Chafin’s grandmother arrived, Chafin went into labor and the
baby was immediately “taken” from her.
We set forth the allegations of fraudulent concealment in the
analysis section below.
Motion to Dismiss
The Church moved to dismiss the amended complaint for
failure to state a claim. The district court determined that the
allegations failed to toll the statute of limitations for various
reasons. It reasoned that the amended complaint failed to plead
sufficient facts to overcome the statute of limitations. The court
granted the motion and dismissed the claims with prejudice.
Chafin filed a timely appeal, which we moved to our docket.1
1
See Neb. Rev. Stat. § 24-1106(3) (Supp. 2017).
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Nebraska Supreme Court A dvance Sheets
301 Nebraska R eports
CHAFIN v. WISCONSIN PROVINCE SOCIETY OF JESUS
Cite as 301 Neb. 94
ASSIGNMENTS OF ERROR
Chafin assigns generally that the district court erred (1)
in dismissing her amended complaint and (2) in evaluating
its merits.
[1] But Chafin’s argument is quite limited. To be considered
by an appellate court, an alleged error must be both specifi-
cally assigned and specifically argued in the brief of the party
asserting the error.2 Chafin argues only that the fraudulent
concealment of the adoption persisted until she discovered her
son in 2015, therefore tolling the statute of limitations. Thus,
we confine her assignment of error to her specific argument
regarding fraudulent concealment.
STANDARD OF REVIEW
[2] An appellate court reviews a district court’s order grant-
ing a motion to dismiss de novo, accepting the allegations in
the complaint as true and drawing all reasonable inferences in
favor of the nonmoving party.3
ANALYSIS
Statute of Limitations
The Church asserts that Chafin’s claims are barred by a
4-year statute of limitations. Neb. Rev. Stat. § 25-207(3)
(Reissue 2016) sets forth a 4-year statute of limitations for
“an action for an injury to the rights of the plaintiff, not aris-
ing on contract, and not hereinafter enumerated.” Although a
claim under § 25-207 can be asserted at the time the cause of
action accrued, “an action for relief on the ground of fraud
. . . shall not be deemed to have accrued until the discovery of
the fraud.”4
[3,4] An action for fraud does not accrue until there has
been a discovery of the facts constituting the fraud, or facts
2
In re Interest of Nicole M., 287 Neb. 685, 844 N.W.2d 65 (2014); Carlson
v. Allianz Versicherungs-AG, 287 Neb. 628, 844 N.W.2d 264 (2014).
3
Burklund v. Fuehrer, 299 Neb. 949, 911 N.W.2d 843 (2018).
4
§ 25-207(4).
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CHAFIN v. WISCONSIN PROVINCE SOCIETY OF JESUS
Cite as 301 Neb. 94
sufficient to put a person of ordinary intelligence and pru-
dence on an inquiry, which, if pursued, would lead to such
discovery.5 Discovery, as applied to the statute of limitations,
occurs when one knows of the existence of an injury or dam-
age and not when he or she has a legal right to seek redress
in court.6
Unless Chafin sufficiently pled fraudulent concealment,
the statute of limitations began to run in 1969 when Chafin
discovered the existence of her injury. At that point, Chafin
knew that the Church facilitated the adoption, knew that the
child never returned to her, and knew she was injured by the
adoption because she was not allowed to keep her son. At
the time of her child’s birth, Chafin was aware of her injury
and sufficient facts to put a person of ordinary intelligence
and prudence on inquiry. From these facts, Chafin knew
who allegedly committed the fraud, what was done, where
it was done, how it was done, and when her injury from the
fraud occurred.
Tolling by Fraudulent
Concealment
[5,6] Chafin asserts that fraudulent concealment tolls the
statute of limitations. If the complaint on its face shows that
the cause of action is time barred, the plaintiff must allege
facts to avoid the bar of the statute of limitations and, at trial,
has the burden to prove those facts.7 In order to successfully
assert the doctrine of fraudulent concealment and thus estop
the defendant from claiming a statute of limitations defense,
the plaintiff must show the defendant has, either by deception
5
Fitzgerald v. Community Redevelopment Corp., 283 Neb. 428, 811 N.W.2d
178 (2012).
6
Andres v. McNeil Co., 270 Neb. 733, 707 N.W.2d 777 (2005). See, also,
Alston v. Hormel Foods Corp., 273 Neb. 422, 730 N.W.2d 376 (2007);
Kalkowski v. Nebraska Nat. Trails Museum Found., 20 Neb. App. 541, 826
N.W.2d 589 (2013) (applying general discovery rule to discovery of fraud).
7
See Lindner v. Kindig, 285 Neb. 386, 826 N.W.2d 868 (2013).
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Nebraska Supreme Court A dvance Sheets
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CHAFIN v. WISCONSIN PROVINCE SOCIETY OF JESUS
Cite as 301 Neb. 94
or by a violation of a duty, concealed from the plaintiff mate-
rial facts which prevent the plaintiff from discovering the mis-
conduct.8 Under the doctrine of fraudulent concealment, the
plaintiff must show that he or she exercised due diligence to
discover his or her cause of action before the statute of limita-
tions expired.9
Pleading Fraudulent Concealment
With Particularity
In order to determine whether an allegation of fraudulent
concealment is sufficient to survive a motion to dismiss, we
must determine the proper pleading standard. The Church con-
tends that a specific pleading rule controls.
“In all averments of fraud, . . . the circumstances constitut-
ing fraud . . . shall be stated with particularity.”10 The height-
ened pleading requirement stems from the practice at common
law and under the codes and “imparts a note of seriousness and
encourages a greater degree of pre-institution investigation by
the plaintiff.”11
[7] Because we have not specifically considered whether
§ 6-1109(b) applies to pleading fraudulent concealment to
avoid a statutory bar and because the Nebraska Court Rules
of Pleading in Civil Cases are modeled after the Federal Rules
of Civil Procedure, we may look to federal decisions for
guidance.12 The Eighth Circuit determined that “allegations of
fraud, including fraudulent concealment for tolling purposes,
[must] be pleaded with particularity.”13 While we are not
8
Andres v. McNeil Co., supra note 6.
9
Id.
10
Neb. Ct. R. Pldg. § 6-1109(b) (rev. 2008).
11
See 5A Charles Alan Wright & Arthur R. Miller, Federal Practice and
Procedure § 1296 at 31 (3d ed. 2004).
12
See Ichtertz v. Orthopaedic Specialists of Neb., 273 Neb. 466, 730 N.W.2d
798 (2007).
13
Great Plains Trust Co. v. Union Pacific R. Co., 492 F.3d 986, 995 (8th Cir.
2007).
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CHAFIN v. WISCONSIN PROVINCE SOCIETY OF JESUS
Cite as 301 Neb. 94
bound to follow this decision, we are persuaded by the Eighth
Circuit’s reasoning. Moreover, at oral argument, Chafin effec-
tively conceded that the “particularity” requirement applies
to fraudulent concealment. We now hold that allegations of
fraudulent concealment for tolling purposes must be pleaded
with particularity.
[8,9] In order to survive a motion to dismiss, a complaint
alleging fraudulent concealment must plead with particularity
how material facts were concealed to prevent the plaintiff from
discovering the misconduct and how, through due diligence,
the plaintiff failed to discover his or her injury.14 “‘This means
the who, what, when, where, and how: the first paragraph of
any newspaper story.’”15
Chafin’s brief argued that she “pled specific facts that sup-
port her further allegation that the original fraud regarding the
illegal taking of her baby was fraudulently concealed by the
[Church] until 2015.”16 At oral argument, she again claimed to
have alleged specific facts.
So, what did Chafin plead to meet this requirement? Only
four statements in the amended complaint purport to address
the period from 1969 to 2015. These were:
• The Church “covered-up and concealed facts and witnesses
necessary to pursue and [sic] action against them.”
• The concealment continued from the birth of her son until
they were reunited in 2015.
•
The Church “continued in their fraudulent adoption and
fraudulently covered up and concealed from Chafin any facts
that would have put her on notice of the adoption fraud and,
therefore, Chafin was unable to discover the necessary rel-
evant facts to put her on notice of the adoption fraud perpe-
trated against her.”
14
See Andres v. McNeil Co., supra note 5.
15
Great Plains Trust Co. v. Union Pacific R. Co., supra note 13, 492 F.3d at
995 (quoting DiLeo v. Ernst & Young, 901 F.2d 624 (7th Cir. 1990)).
16
Brief for appellant at 6.
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CHAFIN v. WISCONSIN PROVINCE SOCIETY OF JESUS
Cite as 301 Neb. 94
• Chafin was unaware of her claims until 2015 as a result of
the Church’s “deceptions, cover-up, concealment, misrepre-
sentations, illegal suppression of evidence and destruction of
evidence,” and remained unaware of potential legal claims
because of the concealment.
But all of these allegations are mere legal conclusions. As
to fraudulent concealment, the amended complaint simply does
not tell us the who, what, when, where, and how. Because
Chafin failed to particularly allege fraudulent concealment, the
statute of limitations did not toll. Thus, long before 2015, her
claims were time barred.
CONCLUSION
We conclude that Chafin’s claims are barred by the statute
of limitations. We therefore affirm the order of the district
court granting the motion to dismiss her amended complaint
with prejudice.
A ffirmed.
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} |
843 N.E.2d 897 (2006)
The PEOPLE of the State of Illinois, Plaintiff-Appellee,
v.
Larry STRICKLAND, Defendant-Appellant.
No. 4-04-0218.
Appellate Court of Illinois, Fourth District.
February 10, 2006.
Rehearing Denied March 13, 2006.
*899 Daniel D. Yuhas (court-appointed), Erica R. Clinton, Assistant Defender, Office of the State Appellate Defender, Springfield, for Larry Strickland.
Thomas J. Brown, State's Attorney, Norbert J. Goetten, Director, Robert J. Biderman, Deputy Director, Kathy Shepard, Staff Attorney, State's Attorneys Appellate Prosecutor, Springfield, for the People.
Presiding Justice TURNER delivered the opinion of the court:
In September 2003, the State charged defendant, Larry Strickland, with four counts of aggravated battery (Pub. Act 92-841, § 5, eff. August 22, 2002 (2002 Ill. Laws 3050, 3053) (amending 720 ILCS 5/12-4(b)(6) (West Supp.2001))). After a January 2004 trial, a jury found defendant guilty as charged. At a March 2004 sentencing hearing, the trial court sentenced defendant to three concurrent terms of four years' imprisonment to run consecutive to defendant's six other prison terms.
Defendant appeals, asserting (1) he was denied a fair trial because he was handcuffed to a table during his jury trial and (2) the trial court erred by not inquiring into his pro se ineffective-assistance-of-counsel contention. We affirm.
I. BACKGROUND
On January 28, 2004, the trial court held a jury trial on the charges against defendant. Before the trial and outside the jury's presence, the following exchange took place:
"THE COURT: All right. Presently, you have both hands
THE DEFENDANT: Yes, sir.
THE COURT:handcuffed.
THE COURT: I typically allow, unless there is a reason not toare you right-handed or left-handed[?]
THE DEFENDANT: Left-handed.
THE COURT: Left-handed. All right. I am going to direct that the correctional officers free your left hand, but handcuff your right hand to the table where we have an eyebolt.
THE DEFENDANT: Yes, sir.
THE COURT: So that would allow you some freedom with your left hand toyou have papers there, I note, so you will have freedom of your left hand to look at your papers.
THE DEFENDANT: Yes, sir. Thank you. Will I pick a jury today, or what?"
Also before trial, defendant presented a letter he had written to authorities at the Pontiac Correctional Center (Center) about problems he was experiencing. The trial court allowed defendant to discuss the letter with his attorney, who then explained to the court he was unaware of a manner in which to introduce the letter as evidence at trial. The court allowed the letter to be put in the record for appeal purposes only. Defendant again insisted he wanted his problems with prison officials brought out at trial and wanted to testify to those matters. The court stated it would allow defendant to talk with defense counsel some more.
The State presented the testimony of Bradley Knight, a correctional officer at the Center; Gary Kuhse, a sergeant at the Center; Anthony Harvey, who, at the time of the incident, was a captain at the Center; Joyce Friel, a nurse at the Center; and Karl Webber, a correctional officer in the Center's internal affairs division. Defendant did not present any evidence.
Knight testified that on the morning of October 30, 2002, he was picking up break-fast trays at the Center when he noticed a *900 liquid substance coming from the cracks of defendant's cell door. Knight then notified the command staff, and Harvey and Kuhse responded. Kuhse ordered defendant to turn his back to them so Kuhse could open the cuffing hatch and handcuff defendant. When Kuhse opened the hatch and attempted to handcuff defendant, defendant reached out with a toothpaste tube and squirted an unknown liquid in their direction. The substance, which smelled like a mix of feces and urine, hit Knight and Harvey on their right arms as they turned away. Knight observed that defendant's pulling away from Kuhse caused Kuhse's left ring finger to get scratched on the top of the cuffing hatch. Kuhse's finger was bleeding. After the incident, Knight went to the Center's health-care unit and saw Friel.
Defense counsel cross-examined Knight about the location of the cuffing hatch on the cell door and other aspects of the door. He also asked questions regarding the cuffing procedure and each officer's position in relationship to the door and each other. Moreover, defense counsel inquired about how Kuhse's finger was injured.
Harvey and Kuhse gave testimony similar to Knight's regarding the October 30, 2002, incident. Kuhse stated his finger was bleeding after his struggle with defendant in the cuffing hatch. Harvey indicated some of the substance landed on his right arm and right shirt sleeve. Defense counsel cross-examined both witnesses, bringing out the discrepancies in the officers' testimony about the incident's details and exploring how defendant was able to squirt the substance out of his cell directly at the officers.
Friel testified she examined all three officers at the Center's health-care unit on October 30, 2002. Knight had a foreign substance on his right arm, and thus she had him wash and cleanse his arm. Kuhse had a cut on his wedding-ring finger, which she cleansed and disinfected, and to which she applied a triple antibiotic ointment. Harvey did not have any actual exposure when he arrived at the Center so she just took his vitals and checked him over.
Webber testified he investigated the October 30, 2002, incident and talked to defendant on December 24, 2002. Defendant explained he received a juice carton that was leaking with his breakfast. He got angry about the leaky carton but did not talk to an officer about it. Webber also testified he asked defendant if he squirted the fecal matter on the officers as alleged, and said defendant replied "yes, he did." Webber then asked defendant what exactly was in the stuff he squirted, and defendant replied "'it is something bad.'"
After the State's witnesses testified, the trial court recessed the trial for lunch and allowed defendant to discuss with defense counsel the matters to which defendant wanted to testify. When the proceedings resumed, defendant stated he no longer wanted to testify.
After hearing all of the evidence, the jury found defendant guilty of all four charges. On March 10, 2004, the trial court held a sentencing hearing at which defendant made an oral posttrial motion, asserting an ineffective-assistance-of-counsel claim. The court denied the motion. It then sentenced defendant to three concurrent terms of four years' imprisonment on the first three counts to run consecutive to defendant's convictions in the following cases: (1) People v. Strickland, No. 85-C-13416 (Cir. Ct. Cook Co.); (2) People v. Strickland, No. 92-CF-25 (Cir. Ct. Livingston Co.); (3) People v. Strickland, No. 94-CF-76 (Cir. Ct. Livingston Co.); (4) People v. Strickland, No. 94-CF-146 (Cir. Ct. Livingston Co.); (5) People v. Strickland, No. 01-CF-250 (Cir. Ct. Livingston Co.); and (6) People v. Strickland, No. 03-CF-177 (Cir. Ct. Livingston Co.). This appeal followed.
*901 II. ANALYSIS
A. Fair Trial
Defendant first argues he was denied a fair trial because the trial court ordered one of his hands to be handcuffed to the table during his jury trial. Defendant acknowledges he did not object to being handcuffed at trial but asserts this court should find the handcuffing resulted in plain error (134 Ill.2d R. 615(a)). The application of the plain-error doctrine and what should happen when plain error occurs are sources of contention among our sister courts. Thus, we will provide a thorough background of the case law in this area.
In People v. Boose, 66 Ill.2d 261, 265, 5 Ill.Dec. 832, 362 N.E.2d 303, 305 (1977), the Supreme Court of Illinois found the shackling of an accused should be avoided if possible because it (1) tends to prejudice the jury against the accused, (2) restricts the accused's ability to assist counsel during trial, and (3) offends the dignity of the judicial process. However, the Boose court recognized a defendant may be restrained where the court reasonably believes (1) the defendant may try to escape, (2) the defendant may pose a threat to the safety of the people in the courtroom, or (3) restraint is necessary to maintain order during the trial. Boose, 66 Ill.2d at 266, 5 Ill.Dec. 832, 362 N.E.2d at 305. The determinations of whether to restrain a defendant and what restraints are most suitable are within the trial court's discretion, and a reviewing court will not overturn those decisions unless the trial court abused its discretion. Boose, 66 Ill.2d at 266-67, 5 Ill.Dec. 832, 362 N.E.2d at 305-06.
In making the determination whether to restrain a defendant, Boose directs the trial court to hold proceedings outside the presence of the jury. During those proceedings, the defense counsel should have the opportunity to present reasons why the defendant should not be restrained, and the trial court should state for the record the reasons for restraining the defendant in the courtroom. Boose, 66 Ill.2d at 266, 5 Ill.Dec. 832, 362 N.E.2d at 305. Additionally, the Boose court provided a nonexclusive list of 12 factors for the trial court to consider in making its determination. Boose, 66 Ill.2d at 266-67, 5 Ill.Dec. 832, 362 N.E.2d at 305-06.
That same year, our supreme court applied Boose to a bench trial, noting the shackling of an accused without clear cause jeopardizes the presumption of innocence's "value and protection and demeans our justice." In re Staley, 67 Ill.2d 33, 37, 7 Ill.Dec. 85, 364 N.E.2d 72, 73 (1977). In both Boose and Staley, the supreme court affirmed the appellate courts' reversal of the trial courts' judgments. Boose, 66 Ill.2d at 269, 5 Ill.Dec. 832, 362 N.E.2d at 307; Staley, 67 Ill.2d at 38, 7 Ill.Dec. 85, 364 N.E.2d at 74.
Two years later, the court addressed a defendant's contention his conviction should be reversed because he appeared before the venire in handcuffs, even though he did not object to the handcuffs at that time. People v. Hyche, 77 Ill.2d 229, 240-41, 32 Ill.Dec. 893, 396 N.E.2d 6, 12 (1979). Our supreme court concluded the defendant had waived any error by failing to object to his appearance in handcuffs and thus affirmed the trial court's judgment. Hyche, 77 Ill.2d at 241, 32 Ill.Dec. 893, 396 N.E.2d at 12. In reaching that conclusion, it expressly distinguished Boose and Staley, noting the defendants in those cases had objected to appearing in handcuffs. Hyche, 77 Ill.2d at 241, 32 Ill.Dec. 893, 396 N.E.2d at 12.
The Hyche court found guidance in the United States Supreme Court's decision in Estelle v. Williams, 425 U.S. 501, 96 S.Ct. 1691, 48 L.Ed.2d 126 (1976). Hyche, 77 *902 Ill.2d at 241, 32 Ill.Dec. 893, 396 N.E.2d at 12. There, without objection, the defendant appeared before the jury in prison attire. Estelle, 425 U.S. at 502, 96 S.Ct. at 1692, 48 L.Ed.2d at 129-30. The Estelle Court began by recognizing the wearing of jail or prison attire could possibly impair the presumption of innocence and found compelling an accused to wear such attire violated the fourteenth amendment. Estelle, 425 U.S. at 503-06, 96 S.Ct. at 1692-94, 48 L.Ed.2d at 130-31. However, the Court concluded that "although the State cannot, consistently with the Fourteenth Amendment, compel an accused to stand trial before a jury while dressed in identifiable prison clothes, the failure to make an objection to the court as to being tried in such clothes, for whatever reason, is sufficient to negate the presence of compulsion necessary to establish a constitutional violation." Estelle, 425 U.S. at 512-13, 96 S.Ct. at 1697, 48 L.Ed.2d at 135.
In People v. McCue, 175 Ill.App.3d 762, 765-66, 125 Ill.Dec. 243, 530 N.E.2d 271, 273 (1988), the Third District followed Hyche and concluded that since the defendants failed to object to being handcuffed, they waived any alleged error that occurred by them being handcuffed throughout their trial. The McCue court also found, in the alternative, the trial court did not abuse its discretion in ordering the defendants handcuffed based on the Boose factors. McCue, 175 Ill.App.3d at 766, 125 Ill.Dec. 243, 530 N.E.2d at 273-74.
Despite its application of Hyche in McCue, the Third District in People v. Doss, 347 Ill.App.3d 418, 428, 283 Ill.Dec. 92, 807 N.E.2d 697, 705 (2004), held the trial court's decision to keep on the defendant's leg shackles during the trial, to which the defendant did not object, was plain error since it deprived the defendant of a fair trial. There, the trial court had only indicated it believed the jury could not see the shackles, which the Third District found insufficient under Boose. The Doss court reversed the defendant's conviction and remanded for further proceedings. Doss, 347 Ill.App.3d at 428, 283 Ill.Dec. 92, 807 N.E.2d at 705; see also People v. Allen, 354 Ill.App.3d 442, 446, 290 Ill.Dec. 284, 821 N.E.2d 335, 339 (2004), appeal allowed, 214 Ill.2d 537, 294 Ill.Dec. 4, 830 N.E.2d 4 (2005) (No. 99977) (stun belt); People v. Brown, 356 Ill. App.3d 1088, 1091, 293 Ill.Dec. 381, 828 N.E.2d 351, 354 (2005) (shackles).
In other cases where the defendant has failed to object to the use of a stun belt at trial, the Third District has found a violation of constitutional rights but concluded the cases should be remanded to the trial court for a retrospective Boose hearing. See People v. Johnson, 356 Ill.App.3d 208, 211-12, 292 Ill.Dec. 177, 825 N.E.2d 765, 767-68 (2005); People v. Buckner, 358 Ill. App.3d 529, 532, 534, 294 Ill.Dec. 726, 831 N.E.2d 676, 679-80 (2005).
In People v. Bennett, 281 Ill.App.3d 814, 825-26, 217 Ill.Dec. 230, 666 N.E.2d 899, 906-07 (1996), the First District reversed the conviction of a defendant, who was tried in shackles, under the plain-error doctrine. However, there, the defendant had requested the shackles be removed at trial but had forfeited the argument on appeal by failing to raise it in a posttrial motion (see People v. Enoch, 122 Ill.2d 176, 186, 119 Ill.Dec. 265, 522 N.E.2d 1124, 1130 (1988)). Bennett, 281 Ill.App.3d at 823, 217 Ill.Dec. 230, 666 N.E.2d at 905.
In People v. Crutchfield, 353 Ill.App.3d 1014, 1022, 289 Ill.Dec. 731, 820 N.E.2d 507, 515 (2004), the Fifth District declined to apply the plain-error doctrine to a defendant's challenge to his wearing a stun belt during trial because the record clearly demonstrated the error did not contribute to his conviction. There, like Bennett, the defendant had objected to the stun belt at trial but had failed to raise the issue in a *903 posttrial motion. Crutchfield, 353 Ill. App.3d at 1021, 289 Ill.Dec. 731, 820 N.E.2d at 514. The Fifth District also reached the same conclusion in People v. DuPree, 353 Ill.App.3d 1037, 1043-44, 289 Ill.Dec. 784, 820 N.E.2d 560, 565-66 (2004), where the defendant forfeited his stun-belt challenge by failing to object at trial.
After considering the aforementioned case law, we decline to reverse defendant's conviction under the plain-error doctrine. Unlike the Third District cases that have found plain error, our supreme court has not applied Boose and Staley when a defendant has failed to object to appearing before a jury in restraints. See Hyche, 77 Ill.2d at 241, 32 Ill.Dec. 893, 396 N.E.2d at 12. The Hyche court indicates it is the State's compelling the defendant to wear restraints before the jury that creates the constitutional violation. Hyche, 77 Ill.2d at 241, 32 Ill.Dec. 893, 396 N.E.2d at 12. Thus, when a defendant fails to object to wearing restraints, the presence of compulsion is negated, and a constitutional violation has not been established. See Hyche, 77 Ill.2d at 241, 32 Ill.Dec. 893, 396 N.E.2d at 12.
Moreover, we agree with the State that the United States Supreme Court's recent decision in Deck v. Missouri, 544 U.S. 622, 125 S.Ct. 2007, 161 L.Ed.2d 953 (2005), does not warrant a different result. There, the defendant continuously objected to wearing the shackles. Deck, 544 U.S. at ___, 125 S.Ct. at 2010, 161 L.Ed.2d at 960. Thus, the Deck Court did not address whether a defendant's constitutional rights are violated when the defendant does not object to the restraints at trial.
Even if Deck provides a defendant's presence at trial in shackles without objection is a constitutional violation, defendant has not established plain error here. First, the Deck Court expressly states a defendant's due-process rights are violated by "the use of visible restraints." (Emphasis added.) Deck, 544 U.S. at ___, 125 S.Ct. at 2014, 161 L.Ed.2d at 964. In this case, the trial court noted defendant's left hand was free and his right hand was handcuffed to an eyebolt attached to the table. In its brief, the State asserts defendant fails to argue and the record fails to show the single handcuff was visible to the jury. In his reply brief, defendant does not refute this contention. Under the plain-error doctrine, defendant has the burden of proving an error occurred (see People v. Herron, 215 Ill.2d 167, 187, 294 Ill.Dec. 55, 830 N.E.2d 467, 480 (2005)) and thus had the burden of demonstrating the handcuff was visible to the jury.
Second, even if the handcuff was visible to the jury, the State has proved "'beyond a reasonable doubt that the [shackling] error complained of did not contribute to the verdict obtained.'" Deck, 544 U.S. at ___, 125 S.Ct. at 2015-16, 161 L.Ed.2d at 966, quoting Chapman v. California, 386 U.S. 18, 24, 87 S.Ct. 824, 828, 17 L.Ed.2d 705, 710 (1967). Here, the evidence of defendant's guilt was overwhelming. See People v. Kennedy, 150 Ill.App.3d 319, 326, 103 Ill.Dec. 687, 501 N.E.2d 1004, 1009 (1986) (finding that even if the defendant had not been wearing leg irons, the jury would have found him guilty where the evidence was overwhelming); see also People v. Barney, No. 4-04-0217 (February 10, 2006), ___ Ill.App.3d ___, ___ Ill.Dec. ___, ___ N.E.2d ___. Defendant was upset about a leaky juice carton and admitted to Webber he had squirted the fecal matter on the officers. Harvey, Kuhse, and Knight all testified Kuhse's finger was injured when he struggled with defendant in the cuffing hatch. Friel confirmed the injury to Kuhse's finger and the substance on Knight's arm.
B. Ineffective Assistance of Counsel
Defendant also contends his case must be remanded because the trial court *904 failed to make an adequate inquiry into his pro se ineffective-assistance-of-counsel allegation. Whether the trial court made an adequate inquiry is a question of law, and thus our review is de novo. See People v. Savage, 361 Ill.App.3d 750, 756, 297 Ill. Dec. 760, 838 N.E.2d 247, 252 (2005).
When a defendant raises pro se a posttrial ineffective-assistance-of-counsel claim, the trial court may, when warranted, appoint new counsel to assist the defendant with presenting his claim. People v. Pope, 284 Ill.App.3d 330, 333, 219 Ill. Dec. 750, 672 N.E.2d 65, 67 (1996); People v. Krankel, 102 Ill.2d 181, 189, 80 Ill.Dec. 62, 464 N.E.2d 1045, 1049 (1984). Thus, when a defendant asserts such a claim, the court must first conduct an "adequate inquiry" to determine the factual basis for the claim. People v. Johnson, 159 Ill.2d 97, 125, 201 Ill.Dec. 53, 636 N.E.2d 485, 497 (1994). If the court concludes the claim lacks merit or pertains only to matters of trial strategy, then new counsel is unnecessary. However, if the inquiry indicates trial counsel's possible neglect of the case, then the court should appoint new counsel. Pope, 284 Ill.App.3d at 333, 219 Ill.Dec. 750, 672 N.E.2d at 67.
Therefore, we address "`whether the trial court conducted an adequate inquiry' into the allegations." People v. Peacock, 359 Ill.App.3d 326, 339, 295 Ill.Dec. 563, 833 N.E.2d 396, 407 (2005), quoting People v. Moore, 207 Ill.2d 68, 78, 278 Ill.Dec. 36, 797 N.E.2d 631, 638 (2003). In conducting an inquiry, the trial court uses one or more of the following methods: "(1) questioning the trial counsel, (2) questioning the defendant, and (3) relying on its own knowledge of the trial counsel's performance in the trial." Peacock, 359 Ill. App.3d at 339, 295 Ill.Dec. 563, 833 N.E.2d at 407.
Defendant's recitation of what occurred at his sentencing hearing is deficient. The following is a brief summary of what actually took place. The trial court invited defendant to talk about why he sought a trial in this case, and defendant began by stating the following:
"Your Honor, I think it was a grave misjustice that I was and that I have been convicted. I don't think I had the representation. I don't think I had the proper counsel to represent me. My counsel never asked me anything about the case. We never talked about any strategies about the case."
Defendant asserted he was being harassed and poisoned by prison officers. He noted the things he believed he was being denied in prison and again stated, "I am not being given the proper attorney. I am not being represented properly by counsel."
Defendant later requested a motion for a new trial based on ineffective assistance of counsel. He asserted his attorney (1) did not communicate with him, except for asking him if he would take three years; (2) failed to present evidence he had a conflict with Center officials; (3) failed to show Friel did not have a record on Harvey; and (4) failed to argue the events could not have happened the way the officers testified they did. The trial court acknowledged defendant's oral motion for a new trial and denied it, noting it had recalled the trial.
Defendant contends his case is similar to People v. Robinson, 157 Ill.2d 68, 191 Ill. Dec. 107, 623 N.E.2d 352 (1993). There, the trial court denied the defendant's motion without any inquiry at all. Our supreme court stated "the trial court should have afforded the defendant the opportunity to specify and support his complaints." Robinson, 157 Ill.2d at 86, 191 Ill.Dec. 107, 623 N.E.2d at 361.
Unlike Robinson, the trial court in this case did allow defendant to explain why he thought his counsel was ineffective. The court gave defendant ample opportunity to *905 set forth and support his ineffective-assistance-of-counsel claim. Contrary to defendant's assertion, the court did not utterly fail to make an initial inquiry into his claims.
Here, the trial court's inquiry into defendant's ineffective-assistance-of-counsel claims was adequate. The court allowed defendant to present his ineffective-assistance-of-counsel claim and then relied on its own knowledge of the trial to deny defendant's posttrial motion that raised the ineffective-assistance-of-counsel claim. The court's reliance on its recollection was adequate in this case where defendant's allegations were refuted by the trial record. See People v. Young, 341 Ill.App.3d 379, 383, 275 Ill.Dec. 237, 792 N.E.2d 468, 472 (2003) (finding further inquiry into the factual basis of defendant's pro se ineffective-assistance claims was unnecessary where the claims related to trial matters and the judge hearing the posttrial motion had presided over the trial).
III. CONCLUSION
For the reasons stated, we affirm the trial court's judgment.
Affirmed.
STEIGMANN and MYERSCOUGH, JJ., concur.
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NOTE: This order is nonprecedentia1.
UHnited States Court of Appeals
for the Federal Circuit
RICHARD A. BECKER,
Petitioner,
V.
DEPARTMENT OF VETERANS AFFAIRS,
Respondent.
2012-3111
Petition for review of the Merit Systems Protection
Board in case no. NY4324110013-I-1.
ON MOTION
ORDER
The Department of Veterans Affairs moves out of time
for a 149-day extension of time, until September 27, 2012,
to file its response brief out of time.
Upon consideration thereof,
IT ls ORDERED THAT:
RICHARD BECKER V. DVA 2
The motion is granted. No further extensions should
be anticipated.
FOR THE COURT
1 7 /s/ Jan Horbaly
Date J an Horbaly
Clerk
cc: Richard A. Becker
Lauren S. Moore, Esq.
F|LED
21 . Awem.sson
s u‘sr?+is`i'ii)€sizxic\acu\r
SEP172U12
JAN HORBALY
CLERK
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515 F.2d 988
169 U.S.App.D.C. 271
FEDERAL TRADE COMMISSION, Appellant,v.MANAGER, RETAIL CREDIT COMPANY, MIAMI BRANCH OFFICE, Appellee.
No. 73-1844.
United States Court of Appeals,District of Columbia Circuit.
Argued Sept. 13, 1974.Decided Feb. 28, 1975.
James P. Timony, Atty., F.T.C., with whom Harold H. Titus, Jr., U. S. Atty., at the time the brief was filed, and Harold D. Rhynedance, Jr., Asst. Gen. Counsel, F.T.C., were on the brief for appellant.
Edward J. Schmuck, Washington, D. C., with whom Francis M. Gregory, Jr., and Stephen S. Cowen, Washington, D. C., were on the brief, for appellee.
Before BAZELON, Chief Judge, and ROBINSON and MacKINNON, Circuit Judges.
MacKINNON, Circuit Judge:
1
The Federal Trade Commission (FTC) applied to the District Court for enforcement of an administrative subpoena duces tecum requiring the Retail Credit Company (Retail) to produce documentary evidence for a Commission investigation of the practices of certain consumer reporting agencies under the Fair Credit Reporting Act (FCRA), 15 U.S.C. § 1681 et seq. Following a trial the District Court ruled that the FTC, like other Government agencies seeking consumer credit reports regulated by the FCRA, must obtain a court order or the permission of affected consumers in order to compel disclosure of the documents.1 Because we conclude that the FTC has special statutory power incident to its role as enforcer of the FCRA, we reverse.
2
* In 1970 Congress appended to the Consumer Credit Protection Act, 15 U.S.C. § 1601 et seq., a number of provisions collectively known as the Fair Credit Reporting Act. Section 602 of the FCRA recognized that "(c)onsumer reporting agencies have assumed a vital role in assembling and evaluating consumer credit and other information on consumers" and affirmed the "need to insure that (such) agencies exercise their grave responsibilities with fairness, impartiality, and a respect for the consumer's right to privacy." The congressional prescription was a comprehensive series of restrictions on the disclosure and use of credit information assembled by consumer reporting agencies. Section 604 identifies three instances in which reporting agencies may furnish credit reports: (1) in response to an appropriate court order; (2) by permission of consumers whose credit ratings are documented in the reports sought; and (3) to a person with a legitimate business interest in the information.2 Section 608 allows disclosure of limited portions of the reports essentially identifying information to governmental agencies unable to qualify under any of the subsections of section 604.3 The Act attaches special restrictions to the preparation and disclosure of investigative consumer reports4 and requires that an agency apprise a consumer who makes an appropriate request of the nature and substance of information in his file, the sources of the data, and the identity of parties to whom it is released.5
3
Section 621 sets forth an elaborate scheme for administrative enforcement of the FCRA. Subsection (a) imposes upon the Federal Trade Commission the responsibility for enforcing compliance with the requirements of the FCRA with respect to the preponderance of consumer reporting agencies and affirms the Commission's right to use its customary procedural, investigative and enforcement powers.6 Subsection (b) commits enforcement obligations to specified Government agencies where enumerated institutions or statutes are involved.7 Though each of the agencies listed in (b) is authorized to use all authority conferred on it by law to enforce the FCRA in its respective province, none wields powers as comprehensive as that of the FTC.
4
On April 1, 1972, as part of an ongoing investigation of the practices of certain consumer reporting agencies, the FTC issued a subpoena duces tecum to the Manager of the Miami Branch Office of the Retail Credit Company.8 The company assembles and sells data bearing on an individual's credit rating, fitness for employment, and qualifications for insurance, including personal information on character, reputation, and life style. Specification 7 of the subpoena requested production of the complete files of all consumers who since January 1 had directed the Miami Branch Office to release information in their files. Specification 9 sought the complete files of all individuals investigated by four named credit investigators during certain periods of time. Retail complied with the entirety of the subpoena save specifications 7 and 9; in a letter dated May 8, 1972, the company explained that the disclosures requested in those paragraphs would violate both section 604 of the Fair Credit Reporting Act and the rights of privacy of those consumers whose reports the Commission was seeking.9
5
The FTC petitioned the District Court for an order compelling compliance with its subpoena and for a declaration, pursuant to 28 U.S.C. § 2201 (1959), that section 621 of the FCRA permits voluntary compliance with Commission requests for the production of consumer reports. Retail Credit counterclaimed for a declaration that the Act forbids distribution of consumer reports unless the request is supported by court order or consumer authorization. Because the FTC managed to obtain some of Retail's consumer reports distributed to insurance companies after the initial pleadings were filed, Retail amended its counterclaim to include a request for a declaration that no person or organization could release its reports unless the requirements of section 604 were followed.
6
At trial Commission witnesses testified to the need for prompt access to consumer reports in investigations of reporting agencies' compliance with the FCRA. Retail responded that the language of the statute did not allow disclosure by administrative subpoena, that the procedures which the Act specified were adequate for the Commission's task, and that the privacy considerations which had prompted passage of the FCRA militated against any unauthorized or unnecessary disclosure. On April 23, 1973, the District Court entered an order denying the Commission's power to compel production of Retail's consumer reports by administrative subpoena. Instead the court treated the FTC petition as an application for a court order under section 604 of the FCRA and proceeded to grant the application, subject to Commission notification, by mail and publication, of the consumers whose reports were sought, in order to afford them an opportunity to refuse disclosure. Because the court denied the FTC direct access to Retail's consumer reports, it similarly disapproved the agency's efforts to secure the reports from third parties who had purchased them for legitimate business purposes, and forbad that line of attack in the future.
II
7
The Fair Credit Reporting Act speaks with apparent ambiguity of the FTC's power to obtain consumer reports from reporting agencies. Section 604 establishes a seemingly exclusive catalogue of the instances in which reports may be disclosed "A consumer reporting agency may furnish a consumer report under the following circumstances and no other" and includes in the list disclosure by court order, with consumer permission, and for a legitimate business purpose. Section 608 also specifically authorizes disclosure of limited identifying information to Government agencies and thus creates no real exception to the general prohibition of section 604.
8
On the other hand, section 621(a), the provision for administrative enforcement of the FCRA, grants the Commission "such procedural, investigative, and enforcement powers, including the power . . . to require . . . the production of documents, and the appearance of witnesses as though the applicable terms and conditions of the Federal Trade Commission Act were part of this title." (Emphasis added.) The inclusive language of the relevant portion of the Federal Trade Commission Act, 15 U.S.C. § 49, applicable to enforcement of the FCRA mutatis mutandis, indicates that the investigative powers of the Commission are broad enough to include the subpoena of consumer reports:
9
(F)or the purposes of this Act the Commission . . . shall at all reasonable times have access to, for the purpose of examination, and the right to copy any documentary evidence of any corporation being investigated or proceeded against; and the commission shall have the power to require by subpoena the attendance and testimony of witnesses and the production of all such documentary evidence relating to any matter under investigation. . . . (Emphasis added.)
10
The Commission's plenary power to secure information bearing on authorized agency inquiries is well established by judicial decision. United States v. Morton Salt Co., 338 U.S. 632, 652-53, 70 S.Ct. 357, 94 L.Ed. 401 (1950); Oklahoma Press Publishing Co. v. Walling, 327 U.S. 186, 199-201, 216-17, 66 S.Ct. 494, 90 L.Ed. 614 (1946); Adams v. FTC, 296 F.2d 861, 866 (8th Cir. 1961), cert. denied, 369 U.S. 864, 82 S.Ct. 1029, 8 L.Ed.2d 83 (1962); FTC v. Green, 252 F.Supp. 153 (S.D.N.Y.1966). Cf. FTC v. Browning, 140 U.S.App.D.C. 292, 295 n. 7, 435 F.2d 96, 99 n. 7 (1970). Claims of secrecy of subpoenaed information have generally proved no barrier to discovery by the FTC. FTC v. Tuttle, 244 F.2d 605 (2d Cir.), cert. denied, 354 U.S. 925, 77 S.Ct. 1379, 1 L.Ed.2d 1436 (1957); FTC v. Cooper, CCH 1962 Trade Cases, P 70, 353 (S.D.N.Y.). As Justice Jackson remarked in Morton Salt, supra, interpreting the precise statute that is here incorporated by reference, "(w)hen investigative and accusatory duties are delegated by statute to an administrative body, it, too, may take steps to inform itself as to whether there is probable violation of the law." 338 U.S. at 643, 70 S.Ct. at 364. "The only power that is involved here is the power to get information from those who best can give it and who are most interested in not doing so." 338 U.S. at 642, 70 S.Ct. at 364.
11
To interpret correctly the powers which Congress conferred on the FTC we must resort to various tools of interpretation. The District Court employed two distinct analytic methods legislative history and traditional canons of statutory construction both of which led it to the determination that sections 604 and 608 define the limits of FTC power to obtain consumer credit reports. We find the latter method dispositive, and mention the legislative history of the FCRA only to demonstrate that it neither supports nor undermines our conclusion, but is in fact mute on the issue involved in this case.
12
The principle that a specific statutory provision prevails over a more general provision is established beyond question. Clifford F. MacEvoy Co. v. United States, 322 U.S. 102, 107, 64 S.Ct. 890, 88 L.Ed. 1163 (1944)10; D. Ginsberg & Sons v. Popkin, 285 U.S. 204, 208, 52 S.Ct. 322, 76 L.Ed. 704 (1932); United States v. City of Chester, 144 F.2d 415, 421 (3d Cir. 1944). The District Court applied this rule and found that sections 604 and 608 deal more specifically with disclosure of consumer reports than section 621, a general statement of FTC powers and responsibilities. Because disclosure was identified as the pertinent subject, the Act's general statement of disclosure requirements, section 604, the most thorough treatment of the topic, was accorded priority. Of course a topic can always be isolated which is treated more precisely in one paragraph than in the next. But this controversy revolves around FTC power to compel production of reports in aid of its duty to enforce the Act, not around reporting agencies' responsibilities in voluntarily releasing data in their daily operations. The proposition can scarcely be stated in terms which do not answer the question this case presents, that section 621 deals more specifically with FTC authority to obtain consumer reports for enforcement purposes than do sections 604 and 608, which outline the general requirements of confidentiality imposed on reporting agencies vis-a-vis consumers and clients.
13
Section 608, "Disclosure to Governmental Agencies," specifically allows disclosure of "identifying information respecting any consumer . . . to a government agency." Clearly agencies in need of greater detail must pursue it according to the strictures of section 604, absent some other statutory basis for access to consumer reports. Retail reasoned, and the trial court ruled, that section 608 creates "no special exception . . . for the Federal Trade Commission."11 This conclusion is predicated on the faulty premise that section 608 is the sole provision in the Act creating an exception from section 604 for governmental agencies. Section 608 confers additional power on agencies, but without restrictive language of the sort used in section 604. Section 621, like section 608, constitutes an exception to the general rule of section 604 in fact, it is the precise "special exception . . . for the Federal Trade Commission" which the trial court overlooked. To the general rule for governmental agencies, section 621 adds additional authority: in fulfilling its duty of administrative enforcement, the FTC shall have "the power . . . to require . . . the production of documents . . . as though the applicable terms and conditions of the Federal Trade Commission Act were part of this title." As noted, in the absence of a statutory directive to the contrary FTC power to subpoena documents is not circumscribed by claims of confidentiality. It is difficult to imagine a more specific grant of enforcement powers under the FCRA or a more explicit articulation of FTC authority to compel production of consumer reports than the language of section 621.
14
Another canon of construction might be invoked to yield the same conclusion. The presumption against interpreting a statute in a way which renders it ineffective is hornbook law. General Motors Acceptance Corp. v. Whisnant, 387 F.2d 774, 778 (5th Cir. 1968); Uptagrafft v. United States,315 F.2d 200, 204 (4th Cir. 1963); Abbot v. Bralove, 85 U.S.App.D.C. 189, 190-91, 176 F.2d 64, 65-66 (1949). We perceive no way to read that part of section 621 which vests investigatory power in the FTC as subordinate to sections 604 and 608 without stripping the former provision of all significance. Such a construction would make all language in section 621 affirming Commission power to use its administrative subpoena to compel the production of relevant documents either redundant or an utter nullity.12 In the face of a perfectly plausible and consistent alternative construction of the statute, this position is untenable. See generally Jarecki v. G. D. Searle & Co., 367 U.S. 303, 307-08, 81 S.Ct. 1579, 6 L.Ed.2d 859 (1961); United States v. Menasche, 348 U.S. 528, 538-39, 75 S.Ct. 513, 99 L.Ed. 615 (1955); Abbot v. Bralove, supra; Ruiz v. Morton, 462 F.2d 818, 819-20 (9th Cir. 1972).
15
The principle that a statute should be read and construed as a whole is also germane to this situation. See United States v. American Trucking Ass'ns, Inc., 310 U.S. 534, 542-43, 60 S.Ct. 1059, 84 L.Ed. 1345 (1940); Smither & Co. v. Coles, 100 U.S.App.D.C. 68, 70, 242 F.2d 220, 222, cert. denied, 354 U.S. 914, 77 S.Ct. 1299, 1 L.Ed.2d 1129 (1957). Had sections 604 and 608 not contained generalized statements on the disclosure and discoverability of consumer reports, the FTC would have enjoyed its customary enforcement powers, including the power to obtain documents by administrative subpoena, without any express declaration to that effect.13 Because the broad language of sections 604 and 608 might call the FTC's investigatory powers into question, section 621 specifically authorizes the Commission by administrative subpoena to compel the production of documents in enforcement proceedings. The significance of this latter provision is highlighted when it is read in conjunction with sections 604 and 608; it is the specific exception to the more general statements limiting the disclosure of consumer reports which the District Court sought.
III
16
The proper function of legislative history is to resolve ambiguity, not to create it. United States v. Missouri Pac. R. Co., 278 U.S. 269, 278, 49 S.Ct. 133, 73 L.Ed. 322 (1929)14; Montgomery Charter Service, Inc. v. Washington Metropolitan Area Transit Commission, 117 U.S.App.D.C. 34, 37, 325 F.2d 230, 233 (1963). When the FCRA is read as an integrated whole it does not speak ambiguously of the FTC's power to compel the production of consumer reports; on the contrary, the specific language of section 621 affirms that power. We examine the legislative history of the Act to demonstrate that it does not contradict our interpretation of provisions of the statute.
17
Retail argued, and the District Court ruled, that the Senate meant unequivocally to require that information disclosed to any governmental agency be limited to identifying data, unless the requirements of section 604 were met. The Senate Committee Report on S. 823, passed by the Senate on November 6, 1969, states:
18
Section 608. Disclosure to Governmental Agencies
19
The disclosure of information to governmental agencies is limited to identifying type information . . . unless the governmental agency has obtained a court order or is a bona fide creditor, insurer, employer, or licensor.15
20
We find the impact of this "unequivocal legislative history" mitigated substantially by the Senate Committee's equally concise explanation of the provision enacted as section 621. The Committee report states that to supplement judicial enforcement of the Act through civil actions brought by consumers,
21
(c)ompliance would be further enforced by the Federal Trade Commission with respect to consumer reporting agencies and users of reports who are not regulated by another Federal agency. The FTC can use the cease and desist authorities and other procedural, investigative and enforcement powers which it has under the FTC Act to secure compliance.16
22
No more explicit affirmation of the availability of the full panoply of FTC investigative powers was necessary to indicate that the Commission's statutory role as guardian of the FCRA excepted it from the strictures of sections 604 and 608 in fulfilling that role. That the specific should prevail over the general is not merely a technical canon of statutory construction, but also, to borrow Justice Holmes' phrase, an axiom of experience.17 Logic, experience and the law dictate that the item of legislative history which speaks most particularly of the FTC's power to require the production of documents in a given situation should be given the greatest weight.
23
During congressional deliberation of the FCRA other agencies whose statutory functions would be aided by access to the reports and whose use of the documents would be to the consumers' advantage requested the power to obtain consumer reports without securing a court order or consumer permission. Because Congress did not act upon these claims of need and benign purpose, Retail argues that the FTC should not be accorded a preferred position on the ground that prompt access to the reports is essential to enforcement of the Act and the protection of consumers' interests. But the legislative decision to ignore pleas for outright exemptions from sections 604 and 608 advanced by the Federal Reserve Board and the Office of the Comptroller of the Currency are of negligible significance. Both agencies are given specific authority to enforce compliance with the FCRA in section 621(b) of the Act, according to the terms of their respective organic statutes. Those bodies appealed to Congress for new statutory authority, the power to obtain confidential reports by administrative subpoena; the FTC seeks only to maintain an investigative tool which has traditionally been part of its hegemony, and which is specifically incorporated into the FCRA by the language of section 621(a). Moreover, the significance of congressional inaction in these circumstances cannot be equated with the force of the explicit phrasing of section 621.
24
The legislative history of the Act, particularly the Senate Committee's broad affirmation of the FTC's investigative enforcement powers, is consistent with specific language in section 621 outlining the Commission's unique role in supervising the conduct of reporting agencies. In that supervisory capacity the FTC is distinct from the general class of governmental agencies to which section 608 refers; its duty to enforce the FCRA creates a particular and continuous need for access to consumer reports, a need of a different order from that of any other governmental agency.
IV
25
The District Court also ruled that the limitations of section 604 governed the FTC's attempts to obtain consumer credit reports from Retail's customers in particular, from certain insurance companies which on several occasions had furnished the Commission with the documents in the absence of an appropriate court order. That ruling was predicated on two conclusions: that the Commission could not pursue by indirection a course specifically forbidden by the FCRA; and implicitly, that the Act was intended to cover disclosure of confidential credit information by parties other than reporting agencies. Because we disagree with its premises, we must disapprove this ancillary holding as well.
26
By its terms section 604 regulates disclosure by "consumer reporting agencies" and no other parties. Passage of the FCRA was prompted by concern over the power of those agencies and the potential for abuse it presented, not the lesser risk of subsequent disclosures or distortions by the more fragmented group of customers of reporting agencies.18 The sole manifestation of congressional attention to the latter problem is section 615, which imposes upon users of consumer reports the duty to disclose to individuals whose credit is impaired the identity of reporting agencies which compiled the damaging information, and which allows a consumer to discover the nature of data which adversely affects his credit standing regardless of whether it is disseminated by a reporting agency. A number of other consumer safeguards19 help to create a substantial likelihood that a consumer will be aware that information potentially damaging to his credit standing is in circulation. Because at that point the consumer may discover and challenge the information, regulation of disclosure by users to third parties is a less essential aspect of the protection of the confidentiality of personal information used in the determination of credit standing.
27
Since the Commission may obtain reports from reporting agencies without regard to sections 604 or 608 in enforcing the FCRA, a fortiori those provisions should not bar disclosure to the FTC by the customers of the agencies, parties not within the purview of the Act.
V
28
Our determination that third parties may obtain consumer reports from customers of reporting agencies is founded on the language of the FCRA; it does not evidence disagreement with the congressional conclusion that unlimited disclosure of information bearing on personal financial affairs, lifestyle and character will do harm both to individuals involved and to the banking system. Though we rule that the FTC may obtain consumer reports by administrative subpoena in enforcing the Act, we find implicit in the statutory scheme of the FCRA the caveat that the Commission is prohibited from using information which it obtains under section 621 for any purpose other than carrying out its enforcement duties under the Act.20
29
This qualification imposes on the FTC a burden not shared by individuals or organizations who obtain consumer reports under section 604. But those users of reporting agencies' data have either made a showing sufficient to secure a court order compelling disclosure, or they have purchased the information to fulfill a presumably legitimate business need. As users of credit reports they are specifically made liable to the civil penalties imposed by sections 616 and 617 for failure to comply with the notification requirements of section 615. Certain natural forces may induce these users to keep credit reports confidential. For example, a potential employer or business associate whose reputation is essential to financial success will be chary of indiscriminate disclosures of personal material when to make those disclosures could harm his esteem and thus his competitive position in a given business community.
30
The FTC stands in an altogether different posture. Congress afforded it a means of quick access to consumer reports for a solitary and limited purpose: enforcement of the FCRA. The Commission's interest lies not in evaluating the details of consumers' financial positions or character analyses, but rather in protecting consumers from certain proscribed reporting practices. Because section 621 gives the FTC a specific and exclusive province of administrative enforcement, subsequent disclosure of data the Commission subpoenas cannot, in the ordinary case, serve the limited purpose for which the subpoena is authorized. Thus we conclude that the FTC, to the maximum extent consistent with its enforcement duties, must safeguard the confidentiality of any information in consumer reports it obtains by administrative subpoena under section 621 of the FCRA.
The judgment of the District Court is
31
Reversed.
1
357 F.Supp. 347 (D.D.C.1973)
2
§ 604. Permissible purposes of consumer reports
A consumer reporting agency may furnish a consumer report under the following circumstances and no other:
(1) In response to the order of a court having jurisdiction to issue such an order.
(2) In accordance with the written instructions of the consumer to whom it relates.
(3) To a person which it has reason to believe
(A) intends to use the information in connection with a credit transaction involving the consumer on whom the information is to be furnished and involving the extension of credit to, or review or collection of an account of, the consumer; or
(B) intends to use the information for employment purposes; or
(C) intends to use the information in connection with the underwriting of insurance involving the consumer; or
(D) intends to use the information in connection with a determination of the consumer's eligibility for a license or other benefit granted by a governmental instrumentality required by law to consider an applicant's financial responsibility or status; or
(E) otherwise has a legitimate business need for the information in connection with a business transaction involving the consumer.
Act § 604, 15 U.S.C. § 1681b.
3
§ 608. Disclosures to governmental agencies
Notwithstanding the provisions of section 604, a consumer reporting agency may furnish identifying information respecting any consumer, limited to his name, address, former addresses, places of employment, or former places of employment, to a governmental agency.
Act § 608, 15 U.S.C. § 1681f.
4
Act §§ 606, 614, 15 U.S.C. §§ 1681d, 1681l
5
Act §§ 606, 609, 610, 15 U.S.C. §§ 1681d, 1681g, 1681h
6
§ 621. Administrative enforcement
(a) Compliance with the requirements imposed under this title shall be enforced under the Federal Trade Commission Act by the Federal Trade Commission with respect to consumer reporting agencies and all other persons subject thereto, except to the extent that enforcement of the requirements imposed under this title is specifically committed to some other government agency under subsection (b) hereof. For the purpose of the exercise by the Federal Trade Commission of its functions and powers under the Federal Trade Commission Act, a violation of any requirement or prohibition imposed under this title shall constitute an unfair or deceptive act or practice in commerce in violation of section 5(a) of the Federal Trade Commission Act and shall be subject to enforcement by the Federal Trade Commission under section 5(b) thereof with respect to any consumer reporting agency or person subject to enforcement by the Federal Trade Commission pursuant to this subsection, irrespective of whether that person is engaged in commerce or meets any other jurisdictional tests in the Federal Trade Commission Act. The Federal Trade Commission shall have such procedural, investigative, and enforcement powers, including the power to issue procedural rules in enforcing compliance with the requirements imposed under this title and to require the filing of reports, the production of documents, and the appearance of witnesses as though the applicable terms and conditions of the Federal Trade Commission Act were part of this title. Any person violating any of the provisions of this title shall be subject to the penalties and entitled to the privileges and immunities provided in the Federal Trade Commission Act as though the applicable terms and provisions thereof were part of this title.
Act § 621(a), 15 U.S.C. § 1681s(a) (emphasis added).
7
(b) Compliance with the requirements imposed under this title with respect to consumer reporting agencies and persons who use consumer reports from such agencies shall be enforced under
(1) section 8 of the Federal Deposit Insurance Act, in the case of:
(A) national banks, by the Comptroller of the Currency;
(B) member banks of the Federal Reserve System (other than national banks), by the Federal Reserve Board; and
(C) banks insured by the Federal Deposit Insurance Corporation (other than members of the Federal Reserve System), by the Board of Directors of the Federal Deposit Insurance Corporation.
(2) section 5(d) of the Home Owners Loan Act of 1933, section 407 of the National Housing Act, and sections 6(i) and 17 of the Federal Home Loan Bank Act, by the Federal Home Loan Bank Board (acting directly or through the Federal Savings and Loan Insurance Corporation), in the case of any institution subject to any of those provisions;
(3) the Federal Credit Union Act, by the Administrator of the National Credit Union Administration with respect to any Federal credit union;
(4) the Acts to regulate commerce, by the Interstate Commerce Commission with respect to any common carrier subject to those Acts;
(5) the Federal Aviation Act of 1958, by the Civil Aeronautics Board with respect to any air carrier or foreign air carrier subject to that Act; and
(6) the Packers and Stockyards Act, 1921 (except as provided in section 406 of that Act), by the Secretary of Agriculture with respect to any activities subject to that Act.
Act § 621(b), 15 U.S.C. § 1681s(b).
8
SUBPOENA DUCES TECUM UNITED STATES OF AMERICA FEDERAL TRADE COMMISSION
To Manager, Retail Credit Company, Miami Branch Office-1313 S.W. 27th Ave., Miami, Florida
You are hereby required to appear before Robert W. Russell, Attorney, and David F. Bragg, Investigator of the Federal Trade Commission, at Retail Credit Company, Miami Branch Office, 1313 S.W. 27th Ave. in the City of Miami, Florida on the 20th day of April, 1972, at 2:00 p.m., to testify, or in lieu thereof, to furnish the documents and information required. (See attached specifications).
And you are hereby required to bring with you and produce at said time and place the following books, papers, and documents:
See attached specifications.
Fail not at your peril.
In testimony whereof, the undersigned, an authorized official of the Federal Trade Commission, has caused the seal of said Federal Trade Commission to be affixed, and has hereunto set his hand at Washington, D. C., this 1st day of April, 1972.
/s/ Illegible
SPECIFICATIONS
1
The originals or in lieu thereof, clear, accurate and legible copies of the Field Representative Performance Control Records (Form 930-9-70 or its successor form) for all Field Representatives in your Office for the months of January, February and March 1972;
2
The originals, or in lieu thereof, clear, accurate and legible copies of Field Representative's Record (Form 105-1-71 or its successor form) for all Field Representatives in your office for 1971 and 1972;
3
The originals, or in lieu thereof, clear, accurate and legible copies of all other forms relating to evaluation of personnel performance, for the most recent time period completed;
4
The originals, or in lieu thereof, clear, accurate and legible copies of all records, documents and memoranda, from whatever source, relating to or discussing any of the following:
a. Field Representative and/or Office quotas for significant, adverse, decline or protective information.
b. Performance of any and/or all Field Representatives, past or presently employed.
c. Competitor trials with any other consumer reporting agency or agencies.
d. Performance of your Office in its capacity as a Branch Office of the Retail Credit Company.
5
The originals, or in lieu thereof, clear, accurate and legible copies of all "records" on all consumers who have contacted your Office (whether in person or over the telephone) for disclosure of the information in their files since January 1, 1972 pursuant to Section 689 of said Act;
6
The originals, or in lieu thereof, clear, accurate and legible copies of the receipts or other records of payment for disclosure relating to any of the consumers referred to in # 5 above;
7
The originals, or in lieu thereof, clear, accurate and legible copies of the complete files, regardless of how stored, of the consumers specified in # 5 above;
8
A complete list of the names and addresses of all individuals formerly employed at your Branch Office, including any sub-office within the territory served by your Branch Office, since January 1, 1971. This list shall include the title, or in lieu thereof, a complete and accurate job description, and the exact dates of employment for each person contained therein
9
The originals, or in lieu thereof, clear accurate and legible copies of the complete files, regardless of how stored, of all individuals investigated by * * * during the month of March, 1972; * * * during the period March 12 through March 18, 1972; * * * during the period March 5 through March 11, 1972; and * * * during the period February 27 through March 4, 1972
J.A. 8, 10-11.
9
Subsection (a)(4) of § 602 of the Act, entitled "Findings and purpose," states:
There is a need to insure that consumer reporting agencies exercise their grave responsibilities with fairness, impartiality, and a respect for the consumer's right to privacy.
15 U.S.C. § 1681(a)(4).
10
However inclusive may be the general language of a statute, it "will not be held to apply to a matter specifically dealt with in another part of the same enactment. . . . Specific terms prevail over the general in the same or another statute which otherwise might be controlling." Ginsberg & Sons v. Popkin, 285 U.S. 204, 208 (52 S.Ct. 322, 323, 76 L.Ed. 704)
322 U.S. at 107, 64 S.Ct. at 894.
11
357 F.Supp. at 352
12
Under the construction advanced by Retail the statement in § 621 that "The Federal Trade Commission shall have . . . the . . . power . . . to require . . . the production of documents" is merely repetitive of the Commission's power to obtain reports under the three conditions set forth in § 604, and to discover identifying information absent those circumstances under § 608. That portion of § 621 which authorizes the FTC to use its customary enforcement powers notably its administrative subpoena to enforce the FCRA becomes meaningless by this reading, for the Commission would be prohibited from issuing a subpoena without the prior judicial approval required by § 604. Such a construction would severely restrict the FTC in carrying out its statutory duty to enforce the Act in all its particulars
13
Section 621 provides in part that a violation of the FCRA shall constitute "an unfair or deceptive act or practice in commerce in violation of section 5(a) of the Federal Trade Commission Act and shall be subject to enforcement by the Federal Trade Commission under Section 5(b) thereof . . . ." This declaration of FTC jurisdiction over violations of the Act implies the availability of the Commission's statutory investigative powers in proceedings enforcing the FCRA. See generally Automatic Canteen Co. v. FTC, 346 U.S. 61, 79, 73 S.Ct. 1017, 1027, 97 L.Ed. 1454 (1953), acknowledging that the Commission had a "broad power of investigation and subpoena" under the Robinson-Patman Act, 15 U.S.C. § 13, though in conferring upon the FTC authority to enforce that act Congress did not mention subpoena powers. FTC v. Tuttle, 244 F.2d 605 (2d Cir. 1957), similarly upholds the power of the FTC to issue subpoenas in proceedings under the Clayton Act, 15 U.S.C. § 18
14
Where doubts exist and construction is permissible, reports of the committees of Congress and statements by those in charge of the measure and other like extraneous matter may be taken into consideration to aid in the ascertainment of the true legislative intent. But where the language of an enactment is clear, and construction according to its terms does not lead to absurd or impracticable consequences, the words employed are to be taken as the final expression of the meaning intended. And in such cases legislative history may not be used to support a construction that adds to or takes from the significance of the words employed
278 U.S. at 278, 49 S.Ct. at 136 (citations omitted).
15
S.Rep.No.91-517, 91st Cong., 1st Sess. 6 (1969)
16
Id. at 7 (emphasis added)
17
Boston Sand & Gravel Co. v. United States, 278 U.S. 41, 48, 49 S.Ct. 52, 73 L.Ed. 170 (1928)
18
Section 602 of the Act provides:
(2) An elaborate mechanism has been developed for investigating and evaluating the credit worthiness, credit standing, credit capacity, character, and general reputation of customers.
(3) Consumer reporting agencies have assumed a vital role in assembling and evaluating consumer credit and other information on consumers.
(4) There is a need to insure that consumer reporting agencies exercise their grave responsibilities with fairness, impartiality, and a respect for the consumer's right to privacy.
15 U.S.C. § 1681(a)(2)-(4).
19
Section 607 imposes upon the agencies a duty to verify the identity of prospective users of reports and to ascertain that the reports will serve purposes permissible under the statute. Sections 609, 610 and 611 afford the consumer an opportunity to discover the nature, substance, and in some cases the sources of information in his file, and outline a procedure for reexamining data of disputed accuracy. Section 613 provides that consumers shall be apprised of the identity of recipients of any potentially damaging information which is of public record. As noted, each of these provisions is reinforced by the civil penalties established in sections 616 and 617
20
We leave to an appropriate case those questions which might arise when private citizens claim the right to the disclosure of such information under the Freedom of Information Act, 5 U.S.C. § 552
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215 F.2d 776
E. A. LYNCH, as Trustee in Bankruptcy for the Estates ofMargaret A. Stotler and Robert L. Stotler,Bankrupts, Appellant,v.Robert L. STOTLER and Margaret A. Stotler, Appellees.
No. 14183.
United States Court of Appeals, Ninth Circuit.
Sept. 27, 1954.
Craig, Weller & Laugharn, Herbert F. Laugharn, Thomas S. Tobin, A. J. Bumb, Los Angeles, Cal., for appellant.
Lyle M. Stevens, Long Beach, Cal., for appellee.
Before FEE and CHAMBERS, Circuit Judges, and CLARK, District Judge.
CHAMBERS, Circuit Judge.
1
The appellees, owners and operators of the Humpty Dumpty Inn in Long Beach, upon their voluntary petitions, were adjudged bankrupts on May 5, 1952. Prior thereto in December, 1950, they had executed and recorded in the office of the County Recorder of Los Angeles County a Declaration of Homestead which read in its entirety as follows:
2
'Declaration of Homestead
3
'(By Head of Family)
4
'Know All Men by These Presents):
5
'That I, Robert L. Stotler and Margaret A. Stotler, husband and wife, as joint tenants, do certify and declare as follows:
6
'(1) I am . . .
7
'(2) I am the head of a family consisting of . . . and who (is, are). . . under my care and maintenance.
8
'(3) I am now residing with my family on the land and premises located in the City of . . ., County of Los Angeles, State of California, and more particularly described as follows:
9
'Lot 87 of Tract No. 13636 in the city of Long Beach as per map recorded in Book 296, Ages 26, 27 and 28 of Maps in the office of County Recorder of said county.
10
'(4) I claim the land and premises hereinabove described, together with the dwelling house thereon, and its appurtenances, as a Homestead.
11
'(5) I estimate the actual cash value of the land and premises hereinabove described to be . . .($. . .) Dollars.
12
'(6) No former declaration of homestead has been made by me, except as follows: . . .
13
'(7) The character of said property so sought to be homesteaded is as follows: . . .
14
'In Witness Whereof, I have hereunto set my hand this sixth day of December, 1950.1
15
'(s) Robert L. Stotler (s) Margaret A. Stotler
16
'State of California County of Los Angeles--ss
17
'On this sixth day of December, A.D., 1950, before me, Edgar J. Bramble, a Notary Public in and for said County and State, personally appeared Robert L. Stotler and Margaret A. Stotler, known to me to be the person whose name is subscribed to the within Instrument, and acknowledged to me that they executed the same.
18
'In Witness Whereof, I have hereunto set my hand and affixed my official seal the day and year in this certificate first above written.
19
'(s) Edgar J. Bramble, Notary Public in and for said County and State.
20
My commission expires November 27, 1952. 'ENDORSED
21
'Document No. 882. Recorded at request of Robert L. Stotler Dec. 26, 1950, 15 min. past 10 a.m. Book 35151, page 425, Official Records County of Los Angeles, California. Fee $1.70.
22
'Mame B. Beatty, County Recorder 'By F. Counell, Deputy
23
'Homestead, Declaration of, Wolcott's Form 738.'
24
In the bankruptcies, which were consolidated, the Stotlers asserted that their real estate described in the declaration was exempt property under California law and an exemption which should be recognized as against the trustee and the bankrupts' creditors.
25
The trustee and the referee denied the exemption, holding the declaration too incomplete to be legally effective. Their main objection to the instrument was that Section 1263 of the California Civil Code provides, inter alia, that a declaration of homestaed must contain 'an estimate of their (the premises) actual cash value' and, so the trustee and referee said, this requirement had not been met; therefore, no valid declaration had been made.
26
The bankruptcy schedules reported the real estate, asserted its exemption under California law and listed the property as having no value 'above the encumbrances and homestead.' Nowhere in the record before this court is there any indication that the debtors have ever officially stated what the actual value is of the property itself. It does appear that two trust deeds (i.e., the encumbrances) on the property secured amounts which total about $12,800.
27
On review in the district court, the referee was reversed, 114 F.Supp. 301, the district court construing the document to mean that the homestead declaration could affect only so much of the property's value as was unencumbered, and it was logical to assume herein that the declarants meant to say in their declaration, when they left the value of the property blank, that in their opinion the property had no value or no value above encumbrances.
28
The argument is ingenious, but we cannot accept it. As we see it, in logic, the argument turns upon itself and destroys itself in the mere statement. For if one must have value to declare a homestead, then how could there be a homestead of no value? In our view, the Stotlers, being face up against the necessity of stating the value of their property in the declaration, failed to state that the property had value or no value and, if it had value, what the value was.
29
Construing, as we do, that the claimants failed to declare the value of the homestead, then we come to the legal effect of the failure.
30
Both parties cite many California homestead cases. Many of these cases tend toward a liberal construction of the California exemption statutes.
31
Although homestead exemptions are a creature of statute and not of common law, we are bound to and we do accept the idea that the statute should not be too strictly construed. But where the homestead requires as a condition of its existence the performing of certain acts and some of them have not been performed, we find no California case that would justify us in reading statutory requirements out of the statute. As we have construed the declaration, the bankrupts did little more than say in writing, 'We want a homestead.'
32
We think we are compelled to deny the homestead on the basis of the underlying reasoning of the following California cases: Rich v. Ervin, 86 Cal.App.2d 386, 194 .2d 809; Crenshaw v. Smith, 74 Cal.App.2d 255, 168 P.2d 752; Schuler-Knox Co. v. Smith, 62 Cal.App.2d 86, 144 P.2d 47; Reid v. Englehart-Davidson Co., 126 Cal. 527, 58 P. 1063; Ames v. Eldred, 55 Cal. 136; Ashley v. Olmstead, 54 Cal. 616.
33
It may be said that the California statute serves no useful purpose in requiring that the value of a homestead should be set forth in a declaration. Maybe the United States statutes should allow a homestead of decent value. Those are legislative matters.
34
The circumstances of the execution of the homestead on the standard California Wolcott form, we have no way of knowing. Edgar J. Bramble appears thereon as the notary who executed the jurat. If the bankrupts composed the declaration themselves and Mr. Bramble acted only in his proper function as a notary, then the Stotlers must charge their loss to their own failure to carry out the plain suggestions of the form or to seek advice from a competent lawyer. There is no indication that Notary Bramble is a member of the California bar.
35
The judgment of the district court is reversed with instructions to affirm the referee in denying the claim of the bankrupts for exemption of the real estate herein involved.
1
All blanks were created by the printer. No blanks were made or drawn and no physical attention was paid to any of the blanks indicated by dotted lines after the printer finished
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145 U.S. 499 (1892)
GLENN
v.
MARBURY.
No. 1231.
Supreme Court of United States.
Submitted January 11, 1892.
Decided May 16, 1892.
ERROR TO THE SUPREME COURT OF THE DISTRICT OF COLUMBIA.
Mr. Henry Wise Garnett, Mr. Conway Robinson, Jr., Mr. Charles Marshall and Mr. John Howard for plaintiff in error.
Mr. Martin F. Morris for defendant in error.
*500 MR. JUSTICE HARLAN delivered the opinion of the court.
This action at law was brought, March 22, 1889, by John Glenn, in his capacity as substituted trustee in a certain deed of trust made by the National Express and Transportation Company, a corporation of Virginia; also, as trustee by virtue of an order passed by the Chancery Court of the City of Richmond, Virginia, in a suit in equity brought by William W. Glenn, suing on behalf of himself and others, creditors of that corporation. Its object was to obtain a judgment against the defendant, Marbury, for the sum alleged to be due from him under an order, in the above cause, making an assessment and call on subscribers to the stock of that company.
The facts necessary to be stated in order to show fully the grounds of the defence are as follows:
In August, 1866, Josiah Reynolds, a citizen of Maryland and a stockholder of the National Express and Transportation Company, suing on behalf of himself and all stockholders of that corporation who should come in and contribute to the expenses of the suit, brought an action in equity in the Circuit Court of the United States for the Eastern District of Virginia, against that corporation to be hereafter, in this opinion, designated as the Express Company and against its president, directors and superintendent. The bill set forth that the company had been and was then being conducted in a reckless, extravagant and improvident manner, and that the money subscribed by the plaintiff and other stockholders had been and was being wasted and misapplied in conducting its business, chiefly in ways and for purposes that were illegal and in fraud of the rights of stockholders. The relief sought was an injunction restraining and prohibiting the company from conducting its business in the illegal and improvident manner specified in the bill. The bill, also, prayed that a receiver be appointed by the court to take possession of the property and effects, books of account and papers of the company; that such property and effects might be sold and disposed of, and any money due the company collected by the receiver; and that an account be taken under the order of *501 the court of its business, its debts and liabilities paid, and the balance distributed among the stockholders. The bill particularly referred to an agreement with one Ficklin which, it was alleged, ought to be set aside as in fraud of the rights of stockholders. The defendants were duly served with process, and one of them, J.J. Kelly, the superintendent of the Express Company, filed an answer. The company appeared and adopted as its own the answer of Kelly.
On the 23d of August, 1866, an order of injunction was issued restraining the defendants "from collecting or taking any proceedings to collect or enforce from the complainant the payment of moneys for or on account of his stock in said company or assignments or calls thereon, either by sales of stock or otherwise, and from making any assessments upon the complainant in respect to or on account of his said stock, and also enjoining and restraining the said company, its directors, agents and servants, from pleading, using, or applying the property, funds, effects and credits of the said company to or for any purposes or objects other than the regular and legitimate express and transportation business for which the said company was organized, and from carrying out or fulfilling the agreement with Benjamin Ficklin, mentioned in said bill or any similar agreement with any other person, and from selling any of the shares of said stock held or owned by the complainant until the further order of this court."
The Express Company, on the 20th day of September, 1866, having previously appeared and filed its answer in the Reynolds suit executed to John Blair Hoge, J.J. Kelly and C. Oliver O'Donnell, a deed assigning and conveying to them all the estate, property, rights and credits of the company, of every kind and wherever they might be, including moneys payable to the company, "whether on calls or assessments on the stock of the company," or on notes, bills, accounts or otherwise. The deed was made on certain trusts, among others, that the trustees should permit the Express Company to remain in the possession and use of all the property conveyed or assigned, except debts, claims and moneys payable, until November 1, 1866, and thereafter until the trustees should be *502 requested by one or more of the creditors secured by the deed, and whose debt or debts should then be due, to take possession of the assigned property: the trustees, however, to take possession at any time, if requested by the company's board of directors. The trustees were required by the deed to proceed without unnecessary delay "to collect all the debts, claims and moneys payable, which are hereby granted or assigned."
On the 31st of December, 1866, the court appointed a receiver of the money, property and effects of the Express Company, "with all the powers, rights and obligations usual in such cases, subject to the control of this court, until the affairs of said company be fully and finally closed up." He was ordered to execute and file, before entering upon his duties, a bond, with sureties to be approved by the court, of $20,000, conditioned for the faithful discharge of his duties as receiver of the funds, property and effects of the Express Company. It was further provided in the order appointing the receiver as follows:
"That upon the execution, approval, and filing of said bond the said receiver shall be vested with all the estate, real and personal, as well as all the money, notes, accounts, assessments due on stock or other securities, or rights in action of the said National Express and Transportation Company, as trustee of such estate and property, for the use and benefit of the creditors of said company and of its stockholders and others who may be interested in the same, with all the powers, rights and authority of a trustee appointed by this court or acting within its jurisdiction and control.
"Such receiver shall have all the powers and authority which ordinarily belong to such trustee, and the said defendants, as well as all other persons who may have the possession or control of any of the money, books, property, effects or things in action of the said National Express and Transportation Company, and especially John Blair Hoge, John J. Kelly and C. Oliver O'Donnell, the trustees named in a pretended assignment referred to in the complainant's petition, are hereby required to assign, transfer and deliver to the said trustee, on being notified of this order, all such money, property, notes, *503 bonds, estate, real and personal, so in their hands or under their control, and they are also required to execute and deliver all deeds, conveyances, releases, transfers or acquittances that may in anywise be necessary to place any or all of said property or effects so in the hands or under the control of the said receiver, and they and each of them, on being required, shall make all discovery and furnish all information which the said receiver may require in relation to any or all of the property, business or transactions of the said company.
"The said receiver will proceed to collect all the property, money and effects of the said National Express and Transportation Company and convert the same into money, and he will also ascertain the amount of the debts and liabilities of the said National Express and Transportation Company, and, after payment therefrom of all expenses, including counsel fees and costs, with such compensation as the court may allow him, will, from time to time, apply the funds so received and obtained by him in the satisfaction and discharge of the debts of the said company under the orders of this court.
"And if there shall be any sums due upon the shares of the capital stock of the said company the said receiver will proceed to collect and recover the same, unless the persons from whom the said sums may be due shall be wholly insolvent, and for this purpose may prosecute actions at law or in equity for the recovery of such sums in his own name as receiver or otherwise as he may deem best, and shall apply the money so received under the order of this court to the satisfaction and payment of the remaining debts of said company, as well as the legal and necessary expenses of the due execution of this trust, including a reasonable compensation and commission to himself for services on this behalf and also including such necessary and reasonable fees and costs as may be necessary in maintaining, prosecuting, or defending any suit or suits which it may be necessary to prosecute or defend in order to the full execution of this trust."
The receiver gave the required bond, and it was approved by the court on the 12th of January, 1867.
Reynolds having died, Washington Kelley, a stockholder, *504 was permitted to become a party plaintiff and, with the leave of the court, filed August 20, 1870, an amended and supplemental bill. The receiver reported to the court, December 11, 1880, that he had not been able to obtain possession of any of the company's effects, except two freight cars, and that so far as he could ascertain, in all the States where the company did business, its property and effects had been attached by its creditors. This report being made, "on motion of the defendants John Blair Hoge and J.J. Kelly," the order appointing the receiver was vacated, annulled and set aside, the receiver discharged and exonerated, the injunction dissolved, and the suit dismissed.
On the 4th of December, 1871, W.W. Glenn, suing on behalf of himself and all other creditors of the Express Company, filed his bill in equity, in the Chancery Court of the City of Richmond against that corporation, and its officers, and against the trustees named in its deed of September 20th, 1866. The object of that suit was to collect the assets of the company, including the amounts due from the subscribers to its stock. The proceedings in that cause are fully set out in Hawkins v. Glenn, 131 U.S. 319. It is only necessary now to state that in the progress of that suit an order was entered December 14, 1880, sustaining the validity of the deed of assignment of September 20, 1866, removing the surviving trustees named in it, with their consent, and substituting in their place John Glenn, who was clothed by that order, "with all the rights and powers, and charged with all the duties of executing the trusts of said deed to the same effect as were the original trustees therein;" Glenn, however, not to take possession of the property covered by the deed, until he gave bond with security for the faithful discharge of his duties as substituted trustee. He gave such bond January 3, 1881, and it was approved by the court.
By the same order a call and assessment of thirty per cent of the par value of each share of stock was made upon stockholders, who were required to make payment to John Glenn, substituted trustee. By a decree entered July 21, 1883, it was adjudged "that John Glenn, trustee, on the payment to him, *505 within six months from the date of this decree, by any of the subscribers to the stock of the defendant company, or by any other person claimed to be liable on account of said stock, of twenty-five per centum of the original amount of said subscription, with interest thereon at the rate of six per centum per annum, from thirty days from the date of this decree, with any costs incurred heretofore or by said trustee in any suit brought by him heretofore, or which may hereafter be brought before tender of said twenty-five per cent under this decree, to recover of such stockholder or other party, the amount for which he may be responsible on said stock under the decree in this cause, shall execute a receipt therefor to operate as a full acquittance and discharge of all persons on account of such subscription, both of the original subscribers thereto, and of any assignee thereof." By another order, made March 26, 1886, in the Circuit Court of Henrico County, Virginia to which the cause was removed in 1884 an additional call and assessment of fifty per cent of the par value of each share of stock was made upon stockholders, who were severally required to pay the said amounts hereby called for and assessed to John Glenn, he being "authorized and directed to collect and receive said call and assessment, and to take such prompt steps to that end, by suit or otherwise, and in such jurisdictions as he may be advised."
Marbury, it is admitted, was an original subscriber for 100 shares of the company's stock, for which he received a certificate, paying twenty per cent only on his subscription. The object of the present suit is to recover from him the sum of $5000, by reason of the above call and assessment of fifty per cent, with interest at the rate of six per cent per annum from March 26, 1886, the date of the order making such call and assessment. He pleaded that he never was indebted, and did not promise as alleged; that the plaintiff's cause of action did not accrue within three years before the commencement of this suit; that the Chancery Court of the city of Richmond had no jurisdiction to render the decree of December 14, 1880; and that the plaintiff, as trustee, had no right to sue in the court below in his own name or otherwise.
*506 At the trial below the court refused to instruct the jury, at the plaintiff's instance, that this action, having been brought within three years after the decree, in the Circuit Court of Henrico County, Virginia, of March 26, 1886, the plea of limitation constituted no defence. It also refused to instruct the jury, at the instance of the plaintiff, that the decree of July 21, 1883, in the Virginia court constituted no defence, and did not relieve the defendant from liability for the assessment made by the order in that court of March 26, 1886. And, upon the motion of the defendant, the jury were directed to find, and in accordance with that direction returned a verdict, for the defendant, on which judgment was entered.
Upon appeal to the general term the judgment was affirmed upon the authority of Glenn v. Busey, 5 Mackey, 233, where it was held, in a case similar to the present one, that Glenn could not maintain an action in the court below in his own name as trustee.
Since the decision in Hawkins v. Glenn, 131 U.S. 319 and Glenn v. Liggett, 135 U.S. 533, the only questions open for consideration in the present case relate to limitation and to the right of the plaintiff to bring this action in his own name as trustee.
It is not disputed that the time prescribed by the statutes in force in the District of Columbia for the bringing of suits like the present one is three years from the accruing of the cause of action. The defendant contends that liability upon his subscription of stock could have been enforced by the receiver appointed by the Circuit Court of the United States for the Eastern District of Virginia in the Reynolds suit, at any time after the 12th of January, 1867, on which day the receiver's bond was filed and approved by the court; and that, as more than three years elapsed, after that date, and while the Reynolds case was pending, without suit being brought against him, he is protected by the statute of limitation. We are of opinion that this position cannot be sustained. The order of December 31, 1866, in the Reynolds suit was not, in any proper sense, a call or assessment on the company's stock. Nor was it equivalent to one. The deed of September 20, 1866, assigned *507 and transferred to Blair, Kelly and O'Donnell, trustees, among other property, all moneys payable "on calls or assessments on the stock of the company," and the order of December 31, 1866, in the Reynolds suit vested in the receiver, as trustee, "assessments due on stock," and directed him to proceed in the collection and recovery of "any sums due upon the shares of the capital stock of the said company." But nothing was due from subscribers of stock until a formal call or assessment was made by the company, and no call or assessment could be made by the trustees named in the deed of September 20, 1866, or by the receiver in the Reynolds suit. Glenn v. Macon, 32 Fed. Rep. 7.
In Hawkins v. Glenn, the court said (p. 333): "By the deed the subscriptions, so far as uncalled for, passed to the trustees, and the creditors were limited to the relief which could be afforded under it, while the stockholders could be subjected only to equality of assessment, and as the trustees could not collect except upon call, and had themselves no power to make one, rendering resort to the president and directors necessary, or, failing their action, then to the courts, it is very clear that the statute of limitations could not commence to run until after the call was made." See also Scovill v. Thayer, 105 U.S. 143, 155. If the court, in the Reynolds suit, had intended to make a call for the payment in full of all subscriptions of stock, it would have used language different from that employed in the order appointing the receiver. It is clear that no action could have been maintained by the receiver in the Reynolds suit, in respect to unpaid subscriptions, except to compel the payment of sums due on formal calls or assessments, if any, made by the company prior to the institution of that suit. For these reasons, the defence based upon limitation cannot be sustained. And in conformity with Hawkins v. Glenn, and Glenn v. Liggett, we hold that limitation commenced to run, in favor of the present defendant, only from the order in the Virginia court making the call or assessment on subscribers of stock. Glenn v. Williams, 60 Maryland, 93, 122, 123.
The other question as to the right of the plaintiff, in virtue *508 of the authority conferred upon him by the Virginia court, to bring the present action in his own name as trustee, is a more serious one. In Jackson v. Tiernan, 5 Pet. 580, 597, 599, Mr. Justice Story, speaking for the court, said that "the general principle of law is, that choses in action are not at law assignable. But, if assigned, and the debtor promises to pay the debt to the assignee, the latter may maintain an action for the amount against the debtor, as money received to his use. Independently of such promise, there is no pretence that an action can be sustained." After referring to some adjudged cases, which he said were distinguishable from the one then before the court, he proceeded: "They are either cases where there was an express promise to hold the money subject to the order of the principal, or there was an implied promise to pay it over as it was received to the use of a particular person. The express promise to pay to order bound the party, and excluded any claim for a lien, and any defence for want of privity between him and the holder of the order. The receipt of the money for the use of a particular person necessarily imported a promise or obligation to hold it in privity for such person."
In Pritchard v. Norton, 106 U.S. 124, 130, Mr. Justice Matthews, delivering judgment, said: "Whether an assignee of a chose in action shall sue in his own name or that of his assignor is a technical question of mere process, and determinable by the law of the forum; but whether the foreign assignment, on which the plaintiff claims, is valid at all or whether it is valid against the defendant, goes to the merits and must be decided by the law in which the case has its legal seat. Wharton, Conflict of Laws, §§ 735, 736." And in New York Guaranty Co. v. Memphis Water Co., 107 U.S. 205, 214, the court, speaking by Mr. Justice Bradley, said: "We have lately decided, after full consideration of the authorities, that an assignee of a chose in action, in which a complete and adequate remedy exists at law, cannot, merely because his interest is an equitable one, bring a suit in equity for the recovery of the demand. Hayward v. Andrews, 106 U.S. 672. He must bring an action at law in the name of *509 the assignor to his own use. This is true of all legal demands standing in the name of a trustee, and held for the benefit of cestuis que trust. Besides the authorities cited in that case, reference may be made to Mitford on Pleading, 123, 125; Willis's Equity Plead. 435, note g; Adair v. Winchester, 7 Gill & Johns. 114; Mosely v. Boush, 4 Rand. Va. 392; Doggett v. Hart, 5 Fla. 215; Smiley v. Bell, Mart. & Y. Tenn. 378; and the English and American notes to Ryall v. Rowles, 1 Ves. Sen. 348, and to 2 White & Tudor's Leading Cases in Equity, pp. 1567, 1670 (ed. 1877)."
The right which the Express Company acquired by the defendant's subscription to its capital stock was only a chose in action. It passed by the deed of September 20, 1866, to the trustees Blair, Kelly and O'Donnell, but subject to the condition that a chose in action is not assignable so as to authorize the assignee to sue at law, in his own name, unless the right to do so is given by a statute, or by settled law, in the jurisdiction where suit is brought. This is the well-established rule of the common law, and the common law touching this subject governs in the District of Columbia. If the trustees named in the deed of 1866 had sued in this District for sums due upon calls or assessments on stock, they must have sued in the name of the Express Company for their use, unless the stockholders expressly promised to pay them, or unless such a promise could be implied as matter of law. There was no such express promise by Marbury, although he concurred in the assignment made by the company to those trustees.
But it is said that stockholders must be presumed to assent to every lawful disposition made of its property by the corporation. When this point was made in Glenn v. Busey, 5 Mackey, 243, it was fully met by Mr. Justice Cox, speaking for the court. After observing that a stockholder in a corporation holds a double relation to it; that, in his capacity as debtor, he has not promised to pay to the company's order or to its assignee, but to the company only; and that as stockholder he would not be held to have given more than the general authority to the corporation to deal with its property, he said: "If we go further than this, we must hold that the mere fact *510 of being a stockholder in a corporation makes his indebtedness a negotiable one, even against the terms of his agreement with the company and the intention of the parties. Thus, if a stockholder borrowed money from the company on his sealed bond, the argument would be that as his bond is a part of the assets of the company, and he has generally and impliedly assented to the assignment or negotiation of its property, as it may think best, ergo, his bond may be negotiated like a promissory note. But this reasoning would not stop at corporations. It would apply equally to partnerships. Each member of a partnership is the agent of all, and all the others are the agents of each, and all or each would have authority to settle debts by the assignment of property of the firm. If, then, one becomes indebted to the firm on an open account, the firm, on the principles before mentioned, could assign or negotiate the debt, and so give the assignee a right of action in his own name. In such action the plaintiff, after stating the original indebtedness and its assignment, which would make a demurrable case, would only have to supplement it by an averment that the debtor was a member of the firm who made the assignment, and his case would be complete. It is hardly necessary to say that this would be a novelty in the law of contracts and actions and pleadings, for which not a semblance of authority could be found."
Is the question as to the right of the trustee Glenn to bring this suit, in his name, any different by reason of the fact that the Virginia court made the call or assessment in question, substituted the plaintiff as trustee in the place of Blair, Kelly and O'Donnell removed, and both authorized and directed him to collect and receive such call or assessment, taking steps to that end by suit or otherwise, and in such jurisdiction as he might be advised? We think not. Undoubtedly the Express Company, having refused or neglected to make the necessary call or assessment, a court of equity could itself make it, if the interest of creditors required that to be done. In other words, as said in Scovill v. Thayer, 105 U.S. 143, 145, and repeated in Hawkins v. Glenn, 131 U.S. 335, "the court will do what it is the duty of the company to do." See *511 also Glenn v. Williams, 60 Maryland, 93, 113, 114. But the making of the call or assessment by the court, for the company, does not, in the absence of some statutory provision on the subject, change the rule that a demand upon the stockholder to meet a call or assessment, by competent authority, must be enforced in the name of the person or corporation holding the legal title to the stock subscription, and to whom the promise of the stockholder was made. There is no reason why the trustee Glenn could not have sued in the name of the company. For, as said in Hawkins v. Glenn, concurring with the Supreme Court of Appeals of Virginia in Hamilton v. Glenn, 85 Virginia, 901, 905, "as this corporation, notwithstanding it may have ceased the prosecution of the objects for which it was organized, could still proceed in the collection of debts, the enforcement of liabilities, and the application of its assets to the payment of its creditors, all corporate powers essential to those ends remained unimpaired."
We concur entirely in the views expressed by Mr. Justice Cox, speaking for the court, in Glenn v. Busey, where will be found a careful and elaborate discussion of this question. In harmony with the decision in that case, we hold that the present suit cannot, consistently with the principles of the common law which is the law, upon this question, for the District of Columbia be maintained by the plaintiff in his own name, as trustee. We are aware that a different rule obtains in some jurisdictions where the common law has been modified by statute or by a settled course of decisions, but we are unable to hold that the law of this District is otherwise than has been indicated in this opinion.
Judgment affirmed.
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469 F.3d 993
Calvin HAWKINS and Donna L. Hawkins, Plaintiffs-Appellees,v.UNITED STATES, Defendant-Appellant.
No. 06-5013.
United States Court of Appeals, Federal Circuit.
November 17, 2006.
COPYRIGHT MATERIAL OMITTED Patrick O. King, King & Taggart, Ltd., of Carson City, Nevada, argued for plaintiffs-appellees.
Hillary A. Stern, Attorney, Commercial Litigation Branch, Civil Division, United States Department of Justice, of Washington, DC, argued for defendant-appellant. With her on the brief were Peter D. Keisler, Assistant Attorney General; David M. Cohen, Director; and Kathryn A. Bleecker, Assistant Director.
Before MICHEL, Chief Judge, LOURIE, Circuit Judge, and ELLIS,* District Judge.
MICHEL, Chief Judge.
1
The claim at issue in this case was brought under the Public Safety Officers' Benefits Act ("PSOBA" or "Act") of 1976, Pub.L. No. 94-430 (codified as amended at 42 U.S.C. §§ 3796-96c (1982 & Supp. II 1984)). The United States appeals an August 31, 2005 order of the United States Court of Federal Claims holding that Mrs. Nancy Hawkins, a member of the Washoe County (NV) Volunteer Mounted Posse, was a "public safety officer" who died as a direct and proximate result of a personal injury sustained in the "line of duty," and therefore met the Act's requirements for an award of a death benefit to her survivors, the plaintiffs. Hawkins v. United States, 68 Fed.Cl. 74, 76 (Fed.Cl.2005). In the opinion accompanying the order, the Court of Federal Claims construed "law enforcement officer," which like a firefighter is a species of "public safety officer," as defined in the Act to encompass not only officers who enforce criminal law, but also persons who have no criminal law enforcement authority such as those who enforce only civil law. The court also invalidated 28 C.F.R. § 32.2(c)(1), the regulation in which the Bureau of Justice Assistance ("BJA"), a unit of the Department of Justice charged with implementing the Act, defined "line of duty," a term not defined in the PSOBA itself. Because the Court of Federal Claims incorrectly construed "law enforcement officer" and erred by failing to defer to the BJA's definition of "line of duty," we reverse the court's judgment of entitlement and vacate the court's invalidation of 28 C.F.R. § 32.2(c)(1).
I. BACKGROUND
A.
2
The PSOBA provides a one-time cash payment to survivors of public safety officers who die in the line of duty. In relevant part, § 3796(a) provides that "[i]n any case in which the Bureau of Justice Assistance determines . . . that a public safety officer has died as the direct and proximate result of a personal injury sustained in the line of duty, the Bureau shall pay a benefit . . . ." 42 U.S.C. § 3796(a) (Supp. II 1984). For a survivor or survivors to be entitled to payment, the public safety officer must have suffered a personal injury within the meaning of the Act, the injury must have been suffered in the line of duty, and the death must have been the direct and proximate result of the personal injury. Id.; see also Yanco v. United States, 258 F.3d 1356, 1359 (Fed.Cir.2001).
3
A "public safety officer" was defined in the 1984 version of the Act, applicable here, as "an individual serving a public agency in an official capacity, with or without compensation, as a law enforcement officer or a firefighter." 42 U.S.C. § 3796b(7) (Supp. II 1984). A "law enforcement officer," in turn, was defined as "an individual involved in crime and juvenile delinquency control or reduction, or enforcement of the laws, including, but not limited to, police, corrections, probation, parole, and judicial officers[.]" 42 U.S.C. § 3796b(5) (Supp. II 1984). The Act does not define "line of duty." However, the BJA is authorized under 42 U.S.C. § 3796c(a) to "establish such rules, regulations, and procedures as may be necessary to carry out the purposes of" the PSOBA. Pursuant to this authority, the BJA promulgated regulations set forth in Part 32 of Title 28 of the Code of Federal Regulations (28 C.F.R. §§ 32.1 et. seq.). Section 32.2(c)(1) defined "line of duty" as:
4
Any action which an officer whose primary function is crime control or reduction, enforcement of the criminal law, or suppression of fires is obligated or authorized by rule, regulation, condition of employment or service, or law to perform, including those social, ceremonial, or athletic functions to which the officer is assigned, or for which he is compensated, by the public agency he serves. For other officers, "line of duty" means any action the officer is so obligated or authorized to perform in the course of controlling or reducing crime, enforcing the criminal law, or suppressing fires . . . .
5
28 C.F.R. § 32.2(c)(1) (emphases added).
B.
6
Calvin Hawkins and Donna L. Hawkins ("plaintiffs") are the surviving spouse and minor child, respectively, of Mrs. Nancy Hawkins. Mrs. Hawkins was a deputy sheriff in the Washoe County (NV) Volunteer Mounted Posse. Mrs. Hawkins was appointed as a deputy sheriff by Washoe County Sheriff Vincent G. Swinney under the authority of Nevada Revised Statute § 248.040.1 On December 8, 1984, Mrs. Hawkins was called by Sheriff Swinney to join a mounted horse posse to round-up wild horses that were entering upon and causing damage to private property in Washoe County. The posse consisted of deputies on horseback and in patrol cars, as well as overhead helicopter support. During the round-up, Mrs. Hawkins was thrown from the horse she was riding and knocked unconscious. Mrs. Hawkins never regained consciousness and died as a result of craniocerebral and blunt force trauma injuries on December 10, 1984.
C.
7
Following Mrs. Hawkins' death, plaintiffs submitted a death benefit claim under the PSOBA with the BJA on June 20, 2001.2 The BJA reviewed the claim and issued a decision on June 2, 2002 finding that, although a member of the Volunteer Mounted Posse, Mrs. Hawkins was not a "public safety officer" within the meaning of the Act. The BJA found that Mrs. Hawkins did not meet the definition of "law enforcement officer," the only relevant species of "public safety officer," because she had no law enforcement authority and therefore her survivors were ineligible for the death benefit under the Act.
8
Plaintiffs appealed the decision within the Department of Justice, and in accordance with BJA regulations, an appeal hearing was held on February 26, 2003 before an independent Hearing Officer. The Hearing Officer issued a determination on October 7, 2003 affirming the BJA's denial of the death benefit. The Hearing Officer concluded that the facts were "insufficient to establish that members of the Washoe County Sheriff's Posse were vested with the requisite law enforcement authority to qualify them as law enforcement officers" under the PSOBA. The Hearing Officer based his decision on the following factors: (1) that there was no evidence that Mrs. Hawkins had authority to enforce criminal law; (2) that rounding up wild horses is a general law enforcement agency activity rather than an activity specifically involving enforcement of the criminal law; and (3) that Mrs. Hawkins was neither authorized to carry firearms nor exercise police power, and had received no formal training. Moreover, the Hearing Officer concluded that even if members of the Mounted Posse had crime-fighting authority (e.g., to quell riots), there was no evidence that Mrs. Hawkins was engaged in such crime fighting at the time of her death.
9
Plaintiffs appealed the Hearing Officer's determination to the BJA Director pursuant to 28 C.F.R. § 32.24 on February 10, 2004. In the absence of a Final Decision by the Director, plaintiffs filed a complaint on November 19, 2004 in the Court of Federal Claims seeking the survivor benefit under the PSOBA and also attorney fees.3 The United States filed a motion for judgment on the administrative record on March 16, 2005. The court issued its decision on August 31, 2005 denying the motion and entering a final judgment for plaintiffs in the statutory amount of $ 50,000.00. Hawkins, 68 Fed.Cl. at 76.
10
In its decision, the court held that Mrs. Hawkins was a "public safety officer" who died in the "line of duty" under 42 U.S.C. § 3796(a). In doing so, the court first held that the BJA's final decision did not properly apply Congress's statutory definition of "public safety officer." The court held that to be a "public safety officer," plaintiffs had to prove only that Mrs. Hawkins was serving: (1) in a public agency;4 (2) in an official capacity; and (3) as a law enforcement officer. Id. at 82; see also 42 U.S.C. § 3796b(7) (Supp. II 1984).
11
The court held that Mrs. Hawkins served in an "official capacity" because she was sworn in as a deputy sheriff and, under Nevada Revised Statute § 248.040, had "all the duties devolving on the sheriff of the county," including, as set forth in Nevada Revised Statute § 248.090, the duties of keeping the peace, serving process, making arrests, etc. Hawkins, 68 Fed.Cl. at 82. Thus, the court reasoned that contrary to the assertions of the United States, Mrs. Hawkins did indeed have authority to arrest, carry a firearm, and fight crime as a duly appointed deputy sheriff, although she did not actually do so or perform other criminal law enforcement duties during her three year tenure with the Sheriff's Department. Id.
12
The court also relied on Mrs. Hawkins' supposed arrest authority under Nevada law to find that she was indeed a "law enforcement officer" for purposes of the PSOBA. Id. at 82-83. In doing so, the court rejected the government's assertion that, to be a "law enforcement officer," Mrs. Hawkins had to have been involved in crime control or reduction or enforcement of the criminal laws. Id. at 82. The court acknowledged that Mrs. Hawkins was not certified by the state, had received no formal training as a law enforcement officer, and further had no authorization to carry a firearm. Id. The court also acknowledged that Mrs. Hawkins' experience "was limited to social and ceremonial activities, search and rescue, protection and preservation of property, participation in fund raisers, mounted crowd control, and traffic direction and control." Id. at 82-83. Nevertheless, the court seized onto the absence of the word "criminal" in the statutory phrase "enforcement of the laws," 42 U.S.C. § 3796b(5), and reasoned that Congress broadly defined "law enforcement officer" to include even those who enforce only the civil law. Id. at 83 ("Congress did not define a `law enforcement officer' to exclude those who enforce civil laws."). Therefore, the court determined as a matter of fact and law that Mrs. Hawkins was a "law enforcement officer" under the PSOBA. Id.
13
Finally, the court held that the BJA's decision that Mrs. Hawkins did not die in the "line of duty" was contrary to law and arbitrary and capricious. Id. at 83. As a basis for this holding, the court stated that the PSOBA legislative history was "replete" with lobbying efforts by the Department of Justice ("DOJ") to limit "line of duty" to exclude accidental deaths, but that the DOJ "lost that battle" because Congress declined to do so. Id. at 83-84. The court also reasoned that Congress's intent in enacting the PSOBA "was for the families of all law enforcement officers involved in `enforcement of the laws,' whether criminal or civil, to be eligible for PSOBA survivor benefits, if they died enforcing those laws." Id. at 84. Since the BJA's definition of "line of duty" as set forth in 28 C.F.R. § 32.2(c)(1) does not extend to individuals involved in the enforcement of civil law, the court held that the regulation "undermine[s] Congress' direction, it is contrary to law, as well as arbitrary and capricious, and . . . entitled to no deference." Id. Accordingly, the court entered a final judgment of liability. Id.
14
This appeal followed. This court has jurisdiction under 28 U.S.C. § 1295(a)(3).
II. DISCUSSION
A.
15
In reviewing administrative denial of a benefit under the PSOBA, the Court of Federal Claims is limited to reviewing: (1) whether there has been substantial compliance with statutory requirements and provisions of implementing regulations; (2) whether there has been any arbitrary or capricious action by government officials involved; and (3) whether substantial evidence supports the decision. Chacon v. United States, 48 F.3d 508, 511 (Fed.Cir.1995). On appeal, we review the judgment of the Court of Federal Claims de novo, applying this deferential standard anew. Greeley v. United States, 50 F.3d 1009, 1010-11 (Fed.Cir.1995) (in PSOBA case, finding that BJA's factual finding that traumatic injury was not a substantial factor in fire chief's death was supported by substantial evidence, and reversing Court of Federal Claims' judgment to the contrary).
B.
16
The government argues on appeal that the BJA's regulatory interpretation of the term "law enforcement officer" is entitled to deference under Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). According to the government, the Court of Federal Claims erred in concluding that "law enforcement officer" in § 3796b(5) constitutes the "unambiguously expressed intent of Congress" to cover individuals who solely enforce civil law. The government asserts that the statutory phrase "enforcement of the laws" in § 3796b(5) is actually ambiguous, since the term "laws" may encompass many different types of law or only criminal law. Given this ambiguity, the government asserts that the BJA's interpretation of the PSOBA as requiring that "law enforcement officer[s]" involved in the "enforcement of the laws" actually be involved in the enforcement of criminal law rather than purely civil law warrants Chevron deference because it is consistent with the intent of Congress to protect the families of those involved in crime control and reduction. The government asserts that Congress's intent is demonstrated here in the plain meaning of the statute's contextual language, the Act's legislative history, and a recent statutory clarification. In contrast, plaintiffs argue that the statutory definition of "law enforcement officer" is not ambiguous. Plaintiffs assert that the phrase "enforcement of the laws" stands by itself in the definition of "law enforcement officer," and that this definition includes all employees of public safety agencies who enforce the laws, whether criminal and/or civil. Accordingly, plaintiffs argue that the BJA's interpretation of § 3796b(5) is not entitled to deference under Chevron. For the reasons set forth below, we need not decide between the positions of the government and the plaintiffs. Rather, we hold the statute is clear and therefore Chevron deference has no application here.
17
When we are confronted with a challenge to an agency's interpretation of a term of a statute it has been charged with administering, this court engages in the familiar two-step analytic process articulated in Chevron. We always first determine "whether Congress has directly spoken to the precise question at issue." Chevron, 467 U.S. at 842, 104 S.Ct. 2778. "We do so by employing the traditional tools of statutory construction; we examine the statute's text, structure, and legislative history, and apply the relevant canons of interpretation." Delverde, SrL v. United States, 202 F.3d 1360, 1363 (Fed. Cir.2000); see also Chevron, 467 U.S. at 843 n. 9, 104 S.Ct. 2778. If we find "that Congress had an intention on the precise question at issue, that intention is the law and must be given effect," Chevron, 467 U.S. at 843 n. 9, 104 S.Ct. 2778, and the issue then devolves into whether the agency acted in accordance with that intention. Delverde, 202 F.3d at 1363. On the other hand, if we conclude that "Congress either had no intent on the matter, or that Congress's purpose and intent is unclear," the next question for the court is whether the agency's interpretation is based on a permissible construction of the statutory language at issue. Id.; see also Chevron, 467 U.S. at 843, 104 S.Ct. 2778 (footnote omitted). With regard to the latter step, "the court need not conclude that the agency construction was the only one it permissibly could have adopted to uphold the construction." Chevron, 467 U.S. at 843 n. 11, 104 S.Ct. 2778. Rather, so long as the agency's construction of the term in the statute is reasonable, Chevron "requires a federal court to accept the agency's construction . . . even if the agency's reading differs from what the court believes is the best statutory interpretation." Nat'l Cable & Telecomms. Ass'n v. Brand X Internet Servs., 545 U.S. 967, 125 S.Ct. 2688, 2699, 162 L.Ed.2d 820 (2005).
18
The "precise question at issue" in this case is whether the term "law enforcement officer"5 as defined in 42 U.S.C. § 3796b(5) (Supp. II 1984) includes officers who solely enforce civil law. Statutory construction is a matter of law that we review de novo. See, e.g., Abbott v. United States, 204 F.3d 1099, 1101 (Fed.Cir.2000). In construing a statute, we begin with its literal text, giving it its plain meaning. Timex V.I., Inc. v. United States, 157 F.3d 879, 882 (Fed.Cir.1998). Moreover, "[w]e must try to read the statute as a whole, to give effect to all of its parts, and to avoid, if possible, rendering language superfluous." Delverde, 202 F.3d at 1364-65.
19
As noted above, Congress defined "law enforcement officer" in § 3796b(5) (Supp. II 1984) as "an individual involved in crime and juvenile delinquency control or reduction, or enforcement of the laws, including, but not limited to, police, corrections, probation, parole, and judicial officers." Given the absence of the modifier "criminal" before "laws" in the statutory phrase "enforcement of the laws," the Court of Federal Claims read the phrase literally to mean all categories of law. Hawkins, 68 Fed.Cl. at 83. This approach is incorrect, however, since courts cannot focus on the phrase "enforcement of the laws" in isolation. Instead, we must "follow the cardinal rule that statutory language must be read in context since a phrase gathers meaning from the words around it." Hibbs v. Winn, 542 U.S. 88, 101, 124 S.Ct. 2276, 159 L.Ed.2d 172 (2004) (internal quotation marks omitted); see also Gen. Dynamics Land Sys. v. Cline, 540 U.S. 581, 596, 124 S.Ct. 1236, 157 L.Ed.2d 1094 (2004); Dole v. United Steelworkers of Am., 494 U.S. 26, 35, 110 S.Ct. 929, 108 L.Ed.2d 23 (1990) (statutory interpretation is "not guided by a single sentence or member of a sentence, but look[s] to the provisions of the whole law").
20
When the phrase "enforcement of the laws" is read in context, it is clear that Congress intended for "law enforcement officer" to cover individuals who enforce criminal law, rather than merely civil law. In this regard, we note that all of the other elements defining "law enforcement officer" in § 3796b(5) plainly involve criminal laws, i.e., "crime and juvenile delinquency control or reduction . . . including but not limited to, police, corrections, probation, parole, and judicial officers." 42 U.S.C. § 3796b(5) (Supp. II 1984) (emphases added). Thus, even though the phrase "enforcement of the laws" standing alone does not expressly exclude those who only enforce civil law, we find that the language of the provision as a whole evidences Congress's intent to limit "law enforcement officer[s]" to individuals involved in crime and juvenile delinquency control or reduction or enforcement of the criminal law.
21
Our conclusion that Congress intended for the PSOBA to encompass in "law enforcement officer" those who enforce the criminal law rather than only civil law is further supported by the Act's legislative history. The legislative history makes clear that the purpose of the PSOBA was to compensate the family of an officer who died as a result of a "criminal act or apparent criminal act," as well as to provide incentive to those individuals who would expose themselves to the physical risks and hazards inherent in crime fighting. S.Rep. No. 94-816, at 3 (1976), as reprinted in 1976 U.S.C.C.A.N. 2504. Indeed, the House of Representatives' version of the PSOBA was motivated by, in part, a recognition of "the major risk of death confronting law enforcement officers stem[ming] from their exposure to criminal activity," H. Rep. No. 94-1032, at 4 (1976), while the Senate recognized a need to reverse "[t]he alarming trend of crime." S.Rep. No. 94-816, at 3 (1976), as reprinted in 1976 U.S.C.C.A.N. 2504, 2505.
22
As originally enacted in 1976, Congress defined "law enforcement officer" to mean "a person involved in crime and juvenile delinquency control or reduction, or enforcement of the criminal laws." 42 U.S.C. § 3796b(5) (1976) (emphasis added). See also H. Conf. Rep. No. 94-1501, at 6 (1976), as reprinted in 1976 U.S.C.C.A.N. 2504, 2511. This language was changed, however, as part of the Comprehensive Crime Control Act of 1984. In the later statute, the definition of "law enforcement officer" was amended to "an individual involved in crime and juvenile delinquency control or reduction, or enforcement of the laws . . . ." 42 U.S.C. § 3796b(5) (Supp. II 1984). While we follow a presumption that, by deleting the word "criminal," Congress intended to broaden the type of laws encompassed in § 3796b(5), see Stone v. INS, 514 U.S. 386, 397, 115 S.Ct. 1537, 131 L.Ed.2d 465 (1995) (statutory amendments are presumed "to have real and substantial effect"), we find this presumption rebutted by the legislative history.
23
That history indicates that the 1984 amendments to the PSOBA merely reauthorized the existing Act with four minor modifications "which are consistent with congressional intent as expressed in the legislative history of the 1974[sic] Act." S.Rep. No. 98-225, at 282, as reprinted in 1984 U.S.C.C.A.N. 3182, 3463. None of these modifications, however, are relevant here. Moreover, later still, Congress changed the statutory phrase back to "enforcement of the criminal laws" as part of the Violence Against Women and Department of Justice Reauthorization Act of 2005. Congressman Lamar Smith described the amendment as "making the test conform more clearly to the legislative intention, which has been correctly reflected in the Bureau's longstanding interpretation of the Act." 151 Cong. Rec. H12125 (daily ed. Dec. 17, 2005) (statement of Rep. Smith). Thus, based upon the legislative history both contemporaneous with and subsequent to the 1984 amendment, we find that Congress intended all along for a "law enforcement officer" as defined in the Act to mean an individual who is involved in the enforcement of the criminal law rather than purely civil law.
24
Because after employing the traditional tools of statutory construction we find the definition of "law enforcement officer" in § 3796b(5) unambiguous, we need not reach the government's argument that deference is due under Chevron. See, e.g., Timken U.S. Corp. v. United States, 421 F.3d 1350, 1359 n. 6 (Fed.Cir.2005). Nevertheless, we observe that to the extent the statutory phrase "enforcement of the laws" could be viewed as ambiguous as to the type of "laws" Congress intended to encompass in the statute, we would conclude that the BJA's interpretation thereof to exclude an officer who only enforces civil law is reasonable.
25
Finally, we find that the BJA's decision rejecting plaintiffs' claim for a death benefit under the PSOBA is in accordance with Congress's intent as discussed above. In this regard, substantial evidence supports the BJA's factual determination that Mrs. Hawkins was not a "law enforcement officer." The Court of Federal Claims concluded that Mrs. Hawkins was a "law enforcement officer" because (1) she had arrest authority under Nevada law, and because (2) the definition of "law enforcement officer" does not expressly exclude officers who solely enforce civil law. With regard to the latter rationale, we reiterate that a "law enforcement officer" involved in the "enforcement of the laws" is an individual who is involved in criminal law enforcement rather than purely civil law enforcement. As Mrs. Hawkins was only involved in the enforcement of civil law, if at all, and here worked simply to protect private property from wild horses, we conclude that she was not a "law enforcement officer" under the Act.
26
With regard to the former rationale, however, we accept the trial court's finding (although it is unclear) that Mrs. Hawkins was sworn in as a deputy sheriff pursuant to Nevada Revised Statute § 248.040. Nevertheless, we stress that this statute did not actually authorize or obligate Mrs. Hawkins to fight crime. Under § 248.040, a deputy sheriff "may perform all the duties devolving on the sheriff of the county." Nev.Rev.Stat. § 248.040 (emphasis added). In other words, the Nevada statute merely provided Sheriff Swinney the power to appoint Mrs. Hawkins as a deputy sheriff, and to assign to her all of his duties—including his duty as a servant of a police agency to compel adherence to the criminal law. However, no evidence whatsoever in the record suggests that Sheriff Swinney actually authorized Mrs. Hawkins to perform any such duty to enforce the criminal law. In fact, the evidence implies quite the opposite. As the Court of Federal Claims acknowledged, Mrs. Hawkins' actual duties were limited to activities related to the enforcement of the civil law (or non-enforcement activities such as the rounding up of wild horses), as well as social and ceremonial activities. Indeed, we infer from the undisputed facts that Sheriff Swinney never authorized or obligated Mrs. Hawkins to perform any of his crime-fighting duties—such as make arrests, detain suspected criminals, investigate crime, etc. Indeed, such would be highly improbable since he never equipped her with the proper tools to perform these dangerous activities in the first place.6 Thus, while Mrs. Hawkins may have been duly appointed by Sheriff Swinney as a deputy sheriff, there is no evidence here that he actually authorized or obligated her to perform duties bearing a relationship to the enforcement of criminal law.
27
While we do not denigrate Mrs. Hawkins' important contributions to the Washoe County Sheriff's Department, we conclude that Congress intended for the benefits of the PSOBA to flow only to the family of a "law enforcement officer" who is exposed to the "constant risk of death" by acts of criminals or related events inherent in the activities of crime and juvenile delinquency control or reduction, or enforcement of the criminal law. See S.Rep. No. 94-816, at 5, as reprinted in 1976 U.S.C.C.A.N. 2504, 2507 ("The law enforcement officer must contend with violent elements in our society in a face-to-face situation. The greater the sacrifice involved, the greater our Nation's support and gratitude should be."). Thus, it appears to us that an officer's actual responsibilities or obligations as appointed, rather than some theoretical authorizations, are controlling under the PSOBA.7 Employees of a law enforcement agency may be considered sworn police officers or deputy sheriffs by law, but for various reasons are not appointed for, or actually involved in, the enforcement of criminal law. For this reason, we must look to the actual obligations a law enforcement employer demands from its employee to determine whether that employee is actually a "law enforcement officer" for purposes of determining eligibility under the PSOBA. An officer must have more than potential statutory authority and a ceremonial swearing-in to be considered as being involved in crime and juvenile delinquency control or reduction, or criminal law enforcement. Rather, the officer must be actually appointed for and authorized or obligated to fight crime or perform criminal law enforcement duties on behalf of the police agency that he or she serves. Here, Sheriff Swinney appointed and expected Mrs. Hawkins to perform only those duties related to protecting private property and perhaps to the enforcement of civil law. Thus, we must conclude that she was not a "law enforcement officer" for purposes of the Act.
28
We hold that, since a "law enforcement officer" must be appointed for and given the authorization or obligation to perform duties involving the control or reduction of crime and juvenile delinquency or enforcement of criminal law, and Mrs. Hawkins was not, the BJA's determination that Mrs. Hawkins was not a "law enforcement officer" under 42 U.S.C. § 3796b(5) (Supp. II 1984) is supported by substantial evidence.
C.
29
Contrary to the ruling of the trial court, Mrs. Hawkins could not be a law enforcement officer who died in the "line of duty" because she was simply not a "law enforcement officer" as defined in the PSOBA. Therefore, we need not and do not review whether she otherwise met the definition of "line of duty" at her death, i.e., whether she was performing actions that she was "obligated or authorized to perform in the course of controlling or reducing crime, [or] enforcing of the criminal law" at the scene of her death. 28 C.F.R. § 32.2(c)(1). However, the government also appeals the Court of Federal Claims' ruling invalidating 28 C.F.R. § 32.2(c)(1). That we should and do review. For many of the reasons articulated above, we hold that the court erred in invalidating the regulation.
30
As noted above, in contrast to "law enforcement officer," Congress did not provide any definition whatsoever for "line of duty" in the PSOBA. However, Congress expressly delegated authority to the BJA to promulgate regulations to implement the Act. See 42 U.S.C. § 3796c(a). Given this express authority, the BJA's regulatory interpretation of "line of duty" in § 32.2(c)(1) must be upheld unless it is "arbitrary, capricious, or manifestly contrary to the statute." Chevron, 467 U.S. at 844, 104 S.Ct. 2778. The trial court held it was, but we cannot agree.
31
The regulatory definition of "line of duty" (for a law enforcement officer whose primary function is not crime control or reduction or enforcement of the criminal law) as "any action . . . perform[ed] in the course of controlling or reducing crime, [or] enforcing the criminal law," 28 C.F.R. § 32.2(c)(1), necessarily excludes an officer lacking such primary duties who is not engaged in the act of fighting crime or enforcing the criminal laws at the time of death. Plaintiffs cite the lower court's conclusion that in promulgating 28 C.F.R. § 32.2(c)(1), the BJA narrowed the PSOBA beyond what Congress had intended. Plaintiffs argue that this regulation is arbitrary and capricious because, by requiring law enforcement officers to have died while "controlling or reducing crime" or "enforcing the criminal law," it undermines Congress's intent to provide a death benefit under the PSOBA to survivors of all law enforcement officers who died in the line of duty—whether those officers were appointed to enforce civil and/or criminal law. Further, plaintiffs repeat the lower court's rationale that, when thwarted by Congress during enactment of the statute, the DOJ improperly narrowed the scope of "line of duty" by regulation instead.
32
We discern several cogent reasons plaintiffs' arguments must be rejected. First, as correctly pointed out by the government, it was not Congress's intent for the families of individuals involved in the enforcement of only civil law to receive a death benefit under the PSOBA. In this regard, the BJA's regulatory definition is consistent with both the legislative history (which demonstrates that Congress intended its program to only compensate those engaged in crime-fighting or criminal law enforcement) and the purpose of the PSOBA (which is to encourage more individuals to become law enforcement officers to fight crime).
33
Second, the lower court's reliance on the legislative history is confusing at best. The court's logic appears to be that since "line of duty" can include accidents that result in the death of, for example police officers, it must also include accidents that result in the death of persons who are not police or the like. This is a logical fallacy not supported by the legislative history of the Act. Specifically, the Senate bill that was favorably reported by the Judiciary Committee provided a death benefit to survivors only if an officer died in the line of duty from "injuries directly and proximately caused by a criminal act or an apparent criminal act." S.Rep. No. 94-816, at 1, as reprinted in 1976 U.S.C.C.A.N. 2504. However, an amendment was introduced on the Senate floor substituting "as the direct and proximate result of a personal injury sustained in the line of duty" for the more limiting "criminal act" language. Speaking in support of the amendment, Senator McClellan stated that the bill "is not health insurance; but it does provide for payment if an officer is killed in the line of duty, either by accident or by willful assault by a criminal." 122 Cong. Rec. 22,644-45 (1976) (statement of Sen. McClellan). While this language was incorporated into the final version of the Act, it does not follow that "line of duty" also includes accidental deaths of individuals not enforcing criminal laws. Rather, Senator McClellan's statements suggest the opposite, i.e., that if during the course of controlling or reducing crime and juvenile delinquency or enforcing the criminal law, a law enforcement officer is killed as the result of an accidental event (such as a car crash) the benefit applies as well as when death results from a willful assault by a criminal. In either case, the PSOBA would compensate the survivors of that officer. But, those not engaged in controlling or reducing crime and juvenile delinquency or enforcing the criminal law who die in such accidents are not covered.
34
For these reasons, the BJA's regulation interpreting "line of duty," 28 C.F.R. § 32.2(c)(1), contrary to the holding of the lower court, is not "arbitrary, capricious, or manifestly contrary to the statute." Chevron, 467 U.S. at 844, 104 S.Ct. 2778. We therefore vacate its invalidation by the Court of Federal Claims.
III. CONCLUSION
35
For the foregoing reasons, the order of the Court of Federal Claims denying the government's motion for judgment on the administrative record, and entering a final judgment for plaintiffs is
36
REVERSED-IN-PART and VACATED-IN-PART.
Notes:
*
Honorable T.S. Ellis, III, United States District Court for the Eastern District of Virginia, sitting by designation
1
Under this statute, "each sheriff may appoint, in writing signed by him, one or more deputies, who may perform all the duties devolving on the sheriff of the county." Nev. Rev.Stat. § 248.040. The statute does not define these "duties," and says nothing of a volunteer mounted posse. Although no appointing paper is in the appellate record, the government does not contest, and we do not reach, the issue of whether Mrs. Hawkins was appointed in writing
2
Plaintiffs filed their death benefit claim more than 16 years after Mrs. Hawkins' death. Since the BJA accepted the claim and subsequently issued two decisions, neither of which challenged plaintiffs' claim as time-barred, the Court of Federal Claims found that the BJA Director exercised discretion under 28 C.F.R. § 32.20(c) to allow the filing of plaintiffs' claim for good causeHawkins, 68 Fed.Cl. at 80. The government does not contest this finding on appeal.
3
The government accepted the Hearing Officer's decision as the final decision of the BJA for purposes of jurisdiction before the Court of Federal Claims
4
Neither party disputed before the trial court that the Washoe County Sheriff's Department was a public agency
5
The statutory definition of "law enforcement officer" provided in the PSOBA bears no relationship to that provided in 5 U.S.C. § 8331(20), which is relevant to law enforcement officer status for purposes of the Federal Law Enforcement Pay Reform Act of 1990 or the Civil Service Reform Act of 1978
6
Mrs. Hawkins had no formal training, had no certification from the state, and further had neither authorization nor assignment from Sheriff Swinney to carry a firearm or any other type of weapon associated with crime control
7
We do not mean to imply by our decision here that the definition of "law enforcement officer" requires an individual always to be assigned crime-fighting duties on a day-to-day basis. Rather, so long as a law enforcement officer was under authorization or obligation by his employer to actually control or reduce crime and juvenile delinquency or enforce criminal law, he or she would be covered by the PSOBA even though his or her primary function was not in the enforcement of the criminal law
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730 P.2d 1112 (1986)
In re the MARRIAGE OF Stephanie H. SABO, Petitioner and Respondent, and
Thomas I. Sabo, Respondent and Appellant.
No. 86-168.
Supreme Court of Montana.
Submitted on Briefs August 14, 1986.
Decided December 11, 1986.
Rehearing Denied February 3, 1987.
Henningsen & Purcell, Mark A. Vucurovich, Butte, for respondent-appellant.
J. David Penwell, Bozeman, for petitioner-respondent.
TURNAGE, Chief Justice.
Thomas Sabo appeals from a December 31, 1985, judgment of the Second Judicial District Court, Silver Bow County. The judgment ordered Thomas to pay Stephanie $7,750 in past child support, pay her $3,904.85 from the sale of marital property, and pay her $2,201.23 in attorney fees plus 10 percent accruing interest.
We reverse in part and affirm in part.
Thomas Sabo raises two issues for our review:
1. Is a non-custodial father, who assumes permanent custody and support of the children with the consent of the custodial mother, relieved of the obligation to pay child support accruing after and during the consensual assumption of custody?
2. Did substantial evidence support the court's finding that Stephanie was a partner with Thomas in SACO Investments?
After sixteen years of marriage, the Sabos were divorced on November 15, 1976, in Silver Bow County. At the time, Thomas was an attorney and Stephanie was a real estate agent. The divorce decree incorporated a settlement agreement in which Thomas agreed to pay Stephanie $125 per month per child, in support for their three minor children. Thomas' support obligation for his son, Mark, ended in September 1979, when Mark turned eighteen.
Through February 1981, Thomas paid Stephanie $8,375 in child support. In March 1981, Stephanie filed a Uniform Reciprocal Enforcement of Support Act (URESA) claim against Thomas while she was living in Texas. Thomas paid $1,000 on the claim but paid no child support after that date.
In the summer of 1981, both the youngest daughter, Erin, and the youngest son, *1113 Matthew, began living permanently with Thomas in Bozeman. Thomas never brought any action to modify the children's support payments to reflect the change in circumstances. While the children lived with Thomas, Stephanie had weekly dinners with them but made no claim for child support. Matthew turned eighteen in April 1982. Stephanie brought the present action on January 25, 1985, less than one month before Erin turned eighteen.
Issue No. 1
Is a non-custodial father, who assumes permanent custody and support of the children with the consent of the custodial mother, relieved of the obligation to pay child support accruing after and during the consensual assumption of custody?
Generally, when child support becomes due under a dissolution decree, the support becomes a judgment debt similar to any other judgment for money. Section 40-4-208, MCA. In Re Marriage of Carlson (Mont. 1984), 693 P.2d 496, 499, 41 St.Rep. 2419. Under this statute, the court may modify a child support award, but only upon a showing of changed circumstances or written consent of the parties. The statute allows only prospective, not retroactive, modification of child support. Section 40-4-208(1), MCA, provides: "[A] decree may be modified by a court as to maintenance or support only as to installments accruing subsequent to the motion for modification." Previously, we held that the statute barred modification of child support in arrears. "A divorce decree cannot be modified to cancel past due and unpaid child support." Dahl v. Dahl (1978), 176 Mont. 307, 310, 577 P.2d 1230, 1232. Following the equitable principles expressed in three recent cases, we overrule Dahl and its progeny.
In State of Washington ex rel. Blakeslee v. Horton (Mont. 1986), 722 P.2d 1148, 43 St.Rep. 1321, we applied equitable principles to bar collection of past due and unpaid child support installments. Blakeslee noted the totality of the circumstances surrounding the parents' relationship with the children, and the oral support agreement which had governed their relationship for fourteen years. Citing the Blakeslee district court, we stated:
The law is clear that the arrearage in child support payment cannot be modified by the court upon any retroactive basis ... These legal principles, however valid they may be as a general rule, are rendered impotent when the parties mutually agree that they be ignored and also carry out such agreement in actual fact ... Equity cannot allow the mother to participate in nullification of the purpose of the law in fact and, at the same time, allow her to claim the benefit of it in theory, simply because there is a meter running which can total a dollar loss in child support. [Emphasis added.]
Blakeslee, 722 P.2d at 1050-1051.
Thomas Sabo accepted the children into his home and raised the children without any support from Stephanie, even though she was employed as a real estate agent after her return to Bozeman. Stephanie never asserted that her current request was founded upon any actual need of her children. Furthermore, she never suggested any implied need which had not been satisfied over the years, or which had now arisen and could possibly serve to validate her action at this belated point. See Blakeslee, 722 P.2d at 1151.
Although Thomas took no action to change the terms of the divorce decree, he accepted sole responsibility for the children's health, welfare and support. During the period of Thomas' care, Stephanie's major contribution was sharing her Mexican vacation with Erin. Such inequity cannot validate her claim. "Although legally the mother may have been correct in her claim for child support, equity demands that the claim must fail. This Court has long adhered to such principles of equity." Blakeslee, 722 P.2d at 1151.
The Sabo children voluntarily moved in with Thomas. During the entire period the children lived with Thomas, Stephanie neither pursued support payments in arrears nor objected to the shift in custody. By her assent and conduct, Stephanie consented *1114 to the arrangement. As we recently held, "[T]he equitable principle arises when the mother has expressly or impliedly consented to an arrangement other than the payment of the judgment." In Re Marriage of Cook (Mont. 1986), 725 P.2d 562, 566, 43 St.Rep. 1732, 1737. This principle acknowledges that the real beneficiaries of the judgment are the children, not the person named in the judgment. In Cook, the mother was awarded custody and child support for the children. A few years after the divorce, the children began living permanently with the father. Upon his petition, the father was granted custody of the children several years later.
On the issue of child support in arrears, we agreed with the Cook district court that the parents had entered into a binding oral agreement modifying support and visitation. The father relied on the agreement to his financial detriment. We concluded that the mother was estopped from enforcing the support provisions of the decree after the date they entered into the oral agreement. "Furthermore, the changes in the children's residences represented changed circumstances so substantial and continuing as to make enforcement of [the father's] original and modified support obligation unconscionable." Cook, 725 P.2d at 566.
Never, during the entire period that the Sabo children were being raised by Thomas, did Stephanie offer any financial assistance to Thomas. In Cook, we noted that circumstances may not allow the mother to collect child support in arrears, "where the husband has made expenditures which constitute substantial compliance with the spirit and intent of the decree." Cook, 725 P.2d at 566. Thomas has met both the spirit and the purpose of child support obligations. Thomas did not abrogate his duties and obligations under the decree of dissolution. On the contrary, he assumed the duties of the custodial parent by default, after Stephanie relinquished them.
Stephanie consented to the change in custody and support. The question now becomes whether consensual modification of child support is enforceable in Montana and the extent of any such enforcement.
Upon compelling evidence, the doctrine of equitable estoppel may override the provisions of § 40-4-208, MCA. This principle was best articulated in In Re the Marriage of Jensen (Mont. 1986), 727 P.2d 512, 515-16, 43 St.Rep. 1891, XXXX-XXXX.
We therefore hold that in Montana a decree for support may be modified on equitable grounds by a court where there is clear and compelling evidence of the terms of an oral agreement or modification. We further hold such modification may be applied only to maintenance and support payments to be made subsequent to the oral agreement for modification.
These conclusions "are consistent with both Blakeslee and Cook where we enforced oral agreements pertaining to installments of support subsequently accruing." Jensen, 727 P.2d at 516, 43 St.Rep. at 1894.
Under the equitable principles of Blakeslee, Cook and Jensen, we hold that Thomas substantially complied with the decree obligations. By her assent and conduct, Stephanie consented to the shift in custody and support. We cannot equitably allow Stephanie to reap a windfall of support payments, if she never made the support expenditures. "A party to an agreement which has been performed for some length of time is estopped to deny its validity." Jensen, 727 P.2d at 516, 43 St.Rep. at 1895. Thomas is therefore relieved of the obligation to pay any child support accruing after and during his consensual assumption of custody.
On Issue No. 1, we reverse.
Issue No. 2
Did substantial evidence support the court's finding that Stephanie was a partner with Thomas in SACO Investments?
Thomas engaged in business activities with a realtor, Gene Cook, in SACO Investments. SACO's primary purpose was investment in real estate. During the marriage, SACO bought some parcels known as the Hoff Property. In the settlement *1115 agreement, Thomas' share of the parcels was identified as the jointly-held property of Thomas and Stephanie.
After the divorce, SACO sold the one remaining parcel of the Hoff Property for $14,000. However, Thomas did not tell Stephanie about the sale or give her any money from the sale. Stephanie later learned of the sale from Cook. Thomas contended that Stephanie was not a SACO partner and, therefore, not entitled to any proceeds. However, the District Court found that she was a partner and entitled to one-half of Thomas's share. Therefore, the court awarded her one-fourth of the total proceeds plus interest, or $3,904.85.
The court's finding was well supported. Various SACO deeds identify Stephanie as a partner. The deeds were prepared by Thomas as attorney for the partnership. Furthermore, in his original response to Stephanie's divorce filing, Thomas signed a sworn statement that the only assets he held, personally and apart from the marital estate, were his car and law practice. In addition, Thomas signed the property settlement agreement, listing SACO properties as "jointly held properties."
These documents, signed by Thomas, are substantial evidence that Stephanie was entitled to participate in the partnership property. We will not set aside the findings of the District Court unless there is a clear abuse of discretion. In Re the Marriage of Perry (Mont. 1985), 704 P.2d 41, 43, 42 St. Rep. 1101, 1104. No such abuse existed in this case.
On Issue No. 2, we affirm.
HARRISON, WEBER, MORRISON, SHEEHY, GULBRANDSON and HUNT, JJ., concur.
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62 U.S. 294 (1858)
21 How. 294
DICKERSON B. MOREHOUSE, PLAINTIFF IN ERROR,
v.
WILLIAM A. PHELPS.
Supreme Court of United States.
*298 It was argued by Mr. Washburne and Mr. Reverdy Johnson for the appellant, and Mr. Blair for the appellee.
*302 Mr. Justice CATRON delivered the opinion of the court.
Phelps recovered of Morehouse the undivided moiety of lots Nos. 8 and 9 in the town of Galena, in a State Circuit Court in Illinois, which judgment was affirmed in the Supreme Court of that State; and from this decision the cause is brought here on writ of error. We are now called on to re-examine the controversy to the extent that acts of Congress, and the proceedings of officers acting under the authority of the United States, are drawn in question.
Phelps claims, through a paper addressed to the agent of the United States superintending the lead mines at Fever river; and this paper his counsel assumes to be a deed that conveys lands. It bears date November 8, 1829, and is from Guyard to Phelps, for a moiety of the lots in dispute.
The courts of Illinois held it to be an effective conveyance of title, and that, by force thereof, Phelps became "the legal representative" of Guyard, within the intent and true construction of the patents made to the representatives of Guyard and Morehouse.
The act of 1836 required that commissioners should hear and determine all claims to lots of which a preference of entry was sought, according to the act of 1829; they had power conferred on them to administer oaths and take evidence, and were directed to reduce it to writing, in support of claims to pre emptions presented for consideration; and, when all the testimony was heard and considered, they were to file with the register and receiver the whole testimony in the case, (that is, in all the instances,) together with a certificate in favor of each person having the right of pre-emption; and on payment being made to the receiver by the person ascertained to be entitled, the register was ordered to issue a certificate of purchase to him to whom the right of pre-emption had been adjudged; and the remaining lots were to be exposed to public sale.
It was the political power that was dealing with this property. Congress could award it either for a consideration, or confer it on any one that they desired should have it. The awards were made through a tribunal exercising the political power, and whose adjudications were conclusive of the right *303 to purchase; nor had the courts of justice any jurisdiction to interfere.
Phelps did not come forward and prefer a claim to have a pre-emption allowed, and if Morehouse had not acquired this right, the land would have been sold at auction; Phelps would have then stood in the situation of all others claiming preferences of entry throughout the public domain, who fail to prove up their claims before the register and receiver, and permit the land to be sold at the public sales. He abandoned his preference, and allowed it to be forfeited even conceding its original validity.
2. If Phelps has a legal title, he took it by the terms of the patents. The patent for No. 9 recites, that the legal representatives of Robert P. Guyard and Dickerson B. Morehouse had deposited in the General Land Office the register's certificate at the land office at Galena; that full payment had been made, by said legal representatives above named, for lot No. 9, (the boundary of which is described,) and which lot had been purchased by said representatives of Guyard and Morehouse; and, in consideration of the premises, the United States have given and granted, and do give and grant, "unto the said representatives of Guyard and Morehouse, and to their heirs, the said lot above described; to have and to hold, unto the said representatives, and their heirs and assigns, forever, as tenants in common." The patent for lot No. 8 is in the same terms.
For the purpose of explaining who the grantees are, and that they were the purchasers, extrinsic proof was introduced in the State Circuit Court, to the end of establishing the fact that Morehouse, as administrator of Guyard, and on his own behalf, proved the joint occupancy of lots 8 and 9 before the commissioners appointed to grant certificates of pre-emption under the act of 1836; that Morehouse obtained certificates of pre-emption, filed them with the register, paid the purchase-money to the receiver of the land office at Galena, took out his patent certificates, presented them at the General Land Office, and received the patents. The deed to Phelps was produced and recorded at Galena, June 18, 1847. Morehouse obtained his pre-emption certificates for lots Nos. 8 and 9, paid his money *304 for them, and got his patent certificate February 20, 1838, and on the 1st day of January, 1846, the patents issued.
We feel confident, from the face of the patents, that they were made for the benefit of those who obtained the certificate of pre-emption, and paid for the land. Such, in our judgment, is the fair construction of the patents, and of the second section of the act of 1836, on which they are founded. The patents, throughout, refer to those who bring the claim before the board, obtain the right of entry, pay the purchase-money, and enter the land.
It was the duty of Morehouse, as administrator of Guyard, to make payment for the moiety of the lots Nos. 8 and 9, on behalf of the estate of Guyard, out of the personal property in the administrator's hands. (Revised Statutes of Illinois, title Wills, sec. 107; adopted in 1836.)
And by the 98th and 99th sections of said title, the administrator was empowered to convert the lands into personal assets for the payment of debts; the personal estate having proved insufficient.
The capacity of Morehouse to cause the entry to be made, depends on State laws, with which we have no power to deal in the present writ of error, further than to ascertain from them that Morehouse was, in his capacity of administrator, "the legal representative" of Guyard; and such we think he was, and that the patents are technically accurate.
As Phelps was plaintiff in the ejectment suit, and Morehouse in possession, it was imposed on Phelps to show a valid legal title to authorize a recovery of the land by him; and having no such title, Morehouse's possession was sufficient for his protection.
The decisions referred to on behalf of the defendant in error, where Spanish claims had been confirmed, and where the United States gave an additional sanction to an incipient title existing when we acquired Louisiana, do not apply. In those cases, titles which were undoubtedly private property, that could be alienated, and which descended, were examined, and their validity ascertained; and when found meritorious, ordered to be defined by survey, and a United States patent was *305 in most cases ordered to be issued. But this did not defeat outstanding interests in the land for which the patent issued; as was held in the cases of Stoddart v. Chambers, Russell v. Penrose, and Landes v. Brant. The patent covered the whole title; at least, from the time it was asserted before a board of commissioners appointed by Congress to investigate the claim; and the patent inured to the protection of alienees and heirs. The United States Government was bound to protect existing interests in the lands acquired by the United States from France, by the treaty of 1803.
Here, however, a very different claim to the lands in the town of Galena is set up. The Government was the absolute owner; Congress might have repealed the acts of 1829 and 1836, at any time before actual purchases were made by those claiming a preference to enter, and the lands have been sold at auction. Up to the date of the entry and purchase, the title was in the United States; behind which date the courts of justice can uphold no deed of conveyance of the public lands, unless Congress has authorized assignments of occupant claims to be made; and as the acts of 1829 and 1836 awarded the preference of entry to the claimant who applied, and obtained, the favorable decision of the board of commissioners, no inquiry can be made into the dealings between Phelps and Guyard.
It is ordered that the judgment of the Supreme Court of Illinois be reversed, and that the cause be remanded, to be proceeded in according to this opinion.
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FILED
United States Court of Appeals
UNITED STATES COURT OF APPEALS Tenth Circuit
TENTH CIRCUIT October 10, 2014
Elisabeth A. Shumaker
Clerk of Court
UNITED STATES OF AMERICA,
Plaintiff - Appellee,
v. No. 14-2090
(D.C. No. 2:13-CR-01281-RB-1)
ADRIANA IVETTE ESTRADA, (D. N. Mex.)
Defendant - Appellant.
ORDER AND JUDGMENT*
Before HARTZ, McKAY, and MATHESON, Circuit Judges.
Adriana Estrada entered a plea agreement and pled guilty to one count of
importing marijuana from Mexico and one count of possession of marijuana with intent
to distribute. On August 20, 2013, she was sentenced to time served and two years of
supervised release. That same day, the Department of Homeland Security initiated
*After examining Appellant=s brief and the appellate record, this panel has
determined unanimously that oral argument would not materially assist the determination
of this appeal. See Fed. R. App. P. 34(a)(2) and 10th Cir. R. 34.1(G). The case is
therefore ordered submitted without oral argument. This order and judgment is not
binding precedent, except under the doctrines of law of the case, res judicata, and
collateral estoppel. It may be cited, however, for its persuasive value consistent with Fed.
R. App. P. 32.1 and 10th Cir. R. 32.1.
removal proceedings against her. She is a Mexican citizen and had been a lawful
permanent resident.
On September 24, 2013, Ms. Estrada filed a motion for a writ of coram nobis to
vacate her conviction based on ineffective assistance of counsel. The district court,
adopting the magistrate judge’s Proposed Findings and Recommended Disposition,
denied the motion, concluding Ms. Estrada had not established ineffective assistance of
counsel under Strickland v. Washington, 466 U.S. 668 (1984). Ms. Estrada appeals.
A coram nobis request under the All Writs Act, 28 U.S.C. § 1651(a), may be
considered when the movant is not in custody and therefore ineligible for habeas corpus
relief under 28 U.S.C. § 2255. See Chaidez v. United States, 133 S. Ct. 1103, 1106 n.1
(2013); Rawlins v. Kansas, 714 F.3d 1189, 1196 (10th Cir. 2013). But a movant serving
a term of supervised release remains “in custody” for purposes of § 2255, see United
States v. Cervini, 379 F.3d 987, 989 n.1 (10th Cir. 2004), and cannot file a coram nobis
proceeding, see United States v. Torres, 282 F.3d 1241, 1245 (10th Cir. 2002) (“[A]
prisoner may not challenge a sentence or conviction for which he is currently in custody
through a writ of coram nobis.”).
-2-
Although Ms. Estrada’s incarceration had ended when she filed her motion, she
remained on supervised release and was therefore ineligible to file for a writ of coram
nobis. We affirm.1
ENTERED FOR THE COURT
Scott M. Matheson, Jr.
Circuit Judge
1
We may affirm the district court’s judgment on an alternative ground supported
in the record. United States v. Winningham, 140 F.3d 1328, 1332 (10th Cir. 2013)
(“[W]e may affirm the district court on a wholly different basis so long as our decision
finds support in the record.”).
We are permitted to affirm the district court even on an issue the litigants failed to
raise below. “Whether to address [an] argument despite the litigant’s failure to raise it
below is subject to this court’s discretion based on the circumstances of the individual
case.” United States v. Jarvis, 499 F.3d 1196, 1201 (10th Cir. 2007). For example, “the
Supreme Court has indicated appellate courts might be justified in resolving an issue for
the first time on appeal ‘where the proper resolution is beyond any doubt or where
injustice might otherwise result.’” Id. (quoting Singleton v. Wulff, 428 U.S. 106, 120
(1976)). Although the Government failed to raise in the district court that Ms. Estrada
was “in custody” at the time of her petition, we exercise our discretion to affirm on this
ground.
-3-
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Order Michigan Supreme Court
Lansing, Michigan
December 19, 2012 Robert P. Young, Jr.,
Chief Justice
143342 Michael F. Cavanagh
Marilyn Kelly
Stephen J. Markman
Diane M. Hathaway
CHARTER TOWNSHIP OF LYON, Mary Beth Kelly
Plaintiff-Appellee, Brian K. Zahra,
Justices
v SC: 143342
COA: 294074
Oakland CC: 2007-083871-CC
McDONALD’S USA, L.L.C.,
Defendant,
and
MILFORD ROAD EAST DEVELOPMENT
ASSOCIATES, L.L.C.,
Intervening Defendant-Appellant.
_________________________________________/
AMENDMENT TO ORDER
On order of the Court, this Court’s December 18, 2012 order is amended to read as
follows:
On order of the Court, leave to appeal having been granted and the briefs and oral
arguments of the parties having been considered by the Court, we hereby VACATE part
II.B and the first sentence of part IV of the Court of Appeals May 24, 2011 majority
opinion, which are unnecessary to the decision in this case. The appellant’s request for
relief is DENIED in all other respects.
CAVANAGH, MARILYN KELLY, and HATHAWAY, JJ., concur in the result.
ZAHRA, J. (dissenting).
I would reverse the Court of Appeals majority decision and reinstate the trial
court’s award to defendant-appellant Milford Road East Development Associates, L.L.C.
(defendant) of just compensation under the Uniform Condemnation Procedures Act
(MUCPA), MCL 213.51 et seq., in the amount of $1.5 million.
This case involves review of a verdict rendered after a bench trial in a
condemnation action. Defendant is the developer of Lyon Towne Center, located in
plaintiff Lyon Charter Township, south of I-96 and east of Milford Road. A related
company, Milford Road West Development Associates, L.L.C. (MRWDA) has the same
owners as defendant and is the developer of Lyon Crossing, a development also south of
I-96, but west of Milford Road. Defendant and MRWDA entered into two nearly
2
identical planned development agreements with plaintiff to develop the approximately
115 acres of vacant land. The developments were phased developments collectively
known as Lyon Centers. Defendant expended approximately $10 million to construct a
ring road called Lyon Center Drive to connect Lyon Towne Center and Lyon Crossing
and bring public sewer and water service to Lyon Centers. Before the development was
completed, plaintiff exercised its right of eminent domain to access these water and sewer
lines to benefit a neighboring private property owner.
Claiming that it merely desired “to expand its municipal public services, water and
sewer, to that portion of the township north of 1-96,” plaintiff asked McDonald’s USA,
L.L.C., which had purchased a unit in the condominium development, to grant it an
easement over its property. When defendant originally sold the unit to McDonald’s,
defendant, pursuant to the Lyon Towne Center Master Deed and Bylaws, “reserve[d] for
the benefit of itself . . . permanent easements to use, tap into, enlarge or extend all utility
facilities in the Condominium and servient estates . . . .” Defendant also reserved for
itself the right to approve or disapprove all future developments and improvements,
including utilities. McDonald’s thus refused to grant plaintiff the requested easement.
Plaintiff then filed this action against McDonald’s to condemn an easement for
permanent subsurface water and sewer utilities under the condominium unit within Lyon
Towne Center owed by McDonald’s. Defendant moved to intervene, noting that it
retained the above-mentioned property rights to the common elements of the Lyon Center
under the master deed and bylaws. In response, plaintiff maintained that defendant had
no property interest in the affected property and that no common elements are involved.
Plaintiff maintained this position throughout the proceedings.
The trial court awarded defendant $1.5 million as just compensation under the
UCPA. The Court of Appeals reversed the judgment in a 2-1 decision, concluding in part
that the trial court had wrongly awarded damages to defendant for being “outpositioned”
in the market place. 1 The Court of Appeals majority further concluded that the trial
court’s award constituted a “new theory of compensation” that would “seriously hinder
future economic growth, particularly in commercial and industrial markets.” 2
Like most condemnation actions, this case is factually intense. Omitted from the
Court of Appeals majority opinion are some undisputed facts that plainly influenced the
trial court’s decision and are, in my view, pertinent to appellate review. For example, the
automobile dealership that benefitted from plaintiff’s exercise of eminent domain had
previously been under contract to purchase property within defendant’s development.
The object of this contract never came to fruition because plaintiff withheld its approval
1
Lyon Charter Twp v McDonald’s USA, LLC, 292 Mich App 660, 675 (2011).
2
Id. at 673-674.
3
to place the dealership within defendant’s development. At the same time, plaintiff
rezoned nearby property to accommodate placement of an automobile dealership on that
property. After the dealership purchased the rezoned property, it was discovered that the
land would not percolate water, 3 thereby making it impossible to use septic tanks. The
dealership could be constructed in its new location only if the water and sewer lines that
defendant had paid approximately $10 million to extend to its property were further
extended to the rezoned parcel. Plaintiff was reluctant to exercise its power of eminent
domain and agreed to do so only after the dealership and its developer agreed to
indemnify and hold plaintiff harmless for its condemnation action. The trial court
observed that plaintiff not only prevented defendant from developing its property in
accordance with the phased development plan, but also diverted at least two would-be
purchasers of property within defendant’s development to land that could be developed
only because of plaintiff’s exercise of eminent domain.
In my view, this Court’s order vacating “part II(B) and the first sentence of part IV
of the Court of Appeals majority opinion, which are unnecessary to the decision in this
case,” but otherwise denying relief is troubling for several reasons. The order vacates the
portion of the Court of Appeals majority opinion relating to its interpretation of “parcel”
under the UCPA but otherwise denies relief and thus, by implication accepts the Court of
Appeals majority’s conclusion that, even if it had property rights that were affected by
the taking, defendant is simply not entitled to just compensation. In my view, while the
order properly leaves in place the Court of Appeals majority’s determination that
defendant has a property interest in the property that was taken, it improperly lets stand
the clearly erroneous determination that this property interest was limited because the
master deed or bylaws specify that any development was “subject to plaintiff’s approval.”
That plaintiff’s approval was required merely acknowledges that plaintiff has the right to
regulate all development. Though plaintiff could veto a project approved by the
developer, it did not have the right under the master deed or bylaws to compel an
extension of the public utilities as done here without paying defendant just compensation.
In other words, there is little dispute that defendant possessed property rights under the
master deed and bylaws that were affected by plaintiff’s taking.
The order also leaves unaddressed the significant issue of defining the “parcel” of
property affected by the taking under the UCPA. The UCPA defines a “parcel” as “an
identifiable unit of land, whether physically contiguous or not, having substantially
common beneficial ownership, all or part of which is being acquired, and treated as
separate for valuation purposes.” 4 The Court of Appeals majority held that because the
“common beneficial ownership between defendant and Milford Road West Development
3
“Percolating water that oozes or seeps through soil without a defined channel . . . .”
Black’s Law Dictionary (7th ed), p 1585.
4
MCL 213.51(g).
4
Associates is extraneous to the deeds,” it “is insufficient to grant an interest in the
McDonald’s easement to the common owners.” 5 However, as explained by amicus
curiae Michigan Chamber Litigation Center,
[t]he legislature did not limit the relevant ‘parcel’ for valuation purposes in
a condemnation case to the individually deeded lots within a development;
instead, it defined the relevant “parcel” to include the development as a
whole, so long as it is an “identifiable unit of land” subject to “substantially
common beneficial ownership.”
The Court of Appeals majority clearly erred by relying on the fact that the “common
beneficial ownership between defendant and Milford Road West Development
Associates is extraneous to the deeds” to conclude that Lyon Centers is not the pertinent
“parcel.” 6 In essence, the Court of Appeals majority engrafted on the definition of
“parcel” additional requirements not contained within it. Property under common, but
separate, ownership is often developed in phases, and it is foreseeable that, in future
condemnations, a taking from one phase of a commonly owned series of developments
may have significant effects on the value of property used in later (or simply other)
phases of the development. The Legislature expressly provided that parcels having
substantially common ownership might be deemed to be a single parcel, even when they,
as in this case, are not contiguous.
In my view, the erroneous interpretation of the term “parcel” also infected the
Court of Appeals majority decision in regard to the amount of just compensation. On one
hand, the Court of Appeals majority “assume[d], without deciding,” that Lyon Centers
was an identifiable unit of land with common ownership, yet on the other hand held that,
because the right of control defendant relied on derived from the master deed for the
Lyon Towne Center, which created no rights within Lyon Crossings, defendant could not
recover for any impairment of the value of Lyon Crossing. 7 Had the Court of Appeals
majority truly assumed without deciding that Lyon Centers was an identifiable unit of
land with common ownership, the Court of Appeals majority would have recognized that
the easement within Lyon Centers must necessarily also be subject to common
ownership.
Last, and most troubling, is that this Court’s order leaves in place a rule of law
barring just compensation awards when a condemning governmental entity characterizes
a loss of a property’s market value as attributable to being “outpositioned” in the market
place. While plaintiff correctly notes that no case directly supports this proposition,
5
Lyon Charter Twp, 292 Mich App at 670.
6
Id.
7
Id. at 669-670.
5
plaintiff concedes that no case directly contravenes this proposition either. Indeed, no
Michigan court has previously addressed the question of just compensation under these
particular circumstances. However, this does not mean that the trial court abused its
discretion by awarding defendant just compensation under these particular circumstances.
Instead, one may reasonably conclude that the trial court’s award merely compensated
defendant for plaintiff’s taking of defendant’s property rights in a manner that is wholly
consistent with the well-established principle that “[w]hen only part of a larger parcel is
taken, as is the case here, the owner is entitled to recover not only for the property taken,
but also for any loss in the value to his or her remaining property.” 8 In other words,
although these precise circumstances may never have been addressed by this Court
before, or perhaps more likely may never have been specifically identified in the
language of “outpositioning,” or “lost competitive disadvantage,” the broader principles
relied on by the trial court have certainly been addressed by this Court on many
occasions. Just as traditional principles of free speech apply in a countless array of new
circumstances regularly arising in courts throughout the land, e.g., hate crimes, campaign
finance restrictions, regulatory prohibitions on commercial speech, antiharassment laws,
etc., traditional principles of just compensation apply in a countless array of new
circumstances regularly arising in those same courts.
It is well established that the “proper measure of damages in a condemnation case
involving a partial taking consists of the fair market value of the property taken plus
severance damages to the remaining property if applicable.” 9 “The purpose of just
compensation is to put property owners in as good a position as they would have been
had their property not been taken from them.” 10 Accordingly, “the proper amount of
compensation for property takes into account all factors relevant to market value.” 11
[A] guiding principle when awarding just compensation in a
condemnation suit is to “neither enrich the individual at the expense of the
public nor the public at the expense of the individual” but to leave him “in
8
M Civ JI 90.12.
9
Dep’t of Transp v VanElslander, 460 Mich 127, 130 (1999) (citations and quotation
marks omitted); see also 13 Powell, Real Property, § 79F.04[3][a], p 79F-66.1 (“The law
is well settled that takings of a part of an owner’s land require not only that the owner be
paid for the portion of the property that is taken, but also for any diminution in value to
the property that remains.”).
10
VanElslander, 460 Mich at 129 (citations and quotation marks omitted).
11
Silver Creek Drain Dist v Extrusions Div, Inc, 468 Mich 367, 379 (2003) (emphasis
added), see also VanElslander, 460 Mich at 129 (“Just compensation means the full
monetary equivalent of the property taken.”) (emphasis added) (citations and quotation
marks omitted).
6
as good a position as if his lands had not been taken.” Thus, in a partial
taking, the formula to calculate the fair market value of the remainder
parcel must account for the fact that damages will vary from case to case,
depending on the unique circumstances of each taking. Restoring the
individual to his position before the taking will require a flexible, case-by-
case approach to damages.[12]
Just compensation
“may perhaps depend on the effect which the appropriation may have on
the owner’s interest in the remainder, to increase or diminish its value, in
consequence of the use to which that taken is to be devoted, or in
consequence of the condition of the condition [sic] in which it may leave
the remainder in respect to convenience of use . . . .”[13]
“In considering the effect of the taking upon the remainder, the after value must take into
account the proposed use of the project and the effect of that use upon the remainder.” 14
“Damages to the remainder that are to be reasonably anticipated from use of the property
for the purpose for which the condemnation is made, are relevant in determining the
compensation to be awarded for the taking.” 15 “Further, in valuing what is left after the
taking, you must assume that the [condemning authority] will use its newly acquired
property rights to the full extent allowed by the law.” 16 Defendant’s appraiser testified
that the value of the remainder was reduced by $3 million as a result of the taking. 17
Plaintiff failed to offer an alternative estimate. As mentioned, plaintiff took the position
throughout the proceedings that defendant’s property rights were not affected by the
taking. 18
12
Dep’t of Transp v Tomkins, 481 Mich 184, 198 (2008) (citation omitted).
13
Tomkins, 481 Mich at 207, quoting 1 Cooley, Constitutional Limitations (1st ed), p
565.
14
4A Nichols, Eminent Domain (3d ed), § 14A.06[3], p 14A-127.
15
Id. at 14A-129.
16
M Civ JI 90.12.
17
See 13 Powell, § 79F.04[3][b][ii], p 79F-66.2 (“[s]everance damages equal the
difference between the value of the entire tract before the taking and the value of the
remainder after the taking.”).
18
It should be noted that plaintiff did argue that any property interest was not affected
because, as a practical matter, the water and sewer lines would be installed underground
with directional boring and would not disrupt the surface of the property. Plaintiff
obviously cannot support the proposition that property rights are only affected by a
physical disruption to the property.
7
Further, the Court of Appeals majority wholly failed to apply the correct standard
of review in this case. A trial court’s award of just compensation is reviewed for an
abuse of discretion: “The amount of damages to be recovered by the property owner is
generally left to the discretion of the trier of fact after consideration of the evidence
presented.” 19 “The determination of value and just compensation in a condemnation case
is not a matter of formula or artificial rules, but of sound judgment and discretion based
upon a consideration of all of the evidence . . . .” 20 An abuse of discretion occurs when
the trial court chooses an outcome falling outside the range of principled outcomes. 21
The standard is only once mentioned by the Court in a passing reference to Oakland
County Board of County Road Commissioners v Bald Mountain West, 22 in which the
Court of Appeals held that the trial court did not abuse its discretion by admitting the
defendant’s appraiser’s testimony. The Court of Appeals majority in this case simply did
not review the trial court’s decision to determine whether the trial court had abused its
discretion. Rather, the Court of Appeals majority struck down the trial court’s decision
as a matter of law even though, as mentioned, no Michigan court has previously
addressed the question of just compensation under these circumstances.
The trial court relied on the principles discussed earlier and the Michigan Civil
Jury Instructions to calculate the award. M Civ JI 90.12 provides that, in valuing
property left after a partial taking, the fact-finder should take into account the following
factors:
(1) its reduced size, (2) its altered shape, (3) reduced access, (4) any change
in utility or desirability of what is left after the taking, (5) the effect of the
applicable zoning ordinances on the remaining property, and (6) the use
which the [condemning authority] intends to make of the property it is
acquiring and the effect of that use upon the owner’s remaining
property.[23]
The trial court applied these factors in arriving at its award.
Only defendant submitted evidence to the trial court regarding just compensation.
Defendant’s appraisal expert did not base his opinion on the increased value of the
19
VanElslander, 460 Mich at 129.
20
M Civ JI 90.05.
21
People v Babcock, 469 Mich 247, 269 (2003).
22
Oakland Co Bd of Co Rd Comm’rs v Bald Mountain West, unpublished opinion per
curiam of the Court of Appeals, issued February 14, 2008 (Docket No. 275230).
23
Emphasis added.
8
otherwise useless land owned by the dealership. Rather, the expert focused on the value
of defendant’s parcel. The expert concluded that defendant’s parcel was reduced in value
by $3 million as a result of the taking. Significantly, the trial court noted that plaintiff
submitted no alternative appraisal report. In determining the value after the taking,
defendant’s expert accounted for the loss of desirability, loss of marketability, the
purpose for which plaintiff was going to use the property taken (to create a commercial
enterprise on property that otherwise could not be developed), and the effect of that use
on the owner’s remaining property. The expert opined that the remaining unsold and
unoccupied property in defendant’s development directly suffered as a result of the act of
governmental taking.
As a consequence of the Court of Appeals majority decision, and our limited
action here, defendant, whose property rights were undisputedly taken by the
government, receives nothing. For this reason, I question the Court of Appeals majority’s
conclusion that affirming the award in favor of defendant “would seriously hinder future
economic growth, particularly in commercial and industrial markets.” 24 What developer
will invest multiple millions of dollars to develop unused land knowing that the
government can take the developer’s property rights to the benefit of a private sector
competitor without compensating the developer for the resulting diminution in the value
of the property?
Further, I question the validity of the Court of Appeals majority’s policy argument
that “[t]o allow an award for lost competitive advantage would be to allow the first
developer in a geographic area to monopolize real estate by placing unreasonably high
cost barriers for competitors to tap into public utility lines.” 25 First, the competitor ran
the risk that public utility lines would not be available when it purchased
24
Lyon Charter Twp, 292 Mich App at 673-674.
25
Id. at 675.
9
property for which the competitor believed it would not need to tap into public utility
lines. Second, the competitor here did not negotiate the extension of public utilities with
defendant. Rather, the competitor unilaterally lobbied plaintiff to condemn an easement.
Third, any monopolization of public utility lines could have been avoided had plaintiff at
all indicated a desire to extend those public utility lines north of I-96 through Lyon
Centers. Plaintiff expressly agreed to a submitted “utility and grading plan,” a “storm
water management” plan, and various other design documents incorporated within the
planned development agreements. There is no evidence that any of these documents
considered the possibility of extending utility lines outside of Lyon Crossing. Only after
defendant installed utility lines at significant cost to benefit its condominium units and
the condominium project in general did plaintiff consider extending the utility lines in
this manner. In my view, plaintiff was in the best position to prevent any so-called
monopolistic effect by negotiating the extension of utility lines over private property in
the planned development agreements.
After taking these property rights, plaintiff in essence gave these rights to a private
entity, no doubt with the expectation of generating additional tax revenue for the very
taking it had facilitated. All this was done while being indemnified and held harmless by
the private entity that benefitted from plaintiff’s actions. The trial court did not err by
concluding that Lyon Centers was the relevant parcel and that defendant had property
rights that were affected by plaintiff’s taking. Further, the trial court did not abuse its
discretion in awarding defendant just compensation. I would reverse the judgment of the
Court of Appeals and reinstate the trial court’s judgment.
MARKMAN and MARY BETH KELLY, JJ., join the statement of ZAHRA, J.
I, Corbin R. Davis, Clerk of the Michigan Supreme Court, certify that the
foregoing is a true and complete copy of the order entered at the direction of the Court.
December 19, 2012 _________________________________________
t1217 Clerk
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180 Ill. App.3d 632 (1989)
536 N.E.2d 125
LARRY E. MOSS, Plaintiff-Appellant,
v.
EVERETT GIBBONS et al., Defendants (Van Manh et al., Defendants-Appellees).
No. 4-88-0275.
Illinois Appellate Court Fourth District.
Opinion filed March 9, 1989.
*633 *634 William C. Zukosky, of Urbana, and Edward Zukosky, of Wenona, for appellant.
Costigan & Wollrab, P.C., of Bloomington (William F. Costigan, of counsel), for appellee St. James Hospital.
Richard E. Stites, of Livingston, Barger, Brandt & Schroeder, of Bloomington, for appellee Van Manh.
Heyl, Royster, Voelker & Allen, of Peoria (Gary M. Peplow and Nicholas J. Bertschy, of counsel), for appellee N. Gutierrez.
Orders affirmed.
JUSTICE KNECHT delivered the opinion of the court:
This is an appeal from the dismissal with prejudice of a medical malpractice action (Ill. Rev. Stat. 1985, ch. 110, par. 2-622).
We affirm.
The plaintiff, Larry E. Moss, is a prisoner at the Pontiac Correctional Center. On February 29, 1984, he was attacked in his cell and suffered an injury to his left eye. Following the attack, the plaintiff was taken to the medical unit at the correctional center where he was assigned to the care of Everett Gibbons, M.D., John Hatala, M.D., Van Manh, M.D., Raspal Dalal, M.D., Syed Ali, M.D., and Timothy Miller, an optometrist.
The medical unit took orbital X rays of the plaintiff. The X rays were sent for review to N. Gutierrez, M.D. Gutierrez is a radiologist at St. James Hospital in Pontiac, Illinois. He read the X rays as negative for fractures of the left orbit.
On May 10, 1984, the plaintiff was examined by Dennis Lockhart, M.D. Lockhart is an ophthalmologist at Gailey Eye Clinic in Bloomington, Illinois. He ordered orbital X rays with waters view of the plaintiff. Lockhart read the X rays as questionable for a blow-out fracture of the left orbital floor. He recommended additional X rays be taken of the plaintiff.
On May 22, 1984, orbital X rays with waters view and a tomogram were taken of the plaintiff at St. James Hospital. Gutierrez read *635 the X rays and tomogram as positive for blow-out fracture of the left orbital floor.
On June 1, 1984, Lockhart reexamined the plaintiff. He recommended surgery be performed to correct the eye disorders of the plaintiff. The surgery was unsuccessful. The plaintiff now suffers intractable double vision with his left eye rolled upward.
On May 6, 1986, the plaintiff filed a five-count medical malpractice complaint (Ill. Rev. Stat. 1985, ch. 110, par. 2-622) against defendants Gibbons (count I), Hatala (count II), Manh (count III), Dalal (count IV), and Ali (count V) in the circuit court of Livingston County. On May 7, 1986, without the leave of the circuit court, the plaintiff filed an amendment to the complaint against defendants Miller (count VI), Gutierrez (count VII), and St. James Hospital (count VIII). The amendment was accompanied by an attorney affidavit which stated the required consultation under section 2-622(a)(1) could not be obtained prior to the expiration of the statute of limitations.
On August 4, 1986, the 90th day after the filing of the complaint, the plaintiff filed a motion to extend the time of filing of the medical report. Attached to the motion was the section 2-622(a)(1) consultation affidavit. On August 18, 1986, without the leave of the circuit court, the plaintiff filed the medical report.
Defendants Gutierrez, Manh, and St. James Hospital filed motions to dismiss the counts directed against them in the complaint. The motions attacked (1) the manner and timing of the filings of the pleadings under the statute of limitations; (2) the plaintiff's failure to consult with a health professional practicing in their respective medical specialties; and (3) the meritoriousness determination in the medical report of the reviewing health professional. In response, the plaintiff filed a motion for leave to amend the May 6, 1986, complaint and the May 7, 1986, consultation affidavit. The plaintiff did not offer any proposed amendments to the circuit court. On April 3, 1987, the circuit court granted the motions to dismiss of defendants Gutierrez and St. James Hospital. On July 28, 1987, the circuit court granted the motion to dismiss of defendant Manh. The circuit court ordered dismissals with prejudice based on the failure of the plaintiff to comply with the statutory prerequisites for filing medical malpractice actions.
The circuit court denied the subsequent motions of the plaintiff for leave to amend the pleadings and to reconsider, revise, and vacate the dismissal orders. On March 2, 1988, the circuit court reaffirmed the dismissal orders. Following these rulings, the plaintiff orally moved for voluntary dismissal (Ill. Rev. Stat. 1985, ch. 110, par. 2-1009) *636 against defendants Gibbons, Hatala, Dalal, Ali, and Miller. The circuit court granted the oral motion. The plaintiff now appeals.
The defendants correctly contend the consultation affidavit is not based on the written medical report of the reviewing health professional.
The consultation affidavit is to declare that "the reviewing health professional has determined in a written report, after a review of the medical record and other relevant material involved in the particular action that there is a reasonable and meritorious cause for the filing of such action." (Ill. Rev. Stat. 1985, ch. 110, par. 2-622(a)(1).) This means the consultation affidavit is to be based on the written medical report of the reviewing health professional.
1 The consultation affidavit was executed on August 4, 1986. The affidavit stated the reviewing health professional had not yet supplied the written medical report. The medical report was dated August 14, 1986. Obviously, the consultation affidavit could not have been based on the written medical report of the reviewing health professional. Thus, the plaintiff failed to comply with the statutory prerequisites for filing a medical malpractice action.
The defendants next contend the consultation affidavit and the medical report are insufficient because the reviewing health professional did not practice in their respective medical specialties.
Section 2-622(a)(1) places two restrictions on the selection of the reviewing health professional. First, the health professional must be "knowledgeable in the relevant issues involved in the particular action." (Ill. Rev. Stat. 1985, ch. 110, par. 2-622(a)(1).) Second, the health professional must practice in the same medical specialty of any defendant specialists. Ill. Rev. Stat. 1985, ch. 110, par. 2-622(a)(1).
2 The plaintiff selected Sidney D. Kamen, M.D., as the reviewing health professional. Kamen is licensed to practice medicine in all of its branches. He specializes in ophthalmology. As such, Kamen is knowledgeable in the diagnosis and treatment of eye disorders. Thus, the first restriction on the selection of the reviewing health professional is met.
The medical specialty restriction on the selection of the reviewing health professional was recently discussed in Hagood v. O'Conner (1988), 165 Ill. App.3d 367, 519 N.E.2d 66. The appellate court noted Illinois does not define or otherwise regulate the medical specialties of physicians. Rather, a licensed physician is qualified to practice medicine in all of its branches. (Ill. Rev. Stat. 1985, ch. 111, par. 4401 et seq.) For these reasons, the appellate court determined:
"[A] licensed physician in Illinois is a legally qualified practitioner *637 in every so-called medical specialty. Therefore, for the purposes of this Act, a physician who is licensed to practice medicine in all of its branches may evaluate the treatment given by any other physician who is licensed to practice medicine in all of its branches, even if the defendant physician holds himself out to be a specialist." Hagood, 165 Ill. App.3d at 372-73, 519 N.E.2d at 69.
Defendant Gutierrez is alleged to be the agent of St. James Hospital. Gutierrez is a physician specializing in radiology. In Relaford v. Kyaw (1988), 173 Ill. App.3d 1034, 527 N.E.2d 1328, the appellate court found a thoracic surgeon qualified to be a reviewing health professional in a medical malpractice action alleging negligent failure to diagnose lung cancer from the X rays of the plaintiff. The instant case is similar to Relaford in that the medical malpractice action alleges the negligent failure to diagnose a fracture of the left orbital floor from the X rays of the plaintiff. The diagnostic X ray knowledge of an ophthalmologist on eye disorders is comparable to that of a thoracic surgeon on lung diseases. Accordingly, Kamen is qualified to be the reviewing health professional as to defendant Gutierrez.
3 Defendant Manh is alleged to be a physician licensed to practice medicine in all of its branches. Kamen possesses the same medical license. Thus, Kamen is qualified to be the reviewing health professional as to defendant Manh.
Defendant St. James is a hospital. Hospitals fall into the "all other defendants" category under section 2-622(a)(1). (Shanks v. Memorial Hospital (1988), 170 Ill. App.3d 736, 739, 525 N.E.2d 177, 179-80.) For this category of defendants, the plaintiff must select a physician licensed to practice medicine in all of its branches as the reviewing health professional. Kamen is the physician licensed to practice medicine in all of its branches. Thus, Kamen is qualified to be the reviewing health professional as to defendant St. James Hospital.
The defendants contend the medical report does not identify the reasons for the reviewing health professional's determination there was a meritorious cause of action against them. We agree.
The plaintiff filed a single medical report. A separate report as to each defendant need not be filed. (Hagood, 165 Ill. App.3d at 374, 519 N.E.2d at 70.) The medical report presented the case history and treatment of the plaintiff. This manner of presentation can be sufficient to identify the reasons for the meritoriousness determination. (See Hagood, 165 Ill. App.3d at 373, 519 N.E.2d at 70; Relaford, 173 Ill. App.3d at 1040, 527 N.E.2d at 1332.) It is not sufficient in the instant case.
*638 4 The medical report did not mention defendant Manh. The report should discuss the involvement of each defendant in the treatment of the plaintiff. (Alford v. Phipps (1988), 169 Ill. App.3d 845, 853-54, 523 N.E.2d 563, 568-69.) Without such discussion, the report amounts to little more than a generalized conclusion of medical malpractice. A generalized conclusion of medical malpractice cannot support the meritoriousness determination. Consequently, the medical report is insufficient for a meritoriousness determination as to defendant Manh.
5 The medical report mentioned defendant Gutierrez and discussed his limited involvement in the case. Defendant Gutierrez reviewed two sets of orbital X rays of the plaintiff. The medical report could not confirm the negative reading for an orbital fracture in the first set of X rays. These X rays were not available for review. The medical report confirmed the positive reading for an orbital fracture in the second set of X rays. As such, the medical report is not critical of the X ray reviewed by defendant Gutierrez. Thus, the medical report is insufficient for a meritoriousness determination as to defendant Gutierrez.
The medical report also mentioned defendant St. James Hospital. The involvement of defendant St. James Hospital in the case is limited to the review of its alleged agent Gutierrez. Given the preceding discussion, the medical report is insufficient for a meritoriousness determination as to defendant St. James Hospital.
The plaintiff contends the circuit court abused its discretion in denying leave to amend and in dismissing the action with prejudice.
6 The determination of whether the pleadings are sufficient to comply with section 2-622 is a matter of discretion for the circuit court. This pleading determination depends on the facts and circumstances of each case. (Alford, 169 Ill. App.3d at 854-55, 523 N.E.2d at 569.) Where the pleadings are determined to be insufficient, the circuit court must determine whether to allow amendment or dismissal. Absent a manifest abuse of discretion, the amendment or dismissal determination of the circuit court will not be disturbed on appeal. McCastle v. Sheinkop (1987), 121 Ill.2d 188, 194, 520 N.E.2d 293, 296.
7 "[A] medical malpractice plaintiff should be afforded every reasonable opportunity to establish his case." (Hansbrough v. Kosyak (1986), 141 Ill. App.3d 538, 549, 490 N.E.2d 181, 188.) Accordingly, amendments to pleadings are to be liberally allowed to enable medical malpractice actions to be decided on their merits rather than on procedural technicalities. The test is the furtherance of the ends of justice. *639 Taylor v. City of Beardstown (1986), 142 Ill. App.3d 584, 491 N.E.2d 803.
8 In Taylor, this appellate court reiterated the guidelines for amendment to medical malpractice pleadings under the ends of justice test:
"In passing on a motion to amend, a court should properly consider the ultimate efficacy of a claim as well as previous opportunities to assert it. [Citations.] Thus, the merits of a proposed amendment should be considered, and a trial court should not deny leave to amend solely on the basis of a delay in filing, unless accompanied by a showing of prejudice to the opposing party which goes beyond mere inconvenience. [Citations.] If, on the other hand, the proposed amendment as submitted to the trial court would not cure any defects in the complaint, then a motion for leave to amend is properly denied." Taylor, 142 Ill. App.3d at 591, 491 N.E.2d at 808.
9 The plaintiff did not offer any proposed amendments of the pleadings to the circuit court. The failure to offer a proposed amendment is generally fatal for review of the exercise of discretion by the circuit court. (Intini v. Schwartz (1979), 78 Ill. App.3d 575, 579-80, 397 N.E.2d 84, 87.) There are two instances in which a proposed amendment need not be offered to the circuit court. First, a proposed amendment need not be offered where its nature is apparent from the proceeding. (Intini, 78 Ill. App.3d at 579, 497 N.E.2d at 87.) Second, a proposed amendment need not be offered where its offer is foreclosed by the circuit court. (Scala/O'Brien Porsche Audi, Inc. v. Volkswagen of America, Inc. (1980), 87 Ill. App.3d 757, 762, 410 N.E.2d 205, 209.) Neither instance applies here. Therefore, the circuit court acted within its discretion in denying leave to amend and in dismissing the action with prejudice.
The plaintiff lastly contends his medical malpractice action should not have been dismissed with prejudice as he was under a legal disability.
Imprisonment is a legal disability. A legal disability may toll the statute of limitations. (Ill. Rev. Stat. 1985, ch. 110, par. 13-211.) Thus, a prisoner may elect to seek immediate legal redress or to postpone legal redress.
10 The plaintiff sought immediate legal redress. He did not claim imprisonment as a legal disability in the pleadings. The pleadings only referred to imprisonment as a description of the scene of the injury and initial medical treatment. Moreover, the May 7, 1986, attorney affidavit implicitly disclaimed imprisonment as a legal disability. *640 The affidavit did not seek to toll the statute of limitations. Rather, the affidavit sought a filing extension beyond the statute of limitations. After the circuit court granted the motions to dismiss of the defendants, however, the plaintiff attempted to claim imprisonment as a legal disability. This claim was not responsive to the statutory noncompliance basis for the dismissals. Given these facts, the plaintiff has waived any claim of imprisonment as a legal disability.
Defendants Gutierrez and Manh also contend the plaintiff did not earlier appeal the dismissal orders.
11 The notice of appeal is to be liberally construed in the absence of prejudice to the nonappealing party. Nevertheless, care should be given in stating the requested relief in the notice of appeal. The appellate court has jurisdiction over only the matters raised in the notice of appeal. 107 Ill.2d R. 303(c); Lewanski v. Lewanski (1978), 59 Ill. App.3d 805, 815, 375 N.E.2d 961, 968.
The notice of appeal may be construed to bring up for review an earlier unspecified order where the order is a step in the procedural progression to the specified order. Burtell v. First Charter Service Corp. (1979), 76 Ill.2d 427, 434-35, 394 N.E.2d 380, 383.
12 In the instant case, the plaintiff requested relief from the March 2, 1988, order in the notice of appeal. The plaintiff did not specify either the April 3, 1987, order or the July 28, 1987, order in the request. These unspecified orders were steps in the procedural progression to the specified order of March 2, 1988. Given the interrelationship between these orders, the notice of appeal is sufficient to confer jurisdiction on the appellate court to consider the propriety of all these orders.
Affirmed.
LUND and SPITZ, JJ., concur.
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510 U.S. 872
Holtzclawv.United States.
No. 93-5039.
Supreme Court of United States.
October 4, 1993.
1
Appeal from the C. A. 5th Cir.
2
Certiorari denied. Reported below: 993 F. 2d 1543.
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} |
In the
United States Court of Appeals
For the Seventh Circuit
No. 12-3864
UNITED STATE OF AMERICA,
Plaintiff-Appellee,
v.
ANDRE WILLIAMS,
Defendant-Appellant.
Appeal from the United States District Court for the
Western District of Wisconsin.
No. 12-CR-00054 — William M. Conley, Judge.
ARGUED APRIL 23, 2013 — DECIDED SEPTEMBER 24, 2013
Before RIPPLE and HAMILTON, Circuit Judges, and
STADTMUELLER, District Judge.*
STADTMUELLER, District Judge. On the night of March 21,
2012, City of Fitchburg police officers responded to an anony-
mous 911 call reporting a group of twenty-five individuals
*
The Honorable J.P. Stadtmueller of the Eastern District of Wisconsin,
sitting by designation.
2 No. 12-3864
acting loudly and displaying hand guns in a parking lot. Upon
arriving at the scene, the officers observed something different:
a smaller group of individuals, none of whom appeared to be
acting inappropriately. The officers approached this group,
which had begun to disperse slowly. For no apparent reason,
one of the officers singled out the appellant, Andre Williams,
and performed a frisk. Mr. Williams began to resist the frisk
and tried to escape, but was ultimately restrained. Thereafter,
the officers searched his body and found both a handgun and
several ‘ecstasy’ pills. Mr. Williams was arrested and charged
with being a felon in possession of a firearm. He moved to
suppress the evidence seized from him, but the district judge
ultimately denied his motion. Thereafter, Mr. Williams pled
guilty to possession of a firearm as a convicted felon, but
reserved his right to appeal. At sentencing, the district judge
applied two sentencing enhancements, which significantly
increased William’s offense level and applicable range of
imprisonment under the advisory sentencing guidelines.
Following sentencing, Mr. Williams appealed his conviction
and sentence to this court, arguing that the evidence used to
obtain the conviction should have been suppressed, and, in the
alternative, that the district judge erred in applying the
sentencing enhancements. We find that the search was unlaw-
ful, and accordingly reverse the denial of his suppression
motion, vacate his judgment of conviction, and remand the
matter for additional proceedings consistent with this opinion.
Because we reverse the underlying judgment of conviction, we
need not reach the sentencing enhancement issue.
No. 12-3864 3
I. Background
On the night of March 21, 2012, at 11:25 p.m., a woman
called 911 to report the presence of a large group of individuals
in a parking lot outside of a bar in Fitchburg, Wisconsin. The
woman refused to provide her name, but explained that there
were approximately twenty-five people, three or four of whom
she had observed with “guns out.” She did not report any
fighting or threatening behavior, instead only informing the
911 dispatcher that the people were being loud while loitering
in the parking lot of Schneid’s, a local bar (to which the police
apparently respond quite often due to reports of violence, gang
activity, drugs, and weapons).
As a result of receiving this tip, the dispatcher sounded a
tone at the City of Fitchburg Police Department’s (“the
Department”) headquarters indicating a weapons call. That
tone issued during the Department’s nightly briefing, and a
number of officers immediately suited up to respond to the
call.
The officers drove to Schneid’s parking lot, arriving three
to five minutes after the call, and observed a much different
scene than that reported by the anonymous caller. Instead of
seeing a group of twenty-five belligerent men, the officers
discovered only eight to ten individuals standing around a
group of cars in the parking lot. At the time the officers
approached the group, the individuals were not loud or
otherwise acting disruptively, nor were they displaying their
firearms. In fact, one of the officers, Ryan Jesberger, testified
that he and the other officers from his department were not
4 No. 12-3864
even sure that this smaller group was the same one that had
been reported by the anonymous caller.
The officers approached the group anyway. As they
approached, the group apparently began to disperse, but no
one attempted to flee the scene. Each member of the group
appeared to act in the same manner, avoiding eye contact with
the officers and walking slowly away from the area.
For reasons that are entirely unclear from the record, the
officers began to perform pat-downs on the members of the
group. Officer Jesberger singled out Mr. Williams, in particu-
lar, and requested that Mr. Williams step forward and display
his hands. At the evidentiary hearing on this issue, Officer
Jesberger stated that he started to “zero in” on Mr. Williams
“once [Officer Jesberger] saw the way [Mr. Williams] was
acting.” However, Officer Jesberger did not provide any
further detail on what, precisely, piqued his interest in Mr.
Williams, as opposed to the other members of the group.
While, apparently, Mr. Williams was not making eye contact
with the officers and was attempting to slowly move away
from the scene, all of the evidence indicates that every other
member of the group was doing exactly the same thing.
After Officer Jesberger requested that Mr. Williams step
forward, Mr. Williams asked “Why?,” but was compliant in
every other respect. At Officer Jesberger’s request, Mr. Wil-
liams stepped out from his position between two cars, showed
his hands, and then placed his hands on his head.
Officer Jesberger then began to pat down Mr. Williams. At
that point, Mr. Williams began to move his hands toward his
waist. Officer Jesberger warned Mr. Williams not to do so, but
No. 12-3864 5
Mr. Williams continued to move his hands. Accordingly,
Officer Jesberger attempted to handcuff Mr. Williams, who
instead pulled away and tried to run from the scene. He did
not get very far before other officers took him down to the
ground. The officers held Mr. Williams to the ground and
directed that he pull his hands out from underneath him, but
Mr. Williams did not (or perhaps could not) comply. They then
attempted to get him to comply by striking him with their knee
and taser-ing him. This worked, and Officer Jesberger was
finally able to handcuff Mr. Williams. However, during this
scuffle, another officer injured his knee when he moved it in an
unnatural way.
With Mr. Williams successfully detained, the officers
performed a pat-down search of his person and recovered a
handgun, several ecstasy pills, and approximately $600.00 in
cash. They immediately placed Mr. Williams under arrest.
On April 18, 2012, Mr. Williams was indicted in the
Western District of Wisconsin, and charged with being a felon
in possession of a firearm, in violation of 18 U.S.C. § 922(g)(1).
He then moved to suppress the gun recovered from him
during Officer Jesberger’s frisk. Mr. Williams argued that
suppression was appropriate, because the officers did not have
a reasonable suspicion on which to base either their initial
investigatory stop or to perform the frisk of Mr. Williams.
Magistrate Judge Stephen Crocker held an evidentiary hearing
on the motion approximately one week later, after which time
he recommended that Mr. Williams’ motion be denied. The
magistrate judge suggested that the frisk was unconstitutional
but was sufficiently deliberate to require exclusion of the gun,
6 No. 12-3864
by proposing an extension of the logic of Herring v. United
States, 555 U.S. 135 (2009), to a warrantless frisk in a Terry stop.
Both Mr. Williams and the government objected to that
ruling. Mr. Williams objected to the final determination that
the gun should not be suppressed; the government objected to
the magistrate’s finding that the frisk was unconstitutional.
While the objections were pending before District Judge
William Conley, Mr. Williams entered into a plea agreement
with the government. He agreed to plead guilty, but reserved
his right to appeal if the district judge determined that the gun
should not be suppressed.
The district judge eventually determined that the gun
should not be suppressed, and Mr. Williams pled guilty. The
matter progressed toward sentencing. The probation officer
prepared a presentence report, determining Mr. William’
guideline range of imprisonment to be thirty-seven to forty-six
months. The sentencing judge applied two sentencing enhance-
ments, and ultimately imposed a 70-month sentence.
Mr. Williams appealed, arguing that the district judge erred
in failing to exclude the firearm and in applying both of the
sentencing enhancements. Because we agree that the failure to
exclude the firearm was in error, we need not reach the
sentencing issues.
II. Discussion
If we determine that the district judge should have sup-
pressed the firearm, then we must vacate Mr. Williams’
judgment of conviction. In such a case, we need not review the
sentencing enhancement issue.
No. 12-3864 7
There are two grounds upon which we can find that the
gun should have been suppressed. First, if we determine that
the initial stop of Williams, when Officer Jesberger asked him
to step out from the group and submit to a frisk, was unconsti-
tutional, then we must also determine that all of the later
occurrences, including the frisk and recovery of the firearm,
were similarly unconstitutional, and likely warrant suppres-
sion. Second, even if we were to determine that the initial stop
was permissible, then we must ask whether the frisk itself was
constitutional. If we find that it was not, then the later recovery
of the firearm was also unconstitutional, likely warranting
suppression of the firearm.
For the reasons that follow, we find that the frisk was
unconstitutional, and therefore hold that the district judge
erred in denying Mr. Williams’ motion to suppress. Accord-
ingly, we do not reach the sentencing enhancement issue.
A. Standard of Review
We review the district judge’s denial of Mr. Williams’
suppression motion, reviewing factual findings for clear error
and both legal conclusions and mixed questions of law and fact
de novo. United States v. Freeman, 691 F.3d 893, 899 (7th Cir.
2012) (citing United States v. Huebner, 356 F.3d 807, 812–13 (7th
Cir. 2004)); United States v. Burnside, 588 F.3d 511, 516–17 (7th
Cir. 2009) (citing United States v. Mosby, 541 F.3d 764, 767 (7th
Cir. 2008); United States v. Groves, 530 F.3d 506, 509 (7th Cir.
2008); United States v. McIntire, 516 F.3d 576, 578–79 (7th Cir.
2008); United States v. Fiasche, 520 F.3d 694, 697 (7th Cir. 2008)).
In this case, we are called upon to examine the district
court’s legal determination that Officer Jesberger’s stop and
8 No. 12-3864
frisk of Mr. Williams was constitutional. The parties do not
disagree over the factual record, as set forth by the district
judge. Rather, their dispute is solely over the application of the
relevant law to those facts. Accordingly, our review of the
district judge’s determination on the stop and frisk must be de
novo—particularly because “‘what happened’ is not an issue,”
in this case. United States v. Carlisle, 614 F.3d 750, 754 (7th Cir.
2010) (citing Burnside, 588 F.3d at 516).
B. Discussion
As we have already mentioned, there are two junctures at
which we could find the search leading to the recovery of the
firearm to be unconstitutional: at the moment that Mr. Wil-
liams was singled out and stopped, or at the moment that Mr.
Williams was frisked. Slightly different legal standards apply
to each of those situations, so we address them separately. See,
e.g., Ybarra v. Illinois, 444 U.S. 85, 94 (1975) (pointing out that,
even if an initial stop is lawful, a subsequent frisk must be
separately supported to be constitutional); United States v.
McKoy, 428 F.3d 38, 39 (7th Cir. 2005) (“It is insufficient that the
stop itself is valid; there must be a separate analysis of whether
the standard for pat-frisks has been met.”).
1. Initial Stop
In this portion of my opinion, I disagree with Judge
Hamilton, and find that the police officers’ initial stop of the
group of individuals was lawful.
Police officers may detain a suspect for a brief investigatory
stop if they have a “reasonable suspicion based on articulable
facts that a crime is about to be or has been committed.”
No. 12-3864 9
Carlisle, 614 F.3d at 754–55 (citing United States v. Wimbush, 337
F.3d 947, 949 (7th Cir. 2003)); Terry v. Ohio, 392 U.S. 1, 21 (1968).
This requires “more than a hunch but less than probable
cause.” Jewett v. Anders, 521 F.3d 818, 823 (7th Cir. 2008) (citing
Illinois v. Wardlow, 528 U.S. 119, 123 (2000); United States v.
Lenoir, 318 F.3d 725, 729 (7th Cir. 2003)). To find that reasonable
suspicion existed to justify as stop, the Court must examine the
totality of the circumstances in the situation at hand, in light of
the individual officers’ own training and experience, and
should uphold the stop if it finds that “the detaining officer
ha[d] a ‘particularized and objective basis’ for suspecting legal
wrongdoing.” United States v. Arvizu, 534 U.S. 266, 273 (2002)
(citing United States v. Cortez, 449 U.S. 411, 417–18 (1981);
Ornelas v. United States, 517 U.S. 690, 699 (1996)).
The first question I must ask is what, precisely, Officer
Jesberger relied upon in deciding to stop Mr. Williams. The
Government points, almost exclusively, to the anonymous 911
call, itself, arguing that the call was an emergency report,
which can support an officer’s reasonable suspicion with less
objective evidence to corroborate the report. See United States
v. Hicks, 531 F.3d 555, 559–60 (citing Alabama v. White, 496 U.S.
325, 332 (1990); New York v. Quarles, 467 U.S. 649 (1984)).
However, in passing, the government also mentions that this
stop occurred at night in a high-crime area.
Do those facts, taken in conjunction with one another,
support a finding that Officer Jesberger had a reasonable
suspicion to stop Mr. Williams? Yes, but this is a very close
call.
10 No. 12-3864
The 911 call, in and of itself (and despite being anonymous),
provided Officer Jesberger with a reasonable suspicion to stop
Mr. Williams. When responding to an emergency report,
officers may use the report, itself, to justify a Terry stop,
provided that the report describes an ongoing emergency, as
opposed to general criminality. See Hicks, 531 F.3d at 558–59
(distinguishing Florida v. J.L., 529 U.S. 266, 268 (2000) on the
basis that the report in Hicks provided details of an ongoing
emergency situation, whereas the tip in J.L. reported only
general criminality). In Hicks, we found that an individual’s
911 call reporting that “There’s a guy beating a woman up in
my house,” was an emergency report justifying a Terry stop.
Hicks, 531 F.3d at 557, 560. Here, the 911 call was arguably even
more specific in reporting an emergency situation. The caller
stated that there was a large group of people being loud and
waving guns (R. 41, at 3–4) in a location at which violent crime
and drug activity is regularly reported.1 An officer responding
to that scene would certainly be justified in believing that a
volatile emergency situation was underway, and stopping
members of a nearby group of individuals upon arrival at the
scene. Therefore, I find that the 911 call supported a reasonable
1
Indeed, this situation is much more egregious than that presented in J.L.
In that case, the Supreme Court examined a tip reporting the mere
possession of a firearm. J.L., 529 U.S. at 273–74. Here, on the other hand, the
caller reported far more: that guns were being openly displayed in a bar
parking lot, to which police frequently reported in response to crime and
gang activity, by a large group of people who were acting very loud.
Whereas the J.L. caller reported a situation in which an individual was
merely possessing a gun in public, the caller in this case reported the much
more dangerous situation of multiple individuals displaying guns in a
situation that may have been construed as a fight.
No. 12-3864 11
suspicion that a crime was in progress or about to be commit-
ted, making the stop a permissible Terry stop. See, e.g., id.;
Terry, 392 U.S. at 30.
Moreover, that conclusion is not changed by the fact that
the 911 call was made anonymously. Mr. Williams argues that
the 911 call could not support a reasonable suspicion, under
J.L., because it was made anonymously. That is incorrect. The
mere fact that the caller was anonymous is not enough, under
J.L. to make the 911 call per se unreliable. Hicks, 531 U.S. at
558–59 (citing United States v. Brown, 496 F.3d 1070, 1077 (10th
Cir. 2007); United States v. Elston, 479 F.3d 314, 319 (4th Cir.
2007); United States v. Drake, 456 F.3d 771, 775 (7th Cir. 2006);
United States v. Terry–Crespo, 356 F.3d 1170, 1176 (9th Cir. 2004);
Anthony v. City of New York, 339 F.3d 129, 136–37 (2d Cir. 2003);
United States v. Holloway, 290 F.3d 1331, 1338–39 (11th Cir.
2002); United States v. Valentine, 232 F.3d 350, 354 (3d Cir.
2000)); see also United States v. Wooden, 551 F.3d 647 (“Doubtless
greater confidence can be achieved when police know a caller’s
identity . . . yet, as a practical matter a name given by a caller
does not make a tip any less anonymous … it would under-
mine the goal of the 911 system to require a caller to prove his
identity.”). So long as the call reported an ongoing emergency,
J.L. may be distinguished. Hicks, 531 U.S. at 558–59 (“Every
circuit to consider the question has distinguished J.L. when the
tip is not one of general criminality, but of an ongoing emer-
gency … or very recent criminal activity.”) Here, where the
caller also provided information regarding how she obtained
the information on which she based her report, I find it
appropriate to hold that Officer Jesberger had a reasonable
suspicion for the stop. Wooden, 551 F.3d at 649 (“The caller in
12 No. 12-3864
this case told us how he knew that Wooden had a gun …
[c]orroboration of other information would not make this claim
more plausible.”).
Mr. Williams also asserts that the changed circumstances
between the time of the 911 report and the officers’ arrival on
the scene undermined the credibility and emergency nature of
that report, thus depriving it of its ability to provide Officer
Jesberger with a reasonable suspicion to conduct the Terry
stop; again, he is incorrect, though this is a much closer
question. As Mr. Williams points out, the 911 caller reported
that there was a group of 25 or more individuals in the parking
lot being very loud. When the officers arrived, only eight to ten
individuals remained, and apparently none of them were
acting in a loud or threatening manner. But I find that those
facts are not enough to strip the 911 report of either its credibil-
ity or of its emergency nature.
This does not undermine the report’s credibility. As to that
issue, I look again to Hicks, which noted that “a lower level of
corroboration is required before conducting a stop on the basis
of an emergency report.” 531 F.3d at 559 (citing Quarles, 467
U.S. 649). Thus, here, where the caller remained anonymous,
but provided very specific details about the location and
activities of a group of men, I believe that low level of corrobo-
ration is satisfied. Additionally, while the group was smaller,
by approximately one-half to two-thirds, upon the arrival of
police, that fact should not undermine the credibility of the
call. The officers arrived within three to five minutes, which is
more than enough time for some participants to have left
(especially if they were frightened by an escalating violent
situation) but not likely enough time for an entire group of 25
No. 12-3864 13
people to have left and been replaced by a new group of eight
to ten. Accordingly, I find that the low threshold of corrobora-
tion required to rely on an emergency call was satisfied.
Relatedly, the fact that the officers found a much smaller
group of men who were not acting loudly or brandishing
weapons, did not suddenly strip the report of its emergency
nature. Wooden, 551 F.3d 647, is instructive. In that case, an
anonymous caller provided a description of an individual, who
he said had drawn a weapon from his holster during a fight
with his girlfriend. Id. Police responded and found a couple
near the reported scene, who were no longer arguing. Id.
Despite that change in circumstances, we nonetheless upheld
a stop of the armed individual. Id., at 649–50. The same should
be the case here. Any change in the number of people present
and their activity could very well have been attributable to the
arrival of the police and the time between the call and the
officers’ arrival. That change from volatile to stable, which
happened very quickly, was not guaranteed to be permanent.
Indeed, in a previously-volatile situation in which guns have
recently been reported, officers can (and likely should) proceed
with a reasonable suspicion that violence may break out again
in a short time. Moreover, the situation had not changed so
drastically that the officers should have assumed that the
emergency potential had entirely passed without possibility of
return. Eight to ten individuals still remained in a parking lot
known for the occurrence of previous violent and criminal
activity. This fact supported a belief that the threat of the
reported emergency continued, even after officers arrived at
the scene and discovered a different situation than was initially
reported.
14 No. 12-3864
For these reasons I find that Officer Jesberger’s stop of Mr.
Williams was supported by a reasonable suspicion. Accord-
ingly, the district court properly found that the stop was
permissible.
2. Subsequent Frisk
Both Judge Hamilton and I agree, on the other hand, that
the district court’s decision on the frisk issue was in error.
A reviewing court must analyze a frisk separately from an
initial stop, applying a slightly different standard to determine
whether the frisk was lawful. See, e.g., Ybarra, 444 U.S. at 94;
McKoy, 428 F.3d at 39. This separate standard is necessary to
protect the public from frisks, which are “a serious intrusion
upon the sanctity of the person, which may inflict great
indignity and arouse strong resentment.” Terry, 392 U.S. at 17.
Thus, given the more burdensome intrusion of a frisk, such
action should only be allowed when the officer can point to
articulable facts that would establish the separate and specific
condition that the detainee has a weapon or poses some
danger. Id., at 27. In other words, an officer performing a Terry
stop may not automatically frisk the individual subject to the
stop; rather, to do so, the officer must have some articulable
suspicion that the subject is “armed and dangerous.” Arizona
v. Johnson, 555 U.S. 323, 323 (2009); United States v. Pedroza, 269
F.3d 821, 827 (2001) (citing Terry, 392 U.S. at 27). This more
specific analysis, requiring the officer to hold a reasonable
suspicion that the subject is “armed and dangerous” as
opposed to being generally suspicious, allows courts to
distinguish between legitimate and illegitimate frisks, the latter
No. 12-3864 15
of which constitute severe intrusions upon individual liberty.
Terry, 392 U.S. at 27.
Again, we begin our analysis by examining the circum-
stances that Officer Jesberger may have relied upon in deciding
to frisk Mr. Williams. The government asserts that the follow-
ing facts supported Officer Jesberger’s decision to frisk Mr.
Williams: the fact that the group, in general, avoided eye
contact with the officers and started to move away from the
area upon the officers’ arrival; the fact that Mr. Williams, in
particular, had his hands in his pocket or near his waistband,
avoided eye contact, and began to move away from the area;
the fact that this all occurred in a high crime area; and the fact
that the police were responding to a 911 call reporting weap-
ons.
None of those facts, alone or together, could have sup-
ported a reasonable suspicion that Mr. Williams was armed
and dangerous. To begin, the Court cannot see how the
group’s general behavior could possibly support a reasonable
suspicion that Mr. Williams, himself, was armed and danger-
ous. Moreover, neither the group behavior nor Mr. Williams’
own personal behavior could support a reasonable suspicion
that he was armed and dangerous. Most people, when con-
fronted by a police officer, are likely to act nervous, avoid eye
contact, and even potentially shift their bodies as if to move
away from the area, thus making such behaviors of very little
import to a reasonable suspicion determination. See, e.g., United
States v. Broomfield, 417 F.3d 654, 655 (7th Cir. 2005) (noting that
importance of eye contact is purely subjective and easily
skewed by police officers to support their view of a situation);
United States v. Simpson, 609 F.3d 1140, 1147 (10th Cir. 2010);
16 No. 12-3864
United States v. Urrieta, 520 F.3d 569, 577 (6th Cir. 2008); McKoy,
428 F.3d at 40; United States v. Portillo–Aguirre, 311 F.3d 647, 656
n. 49 (5th Cir. 2002); United States v. Jones, 269 F.3d 919, 928 (8th
Cir. 2001); and United States v. Richardson, 385 F.3d 625, 630–31
(6th Cir. 2004).
Additionally, while we understand that the fact that a stop
occurs in a high-crime area may be a factor under Terry, we
believe that the rest of the case for a frisk, here, was so weak
that this factor cannot save the frisk. “Even in high crime areas,
where the possibility that any given individual is armed is
significant, Terry requires reasonable, individualized suspicion
before a frisk for weapons can be conducted.” Maryland v. Buie,
494 U.S. 325, 342 n.2 (1990) (applying Terry’s principles to
protective sweep of a house). In fact, even when police have a
warrant to search the premises of an area, they must have
separate, particularized cause to search the people who are
coincidentally therein. Ybarra v. Illinois, 444 U.S. at 91. Just as
“[e]ach patron who walked into the” searched premises in
Ybarra was “clothed with constitutional protection against an
unreasonable search an seizure,” so was Mr. Williams when he
stood in the parking lot on the night in question. Id. Thus, here,
where the officers knew of the high crime nature of the area,
but had no other basis for reasonable, individualized suspicion
of Mr. Williams, the frisk was still inappropriate.
Finally, while officers were responding to a weapons call,
that fact could not give rise to a reasonable belief that Mr.
Williams, personally, was armed and dangerous. By the time
the officers arrived, the situation looked much different than
had been reported during the 911 call. Considerably fewer
people were present, and the individuals who were present
No. 12-3864 17
were not acting loudly or displaying their weapons. Thus,
upon their arrival, the officers had practically no reason to
believe that any of the remaining individuals were armed and
dangerous. Indeed, the individuals with guns may have been
among the 15 to 20 individuals who had left the group between
the time of the call and the officers’ arrival. Moreover, the 911
caller did not provide any information that would have
identified Mr. Williams as one of the individuals in possession
of a weapon. In sum, the 911 call was vague, circumstances
had changed, and therefore we cannot envision that the call
support a reasonable belief Mr. Williams was armed and
dangerous.
Even taking every one of those facts in conjunction with
one another, we must conclude that, together, they do not
support a reasonable belief that Mr. Williams was armed and
dangerous. The government is required to show that Officer
Jesberger’s frisk was supported by articulable facts that could
establish specifically that Mr. Williams was armed and
dangerous. The facts, here, are much more general, and could
be applied to practically any person that had been around the
area when the officers showed up that night. Indeed, similar
facts could support a search of practically anyone who hap-
pens to be near a high-crime area at night when police are
called. That is the very evil that the Terry court was concerned
with unleashing, and the reason that the Terry court restrained
the ability to frisk. See Terry, 392 U.S. at 17–18. Accordingly, we
18 No. 12-3864
are obliged to conclude that Officer Jesberger’s frisk of Mr.
Williams was unconstitutional.2
The Government argues that our recent decision in United
States v. Patton, 705 F.3d 734 (7th Cir. 2013), compels an
opposite conclusion, but we disagree. Patton is distinguishable.
In that case, officers responded to a report of seven to eight
men drinking alcohol on a public sidewalk. Id., at 735. The
report came at 1:30 a.m. from a high-crime neighborhood,
where there had been recent shootings. Id. When they arrived
on the scene, the officers saw several men with open beer cans,
but Mr. Patton, himself, did not have a beer can. Id. The officers
instructed all of the men, including Mr. Patton, to step toward
a nearby Cadillac. Id. Patton began to back away from the
group, stepping backwards by approximately five and fifteen
feet onto the lawn behind the sidewalk he had previously been
standing on. Id., at 736. At an evidentiary hearing, the arresting
officer stated that when a suspect backs away in that manner,
it typically means that the individual has a gun or is subject to
an outstanding warrant. Id. The officer was eventually able to
bring Mr. Patton toward the Cadillac, where he frisked Mr.
Patton and discovered a firearm. Id. The district court held that
2
Certainly, it must be noted that Mr. Williams resisted officers' attempts to
frisk him. But we must disregard that fact, because that noncompliance
occurred only after the frisk began. For purposes of our analysis, we must
look to what Officer Jesberger knew at the moment he began to frisk Mr.
Williams. The frisk is permissible only if, at that point, Officer Jesberger had
some reasonable suspicion that Mr. Williams was armed and dangerous.
See, e.g., United States v. Odum, 72 F.3d 1279, 1284 (7th Cir. 1995); Michigan
v. Chesternut, 486 U.S. 567, 573 (1988); Terry, 392 U.S. at 27. He did not, and
therefore his frisk of Mr. Williams was unconstitutional.
No. 12-3864 19
the frisk was permissible and we affirmed. But, there are a
number of distinguishing factors in that case. To begin, in
Patton, the defendant was part of a group that was openly
violating the law, even if he, himself, did not have a beer in his
hand. Here, on the other hand, neither Mr. Williams nor the
group as a whole was acting illegally in any way—indeed, they
were not even loud or belligerent when the police arrived.
Additionally, Mr. Patton exhibited behavior that was much
more apparent and concerning than Mr. Williams’ behavior,
here. Mr. Patton backed up by at least five feet after being told
to step forward, leaving the sidewalk and moving onto the lawn
behind it; here, on the other hand, Officer Jesberger reported
only that Mr. Williams (as well as the rest of the group) seemed
to move away and act nervously. Officer Jesberger did not
identify any specific movement or act by Mr. Williams that
caused him concern, but rather pointed to a general sense of
nervousness and backward movement, all of which occurred
before Mr. Williams was asked to step forward. In fact, Mr.
Williams was generally compliant with all of the officers’
commands until the frisk began, and did nothing whatsoever
that would have singled himself out from the other members
of the group. Therefore, we believe that Patton is distinguish-
able and does not apply in this case.
It is important to note, here, that all three members of this
panel reject the Government’s view that the officers were
entitled to frisk every person present on the scene. It is cer-
tainly clear that they lacked the requisite individualized
suspicion to do so. Nonetheless, at the evidentiary hearing it
became clear that, when the officers arrived on the scene, they
each stopped a separate member or members of the group. See
20 No. 12-3864
R. 30, at 19–22 (“Other officers were arriving on scene and
contacting various subjects within that group and attempting
to obviously deem the scene safe.”). Thus, Officer Jesberger
likely would have stopped and frisked Mr. Williams regardless
of the placement of his hands. The fact of where he had placed
his hands was simply a convenient reason for doing so,
afterwards.
Nonetheless, that single fact, even taken in conjunction with
all of the other facts surrounding the frisk, still does not
support a reasonable suspicion. To begin, Mr. Williams
immediately removed his hands from his pockets at Officer
Jesberger’s request. It was only after Mr. Williams had re-
moved his hands that Officer Jesberger decided to frisk him.
Furthermore, the simple fact that one’s hands are in one’s
pockets is of a similar nature to one’s avoiding eye contact. In
other words, it is of little value. If one were to drive down any
given street, it is likely that an uncountable number of citizens
would have their hands in their pockets. This does not change
in high crime neighborhoods. Certain people prefer their hands
to be pocketed—and why not? It can often be more comfort-
able. But, under the dissent’s view, if Mr. Williams had simply
decided not to avail himself of that comfort, he would not have
been subject to a frisk. On this, we should note that we do not
believe that pocketed hands are entirely irrelevant nor do we
create a categorical rule finding them so. Indeed, if one’s hands
are pocketed in an awkward way or if it seems that the
individual is holding a larger-than-average item in his or her
pocket, those facts could lead a reasonable officer to believe
that a gun was contained therein, and support a frisk. But, the
simple act of holding one’s hands in should not be grounds for
No. 12-3864 21
a search, even if it occurs at night in a high-crime area. We
cannot support a rule that seemingly would allow those people
who typically spend time in “low crime” areas (read: more
affluent areas of town) to walk around with hands pocketed at
night while not being subject to search, while depriving people
in higher crime areas of that same ability.
3. Herring v. United States
The final question we must ask is whether Officer
Jesberger’s frisk of Mr. Williams was so deliberate that the
exclusionary rule should apply. Herring v. United States, 555
U.S. 135 (2009); see also Hudson v. Michigan, 547 U.S. 586, 591
(2006) (exclusion is a “last resort, not our first impulse”); United
States v. Leon, 468 U.S. 897, 923 (1984); Illinois v. Gates, 462 U.S.
213, 223 (1983). In Herring, the Supreme Court noted that
courts should not exclude evidence unless the actions in
question were “sufficiently deliberate that exclusion can
meaningfully deter” similar actions in the future, and that the
actions were “sufficiently culpable that such deterrence is
worth the price paid by the judicial system.”Herring, 555 U.S.
at 144. The magistrate judge, below, relied upon this rule in
recommending that the firearm should not have been sup-
pressed, and therefore we think it appropriate to address the
issue.
Officer Jesberger’s action, here, was both deliberate and
culpable to an extent that warrants suppression under Herring.
As we stated above, Officer Jesberger had little articulable
reason to suspect that Mr. Williams was armed and dangerous.
In fact, the reasons he did articulate could have been used as
pretext to search practically any person who was near the scene
22 No. 12-3864
on the night of the arrest. For no apparent reason, Officer
Jesberger singled out Mr. Williams, and proceeded to search
him. It is entirely unclear from the record what, precisely,
about Mr. Williams set off Officer Jesberger’s sense that he
should be searched. But, in reaching our conclusion in this
case, we hope that other officers will be deterred from engag-
ing in the arbitrary, almost random, search of individuals who
happen to be near the scene of a crime. Therefore, suppression
in this case is appropriate under Herring.
III. Conclusion
Last, we feel it appropriate to address several additional
points raised in the dissent. First, Judge Ripple overstates the
fact that Mr. Williams “approached” Officer Jesberger with his
hands in his pockets. Dissenting Op. at 36. While that may,
technically, be true, it should be clarified that Mr. Williams
approached Officer Jesberger at the officer’s request and
immediately removed his hands from his pockets at the
officer’s request. This sort of compliant behavior is not the
makings of reasonable suspicion that a person is armed and
dangerous. Moreover, this is a much different picture than that
painted by Judge Ripple: Mr. Williams never walked toward
Officer Jesberger with his hands pocketed. In fact, Mr. Wil-
liams “tried to kind of walk away from the area.” R. 11.
Second, Judge Ripple asks for a more concrete rule, wondering
what more a subject must “do before an officer can conduct a
protective frisk?” Dissenting Op. at 42. But we do not believe
any new concrete rule is necessary. Indeed, the rule remains
the same: the police officer must have reasonable suspicion
that the subject is armed and dangerous. That reasonable
suspicion was simply not present, here.
No. 12-3864 23
For all of these reasons, we hold that Officer Jesberger
lacked a reasonable suspicion to conduct a frisk of Mr. Wil-
liams at the time the frisk began, in violation of Mr. Williams’
Fourth Amendment rights. Accordingly, we must REVERSE the
denial of Mr. Williams’ motion to suppress, VACATE his
judgment of conviction, and REMAND this matter with instruc-
tions to the district judge to grant his suppression motion and
for additional proceedings consistent with this decision. As
already stated, because we determine that Mr. Williams’
conviction must be vacated, we do not reach the sentencing
issues raised by the parties.
24 No. 12-3864
HAMILTON, Circuit Judge, concurring in part and concurring
in the judgment. I join the portions of Judge Stadtmueller’s
opinion holding that the frisk of defendant Williams violated
his constitutional rights and that no good-faith exception is
available to avoid the exclusionary rule. I also therefore join in
the judgment to reverse the judgment of the district court and
to remand for further proceedings.
I do not join the portion of the opinion (Part II-B-1) holding
that the police officers could lawfully carry out a Terry stop of
Mr. Williams. That portion of the opinion is not actually
necessary to the judgment, and the question is a close one,
especially as state law and federal constitutional law have been
evolving to provide expanded protection for individual
possession of firearms in public. See Rabin v. Flynn, — F.3d —,
—, 2013 WL 3455689, at *8–*10 (7th Cir. July 9, 2013) (Rovner,
J., concurring); Moore v. Madigan, 702 F.3d 933, 942 (7th Cir.
2012) (striking down Illinois law prohibiting most people from
carrying firearms in public), reh’g en banc denied, 708 F.3d 901
(7th Cir. 2013); State v. Hamdan, 665 N.W.2d 785, 811–12 (Wis.
2003) (reversing conviction for carrying concealed weapon;
store owner carried concealed weapon in his store for his
security in high crime neighborhood). In essence, as public
possession and display of firearms become lawful under more
circumstances, Fourth Amendment jurisprudence and police
practices must adapt. 1
1
To describe federal constitutional law as “evolving” is to use a loaded
term these days. There can be little doubt, though, that District of Columbia
v. Heller, 554 U.S. 570 (2008), overturned the established federal constitu-
tional understanding that the Second Amendment did not provide an
(continued...)
No. 12-3864 25
A Terry stop requires reasonable suspicion that the individ-
ual subject has committed or is about to commit a crime. Terry
v. Ohio, 392 U.S. 1, 22–23 (1968); see also United States v. Place,
462 U.S. 696, 702 (1983). To focus on the facts of this case, the
911 caller here reported that three or four people in a group of
approximately twenty-five had “guns out” outside a trouble-
some bar. When asked by the 911 operator, she said they were
not fighting, taunting, or threatening each other. She also said
she did not see anyone pointing guns at anyone else.
When the 911 call came in shortly after 11:00 p.m., the entire
night shift of the Fitchburg Police Department, six or seven
officers, was at headquarters for the nightly briefing. All the
officers responded immediately. Within five minutes, they
arrived outside the bar with their own “guns out.” The officers
found eight to ten people remaining outside the bar. But by the
time of the officers’ arrival, no guns were visible, nor was
anyone in the remaining group acting in a suspicious way that
officers could later identify at the suppression hearing, except
that the people did not make eye contact with officers and they
began to walk slowly away from each other. Cf. Illinois v.
Wardlow, 528 U.S. 119, 124–25 (2000) (subject’s unprovoked
flight from police arriving in high-crime area supported Terry
1
(...continued)
individual right to bear arms independent of a State militia, or that
McDonald v. City of Chicago, — U.S. —, 130 S. Ct. 3020 (2010), reinterpreted
an amendment intended to protect the powers of States and made it
applicable against States. See, e.g., United States v. Cruikshank, 92 U.S. 542, 553
(1875) (Second Amendment applied only to Congress; States remained free
to restrict or protect the right to bear arms under their police powers).
26 No. 12-3864
stop). The police officers moved in. They stopped and started
to frisk everyone on the scene, including Williams.
Did the police have reasonable suspicion to justify a Terry
stop of everyone, or of Williams in particular? I doubt it, but
the question is close enough that the better course would be to
bypass the question and reverse because the frisk of Williams
was not justified, as Judge Stadtmueller has explained.
Let’s start by asking what crime was suspected or feared
here? The government does not specify, but the best candidate
for an actual crime is disorderly conduct, with or without
Wisconsin’s enhancement for disorderly conduct with a
dangerous weapon. See Wis. St. §947.01(1) (disorderly con-
duct); §939.63 (enhanced penalties for committing crimes while
armed with dangerous weapon). The disorderly conduct
statute outlaws “violent, abusive, indecent, profane, boister-
ous, unreasonably loud or otherwise disorderly conduct under
circumstances in which the conduct tends to cause or provoke
a disturbance,” but with a new and important qualification
discussed below.
Without the mention of the guns, there was just a gathering
of people talking loudly outside a bar, so my colleagues’
conclusion about the authority for a Terry stop here stands or
falls on the significance of the 911 caller’s report that three or
four individuals had “guns out.”2 From the 911 call, it’s clear
2
The facts here do not support the conclusion that the police were
responding to an ordinary disorderly conduct call. They were responding
to a 911 call about guns, and the guns were the reason the situation was
treated as an emergency calling for the entire shift to respond. The
(continued...)
No. 12-3864 27
that the visible guns frightened the caller. They also gave the
police officers good reason to be cautious, but that is not
necessarily enough to justify the intrusion of a Terry stop. Even
a Terry stop alone, without a frisk, still requires a “particular-
ized and objective basis for suspecting the particular person
stopped of criminal activity.” United States v. Cortez, 449 U.S.
411, 417–18 (1981).
The qualification about disorderly conduct is based on a
new Wisconsin law. The incident here occurred on March 21,
2012. Some months earlier, Wisconsin had amended its
disorderly conduct statute to protect civilians’ rights to possess
and even display loaded firearms in public places. Before July
2011, the disorderly conduct statute had provided:
Whoever, in a public or private place, engages in
violent, abusive, indecent, profane, boisterous,
unreasonably loud or otherwise disorderly
conduct under circumstances in which the
conduct tends to cause or provoke a disturbance
is guilty of a Class B misdemeanor.
Wis. Stat. §947.01 (2010). In 2011, as part of a comprehensive
rewrite of firearm laws in Act 35, Wisconsin added the follow-
ing paragraph to the disorderly conduct statute to protect the
rights to possess and carry firearms openly in public:
2
(...continued)
government does not argue that the group outside the bar—either the
original group of twenty-five or the remaining group of eight to ten—or any
individual within the group was “unreasonably loud” or “boisterous,”
possibly triggering the disorderly conduct statute without considering
whether or not individuals in the group were also armed.
28 No. 12-3864
(2) Unless other facts and circumstances indicate
a criminal or malicious intent on the part of the
person apply, a person is not in violation of, and
may not be charged with a violation of, this
section for loading, carrying, or going armed
with a firearm, without regard to whether the
firearm is loaded or is concealed or openly
carried.
Wis. Stat. §947.01(2) (2012).
The new Wisconsin statute makes it clear that the persons
on the scene could not have been arrested for disorderly
conduct for displaying guns, for there was no indication of
“criminal or malicious intent.” The 911 caller said first that
several people had “guns out” and later that they were
“waving” the guns but not threatening anyone. Visible guns
may be disturbing to those nearby, but that’s the point of the
new Wisconsin statute. Merely possessing or displaying a gun
without criminal or malicious intent does not violate the law,
even if the display is disturbing or frightening to others. A
Terry stop does not require probable cause for an arrest, of
course, but it still requires reasonable suspicion of genuinely
criminal conduct. Based on the new Wisconsin law, that is hard
to find on this record.
In questioning the authority for a Terry stop here, I do not
mean to suggest that the police could not or should not have
responded to the 911 call. The caller reported what might have
been a dangerous mixture of alcohol and guns late at night
outside a bar known to the police as a trouble spot. I recognize
that the blend of firearms and alcohol late at night could have
No. 12-3864 29
become dangerous and/or criminal within a split-second. It
was appropriate to respond to the 911 call with a strong and
visible police presence, one that involved talking with people
on the scene when they arrived. Such police actions do not
raise Fourth Amendment issues and may do a great deal to
prevent trouble. See Florida v. Rodriguez, 469 U.S. 1, 5–6 (1984)
(initial contact when officers asked civilian if he would step
aside and talk with them was “the sort of consensual encounter
that implicates no Fourth Amendment interest”), citing United
States v. Mendenhall, 446 U.S. 544, 554 (1980) (opinion of
Stewart, J.), and Florida v. Royer, 460 U.S. 491, 497 (1983)
(plurality); 4 Wayne R. LaFave, Search and Seizure § 9.4, at 560
(5th ed. 2012). (In fact, that visible presence is the sort of police
response the 911 caller asked for, not the much more aggres-
sive response that occurred.)
Going beyond a strong and visible police presence, to Terry
stops, however, is a significant step with important conse-
quences. When courts say that a Terry stop is authorized, they
are authorizing what Terry itself recognized is a “seizure” of
the person that could involve substantial infringement on
personal liberty. 392 U.S. at 16–17. When a Terry stop is
authorized, the subject of the stop is not free to walk away. The
officer is authorized to use reasonable force to require the
subject to submit to the stop. Place, 462 U.S. at 702; Adams v.
Williams, 407 U.S. 143, 146 (1972); 4 LaFave, Search and Seizure
§ 9.2(d), at 413.
What was it about this situation that could lead us to
conclude that it was reasonable to stop Mr. Williams from
simply walking away from the officers? There was no individ-
ualized suspicion concerning him. And the entire group, which
30 No. 12-3864
had dwindled from about twenty-five to eight or ten people,
was peaceful and, for all the officers knew, law-abiding. There
was nothing like the suspicious casing of a store window that
provided reasonable suspicion in Terry. Nor was there any
conduct like that in the principal cases relied upon by my
colleagues. In United States v. Hicks, 531 F.3d 555, 557 (7th Cir.
2008), the emergency caller reported, “There’s a guy beating a
woman up in my house,” and that the man had a pistol and
was threatening to shoot the woman. That was a report of a
crime and a real emergency. There was nothing comparable
reported here. Or in United States v. Wooden, 551 F.3d 647, 648
(7th Cir. 2008), the 911 call said that an armed man was
arguing with his girlfriend, had a gun in a holster, and had
pulled out the gun. That was not as volatile as the report in
Hicks but was still closer to criminal conduct than was reported
here.
The amended Wisconsin disorderly conduct statute
requires some indication of criminal or malicious intent before
a person’s possession of a firearm in public, whether concealed
or visible, can contribute to a violation. Moreover, we have
held that the Second Amendment includes at least some
individual right to carry a gun in public, subject to restrictions
that remain to be tested in court. Moore, 702 F.3d at 942. After
Heller and McDonald, all of us involved in law enforcement,
including judges, prosecutors, defense attorneys, and police
officers, will need to reevaluate our thinking about these
Fourth Amendment issues and how private possession of
firearms figures into our thinking. See Rabin, —F.3d at —, 2013
WL 3455689, at *7 (Rovner, J., concurring) (noting that private
citizens in Illinois may soon be carrying firearms in public,
No. 12-3864 31
resulting in more investigatory stops and a need to define and
respect limits for such stops). As we work our way through
those issues case by case, we also need to recognize genuine
safety concerns of police officers and citizens, as well as the
potential for intentional or unintentional discrimination based
on neighborhood, class, race, or ethnicity.
Five or six years ago, I would have had little trouble
agreeing with my colleagues that the police here faced a
potential emergency and that a Terry stop was justified. But the
combination of Heller, McDonald, and Moore under the federal
Constitution, and Wisconsin’s laws, including the 2011
amendment to its disorderly conduct statute and adoption of
Article I, section 25 of its Constitution, together convince me
that the calculus is now quite different. I have no doubt that
these changes in the law make the work of police officers more
difficult and more dangerous. I also fear that human and
institutional responses to those dangers may increase the risk
of profiling based on race, ethnicity, dress, class or neighbor-
hood. The new constitutional and statutory rights for individu-
als to bear arms at home and in public apply to all. The courts
have an obligation to protect those rights for people in bad
neighborhoods as well as good ones. See McDonald v. City of
Chicago, 130 S. Ct. 3020, 3087–88 (2010) (Thomas, J., concurring
in the judgment) (explaining historical importance of individ-
ual right to bear arms for black citizens in defending them-
selves from racially-motivated violence by whites).
For these reasons, I concur in only part of Judge
Stadtmueller’s opinion and in the judgment to reverse and
remand the case.
32 No. 12-3864
RIPPLE, Circuit Judge, concurring in part and dissenting in
part. I agree with Judge Stadtmueller that Officer Jesberger’s
stop of Mr. Williams was justified. It is clear that, in order to
perform a constitutional “stop,” circumstances must lead an
officer “reasonably to conclude in light of his experience that
criminal activity may be afoot.” Terry v. Ohio, 392 U.S. 1, 30
(1972). As one commentator has noted, “reference to when
‘criminal activity may be afoot’ strongly suggests that though
the arrest standard may sometimes require that guilt be more
probable than not, this is never the case as to a stopping for
investigation, where the very purpose is to clarify an ambigu-
ous situation.” Wayne R. LaFave et al., Criminal Procedure
§ 3.8(d) (5th ed. 2009), (footnote omitted). Consequently,
although an officer may have discovered, upon investigation,
that the reported display of weapons was without criminal or
malicious intent, see Judge Hamilton’s Op. at 4 (quoting Wis.
Stat. § 947.01(2)), the fact that weapons were (1) being bran-
dished by individuals, (2) who were part of a boisterous crowd
of twenty-five, (3) outside of a bar, (4) which previously had
been identified as a high-crime location, (5) late at night, and
(6) in such a manner as to cause passers-by to leave the area
and contact authorities, justified police investigation. No
protections for gun owners set forth in the Wisconsin Statutes
negate the constitutional and salutary efforts of police to look
into the possibility that weapons were being used to escalate
an argument or to engender intimidation, or were being
waived recklessly by intoxicated individuals in a way that
might endanger the public. The fact that any of the circum-
stances described by the caller “may have been independently
susceptible to innocent explanation does not negate their
collective contribution to Officer [Jesberger’s] reasonable
No. 12-3864 33
suspicion under the totality of the circumstances.” United
States v. Richmond, 641 F.3d 260, 262 (7th Cir. 2011).
Unlike my colleagues, however, I believe that the frisk
performed by Officer Jesberger also was supported by reason-
able suspicion. I therefore respectfully dissent.
A.
The Supreme Court in Terry, 392 U.S. at 24, recognized “the
need for law enforcement officers to protect themselves and
other prospective victims of violence in situations where they
may lack probable cause for an arrest.” Thus, “[w]hen an
officer is justified in believing that the individual whose
suspicious behavior he is investigating at close range is armed
and presently dangerous to the officer or to others,” he is
permitted to take reasonable steps to assure the safety of
himself and others. Id. This includes conducting “a reasonable
search for weapons.” Id. at 27.
However, once an officer has lawfully stopped a suspect, he
is not automatically entitled to conduct a protective pat-down
or frisk. “[T]here must be a separate analysis of whether the
standard for pat-frisks has been met.” United States v. McKoy,
428 F.3d 38, 39 (1st Cir. 2005); see also United States v. Brown, 188
F.3d 860, 864 (7th Cir. 1999). “The officer need not be abso-
lutely certain that the individual is armed”; rather he must
have a reasonable suspicion that his “safety or that of others
[i]s in danger.” Terry, 392 U.S. at 27. The Court has explained
that the necessary quantum of proof to establish reasonable
suspicion “is considerably less than proof of wrongdoing by a
preponderance of the evidence.” United States v. Sokolow, 490
34 No. 12-3864
U.S. 1, 7 (1989). “[T]he reasonable suspicion standard is an
objective one,” which asks “whether a reasonable police
officer, faced with the circumstances confronting [the officer in
the case], would believe that [the suspect] posed a danger to
those in the immediate vicinity.” United States v. Patton, 705
F.3d 734, 738 (7th Cir. 2013) (citing Terry, 392 U.S. at 27). Thus,
whether an officer has reasonable suspicion “turns on the
totality of the circumstances confronting the officer.” Id.
The Supreme Court has explained that the totality of the
circumstances requires “tak[ing] into account” “the whole
picture.” United States v. Cortez, 449 U.S. 411, 417 (1981). The
Court elaborated:
[T]he assessment must be based upon all the circum-
stances. The analysis proceeds with various objec-
tive observations, information from police reports,
if such are available, and consideration of the modes
or patterns of operation of certain kinds of law-
breakers. From these data, a trained officer draws
inferences and makes deductions—inferences and deduc-
tions that might well elude an untrained person.
The process does not deal with hard certainties,
but with probabilities. Long before the law of proba-
bilities was articulated as such, practical people
formulated certain common sense conclusions about
human behavior; jurors as factfinders are permitted
to do the same—and so are law enforcement offi-
cers. Finally, the evidence thus collected must be
seen and weighed not in terms of library analysis by
No. 12-3864 35
scholars, but as understood by those versed in the
field of law enforcement.
Id. at 418 (emphasis added). Circumstances to be considered as
part of the reasonable suspicion analysis include: the officer’s
experience and training, United States v. Arvizu, 534 U.S. 266,
273 (2002); the stop’s location, United States v. Tinnie, 629 F.3d
749, 752 (7th Cir. 2011) (noting that the stop occurred in a high-
crime area); when the stop occurred, Patton, 705 F.3d at 738
(noting that the stop occurred in “essentially the middle of the
night”); and the suspect’s demeanor and behavior, United
States v. Ocampo, 890 F.2d 1363, 1368 (7th Cir. 1989). Frequently
“[a]ny one of these factors [identified by the officer] is not by
itself proof of any illegal conduct and is quite consistent with
innocent [conduct]. But … taken together they amount to
reasonable suspicion.” Sokolow, 490 U.S. at 9.
B.
Applying these well-established principles, I would hold
the frisk of Mr. Williams to be within the bounds delineated by
Terry and supported by reasonable suspicion.
I begin by recalling the circumstances facing Officer
Jesberger when Mr. Williams approached him because these
circumstances must support a reasonable suspicion that
Mr. Williams specifically was armed and dangerous. See Tinnie,
629 F.3d at 751 (“In determining whether an officer had
reasonable suspicion, courts consider the circumstances known
to the officer at the time of the [frisk].” (internal quotation
marks omitted)). Officer Jesberger knew that Mr. Williams and
the other members of the group were in a high-crime area,
36 No. 12-3864
relatively late at night, that the 911 call reported the presence
of several firearms and that Mr. Williams and other members
of the group refused to make eye contact with the police and
attempted to move away from the scene upon the officers’
arrival.
As the majority notes, the Supreme Court has emphasized
that reasonable suspicion is “a suspicion [about] the particular
individual being stopped.” Cortez, 449 U.S. at 418. However,
officers are not required to ignore facts that, by themselves, are
insufficient to create a reasonable suspicion. Indeed, these facts
are part of the totality of the circumstances and must be
considered when assessing reasonable suspicion. See, e.g.,
Ocampo, 890 F.2d at 1368 (holding that although insufficient by
itself, “[t]he information supplied by [an] informant [i]s just
one factor among many” to consider when determining
whether officers had “a reasonable and articulable suspicion”).
Moreover, we consistently have found reasonable suspicion
sufficient to justify frisks based on generalized, background
facts in conjunction with particular facts about the suspect. See,
e.g., Patton, 705 F.3d at 738-39 (considering factors “beginning
with the general and moving toward the specific” that justified
the officers’ reasonable suspicion, such as the “high-crime area
of the city” where the frisk occurred, the time of night of the
frisk, as well as the suspect’s “evasive behavior” and “nervous
demeanor”); United States v. Oglesby, 597 F.3d 891, 894 (7th Cir.
2010) (finding reasonable suspicion based on the suspect’s
“behavior, coupled with the other circumstances,” such as the
fact that the encounter with the suspect “occurred at night in
a location that was known to the officers to be a high-crime
area”); Brown, 188 F.3d at 865 (finding “reasonable suspicion
No. 12-3864 37
that [the suspect] might be armed and dangerous which was
sufficient to support [the officer’s] decision to conduct the
pat-down search” when the suspect’s individual behavior was
considered “[a]gainst th[e] background” of the stop’s location).
The generalized facts outlined above were not the only
circumstances confronting Officer Jesberger when he decided
to frisk Mr. Williams. Rather, Mr. Williams did something that
distinguished him from the rest of the group and that caused
the officer to conclude that a frisk was necessary. The
magistrate judge and the district court both credited Officer
Jesberger’s testimony at the suppression hearing:
[T]he thing that drew me to Mr. Williams was
that his hands were in his pockets and he was
kind of avoiding—everyone was avoiding eye
contact with us and that’s usually, based on my
training and experience when people are avoid-
ing eye contact and kind of trying to walk away
from us, that’s a pretty good sign that something
is up.[1]
He also testified that, upon his request to Mr. Williams “to
come over and speak with me,” Mr. Williams initially replied
“why”; Officer Jesberger then repeated his request, and
Mr. Williams complied.2 As Mr. Williams approached Officer
Jesberger, however, he kept his hands in his pockets.
Observing the placement of Mr. Williams’s hands, Officer
Jesberger requested that Mr. Williams “to place both of his
1
R.20 at 20.
2
Id. at 12.
38 No. 12-3864
hands—take both of his hands out of his pocket … .”3 He also
decided “to conduct a pat-down for my safety and for the
safety of everyone there due to the [weapons nature of the] call
and due to him having his hands in a weapon area.”4 Officer
Jesberger explained that the location of Mr. Williams’s hands
was his “first and foremost … concern,” because
with a weapons call, if people have a gun, it’s
typically not going to be a place where I’m going to
be able to see it. So it’s either going to be in their
pockets, their waistband, and that’s where
[Mr. Williams’s] hands were, so that’s why the
concern was there.[5]
When asked if he was “concerned about officers’ safety,”
Officer Jesberger responded that he was concerned “[f]irst and
foremost [with the safety of] the community and everyone else
around there, as well as officer safety” based on the attendant
circumstances and Mr. Williams’s behavior.6
Courts since Terry have made clear that in assessing
whether, under the totality of the circumstances, an officer “is
justified in believing that the individual whose suspicious
behavior he is investigating at close range is armed and
presently dangerous to the officer or to others,” “due weight
3
Id. at 12-13.
4
Id. at 13-14.
5
Id. at 13.
6
Id.
No. 12-3864 39
must be given … to [the officer’s] specific reasonable inferences
which he is entitled to draw from the facts in light of his
experience.” Terry, 392 U.S. at 24, 27; see also United States v.
Jackson, 300 F.3d 740, 746 (7th Cir. 2002) (holding that the
totality of the circumstances “include[] the ‘experience of the
law enforcement agent’” (quoting United States v. Odum, 72
F.3d 1279, 1284 (7th Cir. 1995))); United States v. Andrade, 551
F.3d 103, 112 (1st Cir. 2008) (holding that in forming a reason-
able suspicion that a suspect may be armed and dangerous, an
officer “may draw on his own experience and specialized
training to make inferences from and deductions about the
cumulative information . . . that might well elude an untrained
person” (internal quotation marks omitted)). Frequently,
reasonable suspicion is found based on “the circumstances of
the encounter, in combination with [the officer’s] experience and
training.” Oglesby, 597 F.3d at 895.
Based on his training and experience, Officer Jesberger
believed that Mr. Williams was secreting a weapon because
Mr. Williams approached him with his hands in his pockets.
We have recognized that the placement of a suspect’s hands in
his pockets or at his waistband is a legitimate consideration in
assessing whether an officer is justified in believing that an
individual is armed and presents a threat to himself or to
others. See, e.g., United States v. Mitchell, 256 F.3d 734, 736 (7th
Cir. 2001) (finding reasonable suspicion where the frisking
officer testified that, “‘[f]rom past experience, [the fact that
Mitchell’s hand was on the front of his waist] either signified
that, one, they’re holding on to something in their waistband,
be it a gun or drugs” and that “I strongly felt in this case,
considering the shots fired call we had received and
40 No. 12-3864
Mr. Mitchell’s action, that it was a—it was a gun in his case’”
(alteration in original)); see also, e.g., United States v. Mays, 643
F.3d 537, 542 (6th Cir. 2011) (identifying that the suspect
“frantically dug his hands into his pockets” as one of the
totality of circumstances justifying a frisk); Andrade, 551 F.3d at
113 (finding that the facts that “Andrade had his hands in his
pocket[] and refused to make eye contact” contributed to
officer’s objectively reasonable belief that he was in danger);
United States v. Ellis, 501 F.3d 958, 962 (8th Cir. 2007) (noting
that suspect “act[ed] nervously and reach[ed] toward his
pocket” among other factors that justified a frisk).
This particularized information about Mr. Williams’s
conduct is significant because it distinguished Mr. Williams
from the other members of the group and from merely “any
person that had been around the area when the officers
showed up that night,” Majority Op. 18. His specific behavior,
indicative of weapon possession, must be taken into account in
determining whether the officer had a reasonable suspicion
that Mr. Williams was armed and dangerous.
Mr. Williams’s placement of his hands in an area where
weapons typically are secreted while in close proximity to a
police officer must be considered in conjunction with the other
circumstances confronting the officers—the report that some in
the group were armed, evasive behavior upon the officers’
arrival, the high-crime location, time of the encounter and the
presence of others nearby. Considering all of these factors, I
conclude that they create a reasonable suspicion that
Mr. Williams was armed and posed a risk to the safety of the
officers and the public. Therefore, I would hold that Officer
No. 12-3864 41
Jesberger was justified in conducting a protective frisk of
Mr. Williams before conducting further investigation.
The majority’s decision creates an unworkable rule for
police and disregards Terry’s concern for officer safety. The
majority holds that a police officer is not entitled to conduct a
protective frisk of a suspect whom “he is investigating at close
range,” Terry, 392 U.S. at 24, when the officer has received a
report that some in the group of which the suspect is a part
possess weapons and the suspect’s behavior indicates that he
likely is armed. The majority offers no guidance to the police
in this situation. What more must the suspect do before an
officer can conduct a protective frisk? The majority does not
say. How does the commanding officer of a police precinct
explain today’s holding to his police officers before they take
to the streets in the gang-infested areas of the major cities
within this circuit?
How much more risk must an officer be required to absorb
before he can take minimal actions to protect himself? The
Supreme Court stated in Terry that “to deny the officer the
power to take necessary measures to determine whether the
person is in fact carrying a weapon and to neutralize the threat
of physical harm,” is “clearly unreasonable.” Id. This is the
practical effect of the majority’s holding. It constitutes a major
departure from the established case law of the Supreme Court
and of this court. See Sup. Ct. R. 10.
For the foregoing reasons, I respectfully dissent.
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585 N.W.2d 68 (1998)
STATE of Minnesota, Respondent,
v.
Corey Lamont HOLIDAY, Appellant.
No. C1-98-12.
Court of Appeals of Minnesota.
October 6, 1998.
Hubert H. Humphrey III, Attorney General, St. Paul; and Jay M. Heffern, Minneapolis City Attorney, Michelle Doffing, *69 Assistant City Attorney, Minneapolis, for respondent.
William E. McGee, Hennepin County Public Defender, Renee Bergeron, Assistant Public Defender, Minneapolis, for appellant.
Considered and decided by CRIPPEN, P.J., and KLAPHAKE and SHUMAKER, JJ.
OPINION
KLAPHAKE, Judge.
Appellant Corey Holiday was convicted of misdemeanor trespassing in violation of Minneapolis, Minn., Code of Ordinances § 385.380. Because we conclude the ordinance requires a narrow construction that does not cover Holiday's conduct, we reverse the conviction.
FACTS
Holiday was tab charged with violating the trespass ordinance on August 5, 1997. Four days earlier, on August 1, Minneapolis police had given Holiday a Trespass Warning Form for trespassing at 1184 Fourth Avenue, part of the Rowhouse Projects, a public housing project owned by the Minneapolis Public Housing Authority (MPHA). Holiday signed the warning, which recited the language of the trespass ordinance and stated that it applied to "All MPHA" property.
Before trial, Holiday moved to dismiss for lack of probable cause, improper issuance of the Trespass Warning Form, and claim of right. The trial court denied these motions. The court concluded that although Holiday's initial arrest on August 1 was illegal, suppression of the Trespass Warning Form or dismissal of the charge was not required.
At trial, the state established that on August 1, a police officer saw 10 people, including a man identified as Holiday, standing in front of the door to 1184 Fourth Avenue. The officer testified that when the group fled, he gave chase and eventually detained Holiday. The officer gave Holiday the Trespass Warning Form, which Holiday signed.
On August 5, the same officer drove up to the Rowhouse Projects and recognized Holiday, who fled on foot. The officer detained Holiday nearby and arrested him for trespassing.
Holiday testified in his own defense, stating that he lived some distance from the Rowhouse Projects but had friends and family who lived in the neighborhood. Holiday denied going to the Rowhouse Projects on August 1, but admitted that he was arrested nearby and that he signed the Trespass Warning Form. Holiday also denied he was on the 1100 block of Fourth Avenue on August 5, the night of his second arrest.
The jury found Holiday guilty of trespass. Holiday moved for judgment of acquittal, based in part on his claim that the trespass ordinance is unconstitutional. The trial court denied that motion, and this appeal followed.
ISSUE
Is Minneapolis Code § 385.380 unconstitutionally overbroad?
ANALYSIS
Ordinances, like statutes, are presumed valid and will be declared unconstitutional only if shown to be so beyond a reasonable doubt. Press v. City of Minneapolis, 553 N.W.2d 80, 84 (Minn.App.1996). The party challenging the constitutionality of the statute or ordinance bears the burden of proving the enactment unconstitutional. State v. Holmberg, 545 N.W.2d 65, 70 (Minn. App.1996), review denied (Minn. May 21, 1996). The question of the constitutionality of an ordinance is a matter of law that this court reviews de novo. State v. Stallman, 519 N.W.2d 903, 905 (Minn.App.1994).
The Minneapolis trespass ordinance provides in pertinent part:
(a) No person shall intentionally trespass on the land of another and, without claim of right, refuse to depart therefrom on demand of the lawful possessor thereof or his agent. A demand to depart may be made as follows:
(1) Orally, or in writing, by the lawful possessor or the possessor's agent[.]
* * * * * *
*70 (b) No person who has received a written demand to depart pursuant to clause (1) of paragraph (a) of this section shall reenter the lawful possessor's land without the written permission of the lawful possessor or the agent providing said demand for a period of up to ninety (90) days from the date of the written demand, as provided therein.
Minneapolis, Minn., Code of Ordinances § 385.380 (1997) (emphasis added).
Holiday argues that the ordinance is unconstitutionally overbroad because it reaches a substantial amount of constitutionally protected conduct. See State v. Mercherson, 438 N.W.2d 707, 709 (Minn.App.1989) (criminal statute that reaches substantial amount of constitutionally protected conduct may be held facially invalid). Holiday reasons that the ordinance violates the right of association because it prevents him from visiting friends and family who live in public housing. See generally Roberts v. United States Jaycees, 468 U.S. 609, 618, 104 S.Ct. 3244, 3250, 82 L.Ed.2d 462 (1984) (Bill of Rights limits state's authority over individual's freedom to enter into particular associations). Holiday also argues that the ordinance is unconstitutionally overbroad because, by its terms, a demand to depart can be made without any initial trespass having been committed.
A defendant asserting a statute or ordinance is unconstitutionally overbroad may challenge the provision on its face and not merely in its application to his own conduct. Broadrick v. Oklahoma, 413 U.S. 601, 612, 93 S.Ct. 2908, 2916, 37 L.Ed.2d 830 (1973). The overbreadth doctrine should be applied only if the degree of overbreadth is substantial and the provision is not subject to a limiting construction. State v. Machholz, 574 N.W.2d 415, 419 (Minn.1998).
The ordinance at issue here prohibits both an initial trespass, when the offender refuses to leave despite a demand to do so, and a reentry trespass, when the offender returns to the property despite having received a written demand to depart and without receiving written permission to enter. See Minneapolis, Minn., Code of Ordinances § 385.380(a) (prohibiting initial trespass), (b) (prohibiting reentry trespass). Because the ordinance is subject to two limiting constructions, we conclude that it is not unconstitutionally overbroad.
First, the most logical reading of the ordinance requires that an initial trespass must occur before the "lawful possessor" or his agent may issue a demand to depart. See generally State v. Murphy, 545 N.W.2d 909, 916 (Minn.1996) (courts must accept most logical and practical construction of statute). Paragraph (b) of the ordinance, which defines a reentry trespass, references paragraph (a)(1), the demand to depart, but does not explicitly incorporate paragraph (a), which defines an initial trespass. Nevertheless, because a demand to depart logically must be triggered by an initial trespass, we conclude that an initial trespass must occur before a person can commit a reentry trespass.
Second, the ordinance cannot be construed so broadly as to prohibit Holiday's "re-entry" onto any property owned by the Minneapolis Public Housing Authority (MPHA). The ordinance allows a "lawful possessor" or the possessor's "agent" to issue a demand to depart. Minneapolis Code § 385.380(a). The tenant is the lawful possessor of the property. Cf. Neilan v. Braun, 354 N.W.2d 856, 859 (Minn.App.1984) (valid lease provides lessee with right of possession superior to that of lessor). Thus, either the Minneapolis police or the MPHA could serve as agents for the MPHA or its tenants, and issue a demand to depart. To avoid finding the ordinance unconstitutionally overbroad, however, we conclude that that authority does not allow the exclusion of a trespasser from all public housing in the city.
The city's interpretation of the ordinance, apparently reflected in MPHA agreements with its tenants, is that an initial trespass on one MPHA property permits the MPHA or the police to act as agents for the tenant in possession of that property and to exclude a trespasser from all MPHA properties. This construction of the ordinance seriously impinges upon the freedom of association of persons such as Holiday, who testified that *71 he had friends and family living in MPHA properties.[1]
It is true that the government, no less than a private owner of property, has the right to limit access to its property. United States Postal Serv. v. Council of Greenburgh Civic Ass'ns., 453 U.S. 114, 129-30, 101 S.Ct. 2676, 2685, 69 L.Ed.2d 517 (1981). But the police here attempted to exclude Holiday from properties occupied by many individuals, covering significant sections of the city. Such a sweeping restriction arguably cannot be imposed even on a convicted felony offender, as a condition of probation. See State v. Haynes, 423 N.W.2d 102, 104 (Minn.App. 1988) (condition of probation excluding defendant from area of north Minneapolis not unconstitutional where it did not limit his association with family or work, and only narrowly circumscribed his right to travel). Holiday's "banishment" from public housing projects was imposed based merely on the appearance that he had committed the misdemeanor offense of trespassing.
We cannot logically construe the ordinance as giving a "possessor's agent" authority that is more extensive and far reaching than that of the principal (or tenant). Cf. Quinlivan v. EMCASCO Ins. Co., 414 N.W.2d 494, 497 (Minn.App.1987) (all agent's authority must be traced to principal), review denied (Minn. Jan. 15, 1988). If individual MPHA tenants cannot exclude Holiday from all MPHA properties, no apparent authority exists for the police or the MPHA, as the tenants' agents, to do so. Thus, we construe the ordinance to allow issuance of a demand to depart only from a specific MPHA property.
At trial, the city established that Holiday committed an initial trespass at 1184 Fourth Avenue, part of the Rowhouse Project, and that Holiday was given a written demand to depart, in the form of a "Trespass Warning Form." The city did not prove that Holiday returned to 1184 Fourth Avenue on August 5, merely that he returned to some part of the Rowhouse Project, an MPHA property. Because there is insufficient evidence to support a conviction under the ordinance as we have construed it, we reverse the conviction on this basis. Given our reversal, we need not address the other constitutional issues raised.
DECISION
To avoid a finding of unconstitutional overbreadth, the Minneapolis trespass ordinance must be construed to allow the issuance of a demand to depart only from a specific property, after an initial trespass has been made onto that property.
Reversed.
NOTES
[1] This court has treated the freedom of association as a constitutional right closely associated with First Amendment protections. Stone v. Badgerow, 511 N.W.2d 747, 750 (Minn.App. 1994), review denied (Minn. Apr. 19, 1994). There is some dispute whether the freedom of intimate association involved here, that is unrelated to expressive conduct protected by the First Amendment, is subject to the overbreadth doctrine. See Hvamstad v. Suhler, 727 F.Supp. 511, 517 (D.Minn.1989) (noting Supreme Court has not addressed issue but holding overbreadth doctrine does not apply to freedom of intimate association claims), aff'd 915 F.2d 1218, 1219 (8th Cir.1990) (affirming First Amendment analysis without discussion). We believe, however, that it is appropriate to apply the overbreadth doctrine to such a sweeping limitation on the freedom of association. But, even if the overbreadth doctrine were not applied, the ordinance cannot be interpreted as broadly as the city interprets it.
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F I L E D
United States Court of Appeals
Tenth Circuit
UNITED STATES COURT OF APPEALS
AUG 22 2002
TENTH CIRCUIT
PATRICK FISHER
Clerk
ELIOT PAUL GOULD,
Petitioner - Appellant,
v. No. 02-1162
(D.C. No. 00-N-461)
STATE OF COLORADO and STATE (D. Colorado)
OF NEW MEXICO,
Respondents - Appellees.
ORDER AND JUDGMENT *
Before EBEL, LUCERO, and O’BRIEN, Circuit Judges.
On October 29, 1999, a New Mexico grand jury issued a twenty-eight count
indictment against Petitioner-Appellant Eliot Paul Gould. Approximately four
months later, law enforcement officers in Larimer County, Colorado, arrested Mr.
Gould for being a fugitive from New Mexico. Because Mr. Gould refused to
*
After examining appellant’s brief and the appellate record, this panel has
determined unanimously that oral argument would not materially assist the
determination of this appeal. See Fed. R. App. P. 34(a)(2) and 10th Cir. R.
34.1(G). The case is therefore ordered submitted without oral argument. This
Order and Judgment is not binding precedent, except under the doctrines of law of
the case, res judicata, and collateral estoppel. The court generally disfavors the
citation of orders and judgments; nevertheless, an order and judgment may be
cited under the terms and conditions of 10th Cir. R. 36.3.
waive extradition, the district attorney for Larimer County “filed a fugitive
complaint against Mr. Gould.” (R.O.A., Doc. 19 at 7.) Shortly thereafter, the
Governor of New Mexico filed a formal extradition request with the Governor of
Colorado, who subsequently issued an extradition warrant “commanding the arrest
of Mr. Gould in Colorado and his delivery to New Mexico.” (Id.)
In April 2000, Mr. Gould left Colorado and traveled to New Mexico,
where, on April 18, 2000, New Mexico officials arrested and subsequently
arraigned him on the twenty-eight count indictment. Upon learning that Mr.
Gould had been arrested and arraigned in New Mexico, Colorado dismissed its
fugitive extradition case against Mr. Gould.
Approximately six weeks before his arrest and arraignment in New Mexico,
Mr. Gould filed a “Petition for the Intervention of the United States District
Court” with the United States District Court for the District of Colorado. (Id.,
Doc. 2.) On April 18, 2000, the very day Mr. Gould was arrested in New Mexico,
a federal magistrate judge entered an order characterizing Mr. Gould’s motion as
a petition for a writ of habeas corpus filed pursuant to 28 U.S.C. § 2241. 1 (Mag.
1
As best we discern from the filings before us, Mr. Gould does not dispute
the district court’s decision to characterize his motion as a habeas petition filed
under § 2241. Our review of the record indicates that the district court acted
properly. See Jacobs v. McCaughtry, 251 F.3d 596, 597 (7th Cir. 2001)
(explaining that a state court defendant held pursuant to a state court judgment
should file a habeas petition under 28 U.S.C. § 2254, but that a state court
(continued...)
-2-
R. & R. at 1.) Mr. Gould subsequently filed an amended complaint (R.O.A., Doc.
10), and the district court ordered the Respondents-Appellees, the states of
Colorado and New Mexico, to show cause why a writ of habeas corpus should not
issue. (Id., Doc. 11.) Colorado and New Mexico responded by asserting that, for
various reasons, Mr. Gould’s petition should be dismissed for lack of subject
matter jurisdiction. (Id., Docs. 19 & 20.) Mr. Gould then filed a response to the
motions to dismiss, and the district court referred the petition to a federal
magistrate judge. In his filings with the district court, Mr. Gould raised numerous
challenges to the indictment, alleging, among other things, that he could not
possibly have committed the crimes charged in the indictment and that the
procedures used by the grand jury ran afoul of a recent New Mexico Supreme
Court decision. Mr. Gould also argued that Colorado’s extradition procedures
violated his due process rights.
In his report and recommendation, the magistrate judge concluded that Mr.
Gould’s challenges to the New Mexico indictment and Colorado’s extradition
procedures should be dismissed. The magistrate judge reasoned that Mr. Gould’s
1
(...continued)
defendant attacking his pretrial detention should bring a habeas petition under 28
U.S.C. § 2241); Stringer v. Williams, 161 F.3d 259, 262 (5th Cir. 2000) (same);
see also Montez v. McKinna, 208 F.3d 862, 865, 870-71 (10th Cir. 2000);
(McKay, J., dissenting) (explaining that a state petitioner may use § 2241 to
challenge his pretrial detention).
-3-
claims concerning Colorado’s extradition proceedings were moot, given that the
state had dismissed the extradition complaint. (Mag. R. & R. at 5.) As to Mr.
Gould’s attacks on the New Mexico indictment, the magistrate judge held that
“allegations concerning the criminal indictment should be raised in New Mexico
rather than in [federal court].” (Id. at 5-6.) Even assuming jurisdiction, the
magistrate judge found that Mr. Gould had “not satisfied the stringent criteria
required to justify the extraordinary action of federal court intervention in
pending state criminal proceedings.” (Id. at 6 (citing Phelps v. Hamilton, 59 F.3d
1058, 1063-64 (10th Cir. 1994).)
The district court, over Mr. Gould’s objections, adopted the magistrate
judge’s report and recommendation. (R.O.A., Doc. 35.) Mr. Gould then filed a
notice of appeal. (Id. at 37.) Because Mr. Gould is challenging his detention by
state authorities, he must obtain a certificate of appealability (COA) before we
may consider the merits of his appeal. Montez v. McKinna, 208 F.3d 862, 867
(10th Cir. 2000). A COA is appropriate only where “the applicant has made a
substantial showing of the denial of a constitutional right.” 28
U.S.C. § 2253(c)(2). The district did not grant Mr. Gould a COA; accordingly,
we construe his notice of appeal as a COA application. See Fed. R. App. P.
22(b).
-4-
After carefully reviewing the record, we believe, substantially for the
reasons identified in the magistrate judge’s report and recommendation and the
district court’s order, that Mr. Gould is not entitled to a COA. Therefore, we
DENY Mr. Gould’s COA application and DISMISS this appeal 2.
ENTERED FOR THE COURT
David M. Ebel
Circuit Judge
2
The appellant’s motion to file a supplemental brief is granted.
-5-
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611 F.2d 373
Peppersv.McKenna
No. 77-3452
United States Court of Appeals, Sixth Circuit
11/8/79
N.D.Ohio
AFFIRMED
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582 F.Supp. 128 (1984)
Murray SCHLANGER, Plaintiff,
v.
FOUR-PHASE SYSTEMS, INC., et al., Defendants.
No. 81 Civ. 7798 (CLB).
United States District Court, S.D. New York.
March 6, 1984.
*129 Max W. Berger and Daniel Berger of Bernstein, Litowitz, Berger & Grossman, New York City, for plaintiff.
Garrett Johnson of Kirkland & Ellis, Chicago, Ill., for defendant.
MEMORANDUM OPINION AND ORDER
BRIEANT, District Judge.
By motion filed October 14, 1983 and fully submitted for decision on November 22, 1983, defendants in this class action, brought under § 10(b) of the Securities Exchange Act of 1934, 15 U.S.C. § 78j(b), Rule 10b-5 of the Securities and Exchange Commission, 17 C.F.R. § 240.10b-5, and state common law, seek summary judgment in their favor on the ground that the undisputed facts establish that no material misstatements or omissions were made, and that defendants acted without scienter. Plaintiff opposes the motion for the reasons stated below. Familiarity with all prior proceedings in this matter is assumed. The facts relevant to the instant motion are as set forth below.
According to the Amended Class Action Complaint, filed July 16, 1982, defendant Four-Phase Systems, Inc. ("Four-Phase") is the issuer of common stock which was, at the relevant time, listed and traded on the New York Stock Exchange ("NYSE"). The individual defendants are former officers and/or directors of Four-Phase. Plaintiff is suing as the representative of a class which includes all persons other than defendants who owned Four-Phase stock immediately prior to the December 2, 1981 public announcement by the issuer quoted below, and who sold the stock at any time prior to a later announcement on December 10, 1981, of a proposed merger by the issuer with Motorola ("Motorola"). (See Memorandum and Order dated Nov. 10, 1982, at 2 and 8). 555 F.Supp. 535.
On December 2, 1982 the defendants issued an announcement (the "Hodder Statement"), disseminated to the public over the Dow-Jones wire, which read as follows:
"R. Frederick Hodder, Treasurer of Four-Phase Systems said the Company is not aware of any corporate developments which would affect the market of its stock."
This statement was released following several calls to Four-Phase from Veronica Dever, a marketing representative of the NYSE, regarding a steep and sudden rise in the market price and concurrent increase in the trading volume of Four-Phase common stock. It is undisputed that on November 27, November 30 and December 1, 1981, the three trading days before December *130 2, 1981, Four-Phase closed on the NYSE at prices of $28, $27 5/8 ths and $28¾ths on share volume of 27,500, 18,000 and 39,800 shares, respectively. On December 2, 1981, the price rose to $34½ with a volume of 302,000 shares.
Plaintiff claims that the Hodder Statement was false and also that it contained a material omission. In essence, plaintiff seeks to establish at trial that word of then on-going merger negotiations between Four-Phase and Motorola had leaked, causing the substantial change in the volume of shares sold and the market price experienced on December 2, 1981, prior to release of the Hodder Statement, and that the market subsequently reacted adversely to Four-Phase stock and its price dropped as a result of the Hodder Statement. It is conceded that on December 8, 1981, when the NYSE halted trading, the stock closed at $32 7/8 ths with a volume of 103,200 shares. On December 10, 1982, while trading was halted, Four-Phase announced that it had entered into a merger agreement with Motorola, whereby Motorola would acquire all Four-Phase stock for Motorola stock in an exchange valued at $45 per share. On December 11, 1981, when trading resumed, the closing price of Four-Phase stock was $39½ with a volume of 527,900 shares.
Plaintiff pleads that the December 2nd statement was materially false and misleading, that defendants knew that a merger was under discussion with Motorola, and that they also knew that the possibility of such a merger was a favorable corporate development which could and did in fact affect the market in the stock once news of the merger negotiations leaked. Except with relation to the merger negotiations, they knew of nothing else which could have produced the market reaction. Accordingly, they knew that the Hodder Statement was false and misleading as to a material fact.
It is alleged further that the Hodder Statement artificially depressed the market price of Four-Phase, thus affecting the "integrity" of the market, and that in reliance on the Hodder Statement and/or the integrity of the market, plaintiff and those similarly situated sold their stock during the class period, suffering damages or a lost benefit which would have been enjoyed had they awaited the merger.
Defendants contend that in light of the information known to Four-Phase and the individual defendants on December 2, 1981, the Hodder Statement was neither a material misstatement nor a material omission, and they assert further that the same undisputed facts establish that they acted without the requisite fraudulent intent. Additionally, they argue that scienter is lacking because Four-Phase issued the release on the "advice of counsel." For these reasons, they urge that summary judgment is appropriate under Reiss v. Pan American World Airways, Inc., 711 F.2d 11 (2d Cir.1983). A review of the events preceding the December 2nd announcement follows.
In February 1981 Four-Phase, through its president and chairman, Lee Boysel, vice-president of finance, Glen McLaughlin, and a director, Neil Brownstein, met with Frederick Frank, a managing director of Lehman Brothers Kuhn Loeb ("Lehman"), Four-Phase's investment banker, to discuss the prospects of a merger of Four-Phase into some other company as a means of financing the company's long-term capital requirements for future operations and expansion and to investigate Lehman's qualifications for representing Four-Phase in any merger investigations and negotiations. A further meeting with Lehman was held on February 20, 1981 at which Lehman presented a list of selected merger candidates, Lehman's fee arrangement was discussed, a strategy for contacting only three potential merger candidates at any one time was adopted, and a code name, "Project Sherwood," was selected for the joint effort to acquire a merger partner. Subsequent to this meeting, Four-Phase directed Lehman to proceed with Project Sherwood, a fee arrangement was agreed upon, and Lehman was engaged as the exclusive agent for the purpose of finding *131 a purchaser or merger partner for the company.
In the Spring of 1981, Lehman first contacted Motorola in connection with Project Sherwood. Written materials about Four-Phase were forwarded to Motorola, and Motorola informed Lehman that such an acquisition might be consistent with its own growth strategies. In the months that followed, Lehman also approached two other potential partners, General Dynamics and McDonnell Douglas, each of which also expressed an interest in acquiring Four-Phase. However, all acquisition plans were delayed while Four-Phase prepared for a public offering of debentures which became effective in June 1981, and it was not until August 28, 1981 that representatives of Four-Phase and Motorola met to discuss a possible merger.
At that time, Motorola presented its notion of the necessary event or stages precedent to an agreement to purchase Four-Phase. These included a thorough investigation of the company's management, a detailed evaluation of the company's business, and a careful pricing analysis of any proposed transaction. Several additional meetings among various representatives of Motorola and Four-Phase took place in September, October and November, 1981, at which the structure of the acquisition and its pricing were discussed. Also during this period, Lehman slowed down its activities with respect to the other two merger candidates, and "increasingly detailed information regarding Four-Phase, its products, its current operations, its finances, and its business projections" was provided to Motorola. (See Affidavit of Glen McLaughlin, sworn to October 13, 1983, at ¶ 5). Motorola, for its part, retained its own investment banking firm, Goldman Sachs & Co., to assist in the merger negotiations, and several reports were prepared by that firm on the structure and price of a proposed acquisition.
The last meeting between Four-Phase and Motorola before the December 2nd Hodder Statement took place on November 23rd and 24th at Four-Phase headquarters, when Motorola's chairman and vice-chairman first visited Four-Phase. Although the negotiations proceeded with Motorola stating that it would reflect on the proposed transaction and contact Four-Phase, defendants assert that no offer to acquire Four-Phase was made at that time, and that from the close of this meeting until the issuance of the press release on December 2nd, there were no further meetings or other communications between Four-Phase and Motorola.
Defendants argue in effect that because no formal offer had been made by Motorola at the time the Hodder Statement was issued, Four-Phase's decision not to reveal its ongoing merger negotiations with Motorola cannot be actionable under § 10(b) or Rule 10b-5. They, in effect, characterize the press release as a failure to disclose or an omission, and therefore they rely upon the decision of the Court of Appeals in Reiss v. PanAm, supra, wherein the Court concluded that summary judgment for the defendant in that case was appropriate, because "[i]t does not serve the underlying purpose of the securities acts to compel disclosure of merger negotiations in the not unusual circumstances before us." 711 F.2d at 14.
Defendants urge that this conclusion was premised upon the Court's recognition that "[s]uch negotiations are inherently fluid," and their premature disclosure "may in fact be more misleading than secrecy so far as investment decisions are concerned." Id. In addition, defendants rely upon Staffin v. Greenburg, 672 F.2d 1196 (3d Cir. 1982), which was cited in Reiss, wherein the Court observed that:
"Those persons who would buy stock on the basis of the occurrence of preliminary merger discussions preceding a merger which never occurs, are left `holding the bag' on a stock whose value was inflated purely by an inchoate hope." Staffin, supra, at 1206-07.
Defendants contend further that the imposition of a disclosure requirement with respect to merger negotiations would make such negotiations "virtually impossible," *132 because any statement made would carry a grave risk of liability whenever discussions did not result in a merger. (See Memorandum in Support of Defendants' Motion for Summary Judgment filed October 14, 1983, at 11, quoting from Reiss, supra at 14).
Finally, defendants have furnished to the Court a recent unpublished decision of a Judge of the United States District Court for the Eastern District of Pennsylvania, Greenfield v. Heublein, Inc., 575 F.Supp. 1325 (E.D.Pa.1983), in which that court granted the defendants' motion to dismiss, holding that there is no duty to disclose preliminary merger discussions prior to the date when an agreement in principle is reached. See Greenfield, supra, at 1337.
We consider that portion of the argument based on Greenfield at the outset. In this Court's view the Greenfield decision is wrong, essentially because it fails to distinguish between cases involving false or misleading statements, and situations involving a decision merely to remain silent and not disclose pre-merger negotiations. In any event, the decision in Greenfield, so much emphasized in defendants' argument, is not binding precedent in this Court. Indeed, it would not be binding were its author appointed for this district. See Farley v. Farley, 481 F.2d 1009, 1012 (3d Cir.1973), which holds:
"[E]ven if [prior E.D.Pa. district court decision] had decided the precise issue, its holding is not a precedent binding on other courts. The decision of a three-judge court is entitled to no more weight than any other district court decision. See 1B J. Moore, Federal Practice ¶ 0.402[1] n. 29 at 62. Consequently, the [prior district court decision] is not necessarily binding on any other district court, id. at 61, and does not invariably have to be followed in the Eastern District. Id. at 58-59."
See also, United States v. Birney, 686 F.2d 102, 107 (2d Cir.1982) (law of the case); Aknin v. Phillips, 424 F.Supp. 104, 105 (S.D.N.Y.1977) (this court may disregard conflicting decision of the Third Circuit).
Opposing the motion, plaintiffs assert that the issue of materiality cannot be resolved in defendants' favor as a matter of law, or absent a plenary trial. They argue, in the alternative, that in light of the undisputed facts summary judgment should be granted in plaintiff's favor, or that the Court should deny defendants' motion for summary judgment, because genuine issues of fact are in dispute regarding when Four-Phase received an offer from Motorola and whether defendants had a reasonable basis for concluding that there was a leak of information by December 2nd. (See Plaintiff's Statement Pursuant to Rule 3(g), filed November 10, 1983).
Plaintiff contends, and this Court concludes, that defendants, having chosen to issue a public statement in response to the unusual market activity in Four-Phase as observed by the NYSE, were required to include in that statement when issued, every "material fact necessary in order to make the statements made, in light of the circumstances under when they were made, not misleading."
Plaintiff apparently concedes, and the Court agrees, that Four-Phase could have remained silent, and would not have been required, under Reiss, to issue any public announcement concerning the then inchoate merger negotiations with Motorola. Rather, plaintiff argues that the duty to disclose arose when defendants chose to make a statement, and that any such statement was required to tell the truth. It is asserted further that the cases cited by the defendants are distinguishable, and that the materiality of the Hodder Statement is established by the facial language of the release, and the fact that Four-Phase's stock fell after the announcement, as previously noted, and then rose following the December 10, 1981 merger announcement. No explanation of the price activity prior to December 2nd is suggested, other than leaks of the existence of the merger discussions. Of course, the defendants knew that there is no secret when two people know it. More than a few persons knew Four-Phase was actively seeking to merge *133 and if Four-Phase's managers had not thought that the negotiations were worthy of further pursuit, presumably they would have suspended the discussions or reopened dealings with others. They knew of no other fact, apart from leaks, which could have explained the sudden rise in price and volume.
This Court agrees that summary judgment cannot be granted in defendants' favor with respect to the issues of duty and materiality, and that contested issues of fact are present in this case. While the federal securities laws do not impose a general duty upon an issuer to disclose material facts or new developments when it is not trading in its own securities, it does have a duty to make certain that any statement it does issue is truthful and complete, and does not materially misrepresent the facts existing at the time of the announcement. Securities and Exchange Commission v. Texas Gulf Sulphur Co., 401 F.2d 833, 860-62 (2d Cir.1968) (en banc), cert. denied, 394 U.S. 976, 89 S.Ct. 1454, 22 L.Ed.2d 756 (1969); see also State Teachers Retirement Board v. Fluor Corp., 654 F.2d 843, 853 (2d Cir.1981). In this case, defendants did make an announcement, intended to be relied on by purchasers and sellers, and therefore had a duty to make a statement which was both truthful insofar as it went, and not misleading in light of the facts known at that time.
The authority cited by the defendants is not persuasive. Reiss, supra, is clearly distinguishable as a case involving an omission, under circumstances where there was no duty to disclose inchoate merger plans. In that case, defendant Pan American had secured a loan commitment in connection with its desire to acquire National Airlines. However, its initial approach to National Airlines was rebuffed, and the loan commitment expired. In the meantime, both Pan American and Texas International Airlines began purchasing National Airlines' stock in the open market. At about the same time, but completely unrelated to its purchases of National Airlines stock, Pan American authorized the redemption of its convertible debentures in the belief that because the current market price of Pan American stock exceeded the conversion price debentureholders would convert. Pan American announced the redemption, but made no announcement regarding its simultaneous decision to renew its efforts to acquire National Airlines. A week later Pan American announced a firm offer to acquire National Airlines, thereby causing a rise in market price of its own stock. Debentureholders who had sold their debentures, rather than converting them to common stock, commenced an action under Rule 10b-5, asserting that had they known, they would have converted.
Reiss is distinguishable on several important grounds: it involved a failure by Pan American to disclose anything about its intentions to offer to acquire National Airlines, this in the context of an otherwise truthful statement concerning an unrelated corporate development. There had been no current history of discussions or negotiations between Pan American and National Airlines; there had been no unusual market activity in Pan American's stock; the release issued concerning the debentures itself served to encourage debentureholders to convert rather than to sell. Nothing was leaking into the market from insiders.
Staffin, supra, is also distinguishable. In that case, the issuer made a tender offer for its own stock. Prior to the date of the closing of this offer, an officer of the issuer, without consulting its controlling person, suggested to a company with whom the issuer had prior dealings, that it might wish to meet to discuss the possible acquisition of the issuer. It was held that there was no affirmative duty to disclose this in connection with the tender offer. Staffin, supra, 672 F.2d at 1205-06. However, unlike the instant case, no statement of any kind was made by the issuer, and there was no evidence of any unusual market activity or leaks of inside information. Moreover, when the issuer and the potential purchaser did arrange a meeting, and trading in the issuer's stock increased dramatically, suggesting a leak, the issuer released a *134 statement disclosing that "exploratory talks" were scheduled with a potential purchaser. 672 F.2d at 1201.
This Court concludes that defendants, once having chosen to make a statement of fact, had a duty to disclose all material facts "necessary in order to make the statement made, in light of the circumstances under which it was made, not misleading." Accordingly, the Hodder Statement may give rise to liability if at trial it is determined that the statement was intentionally or recklessly false, in light of what was known at the time, including any facts from which a leak could be inferred, and was also material.
Under TSC Industries, Inc. v. Northway, Inc., 426 U.S. 438, 449, 96 S.Ct. 2126, 2132, 48 L.Ed.2d 757 (1976), materiality has been defined as a:
"showing of substantial likelihood that, under all the circumstances, the omitted fact would have assumed actual significance in the deliberations of the reasonable shareholder. Put another way, there must be a substantial likelihood that the disclosure of the omitted fact would have been viewed by the reasonable investor as having significantly altered the `total mix' of information made available."
Such a determination is peculiarly within the province of the trier of fact, see TSC Industries, Inc., supra, at 450, 96 S.Ct. at 2133, and should be resolved at a plenary trial.
Defendants also assert that their motion for summary judgment should be granted because there is no evidence that "any Four-Phase officer acted recklessly or with intent to deceive or defraud in issuing the December 2 release." (Memorandum in Support of Defendants' Motion for Summary Judgment, filed October 14, 1983, at 11-12). In support, defendants again cite Reiss, supra, wherein it was held that scienter was not established where plaintiffs could only prove that the defendant who made no statement feared that any release regarding a possible merger would be misleading and could have jeopardized the merger negotiations. In addition, they urge that lack of scienter is established if, as is claimed here, defendants made full disclosure to counsel, requested counsel's advice on the legality of the contemplated action, received advice that it was legal, and relied in good faith on that advice. [Memorandum in Support of Defendants' Motion for Summary Judgment, filed Oct. 14, 1983, at 13, citing Securities and Exchange Commission v. Savoy Industries, Inc., 665 F.2d 1310, 1314 (D.C.Cir.1981); Securities and Exchange Commission v. Manor Nursing Centers, Inc., 458 F.2d 1082, 1101-02 (2d Cir.1972); and Securities and Exchange Commission v. Harwyn Industries Corp., 326 F.Supp. 943, 954 (S.D. N.Y.1971)].
Plaintiff opposes by contending that the credibility of the defendants, as it relates to scienter, is in issue and that accordingly summary judgment in favor of defendants must be denied. Alternatively, plaintiff asserts that even if the facts as presented by defendants are taken as true, this Court should find, as a matter of law, that defendants acted with the requisite fraudulent intent.
Specifically, plaintiff contends that the "intense trading in [Four-Phase] stock and violent price fluctuation" on December 2nd, of which defendants were well aware, and must have realized came from leaks of the merger dealings, negates any inference that they issued the Hodder Statement in good faith.
To establish scienter under § 10(b) and Rule 10b-5, of course, more than a conscious misstatement or failure to disclose must be shown. In general, "there must be proof that the [misstatement or the] nondisclosure was also intended to mislead." Reiss, supra, 711 F.2d at 14. However, in situations where the defendants, as here, owe a fiduciary duty to the seller of securities, reckless conduct is sufficient to establish scienter. See Sirota v. Solitron Devices, Inc., 673 F.2d 566, 575 (2d Cir.), cert. denied, 459 U.S. 838, 103 S.Ct. 86, 74 L.Ed.2d 80 (1982), citing, IIT v. Cornfeld, 619 F.2d 909, 923 (2d Cir.1980). *135 On the basis of the affidavits submitted by defendants, this Court cannot conclude that they did not intentionally or recklessly mislead the public in releasing the December 2nd statement.
It is argued that at the time of the NYSE inquiries which led to the Statement, Four-Phase did not know one way or the other whether there would be a merger offer from Motorola or any other company. (McLaughlin Affidavit, ¶ 7). However, defendants do not dispute that high-level discussions and negotiations between Four-Phase and Motorola had taken place. (McLaughlin Affidavit, ¶¶ 5 and 6; Affidavit of Robert W. Galvin, sworn to October 12, 1983, ¶ 6). Certainly those who bought stock in reliance on the leaks regarded the leaked information as highly material.
Nor do conclusory statements that high volume and sudden price rises had occurred before (McLaughlin Affidavit, ¶ 10), or that the company did not have direct knowledge of leaks concerning the merger negotiations (McLaughlin Affidavit, ¶ 11), or that there was no information indicating a "breach of confidentiality" regarding the negotiations with Motorola (Id.) lead inevitably to the conclusion that the defendants acted without scienter. The trier of fact could choose to disbelieve such statements or could find that defendants acted recklessly, because they were aware of unusual market activity in Four-Phase's stock which reasonably could have been caused by a leak, in light of the recent discussions with Motorola, and no other possible concurrent causative event or fact was known to them. This also distinguishes the instant case from Reiss, supra, which did not involve any evidence of unusual market activity.
Moreover, in Reiss, the Court premised its findings upon the fact that full disclosure would have benefitted the defendant, because it "would have increased the trading price of its common stock," thus increasing "the incentive for debentureholders to convert." 711 F.2d at 14. In the instant case it is at least arguable that the December 2nd statement, which foreseeably could lower the market price of Four-Phase stock, benefitted Four-Phase because full and truthful disclosure would have increased the market price making a merger less appealing. It probably could be developed by expert testimony at trial that for a merger or tender offer to succeed the value of the proceeds must usually be significantly greater than the market price of the shares at the time of announcement.
There is also no merit in defendants' contention that summary judgment is warranted because good faith reliance upon advice of counsel relieves them of any liability. It has never been the law that defendants may avoid liability under § 10(b) or Rule 10b-5 by consulting with counsel before engaging in fraudulent conduct, or uttering material false statements. See, e.g., Wellman v. Dickinson, 475 F.Supp. 783, 832 (S.D.N.Y.1979), aff'd, 682 F.2d 355 (2d Cir.1982), cert. denied, ___ U.S. ___, 103 S.Ct. 1522, 75 L.Ed.2d 946 (1983). Such reliance has, however, been considered by courts in determining the appropriate form of relief in civil actions instituted by the Securities and Exchange Commission, see, e.g., Securities and Exchange Commission v. Savoy Industries, Inc., 665 F.2d 1310, 1314-15 and n. 28 (D.C.Cir.1981); Securities and Exchange Commission v. Manor Nursing Centers, Inc., 458 F.2d 1082, 1101-02 (2d Cir.1972). It does not excuse the violation, if a violation did occur.
Defendants' motion for summary judgment is denied in its entirety. Plaintiff's application for summary judgment is also denied, as a matter of discretion because the Court believes that the totality of facts, including specifically the facts concerning the issues of materiality and scienter, should be fully developed in a plenary trial.
Counsel for the parties shall appear on April 5, 1984 at 9:30 A.M. in courtroom 705 for a final pre-trial conference to set a trial date. All pre-trial discovery in the action shall be completed by that date.
So Ordered.
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936 F.2d 584
Unpublished DispositionNOTICE: Tenth Circuit Rule 36.3 states that unpublished opinions and orders and judgments have no precedential value and shall not be cited except for purposes of establishing the doctrines of the law of the case, res judicata, or collateral estoppel.UNITED STATES of America, Plaintiff-Appellee,v.Carlos BENCOMO-TREVIZO, Defendant-Appellant.
No. 90-2136.
United States Court of Appeals, Tenth Circuit.
June 24, 1991.
Before McKAY and SETH, Circuit Judges, and BROWN,1 District Judge.
ORDER AND JUDGMENT2
McKAY, Circuit Judge.
1
After examining the briefs and appellate record, this panel has determined unanimously that oral argument would not materially assist the determination of this appeal. See Fed.R.App.P. 34(a); 10th Cir.R. 34.1.9. The case is therefore ordered submitted without oral argument.
2
The court has reviewed the briefs and record filed in this case and finds no reversible error.
3
AFFIRMED.
1
Honorable Wesley E. Brown, United States Senior District Judge for the District of Kansas, sitting by designation
2
This order and judgment has no precedential value and shall not be cited, or used by any court within the Tenth Circuit, except for purposes of establishing the doctrines of the law of the case, res judicata, or collateral estoppel. 10th Cir.R. 36.3
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847 F.2d 839
Galvanv.I.N.S.*
NO. 86-4365
United States Court of Appeals,Fifth Circuit.
MAY 19, 1988
1
Appeal From: I.N.S.
2
AFFIRMED.
*
Fed.R.App.P. 34(a); 5th Cir.R. 34.2
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478 P.2d 822 (1971)
Frank H. MULLER and Ronald Lloyd French, Appellants,
v.
STATE of Alaska, Appellee.
No. 1181.
Supreme Court of Alaska.
January 7, 1971.
*824 Marcus R. Clapp, Anchorage, for appellant, Frank H. Muller.
James L. Johnston, Anchorage, for appellant, Ronald Lloyd French.
G. Kent Edwards, Atty. Gen., Juneau, Robert L. Eastaugh, Asst. Atty. Gen., Anchorage, for appellee.
Before BONEY, C.J., DIMOND, RABINOWITZ and CONNOR, JJ., and LEWIS, Superior Court Judge.
OPINION
BONEY, Chief Justice.
This is an appeal from a denial, by the superior court, third judicial district, of the appellants' motion to dismiss with prejudice certain criminal charges pending against them. The appellants contend that the denial of a pre-trial motion to dismiss with prejudice should be construed as a final judgment pursuant to Supreme Court Rule 6.[1] The state, on the other hand, maintains that the denial of a motion to dismiss is not an appealable final judgment. We agree with the state's view.
The denial of the appellants' motion did not terminate the proceedings against them and was in no sense a final judgment of the type contemplated by Rule 6.[2] The provisions of the Supreme Court Rules governing petitions for review are specifically designed for cases such as this, and permit discretionary review by this court.[3] Because a constitutional question of particular substance and importance has been presented we will consider this appeal as a petition for review, and grant review.[4]
The circumstances which precipitated this appeal deserve brief mention. The appellants, Ronald Lloyd French and Frank H. Muller, were indicted by a grand jury *825 in Anchorage on various felony charges stemming from an alleged incident of kidnap and rape. Pursuant to a motion by the state, the superior court ordered the cases against Muller and French to be consolidated. As a condition to the consolidation, the court ruled that the state would be precluded from using at trial certain statements ostensibly made to police by French.
The appellants were subsequently brought to trial in Anchorage;[5] a jury was selected and sworn, and the prosecuting attorney commenced his opening statement. In his statement, the prosecutor, evidently unaware of the previous ruling of the court, made reference to the statements which had been obtained from French:
The State believes the evidence will show that after being fully accorded his constitutional rights at that particular time and place, Mr. French made statements indicating that Mr. Muller and Mr. French or excuse me, Mr. French * * *.
At this juncture, the prosecutor was interrupted by the appellants' counsel, who apprised both the court and the prosecutor of the previous order excluding the statements made by French. The jury was excused and after a brief discussion the appellants moved for a mistrial. The prosecutor concurred and the court declared a mistrial.[6] Muller and French later filed a motion for dismissal with prejudice, contending that a retrial was precluded by double jeopardy.[7] Their motion having been denied, Muller and French brought this appeal.
The sole question presented on appeal is whether, in light of the mistrial below, retrial of the appellants is forbidden by double jeopardy. At the time that the mistrial was declared, the jury had already been sworn and the trial had commenced; accordingly there can be no doubt that the appellants were placed in jeopardy at the first trial.[8] Yet the fact that an individual is once placed in jeopardy does not mean that, if a mistrial is declared, he cannot later be brought to trial anew. To the contrary, the proposition appears to be well settled that retrial will be permitted in numerous instances.[9] Authorities *826 are especially consistent where a mistrial is procured by the defendant. In such cases it is generally recognized that by requesting a mistrial the defendant consents to the dismissal of the jury, and can therefore usually be retried.[10]
It is the appellants' contention that the general rule permitting retrial where a mistrial has been obtained at the request of the defendant should not apply to the present case. The appellants argue that our recent holding in Lewis v. State[11] requires a trial judge to make a specific finding of manifest necessity before a mistrial can properly be declared. It is asserted here that the trial judge granted the appellants' motion for mistrial solely on the basis of the state's concurrence, without making any inquiry into the question of manifest necessity. Thus, we are asked to hold that jeopardy attached in this case because the trial court granted a mistrial and dismissed the jury without considering the issue of manifest necessity. However, we do not think that Lewis supports the appellants' position.
Our decision in Lewis v. State dealt with a situation where the trial court had granted a motion for mistrial made by the state. Mistrial was declared over the objections of the defendant. In Lewis we adopted the federal standard of "manifest necessity" as the proper gauge of whether a mistrial could be declared without barring retrial; we cited the following language from Mr. Justice Story's opinion in United States v. Perez:[12]
We think that, in all cases of this nature, the law has invested courts of justice with the authority to discharge a jury from giving any verdict, whenever, in their opinion, taking all the circumstances into consideration, there is a manifest necessity for the act, or the ends of public justice would otherwise be defeated.
Under this test, then, a trial court may declare a mistrial without barring retrial when it concludes that there is a manifest necessity to do so. In Lewis, we reviewed the record of trial court proceedings and concluded that there had been no manifest necessity to declared mistrial. Consequently we held that a retrial of the appellant's case was precluded by double jeopardy.[13]
Our holding in the Lewis case stands for the proposition that if a mistrial is declared in the absence of a manifest necessity, then a retrial will be barred by double jeopardy. Lewis did not reach the question whether retrial will be barred in cases where the declaration of a mistrial is a manifest necessity. In such instances, the permissibility of a retrial will depend upon the circumstances that make it manifestly necessary to dismiss the jury. As we pointed out in Lewis, the right of the defendant to have his trial completed before the jury originally empaneled must at times be subordinated to a greater public *827 interest.[14] As a general rule, where the failure to complete a trial stems from a manifest necessity, the public interest will prevail and double jeopardy will not be held to bar a retrial.
There may be instances, however, where double jeopardy will preclude a second trial. There is nothing absolute in the law, and, like all rules, the rule permitting reprosecution of a defendant where his mistrial was declared pursuant to a manifest necessity is not flawless. Ultimately, our inquiry must be directed to the question whether a retrial would result in the kind of harassment and oppression against which the double jeopardy provision is meant to protect.[15]
Instances of deliberate prosecutorial misconduct are particularly subject to scrutiny. Oppression will be most acute where a prosecutor deliberately precipitates a mistrial in a case which is going badly in order to allow himself, at a later time, either to present a better case or simply to harass the defendant with another prosecution.[16]
The greater the prosecutor's effort to inject a trial with prejudicial error, the more manifest becomes the necessity for dismissing the jury, and the more likely becomes the possibility that the defendant will be forced to request a mistrial. Under these circumstances, to adhere to the general rule allowing retrial where the mistrial is the result of a manifest necessity would lead to harsh and oppressive consequences.[17] Thus, in cases where it is clear that the prosecutor, motivated by a desire to avoid an acquittal in a case which is going badly, engages in purposeful misconduct which forces the court to declare a mistrial, the policy of protecting an accused individual from harassment by consecutive prosecution may demand that a retrial be barred, even though the mistrial was manifestly necessary.[18]
However, it is sufficient for the purposes of the instant case to observe that here, the prosecutor's remarks which led to the declaration of a mistrial were negligently made, and fall far short of evidencing the requisite element of intentional misconduct. The appellants have suggested that any misconduct on the part of a prosecutor including negligent remarks should bar retrial. We cannot accept this view. Such a rule would fail to adequately take into account the public interest in prosecuting and punishing individuals guilty of crime.[19]
*828 In this case, then, we apply the general rule that where a mistrial is declared by reason of a manifest necessity, double jeopardy will not bar a retrial. The appellants argue that the rule should not apply because the trial court did not independently consider the question of whether there was a manifest necessity to declare the mistrial. We find this argument to be without merit. Where a defendant insists that a mistrial is necessary,[20] and where the trial court agrees, the manifest necessity for a mistrial may be considered to have been adequately established. Under such circumstances further inquiry into the issue on behalf of the defendant by an appellate tribunal would be nugatory.[21]
Moreover, to permit the appellants to argue the issue of manifest necessity on appeal would inevitably raise problems of estoppel. By opting to move for a mistrial instead of requesting a jury instruction to repair any damage which had been caused by the prosecutor's remarks, the appellants actively asserted the manifest necessity of dismissing the jury which had been empaneled to hear their case. Having succeeded in persuading the trial court that a mistrial was necessary, the appellants now seek to convince us on appeal that the trial court committed error by granting an unnecessary mistrial. Certainly, a trial court must always be circumspect about granting a mistrial. Yet to allow the appellants to prevail on appeal by maintaining a position diametrically opposed to that which they took at trial would be inimical to the integrity of the judicial process. In short, the appellants should not be permitted to blow hot at trial and then blow cold on appeal.
The appellants also believe that the prosecutors concurrence in their motion for mistrial in some way negated the effect of their request for mistrial, and that accordingly the trial court was bound to make a specific inquiry into the issue of manifest necessity. We disagree. Manifest necessity was conclusively established when the appellants' insistence upon a mistrial was accepted by the court. At no time did the appellants evidence a desire to retract their motion. We simply cannot perceive how the fact that the prosecutor was candid and honest in admitting that he had made a mistake alters the circumstances which led to the appellants' motion for a mistrial.
We conclude that jeopardy did not attach when the trial court granted the appellants' motion for mistrial, and we affirm the court's refusal to dismiss with prejudice the charges pending against the appellants.
NOTES
[1] Supr.Ct.R. 6 provides in part:
An appeal may be taken to this court from a final judgment entered by the superior court or a judge thereof * * *.
[2] In Stewart v. State, 438 P.2d 387, 389 (Alaska 1968), this court considered an appeal under similar circumstances and concluded:
We are in agreement with appellee's position and hold that a denial of a motion for judgment of acquittal where a new trial has been ordered does not terminate the proceedings, and is not a final order within the intendment of Supreme Court Rule 6.
[3] Supr.Ct.R. 23 and 24. We have previously approved the use of a petition for review in a case involving denial of a pretrial motion. See Hartwell v. Cooper, 380 P.2d 591, 592 (Alaska 1963).
[4] Supr.Ct.R. 23 provides, in part:
An aggrieved party may petition this court for review of any order or decision of the superior court, not otherwise appealable under Rule 6, in any action or proceeding, civil or criminal, as follows:
* * * * *
(d) Where such an order or decision involves a controlling question of law as to which there is substantial ground for difference of opinion, and where an immediate and present review of such order or decision may materially advance the ultimate termination of the litigation.
* * * * *
Supr.Ct.R. 24 provides in part:
A review shall not be a matter of right, but will be granted only: (1) where the order or decision sought to be reviewed is of such substance and importance as to justify deviation from the normal appellate procedure by way of appeal and to require the immediate attention of this court.
[5] It must be observed that the superior court judge presiding at the appellants' trial was not the same judge who had previously ordered the cases consolidated; the prosecuting attorney was similarly new to the case, and had not participated in the pre-trial motion to consolidate. Both the trial judge and the prosecutor were, at the outset of the trial, unaware of the prior ruling excluding statements obtained from French.
[6] The trial transcript reveals that the following exchange occurred:
The Court: You don't feel the court, by telling them that it can't be used and they shouldn't consider it can. * * *
Mr. Johnston [Defense Attorney]: I don't feel that's satisfactory.
The Court: Mr. Felton?
Mr. Felton [Prosecuting Attorney]:
Your Honor, I'm afraid due to my ignorance of the prior court ruling that I'm must concur with the defense counsels in this matter. * * *
The Court: In view of the concurrence by the District Attorney, the court will declare a mistrial. When do counsel think they can go to trial again on this?
[7] Alaska Const. art. I, § 9 provides:
No person shall be put in jeopardy twice for the same offense. No person shall be compelled in any criminal proceeding to be a witness against himself.
U.S.Const., Amend. V provides, in part:
[N]or shall any person be subject for the same offence to be twice put in jeopardy of life or limb.
[8] Selman v. State, 406 P.2d 181, 186 (Alaska 1965):
The authorities are well settled that a defendant is considered to have been placed in jeopardy as soon as he has gone to trial and the jury sworn.
[9] See Lewis v. State, 452 P.2d 892, 894, 895 (Alaska 1969). It should be noted that the court in Lewis adopted an interpretation of the Alaska double jeopardy provision identical with that espoused by federal courts under the United States Constitution. Since the decision in Lewis, the United States Supreme Court has made the double jeopardy provision of the United States Constitution applicable to the states. Benton v. Maryland, 395 U.S. 784, 89 S.Ct. 2056, 23 L.Ed.2d 707 (1969). In view of the standard adopted in Lewis, however, the decision in Benton adds little to the appellants' claim in the instant case.
[10] In Selman v. State, 406 P.2d 181, 186 (Alaska 1965), we held that "[i]f the jury is discharged with his [the defendant's] consent, he may be tried again." This statement finds substantial support in the federal cases. See, e.g., United States v. Tateo, 377 U.S. 463, 84 S.Ct. 1587, 12 L.Ed.2d 448, 452 (1964); Gregory v. United States, 133 U.S.App. D.C. 317, 410 F.2d 1016 (1969); Vaccaro v. United States, 360 F.2d 606 (5th Cir.1966); Blair v. White, 24 F.2d 323 (8th Cir.1928); United States v. Harriman, 130 F. Supp. 198 (S.D.N.Y. 1955). See also Note, Double Jeopardy: The Reprosecution Problem, 77 Harv.L.Rev. 1272, 1279 (1964); and Gori v. United States, 367 U.S. 364, 81 S.Ct. 1523, 6 L.Ed.2d 901, 905-907 (Douglas, J., dissenting 1961).
[11] 452 P.2d 892 (Alaska 1969).
[12] 9 Wheat. 579, 6 L.Ed. 165 (1824), cited in Lewis v. State, 452 P.2d 892, 895 (1969).
[13] Lewis v. State, 452 P.2d 892, 896, 897 (1969).
[14] Id. at 894, 895.
[15] That the double jeopardy clause is aimed at protecting individuals from oppression and harassment by successive prosecutions has been frequently noted. See, e.g., Gori v. United States, 367 U.S. 364, 81 S.Ct. 1523, 6 L.Ed.2d 901, 905 (1961); Wade v. Hunter, 336 U.S. 684, 69 S.Ct. 834, 93 L.Ed. 974, 978 (1949); and Note, Double Jeopardy: The Reprosecution Problem, supra n. 10, 77 Harv.L.Rev. at 1273-74.
[16] See, e.g., Downum v. United States, 372 U.S. 734, 83 S.Ct. 1033, 10 L.Ed.2d 100, 103 (1963).
[17] This problem is discussed in Note, Double Jeopardy: The Reprosecution Problem, supra n. 10 at 1281.
[18] In a 1966 decision, the Pennsylvania Supreme Court indicated that retrial might be barred following a mistrial declared upon the defendant's motion where the prosecutor makes a calculated effort to terminate the trial in order to avoid an unfavorable verdict. Commonwealth ex rel. Montgomery v. Myers, 422 Pa. 180, 220 A.2d 859 (1966). The Pennsylvania court's opinion was specifically approved by the Third Circuit in United States ex rel. Montgomery v. Brierley, 414 F.2d 552, 557, 558 (3d Cir.1969). See also Commonwealth v. Warfield, 424 Pa. 555, 227 A.2d 177 (1967). This approach has also been suggested in Note, Double Jeopardy: The Reprosecution Problem, supra n. 10, 77 Harv.L.Rev. at 1281.
[19] We must point out that the appellant's proposal would only result in the undermining of the usefulness of a mistrial as a protective device:
Such rigidity might well operate to deter a trial judge from terminating an irrevocably flawed proceeding in order to avoid immunizing an obviously guilty defendant from further prosecution, thus compelling the parties to endure a probably inconclusive trial.
Commonwealth ex rel. Montgomery v. Myers, 422 Pa. 180, 220 A.2d 859, 866 (1966).
[20] In the present case, defense counsel was adamant in contending that a mistrial was necessary. See the excerpt from the trial transcript cited supra n. 6.
[21] This holding is not tantamount to a ruling that the appellants waived their rights to protection under the double jeopardy clauses. To the extent that we must consider whether reprosecution will undermine the policies upon which the protection of double jeopardy is founded we agree with the appellants that they have not waived their constitutional rights by moving for a mistrial.
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424 S.E.2d 563 (1992)
Keith Allen JONES
v.
COMMONWEALTH of Virginia.
Record No. 0083-91-2.
Court of Appeals of Virginia.
December 1, 1992.
*564 Kimberly B. O'Donnell, Richmond (David J. Johnson, on brief), for appellant.
Margaret Ann B. Walker, Asst. Atty. Gen. (Mary Sue Terry, Atty. Gen., on brief), for appellee.
Present: BENTON, COLEMAN and FITZPATRICK, JJ.
COLEMAN, Judge.
Keith Jones was convicted in the Circuit Court of the City of Richmond of felony murder and use of a firearm in the commission of murder. He also pled guilty to robbery and use of a firearm in the commission of robbery. Jones contends that the evidence is insufficient to sustain the felony murder conviction. We find the evidence to be sufficient and affirm the conviction.
Where sufficiency of evidence is challenged on appeal, the court must view the evidence in the light most favorable to the Commonwealth and accord to it all reasonable inferences fairly deducible therefrom. Higginbotham v. Commonwealth, 216 Va. 349, 352, 218 S.E.2d 534, 537 (1975); Traverso v. Commonwealth, 6 Va.App. 172, 176, 366 S.E.2d 719, 721 (1988). A trial court's judgment will not be disturbed on appeal unless it is plainly wrong or without evidence to support it. Code § 8.01-680; Stockton v. Commonwealth, 227 Va. 124, 145-46, 314 S.E.2d 371, 385 (1984), cert. denied, 489 U.S. 1071, 109 S.Ct. 1354, 103 L.Ed.2d 822 (1989); Evans v. Commonwealth, 215 Va. 609, 612-13, 212 S.E.2d 268, 271 (1975).
On June 25, 1990, Jones walked to an apartment at 2323 Seldon Street in the City of Richmond. When he arrived at the apartment, five other young men were there. "Pee Wee" and "Chuck" were sitting on a porch, and "Bey" was talking to two other men, Calvin Hendricks and Jerome Lawson, on the other side of the street. Hendricks and Lawson planned to purchase drugs from Bey; Bey, however, never intended to sell drugs to the two men, but planned, instead, to rob them.
Jones approached the porch where Pee Wee and Chuck were sitting. Bey and the two men crossed the street and walked toward the porch. Bey walked up to the porch and asked for Pee Wee's gun, which Pee Wee earlier had brought from inside the house. Pee Wee told Bey, "It's over there," and Jones and Bey retrieved it from behind the bushes where Pee Wee had hidden it.
Jones and Bey then robbed the two men at gunpoint. Bey told Jones to hold the gun on the men while Bey searched them for money. Meanwhile, Pee Wee remained on the porch approximately six feet from where the robbery was taking place. Pee Wee laughed at Bey as he searched the men because Bey was intoxicated. As Bey searched Lawson, Hendricks dropped five dollars onto the ground. Jones, who was still holding the gun on both men, leaned over to pick up the money and placed it in his pocket. During that moment, Lawson managed to escape. When Lawson ran, Pee Wee jumped from the porch, told Jones to give him his gun, and pointed it at Hendricks. Pee Wee asked Hendricks, "Why'd your friend run?" Hendricks replied that he did not know and insisted that he did not have any more money. Pee Wee then shot Calvin Hendricks in the face eight times at close range. As Pee Wee began shooting, Jones ran away.
Jones argues that the evidence was insufficient to support his conviction for felony murder because Pee Wee was not a participant in the underlying felony of robbery and because Pee Wee's actions in shooting Hendricks were not part of the criminal enterprise to commit robbery.
Both Jones and the Commonwealth concede that in order to hold Jones responsible for Pee Wee's killing of Hendricks, the Commonwealth must prove that Pee Wee was Jones' co-felon in the underlying robbery. In other words, Pee Wee must have been at least a principal in the second degree to the robbery. Wooden v. Commonwealth, 222 Va. 758, 765, 284 S.E.2d 811, 816 (1981) (criminal participant in a felony may not be convicted of the felony-murder of a co-felon killed by the victim of the initial felony); Haskell v. Commonwealth, *565 218 Va. 1033, 1044, 243 S.E.2d 477, 483 (1978); King v. Commonwealth, 6 Va. App. 351, 357, 368 S.E.2d 704, 707 (1988) (only acts causing death which are committed by those involved in the felony can be the basis for a conviction). The facts are sufficient to support the trial court's finding that Pee Wee was a principal in the second degree to the robbery.
In order for a person to be a principal in the second degree to a felony, the individual must "know or have reason to know of the principal's criminal intention and must intend to encourage, incite, or aid the principal's commission of the crime." McGhee v. Commonwealth, 221 Va. 422, 427, 270 S.E.2d 729, 732 (1980) (applying the standard to accessory before the fact in murder conviction). The person must be "present, aiding and abetting the act done, or keeping watch or guard at some convenient distance." Brown v. Commonwealth, 130 Va. 733, 736, 107 S.E. 809, 810 (1921). "[M]ere presence and consent will not suffice." Underwood v. Commonwealth, 218 Va. 1045, 1048, 243 S.E.2d 231, 233 (1978). The person "must share the criminal intent of the party who actually committed the [crime] or be guilty of some overt act in furtherance thereof." Augustine v. Commonwealth, 226 Va. 120, 124, 306 S.E.2d 886, 889 (1983).
A person assisting his confederate to commit a crime is accountable for all crimes committed by the confederate in furtherance of the criminal enterprise, even though the accomplice may never have intended that the second felony would be committed. Boggs v. Commonwealth, 153 Va. 828, 836, 149 S.E. 445, 447 (1929); Carter v. Commonwealth, 232 Va. 122, 126-27, 348 S.E.2d 265, 268 (1986). The intended wrongful act need only be criminal and need not be a felony. Rollston v. Commonwealth, 11 Va.App. 535, 544, 399 S.E.2d 823, 828 (1991). As long as the felony actually committed by the principal was a probable consequence of the execution of the originally intended criminal design, the person lending assistance is accountable as a principal in the second degree to the felony subsequently committed. Brown, 130 Va. at 738, 107 S.E. at 810; Rollston, 11 Va.App. at 542, 399 S.E.2d at 827; 1 Wharton's Criminal Law § 258, at 329-30 (11th ed.).
The evidence was sufficient to prove that the wrongful or criminal act which Pee Wee intended to aid and abet Jones and Bey in committing was the robbery of Lawson and Hendricks. Bey had spoken to Lawson and Hendricks about selling them drugs when he went to Pee Wee and asked for the gun. After giving them the gun, Pee Wee remained present, observing the progress of the robbery. The house where Pee Wee was sitting was not Pee Wee's residence. When Pee Wee allowed Bey to use his handgun, he assisted and became a participant in the criminal acts committed by Jones and Bey. Moreover, the fact that Pee Wee remained in the immediate presence of the robbery and interceded to prevent Hendricks from escaping shows that he was present to lend assistance, if needed, during the robbery. Furthermore, Jones' testimony proved that Pee Wee intervened, detained Hendricks as the robbery was in progress, and demanded to know why Lawson had run away. Because Pee Wee had supplied the gun initially, the only reasonable conclusion to be drawn from the evidence is that he felt it necessary to intervene, since Bey and Jones were not competent to finish the jobs themselves. Bey was intoxicated, and Jones allowed Lawson to escape while he was retrieving the five dollars from the ground. In fact, the following day, Pee Wee even told Jones that he thought Bey's handling of the robbery was "stupid."
It is immaterial that Jones did not intend for anyone to be shot or that he did not know that Pee Wee would intervene as he did. "[T]he law is well settled in Virginia that each co-actor is responsible for the acts of the others, and may not interpose his personal lack of intent as a defense." Carter, 232 Va. at 126, 348 S.E.2d at 267-68. "Neither premeditation nor an intent to kill is an element of felony murder;" only malice is required. Wooden, 222 Va. at 762, 284 S.E.2d at 814; Spain v. Commonwealth, *566 7 Va.App. 385, 396, 373 S.E.2d 728, 733 (1988).
Where a person ... engages in [felonious] activity ... and homicide ... results, the malice inherent in the [original felony] provides the malice prerequisite to a finding that the homicide was murder. And, all of the criminal participants in the initial felony may be found guilty of the felony-murder of the victim so long as the homicide was within the res gestae of the initial felony.
Wooden, 222 Va. at 762, 284 S.E.2d at 814; Haskell, 218 Va. at 1043, 243 S.E.2d at 483; King, 6 Va.App. at 355, 368 S.E.2d at 706.[1] The intent to rob includes the shared intent among all co-actors to commit all the elements of robbery, including the use of such force as would be expedient for the accomplishment of their purpose. An incidental and probable consequence of the use of a firearm in the commission of a robbery is that someone will get killed. Carter, 232 Va. at 126, 348 S.E.2d at 268. Therefore, Jones is deemed to have shared Pee Wee's intent to shoot and kill Hendricks.
Jones argues that Pee Wee's killing of Hendricks did not "further" the robbery because Pee Wee's intervention was completely unrelated to the robbery and was not intended by Jones. As we have stated, the facts show that Pee Wee was a participant in the plan to rob Hendricks and Lawson and that he intervened to prevent Hendricks from escaping. It is immaterial that Jones did not specifically intend for Pee Wee to act as he did.
Jones also argues that the robbery was complete by the time Pee Wee intervened; thus, Pee Wee could not have "furthered" the robbery by killing Hendricks. We do not agree. The robbery was not complete. The fact that Jones and Bey had taken money from Hendricks and Lawson does not make the robbery complete. Neither Jones nor Bey had secured all the money of the victims, and neither had left the crime scene. When Pee Wee intervened, Jones was still holding the gun against Hendricks. Thus, the robbery was still in progress.
Viewing the evidence in the light most favorable to the Commonwealth, it was sufficient to prove that Pee Wee was Jones' accomplice in the robbery, and Pee Wee's killing Hendricks was part of the common criminal enterprise. Consequently, Jones is criminally liable for the murder committed during the course of the robbery. We affirm Jones' conviction of felony murder.
Affirmed.
NOTES
[1] We reject the Commonwealth's contention that because the defendant in King was indicted for felony homicide (second degree murder, Code § 18.2-33), the rule under King does not apply to felony murder (first degree murder, Code § 18.2-32). The only difference between the two offenses is the underlying felony that results in the killing. Because causation is a necessary element in felony murder, as well, see Haskell, 218 Va. at 1043, 243 S.E.2d at 483, the principles in King concerning the causal link between the felonious act and the killing apply equally to both Code §§ 18.2-32 and 18.2-33.
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129 F.Supp.2d 975 (2000)
Tommie Ruth POLK, Plaintiff,
v.
SENTRY INSURANCE, A Mutual Company, Defendant.
No. CIV.A. 3:99CV858WS.
United States District Court, S.D. Mississippi, Jackson Division.
September 25, 2000.
*976 John G. Jones, Jones & Funderburg, Jackson, MS, for Tommie R. Polk, plaintiff.
Arthur F. Jernigan, Jr., Watson & Jernigan, P.A., Clyde X. Copeland, III, Page, Kruger & Holland, P.A., Jackson, MS, for Sentry Insurance, a mutual company, defendant.
ORDER DENYING REMAND
WINGATE, District Judge.
Before the court is the motion of plaintiff Tommie Ruth Polk brought pursuant to Title 28 U.S.C. § 1447[1] asking this court to remand this lawsuit to the Mississippi state court where it originated. Defendant Sentry Insurance removed this lawsuit from state court to this federal forum under the auspices of Title 28 U.S.C. §§ 1441(a)[2] and 1332,[3] alleging diversity of citizenship and the requisite amount in controversy. The parties here are of diverse citizenship and the amount in controversy exceeds $75,000.00, exclusive of costs and interest, factors contested by neither party. What is in dispute, however, is whether Sentry Insurance timely removed this case to this court under the thirty (30) day window provided by Title 28 U.S.C. § 1446(b), which begins when a removing party receives notice by an "other paper" that a previously non-removable case has now become removable. In his motion to remand, Polk contends that defendant slept on the first "other paper" alerting defendant that this case had become removable to federal court and defendant now is precluded from taking advantage of the removal statutes. Accordingly, the plaintiff asks this court to remand this matter to state court. This court, however, is unpersuaded by Polk's motion to remand and hereby denies the motion for the reasons which follow.
*977 FACTS AND PROCEDURE
On March 9, 1999, this action, arising out of an automobile accident, was initiated in the Circuit Court of Copiah County, Mississippi, by Jerry Mahaffey. Mahaffey, a passenger in an automobile driven by J.C. Lomax, sued Lomax and Tommie Ruth Polk, the driver of the other automobile involved in the accident. Mahaffey also sued Federal Express Corporation, Polk's employer and the owner of the automobile Polk was driving at the time of the automobile accident. Thereafter, Federal Express and Polk filed their answers and defenses to Mahaffey's complaint and, jointly, filed a cross-claim against co-defendant Lomax for damages and other relief. At the time, Federal Express and Polk were represented by the firm of Watson and Jernigan. On August 11, 1999, Polk, represented by Jones and Miller, filed a counterclaim against Sentry Insurance. After the necessary waivers of conflict had been obtained, Sentry also retained the firm of Watson and Jernigan to represent it in defense of Polk's counterclaim. As such, Clyde Copeland of Watson and Jernigan represented Federal Express and Polk (defendant), as well as Sentry Insurance (counter-defendant).
One by one, the various parties began to resolve and voluntarily dismiss these claims. On September 25, 1999, Polk and Lomax entered a final settlement of claim and covenant not to sue. Thereafter, on November 1, 1999, counsel for Federal Express and Polk (defendant), Watson and Jernigan, received correspondence from counsel for Lomax, dated October 29, 1999, which appears to memorialize an earlier oral settlement agreement voluntarily extinguishing Federal Express's claim against Lomax. Enclosed with the correspondence were an Absolute Release With Covenants between Federal Express and Lomax and an insurance draft from Lomax's insurer in favor of Federal Express for $10,000.
The next correspondence received by counsel for Federal Express and Polk was on November 4, 1999. At that time, said counsel received correspondence from Craig Sessums, counsel for Lomax, dated November 3, 1999, in which Sessums forwarded to said counsel a "Final Judgment of Dismissal With Prejudice" signed by himself and Dale Schwindaman, Jr., counsel for plaintiff Mahaffey. Pursuant to that agreed judgment, Mahaffey was dismissing his claim against Federal Express and Polk simultaneously with Lomax. This judgment was signed by the state trial court and filed with that court on November 9, 1999.
Upon the entry of the above judgment, only Polk's claim against Sentry remained. Sentry, a corporate citizen of Wisconsin, and Polk, a citizen of Mississippi, are diverse in citizenship.
On December 3, 1999, Sentry Insurance filed its notice of removal seeking to realign the parties as plaintiff and defendant and to seek the jurisdiction of this court on the notion that this court now had diversity jurisdiction. Prior to the settlements by the other parties, this court lacked diversity jurisdiction since plaintiff is a resident citizen of Mississippi, as are defendants Lomax and Polk. On December 16, 1999, Polk filed her motion to remand, arguing that Sentry's removal had been untimely.
ANALYSIS
The issue presented is whether, by virtue of diversity, this court possesses subject matter jurisdiction over Polk's claim against Sentry. The burden here of establishing that federal jurisdiction exists is on the removing party, the defendant Sentry Insurance. Dodson v. Spiliada Maritime Corp., 951 F.2d 40, 42 (5th Cir. 1992). Both parties agree that the requirements for diversity jurisdiction exist in this case: the "matter in controversy exceeds the sum or value of $75,000," and the parties are "citizens of different states." Title 28 U.S.C. § 1332(a). What the parties do not agree on, however, is whether Sentry Insurance timely removed the case to this court pursuant to Title 28 *978 U.S.C. § 1446(b). Section 1446(b) provides in pertinent part that:
[the] notice of removal of a civil action or proceeding shall be filed within thirty days after the receipt by the defendant, through service or otherwise, of a copy of the initial pleading setting forth the claim for relief upon which such action or proceeding is based...
If the case stated by the initial pleading is not removable, a notice of removal may be filed within thirty days after receipt by the defendant, through service or otherwise, of a copy of an amended pleading, motion, order, or other paper from which it may first be ascertained that the case is one which is or has become removable....
Sentry Insurance contends that its right of removal under § 1441(b) first arose when Sentry's counsel received a November 3, 1999, correspondence from Lomax's attorney, indicating that the plaintiff Mahaffey desired to settle his claims against all defendants whose citizenships would preclude diversity jurisdiction. Plaintiff Polk, on the other hand, points to a letter dated October 29, 1999, from Lomax' attorney to Sentry's counsel which, says Polk, provided the requisite notice to Sentry that the lawsuit was now removable. The pivotal issue before this court thus implicates two considerations: first, whether the embrace of § 1446(b) includes correspondence between counsel as "other paper," notwithstanding that the correspondence was not filed with the Clerk of Court. If not, then further analysis is unwarranted since the correspondence in question were not filed with the Clerk of Court. Should this court determine that § 1446(b) includes counsel correspondence, then the court's next task is to determine whether and when the thrust of the correspondence in question properly triggered removal.
Section 1446(b) does not define "other paper." On at least two occasions, the Fifth Circuit Court of Appeals resolved remand issues without deciding what constitutes "other paper." See FDIC v. Loyd, 955 F.2d 316, 326 (5th Cir.1992) (declining to reach the question of whether "other paper" under § 1446(b) includes or excludes the appointment papers of a receiver); Chapman v. Powermatic, Inc., 969 F.2d 160, 164 n. 8 (5th Cir.1992) (refusing to express an opinion as to whether medical bills and demand letter would be adequate as "other paper" for purpose of the second paragraph of § 1446(b)).
This court, however, in Sunburst Bank v. Summit Acceptance Corp., 878 F.Supp. 77 (S.D.Miss.1995), followed that line of case authority which holds that § 1446(b) is not restricted solely to papers filed in the case. In Sunburst, this court, after relying principally upon the plain language of § 1446(b), interpreted the meaning of "other paper" to include informal correspondences between parties.
The essential purpose of § 1446(b) is to commence the running of the 30-day period once the defendant receives the requisite written notice that the case has become removable. This actual notice may be communicated in a formal or informal manner. Accordingly, this court holds that a demand letter under proper circumstances may be accorded "other paper" status under § 1446(b).
878 F.Supp. 77 at 82.
Similarly, in Hessler v. Armstrong World Industries, Inc., 684 F.Supp. 393 (D.Del.1988), that court adjudged attorneys' correspondence as a permissible "other paper" under the removal statute. In that case, the parties were notified via letter from counsel that the non-diverse parties to the suit had settled. The remaining defendants, however, did not file a petition to remove until more than three months later. They argued that the thirty day time limit had not begun to run until the court had formally received notice that the non-diverse defendants had settled. The Hessler court found that the defendants' petition for removal was untimely. Hessler, 684 F.Supp. at 395. The court reasoned that because the earlier correspondence among the attorneys had given *979 the defendants adequate notice that the case had become removable, that correspondence, not the subsequent notification of the court, constituted an "other paper" for § 1446(b) removal purposes. Id. at 394-95.
This court, still inclined to follow its reasoning in Sunburst Bank v. Summit Acceptance Corp., supra, finds that the correspondence at issue, under the proper circumstances, may be accorded "other paper" status under the removal statute.
Next, the court must determine whether the contents of any of the correspondence in the instant case provide requisite notice for removal, and whether Sentry's notice of removal was timely filed. Put differently, the question before this court is on what date did Sentry Insurance's counsel, Clyde Copeland of Watson and Jernigan, receive an "other paper:" the Lomax letter dated October 29, 1999, and received by Sentry on November 1, 1999; or the Lomax letter dated November 3, 1999, received by Sentry on November 4, 1999. If the former, this case must be remanded, since removal came beyond the thirty-day removal period. If the latter, defendant's removal was timely.
In deciding the timeliness of Sentry's notice of removal, this court notes that the statute clearly prescribes that the time for removal begins to run when the defendant receives the requisite written notice of facts, as opposed to oral and implied notifications, which make the case removable. See Sunburst, 878 F.Supp. at 82; see also Smith v. Bally's Holiday, 843 F.Supp. 1451, 1454 (N.D.Ga.1994). The actual knowledge of the defendant prior to the receipt of the writing is irrelevant to the determination of when a case becomes removable under § 1446(b). The court in Jong v. General Motors Corp., 359 F.Supp. 223 (N.D.Cal.1973), aptly stated this point:
Under § 1446(b), where a case is not originally removable, the time for removal begins only after the defendant receives a copy of a pleading, motion or other paper which shows that the action has become removable. Therefore, the time period to remove an action cannot depend on the defendant's actual knowledge, because the statute expressly allows the defendant to rely on papers presented to it.
Jong, 359 F.Supp. at 226. This latter observation in Jong also disposes of plaintiff's secondary argument that the time restriction of § 1446(b) should begin to run when the removing party has knowledge that the case has become removable, regardless of whether such knowledge comes from a written source. Polk asserts that counsel for Sentry Insurance was aware of settlement negotiations between the plaintiff Mahaffey and defendant Lomax and the effect those negotiations might have on Federal Express and Polk's future status in that litigation. Thus, argues Polk, Sentry's clock for removal began ticking when Sentry acquired that knowledge.
This court disagrees. Section 1446(b) does not provide for oral notice. This court, therefore, looks to when Clyde Copeland of Watson and Jernigan, counsel for defendants Federal Express and Polk and counter-defendant Sentry, received written notification that the action had become removable.
As a general rule, this court has applied the "voluntary-involuntary" rule. Under this rule, "the removability of a case depends on the character of the non-diverse defendant's dismissal. If the plaintiff initiates the dismissal, [as here], it is `voluntary'; if the defendant or the court initiates the dismissal, it is `involuntary'. Only if the dismissal is voluntary may the action be removed." Gandy v. Crompton, 55 F.Supp.2d 593, 596 (S.D.Miss.1999).
Further, the thirty-day time limit under § 1446(b) is triggered only after the removing defendant receives some written notification evidencing an unequivocal abandonment of the plaintiff's claim against any remaining defendants whose citizenships would preclude diversity jurisdiction. See, e.g., Rawlings v. Prater, 981 F.Supp. 988 (S.D.Miss.1997) (agreeing with the contention that the case becomes removable as soon as "defendant receives the *980 documents evidencing plaintiff's unequivocal and unconditional voluntary abandonment of her claim against the resident defendant"); Pullman Co. v. Jenkins, 305 U.S. 534, 59 S.Ct. 347, 83 L.Ed. 334 (1939) (clear and definitive expression that plaintiff desired to terminate action against non-diverse defendant is necessary for action to become removable). Thus, two important criteria trigger the 30-day clock under § 1446(b): (1) that the removing defendant must receive notice from the plaintiff; and (2) that the notice must clearly and definitively evidence the plaintiff's desire voluntarily to dismiss any non-diverse defendants.
Polk argues that the time began to run when Sentry's counsel, Clyde Copeland of Watson and Jernigan, received a letter from Lomax's counsel, dated October 29, 1999. As attested to in his affidavit, Copeland claims to have received that letter on November 1, 1999. Sentry argues that the time began to run only after its counsel received a letter from Lomax's counsel, dated November 3, 1999. As attested to in his affidavit, Copeland claims to have received that letter on November 4, 1999.[4]
This court is unpersuaded that the October 29, 1999, dated letter, received November 1, 1999, constituted an "other paper" within the language of the removal statute, but rather that it was not until Sentry's counsel received the letter dated November 3, 1999, that said counsel had written notification that unequivocally indicated that the plaintiff Mahaffey desired voluntarily to dismiss the nondiverse defendants from the underlying litigation.
The October 29, 1999, letter received on November 1, 1999, states in pertinent part:
Enclosed with this letter please find the original Release and check in the amount of $10,000 in full and final settlement of the above referenced matter. I have forwarded the Final Judgment of Dismissal to Dale Schwindaman and once I have received the same back from him I will forward it to you. Please have your client execute the Release in the presence of a notary and return same to me. I assume you will take care of any outstanding liens.
This letter provides no definitive indication that the plaintiff Mahaffey desired to dismiss or settle his claim against Polk or Federal Express. In fact, the only attachments that were enclosed with the letter were the Absolute Release With Covenants between Federal Express and Lomax and an insurance draft for $10,000 from Lomax's insurer in favor of Federal Express. The most that reasonably could be inferred from the letter and release is that the plaintiff Mahaffey and defendant Lomax had reached a settlement agreement between themselves. And, as counsel for Lomax did not forward a copy of the proposed order to Watson and Jernigan, Sentry's counsel, said counsel had no reasonable way of determining that the plaintiff had an unequivocal desire to dismiss Federal Express and Polk, as well as Lomax.
The November 3, 1999, letter received on November 4, 1999, was accompanied by a "Final Judgment of Dismissal With Prejudice" which states in pertinent part:
[t]his cause came on to be heard on the Motion of the Plaintiff, Jerry Mahaffey, and Cross-Plaintiff, Federal Express Corporation, for a Final Judgment dismissing their claims with prejudice; and it being made known to the Court that their claims have been fully compromised and settled by Defendants paying to Plaintiff and Cross-Plaintiff a sum of money satisfactory to all parties, and all parties consenting to the entry of this Final Judgment and agreeing that this cause should be dismissed with prejudice; and the Court, being fully advised in the premises, does find that said Motion is well taken and should be sustained.[5]
*981 As evidenced by the plain language of the agreed judgment, it was not until November 4, 1999, when Watson and Jernigan, Sentry's counsel, received the agreed judgment signed by Mahaffey's counsel, Dale Schwindaman, did Sentry's counsel receive an unequivocal, written notice that Mahaffey desired voluntarily to dismiss his claims against all non-diverse defendants.
CONCLUSION
Only the correspondence dated November 3, and received on November 4, 1999, comports with both the "other paper" rule and the voluntary/involuntary rule, and which presents an unequivocal abandonment of the plaintiff's case against all non-diverse defendants. Thus, Sentry counsel's receipt of this letter triggered the running of the 30-day clock. Because Sentry Insurance filed its notice of removal on December 3, 1999, twenty-nine (29) days after receipt of said letter, Sentry's removal was timely. Hence, this court hereby denies Polk's motion to remand.
NOTES
[1] Title 28 U.S.C. § 1447(c) provides in pertinent part:
(c) A motion to remand the case on the basis of any defect other than lack of subject matter jurisdiction must be made within 30 days after the filing of the notice of removal under section 1446(a). If at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded.
[2] Title 28 U.S.C. § 1441(a) states in pertinent part:
"[e]xcept as otherwise expressly provided by Act of Congress, any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or defendants, to the district court of the United States for the district and division embracing the place where such action is pending ...."
[3] Title 28 U.S.C. § 1332 provides in pertinent part:
(a) The district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is between
(1) citizens of different States; ...
[4] Copeland's affidavit is uncontroverted as to when he received the letters at issue.
[5] In his affidavit to this court, Clyde Copeland of Watson and Jernigan, maintain that no consideration was provided by his clients, Federal Express and Polk, to Mahaffey towards a settlement and release.
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162 F.3d 94
U.S.v.Gomez-Garcia**
NO. 97-41562
United States Court of Appeals,Fifth Circuit.
October 20, 1998
Appeal From: S.D.Tex. ,No.B-97-CR-257-ALL
1
Dismissed.
**
Conference Calendar
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UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 98-6362
JEFFREY LYNN UNDERWOOD,
Petitioner - Appellant,
versus
JACK LEE, Warden, Keen Mountain Correctional
Center,
Respondent - Appellee.
Appeal from the United States District Court for the Western
District of Virginia, at Roanoke. Samuel G. Wilson, Chief District
Judge. (CA-98-141-R)
Submitted: June 9, 1998 Decided: June 23, 1998
Before MURNAGHAN and HAMILTON, Circuit Judges, and HALL, Senior
Circuit Judge.
Dismissed by unpublished per curiam opinion.
Jeffrey Lynn Underwood, Appellant Pro Se.
Unpublished opinions are not binding precedent in this circuit.
See Local Rule 36(c).
PER CURIAM:
Appellant appeals the district court’s order denying relief on
his petition filed under 28 U.S.C.A. § 2254 (West 1994 & Supp.
1998). We have reviewed the record and the district court’s opinion
and find no reversible error. Accordingly, we deny a certificate of
appealability and dismiss the appeal on the reasoning of the
district court. Underwood v. Lee, No. CA-98-141-R (W.D. Va. Mar. 5,
1998). We deny Underwood’s motion to appoint counsel and his motion
for permission to refile his habeas petition in state court. We
dispense with oral argument because the facts and legal contentions
are adequately presented in the materials before the court and
argument would not aid the decisional process.
DISMISSED
2
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600 F.Supp. 233 (1985)
Jan Allen REINER, Peter Fairchild and Joseph Bilera each individually and on behalf of all others similarly situated and Jan Allen Reiner as President of West Village Houses Fair Rent Committee, Plaintiffs,
v.
WEST VILLAGE ASSOCIATES, West Ville Associates, Washington Village Housing Corp., Raqz, Inc., Starrett Brothers & Eken, Inc., Grenadier Realty Corp., Kreisel Company, Inc., Samuel R. Pierce, Jr., As Secretary of The Department of Housing and Urban Development, The City of New York and The New York City Housing Development Corporation, Defendants.
No. 81 Civ. 6632(MEL).
United States District Court, S.D. New York.
January 17, 1985.
*234 Faust, Rabbach & Sweet, New York City, for plaintiffs; Gerald M. Kleinbaum, New York City, of counsel.
Lipkowitz & Plaut, New York City, for defendants West Village Associates, West Ville Associates, Washington Village Housing Corp., Raqz Inc., Starrett Brothers & Ekin, Inc., Grenadier Realty Corp. and Kreisel Company, Inc.; Gerald D. Roth, Louis Lauer, Stephen Sussman, Daniel Friedman; Lauer & Kessler, New York City, of counsel.
Rudolph W. Giuliani, U.S. Atty., S.D. N.Y., New York City, for defendant Samuel R. Pierce, Jr., as Secretary of the Department of Housing and Urban Development; Alan Nisselson, Asst. U.S. Atty., New York City, of counsel.
Frederick A.O. Schwarz, Jr., Corp. Counsel of City of New York, New York City, for defendants City of New York and the New York City Housing Development Corporation; Fred Kolikoff, New York City, of counsel.
LASKER, District Judge.
This action, which controverts allegedly impermissible rent increases, involves interplay between the National Housing Act ("NHA"),[1] Article 2 of the New York State Private Housing Finance Law ("Mitchell-Lama")[2] and New York City's Administrative Code ("Merola").[3] The plaintiffs are tenants of the West Village Houses apartment project ("project")[4] and Jan Reiner as president of their representative organization, the West Village Houses Fair Rent Committee. The defendants include the past and present owners of the project and the project's managing agencies (past and present) (collectively "owner" or "landlord"), the City of New York ("City"), the New York City Housing Development Corporation ("HDC") and Samuel Pierce as Secretary of the Department of Housing and Urban Development ("HUD").
The complaint presents five claims. The plaintiffs allege (1) that HUD and the landlord violated plaintiffs' right to due process of law and HUD violated its own regulations and procedures in approving the disputed rent increase; (2) that HUD denied the tenants due process by failing to order a rollback of the rents charged in excess of those permitted under the Regulatory Agreement between HUD and the project owner ("the agreement"); (3) that the landlord has been unjustly enriched by the collection of rents not authorized by the *235 agreement; (4) that the landlord has been unjustly enriched by virtue of having made mortgage payments to the City from allegedly unauthorized rents, and (5) that the City has been unjustly enriched by accepting mortgage payments from the landlord with knowledge that the payments were made from unauthorized rents collected by the landlord.
Pursuant to Rule 56 of the Federal Rules of Civil Procedure all of the defendants move for summary judgment on the ground that (1) the tenants have no standing under the agreement to contest rental increases and (2) the tenants were not entitled to notice of or an opportunity to comment on the owners' application to HUD for a rental increase. The City and HDC move for summary judgment on the further ground that the complaint fails to state a cause of action against either of them.[5] The plaintiffs cross move for summary judgment against each of the defendants, asserting that the law requires conclusions opposite to those urged by the defendants.
For the reasons set forth below the defendants' joint motion for summary judgment is granted and the complaint is dismissed.
I. Statutory and Regulatory Background
The National Housing Act
Pursuant to Section 223(f) of the National Housing Act the Secretary of HUD is authorized, at his discretion, to enter into contracts of insurance with mortgagees which are State or local agencies.[6] The mortgages to be insured must meet the eligibility requirements specified in the regulations promulgated in Title 24 of the Code of Federal Regulations, Part 207.32a(k).[7] That section requires that the State or local government, or agency, enter into an agreement with the Commissioner[8] by which the mortgagee establishes a special fund for the purpose of partially reimbursing the Commissioner in the event HUD is called upon to pay an insurance claim on a defaulted mortgage. Such an agreement must contain assurances by the State or local government, or agency that:
The projects securing the mortgages in each portfolio shall not be subject to rent controls by the State, or a political subdivision thereof, or by any authority regulating rents pursuant to State or local law....[9]
Generally, the procedure for effectuating a Section 223(f) refinancing in New York City involves four steps: 1. HDC, on behalf of the City, applies to HUD pursuant to Section 223(f) for a commitment to insure a portion of a Mitchell-Lama mortgage; 2. HUD issues a commitment indicating the principal amount of a mortgage on the property involved that HUD is prepared to insure; 3. the City divides the Mitchell-Lama mortgage into a Senior Mortgage in a principal amount equal to HUD's insurance commitment and a Subordinate Mortgage in a principal amount equal to the remainder of the face amount of the initial mortgage and accrued unpaid interest; 4. HUD insures the Senior mortgage and enters into a Regulatory Agreement with the owner, which, together with the statute and HUD regulations, subject the project to HUD's supervision.
*236 The Mitchell-Lama Law
Article 2 of New York State's Private Housing Finance Law ("Mitchell-Lama") provides benefits such as partial property tax exemptions and tax exempt mortgage financing to private enterprises which construct and maintain low cost housing accommodations for persons qualified under the law to be tenants. Individuals who form "Limited-profit housing companies" pursuant to the law are subject to the supervision and control of the Supervising Agency. Even if a limited-profit housing mortgage is refinanced under the federal 223(f) program it remains governed by the provisions of the Mitchell-Lama statute, rules and regulations
except as provided otherwise by agreement with, or regulations of, the U.S. Department of Housing and Urban Development (HUD). In general, all matters involving management, maintenance, and operation shall be supervised by HUD.[10]
In 1976 the New York State Legislature amended Section 31 of Mitchell-Lama to add the following:
Where the mortgage loan of the company is insured or held by the federal government or where a project is owned by the federal government, rental rates shall be varied without regard to the provisions of any general, special or local law which would otherwise limit or control such rental rates or the determination or variation thereof for so long as such mortgage loan remains outstanding or the project financed by such a mortgage loan is owned by the federal government.[11]
The Merola Law
Section B 61.0 of the Administrative Code of the City of New York (the "Merola Law") was enacted to govern the procedure for instituting rental increases in City-aided Mitchell-Lama projects. It provides in relevant part:
a. Before acting upon any application or motion for an increase in the maximum rental per room to be charged tenants and cooperators of dwellings where the housing and development administration [[[12]]] of [sic] the `supervising agency' under the provisions of the private housing finance law, a public hearing shall be held. Said hearing shall be held upon no less than twenty day's written notice to the tenants and said notice shall have annexed thereto a copy of the application or motion for increase in rentals and shall set forth the facts upon which the application or motion is based.
II.
The facts of this case are substantially undisputed. West Village Houses is a development containing 420 apartments which was initially constructed as a City-aided Mitchell-Lama cooperative project. The project was granted, and still enjoys, partial real property tax exemption by the City, and the development of the project was financed by a $23,961,700 City mortgage loan.
In September, 1975, when the then owner of the project defaulted on its obligations under the mortgage the City commenced a foreclosure action in the Supreme Court, New York County. The court appointed the Administrator of HPD[13] as receiver and authorized him to complete construction of the project, to retain a rental and managing agent and to rent the apartments at market rentals.
In the Spring of 1976 the rental program was commenced by an independent rental and management agent retained by HPD.[14]*237 Substantially full occupancy was achieved by September of that same year. Until September 13, 1978, when the receivership was terminated, tenants were charged the going market rate at the time of the rental. Thus, as a general rule the later an apartment was rented the higher the rental rate, since market rates for Manhattan residential properties were increasing during the period.
On August 5, 1977 HDC submitted an application to HUD for mortgage insurance for the project under Section 223(f). A rental schedule which represented the rent roll then in effect at the project was attached to the application. On March 2, 1978, HUD issued a commitment to insure a mortgage on the project in the amount of $12,034,500. The commitment contained a rental schedule virtually identical to the one supplied to HUD by HDC.
At the closing on September 13, 1978 the City's original mortgage was divided into (1) a Senior mortgage of $12,034,500 and (2) a Subordinate mortgage in the amount of $11,927,200 plus accrued unpaid interest. The receivership of the Administrator was terminated and control of the project was reconveyed to the owner. Finally, HUD insured the Senior mortgage and entered into a Regulatory Agreement with the owner.
The agreement provides that "Owners shall make dwelling accommodation and services of the project available to occupants at charges not exceeding those established in accordance with a rental schedule approved in writing by the Secretary." Def. Exh. D, Regulatory Agreement ¶ 4(a). The contract further provides that HUD will consider requests for increases in a previously approved rental schedule to compensate for increased costs over which the owner has no control or to provide funds to pay debt service under the Subordinate Mortgage if "market conditions warrant" and the economic stability of the project will not be jeopardized. Id. at ¶ 4(c).
The rental schedule annexed to the Regulatory Agreement at the time it was signed in September of 1978 was a copy of the one contained in the commitment issued by HUD in March of 1977, and was therefore almost identical to the original schedule submitted with the application thirteen months earlier. However, since the rental rates had been increasing proportionate to market rates between August 1977 and September 1978 the schedule approved by HUD in September, 1978 inaccurately reflected the rent role actually in effect at the project at the time the Regulatory Agreement became effective.
The discrepancy between the actual rent roll and the one approved by HUD was discovered a few months after the owner resumed operation of the Project. By letter dated March 27, 1979 the owner's managing agent requested that HUD correct the schedule. In response on June 21, 1979, HUD advised the owner that upon receipt of a complete application HUD would consider the request, an action which they later described as a "denial" of the owner's March application.
At some point between the owner's letter to HUD and HUD's response the tenants learned of the owner's request and wrote to HUD seeking an opportunity to comment on the owner's application. Despite HUD's "denial" of the owner's March request the tenants remained concerned about their rights with respect to rent setting procedures. In an apparent attempt to set up a procedure which would allow them to say as to HUD's consideration of future increase applications, the tenants requested, and were granted, a meeting with HUD representatives. At that meeting on July 24, 1979 the tenants were told that it was HUD's view that they had lost certain rights enjoyed by them under the old status as a Mitchell-Lama project. Nevertheless, HUD advised the tenants that in all *238 likelihood a written request by them to review future rent increase submissions would be granted.
On September 30, 1979 the project's managing agent posted a notice in each building of the complex informing the tenants of the owner's intent to file for an increase in the maximum gross potential rents. The owner applied to HUD for an increase from $2,452,857 to $2,698,143 on October 15, 1979. HUD allowed the tenants to review the owner's submissions and on November 10, 1979 certain tenants submitted written comments and materials to HUD in opposition to the application.
At the subsequent request of HUD, the owner submitted further information pertinent to the October application. Moreover, on February 22, 1980 in addition to submitting requested documents, the owner added papers seeking an increase in excess of $1,000,000 above the amount proposed by the owner on October 15. The latter increase was eventually granted by HUD, internally on May 15, 1980, and by formal action on July 22, 1980, without the tenants having been made aware of the increased application. This approval by HUD was the catalyst for the present suit.
III. Plaintiffs' Standing Under the Regulatory Agreement
The tenants assert claims against the owners, the managing agents, the City, HDC and HUD, the gravamen of which is that the rentals charged after September 13, 1978, in excess of those provided for in the rental schedule annexed to the Regulatory Agreement, were legally impermissible. In answer the defendants argue that the tenants have no standing to enforce the Regulatory Agreement between HUD and the project owners because they are not intended beneficiaries of the contract.
The defendants correctly assert that every federal court that has considered the issue of whether tenants are "intended" or "third party" beneficiaries of Regulatory Agreements entered into between HUD and project owners under HUD's various mortgage insurance programs have held that they are not. See, e.g., Falzarano v. United States, 607 F.2d 506, 511 (1st Cir. 1979) (§ 221(d)(3) program, below-market interest rates for insured mortgages, 12 U.S.C. § 17151(d)(3)); Ellis v. HUD, 551 F.2d 13 (3d Cir.1977), aff'g, No. 75-1721 (E.D.Pa. April 8, 1976) (§ 220 program, mortgage insurance for projects built in urban renewal areas, 12 U.S.C. § 175k); Harlib v. Lynn, 511 F.2d 51, 55-56 (7th Cir.1975) (§ 221(d)(3) program); LeGrand Reed v. Esplanade Gardens, Inc., No. 80 Civ. 3780 (S.D.N.Y.1981) (§ 223(f) program). Plaintiffs do not dispute that these have been the federal rulings but argue that those decisions do not control this case. Relying primarily on Zigas v. Superior Court of the State of California, 120 Cal.App.3d 827, 174 Cal.Rptr. 806 (1981), cert. denied, 455 U.S. 943, 102 S.Ct. 1438, 71 L.Ed.2d 655 (1982), the tenants argue that the facts of this case compel the conclusion that they are third party beneficiaries of the Regulatory Agreement. In Zigas, the California court held that tenants of a housing project had standing to enforce a regulatory agreement when the landlord was collecting more rent than the agreement authorized and the government failed to take action against him. However, Zigas is inapplicable to the instant action because, unlike Zigas, in which the third party beneficiary issue was decided based upon state law (since the suit was between private parties and raised no question regarding the liability of the United States) in the present case a federal government agency is a party and the outcome of this case will affect financial obligations of the United States. Accordingly, federal common law governs. See United States v. Standard Oil Co., 332 U.S. 301, 307, 67 S.Ct. 1604, 1907, 91 L.Ed. 2067 (1947); Clearfield Trust Co. v. United States, 318 U.S. 363, 63 S.Ct. 573, 87 L.Ed. 838 (1943); Holbrook v. Pitt, 643 F.2d 1261, 1270 n. 16 (7th Cir.1981).[15]
*239 It is established as a matter of federal law that to be entitled to enforce a contract a third party must be an intended, and not merely an incidental beneficiary. See, e.g., Holbrook v. Pitt, 643 F.2d at 1270. With respect to mortgage insurance Regulatory Agreements between HUD and project owners federal courts have consistently held that tenants of the projects are neither creditor, nor donee beneficiaries. See, e.g., Falzarano v. United States, 607 F.2d at 511; Harlib v. Lynn, 511 F.2d at 55-56; see also LeGrand Reed v. Esplanade Gardens, Inc., No. 80 Civ. 3780, slip op. at 23-24.
In Ellis v. United States Department of Housing and Urban Development, No. 75-1721 (E.D.Pa. Apr. 8, 1976), aff'd, 551 F.2d 13 (3d Cir.1977), the default provision of the Regulatory Agreement which the plaintiffs sought to enforce as third party beneficiaries was identical to the default provision in the case at hand.[16] The provision specifically empowers the Secretary of HUD to take various actions in the case of a breach of the agreement by the owner. The district court concluded and the third circuit affirmed, that the provision contained the exclusive remedies for a breach and held that there was no expression of intention that the plaintiffs-tenants were to be obligees of the Regulatory Agreement.
The Ellis analysis is applicable here since, as indicated, the default provisions are the same. Moreover, the Regulatory Agreement between HUD and West Village contains no provision which indicates an intent contrary to what is expressed in the default paragraph giving the Secretary the exclusive right to enforce the contract. We conclude the tenants are not intended beneficiaries of the agreement and therefore have no standing to enforce it. Accordingly, plaintiffs' second, third, fourth and fifth causes of action, each of which are based upon the Regulatory Agreement, are dismissed.
IV. Plaintiffs Due Process Claim
Applicability of Merola
The primary issue presented by the cross-motions for summary judgment is whether the due process clause of the Fifth Amendment gives the tenants of a housing project constructed under the Mitchell-Lama Law the right to notice of, and an opportunity to comment on, the owner's application for a rent increase before HUD approves it. Determination of the question depends on (1) whether the tenants' interest in receiving notice and the right to comment before a rent increase occurs is a constitutionally protected "property interest" and (2) whether there is sufficient government involvement to invoke the due process clause.[17] The defendants argue that neither the National Housing Act, the Mitchell-Lama Law, the Merola Law, nor HUD's own regulations grant the tenants a constitutionally protected property interest. The plaintiffs do not respond to the defendants' arguments that the NHA and the Mitchell-Lama Law do not grant the tenants a protected property interest, but rely instead on the Merola Law and the landlord's and HUD's practices and procedures. Turning first, then, to the Merola Law, as a threshold matter it must be determined whether that law was applicable to the *240 project after the date of the refinancing, that is September 13, 1978.[18]
The defendants contend that, whatever applicability the Merola Law may have had to the project before 1978,[19] the law was inapplicable to the project after the refinancing because of (1) HUD's assumption of management of the project and (2) the 1976 amendment to Section 31 of Mitchell-Lama, which provides in relevant part that
... rental rates [in HUD-insured Mitchell-Lama projects] shall be varied without regard to the provision of any general, special or local law which otherwise would limit or control such rental rates or the determination or variation thereof.
Plaintiffs respond that because the City continued to hold the subordinate Mitchell-Lama mortgage, despite the refinancing, the project remained a City-aided Mitchell-Lama project governed by Merola and under the partial supervision of HPD. They add that Merola is not within the purview of or affected by the Section 31 amendment because Merola is merely a procedural measure which does not restrict HUD's rent setting power.
In particular plaintiffs argue that the notice and hearing provisions of Merola do not purport to "limit", "control", "determine" or vary any rental rates. The contention, however, is premised on a misreading of the statute and is contrary to the "ordinary meaning" of the words used. See, e.g., Richards v. United States, 369 U.S. 1, 82 S.Ct. 585, 7 L.Ed.2d 492 (1962) (In the absence of evidence to the contrary it is to be assumed that the legislative purpose is expressed by the ordinary meaning of the words used). As we read the statute it suspends the applicability of laws which: (1) limit or control ... rental rates; or (2) limit or control the determination of ... rental rates; or (3) limit or control the variation of ... rental rates.
Nevertheless, even if Merola were deemed merely to set forth a "procedure", the practical result of holding that Merola is applicable to HUD would be to prohibit HUD from approving any rental increase *241 request in Mitchell-Lama projects without first providing 20 days advance notice to the tenants and holding a public hearing.[20] If Merola was applied, HUD would still be free, after holding such a hearing, to approve an owner's application even if presented with compelling reasons why a requested rate increase is unwarranted. Thus, the power of HUD to determine rents would not be constrained. However, our analysis assumes serious compliance with Merola, which, if it is to serve a valid purpose, mandates not only a hearing, but also requires that the criticisms, comments and information received are carefully evaluated and factored into any rent setting determination. Consequently, to require HUD to comply with Merola would, in effect, limit or control HUD in its determination or variation of rental rates, not only by mandating procedures and setting restrictive time frames, but also by governing the information which would control the outcome. This seems to be the result against which the amendment of Section 31 of Mitchell-Lama was meant to protect.
Moreover, as indicated below, the motivation behind the enactment of Section 31 and the manner upon which it was relied by HUD and the City in entering into a Reimbursement Agreement, supports this interpretation. The defendants argue, and the plaintiffs do not disagree, that the 1976 amendment was enacted to enable the state, and its political subdivisions, to meet the qualifications for obtaining mortgage insurance. HUD's regulations require the signing of a Reimbursement Agreement, and the agreement must warrant that the project for which mortgage insurance is sought is not subject to rent controls by the state, or any political subdivision thereof. 24 C.F.R. § 207.32a(k)(i). Paragraph four of the Reimbursement Agreement entered into by HUD and the City states:
HDC and HDA represent and warrant that pursuant to state legislation,
(1) The projects which constitute the security for the mortgages included in the portfolio are not subject to rent controls by the State of New York or any political subdivision thereof or any authority regulating rents pursuant to State or local laws, or to the requirements of Chapter 61, Section B61.0, subdivisions (a) and (b) of the New York City Administrative Code (the "Merola Law") concerning procedures for increasing rents and the timing of such rental increases. ...
This language makes it clear that the City interpreted the provisions of Section 31 as excluding HUD mortgage-insured projects from the operation of the Merola Law. Although the City's interpretation is not decisive as to whether by amending the law the State legislature intended to pre-empt the applicability of Merola to such projects, the clause in the agreement is significant evidence that that was the legislative purpose.
In further support of their contention that Merola is still viable, plaintiffs rely on Article XX, Section 1 of HPD's Rules which provides that housing companies refinanced under the 223(f) program remain subject to Mitchell-Lama and the Rules and Regulations governing City-aided limited-profit housing companies. However, that Section also states that the cited provisions apply "except as provided otherwise by agreement with, or regulations of ... HUD." (Emphasis supplied). Moreover, as the defendants correctly point out, Section 7 of HPD's Rules states in pertinent part:
HUD will be responsible for the approval of all rent/carrying charge increases with respect to all refinanced developments.[21]*242 When read together with HUD's Regulations and the Reimbursement Agreement, HPD's Rules support a conclusion that Merola is no longer viable after the 1976 amendment to Section 31 of Mitchell-Lama.
For the foregoing reasons we find the Merola Law was not applicable to West Village House after September 13, 1978.
Claimed Sources of Entitlement
Having concluded that Merola was not applicable to the project after the date of the refinancing, in September 1978, the question remains whether the tenants possessed a legitimate entitlement sufficient to invoke a right to procedural due process. The defendants argue that if the Merola Law was pre-empted by the refinancing, and we have concluded that it was, any previous "entitlement" of the plaintiffs arising from it was terminated. Plaintiffs respond that they clearly had an entitlement before the refinancing and they continued to possess it after September 1978 because the previous applicability of Merola had established a practice which gave rise to the tenants' reasonable expectation of a benefit within the meaning of Perry v. Sindermann, 408 U.S. 593, 92 S.Ct. 2694, 33 L.Ed.2d 570 (1972).
Although any tenant undoubtedly has a general interest in not having his rent increased, the right to procedural due process exists only when the interest in question rises to the level of a "property interest" as that term is defined, most notably, in Board of Regents v. Roth, 408 U.S. 564, 577, 92 S.Ct. 2701, 2709, 33 L.Ed.2d 548 (1972):
To have a property interest in a benefit a person clearly must have more than an abstract need or desire for it. He must have more than a unilateral expectation of it. He must, instead, have a legitimate claim of entitlement to it....
Property interests, of course are not created by the Constitution. Rather, they are created and their dimensions are defined by existing rules or understandings that stem from an independent source such as state-law rules or understandings that secure certain benefits and that support claims of entitlement to those benefits.
In Roth's companion case, Perry v. Sindermann, 408 U.S. 593, 92 S.Ct. 2694, 33 L.Ed.2d 570 (1972), the Court elaborated on its holding in Roth, concluding that an individual may be entitled to due process protection where he legitimately relies on "policies and practices" which create a reasonable expectation to a benefit.
Thus, the analysis must focus on the plaintiffs' claimed source of entitlement and whether plaintiffs had a legitimate basis to expect a benefit. Applying the Roth-Sindermann formula the Second Circuit held in Grace Towers Tenants Association v. Grace Housing Development Fund Co., 538 F.2d 491 (2d Cir.1976) that Section 221(d)(3) of the National Housing Act did not provide the tenants of a federally subsidized housing project with a legitimate entitlement. The court found that the purpose of the 221(d)(3) program was to promote the construction of housing by private enterprise, Id. at 494, and to accomplish that objective rent regulation was left to the "experienced discretion" of the Secretary. From these findings the court concluded the tenants could not legitimately expect either immunity from rental increases or participation in the process.
A different result had been reached in Burr v. New Rochelle Municipal Housing Authority, 479 F.2d 1165 (2d Cir.1973). There the tenants resided in apartments "controlled and operated by ... a public corporation organized under New York State law to provide low rent housing for persons of low income." The court held the tenants possessed a property interest under Roth, and that they were entitled to limited procedural safeguards prior to the landlord's imposition of across the board rent increases. However, the court did not focus on the claimed source of entitlement in their decision. Moreover, the above-quoted language, as well as the decision of the lower court, 347 F.Supp. 1202, 1205-6 (S.D.N.Y.1972) which the Second Circuit affirmed in relevant part, make it clear that the fact that the landlord itself was a "public *243 body" was an important factor in finding a due process entitlement.
Plaintiffs rely heavily on Gramercy Spire Tenants Association v. Harris, 446 F.Supp. 814 (S.D.N.Y.1977). The tenants in Gramercy Spire lived in apartments governed by the New York City Rent Stabilization Law ("RSL") and the court concluded that since they were the "intended beneficiaries" of the RSL, the law conferred upon the tenants a statutorily created property interest which entitled them to due process protection. However, the Gramercy apartments were under the concurrent regulation of the federal government and the City rent control laws from 1969 until HUD pre-empted the City laws in 1976. Here, in contrast, the City Merola Law became inapplicable to the project once it was under federal regulation by virtue of the amended Section 31 of the State Mitchell-Lama law.
Further, in contrast to the situation in Gramercy Spire, West Village Houses, the project in this case, has never been subject to New York City rent control laws.[22] However, a major purpose of Mitchell-Lama is to provide adequate housing to low income tenants, and West Village Houses is controlled by a company incorporated pursuant to that law. The certificate of incorporation states:
The Company has been organized to serve a public purpose.... All real and personal property acquired by it, and all structures erected or rehabilitated by it, shall be deemed to be acquired, rehabilitated or created for the proper effectuation of the purposes of the Act.
Moreover, assuming arguendo, that Merola was applicable before September 1978,[23] the tenants had a specific statutory right to notice and public hearing prior to the institution of rental increases. Thus, there is a strong argument for the proposition that under Roth and Burr the tenants at one time may have possessed a property interest to which due process attached. The question remains, however, whether that interest continued after the federal refinancing. The issue appears to be one of first instance.
Under Roth and Sindermann a determination that an entitlement exists depends on finding both that a statute (or rules or regulations) conferred an intended benefit on the plaintiff and that the conferring act is in effect at the time the claimed right to due process arises. As the Roth court put it: "[property interests] ... are defined by existing rules ... that secure certain benefits ...." 408 U.S. at 564, 92 S.Ct. at 2702 (emphasis supplied).
Here, there is no question that Merola secures certain benefits, namely, the right to notice of and an opportunity to comment on any proposed rent increase. Further, the law is, literally, in existence. However, since we have concluded that Merola was no longer applicable to West Village Houses once the development was refinanced through the Federal 223(f) program in September 1978, we accordingly conclude that after that date Merola no longer conferred a benefit upon the tenants who reside in the housing complex. Cf., Goldberg v. Kelly, 397 U.S. 254, 262, 90 S.Ct. 1011, 1017, 25 L.Ed.2d 287 (1969) ("[Welfare] benefits are a matter of statutory entitlement for persons qualified to receive them.") (Emphasis supplied).
We recognize that in Roth and Sindermann the Supreme Court was not faced with the question whether a statutory entitlement would continue to exist if the statute was later declared inapplicable. Nor, as previously stated, have we uncovered any other decisions which address the issue. However, in the very context of *244 tenants' rights it has been held that a "property interest" possessed by a tenant in a government housing project is terminated when the nature of the project changes. Russell v. Landrieu, 621 F.2d 1037 (9th Cir.1980) (Low income housing project tenants did not continue to maintain statutory entitlement to operation of project for low income renters after foreclosure on property by HUD and conveyance to later purchaser). Accordingly, we conclude that notwithstanding the fact that the plaintiffs may have been entitled to claim a "property interest" before September 1978, once the housing development became subject to federal regulations, the tenants in West Village no longer possessed such an entitlement.
Plaintiffs next assert that even if they do not possess a property interest under Merola, they legitimately relied on a "practice" established by HUD and the landlord when those parties gave plaintiffs notice and an opportunity for comment on the October 1979 increase application. The defendants answer that a "prior" practice could not have been established because (1) there were no rental increases for tenants in occupancy between its opening and the 1980 HUD-approved increase and (2) the February 22, 1980 request for a further increase was merely supplemental to the October request.
We find that the October and February requests constituted two separate applications because in spite of the fact that the second request did not include an entirely new set of forms, the landlord asked for a substantial increase over the initial application. The issue then, is whether the fact that the landlord posted notice and HUD allowed the tenants an opportunity to comment on the landlord's October application created a "practice" giving rise to a legitimate expectation of future participation.
The cases appear to find that a "practice" may arise in two ways: (1) where, as discussed above, a policy or procedure is contained in some form of written guidelines, see Perry v. Sindermann, 408 U.S. 593, 92 S.Ct. 2694, 33 L.Ed.2d 570 (1972) (teacher legitimately relied upon guidelines promulgated by the Coordinating Board of the Texas College and University System which provided that a teacher like himself had some form of job tenure); Argo v. Hills, 425 F.Supp. 151 (E.D.N.Y.1977) aff'd. mem., 578 F.2d 1366 (2d Cir.1978) (tenants had a legitimate expectation that their rents would not be increased without the procedures provided for in the Rent Stabilization Law being followed) or (2) less frequently, where a "custom" has been established. Cf., Lopez v. Henry Phipps Plaza South, Inc., 498 F.2d 937 (2d Cir.1974) (custom of renewal of leases under Federal Housing and Development Act gave tenants a property interest in continued occupancy and entitled them to some procedural safeguards in eviction proceedings). Here no written guidelines exist and no custom was ever established.
On September 30, 1979 the owner posted notice of his intent to file a rent increase. In November of that year HUD allowed the tenants to file comments in objection to the application. Based upon these actions the tenants assert the existence of an "established practice". No authority is cited for this proposition, and we conclude that the one-time occurrence on which plaintiffs rely is not enough under the decisions in this Circuit to have established a practice out of which due process protection arises.
Finally, plaintiffs argue that HUD's New York Office's voluntary adoption on July 11, 1980 of an internal procedure which would allow tenants in developments under the 233(f) program to have notice and an opportunity for comment on rent increase applications, created an entitlement. The defendants respond that (1) the owner's application had already been internally approved before the date of the adoption of the new procedures and (2) the new procedures were not intended to cover pending applications.
Documentary evidence in the record establishes that HUD had internally approved the owner's application as early as May 15, 1980 and that by letter of June 27, *245 1980 the owner was advised that formal approval was imminent. Moreover, the affidavit of Alexander Naclerio, Director of Housing in HUD's New York Office represents that the new procedures were adopted and went into effect after the approval of the West Village application.
Upon the foregoing facts and, in light of the United States Supreme Court's holding in Udall v. Tallman, 380 U.S. 1, 16-17, 85 S.Ct. 792, 801, 13 L.Ed.2d 616 (1965) that deference to the interpretation given an administrative regulation by the officers or agency charged with its administration is particularly in order, we find that the procedures adopted by the New York office were not applicable to West Village. It follows that the adoption of such procedures did not confer a benefit under which the tenants had a due process right.
V. Government Involvement
We have concluded above that Merola was no longer applicable to the project after September 1978. However, even if it were concluded that the plaintiffs legitimately relied on the continuing existence of Merola, the question would remain whether the existence of governmental involvement in this case was sufficient to invoke the due process clause, the absence of which would defeat plaintiffs' claim. The defendants do not directly address the issue of government action, arguing only that the due process clause has not been invoked here because this case is not an instance in which the government has pre-empted any local rent control laws. The plaintiffs assert that sufficient government involvement exists because the owners have been assisted in their venture by extensive governmental support under Mitchell-Lama. Although this is not such a case, they contend that where the government acts as landlord the tenants are entitled as a matter of right to notice of proposed rent increase applications and the right to comment thereon. There appear not to be any decisions which clearly resolve the question whether there is sufficient government action to invoke the clause on the facts presented in the instant case. However, determinations by the courts in this Circuit do set parameters by providing examples of when the government's role is, and is not sufficient to require due process.
The leading case is Langevin v. Chenango Court, Inc., 447 F.2d 296 (2d Cir.1971). Langevin involved a government authorized rental increase in a federal mortgage insurance § 221(d)(3) project. The court held that it was insufficient to invoke the due process clause since the government itself did not raise the rents, but rather, HUD merely "... allowed the landlord to institute an increase ... which he would have been legally free to do but for its regulatory agreement ...." The court stated:
The due process clause does not forbid Congress from deciding, if it wishes, that federal assistance to `private industry in providing housing for low and moderate income families and displaced families' in the form of insurance and purchase of low interest mortgages need not be conditioned on the granting of an evidentiary hearing with respect to rent increases, but, in the absence of some governmental scheme of rent control, whether general or particularized, may instead be confided to the decision of the experienced staff of the FHA, which has been instructed to subject rent increase applications to thorough investigation to the end that tenants should not be imposed upon.
Id. at 301.
In contrast with Langevin it is clear that where the government is itself the landlord due process will be invoked. See, e.g., Burr v. New Rochelle Municipal Housing Authority, 347 F.Supp. 1202 (S.D.N.Y. 1972), aff'd in relevant part, 479 F.2d 1165 (2d Cir.1973).
Since Langevin the question of government action in the context of project rentals has been addressed by several District Courts within this Circuit. In Klein v. Dept. of Housing and Urban Development, 416 F.Supp. 615 (E.D.N.Y.1976) the facts were that at the time HUD authorized rental increases in the apartment project *246 on which it had, as here, merely insured the mortgage, "no local agency-exercised or was endeavoring to exercise authority over the rents". Id. at 617. Relying on Langevin v. Chenango Court, Inc., 447 F.2d 296, the court held:
It is beyond dispute that when an agency of the United States, acting as a mortgagee, merely permits a landlord to increase rents and in no way repeals a local government rent control regulation such permission need not be preceded by hearings at which the tenants may be heard.
Klein v. Dept. of Housing and Urban Development, 416 F.Supp. at 617 (citations omitted); but see cf., Caramico v. Secretary of the Dept. of Housing and Urban Development, 509 F.2d 694 (2d Cir.1974) (where government's own regulations required the landlord to take certain specified action which impacted on the tenants there was sufficient governmental involvement to invoke due process).
In contrast to Klein, Argo v. Hills, 425 F.Supp. 151 (E.D.N.Y.1977), aff'd mem., 578 F.2d 1366 (2d Cir.1978), involved an apartment project with a HUD insured mortgage which was subject to the New York City Rent Stabilization Law and Rent Stabilization Code. When the local rent control board did not act upon the landlord's request for a rent increase, HUD determined that its interest in the guaranteed mortgage was in jeopardy and eventually issued a formal certification that it had pre-empted local rent controls pursuant to HUD regulations to protect the government's interests. The court held that the § 207 program alone was insufficient governmental involvement to invoke due process, but that where the government had not only insured the mortgage but had also taken the active measure of pre-empting local (rent control) law to insure its interests, the tenants were entitled to procedural due process. Id. at 156-57; see also Gramercy Spire Tenants Association, 446 F.Supp. 814 (S.D.N.Y.1977).
The relevant rules of law which emerge from these decisions can be summarized as follows: where HUD approves a rental increase, there is sufficient government involvement to invoke due process if the government is the landlord, or, if not the landlord, actively pre-empts local rent control law in authorizing the increase.
The facts of this case do not bring it within the penumbra of the decisions which found sufficient government action to require due process protection. Here the government is not the landlord and the project is not subject to New York's Rent Control or Stabilization Laws. Moreover, we have concluded in Point II above that the 1976 amendment to the Mitchell-Lama law revoked the applicability of the Merola Law to the project after September 13, 1978. HUD's 1980 approval of a rent increase, therefore, did not constitute government pre-emption of any local law controlling or restricting rents. Furthermore, although the tenants assert that there was sufficient government involvement (with the landlord) to trigger the right to due process because Washington Village Housing Corporation was organized and receives certain benefits under Mitchell-Lama (a state law), they do not explain why or how the state's involvement can be imputed to the federal government, against whom the tenants assert the due process claim. Finally, there is no allegation in the case at bar that the government in any way required the landlord to seek an increase in the project rents. Accordingly, we conclude that there is insufficient government action to invoke the due process clause in the instant action.[24]
*247 For the foregoing reasons the defendants' joint motion for summary judgment is granted and the plaintiffs' cross-motion is denied. The complaint is dismissed.
It is so ordered.
NOTES
[1] 12 U.S.C. §§ 1701 et seq. (1982).
[2] N.Y.PRIV.HOUS.FIN.LAW §§ 1 et seq. (McKinney 1976).
[3] N.Y.C.ADMIN.CODE Chapter 61, §§ B61.0(a) and (b).
[4] Plaintiffs Jan Allen Reiner, Peter Fairchild and Joseph Bilera bring this action individually and "on behalf of all others similarly situated". However, there has been no class certification, resolution of that issue having been stayed pending decision of the instant summary judgment motions.
[5] In their moving papers and during oral argument on the motion counsel for the City represented that the City and HDC argue this point only in the event that the defendants do not prevail on the other grounds urged in the joint memorandum for summary judgment. Since summary judgment is granted on the grounds set forth in the memorandum we do not consider these points.
[6] Section 223(f) authorizes the Secretary to administer the program under a variety of different Sections of the NHA. The Secretary has elected to administer the 223(f) program under Section 207.
[7] Housing and Urban Development, 24 C.F.R. § 207. 32a (1984).
[8] "Commissioner" refers to the Federal Housing Commissioner acting on behalf of the Secretary of Housing and Urban Development. 24 C.F.R. § 200.4.
[9] 24 C.F.R. § 207.32a(4)(k)(i).
[10] N.Y.PRIV.HOUS.FIN.LAW § 13.
[11] Id. § 31.
[[12]] The Housing and Development Administration ("HDA") was the predecessor agency to the Department of Housing Preservation and Development ("HPD").
[13] HPD is the supervising agency of City-aided Mitchell-Lama projects. N.Y.PRIV.HOUS. FIN.LAW §§ 2(15) and (17).
[14] The first management agent was Mandel Management Company. Grenadier Realty Corp. took over management of the project from January 1, 1977 to about March 20, 1980, at which time the responsibility was assumed by Kreisel Company Inc., the present manager. Only the latter two are defendants in this action.
[15] Even under state law principles plaintiffs' reliance on Zigas is misplaced. The California court found that the federal cases which held that tenants are not third party beneficiaries of a regulatory agreement were distinguishable from the action before them because in Zigas the contested rent increase was never HUD approved. That is not true of the disputed increase in this case.
[16] The relevant portion of ¶ 9(g) states:
Upon a violation of any of the above provisions of this Agreement by Owners, the Secretary may give written notice, thereof, to Owners, .... If such violation is not corrected to the satisfaction of the Secretary within thirty (30) days after the date such notice is mailed or within such further time as the Secretary determines is necessary to correct the violation, without further notice the Secretary may declare a default under this Agreement effective on the date of such declaration of default and upon such default the Secretary may: [take various other action].
[17] A third prong of the analysis, "what process is due?", is not at issue here with respect to the plaintiffs' due process claims.
[18] The defendants maintain, inter alia, that the Merola Law is invalid since it conflicts with the broad powers and discretion granted to HPD relating to rent increases under the state Mitchell-Lama Law and therefore was never applicable to the Project. The arguments on this point on their face have appeal. Nonetheless, the issue of whether Merola is invalid when construed with the state law has yet to be decided by the New York courts. In view of the fact that summary judgment is granted for the defendants on other grounds, we do not address this novel question of state law. Cf., Perry v. Sindermann, 408 U.S. 593, 604, 92 S.Ct. 2694, 2717, 33 L.Ed.2d 570 (1972) (Burger, C.J., concurring) ("Because the availability of the Fourteenth Amendment right to a prior administrative hearing turns in each case on a question of state law, the issue of abstention will arise in future cases .... If relevant state law is unclear, a federal court should, in my view, abstain....").
[19] The defendants do not dispute that the rentals in the project were subject to regulation by HPD pursuant to the provisions of Mitchell-Lama at least until September 13, 1978. Indeed, evidence submitted by the defendants in support of their joint motion supports this conclusion. See Lerner Affidavit at ¶ 2. Nor do the defendants dispute plaintiffs' assertion that the procedure for effecting rent increases at City-aided Mitchell-Lama projects is governed by the provisions of Section B 61.0 of the Administrative Code of the City of New York, i.e., the Merola Law, and that such provisions have been adopted by HPD in its regulations. However, the defendants argue that since the rents in the project were originally established by court order resulting from the foreclosure, and not by HPD, it follows that Merola, which provides for a hearing prior to HPD action on a rent increase, never applied to the project. As previously stated, when the Supreme Court, New York County, authorized the receiver to rent the apartments, each was rented at the market rate prevailing at the time of the individual rental. Since market rates were climbing during the period from the Spring of 1976 through September 13, 1978, the amount of rent paid by tenants in the project varied depending on when they rented an apartment unit. However, no tenant was subjected to a rent increase during the time he remained in his apartment and none requested a hearing to contest such an increase. Nonetheless, although no occasion may have arisen between 1976 and 1978 in which the hearing requirement would appropriately have been applied in this project, that fact does not justify the analytical leap necessary to conclude that the Merola Law was inapplicable. However, since we conclude that Merola was not applicable after 1978 in any event, we do not decide this issue.
[20] As the defendants correctly assert, unlike the limited due process protection which has been granted to tenants contesting a rental increase based on a legitimate claim of entitlement, see Burr v. New Rochelle Municipal Housing Authority, 479 F.2d 1165 (2d Cir.1973), the Merola Law requires a public hearing involving a hearing officer, testimony and other formal attributes.
[21] Although not decisive of the question before us, we note the defendants' argument that as a practical matter, the Merola requirement that HPD give notice and hold a public hearing is inconsistent with the 223(f) program under which HUD is responsible for rent regulation; plaintiffs do not address this discrepancy.
[22] Construction of the project was not completed prior to January 1, 1974, and post-January 1, 1974 buildings are not covered by New York's Rent Control or Stabilization Laws. N.Y. UNCONSOL. LAWS § Y51-3.0(h) (McKinney 1974) (New York City Rent Control Law); N.Y. UNCONSOL. LAWS §§ YY 51-3.0(a)(1) (McKinney 1974) (New York City Rent Stabilization Law); N.Y. UNCONSOL. LAWS § 8625 (McKinney Supp.1983-84) (Emergency Tenant Protection Act).
[23] See footnotes 18 and 19, supra.
[24] While we have concluded that the plaintiffs are not entitled to due process protection as a matter of law, there are also compelling policy considerations which lend additional support to this result. Although there are State statutes which continue to govern West Village Houses, management of the complex, including rents, is subject to the control of the federal government and is governed by federal laws and regulations. It is notable that the stated goal of the state program pursuant to which, in certain instances, Merola attaches, is to provide safe, low-cost housing. In contrast, this circuit has held that although suitable housing is one objective of the National Housing Act, the primary goal of the federal program is to encourage private industry involvement as a more efficient means by which to meet housing needs. See Grace Towers Tenants' Association v. Grace Housing Development Fund Co., 538 F.2d at 494; Langevin v. Chenango Court, 447 F.2d at 301. The successful administration of the federal program requires flexibility to insure its continued economic feasibility and to protect the economic interests of the federal government. See Hahn v. Gottlieb, 430 F.2d 1243 (1st Cir.1970). The Secretary has broad discretion in order to execute the statutory scheme. See Hahn v. Gottlieb, 430 F.2d at 1246; Grace Towers Tenants' Association v. Grace Housing Development Fund Co., 538 F.2d at 494.
It would be inconsistent with these policies and objectives, as well as the general policies protected by the Supremacy Clause, to conclude that a city statute requires the federal government to be bound by its terms.
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537 S.W.2d 749 (1976)
Larry Elton ATWOOD, Appellant,
v.
The STATE of Texas, Appellee.
No. 51563.
Court of Criminal Appeals of Texas.
June 16, 1976.
*750 Ted Allmond (on appeal only), Galveston, for appellant.
Jim Sharon Bearden, County Atty. and Patrick A. Clark, Asst. County Atty., Orange, Jim D. Vollers, State's Atty., and David S. McAngus, Asst. State's Atty., Austin, for the State.
OPINION
GREEN, Commissioner.
In a trial before a jury, appellant was convicted of attempted capital murder. Punishment was assessed at twenty-five years.
Considering the evidence in the light most favorable to the verdict, the record reveals that while Police Officer David Hamlett was questioning appellant concerning a traffic violation on July 7, 1974, and when he asked appellant to show his driver's license, appellant drew a knife from his back pocket and stabbed officer Hamlett in the stomach. Hamlett underwent an operation due to his wound, and was hospitalized for seven days. The sufficiency of the evidence is not challenged.
The 29-year old appellant initially contends that the court reversibly erred in overruling his objection to the following argument of the prosecuting attorney at the punishment stage:
"[Mr. Bearden (State)]: I told you Monday morning that the State of Texas was opposed to probation in this case. If I felt that this was the type of case that deserved to be probated, then with the Court's permission that could have been done. Ladies and Gentlemen, the Legislature did establish the right of probation and established it in the proper cases, probated deserved to be of young people, people who are seventeen and twenty-two, in that age bracket.
"MR. BAKER: Now, Your Honor, I
"MR. BEARDEN: That isn't any boy.
"MR. BAKER: I object to that. That is a gross misstatement of the law and I ask you to instruct the jury to completely disregard it.
"THE COURT: Your objection is overruled.
"MR. BAKER: Note our exception."
Prior to the commencement of the trial, appellant filed his motion for probation in the event of a conviction, and the issue of probation was submitted by the court in its charge to the jury with proper instructions as provided in Art. 42.12, Secs. 3 and 3a, V.A.C.C.P. prior to the argument at the penalty stage of which complaint is made. There was no limitation as to age in the charge on probation.
Appellant specifically contends that the above argument is a misstatement of the law in that it would limit the right of the jury to grant probation to defendants within the age bracket of between seventeen and twenty-two years of age, and would require the approval of the prosecutor with permission of the court. We do not construe the argument as necessarily bearing the interpretation as stated in appellant's contention. A more realistic construction is that the prosecuting attorney was stating his own views of when probation should be given. He argued that if he felt the case proper for probation, then with the court's permission probation "could have done." No objection was addressed to his giving his opinion. He continued, in rather indefinite language, to argue that the Legislature established the right of probation "in the proper cases," and in the remainder of the sentence somewhat ungrammatically expressed his view of a proper case by saying probation is deserved "of young people, people who are seventeen and twenty-two, in that age bracket."
Appellant's objection was limited to the argument being a "gross misstatement of the law." Had the prosecutor stated that probation was limited to defendants of any particular age bracket, he would have been guilty of a "gross misstatement of the law." See Art. 42.12, Secs. 3 and 3a, V.A.C.C.P. Although the argument may have been subject to objection, we do not find that it was subject to the objection made.
*751 Additionally, probation was not applicable to the twenty-five year punishment assessed by the jury. The maximum punishment for which probation may be granted is ten years. Art. 42.12, Secs. 3, 3a, V.A.C.C.P. The jury was instructed by the court in its charge that it could recommend probation if the punishment assessed was ten years or less, and if it found that appellant had never been convicted of a felony.
In Alexander v. State, Tex.Cr.App., 482 S.W.2d 862, three cases against the defendant were tried before a jury at the same time. The defendant plead guilty and filed for probation in each case. On appeal, he complained that the trial court committed reversible error in that it incorrectly advised the defendant that the jury could recommend probation in each case. He contended that under Art. 42.12, Sec. 3a, V.A. C.C.P., "the jury was foreclosed as a matter of law from returning more than one probated sentence in the three robbery cases."
In disposing of this contention, this Court said:
"The issue of probation was submitted to the jury in each case, and a verdict of 35 years was returned in each case. Therefore, the question is moot as to whether or not the jury could or would have granted probation."
In the instant case, the jury clearly showed that it had no intention of granting probation when it assessed punishment at twenty-five years. Under the facts of this case, error, if any, in the above quoted argument of the prosecuting attorney was harmless, and is not cause for reversal. The ground of error is overruled.
In the second ground, appellant contends the court erred in overruling his motion for a mistrial directed at the prosecutor's cross-examination of appellant at the punishment stage concerning charges filed against him for public intoxication and disturbing the peace, which charges did not result in convictions.
The evidence referred to in the argument under this ground of error is as follows:
"Q. Do you recall being arrested for being intoxicated on January the 14th, 1974?
"A. Well, now you see, they've got a bad habitcan I tell you
"Q. Just answer `Yes' or `No.' Do you recall that incident?
"A. 1-7-74 yeah, I believe.
"Q. Do you recall an incident on 10-8-72 of being arrested for D.W.I.?
"A. Right. Well, now, that hasn't ever gone to Court or anything.
"Q. Do you recall, also, fleeing from a police officer on that same occasion that you were arrested for D.W.I.?
"A. The fleeing from the police officer was right in my block. There was no fleeing to that.
"Q. Did you not pay a fine on that?
"A. Yeah, well, I paid a fine which shouldn't have been paid.
"Q. But you did pay a fine, didn't you?
"A. Well, yeahgenerallyI just paid it, you know?
"Q. And by paying a fine, that admits your guilt, doesn't it?
"A. Well, I was informed that I shouldn't have paid it.
"Q. Okay. Let me ask you this: Do you recall also the public intoxication and disturbing the peace on 2-12-65?
"MR. BAKER: Your Honor, we object to all this line of questioning about misdemeanor offenses, and at this time move for a mistrial on the grounds that the District Attorney is inquiring into specific misdemeanors, which he is not entitled to according to the law.
"THE COURT: Your objection is overruled, and your request for a mistrial is denied.
"MR. BAKER: Note our exception.
"BY MR. BEARDEN:
"Q. Do you recall that incident?
"A. What, in '65?
"Q. Yes, sir.
"A. I don't believe so."
No objection to the questions concerning the arrest for intoxication on January *752 14, 1974, the arrest for D.W.I. on October 8, 1972, or for fleeing from a police officer on that same date,[1] was made in a timely fashion sufficient to preserve error. It is fundamental that a timely objection must be urged at the first opportunity. See Stutes v. State, Tex.Cr.App., 530 S.W.2d 309; Hunter v. State, Tex.Cr.App., 530 S.W.2d 573; Cooper v. State, Tex.Cr.App., 500 S.W.2d 837.
The objection finally made by appellant was a general objection "to all this line of questioning about misdemeanor offenses" and was not specifically directed to the "public intoxication and disturbing the peace on 2-12-65." Additionally, appellant denied recalling any such incident. Reversible error is not presented.
The judgment is affirmed.
Opinion approved by the Court.
ODOM, Judge (concurring in part and dissenting in part).
I concur in the affirmance of this case with respect to the first ground of error because I do not believe the argument complained of was of sufficient gravity to have deprived appellant of a fair trial. I do, however, take exception to the majority's reliance on Alexander v. State, Tex.Cr.App., 482 S.W.2d 862, in its asserted alternative basis for disposing of this ground of error.
In Alexander, the defendant contended on appeal that the trial court had improperly admonished him with respect to the permissibility of jury-recommended probation in three jointly-tried, guilty plea cases. This issue of statutory construction was held moot because the punishment assessed in that case would have precluded such a recommendation in any event. Jury argument was not at issue there.
In Alejandro v. State, Tex.Cr.App., 493 S.W.2d 230, the conviction was reversed for improper prosecutorial jury argument on the subject of probation even though the punishment assessed precluded a recommendation for probation by the jury. In two separate dissents, both by Judge Douglas, it was asserted that Alexander v. State, supra, should have been applied. The inapplicability of that case, however, should have been obvious. To hold that improper jury argument regarding probation is harmless or the issue moot whenever it achieves its purpose of securing punishment to a degree that precludes a recommendation of probation or otherwise diminishes consideration of the issue is to hold in effect that the very success of the improper argument renders it harmless. This internal inconsistency should be apparent to all.
Although I agree that the argument complained of in the instant case does not present reversible error, I do so not because of the punishment assessed but despite it.
Having made these comments, I concur in the affirmance of this conviction.
ROBERTS, Judge (dissenting).
I concur in the opinion of my brother Odom only to the extent that he takes exception to the majority's reliance upon Alexander v. State, 482 S.W.2d 862 (Tex.Cr. App.1972). That case is in fact distinguishable for the reasons stated in Judge Odom's opinion.
However, I would hold that the argument constituted unsworn testimony outside the record and that reversal is required under the authority of Alejandro v. State, 493 S.W.2d 230 (Tex.Cr.App.1973), and Lott v. State, 490 S.W.2d 600 (Tex.Cr.App.1973), two cases where this Court reversed because of prosecutors' arguments which unfairly and illegally urged the jurors not to grant probation.
In Alejandro the prosecutor argued as a fact that the probation officer attached to the trial court already had 350 probationers under his supervision. The defendant's objection to this argument was overruled. The prosecutor then argued that the probation officer was supposedly limited to 75 probationers and that there was a special unit in the Texas Department of Corrections *753 for the first offenders, where the defendant could get a junior college education. The jury assessed punishment at 25 years, and this Court held that the argument required reversal.
In Lott, the prosecutor argued that there were different units in the Department of Corrections, including one for young offenders. He then argued that the defendant would be sent to the Ferguson Unit with other young offenders. Objections to these arguments were overruled. The jury assessed a term of ten years without probation; this Court reversed, holding that the error could not be labelled harmless.
The argument before us presents a stronger case for reversal than either Lott or Alejandro. Here, the prosecutor not only injected unsworn testimony in an obvious attempt to persuade the jury not to grant probation, he also completely misstated the law. Probation is clearly not limited to defendants within a given age group. See Article 42.12, Vernon's Ann.C.C.P., especially Sections 3, 3a, and 3d(a). Such a misstatement could only have served to prejudice the rights of the appellant.
Nor can I agree that the prosecutor was merely expressing his view of probation and who should receive probation. The only reasonable interpretation of the prosecutor's statement is that the Legislature had decided that only those between seventeen and twenty-two were entitled to probation.
Moreover, in this case, as in Lott and Alejandro, the appellant's objection was overruled; this compounded the error. Cherry v. State, 507 S.W.2d 549 (Tex.Cr. App.1974).
Finally, this case does not present the problem common to Lott and Alejandro, where it was suggested that the prosecutor's argument was invited; here, no such suggestion is madenor from this record could it be.
I can only conclude that we are faced with the situation described in Alejandro, where this Court held:
"To receive the stamp of approval of this court, jury arguments need to be within the areas of: (1) summation of the evidence, e. g., Ward v. State, Tex.Cr. App., 474 S.W.2d 471; Andrews v. State, 150 Tex.Cr.R. 95, 199 S.W.2d 510; (2) reasonable deduction from the evidence, e. g., Frazier v. State, Tex.Cr.App., 480 S.W.2d 375; Archer v. State, Tex.Cr. App., 474 S.W.2d 484; (3) answer to argument of opposing counsel, e. g., Turner v. State, Tex.Cr.App., 482 S.W.2d 277; Miller v. State, Tex.Cr.App., 479 S.W.2d 670; and (4) plea for law enforcement, e. g., Minafee v. State, Tex.Cr.App., 482 S.W.2d 273; Langham v. State, Tex.Cr. App., 473 S.W.2d 515. The arguments that go beyond these areas too often place before the jury unsworn, and most times believable, testimony of the attorney." 493 S.W.2d, at 231-232 (emphasis added).
The prosecutor's argument in this case was not within the areas approved by this Court. It unquestionably placed damaging believable testimony before the jury, testimony which was both unsworn and untrue.
The judgment should be reversed.
NOTES
[1] As to the conviction for fleeing from an officer, this was admissible as a part of appellant's criminal record at the punishment stage. See Article 37.07, Section 3(a), V.A.C.C.P.
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T.C. Memo. 2017-4
UNITED STATES TAX COURT
MICHAEL LOMBARDI, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 22245-13. Filed January 4, 2017.
Michael Lombardi, pro se.
Brian A. Pfeifer, for respondent.
MEMORANDUM FINDINGS OF FACT AND OPINION
VASQUEZ, Judge: Respondent determined deficiencies and penalties with
respect to petitioner’s 2010 and 2011 Federal income tax as follows:1
1
Unless otherwise indicated, all section references are to the Internal
Revenue Code (Code) in effect for the years at issue, and all Rule references are to
the Tax Court Rules of Practice and Procedure.
-2-
[*2] Penalty
Year Deficiency sec. 6662(a)
2010 $53,676 $10,735.20
2011 10,642 2,128.40
After concessions,2 the issues for decision are: (1) whether petitioner is entitled to
a deduction for meals and entertainment expenses for 2010 in excess of the
amount respondent allowed, (2) whether petitioner is entitled to a deduction for
legal and professional services expenses for 2010 in excess of the amount
respondent allowed, and (3) whether petitioner is liable for accuracy-related
penalties under section 6662(a).
FINDINGS OF FACT
Some of the facts have been stipulated and are so found. The stipulation of
facts and the attached exhibits are incorporated by this reference. Petitioner
resided in Miami, Florida, at the time he filed his petition.
I. Petitioner’s Business
During the years at issue petitioner was the sole shareholder and manager of
U.S. Opportunities, LLC (USO). USO was involved in recruiting foreign workers
2
Petitioner conceded that he must include an additional $209,402 in gross
income for 2010. Petitioner also conceded that he was entitled to a deduction of
only $3,016 for supplies for 2011 and that he could not deduct $14,569 of his total
claimed rent and lease expenses for 2011.
-3-
[*3] for seasonal jobs in the United States. USO’s clients included country clubs,
golf courses, national parks, ski resorts, and other similar organizations.
USO’s services were comprehensive. As USO’s manager, petitioner would
first find foreign workers willing to move to the United States temporarily.
Petitioner would then hire independent lawyers and other professionals to submit
visa applications on behalf of the workers. Finally, petitioner’s wife would find
housing for the workers near the work locations. Petitioner was successful in
recruiting many individuals during the years at issue, and he had clients that
requested his services every year.
II. Notice of Deficiency
Respondent issued a notice of deficiency to petitioner on July 16, 2013. In
the notice, respondent (1) disallowed $6,193 of petitioner’s claimed meals and
entertainment expense deduction for 2010; (2) disallowed $36,600 of petitioner’s
claimed legal and professional services expense deduction for 2010; and
(3) determined section 6662(a) accuracy-related penalties for 2010 and 2011.3
Petitioner timely filed a petition with this Court seeking redetermination.
3
Other adjustments in the notice were either conceded or are computational
and need not be addressed.
-4-
[*4] OPINION
I. Burden of Proof
As a general rule, the Commissioner’s determinations in a notice of
deficiency are presumed correct, and the taxpayer bears the burden of proving that
those determinations are erroneous. Rule 142(a); Welch v. Helvering, 290 U.S.
111, 115 (1933). Section 7491(a) shifts the burden of proof to the Commissioner
as to any factual issue relevant to a taxpayer’s liability for tax if the taxpayer meets
certain preliminary conditions. Higbee v. Commissioner, 116 T.C. 438, 440-441
(2001). This case is decided on the preponderance of the evidence and is not
affected by the burden of proof or section 7491(a).
II. Deductions Generally
Section 162(a) permits a taxpayer to deduct ordinary and necessary
expenses paid or incurred in carrying on a trade or business. See Commissioner v.
Lincoln Sav. & Loan Ass’n, 403 U.S. 345, 352 (1971). A trade or business
expense is ordinary if it is normal or customary within a particular trade, business,
or industry, and it is necessary if it is appropriate and helpful for the development
of the business. Commissioner v. Heininger, 320 U.S. 467, 471 (1943); Welch v.
Helvering, 290 U.S. at 113-114.
-5-
[*5] A taxpayer ordinarily must maintain adequate records to substantiate the
amounts of his or her income and entitlement to any deductions or credits claimed.
See sec. 6001; sec. 1.6001-1(a), Income Tax Regs. If, however, a taxpayer with
inadequate or nonexistent business records is able to prove that he or she paid or
incurred a deductible business expense but does not prove the amount of the
expense, we may estimate the amount allowable in some circumstances (Cohan
rule). See Cohan v. Commissioner, 39 F.2d 540, 542-544 (2d Cir. 1930). The
taxpayer must introduce sufficient evidence to permit us to conclude that the
taxpayer paid or incurred a deductible expense in at least the amount allowed. See
Williams v. United States, 245 F.2d 559, 560 (5th Cir. 1957); Vanicek v.
Commissioner, 85 T.C. 731, 743 (1985). In estimating the amount allowable, we
bear heavily upon the taxpayer who failed to maintain required records and to
substantiate expenses underlying deductions as the Code requires. See Cohan v.
Commissioner, 39 F.2d at 544.
For certain kinds of business expenses, section 274(d) overrides the Cohan
rule. See Sanford v. Commissioner, 50 T.C. 823, 827-828 (1968), aff’d per
curiam, 412 F.2d 201 (2d Cir. 1969). Section 274(d) provides that no deduction is
allowed with respect to travel, entertainment, and listed property (as defined in
section 280F(d)(4)) unless the taxpayer substantiates by adequate records or by
-6-
[*6] sufficient evidence corroborating the taxpayer’s own statement (1) the
amount of the expense or item; (2) the time and place of the travel, entertainment,
or expense; (3) the business purpose of the entertainment or expense; and (4) the
business relationship to the taxpayer of the person or persons entertained.
III. Meals and Entertainment
Petitioner argues he is entitled to deduct $24,7744 in meals and
entertainment expenses he incurred in 2010. In support of the deduction petitioner
produced copies of receipts and a schedule summarizing the contents of the
receipts. The receipts include petitioner’s handwritten statements where he
sometimes indicates the business purposes for the expenditures and/or the
identities of the individuals being entertained. Respondent concedes that
petitioner adequately substantiated expenses of $12,388 but argues that petitioner
has failed to substantiate the excess amount claimed.
The strict substantiation requirements of section 274 apply to “any item with
respect to an activity which is of a type generally considered to constitute
entertainment”. Sec. 274(d)(2). The term “entertainment” is defined to include
“providing food and beverages”. Sec. 1.274-2(b)(1)(i), Income Tax Regs.
4
All figures in this section relating to meals and entertainment expenses
have not been reduced by the 50% limitation provided under sec. 274(n).
-7-
[*7] Therefore, meals and entertainment expenses are subject to strict
substantiation requirements, and a taxpayer claiming a deduction for such an
expense must show (1) the amount of the expense, (2) the time and place of the
entertainment or expense, (3) the business purpose of the entertainment or
expense, and (4) the business relationship to the taxpayer of the “person or persons
entertained”. Sec. 1.274-5T(b)(3), Temporary Income Tax Regs., 50 Fed. Reg.
46015 (Nov. 6, 1985); see sec. 274(d).
We agree with respondent that petitioner adequately substantiated $12,388
in meals and entertainment expenses. However, we have reviewed petitioner’s
remaining receipts and find them to be inadequate to meet the strict substantiation
requirements under section 274(d). First, many of the receipts appear to be for
personal expenses. For example, petitioner included numerous receipts for single
cups of coffee that he consumed by himself. Petitioner also included many
receipts for meals he shared with his wife. These expenses do not generally relate
to any legitimate business purpose. Second, many of the receipts are illegible, and
we are unable to determine the amount, time, and/or place of each expenditure.
Finally, many of petitioner’s handwritten notations on the receipts do not indicate
the business relationship between petitioner and the person being entertained.
-8-
[*8] Under these circumstances, we find that petitioner can deduct only the meals
and entertainment expenses that respondent has conceded.
IV. Legal and Professional Services
Next we address whether petitioner is entitled to deduct expenses incurred
for legal and professional services in excess of what respondent has allowed.
Petitioner claimed a deduction of $87,129 on his 2010 return but argued at trial
that he is actually entitled to deduct $123,982.41. Respondent argues that
petitioner is entitled to deduct only $50,529.
A taxpayer may deduct the costs of legal and professional services if the
costs are ordinary and necessary and directly connected with the taxpayer’s
business. See sec. 162; Levenson & Klein, Inc. v. Commissioner, 67 T.C. 694,
719-721 (1977); sec. 1.162-1, Income Tax Regs. In substantiating his reported
expenses, petitioner provided credit card statements and canceled checks. Several
of the checks are inadequate because they are not related to costs incurred for legal
and professional services. For example, petitioner included several duplicate
checks and two checks labeled “commission” expenses. However, we find that the
remaining checks and credit card statements petitioner provided (as supported by
petitioner’s credible testimony) are ordinary and necessary expenses for USO and
sufficient to substantiate a large portion of the reported legal and professional
-9-
[*9] expenses. Accordingly, we find that petitioner is entitled to deduct $95,923
for legal and professional services expenses for 2010.
V. Accuracy-Related Penalty
We next determine whether petitioner is liable for accuracy-related
penalties. Pursuant to section 6662(a) and (b)(1) and (2), a taxpayer may be liable
for a penalty of 20% of the portion of an underpayment of tax attributable to:
(1) negligence or disregard of rules or regulations or (2) a substantial
understatement of income tax. Whether applied because of a substantial
understatement of income tax or negligence or disregard of rules or regulations,
the accuracy-related penalty is not imposed with respect to any portion of the
underpayment as to which the taxpayer acted with reasonable cause and in good
faith. Sec. 6664(c)(1). The decision as to whether the taxpayer acted with
reasonable cause and in good faith depends upon all the pertinent facts and
circumstances. See sec. 1.6664-4(b)(1), Income Tax Regs.
The term “negligence” in section 6662(b)(1) includes any failure to make a
reasonable attempt to comply with the Code and any failure to keep adequate
books and records or to substantiate items properly. Sec. 6662(c); sec.
1.6662-3(b)(1), Income Tax Regs. Negligence has also been defined as the failure
to exercise due care or the failure to do what a reasonable person would do under
- 10 -
[*10] the circumstances. See Allen v. Commissioner, 92 T.C. 1, 12 (1989), aff’d,
925 F.2d 348, 353 (9th Cir. 1991); Neely v. Commissioner, 85 T.C. 934, 947
(1985). The term “disregard” includes any careless, reckless, or intentional
disregard. Sec. 6662(c).
The term “understatement” means the excess of the amount of tax required
to be shown on a return over the amount of tax imposed which is shown on the
return, reduced by any rebate (within the meaning of section 6211(b)(2)). Sec.
6662(d)(2)(A). Generally, an understatement is a “substantial understatement”
when it exceeds the greater of $5,000 or 10% of the amount of tax required to be
shown on the return. Sec. 6662(d)(1)(A).
The Commissioner has the burden of production with respect to the
accuracy-related penalty. Sec. 7491(c). To meet this burden, the Commissioner
must produce sufficient evidence indicating that it is appropriate to impose the
penalty. See Higbee v. Commissioner, 116 T.C. at 446. Once the Commissioner
meets this burden of production, the taxpayer must come forward with persuasive
evidence that the Commissioner’s determination is incorrect. Rule 142(a); see
Higbee v. Commissioner, 116 T.C. at 447. The taxpayer may meet this burden by
proving that he or she acted with reasonable cause and in good faith with respect
- 11 -
[*11] to the underpayment. See sec. 6664(c)(1); see also Higbee v. Commissioner,
116 T.C. at 447; sec. 1.6664-4(b)(1), Income Tax Regs.
Respondent satisfied his burden of production to establish that imposition of
the penalty is appropriate because petitioner acted with negligence and disregard
of rules. Respondent showed that there were underpayments of tax for 2010 and
2011 resulting from petitioner’s failure to properly report income and to
substantiate expenses underlying his claimed deductions. On his 2010 return
petitioner failed to report over $200,000 in gross receipts and claimed numerous
business expense deductions for personal items such as meals with his wife. On
his 2011 return petitioner claimed deductions for supplies and rent that he later
conceded. Petitioner offered no evidence that he acted with reasonable cause and
in good faith. Accordingly, we hold that petitioner is liable for section 6662(a)
accuracy-related penalties, in amounts which the parties shall determine in their
Rule 155 computations for both tax years.5
5
In the event the Rule 155 computations demonstrate that petitioner’s
understatement of income tax for either year exceeds the greater of $5,000 or 10%
of the amounts of tax required to be shown on the returns, we conclude that the
underpayment for each year will also be attributable to a substantial
understatement of income tax for which petitioner has not shown reasonable
cause.
- 12 -
[*12] In reaching our holding, we have considered all arguments made, and to the
extent not mentioned, we consider them irrelevant, moot, or without merit.
To reflect the foregoing,
Decision will be entered under
Rule 155.
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FIRST DISTRICT COURT OF APPEAL
STATE OF FLORIDA
_____________________________
No. 1D17-643
_____________________________
DIEGO MEJIA-MACH,
Appellant,
v.
STATE OF FLORIDA,
Appellee.
_____________________________
On appeal from the Circuit Court for Suwannee County.
David W. Fina, Judge.
October 23, 2018
PER CURIAM.
AFFIRMED.
ROBERTS, RAY, and WINSOR, JJ., concur.
_____________________________
Not final until disposition of any timely and
authorized motion under Fla. R. App. P. 9.330 or
9.331.
_____________________________
Andy Thomas, Public Defender, and Danielle Jorden, Assistant
Public Defender, Tallahassee, for Appellant.
Pamela Jo Bondi, Attorney General, and Julian Markham,
Assistant Attorney General, Tallahassee, for Appellee.
2
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583 N.W.2d 458 (1998)
459 Mich. 21
PEOPLE of the State of Michigan, Plaintiff-Appellant, Cross-Appellee,
v.
Chester Leo POSBY, Defendant-Appellee, Cross-Appellant.
Docket No. 111619.
Supreme Court of Michigan.
September 15, 1998.
Frank J. Kelley, Attorney General, Thomas L. Casey, Solicitor General, Brian L. Mackie, Prosecuting Attorney, and Lenore M. Ferber, Assistant Prosecuting Attorney Ann Arbor, for people.
State Appellate Defender by Richard B. Ginsberg, Detroit, for defendant-appellee.
MEMORANDUM OPINION
In 1994, the defendant was found guilty, but mentally ill, of first-degree murder. Defendant appealed, and the Court of Appeals reversed defendant's conviction and remanded the case for further proceedings. 227 Mich.App. 219, 574 N.W.2d 398 (1997).
The prosecutor has applied to this Court for leave to appeal, and defendant applied for leave to appeal as cross-appellant. However, we are informed that the defendant has died.
Given the first-out rule, MCR 7.215(H), and the fact that the defendant's death prevents us from reviewing the Court of Appeals two to one opinion, we vacate the opinion and dismiss the application for leave to appeal and the application for leave to appeal as cross-appellant. MCR 7.302(F)(1).
MALLETT, C.J., and BRICKLEY, MICHAEL F. CAVANAGH, BOYLE, WEAVER, MICHAEL J. KELLY, and TAYLOR, JJ., concurred.
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840 F.Supp. 22 (1993)
Thomas CONTINI, et al., Plaintiffs,
v.
HYUNDAI MOTOR COMPANY, et al., Defendants.
No. 90 Civ. 3547 (VLB).
United States District Court, S.D. New York.
December 15, 1993.
*23 Harold L. Schwab, Lester Schwab Katz & Dwyer, New York City, for movant Hyundai.
Stephen Jenkins, Wiesen, Gurfein & Jenkins, New York City, for plaintiffs.
Monte J. Rosenstein, Rosenstein & Helhoski, Middletown, NY, for defendant Kappos.
MEMORANDUM ORDER
VINCENT L. BRODERICK, District Judge.
I
This case brought pursuant to diversity of citizenship jurisdiction under 28 USC § 1332 involves a rear end collision between a truck and the victim's car, leading to personal injuries.[1] The suit includes product liability claims by the plaintiffs, the victims of the accident, against the defendant Hyundai Motor Company ("Hyundai").
Plaintiff and some defendants argue that the Hyundai vehicle involved in the collision was defective because (a) its front seat collapsed backward too freely, contributing to the injuries sustained, and (b) its seat belt failed to restrain an occupant of the front seat. Hyundai has moved for summary judgment on the ground that its vehicle was not defective. I deny the motion without prejudice to its renewal within 45 days of the date of this memorandum order based upon a more complete factual showing as set forth below. Should the motion be renewed, all submissions of the parties currently on file will be deemed resubmitted, and may be supplemented by further materials relevant to the issues.
II
Evidence offered by Hyundai in support of its contention that it is in full compliance with regulatory requirements under 49 CFR § 571, while relevant and potentially persuasive, does not by itself establish beyond reasonable dispute that its vehicle was not defective. Such requirements, unless otherwise provided, do not affirmatively authorize any particular course of conduct. Compare Schmoeger v. Algonquin Gas Transmission Co., 802 F.Supp. 1084 (S.D.N.Y.1992). Instead, they merely establish minimum standards. The applicability of this general concept is specifically confirmed in the case of automobiles by 15 U.S.C. § 1397(c), which provides:
*24 Compliance with any Federal Motor Vehicle Standard ... does not exempt any person from liability under common law.
See generally Murphy v. Nissan, 650 F.Supp. 922 (E.D.N.Y.1987); Garrett v. Ford Motor Co., 684 F.Supp. 407 (D.Md.1987).
In a diversity of citizenship case, a United States district court sits as if a state court, and as such can, as would a state court, consider federal standards even if not directly binding. See Hofbauer v. Northwestern National Bank, 700 F.2d 1197, 1201 (8th Cir.1983); Mendel v. Production Credit Ass'n, 862 F.2d 180, 183 (8th Cir.1988). To hold a federal regulation binding if a federal statute expressly states the contrary, would, however, violate federal law contrary to the Supremacy Clause contained in Article VI § 2 of the Constitution. See Testa v. Katt, 330 U.S. 386, 67 S.Ct. 810, 91 L.Ed. 967 (1947); The Federalist No. 82 (Hamilton) in Modern Lib. ed. 534 (1937); see also Rodriguez v. Westhab, 833 F.Supp. 425 (S.D.N.Y. 1993).
Declining to hold compliance with regulatory standards a complete defense in products liability litigation does not mean they have no impact. A claim that a complying product is defective may be "implausible" and thus require "more persuasive evidence to support [it] than would otherwise be necessary." Matsushita Electric Industrial Co. v. Zenith, 475 U.S. 574, 587, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986). Public sector studies supporting regulatory requirements may also be considered pursuant to Fed. R.Evid. 803(8); see Beech Aircraft Corp. v. Rainey, 488 U.S. 153, 109 S.Ct. 439, 102 L.Ed.2d 445 (1988).
III
Stephen P. Wood, acting on behalf of the Chief Counsel of the National Highway Traffic Safety Administration in a letter to an industry association dated August 8, 1991, wrote on page 2 that under Standard 1209 S4.1(b), safety belts were required to be designed to be capable of restraining a passenger, and that failure of actual performance "could indicate that the lap belt failed to comply ..." (emphasis in original). Such ex parte staff advice, not formally adopted by the agency or published in the Federal Register, is not binding on the courts. See 5 U.S.C. § 552(a); 5 U.S.C. § 500 et seq.; 44 U.S.C. §§ 1501-1511. They may, however, be persuasive, just as commentary by non-governmental sources might be if perceptive. See Southwest Sunsites v. F.T.C., 785 F.2d 1431 (9th Cir.1986).
The Wood letter tends to undermine any contention that the existence of S4.1(b) offers a shield to an automobile manufacturer if its seat belt fails to function effectively. According to the letter, such a circumstance might well suggest a violation of the standard, although such a violation is not necessarily required for common law liability (see 15 U.S.C. § 1397).
IV
While plaintiffs have the ultimate burden of proof, Hyundai must establish that there is no genuine issue of material fact. Faced with the uncontroverted facts that the accident occurred and that the Hyundai vehicle's front seat collapsed backward in such a way as to contribute to the injuries incurred, and that its seat belts failed to restrain the front seat occupant, Hyundai has also offered expert affidavits and supporting studies indicating that its vehicle is properly designed. Hyundai's submissions, however, are incomplete or insufficient in the following respects:
(a) They do not establish in detail that the particular vehicle involved in the accident was properly manufactured, rather than that any manufacturing defect contributed to failure of the seat and seatbelt to restrain the front seat and its passenger sufficiently to prevent or more effectively mitigate the injuries suffered as a result of the accident.
(b) They do not indicate how effectively a state-of-the-art optimally designed and manufactured seat belt produced at the time of the vehicle involved would function to restrain a passenger in an accident such as that involved here, and how such performance would compare with that of the Hyundai involved in the accident.
(c) They do not indicate whether any vehicles of other manufacturers as of the date of the manufacture of the vehicle involved had front seat backs which would collapse backward less readily than did the seat back in *25 the Hyundai in question (whether because of one-sided gearing at the base of the seat or otherwise).
(d) They do not indicate what, if anything, is known about the safety record or accident experience with seats designed to collapse backward less readily than the Hyundai vehicle involved here.[2]
SO ORDERED.
NOTES
[1] See Contini v. Hyundai Motor Co., 149 F.R.D. 41 (S.D.N.Y.1993).
[2] Plaintiffs have submitted a videotape of a "60 Minutes" program containing statements that other manufacturers have utilized more rigid (but of course not entirely rigid) front seats.
Evidence need not be in admissible form to be considered in connection with a summary judgment motion under Fed.R.Civ.P. 56. Offshore Aviation v. Transcon Lines, 831 F.2d 1013, 1015 & n. 1 (11th Cir.1987); see also Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).
The hearsay contained in the "60 Minutes" program, while suggesting potential sources of admissible evidence as defined in Fed.R.Civ.P. 26((b)(1), is insufficiently specific to form any part of a basis for granting or denying summary judgment. Reliability is necessary for evidence to be considered under Fed.R.Evid. 403 even though it need not be in admissible form for purposes of Fed.R.Civ.P. 56; compare also Fed. R.Evid. 803(24), 804(b)(5).
Although I do not consider the "60 Minutes" videotape as affirmative evidence in favor of plaintiffs, Hyundai may initially be expected to have access to industry information concerning the existence of and experience with, firmer seat backs. Its failure to provide such information or to explain inability to do so might support an adverse inference. See Interstate Circuit v. United States, 306 U.S. 208, 225-26, 59 S.Ct. 467, 473-74, 83 L.Ed. 610 (1939); Brink's, Inc. v. City of New York, 717 F.2d 700 (2d Cir.1983); Fera v. Roche, 147 F.R.D. 58 (S.D.N.Y.1993); Rivera v. O'Neill, 146 F.R.D. 93 (S.D.N.Y.1993).
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67 So.3d 684 (2011)
STATE of Louisiana
v.
Ronald Joseph OURSO.
No. 10-1133.
Court of Appeal of Louisiana, Third Circuit.
June 1, 2011.
John F. DeRosier, District Attorney, Carla Sue Sigler, Assistant District Attorney, Lake Charles, LA, for Appellee, State of Louisiana.
G. Paul Marx, Lafayette, LA, for Defendant/Appellant, Ronald Joseph Ourso.
Court composed of JOHN D. SAUNDERS, OSWALD A. DECUIR and MARC T. AMY, Judges.
AMY, Judge.
As part of a plea agreement, the defendant pleaded guilty to possession of cocaine with intent to distribute and possession of methylenedioxymethamphetamine (MDMA) with intent to distribute. The defendant was sentenced to twenty years on each count. The trial court ordered the sentences to run concurrently and to run concurrently with the defendant's sentence in another case. The defendant appeals his sentences. On appeal, defense counsel seeks to withdraw pursuant to Anders v. *685 California, 386 U.S. 738, 87 S.Ct. 1396, 18 L.Ed.2d 493 (1967). For the following reasons, we affirm his convictions. We affirm his sentence for the possession of cocaine with intent to distribute conviction, and vacate his sentence for the possession of MDMA with intent to distribute conviction and remand for resentencing. We deny defense counsel's motion to withdraw.
Factual and Procedural Background
After using an informant to perform a "buy," the Calcasieu Parish Combined Anti-Drug Team obtained and executed a search warrant at the defendant's residence. Based on the results of the search, the defendant was arrested and charged with possession of cocaine with intent to distribute, a violation of La.R.S. 40:967(A)(1); possession of MDMA with intent to distribute, a violation of La.R.S. 40:966(A)(1); and illegal use of currency, a violation of La.R.S. 40:1049.
The defendant's motion to suppress the evidence obtained as a result of the warrant was denied. He subsequently withdrew his plea of not guilty and entered a plea of guilty to the charges of possession of cocaine with intent to distribute and possession of MDMA with intent to distribute. At the same time, the defendant entered a plea of guilty to the charges in a separate case.[1] As part of the plea agreement, the State dropped the instant charge of illegal use of currency, other pending charges of sexual battery, and agreed not to charge the defendant as a habitual offender.
The defendant was subsequently sentenced to twenty years at hard labor on both counts, to run concurrently and to run concurrently with his other charges. The defendant filed a motion to reconsider sentence, which was denied by the trial court without a hearing.
The defendant appeals, asserting as error that his sentence is unconstitutionally excessive. Appellate counsel has filed a brief pursuant to Anders v. California, 386 U.S. 738, 87 S.Ct. 1396, 18 L.Ed.2d 493, in this matter.
Discussion
Errors Patent
Pursuant to La.Code Crim.P. art. 920, all appeals are reviewed for errors patent on the face of the record. After reviewing the record, we find an error patent concerning the defendant's sentence for possession of MDMA with intent to distribute.
The underlying offenses in this case occurred on February 24, 2006. One of the charges upon which the defendant was convicted is possession of MDMA, a schedule I controlled substance, with intent to distribute in violation of La.R.S. 40:966(A)(1). At the time of the offense, La.R.S. 40:966(B)(1) provided that any person who violates subsection (A) with respect to a non-narcotic drug "shall upon conviction be sentenced to a term of imprisonment at hard labor for not less than five years nor more than thirty years, at least five years of which shall be served without benefit of parole, probation, or suspension of sentence, and pay a fine of not more than fifty thousand dollars." (Emphasis added.)
However, when the trial court sentenced the defendant to twenty years at hard labor on this count, it did not specify how many years were to be served without the benefit of parole, probation, or suspension of sentence. While La.R.S. 15:301.1 typically obviates the need to correct the sentence, where the statute gives the trial *686 court discretion as to the number of years imposed to be served without benefits, the reviewing court should vacate the illegally lenient sentence and remand for resentencing. Thus, we vacate the defendant's sentence for his conviction of possession of MDMA with intent to distribute and remand for resentencing. State v. Mayeux, 06-944 (La.App. 3 Cir. 1/10/07), 949 So.2d 520.
Accordingly, we vacate the defendant's sentence for his conviction of possession of MDMA with intent to distribute and remand to the trial court for resentencing on that count.
Anders Brief Analysis
The defendant's appellate counsel, citing Anders v. California, 386 U.S. 738, 87 S.Ct. 1396, 18 L.Ed.2d 493, has filed a brief asserting that he has thoroughly reviewed the trial court record and cannot find any non-frivolous issues to raise on appeal.
The procedure following the submittal of an Anders brief is well-settled. The fourth circuit explained the Anders analysis in State v. Benjamin, 573 So.2d 528, 531 (La.App. 4 Cir.1990):
When appointed counsel has filed a brief indicating that no non-frivolous issues and no ruling arguably supporting an appeal were found after a conscientious review of the record, Anders requires that counsel move to withdraw. This motion will not be acted on until this court performs a thorough independent review of the record after providing the appellant an opportunity to file a brief in his or her own behalf. This court's review of the record will consist of (1) a review of the bill of information or indictment to insure the defendant was properly charged; (2) a review of all minute entries to insure the defendant was present at all crucial stages of the proceedings, the jury composition and verdict were correct and the sentence is legal; (3) a review of all pleadings in the record; (4) a review of the jury sheets; and (5) a review of all transcripts to determine if any ruling provides an arguable basis for appeal. Under [La. Code Crim.P.] art. 914.1(D) this Court will order that the appeal record be supplemented with pleadings, minute entries and transcripts when the record filed in this Court is not sufficient to perform this review.
Pursuant to Anders, 386 U.S. 738, 87 S.Ct. 1396, and Benjamin, 573 So.2d 528, we have thoroughly reviewed the record, including pleadings, minute entries, the charging instrument, and the transcripts. The defendant was provided an opportunity to file his own brief, but did not do so.
A review of the record reveals that the defendant was present and represented by counsel at all crucial stages of the proceedings. Further, the defendant entered a free and voluntary guilty plea after properly being advised of his rights in accordance with Boykin v. Alabama, 395 U.S. 238, 89 S.Ct. 1709, 23 L.Ed.2d 274 (1969). The entry of a guilty plea waived any pre-plea non-jurisdictional defects. See State v. Washington, 10-413 (La.App. 3 Cir. 11/3/10), 50 So.3d 274, citing State v. Crosby, 338 So.2d 584 (La.1976). With regard to his sentence for possession of cocaine with intent to distribute, the defendant received a legal sentence, and we find that an argument for excessive sentence on this conviction would be frivolous and futile.
We have noted the illegality of the defendant's possession of MDMA with intent to distribute sentence. Our review of the record has not revealed any other issues which would support an assignment of error on appeal.
*687 However, because we have vacated the defendant's possession of MDMA with intent to distribute sentence and remanded for resentencing, further proceedings remain in this matter. Therefore, appellate counsel's motion to withdraw is denied. State v. Brister, 02-486 (La.App. 3 Cir. 10/30/02), 829 So.2d 1128.
DECREE
For the foregoing reasons, we affirm the defendant's convictions and his sentence for possession of cocaine with intent to distribute. We vacate the defendant's sentence for possession of MDMA with intent to distribute, and remand to the trial court for resentencing. Appellate counsel's motion to withdraw is denied.
CONVICTIONS AFFIRMED. SENTENCE FOR POSSESSION OF COCAINE WITH INTENT TO DISTRIBUTE AFFIRMED. SENTENCE FOR POSSESSION OF METHYLENEDIOXYMETHAMPHETAMINE (MDMA) WITH INTENT TO DISTRIBUTE VACATED AND REMANDED FOR RESENTENCING. MOTION TO WITHDRAW DENIED.
NOTES
[1] The defendant's conviction and sentence in Calcasieu Parish Docket No. 18423-08, are on appeal in State v. Ourso, 10-1126 (La.App. 3 Cir. 6/1/11), 67 So.3d 680.
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319 F.2d 606
Howard G. ZEYHER, Plaintiff-Appellant,v.S.S. & S. MANUFACTURING COMPANY, Inc., Defendant-Appellee.Howard G. ZEYHER, Plaintiff-Appellant,v.The JASPER CORPORATION, Defendant-Appellee.
Nos. 13954-13955.
United States Court of Appeals Seventh Circuit.
June 28, 1963.
Thomas M. Merrill, Jr., Frederick C. Fiechter, Jr., Warren M. Ballard, Philadelphia, Pa., F. Wesley Bowers, Butt, Bowers & Angermeier, Evansville, Ind., for appellant.
Fred P. Bamberger, Evansville, Ind.; Bamberger, Foreman Oswald & Hahn, Evansville, Ind., of counsel, for appellee.
Before HASTINGS, C.J., and DUFFY and KILEY, JJ.
KILEY, Circuit Judge.
1
These diversity suits depend upon an alleged breach of a sales commission contract. They were consolidated for trial, without a jury, which resulted in findings and judgments for defendants. Plaintiff has appealed.
2
The alleged contract was made in Indiana by plaintiff and S.S. & S. Manufacturing Company, Inc. on August 27, 1959, for a term of three years during which plaintiff undertook to serve S.S. & S. as a sales engineer in selling its cabinets to the radio, television, and high fidelity industry. On October 28, 1960, the directors of Jasper Corporation agreed to acquire all of the stock of S.S. & S. On November 15, 1960, S.S. & S. notified plaintiff that the 'contract' would not be honored by its new owner, the Jasper Corporation. These suits followed, charging S.S. & S. with breach of the 'contract' and Jasper with the tort of inducing the breach.
No. 13954
3
The District Court concluded the 'contract'1 lacked mutuality, certainty, and consideration; and that it was invalid and unenforceable. The conclusion rested on findings that the 'contract' did not bind plaintiff to secure any orders, nor to sell a minimum or maximum of S.S. & S. products; did not provide for a reasonably certain way of determining the sales price or prices of S.S. & S. products; did not bind S.S. & S. to accept any orders submitted by plaintiff; and did not provide a formula for determining when, if any, an obligation to accept an order would arise.
4
Plaintiff does not specifically challenge the findings. He claims the District Court's conclusion is erroneous, and argues that S.S. & S. received all it bargained for and that consequently there was consideration. This argument assumes a 'bargain' and that 'plaintiff was to procure orders' from Warwick. Plaintiff begs the questions in the case.
5
The courts in Indiana 'will not' find uncertainty in contracts if logical construction can find certainty, but to be valid and enforceable the contract must be reasonably definite and certain. International Shoe Co. v. Lacy, 114 Ind.App. 641, 53 N.E.2d 636 (1944). There the Appellate Court of Indiana en banc found that neither party could compel the other to perform and cited a decision of this court, Jordan v. Buick Motor Co., 75 F.2d 447 (7th Cir.1935), to support its decision that the alleged contract before it lacked certainty. This court, in Jordan, found the agreement too indefinite in that it failed, among other things, to specify the number of cars or models which were to be ordered or delivered, and the cost price or terms of payment.
6
We think these cases support the conclusion of the District Court, drawn from its unchallenged findings, that the alleged contract was invalid and unenforceable for lack of certainty and mutuality, and we hold that the conclusion is not erroneous. We find no obligation which either party can legally enforce against the other.
7
W. P. Iverson & Co. v. Dunham Mfg. Co., 18 Ill.App.2d 404, 152 N.E.2d 615 (1958), cited by plaintiff, was a 'malicious interference' case, in which the court decided initially that the alleged contract was valid and enforceable. The court found that though the contract did not express a specific amount of goods on which commission was to be paid, there was a provision that if Iverson & Co. did not sell at least $150,000 in any 'anniversary year,' the contract could be cancelled. The court thought that this implied enough specificity.2 There is no such provision in the 'contract' before us.
8
In Wood v. Lucy, Lady Duff-Gordon, 222 N.Y. 88, 118 N.E. 214 (1917), the court implied consideration where defendant gave an exclusive agency, and unless the agent 'gave his efforts, she could never get anything.' That is not true of S.S. & S. because plaintiff did not have an exclusive agency. We do not find in the case at bar the facts which in Lady Duff-Gordon impelled the court to conclude that the transaction there 'was instinct with obligation.'
9
The claim in Eastern Paper & Box Co. v. Herz Mfg. Corp., 323 Mass. 138, 80 N.E.2d 484 (1948), was for damages for completed sales under an oral contract and not as here for damages for sales that might have been made by plaintiff. Moreover, in contrast to the case at bar, the plaintiff there promised to secure the United Drug business for defendant. In Mandel v. Liebman, 303 N.Y. 88, 100 N.E.2d 149 (1951), the court implied a 'requirement' that plaintiff perform services. The contract there was 'similar in most respects to contracts in current and general use in the entertainment industry.' None of these cases militates against the District Court's conclusion in the case at bar.
10
Finally, we see no merit in the contention of plaintiff that his performance under the 'contract' obviated whatever lack of certainty or mutuality may have existed when the 'contract' was made. This argument presupposes a valid contract. We have decided the District Court's conclusion that the 'contract' was invalid is not erroneous. The case of Rubin v. Dairyman's League Co-op. Ass'n, 284 N.Y. 32, 29 N.E.2d 458 (1940) is not helpful to plaintiff. There the trial court had adopted a jury's finding that the contract was made and the decision was that the Co-op was bound to pay commissions for sales made before the contract was terminated because plaintiff had performed and the Co-op had accepted the benefits of his performance. Here plaintiff makes no claim for commission on orders he procured which defendant accepted.
11
We think that plaintiff's actions for S.S. & S. could not render the 'contract' valid since it was, from the beginning, invalid and unenforceable. Red Wing Shoe v. Shepherd Safety Shoe Corp., 164 F.2d 415, 418 (7th Cir.1947). What transpired under the 'contract' was 'a series of fully executed orders, each complete within itself.' 164 F.2d 415, at 419.
12
We do not reach the question of damages raised by plaintiff.
13
The judgment is affirmed.
No. 13955
14
The District Court found that Jasper had neither ratified nor accepted the 'contract' between plaintiff and S.S. & S., and that Jasper's purposes in acquiring control of S.S. & S. were neither to terminate the 'contract' nor to cause damage to plaintiff. The court concluded Jasper had not induced or coerced the breach of a valid and enforceable contract between plaintiff and S.S. & S., and that plaintiff was not entitled to recover damages from Jasper for any alleged wrong done him.
15
It follows from our decision in No. 13954 that the District Court's findings in this tort action, dependent upon breach of the 'contract,' are not clearly erroneous and its conclusions are not erroneous.
16
The judgment is affirmed.
1
The 'contract,' in the form of a letter dated August 27, 1959, from the President of S.S. & S. Manufacturing Company, Inc., to Mr. Howard G. Zeyher, reads as follows:
'S.S. & S. Manufacturing Company, Inc., does hereby employ you as Sales Engineer for the sale of its products * * * for a period of three (3) years, upon the following terms and conditions:
'1. All orders received from * * * Warwick Manufacturing Corporation, will be * * * paid on the following basis:
'3% Of Net Sales, less carton costs, F.O.B. Evansville, Indiana, until sales reach $500,000.00.
'2. All commission shall be subject to payment by the customer.
'3. All quotations and commitments which shall be binding upon the S.S. & S. Manufacturing Company, Inc., must be on orders accepted in writing by the S.S. & S. * * * Each quotation shall clearly state the price, terms and conditions of sale.'
The letter was signed by the President of S.S. & S., and, after the word 'Accepted,' signed by plaintiff.
2
In addition, there were mutual promises in Iverson
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711 F.Supp. 574 (1988)
STATE OF ALABAMA, etc.; et al., Plaintiffs,
v.
The UNITED STATES ENVIRONMENTAL PROTECTION AGENCY; et al., Defendants,
Chemical Waste Management, Inc.; et al., Intervenors.
Civ. A. No. 88V-987-N.
United States District Court, M.D. Alabama, N.D.
December 15, 1988.
*575 Don Siegelman, Atty. Gen., State of Ala., pro se and for plaintiffs.
R. Craig Kneisel, Robert D. Tambling, Asst. Attys. Gen., Office of the Atty. Gen., Montgomery, Ala., Edward S. Allen, Marshall Timberlake, John P. Scott, Jr., Marrtha F. Petrey, Balch & Bingham, Birmingham, Ala., and David R. Boyd, Balch & Bingham, Montgomery, Ala., for plaintiffs.
Bradley S. Bridgewater, Atty., U.S. Dept. of Justice, Land and Natural Resources Div., Washington, D.C., Fournier J. Gale, III, H. Thomas Wells, Jr., Alfred F. Smith, Jr., Maynard, Cooper, Frierson & Gale, P.C., Birmingham, Ala., and Roger C. Zehtner and Therese M. Yasdick, Chemical Waste Management, Inc., Oak Brook, Ill., for intervenor Chemical Waste.
Jim Mattox, Atty. Gen., State of Tex., Mary F. Keller, First Asst. Atty. Gen., Lou McCreary, Executive Asst. Atty. Gen., Nancy N. Lynch, and John R. Carter, Asst. Attys. Gen., Austin, Tex., for intervenor State of Tex.
OPINION
VARNER, District Judge.
This cause is submitted on Plaintiffs' Motion for Partial Summary Judgment filed herein October 31, 1988, and on all the materials filed in support of or in opposition to said motion.
This case involves the proposed shipment of 47,000 tons of contaminated soil from Geneva, Texas, to Emelle, Alabama. The pertinent facts of this case were extensively set out in this Court's Memorandum Opinion and Order dated October 21, 1988, and will not be restated here.
Plaintiffs move this Court for a partial summary judgment in their favor as to Counts One, Five, Eight and Nine of their Complaint, which ask this Court to grant a permanent injunction requiring the Defendants, the United States Environmental Protection Agency [EPA] and Lee M. Thomas, to (1) reopen the Record of Decision dated September 18, 1986, for the Geneva Industries Site and (2) allow Plaintiffs, after proper notice, an opportunity to be heard and participate in the development of any remedial action at the Geneva Industries Site. Plaintiffs also request the Court to tax their costs, disbursements and attorneys' fees against Defendants.
Counts One, Five, Eight and Nine of Plaintiffs' Complaint all concern the issue of whether or not Defendant EPA provided the State of Alabama proper notice and an opportunity to be heard concerning the decision to send said contaminated soil to the Emelle facility. Plaintiffs' claims are based on the Comprehensive Environmental Response, Compensation and Liability Act of 1980 [Act], regulations adopted pursuant thereto and the Fifth Amendment to the United States Constitution.
In opposition to Plaintiffs' Motion for Partial Summary Judgment, Defendants contend that the Complaint should be dismissed for lack of jurisdiction and improper venue as notice is not required under either the Act or the Constitution and, even if notice is required, there are material facts in dispute.[1]
*576 In determining whether summary judgment is appropriate, the Court should decide whether the moving party has met his burden of showing that there is no genuine issue of material fact and that he is entitled to judgment as a matter of law. Washington v. Dugger, 860 F.2d 1018, 1020 (11th Cir.1988). The moving parties, Plaintiffs, have shown to this Court by affidavits that Plaintiffs did not receive notice from the Defendants before a decision was made to send the contaminated soil to Alabama.
Defendants argue that Plaintiffs, in fact, had notice in the summer of 1988 and had an opportunity to discuss the decision to send said soil to Alabama with officials of the EPA, including Defendant Thomas, Administrator of the EPA. Copies of letters showing correspondence between the State of Alabama and the EPA are included as exhibits to Defendants' opposition filed October 12, 1988, to Plaintiffs' motion for preliminary injunction. However, these letters are not proper evidence to be considered on motion for summary judgment and, therefore, were not taken into consideration.
While the Code sections pertinent to this case require a predetermination notice, the evidence properly submitted to the Court shows that the determination to ship the soil to Alabama was made prior to the State of Alabama's having received any notice of such a shipment. It is possible to waive notice in some instances. There is no competent evidence in this case to show whether Alabama officials did or did not waive any notice by corresponding and meeting with officials from Washington this summer, but, clearly the State of Alabama did not originally waive notice of the original proceedings before the determination was made to send the soil to Alabama.
Therefore, Plaintiffs' Motion for Partial Summary Judgment will be granted.[2] Plaintiffs moved for summary judgment as to Counts One, Five, Eight and Nine of their Complaint. The other counts of the Complaint concern the question of whether alternative remedial methods would have been the proper method for this contaminated soil. Those matters should be determined after conciliation with the State of Alabama by the EPA (President's appointee).
An Order will be entered in accordance with this Opinion.
ORDER
In accordance with the Opinion entered in the above-styled cause on this date, it is ORDERED, ADJUDGED and DECREED by this Court:
1. That Plaintiffs' Motion for Partial Summary Judgment filed herein October 31, 1988, be, and the same is hereby, granted and Defendants, the United States Environmental Protection Agency and its Administrator, Lee M. Thomas, their officers, employees and all persons acting by, through and for them [U.S. Government Defendants], are hereby ORDERED to reopen the Record of Decision dated September 18, 1986, for the Geneva Industries Site and reconsider the remedial action to be taken at the Geneva Industries Site after statutory mandated notice and reconciliation with the State of Alabama.
2. That the Cross-Motion for Summary Judgment filed herein November 10, 1988, by Intervenor State of Texas be, and the same is hereby, denied. The Motion for Continuance contained in said Cross-Motion for Summary Judgment is hereby denied as moot.
3. That the Motion for Summary Judgment filed herein November 10, 1988, by Intervenor Chemical Waste Management, Inc., be, and the same is hereby, denied.
4. That the Federal Defendants' Motion to Dismiss or, in the alternative, Motion for Partial Summary Judgment filed herein *577 November 10, 1988, be, and the same is hereby, denied.
5. That the above-styled cause is hereby dismissed, and the Court hereby reserves ruling on the question of attorneys' fees, costs, etc.[1]
NOTES
[1] The Court has previously ruled on Defendants' claims concerning jurisdiction, venue and whether notice was required in its Memorandum Opinion and Order dated October 21, 1988. Therefore, those claims will not be discussed further.
[2] The Federal Defendants and both Intervenors, Chemical Waste Management, Inc., and the State of Texas, filed motions for summary judgment or motions to dismiss with their responses to Plaintiffs' Motion for Partial Summary Judgment. These other motions for summary judgment and motions to dismiss will be denied.
[1] The primary issues in this case are pending on an interlocutory appeal in the United States Court of Appeals for the Eleventh Circuit. This final Order herein, except for the question of attorneys' fees and costs, is entered with the hope that the disposition by the Court of Appeals may give full guidance to the parties as to pertinent law. Thereafter, the question of attorneys' fees and costs may be fully determined.
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229 Ind. 483 (1951)
99 N.E.2d 247
STATE EX REL. INDIANA ALCOHOLIC BEVERAGE COMMISSION
v.
SUPERIOR COURT OF VANDERBURGH COUNTY ET AL.
No. 28,776.
Supreme Court of Indiana.
Filed June 8, 1951.
*484 J. Emmett McManamon, Attorney General, Allen A. Appleton, Deputy Attorney General, and Clyde H. Jones, First Assistant Attorney General, for relator.
Theodore Lockyear, of Evansville, for respondents.
JASPER, J.
This is an original action by the relator against the Superior Court of Vanderburgh County and the Judge thereof to prohibit the respondents from exercising further jurisdiction in Cause No. B-9245, captioned Uel S. Flanigan and Lydia Flanigan v. Indiana Alcoholic Beverage Commission et al., pending in the Superior Court of Vanderburgh County.
The petition reveals that Uel S. Flanigan and Lydia Flanigan held a permit issued by the State of Indiana to sell beer and wine at retail. The permittees were charged with the selling of alcoholic beverages to a minor, contrary to the laws of this state, and, after a hearing and rehearing, the permit was suspended for thirty days from 7:00 a.m. on March 12, 1951.
The permittees filed an injunction suit in the Superior Court of Vanderburgh County to enjoin the Indiana Alcoholic Beverage Commission from enforcing its suspension order, and to have subsections (a) and (b) of § 12-443, Burns' 1942 Replacement (1949 Supp.), declared unconstitutional. The trial court issued a restraining order. A plea in abatement was filed to the injunction suit, along with a motion to dissolve the restraining order and dismiss the action. The trial court sustained the plea in abatement, dissolved the *485 restraining order, and dismissed the action. A stay of judgment was granted pending appeal to this court. Thereafter contempt proceedings were filed against each individual member of the Indiana Alcoholic Beverage Commission for failure to return the permit to Uel S. Flanigan and Lydia Flanigan pending the appeal. A motion to quash the citation and to discharge the rule was overruled by the trial court.
A temporary writ of prohibition then was issued by this court.
The relator contends that the trial court is without jurisdiction in the injunction suit, and is without jurisdiction to issue a contempt citation, for the reason that there is no property right involved. Subsections (a) and (b) of § 12-443, Burns' 1942 Replacement (1949 Supp.), supra, provide as follows:
"(a) No person shall be deemed to have any property right in any beer wholesaler's permit, beer retailer's permit, beer dealer's permit, liquor wholesaler's permit, liquor retailer's permit, liquor dealer's permit, wine wholesaler's permit, wine retailer's permit or wine dealer's permit, nor shall said permit itself or the enjoyment thereof be considered a property right.
"(b) All liquor retailer's permits, liquor dealer's permits, wine retailer's permits, wine dealer's permits, malt beverage retailer's permits and malt beverage dealer's permits shall be issued, suspended or revoked in the absolute discretion and judgment of the commission. No court shall have jurisdiction of any action, either at law or in equity, to compel the issuance of any such permit, or to revoke, annul, suspend or enjoin any action, ruling, finding or order of the commission suspending or revoking any such permit, and the consent of the sovereign state of Indiana is hereby expressly withdrawn and denied in any such action, either at law or in equity."
*486 The Legislature, in subsection (a) of the last-cited statute, specifically says there shall be no property right in a beer and wine permit. This court has held that a permit to sell alcoholic beverages is not a vested property right. State ex rel. Fry v. Superior Court of Lake County (1933), 205 Ind. 355, 186 N.E. 310; State ex rel. v. Marion Circuit Court (1943), 221 Ind. 572, 49 N.E.2d 538; State ex rel. v. Montgomery Circuit Court (1945), 223 Ind. 476, 62 N.E.2d 149. It is the well-settled law of this state that a restraining order and injunction will be granted only when a civil or property right is involved and there is no adequate remedy at law. State ex rel. v. Montgomery Circuit Court, supra.
To be empowered to act, a trial court must not only have jurisdiction of the parties and of the subject matter, but also have jurisdiction of the particular class of cases. State ex rel. Ferger v. Circuit Ct. (1949), 227 Ind. 212, 216, 84 N.E.2d 585. In the case now before us, the trial court did not have jurisdiction of the particular class of cases.
The trial court had no jurisdiction to grant a restraining order or an injunction against the Indiana Alcoholic Beverage Commission which would in any manner interfere with the granting or suspension of a beer and wine permit, because there is no property right involved. It follows from what we have said that if the trial court had no jurisdiction in the injunction suit, it had no jurisdiction to issue a citation for contempt based upon the violation of a restraining order.[1]
*487 The temporary writ of prohibition is made permanent.
NOTE. Reported in 99 N.E.2d 247.
NOTES
[1] See 17 C.J.S., Contempt, § 14, p. 19.
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338 F.Supp.2d 460 (2004)
UNITED STATES of America
v.
Carl H. CANTER, Carl D'Elia, Michael Marcus, Scott Allen Schuster, Michael Zambouros, Defendants.
No. 03 CR. 887(VM).
United States District Court, S.D. New York.
October 5, 2004.
*461 George R. Goltzer, Goltzer and Adler, Kenneth A. Paul, New York City, John F. Lauro, Tampa, FL, for Defendants.
Marc A. Weinstein, Assistant United States Attorney, Mary Jo White, United States Attorney, New York City, for Plaintiff.
DECISION AND ORDER
I. BACKGROUND[1]
MARRERO, District Judge.
Defendants in this case have been charged in a two-count indictment involving conspiracy to commit securities fraud, wire fraud, and commercial bribery; and with the substantive offense of securities fraud. Trial on this matter had been scheduled to commence on October 18, 2004 but the defendants have requested an adjournment. Defendant Michael Zambouros ("Zambouros") has filed two pre-trial motions. First, Zambouros seeks expedited disclosure from the Government of exculpatory and impeachment evidence. Second, Zambouros requests a hearing to determine whether evidence of a polygraph examination he underwent can be admitted at his trial. The Government opposes both motions. For the reasons set forth below, Zambouros's motions are denied.
II. DISCUSSION
A. EXPEDITED DISCLOSURE OF EXCULPATORY/IMPEACHMENT EVIDENCE
Zambouros requests that the Government produce any and all exculpatory material pursuant to Brady v. Maryland, 373 U.S. 83, 83 S.Ct. 1194, 10 L.Ed.2d 215 (1963); and impeachment material pursuant to Giglio v. United States, 405 U.S. 150, 92 S.Ct. 763, 31 L.Ed.2d 104 *462 (1972), at least 30 days prior to the start of trial. While Zambouros concedes that there is "no clear rule regarding the timing of the disclosure," he requests disclosure of this material so that he can "adequately prepare for cross-examination of key Government witnesses, as well as to develop important themes relating to possible exculpatory material." (Def. Discl. Memo. at 9.)
The Court discerns no basis upon which to require the Government to disclose this material within the time frame Zambouros requests. The Government has specifically acknowledged its ongoing obligation to provide Zambouros with any materials in its possession relating to Brady, Giglio, and the Jencks Act, see 18 U.S.C. § 3500. (See Gov't Memo. at 22-23.) The Court accepts the Government's good-faith representation that it will comply with this obligation. Zambouros does not argue that the Government's full compliance is in doubt. See United States v. Al-Marri, 230 F.Supp.2d 535, 542 (S.D.N.Y.2002) ("[t]his Court sees no basis for an order directing disclosure of such material at this time. The Court also accepts the Government's acknowledgment and reaffirmation of its continuing obligation under Brady to provide timely disclosure in the event that exculpatory information comes to light."); United States v. Rueb, No. 00 Cr. 091, 2001 WL 96177, at *6 (S.D.N.Y. Feb.5, 2001); United States v. Perez, 940 F.Supp. 540, 553 (S.D.N.Y.1996).
The Second Circuit requires only that impeachment material be disclosed "in time for its effective use at trial." United States v. Coppa (In re United States), 267 F.3d 132, 142 (2d Cir.2001). It has been the practice of this Court and of other courts in this district to require that the Government produce these materials a few days before the start of trial, usually on the Friday before a trial scheduled to start on a Monday. See, e.g., United States v. Santiago, 174 F.Supp.2d 16, 40-41 (S.D.N.Y.2001); Perez, 940 F.Supp. at 553. Only where the complexity of the case is exceptional and the amount of evidentiary materials it produces is extremely voluminous may the Court order the Government to disclose such materials well in advance of trial. Cf. United States v. Falkowitz, 214 F.Supp.2d 365, 392-93 (S.D.N.Y.2002) (ordering that the Government produce its exhibit list one week prior to trial and materials relating to Federal Rule of Evidence 404(b) two weeks prior to trial in light of the nature and extent of materials at issue).
In this case, Zambouros provides only a blanket assertion that 30 days would allow him adequate preparation for trial, without setting forth any particular reason as to why the materials at issue are uniquely complex or voluminous so as to indicate that additional time is necessary. The Court does not find that the materials in this case demand expedited disclosure. The Government has acknowledged its obligation to produce all exculpatory and impeachment materials prior to trial and has stated its intent to do so no later than Friday, October 15, 2004. Accordingly, Zambouros's request to compel production of these materials at least 30 days prior to trial is denied.
B. POLYGRAPH EVIDENCE
Zambouros requests a hearing on the admissibility of the results of a polygraph examination he underwent on November 24, 2003, after the Government brought the charges in this case. Zambouros seeks to admit the expert testimony of the polygraph examiner, who would testify that Zambouros answered certain questions relating to the pending charges truthfully. Zambouros never informed the Government of his intention to submit to *463 the examination, and informed the Government of the examination only after receiving the results.
Zambouros contends that the Second Circuit has not addressed the admissibility of polygraph evidence since the United States Supreme Court declared that Federal Rule of Evidence 702 ("Rule 702") governs the admissibility of expert testimony. See Daubert v. Merrell Dow Pharms., Inc., 509 U.S. 579, 587-88, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993). Rule 702 provides that expert testimony based on scientific knowledge is admissible if it "will assist the trier of fact to understand the evidence or to determine a fact in issue," provided that the testimony is "based upon sufficient facts or data" and "is the product of reliable principles and methods." Fed.R.Evid. 702. Zambouros asserts that a hearing is required to establish that his polygraph examination would be admissible under the Daubert factors.[2] In this regard, Zambouros places heavy reliance on United States v. Crumby, 895 F.Supp. 1354 (D.Ariz.1995), and on United States v. Galbreth, 908 F.Supp. 877 (D.N.M.1995), which held the particular polygraph evidence at issue admissible after applying Daubert.
The Court finds Zambouros's arguments unpersuasive. While the Second Circuit has reserved deciding whether polygraph technology is sufficiently reliable evidence to be admissible under Rule 702 in light of Daubert, see United States v. Messina, 131 F.3d 36, 42 (2d Cir.1997), both the Second Circuit and its district courts have consistently expressed serious doubt as to the reliability of such evidence, even after Daubert. See, e.g., United States v. Duverge Perez, 295 F.3d 249, 253-54 (2d Cir.2002) (finding no abuse of discretion from the district court's refusal to admit polygraph evidence in connection with the defendant's sentencing); United States v. Ruggiero, 100 F.3d 284, 292 (2d Cir.1996) (dismissing the significance of polygraph results that might corroborate a defendant's testimony because of their "questionable accuracy"); Monsanto v. United States, Nos. 97 Civ. 4700, S 87 Cr. 555, 2000 WL 1206744, *4 (S.D.N.Y. Aug.24, 2000) ("[P]olygraph examinations are considered unreliable and are inadmissible in court."); United States v. Bellomo, 944 F.Supp. 1160, 1164 (S.D.N.Y.1996) ("[P]olygraph evidence never has been admitted in a federal trial in this Circuit, even in the three years since Daubert...."); United States v. Black, 831 F.Supp. 120, 123 (E.D.N.Y.1993) (holding that, even after Daubert, "[t]he polygraph test is simply not sufficiently reliable to be admissible").
Moreover, five years after Daubert, the United States Supreme Court stated that "there is simply no consensus that polygraph evidence is reliable" and that "the scientific community remains extremely polarized about the reliability of polygraph techniques." United States v. Scheffer, 523 U.S. 303, 309, 118 S.Ct. 1261, 140 L.Ed.2d 413 (1998). In Scheffer, the Supreme Court upheld the constitutionality of Military Rule of Evidence 707, which categorically bans the admission of polygraph evidence in court-martial proceedings. In so holding, the Scheffer Court *464 noted that federal and state courts continue to express doubt as to the reliability of polygraph evidence and found that "there is simply no way to know in a particular case whether a polygraph examiner's conclusion is accurate, because certain doubts and uncertainties plague even the best polygraph exams." Id. at 312, 118 S.Ct. 1261. The Supreme Court held the rule of evidence banning polygraph evidence did not violate a criminal defendant's constitutional right to put forth a defense. See id. at 309, 118 S.Ct. 1261.
While the Court is mindful that Scheffer involved a challenge to a military rule of evidence, the Court finds the Scheffer Court's rationale and discussion of the reliability of polygraph evidence no less germane or compelling. For this reason, Zambouros's arguments relying on Crumby and Galbreth, both pre-Scheffer decisions not binding upon this Court, are unpersuasive. Indeed, Zambouros does not cite to any post-Scheffer federal court ruling that has admitted polygraph evidence.
Furthermore, even if the Court were to entertain the notion that in some circumstances polygraph evidence may be admissible under Daubert, the particular circumstances of Zambouros's polygraph examination cast serious doubt on the reliability of this evidence, and as such, the probative value would be minimal at best. Zambouoros's polygraph examination consisted of three questions: 1) Did you agree with Carl Canter, Howard Zelin, and others to inflate artificially the price of Concap stock? 2) Did you agree with Carl Canter, Howard Zelin, and others to pay secret bribes to brokers to inflate artificially the price of Concap stock? 3) Did you participate in a scheme to manipulate the price of Concap stock? Zambouros answered each question in the negative and the polygraph examiner opined that based on the polygraph charts there was no deception when Zambouros gave these answers.
As discussed above, Zambouros never notified the Government of the polygraph examination, and thus, it could not witness the examination and ensure the integrity of the procedure. Moreover, with the Government unaware of the examination at the time that it was performed, Zambouros essentially had nothing to lose had he failed the examination, it is highly improbable that he would have revealed that result to the Government. Under these circumstances, the reliability of Zambouros's polygraph examination is suspect, and as such, the testimony of the polygraph examiner is inadmissible as a matter of law. See United States v. Saldarriaga, 179 F.R.D. 140, 140 (S.D.N.Y.1998) (holding that evidence of a polygraph examination is inadmissible where the Government was not notified of the examination).
Furthermore, the Court agrees with the Government that the particular questions, as posed, are not probative of Zambouros's guilt or innocence of the charges brought against him. For example, the first question asks whether Zambouros "agree[d] with Carl Canter, Howard Zelin, and others" to artificially inflate Concap stock. As phrased, Zambouros could answer truthfully by responding in the negative while still being guilty of the conspiracy charge if say, he conspired only with Canter and no one else, or only with individuals other than Carl Canter and Howard Zelin. The second question suffers from the same infirmity. Thus, the results of Zambouros's polygraph examination will not "assist the trier of fact" in ultimately determining Zambouros's guilt or innocence. Fed.R.Evid. 702; see also United States v. D'Angelo, No. 02 Cr. 399, 2004 WL 315237, at *27 (E.D.N.Y. Feb.18, 2004) (finding polygraph evidence inadmissible *465 where the witness had been instructed to answer only "yes" or "no" to very specific questions and noting that framing the questions and the response in this way "virtually compel[s] incomplete or misleading answers"); United States v. Bellomo, 944 F.Supp. 1160, 1164 (S.D.N.Y.1996) ("The validity of polygraph evidence is highly dependant on the questions put to the subject by the examiner.... In examining polygraph evidence, therefore, courts must examine the questions posed with great care.").
Accordingly, for this additional reason, the Court finds that Zambouros's polygraph examination bears minimal probative value. In light of the strong likelihood that a jury would place great weight on this type of evidence, its minimal probative value in this case is significantly outweighed by its highly prejudicial effect. See Fed.R.Evid. 403. Zambouros's motion for a hearing on the admissibility of the polygraph examination he underwent in connection with the charges brought against him in this case is denied.
III. ORDER
For the foregoing reasons, it is hereby
ORDERED that the motion of defendant Michael Zambouros ("Zambouros") to compel expedited disclosure of exculpatory and impeachment evidence is DENIED; and it is further
ORDERED that Zambouros's motion requesting a hearing on the admissibility of polygraph examination in this case is DENIED.
SO ORDERED.
NOTES
[1] The factual summary described herein derives from the following documents: (1) Indictment, United States v. Canter, 03 Cr. 887 ("Indictment"); (2) Memorandum in support of Defendant Zambouros's Motion for Disclosure of Exculpatory and Impeachment Evidence, dated July 13, 2004 ("Def.Discl.Memo."); (3) Memorandum of Law in support of Defendant Zambouros' Motion Requesting Hearing on Admissibility of Polygraph Evidence, dated July 13, 2004; and (4) Government's Memorandum of Law in Opposition, dated Aug. 5, 2004 ("Gov't Memo.").
[2] In Daubert, the Supreme Court suggested five non-exclusive factors to assist a court in determining the admissibility of expert testimony: 1) whether the theory or technique can be and has been tested; 2) whether the theory or technique has been subjected to peer review and publication; 3) the known or potential rate of error; 4) the existence and maintenance of standards controlling the technique's operation; and 5) the degree of general acceptance within the relevant scientific community. See Daubert, 509 U.S. at 593-94, 113 S.Ct. 2786.
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Prindle v Guzy (2020 NY Slip Op 00011)
Prindle v Guzy
2020 NY Slip Op 00011
Decided on January 2, 2020
Appellate Division, Third Department
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
This opinion is uncorrected and subject to revision before publication in the Official Reports.
Decided and Entered: January 2, 2020
526834
[*1]Derek S. Prindle, Respondent,
vJohn Guzy, Appellant.
Calendar Date: November 20, 2019
Before: Clark, J.P., Mulvey, Devine and Pritzker, JJ.
John Guzy, Dannemora, appellant pro se.
Leonard & Cummings, LLP, Binghamton (Hugh B. Leonard of counsel), for respondent.
Pritzker, J.
Appeal from an order of the Supreme Court (Burns, J.), entered February 12, 2018 in Chenango County, which denied defendant's motion to, among other things, vacate a restraining notice.
In October 2014, a road rage incident ended with defendant, a retired New York City police officer, shooting plaintiff in the stomach, severely injuring him, and fatally shooting plaintiff's son. Defendant was convicted of, among other crimes, murder in the second degree and attempted murder in the second degree and was sentenced to a lengthy prison term (People v Guzy, 167 AD3d 1230 [2018], lv denied 33 NY3d 948 [2019]). Prior to defendant's conviction, plaintiff commenced a successful personal injury action against defendant that ultimately resulted in a judgment in excess of $1 million. In August 2017, after defendant was convicted, plaintiff's attorney served a restraining notice, pursuant to CPLR 5222 (b), upon the New York City Police Pension Fund, where defendant's pension is administered, to prevent any disbursements to defendant from the pension fund pending defendant's criminal appeal. The pension fund's general counsel replied that it was prohibited from honoring plaintiff's request because defendant's pension is subject to an anti-assignment provision. Thereafter, defendant moved to vacate the restraining notice and to stay the enforcement of the money judgment. Supreme Court denied defendant's motion, finding that the Son of Sam Law (see Executive Law § 632-a) specifically allows crime victims to recover from any funds of a convicted person, including pension funds. Defendant appeals.
"Executive Law § 632-a sets forth a statutory scheme intended to improve the ability of crime victims to obtain full and just compensation from the person(s) convicted of the crime by allowing crime victims or their representatives to sue the convicted criminals who harmed them when the criminals receive substantial sums of money from virtually any source and protecting those funds while litigation is pending" (Waldman v State of New York, 163 AD3d 1114, 1115 [2018] [internal quotation marks, brackets and citations omitted], lv denied 32 NY3d 910 [2018]). As enacted in 1992, the Son of Sam Law only permitted a crime victim to recover "profits of the crime" (Education Law former § 632-a). However, in 2001, the Legislature amended the law to allow a crime victim to seek recovery from "funds of a convicted person," which includes "all funds and property received from any source by a person convicted of a specified crime," but specifically excludes child support and earned income (Education Law § 632-a [1] [c]).
As a preliminary matter, defendant's assertion in his brief — that Retirement and Social Security Law §§ 156-159 were intended "to specifically supersede CPLR 5205 and other state laws pertaining to pensions" — was not raised before Supreme Court and is therefore unpreserved for appellate review (see Grey's Woodworks, Inc. v Witte, 173 AD3d 1322, 1324 [2019]). Defendant also contends that CPLR 5205 exempts his pension from assignment to satisfy plaintiff's judgment because it provides for the exemption of pension funds from the award of money judgments. This Court has found, however, that CPLR 5205 (c) is superseded by the Son of Sam Law (see Matter of New York State Off. of Victim Servs. v Raucci, 106 AD3d 1138, 1139 n [2013]). Defendant's assertions that Retirement and Social Security Law § 110 and Administrative Code of the City of New York § 13-264 protect his pension from assignment to satisfy plaintiff's money judgment are similarly without merit due to the broad reach of the Son of Sam Law (see Kane v Galtieri, 122 AD3d 582, 587 [2014]). Defendant's remaining contentions, including those attacking the constitutionality of the Son of Sam Law, have been reviewed and are lacking in merit.
Clark, J.P., Mulvey and Devine, JJ., concur.
ORDERED that the order is affirmed, without costs.
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287 F.3d 1325
UNITED STATES of America, Plaintiff-Appellee,v.SIGMA INTERNATIONAL, INC., d.b.a. Sigma U.S.A., Inc., Charles Sternisha, et al., Defendants-Appellants.
No. 97-2618.
United States Court of Appeals, Eleventh Circuit.
April 8, 2002.
William Frederic Jung, Black & Jung, John M. Fitzgibbons, The Law Offices of John M. Fitzgibbons, Tampa, FL, Mark Richard Lipinski, Bradenton, FL, for Defendants-Appellants.
David Paul Rhodes, Tamra Phipps, Tampa, FL, Jeffrey A. Clair, Dept. of Justice, Civil Appellate Division, Washington, DC, for Plaintiff-Appellee.
Appeals from the United States District Court for the Middle District of Florida (No. 95-00089-CR-T-24C); Susan C. Bucklew, Judge.
(Opinion March 15, 2001, 244 F.3d 841, 11th Cir., 2001)
Before ANDERSON, Chief Judge, and TJOFLAT, EDMONDSON, BIRCH, DUBINA, BLACK, CARNES, BARKETT, HULL and MARCUS, Circuit Judges.*
BY THE COURT:
A member of this court in active service having requested a poll on whether rehearing en banc should be granted, and a majority of the judges in this court in active service having voted in favor of granting a rehearing en banc,
IT IS ORDERED that the above cause shall be reheard by this court en banc. The previous panel's opinion is hereby VACATED.
Notes:
*
Judge Charles R. Wilson has recused himself and will not participate
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Note: Decisions of a three-justice panel are not to be considered as precedent before any tribunal.
ENTRY ORDER
SUPREME COURT DOCKET NO. 2016-008
MAY TERM, 2016
In re R.S. and C.S., Juveniles } APPEALED FROM:
}
} Superior Court, Windham Unit,
} Family Division
}
} DOCKET NO. 54/55-4-14 Wmjv
Trial Judge: Katherine A. Hayes
In the above-entitled cause, the Clerk will enter:
Mother appeals an order of the superior court, family division, terminating her parental
rights with respect to her children R.S. and C.S., born in August 2009 and June 2008,
respectively.* We affirm.
Mother does not challenge any of the family court’s findings, which reveal the following
facts. Mother moved from New Hampshire to Vermont in August 2013 seeking specialized
services for R.S., who has special needs. She was able to arrange housing for herself and the
children at a shelter, as well as childcare and therapy for the children through recommended
services. In the spring of 2014, a social worker from the Department for Children and Families
(DCF) investigated complaints about mother’s alleged abuse of R.S. One of the childcare
providers at R.S.’s daycare had observed multiple bruises and scratches on R.S.’s body. Based
on these injuries and subsequent interviews, police took the children into protective custody, and
DCF sought emergency custody. The family court issued an emergency care order as to R.S. and
a conditional custody order as to C.S. Following a temporary care hearing, the court ordered
both children placed in DCF custody. Medical examinations of the children revealed multiple
bruises on both children. C.S. had a severe rash in her genital area that could leave her with
permanent scarring, and she was diagnosed with a urinary tract infection, encopresis, and
enuresis. Both children also needed extensive dental work. C.S. needed thirteen fillings, and
R.S. had to be brought to a specialized dentist for tooth extractions.
In August 2014, the parties stipulated that the children were in need of care or
supervision (CHINS) based on the police affidavit in support of the CHINS petition, which
documented observations concerning R.S.’s injuries. The parties also agreed that evidence could
be presented at the disposition hearing concerning mother’s possible chronic neglect of the
children.
*
The family court also terminated the parental rights of the children’s father, who did
not appear or participate in these proceedings and has no connection or relationship with the
children.
A disposition hearing was held in October 2014. The parties agreed to a disposition case
plan that called for continued DCF custody and parent-child contact two days a week for one
hour. At that time, R.S. was placed in a residential treatment home to deal with his significant
needs, while C.S. was placed in a foster home. The plan of services called for mother, among
other things, to demonstrate safe and appropriate parenting, attend all visits, fully engage in
services provided to her, participate in mental health intake, follow recommendations for therapy
and treatment, participate in and complete parenting classes, demonstrate that she had benefitted
from the parenting classes, maintain safe housing, and participate in a diagnostic evaluation. The
case plan set concurrent goals of reunification with mother or adoption.
Mother’s diagnostic evaluation, which consisted of several assessments and tests,
indicated that mother had a relatively high risk of engaging in child abuse due in part to rapid
mood swings and poor anger control. Mother also likely suffered from chronic depression due in
part to suffering from multiple sclerosis, which was diagnosed in 2013. She also may suffer
from attention deficit disorder and a personality disorder. Her therapist recommended her for
Dialectical Behavioral Therapy, but she was unable to complete the therapy.
In April 2015, DCF filed a petition to terminate mother’s parental rights. A hearing was
held over two days in the fall of 2015. Following the hearing, the court issued an order
terminating mother’s parental rights. Based upon its lengthy findings, the court concluded that
the State had demonstrated “unequivocally” that mother’s capacity to care for the children had
not improved significantly and that she would be unable to resume her parental duties within a
reasonable period of time from the children’s perspective. While acknowledging that mother had
met some of the goals of the case plan, the court found that she had failed to fully engage with
service providers and at times was openly hostile to them; had failed to maintain safe and stable
housing that would even allow home visits; had not made any progress in addressing her mental
health issues; had failed to demonstrate safe and appropriate parenting; had not demonstrated an
ability to empathize effectively with her children or recognize their significant needs; had no
insight at all into how her behavior negatively impacted the children or how to set appropriate
limits that would keep them safe and healthy; and had interfered with R.S.’s healthcare and tried
to prevent him from receiving medications aimed at improving his health.
The court found that mother and the children loved one another and were bonded with
each other, but concluded that mother did not play a constructive role in the children’s lives and
that her involvement in their lives would be an obstacle to their continued emotional and
psychological development. The court concluded that mother had a direct negative effect on
R.S., who had suffered significant developmental trauma and needed long-term treatment. It
further concluded that C.S. was in dire need of permanency and that her significant
developmental gains since she had been placed in state custody would be jeopardized if mother’s
parental rights were not terminated. Accordingly, the court determined that there had been a
substantial change in material circumstances warranting a modification of its earlier disposition
order and that all four statutory best-interest factors strongly supported terminating mother’s
parental rights. See In re D.S., 2014 VT 38, ¶ 22, 196 Vt. 325 (stating that court must consider
statutory best-interest factors set forth in 33 V.S.A. § 5114); In re R.W., 2011 VT 124, ¶ 14, 191
Vt. 108 (discussing required threshold showing of changed circumstances).
Mother does not challenge any of the court’s findings or conclusions, but rather argues
for the first time on appeal that the family court improperly allowed the State to relitigate the
allegations of her physical abuse of the children and improperly made findings concerning the
alleged abuse that were not supported by competent evidence. According to mother, because the
2
parties at the merits hearing stipulated to facts in the affidavit supporting the CHINS petition that
did not itself establish the origin of the children’s injuries, and because the State did not appeal
from the CHINS determination, the State was precluded from establishing the origin of the
physical abuse at the termination hearing. She also argues that the evidence presented at the
termination hearing indicating that she had physically abused the children was solely hearsay and
thus could not support the termination order.
We need not address mother’s specific challenges to the trial court’s admission of
evidence concerning the underlying allegations of abuse in this case because the family court did
not base its termination order to any significant degree on its findings concerning mother’s
physical abuse of the children. The merits stipulation established that these children were in
need of care or supervision. Mother does not challenge that determination. The questions before
the court in the termination proceeding were whether mother’s progress toward reunification had
stagnated, and whether termination was in the children’s best interests. In its lengthy discussion
of how the statutory best-interest factors applied in this case, the court mentioned physical abuse
in only one sentence, stating the R.S. was much healthier than when he came into state custody
and no longer needed to fear physical abuse or neglect. As indicated above, the court’s basis for
its termination order was that mother had not played a constructive role in the children’s lives—
in fact her continued involvement in their lives impeded their emotional and psychological
development—and there is no likelihood that she will be able to parent the children safely within
a reasonable period of time from their perspective. These conclusions were based on extensive
findings concerning mother’s progress in meeting the case plan goals and her conduct during
visits with the children. Mother does not challenge these findings and conclusions, which are
supported by clear and convincing evidence and, in turn, support the termination order.
Affirmed.
BY THE COURT:
_______________________________________
Marilyn S. Skoglund, Associate Justice
_______________________________________
Beth Robinson, Associate Justice
_______________________________________
Harold E. Eaton, Jr., Associate Justice
3
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43 P.3d 1233 (2002)
1515-1519 LAKEVIEW BOULEVARD CONDOMINIUM ASSOCIATION, a Washington corporation, Robert A. Ferguson, Douglas A. Taylor, Bruce E. Curnutt, Bruce A. McLaughlin, Frank Y. Fukui and Penny Fukui, husband and wife and the marital community composed thereof, Respondents,
v.
APARTMENT SALES CORPORATION, a Washington corporation, Michael K. Williams and Jane Doe Williams, husband and wife and the marital community composed thereof, Gordon Capretto and Jane Doe Capretto, husband and wife and the marital community composed thereof, Geotech Consultants, Inc., a Washington corporation, Stephen Sullivan dba Stephen Sullivan Architects, Martha Rose dba Rose Construction Management, Gary Swenson and Jane Doe Swenson, husband and wife and the marital community composed thereof, and RSP/EQE, Inc., a Washington corporation, Defendants,
City of Seattle, a Municipal Corporation, Petitioner.
No. 70704-9.
Supreme Court of Washington, En Banc.
Argued October 16, 2001.
Decided April 18, 2002.
*1234 Palmer Smith, Stanton Beck, Linda Clapham, Charles Willmes, Graham & Dunn, Stephen Goodman, Mark O'Donnell, Douglas Green, Seattle, for Defendants.
*1235 Marcia Nelson, Thomas Sheehan, Asst. Seattle City Attys., Seattle, for Petitioner.
Rand Koler, Kevin Ireland, Seattle, for Respondents.
CHAMBERS, J.
The 1515-1519 Lakeview Boulevard Condominium Association (homeowners) are the owners of three condominiums that were rendered uninhabitable when the soil underlying the property gave way precipitously during winter storms. The homeowners brought suit against several parties, including the City of Seattle (city). The homeowners argued the city should not have permitted the condominiums to be built due to the latent risk of soil movement, and that the city's storm drains had contributed to the slide. Before allowing the condominiums to be constructed, the city, concerned about the possibility of landslides, had imposed several conditions on the developer. These conditions included a covenant exculpating the city from liability for damages caused by soil movement. In this case, we are asked to determine whether an exculpatory covenant recorded in a deed runs with the land, and whether an action may be maintained against the city for alleged negligence in maintaining storm drains and granting permits. The trial court dismissed all claims against the city at summary judgment. The Court of Appeals agreed that the claims arising from permitting should be dismissed, but reinstated the claims arising from negligently maintained storm drains. We affirm the Court of Appeals dismissal of the negligent permitting claims (though on different grounds), affirm reinstatement of the claims relating to the storm drains, and remand for proceedings consistent with this opinion.
ISSUES
1. Does a covenant exculpating a city from liability for damages caused by soil movement run with the land?
2. Does a city have a duty to homeowners (1) to refuse to grant a building permit when there is a known risk of significant soil movement; or (2) to exercise due care to maintain a public drain system?
FACTS
This is the second case accepted for review by this Court (and the third where review was sought) arising out of the same unfortunate condominium project. These condominiums were built on a steep slope in between the city's Capitol Hill and Eastlake districts. The slope consists mostly of a permeable mixture of sand and fill resting on top of an impermeable mixture of silt and clay, a configuration that often leads to landslides.
Apartment Sales Corporation sought and received a permit from the city to build three townhouse condominiums on this site, 1515-1519 Lakeview Boulevard. The site consisted of a small, flat area and a steep slope running down to a section of freeway. Because the sites were in a potential slide area, the developers were required to obtain several zoning variances.
In addition to the variances, the city imposed three specific conditions before it would grant building permits. First, the developers were required to inform all purchasers of the risk of soil movement. Second, continuous insurance was required. Third, the developers were required to grant and record a covenant releasing the city from liability for damages caused by soil movement, except for damages caused by the city's sole negligence. The covenant reads in relevant part:
WHEREAS, the property is located in a "potential slide area" as defined in City of Seattle Director's Rule 2-87,[[1]] which rule requires as a condition of the issuance of land use and construction permits that this covenant be signed, acknowledged and recorded in the records of King County; NOW, THEREFORE, Owner(s) agree(s) as follows:
1. Owner(s) will inform his/her successors and assigns of the property described in Exhibit "A" that the property is in a potential slide area, of the risks associated with development *1236 thereon, of any conditions or prohibitions on development imposed by the City, and of any features in this design which will require maintenance or modification to address anticipated soils changes.
2. Owner(s) on his/her own behalf and on behalf of his/her heirs, successors and assigns hereby waives any right to assert any claim against the City for any loss, or damage to people or property either on or off the site resulting from soil movement by reason of or arising out of the issuance of the permit(s) by the City for development on this property except only for such losses that may directly result from the sole negligence of the City.
3. Requirements for continuous insurance as required by the permit authorizing the development.
Clerk's Papers (CP) at 44-45.
This covenant was referenced in the Preliminary Commitment for Title Insurance for the Fukuis, owners of 1515 Lakeview Boulevard. No documentation has been supplied on the other two units; however, the other homeowners do not dispute that it was properly recorded or that they had notice.
The homeowners received numerous assurances from the developers that the site was stable and the homes would not slip. The homeowners' complaint alleges they were assured the units would be safe, even if the soil slid away. Lakeview was flooded at least four times between November 1992 and November 1996. In each flood, at least a foot of water inundated the garages and basements of the units. Perhaps not coincidentally, the public storm drain system overflowed each time the condominiums flooded. The homeowners provided the declaration of an engineering geologist, Mackey Smith, which stated that failures of the city-maintained public drain system permitted thousands of gallons of water to inundate the condominiums. Smith also stated that these drain overflows were a contributing cause of the soil movement. There was other evidence of infrastructure failure: in November 1996 a city inspector discovered "the pipe leading from the manhole/catch basin of the former Lakeside Boulevard alignment had separated and was blocked.... This break was repaired." CP at 18.
In late December 1996, two severe storms dumped heavy snow onto soils already at or near saturation. Rain followed, saturating the snow because it could not penetrate frozen soil beneath. Then a warm rain quickly melted the saturated snow. Between December 30, 1996 and January 1, 1997 "temperatures rose rapidly and all of the snow was melted by intense warm air. The combination of saturated soil, freezing temperatures, and snow, followed by rapid thaw and warm rain, triggered widespread flooding and landslides throughout the Puget Sound region." CP at 265.
All three townhouses had been occupied about four years when the sites experienced significant soil movement. At approximately 6:00 a.m. on January 3, 1997, early rising homeowners in the Lakeview complex realized they had no running water. This was because the property had moved, breaking the connection with the water main. Water was "`bubbling out of the ground.'" CP at 19. Within a day, the property had sunk between four and six feet and had moved west two feet. The homes were rendered uninhabitable.
The homeowners sued the city, the developers, the geotechnical engineer, the architect, the contractor, and the structural engineer. The homeowners settled with the developers, and this Court ultimately dismissed the claim against the builders based on the statute of limitations. 1519-1525 Lakeview Blvd. Condo. Ass'n v. Apartment Sales Corp., 144 Wash.2d 570, 29 P.3d 1249 (2001). The city successfully moved for summary judgment based on the covenant, assumption of the risk, and the public duty doctrine. The homeowners appealed, and the Court of Appeals reversed. That court specifically found that the covenant did not run with the land, but found the negligent permitting claims were barred by the public duty doctrine. The Court of Appeals reinstated claims related to negligent maintenance of the storm drains. The city petitioned for review, which we granted.
*1237 ANALYSIS
This case is here on summary judgment presenting only questions of law. All questions will be reviewed de novo. Rivett v. City of Tacoma, 123 Wash.2d 573, 578, 870 P.2d 299 (1994).
A. Does the Exculpatory Language in the Deed Run With the Land?
1. Sovereign Immunity
We must first decide whether the abolition of sovereign immunity, RCW 4.96.010, is violated when a local government requires, as a condition of granting a building permit, an exculpatory covenant tailored to alleviate specific concerns unique to a particular project. We hold that exculpatory covenants do not categorically violate sovereign immunity. However, blanket grants of immunity secured routinely for performance of public functions do not differ meaningfully from ordinances immunizing local governments for their own negligence, and will be invalidated under Rivett, 123 Wash.2d 573, 870 P.2d 299, and Employco Pers. Servs., Inc. v. City of Seattle, 117 Wash.2d 606, 817 P.2d 1373 (1991). See also Howe v. Douglas County, ___ Wash.2d ___, 43 P.3d 1240 (2002). These issues will not be substantially revisited here.
The city contends innovative land use instruments, such as exculpatory covenants, should be encouraged because the Growth Management Act, chapter 36.70A RCW, is channeling development onto more and more marginal lots. The city is also concerned that if it denies building permits, it runs the risk of committing regulatory takings or inverse condemnation, as well as potentially frustrating the laudable goals of the Growth Management Act. The city argues that requiring the release and requiring the developers to have insurance and inform subsequent purchasers of the danger is a fair way to allow development. This argument suggests that property owners of land marginal for development because of the composition, topography, location, or other characteristic of the property should be free to propose creative solutions, and accept the risks of development.
We hold that a local government and a property owner may reach an arms length, bargained-for agreement which may include waivers of liability for risks created by the proposed use of property because of the shape, composition, location or other characteristic unique to the property sought to be developed. Here we find that the exculpatory language of the covenant was tailored to the specific risks presented by the proposed development of the property and appropriately limited in scope to the danger of soil movement. Therefore it does not violate this State's abolition of sovereign immunity by functionally enacting blanket immunity.[2]
2. Enforceability of the Covenant against Successive Owners
The homeowners argue that this covenant may not be enforced against them on the theory exculpatory waivers do not "run with the land" and therefore cannot bind successors in interest. Accordingly, we turn now to the requirements for a covenant to run.
Covenants are deeply rooted in our law, dating at least to the 14th century. Restatement (Third) of Prop: Servitudes: Introduction at 5 (2000). The seminal Spencer's Case, 77 Eng. Rep. 72 (Q.B.1583) established the general requirements. Spencer's Case involved a covenant by a tenant to build a wall. The tenant covenanted on behalf of himself and his executors, administrators, and assigns to build a brick wall on a leased lot. After executing the covenant, the tenant assigned the property to another. The new tenant refused to build the wall. "Although there is some doubt from the report as to who won, the case is famous because the judges laid down three propositions about the running of the burden of covenants." Jesse Dukeminier *1238 & James E. Krier, Property 856 (3d ed.1993). There must be intent to bind successors, the obligation must touch and concern the land, and there must be privity of estate.[3]Id. Otherwise, the "covenant" is merely a contract and will not bind future possessors of the land. William B. Stoebuck, Running Covenants: An Analytical Primer, 52 Wash. L.Rev. 861, 863-64 (1977). Through much of their history, the requirements for a covenant to run varied depending on whether it was "real" (developed and enforced in courts of law) or "equitable" (developed and enforced in the Chancery). However, the distinctions have largely vanished from our law. See Hollis v. Garwall, Inc., 137 Wash.2d 683, 690, 974 P.2d 836 (1999).
Generally, there are five elements required for a covenant to run:
(1) a promise which is enforceable between the original parties; (2) which touches and concerns; (3) which the parties intended to bind successors; and (4) which is sought to be enforced by an original party or a successor, against an original party or a successor in possession; (5) who has notice of the covenant or has not given value.
Stoebuck, supra, at 909-10. Four of these elements are not seriously disputed by the parties before this Court. The issue before us is whether an exculpatory covenant touches and concerns the land.[4]
Professor Stoebuck noted:
If there ever was a rule that a running covenant had to touch and concern land in a physical sense, it has long since been abandoned in America. The most that can be said concerning American doctrine is that the meaning of touch and concern tends to become less clear as physical contact becomes less direct.
Stoebuck, supra, at 870 (footnote omitted). This Court has not adopted a strict test for "touch and concern," instead we have established an analytical approach:
"Generally speaking, a covenant touches or concerns the land if it is such as to benefit the grantor or the lessor, or the grantee or lessee, as the case may be. As the term implies, the covenant must concern the occupation or enjoyment of the land granted or demised and the liability to perform it, and the right to take advantage of it must pass to the assignee. Conversely, if the covenant does not touch or concern the occupation or enjoyment of the land, it is the collateral and personal obligation of the grantor or lessor and does not run with the land."
Rodruck v. Sand Point Maint. Comm'n, 48 Wash.2d 565, 574-75, 295 P.2d 714 (1956), (quoting City of Seattle v. Fender, 42 Wash.2d 213, 254 P.2d 470 (1953) (quoting Pelser v. Gingold, 214 Minn. 281, 8 N.W.2d 36 (1943))). It is an open question whether a covenant warning of risk and exculpating liability for that risk touches and concerns the land. The only court to reach whether such covenant would run held, without analysis of touch and concern, that it did run. Phillips v. Altman, 1966 OK 46, 412 P.2d 199 (holding that a covenant not to sue for damages arising from oil and gas pollution ran with the land and was not void as against public policy).
The city relies upon Hollis, 137 Wash.2d at 690, 974 P.2d 836 to support an argument that this Court has abandoned the requirement of "touch and concern." Hollis does not extend so far. Hollis was limited to mutual covenants in a subdivision. The requirements for covenants running in subdivisions have been relaxed compared to covenants running in other contexts; it is even possible for covenants to be enforced against those who have no covenant appearing on their title. See Stoebuck, supra, at 908-10; *1239 see also 17 William B. Stoebuck, Washington Practice, Real Estate: Property Law § 3.2, at 127-28 (1995). Further, this Court was not considering in Hollis generalized rules governing covenants; instead, the argument focused on whether the liberalized parole evidence rule of Berg v. Hudesman, 115 Wash.2d 657, 801 P.2d 222 (1990) applied to covenants. This Court has not relaxed the touch and concern requirement for the enforceability of covenants in settings other than subdivisions and we decline to do so now.
We conclude that this covenant satisfies the touch and concern doctrine as used in this State. Read as a whole, the covenant burdens the use of land, since the covenant is limited to the reasonable enjoyment of the land and limits rights normally associated with ownership. Further, few things touch and concern land more than the soil itself. This is sufficient to meet the requirements of Rodruck. The city is exculpated for losses that are not caused by the city's own negligence arising from soil movement, as reasonably contemplated by the parties to the covenant. Therefore, we hold that this covenant runs with the land.
NEGLIGENCE[5]
A. Negligent Permitting Claim
While not raised to this Court, given our disposition of the issues we will briefly address whether the city, when granting a permit to the developers, had a duty to future homeowners enforceable in tort. We hold it did not. Alleged negligent permitting alone cannot be the basis of a negligence claim against local government, absent a recognized exception. See Howe, ___ Wash.2d ___, 43 P.3d 1240; Taylor v. Stevens County, 111 Wash.2d 159, 759 P.2d 447 (1988). Homeowners have not established that they fall within a recognized exception. Therefore, we affirm both the trial court and the Court of Appeals dismissal of this claim.
B. City's Duty to Maintain Drainage System
The trial court dismissed the negligent maintenance claims against the city, finding they were barred by the public duty doctrine. The trial court granted summary judgment to the city on this claim. The Court of Appeals reversed.
The homeowners contend the city's storm drain system had been negligently maintained, and that negligence proximately caused the land to slide. They pleaded facts tending to show that they fall within the "special relationship" exception to the public duty doctrine. To fall within the special relationship exception on their negligent maintenance claim, the homeowners must establish: "(1) there is direct contact or privity between the public official and the injured plaintiff which sets the latter apart from the general public, and (2) there are express assurances given by a public official, which (3) gives rise to justifiable reliance on the part of the plaintiff." Taylor, 111 Wash.2d at 166, 759 P.2d 447.
The homeowners also contend that negligent maintenance occurred both to the drainage system on the developed site and off of the developed site. According to the homeowners, the drainage system for the Lakeview property had two components: foundation drains channeling water from the foundation area into a storm sewer system, and lines conducting water from the downspouts off site. The homeowners submitted facts tending to show that the drainage system was built so that it was not tightly lined into the storm sewer system but connected to an infiltration gallery. Instead of taking the surface water away from the site, it introduced the water to the area of the foundation. The defective drainage system was apparently buried before it was inspected by a representative of the city.
The Fukuis filed a claim with the city for flood damage, and were compensated. Aware of the drainage problems, the city installed catch basins in front of the Fukui residence. Ms. Fukui submitted an affidavit *1240 saying she relied on assurances from the city that it would maintain the storm drains. She has demonstrated, sufficient to defeat a claim for summary judgment, direct contact, express assurances, and justifiable reliance. She falls within the special relationship exception with regards to damages occasioned by actual negligence in maintaining the storm drain system. Therefore, we affirm the Court of Appeals reversal of the trial court's dismissal of this claim and remand for further proceedings consistent with this opinion.[6]
CONCLUSION
In summary, we conclude the city is not liable for negligently granting a permit to build on this site. We also hold the exculpatory covenant is valid to the extent it releases the city from liability resulting from soil movement "resulting from ... the issuance of the permit." The covenant does not, and may not, exculpate the city for soil movement-related losses caused by the city's own negligence. The homeowners may pursue claims against the city arising out of negligent maintenance of the storm and water drain system. Accordingly, we reverse in part, affirm in part, and remand for further proceedings consistent with this opinion.
ALEXANDER, C.J., SMITH, JOHNSON, MADSEN, SANDERS, IRELAND, BRIDGE, OWENS, JJ., concur.
NOTES
[1] No argument about the constitutionality or legality of this rule was made at any level; nor was any argument made about the appropriateness of covenants in the land use planning.
[2] By its terms, this covenant does not exculpate the city for losses caused by its "sole negligence." Below, the city argued that any contributing cause other than its sole negligence would exculpate the city totally. Arguably, the city is advancing conditional sovereign immunity, but this issue was not raised to this Court, and so we will make no ruling on it.
[3] Equitable covenants date back to 1848. Tulk v. Moxhay, 2 Phillips 774, 41 Eng. Rep. 1143 (1848). Equitable covenants have a looser privity requirement. See Jesse Dukeminier & James E. Krier, Property 864 (3d ed.1993).
[4] The recently published Restatement (Third) of Property has abolished "touch and concern" as an element of enforceable covenants. In its stead, the Restatement provides that a servitude is valid unless it is illegal, unconstitutional, or violates public policy. Restatement (Third) of Prop: Servitudes § 3.1 (2000). Whether this Court should adopt the Restatement was not raised until the motion for reconsideration to the Court of Appeals opinion, and will not be considered for the first time on review to this Court.
[5] The city has argued below that the covenant should function as an express assumption of the risk. Given our disposition of the case, we decline to reach this argument.
[6] We note a dispute in the briefs about whether competent evidence has been presented to establish the alleged negligence of the city caused the damage to the homeowners. Neither the trial court nor the Court of Appeals considered this issue. Given our disposition of the issues, we decline to consider it.
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Opinion issued August 19, 2008
In The
Court of Appeals
For The
First District of Texas
NO. 01–08–00379-CV
JOANN BRYAN, Appellant
V.
KEMPER AUTO AND HOME INSUBROGEE AND JOSEPH SHELDON,
Appellees
On Appeal from the County Civil Court at Law No. 3
Harris County, Texas
Trial Court Cause No. 872286
MEMORANDUM OPINIONAppellant has neither established indigence, nor paid all the required fees. See
Tex. R. App. P. 5 (requiring payment of fees in civil cases unless indigent), 20.1
(listing requirements for establishing indigence); see also Tex. Gov’t Code Ann. §§
51.207, 51.941(a), 101.041 (Vernon 2006) (listing fees in court of appeals); Fees Civ.
Cases B(1), (3) (listing fees in court of appeals). After being notified that this appeal
was subject to dismissal, appellant did not adequately respond. See Tex. R. App. P.
5 (allowing enforcement of rule); 42.3(c) (allowing involuntary dismissal of case).
We dismiss the appeal for nonpayment of all required fees. We deny all
pending motions.
PER CURIAM
Panel consists of Justices Jennings, Keyes, and Hanks.
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IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 01-60495
Summary Calendar
JOHN DELOACH,
Plaintiff-Appellant,
versus
RICHARD BURDINE, Attorney at Law,
Defendant-Appellee.
--------------------------------------------------------
Appeal from the United States District Court
for the Northern District of Mississippi
USDC No. 1:01-CV-183-P
---------------------------------------------------------
October 1, 2001
Before DAVIS, BENAVIDES and STEWART, Circuit Judges:
PER CURIAM:*
John Deloach, Mississippi prisoner # 49643, appeals the district court's dismissal of his pro
se and in forma pauperis ("IFP") 42 U.S.C. § 1983 complaint for failure to state a claim upon which
relief can be granted. Deloach's complaint named as the only defendant the att rney ret ained to
o
represent him in a state criminal matter and sought damages against the defendant stemming from that
representation. On appeal, Deloach also argues that his state conviction was not supported by the
evidence and that relevant evidence was withheld by the state court. These arguments were not
raised in the district court and may not be raised for t he first time on appeal. See Leverette v.
Louisville Ladder Co., 183 F.3d 339, 342 (5th Cir. 1999). Further, Deloach has filed a motion for
an order requiring the state court to produce documents. That motion is DENIED.
*
Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not be
published and is not precedent except under the limited circumstances set forth in 5TH CIR.
R. 47.5.4.
The dist rict court did not err in determining that Deloach's complaint did not state claims
cognizable under 42 U.S.C. § 1983. See O'Brien v. Colbath, 465 F.2d 358 (5th Cir. 1972). The
defendant is not a state actor for purposes of 42 U.S.C. § 1983. See Polk County v. Dodson, 454
U.S. 312, 321-22, 325 (1981); Russell v. Millsap, 781 F.2d 381, 383 (5th Cir. 1985); see also
O’Brien, 465 F.2d at 359 (noting that § 1983 was not intended as a vehicle for malpractice suits).
Inasmuch as the only claims asserted were against Deloach's retained counsel, the district court could
not grant relief to Deloach under 42 U.S.C. § 1983 even if his allegations were true, and thus the
complaint was properly dismissed. See 28 U.S.C. § 1915(e)(2)(B)(ii) (authorizing dismissal of IFP
complaint at any time for failure to state a claim upon which relief may be granted).
The district court's dismissal of Deloach's lawsuit for failure to state a claim upon which relief
may be granted counts as one strike for purposes of 28 U.S.C. § 1915(g). See Adepegba v.
Hammons, 103 F.3d 383, 388 (5th Cir. 1996). Deloach is warned that if he accumulates three strikes
he will be barred from proceeding in forma pauperis in any civil action or appeal brought in a United
States court unless he is under imminent danger of serious physical injury. See § 1915(g).
AFFIRMED; MOTION DENIED; 28 U.S.C. § 1915(g) SANCTIONS WARNING ISSUED.
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147 Cal.App.2d 646 (1957)
OPHA FRANCES HARVEY et al., Appellants,
v.
PADIE LOU SMITH et al., Respondents.
Civ. No. 5541.
California Court of Appeals. Fourth Dist.
Jan. 17, 1957.
William J. Clark, Sr. and William J. Clark, Jr., for Appellants.
Lacey & Cox and Best, Best & Krieger for Respondents.
MUSSELL, J.
This is a quiet title action brought by plaintiffs and appellants, the children by a former marriage of Otis C. Smith, deceased, against Padie Lou Smith, the widow of the decedent, and Thomas J. Fletcher, the executor of his will. Defendants in their answers alleged that the estate of Otis C. Smith and his heirs and devisees are the owners in fee simple of the property involved. The trial court rendered judgment that plaintiffs take nothing by their complaint and that the title to the property be quieted in the heirs and devisees of Otis C. Smith and Thomas J. Fletcher, as executor under his last will and testament.
The facts are set forth in an agreed statement on appeal. *648 Alice E. Smith died October 8, 1941, and at the time of her death owned the property here involved. She left surviving her Otis C. Smith, her husband, and four children, the plaintiffs and appellants in the present action.
It was stipulated that all parties hereto obtained all their right, title and interest in and to the subject property under the will of Alice E. Smith and by reason of the decree of distribution of her estate, Riverside Probate Number 8979. It was further stipulated that "Otis C. Smith died July 25, 1955; his estate is being probated in Riverside county, number 16710. Defendant Thomas J. Fletcher is the duly qualified and acting executor thereof. The executor included the subject property in the inventory of the estate."
The last will and testament of Alice E. Smith, executed September 4, 1941, contained, in part, the following provisions:
"Third: I give and bequeath to my beloved husband, Otis Smith a life estate in Lots 1 and 2 Block 40 Whittier Subdivision and Lot 1 and the East 13.5 feet of Lot 2 Whittier Subdivision of Block 151, Hemet, Riverside County, California. Said Otis Smith shall be entitled to use and manage said property and to receive and keep for his own use all the rent and revenue therefrom, but he shall not be entitled to sell, mortgage or dispose of the same without the written consent of our children, to wit, Opha Francis Harvey, Dr. Georgiana Raymond, Nina Ronilia Graves, and Otis Robert Smith."
"Fourth: I give and bequeath to my husband, Otis Smith all the residue of my estate, both personal real and mixed property wheresoever the same may be situated."
The order settling final account and decree of distribution in the matter of the estate of Alice E. Smith, Number 8979, dated June 8, 1942, provided, in part, that there be distributed to Otis Smith a life estate, including all income, in and to the property here involved, and "all other property of said estate whether described herein or not."
Appellants contend that under the terms of the last will and testament of Alice E. Smith, deceased, and decree of distribution in the probate of her estate, Otis C. Smith received a life estate and no more in the property involved. This contention is without merit.
[1] In Estate of Goldberg, 10 Cal.2d 709, 713 [76 P.2d 508], the rule is stated:
"In general, and in the absence of some existing and affecting *649 condition such as extrinsic fraud, or anything akin thereto, the rule would appear to be well established that even though from a standpoint of following the specific provisions of the will, a decree of distribution of the estate is inaccurate and incorrect, nevertheless after the decree has become final, for all time thereafter, it remains the unalterable measure of the rights of all persons who may be interested in the estate. (Matter of Trescony, 119 Cal. 568 [51 P. 951]; Lankton v. Superior Court, 5 Cal.2d 694, 696 [55 P.2d 1170]; Goad v. Montgomery, 119 Cal. 552 [51 P. 681, 63 Am.St.Rep. 145]; Moor v. Vawter, 84 Cal.App. 678 [258 P. 622] and authorities therein respectively cited.) [2] However, should the language of such a decree appear to be 'uncertain, vague or ambiguous' it is subject to judicial explanation or interpretation, and in such circumstances, the will itself may be used to establish the true meaning and intent of the decree. (Fraser v. Carmen-Ryles, 8 Cal.2d 143 [64 P.2d 397]; In re Ewer, 177 Cal. 660 [171 P. 683]; Horton v. Winbigler, 175 Cal. 149 [165 P. 423].)"
In Mitchell v. Bagot, 48 Cal.App.2d 281, 285-286 [119 P.2d 758], it was held that there is no rule of law that will permit a court sitting in equity to declare a decree of distribution void because it does not conform to the provisions of the will; that the rule is well settled that once the decree of distribution becomes final it becomes the measure of the rights of the beneficiary and is immune from collateral attack even though in contravention of the terms of the will; and that the will cannot be used to impeach though it may be used to interpret the decree.
In Bacon v. Kessel, 31 Cal.App.2d 245, 250 [87 P.2d 857], the court, in discussing the effect of a decree of distribution, said:
"The decree of distribution from which no appeal was taken is a final judgment, and the certified copy thereof was properly admitted. (Code Civ. Proc., 1905.) That decree is determinative of the facts presented or which might have been presented therein, and is conclusive upon the parties or their privies as to those facts when incidentally put in issue between them in relation to a different matter, in the same or any other court." (Citations.)
[3] In the instant case there is no allegation in the pleadings or statement in the stipulation of facts of extrinsic fraud, mistake, clerical error or jurisdictional defect regarding the decree of distribution in the estate of Alice E. Smith, deceased. *650 That decree became final on August 7, 1942, and remains undisturbed. It was stipulated that all parties hereto obtained all their right, title and interest in and to the property involved under the will of Alice E. Smith and by reason of said decree of distribution. The decree of distribution is not ambiguous. It gives a life estate to Otis C. Smith and the reversionary interest to him under the omnibus clause of the decree by giving to him "all other property of said estate whether described herein or not." [4] Where, as here, a decree of distribution directs distribution in plain and unambiguous terms it operates as an interpretation of the will and binds the parties. (Estate of Tynan, 129 Cal.App.2d 364, 366 [276 P.2d 809].)
Plaintiffs contend that in her will Alice E. Smith designated them as the holders of the reversionary interest in her estate by vesting them with the power of termination. We do not agree with this contention. [5] The function of the court is to construe a will, not to make one; to ascertain the testator's intention as expressed and, if lawful, give it effect. (Estate of Lefranc, 38 Cal.2d 289, 296 [239 P.2d 617].) [6] The provisions in paragraph three of the will prohibiting Otis Smith from selling, mortgaging or disposing of his life estate without the consent of the children did not operate to divest Otis Smith of his life estate. They only curtailed his right to dispose of it and did not create any future vested interest in plaintiffs in the property involved. [7] Under the fourth paragraph of the will the residue of the estate, after a specific bequest to decedent's sister and the life estate to Otis Smith, also bequeathed to Otis Smith "all the residue of my estate, both personal real and mixed property wheresoever the same may be situated." It follows that if the will was used by the trial court in interpreting the decree, the provisions thereof are not inconsistent with those of the decree and the trial court correctly determined the extent of the interest of Otis Smith in the property involved as well as the extent of the interest of the plaintiffs therein.
Plaintiffs argue that the trial court erred in finding that the remainder interest in the property involved was not specifically distributed by the decree of distribution and then concluding that the decree gave to Otis Smith "both a life estate and the entire remainder interest in the subject property and vested in him title to the subject property in fee." However, the trial court could and did conclude that this reversionary interest passed to Otis C. Smith and he was vested *651 with title to the property in fee under the terms of the omnibus clause of the decree and under paragraph four of the will.
The judgment is affirmed.
Barnard, P. J., and Griffin, J., concurred.
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377 N.W.2d 506 (1985)
STATE of Minnesota, Respondent,
v.
Clarence MILLER, Appellant.
No. CO-85-759.
Court of Appeals of Minnesota.
December 3, 1985.
*507 Hubert H. Humphrey, III, Atty. Gen., Robert A. Stanich, Sp. Asst. Atty. Gen., St. Paul, Ann L. Carrott, Douglas County Atty., Alexandria, for respondent.
C. Paul Jones, State Public Defender, Kathy King, Asst. Public Defender, Minneapolis, for appellant.
Considered and decided by POPOVICH, C.J., and LESLIE and NIERENGARTEN, JJ., with oral argument waived.
OPINION
NIERENGARTEN, Judge.
Appellant Clarence Miller was convicted of criminal sexual conduct in the second degree, Minn.Stat. § 609.343(a) (1984), for having sexual contact with a 12-year old girl. On appeal he contends the trial court committed reversible error in admitting expert testimony that the complainant's allegations were truthful. He also contends the trial court should have compelled the complainant to submit to a psychological examination and that the prosecutor committed prosecutorial misconduct in closing argument. We reverse and remand for new trial.
FACTS
J.S., 12 years old, and Miller's daughter were called by Miller to his fish house/workshop. Miller sent his daughter away on an errand, grabbed J.S. and kissed her. After Miller's daughter returned the two girls went outside and again were called by Miller who sent out his daughter on another errand. Miller then grabbed J.S., kissed her, and placed his hand down her blouse and squeezed her breast. J.S. told Miller's daughter what happened and the daughter replied, "Oh no, not again." The two girls were called back a third time and after sending his daughter out Miller asked J.S. if she liked him and kissed her.
Six months later, J.S. told her sister about the incident and later reported the incident to her step-mother.
In January 1984 J.S. reported the incident to the school psychologist, adding that after Miller put his hand down her shirt, she resisted, screamed and ran away. The psychologist contacted social services and an employee interviewed J.S. who told her Miller grabbed and kissed her three times and touched her breast on the first occasion. The employee reported to law enforcement officials and a complaint was subsequently filed charging Miller with criminal sexual conduct in the second degree.
At trial Miller's daughter did not remember J.S. telling her that Miller grabbed her. The psychologist, qualified as an expert on psychology and sexually abused children, over objection, gave his opinion that J.S.'s *508 report was credible and he believed her. Miller did not testify but called three of J.S.'s classmates who testified to her reputation for being untruthful.
Miller was convicted of criminal sexual conduct in the second degree. He was sentenced to 21 months, execution stayed, and was placed on probation for 15 years.
ISSUES
1. Did the trial court commit reversible error in admitting expert testimony regarding the truthfulness of the child victim's allegations of sexual contact?
2. Did the trial court err in failing to order the complainant to submit to a psychological examination?
3. Did the prosecutor commit prosecutorial misconduct in closing argument?
ANALYSIS
Miller contends the court committed reversible error in admitting, over objection, the psychologist opinion regarding J.S.' truthfulness. He is correct. This opinion invaded the province of the jury. It is for the jury to make credibility determinations. State v. Saldana, 324 N.W.2d 227, 231 (Minn.1982).
In Saldana, the supreme court held that an expert's opinion that an adult complainant was a victim of rape and that she had not fantasized the rape was reversible error. In that case, the "expert" was a sexual assault counselor who held a bachelor's degree in psychology and social work and directed the Victim Assistance Program in Mankato. With regard to the expert's opinion that a rape had occurred, the court stated:
Because the jurors were equally capable of considering the evidence and determining whether a rape occurred, Dreyer's opinion was not helpful. Her testimony was a legal conclusion which was of no use to the jury. Furthermore, the danger of unfair prejudice outweighed any probative value. Dreyer's testimony "gave a stamp of scientific legitimacy to the truth of the complaining witness's factual testimony." People v. Izzo, 90 Mich.App. 727, 730, 282 N.W.2d 10, 11 (1979).
Id.
Here, the psychologist did not have such training or experience as would qualify him as an expert on the truthfulness of another's statements. He is a licensed psychologist with a master's degree in psychology who was working as a school counselor and sees about six children. He refers them to social services. That background did not qualify him to make the type of judgment he was asked. In fact, it is a rare person indeed who could qualify to render such an opinion, and then it would only be admitted if the witness whose credibility is in issue is incompetent.
Once a witness is deemed competent, expert opinions concerning the witness's reliability in distinguishing truth from fantasy are generally inadmissible because such opinions invade the jury's province to make credibility determinations. * * * Expert testimony concerning the credibility of a witness should be received only in "unusual cases." * * * As example of such an unusual case is a sexual assault case where the alleged victim is a child or mentally retarded.
Id. (citations omitted).
In State v. Myers, 359 N.W.2d 604 (Minn. 1984) the victim of sexual abuse was an eight-year old child. A clinical psychologist with a Ph.D. in psychology and a caseload of 60 familial sexual abuse cases at time of trial, testified that in her opinion the allegations of the eight-year old child were truthful. However that opinion was admitted on the basis that the defendant had waived his right to object to this expert's testimony by "opening the door" in his cross-examination of the complainant's mother, deemed the "ultimate `expert'" with respect to her victim child. She had expressed her disbelief in her child's complaint that defendant had sexually abused her. That type of testimony validated responsive opinion testimony of another expert. Myers, 359 N.W.2d at 611.
*509 The State argues here that Myers applies because Miller opened the door by alleging fabrication as a defense and arguing this theory in his opening statement and applying it in cross-examination of the victim. We do not believe that merely by cross-examining the complainant Miller has waived his right to object to this expert testimony. Nor was there a waiver when Miller elicited testimony from a child protection worker that J.S. was not sure her father believed the incident had occurred.
The error mandates reversal of Miller's conviction and a new trial. The jury's determination necessarily rested in great part on J.S.' credibility. J.S.' testimony contained some inconsistencies. The psychologist's opinion, as an apparent expert, may well have decided the verdict. For this reason, we reverse and remand for a new trial.
DECISION
Admission of expert's testimony that complainant in a child sexual abuse prosecution was truthful was reversible error. We need not address appellant's other contentions on appeal.
Reversed and remanded for new trial.
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12/27/2019
IN THE COURT OF CRIMINAL APPEALS OF TENNESSEE
AT KNOXVILLE
September 24, 2019 Session
STATE OF TENNESSEE v. DENTON JONES
Appeal from the Criminal Court for Knox County
No. 105473 G. Scott Green, Judge
No. E2018-01981-CCA-R3-CD
The State of Tennessee appeals the Knox County Criminal Court’s denial of its motion
pursuant to Tennessee Rule of Criminal Procedure 36.1. The State sought to correct the
six-year sentence the trial court previously imposed for the Defendant’s two merged
convictions for theft of property valued at $1,000 or more but less than $10,000. See
T.C.A. §§ 39-14-103 (2014) (theft); 39-14-105 (2014) (subsequently amended) (grading
of theft). On appeal, the State contends that the six-year sentence is illegal because the
trial court improperly sentenced the Defendant pursuant to the amended version of the
grading of theft statute, which became effective after the commission of the offense. We
affirm the judgment of the trial court.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Criminal Court Affirmed
ROBERT H. MONTGOMERY, JR., J., delivered the opinion of the court, in which THOMAS
T. WOODALL and ROBERT W. WEDEMEYER, JJ., joined.
Herbert H. Slatery III, Attorney General and Reporter; Katherine C. Redding, Assistant
Attorney General; Charme Allen, Assistant Attorney General; and TaKisha Fitzgerald,
Assistant District Attorney General, for the appellant, State of Tennessee.
Robert L. Jolley, Jr., Knoxville, Tennessee, for the appellee, Denton Jones.
OPINION
On October 26, 2016, a Knox County Criminal Court jury found the Defendant
guilty of two counts of theft of property valued at $1,000 or more but less than $10,000.
The offenses occurred on April 28, 2014. See id. §§ 39-14-103; 39-14-105. At the
February 10, 2017 sentencing hearing, the trial court merged the two counts into a single
conviction and determined the length and manner of service. Although the sentencing
hearing transcript is not included in the appellate record, the original judgment forms
reflect the trial court determined that the Defendant was a career offender and imposed
six-year sentences for Class D felony thefts. However, the special conditions sections of
the judgments reflect that the Defendant was sentenced for Class E felony thefts pursuant
to Tennessee Code Annotated Section 39-11-112, otherwise known as the Criminal
Savings Statute, which states,
When a penal statute or penal legislative act of the state is repealed or
amended by a subsequent legislative act, the offense, as defined by the
statute or act being repealed or amended, committed while the statute or act
was in full force and effect shall be prosecuted under the act or statute in
effect at the time of the commission of the offense. Except as provided
under § 40-35-117, in the event the subsequent act provides for a lesser
penalty, any punishment imposed shall be in accordance with the
subsequent act.
At the time of the offense, theft of property valued at $1,000 or more but less than
$10,000 was a Class D felony. See id. § 39-14-105(a)(3); id. § 40-35-111(b)(4) (stating
that the authorized term of imprisonment for a Class D felony is two to twelve years).
However, the grading of theft statute was amended in 2016, and the amended version
became effective on January 1, 2017. Therefore, the amended statute was effective at the
time of the sentencing hearing. The amended statute states that a Class E felony theft
involves property valued at $1,000 or more but less than $2,500 and that a Class D felony
theft involves property valued at $2,500 or more but less than $10,000. See id. § 39-14-
105(a)(2), (3) (2018).
On July 29, 2018, the State filed a motion to correct an illegal sentence pursuant to
Tennessee Rule of Criminal Procedure 36.1, arguing that the Defendant, a career
offender, had been convicted of Class D felony thefts and that, as a result, the six-year
sentences imposed by the trial court were illegal.
At the August 17, 2018 motion hearing, the trial court did not rule on the State’s
motion because it determined that the original judgment forms had to be corrected to
reflect Class E felony thefts. When the prosecutor argued that the Defendant had been
convicted of Class D felony thefts, the trial judge stated that the thefts involved property
valued “in excess of one thousand dollars” based upon the jury verdict form. The court
ordered the entry of corrected judgments, reflecting that the Defendant had been
convicted of Class E felony thefts. The court acknowledged that originally the conviction
offenses would have been Class D felony thefts but that because the Defendant was
sentenced after the grading of theft statute had been amended, the conviction offenses
were Class E felony thefts. The court determined that the value of the property related to
punishment and was not an essential element of theft.
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On August 30, 2018, corrected judgments were entered, reflecting that the
Defendant had been convicted of Class E felony thefts, and the special conditions
sections state that the court ordered the corrected judgments at the August 17 motion
hearing and that the State’s Rule 36.1 motion had been continued until September 27,
2018.
On September 27, 2018, the trial court considered the State’s Rule 36.1 motion,
which asserted that the Class E felony thefts sentences were illegal. The basis of the
State’s motion was that the jury was instructed to find that the value of the theft was
either more than $500 or more than $1,000, that the jury determined the value was more
than $1,000, and that at the time of the offense, the value of the theft was a Class D
felony. The prosecutor stated that the jury was not instructed to consider a value of
$1,000 or more but less than $2,500 and a value of $2,500 or more but less than $10,000.
The State argued that the value of the theft was an element of the offense, not a function
of punishment, and that it was irrelevant if the grading of theft statute had been amended
after the offense date but before the sentencing hearing. The State argued that because
the Defendant was a career offender, the six-year sentences were illegal.
The Defendant argued that the Rule 36.1 motion did not warrant relief because the
corrected judgments did not reflect illegal sentences. The Defendant argued that the State
chose not to appeal the six-year sentences in the previous appeal, and this court affirmed
the Class E felony theft convictions. Trial counsel noted that the Defendant had served
his sentence and had been released on parole at the time of the motion hearing.
The trial court determined that the State’s Rule 36.1 motion was not properly
before the court. The court stated that the corrected judgments reflected Class E felony
theft convictions and that, as a result, the judgments did not reflect illegal sentences. This
appeal followed.
The State contends that the trial court erred by denying its Rule 36.1 motion. The
State asserts that, at the time of the offenses, theft of property valued at $1,000 or more
but less than $10,000 was a Class D felony, that the jury determined the property had a
value of $1,000 or more but less than $10,000, and that the trial court should have
imposed sentences consistent with the grading of theft statute effective at the time of the
offenses. Furthermore, the State asserts that the Criminal Savings Statute did not permit
the trial court to sentence the Defendant pursuant to the amended grading of theft statute
because the amended version changed an essential element of theft. As a result, the State
argues that, as a career offender, the Defendant should have received twelve-year
sentences for Class D felony thefts. The Defendant responds that the trial court did not
err by denying the State’s motion. We agree with the Defendant.
Tennessee Criminal Procedure Rule 36.1 states, in relevant part, that
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(a)(1) Either the defendant or the state may seek to correct an illegal
sentence by filing a motion to correct an illegal sentence in the trial court in
which the judgment of conviction was entered. . . .
(a)(2) For purposes of this rule, an illegal sentence is one that is not
authorized by the applicable statutes or that directly contravenes an
applicable statute.
The trial court is required to file an order denying the motion if it determines that the
sentence is not illegal. Id. at 36.1(c)(1).
Whether a motion states a colorable claim is a question of law and is reviewed de
novo. State v. Wooden, 478 S.W.3d 585, 588 (Tenn. 2015). A colorable claim is defined
as “a claim that, if taken as true and viewed in a light most favorable to the moving party,
would entitle the moving party to relief under Rule 36.1.” Id. at 593. A motion filed
pursuant to Rule 36.1 “must state with particularity the factual allegations on which the
claim for relief from an illegal sentence is based.” Id. at 594. A trial court “may consult
the record of the proceeding from which the allegedly illegal sentence emanated” when
determining whether a motion states a colorable claim for relief. Id.
Only fatal errors result in an illegal sentence and “are so profound as to render the
sentence illegal and void.” Id. at 595; see State v. Cantrell, 346 S.W.2d 445, 452 (Tenn.
2011). Fatal errors include sentences imposed pursuant to an inapplicable statutory
scheme, sentences that designate release eligibility dates when early release is prohibited,
sentences that are ordered to be served concurrently when consecutive service is required,
and sentences that are not authorized by statute. Wooden, 478 S.W.3d at 595. Errors
which are merely appealable, however, do not render a sentence illegal and include
“those errors for which the Sentencing Act specially provides a right of direct appeal.”
Id.; see Cantrell, 346 S.W.2d at 449. Appealable errors are “claims akin to . . .
challenge[s] to the sufficiency of the evidence supporting a conviction” and “involve
attacks on the correctness of the methodology by which a trial court imposed sentence.”
Wooden, 478 S.W.3d at 595; see Cantrell, 346 S.W.2d at 450-52.
Resolution of the State’s appeal is controlled by the recent opinion by our supreme
court in State v. Ashely N. Menke, --- S.W.3d ---, No. M2017-00597-SC-R11-CD, 2019
WL 6336427 (Tenn. Nov. 27, 2019), along with two companion cases. See State v.
Charles Keese, --- S.W.3d ---, No. E2016-02020-SC-R11-CD, 2019 WL 6336386 (Tenn.
Nov. 27, 2019); State v. Michael Eugene Tolle, --- S.W.3d ---, No. E2017-00571-SC-
R11-CD, 2019 WL 6336390 (Tenn. Nov. 27, 2019). The Menke court concluded that the
Criminal Savings Statute applied to the amended version of the grading of theft statute,
that the value of the property in theft cases is not an essential element of the offense, that
the value of the property taken is a jury question, and that the value of the property is
relevant to punishment after a defendant has been found guilty of theft. Ashely N. Menke,
-4-
2019 WL 6336427, at *11-12. The court concluded that the amended version of the
grading of theft statute “is applicable even where . . . the offense occurred before the
amendment’s effective date,” as long as the amended version is effective at the time of
sentencing. Id. at *13; see Charles Keese, 2019 WL 6336386, at *6, 12 (concluding that
although the Criminal Savings Statute applies in theft cases, “the amended version of the
theft grading statute cannot apply” when a defendant is sentenced before the amended
statute became effective); Michael Eugene Tolle, 2019 WL 6336390, at *4-5.
In the present case, the Defendant was convicted of theft of property. The trial
court stated that the jury determined that the value of property was “in excess of $1,000
dollars.” At the time of the offenses and of the trial, the thefts were Class D felonies
based upon the value of the property. However, before the sentencing hearing occurred,
the amended grading of theft statute became effective, which had the effect of modifying
the conviction offenses to Class E felonies. Although the appellate record does not
contain the sentencing hearing transcript, the record reflects that the court imposed Range
III sentences for a Class E felony. The sentencing range for a Range III offender
convicted of a Class E felony is four to six years. See T.C.A. § 40-35-112(c)(5) (2018).
Likewise, the Defendant was a career offender, which required the court to impose the
“maximum sentence within the applicable Range III.” Id. § 40-35-108(c). Therefore, the
Defendant received the maximum sentence within the appropriate range. We conclude
that the corrected judgments do not reflect illegal sentences and that the trial court did not
err by denying the State’s Rule 36.1 motion. The State is not entitled to relief.
In consideration of the foregoing and the record as a whole, the judgment of the
trial court is affirmed.
____________________________________
ROBERT H. MONTGOMERY, JR., JUDGE
-5-
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IN THE NEBRASKA COURT OF APPEALS
MEMORANDUM OPINION AND JUDGMENT ON APPEAL
MALCHOW V. ARMBRUSTER
NOTICE: THIS OPINION IS NOT DESIGNATED FOR PERMANENT PUBLICATION
AND MAY NOT BE CITED EXCEPT AS PROVIDED BY NEB. CT. R. APP. P. § 2-102(E).
RAY D. MALCHOW, APPELLEE,
V.
WENDY J. ARMBRUSTER, ALSO KNOWN AS WENDY FREEBORN, APPELLANT.
Filed March 11, 2014. No. A-13-235.
Appeal from the District Court for Gage County: PAUL W. KORSLUND, Judge. Affirmed.
Lyle J. Koenig, of Koenig Law Firm, for appellant.
Chris A. Johnson, of Conway, Pauley & Johnson, P.C., for appellee.
IRWIN, MOORE, and BISHOP, Judges.
IRWIN, Judge.
I. INTRODUCTION
This appeal concerns a dispute over the custody and visitation schedule for Alexxandra
Malchow (Alexx), the minor child of Ray D. Malchow and Wendy J. Armbruster (Wendy). In
the proceedings below, Ray filed a motion to modify the parties’ visitation arrangement and
Wendy filed a motion to change custody of Alexx from Ray to Wendy. The district court granted
Ray’s request to modify the parties’ visitation arrangement and denied Wendy’s request to
change custody. Wendy appeals from this decision. On appeal, Wendy challenges certain
evidentiary rulings made by the district court; asserts that the court erred in modifying the
visitation schedule and not changing custody from Ray to Wendy; and disputes the court’s award
of attorney fees to Ray. For the reasons set forth below, we affirm the decision of the district
court in its entirety.
II. BACKGROUND
These proceedings involve Alexx, born in January 2002. Ray is Alexx’s biological father,
and Wendy is Alexx’s biological mother. Ray and Wendy have never been married.
-1-
1. PROCEDURAL HISTORY
Alexx has lived with Ray since she was approximately 3 months old. Initially, this living
arrangement was the result of a voluntary agreement between the parties so that Wendy could
attend college and Ray’s mother could provide daycare for Alexx. However, in April 2004, the
district court entered a formal custody order concerning Alexx. In the order, the court found that
both Ray and Wendy were good parents who were capable of providing care to Alexx. The court
went on to find that given that Alexx had resided with Ray for the previous 2 years, it would be
in her best interests to remain in his custody subject to Wendy’s “liberal parenting time.” That
parenting time was to include every other weekend, specified holidays, and 6 weeks during the
summer.
In March 2006, the district court entered an order modifying the April 2004 custody
order. This subsequent order is not included in our record, but apparently, the order altered only
the parties’ visitation schedule by awarding Wendy additional visitation time. Alexx remained in
the custody of Ray.
On March 3, 2011, Ray filed a complaint to modify the prior custody and visitation order.
In the complaint, Ray alleged that a material change of circumstances had occurred since the
entry of the March 2006 order. Specifically, he alleged that during Alexx’s visitations with
Wendy, Wendy was manipulative and was attempting to undermine Alexx’s relationship with
Ray and with Alexx’s therapist. Ray went on to allege that Wendy’s behaviors were causing
Alexx to suffer from “adverse health effects.” Ray requested that Wendy’s visitation time with
Alexx be restricted or supervised.
Also on March 3, 2011, Ray filed a motion requesting an ex parte order restricting
Wendy’s visitation time with Alexx. Attached to the affidavit was a letter from Alexx’s therapist,
Karen Sharer-Mohatt. Ray’s motion is not included in our record, but apparently, the district
court granted Ray’s request and entered an ex parte order permitting only supervised visitation
time between Wendy and Alexx pending a hearing.
On March 24, 2011, Wendy filed an answer and cross-complaint requesting that she be
awarded custody of Alexx. Wendy denied Ray’s assertions regarding her behavior during visits
with Alexx. In addition, she alleged that Ray and his wife were actively interfering with her
relationship with Alexx and that it would be in Alexx’s best interests to reside with her on a
permanent basis. Wendy also filed a motion to vacate the ex parte order and a motion requesting
the court to appoint an expert to conduct a custody evaluation.
A hearing was held on March 31, 2011, concerning the previously entered ex parte order
and concerning Wendy’s motion for a custody evaluation. After the hearing, the district court
entered an order reinstating Wendy’s parenting time with Alexx. The court did indicate that
during both parties’ time with Alexx, they were not to “discuss or inquire of the minor child
about activities in which she is involved with the other parent, or ask the child to choose between
activities with one parent or the other.” The court also appointed Alexx her own attorney for the
custody proceedings and postponed its decision about the custody evaluation until Alexx’s
attorney could make an informed recommendation on the matter. At some point in time after the
entry of this order, however, the district court apparently denied Wendy’s request for a custody
evaluation.
-2-
Prior to trial, Wendy repeatedly objected to Sharer-Mohatt’s testifying. Wendy argued
that it was not fair that Alexx’s therapist could testify when the court had denied her request for
an independent mental health professional to conduct a custody evaluation. In addition, Wendy
objected to Sharer-Mohatt’s testimony on the basis that she was not qualified to offer expert
testimony. The court denied both of Wendy’s motions and permitted Sharer-Mohatt to testify
concerning her observations and treatment of Alexx and her opinion as to whether Wendy’s
visitation time with Alexx should be supervised.
In July 2012, trial began on Ray’s complaint to modify Wendy’s visitation time and on
Wendy’s complaint to modify custody. The trial continued in October 2012. At the trial, Ray and
Wendy each testified about their relationship with Alexx and about their current circumstances.
In addition, both Ray and Wendy offered other evidence, including the testimony of
Sharer-Mohatt, which concerned their parenting abilities and their relationships with Alexx.
2. RAY’S TESTIMONY
At the time of the modification trial, Ray was living in Beatrice, Nebraska. Ray had been
married for 7 years, and he and his wife had a daughter together. Ray testified that he currently
works full time and that the exact hours he works in any given day or week may vary.
Ray testified that Alexx has been living with him since she was approximately 3 months
old. He indicated that in the 2 or 3 years preceding his filing of the complaint to modify Wendy’s
visitation time, he had become increasingly concerned about Alexx’s relationship with Wendy.
Specifically, Ray testified that Alexx was often upset about things that Wendy was saying to her
and that Alexx felt like Wendy was pressuring Alexx to live with Wendy at her home in Kansas.
Ray indicated that Alexx would “have fits where she would cry and just get mad at everybody,
lash out at people for no reason.” Alexx would also “start itching very profusely in areas where
she would get red and raw.”
Because of Ray’s concerns about Alexx’s behavior after her contact with Wendy, Ray
contacted a psychologist to provide counseling for Alexx. Alexx started seeing Sharer-Mohatt in
November 2009. Since that time, Alexx has seen Sharer-Mohatt approximately once per week.
Ray also began monitoring Alexx’s telephone conversations with Wendy. During his
monitoring of the telephone calls, he has heard Wendy tell Alexx that Alexx chooses to spend
time engaging in extracurricular activities, like participating in horse shows, rather than spending
time with Wendy and Wendy’s family. He also overheard Wendy tell Alexx, “You don’t love
me.” These exchanges hurt Alexx’s feelings, and she would begin to cry while on the telephone.
Ray also heard Wendy continually pressure Alexx to come and live with her, even though it was
obvious that such conversations were upsetting to Alexx and were making her uncomfortable. At
some point after Alexx began counseling, Ray also began recording Alexx’s telephone
conversations with Wendy so that Sharer-Mohatt could listen to the exchanges and offer advice.
Ray testified that after the district court entered the ex parte order temporarily suspending
Wendy’s unsupervised visitations with Alexx in March 2011, Alexx’s behavior improved. He
testified that Alexx “stopped itching” and that she stopped “throw[ing] fits.” Ray indicated that
he believed Alexx was happy during this time period and that there was “a weight lifted off of
her shoulders.” However, Ray also testified that not long after Wendy’s visits with Alexx
resumed, Wendy continued to have inappropriate interactions with Alexx and Alexx continued to
-3-
struggle with their relationship. Wendy pressured Alexx to live with her, and Alexx would come
home from visits with Wendy crying and angry and would scratch her skin.
Ray testified that Wendy refuses to accept responsibility for any of Alexx’s problems or
feelings. Wendy blames Ray for everything that is going on with Alexx. Ray testified that he
wanted the district court to require Wendy to have only supervised visits with Alexx until such
time as Wendy has completed counseling to learn how her behavior is affecting Alexx. Ray
agreed that after Wendy has completed counseling, her visitation could return to the visitation
schedule established in the March 2006 modification order.
3. WENDY’S TESTIMONY
At the time of the modification trial, Wendy was living in Hays, Kansas. Wendy had been
married for 8 years, and she and her husband had two young daughters together.
Wendy testified that Alexx is a very good student who enjoys participating in athletics,
including softball, dance, and horse shows. Wendy testified that she tries to be supportive of
Alexx’s interests by helping to coach her in softball, attending her dance recitals, and asking
about her horse shows. However, Wendy also testified that she is currently struggling in her
relationship with Alexx. Specifically, she indicated that Alexx is “so scared of making anybody
mad, and she is so scared to voice her opinion and be herself” that she and Alexx do not “have
much of a relationship at all.”
Throughout her testimony, Wendy appeared to blame Ray for the problems with her
relationship with Alexx. She testified that Ray hinders their relationship and fails to keep her
informed about Alexx’s daily life. Wendy cited to numerous problems in her visitation time with
Alexx. She indicated that Ray is not flexible in permitting her to have additional time with
Alexx, even when such time is important to Alexx. Wendy testified that when she does come to
Nebraska to visit with Alexx or attend one of Alexx’s activities, she is not permitted to spend
much, if any, alone time with Alexx and is constantly accompanied by Ray’s wife and is
restricted on how long she can see Alexx. In addition, Wendy testified that Ray dictates when
Wendy and her family can go on vacation if they want Alexx to come. And, Wendy testified that
Ray told her that if she wanted Alexx at her wedding, she needed to plan the wedding for her
scheduled visitation time.
In contrast, Wendy testified that she always tries to be flexible with Ray when he asks to
reschedule her visitation time or when he is trying to schedule a family vacation. Wendy testified
that she has done nothing wrong in terms of her relationship with Alexx. She testified that Ray’s
decision to record and physically monitor her telephone calls with Alexx has put pressure on
Alexx and on her relationship with Alexx because they are no longer free to discuss things with
each other. She testified that Alexx has had dry and itchy skin since she was just a baby and that
Alexx’s itching is not related to her relationship with Wendy.
Wendy asked that she be awarded full custody of Alexx. Wendy indicated to the court
that Alexx had expressed an interest in moving to Kansas with Wendy. In addition, Wendy
believed that Alexx’s moving to Kansas would improve their relationship. In the alternative,
Wendy asked that she be given legal custody of Alexx and extended summer visitation time with
her.
-4-
4. OTHER EVIDENCE
In addition to their own testimony, both Ray and Wendy offered additional evidence
concerning their current circumstances and their parenting abilities. Over Wendy’s objection,
Ray offered the testimony of Alexx’s therapist, Sharer-Mohatt.
Sharer-Mohatt testified that she was a clinical psychologist who had been practicing for
more than 15 years. Much of her practice had been dedicated to treating children and
adolescents. Sharer-Mohatt testified that Alexx had been one of her patients since November
2009. She indicated that she had met with Alexx weekly since that time and that, as a result, she
had seen Alexx approximately 75 times. Prior to beginning any therapy with Alexx,
Sharer-Mohatt met with Ray and his wife to discuss their concerns about Alexx. They told
Sharer-Mohatt that they were concerned that Alexx appeared to be anxious, sad, and withdrawn.
They also relayed to Sharer-Mohatt that there were some custody issues between Ray and
Wendy which had involved Alexx.
After talking with Ray and his wife and meeting with Alexx, Sharer-Mohatt believed that
Alexx was suffering from anxiety. Such anxiety was precipitated by Alexx struggling with
transitions between her parents’ homes and by her feeling pressured by Wendy to move to
Wendy’s home. Sharer-Mohatt was particularly concerned about Alexx’s outward
demonstrations of anxiety, which she believed indicated that Alexx was suffering from a very
high level of stress. These outward demonstrations of anxiety included being fidgety and
reserved during therapeutic sessions, suffering from prolonged sadness, and scratching herself
excessively. Sharer-Mohatt testified that Alexx’s symptoms improved when Alexx’s contact
with Wendy was restricted in March and April 2011. Specifically, Sharer-Mohatt observed
Alexx to be more talkative and generally happier. During this time period, Alexx did not report
that she felt any stress and there were fewer scratches on her arms.
Sharer-Mohatt testified that after her sessions with Alexx and after listening to recorded
telephone calls between Alexx and Wendy, she had concerns about Wendy’s interactions with
Alexx. Generally, Sharer-Mohatt expressed a concern about the way that Wendy communicated
with Alexx and about how Wendy dealt with her emotions when discussing things with Alexx.
Wendy appeared to try to make Alexx feel guilty about making certain choices. For example,
Sharer-Mohatt described a situation where Wendy became very upset with Alexx when she
expressed a desire to participate in a horse show rather than go on a vacation with Wendy and
her family. While Wendy was understandably disappointed and upset by Alexx’s decision,
Sharer-Mohatt believed that Wendy acted inappropriately in communicating her feelings to
Alexx, who was only 9 or 10 years old at the time. Sharer-Mohatt testified concerning Wendy’s
behavior, “It’s not the child’s place to contain the anger and disappointment of the parent. It’s the
parent’s place to contain that themselves and then be able to speak with the child about it.”
Sharer-Mohatt also expressed a concern with Wendy’s tendency to place Alexx in
situations where she was forced to choose between Wendy and Ray. She testified that forcing
Alexx to choose between her parents and her parents’ activities is not age appropriate and is
damaging to Alexx’s emotional development. In addition, Sharer-Mohatt indicated that Wendy
actively encouraged Alexx to stop seeing Sharer-Mohatt, which harmed the patient-therapist
relationship.
-5-
Sharer-Mohatt testified that it is important that Alexx have a positive relationship with
Wendy. She recommended that in order to improve this relationship and prevent further
emotional damage to Alexx, Wendy should participate in individual mental health counseling so
that she could learn how her behavior has negatively impacted Alexx and has increased Alexx’s
level of stress and anxiety. She further recommended that until Wendy has completed such
counseling, Wendy and Alexx’s visitation sessions should be supervised by a mental health
professional.
Wendy offered the testimony of various family and friends, including her husband, the
pastor at her church, her mother-in-law, and her sister. These witnesses all testified that Wendy is
a caring, involved mother who loves each of her children very much. The witnesses also offered
testimony which indicated that Ray has not been completely supportive of Wendy and Alexx’s
relationship.
5. DISTRICT COURT ORDERS
After the parties completed their presentations of evidence, Ray made a motion for a
directed verdict as to the issue of Wendy’s request for a change in custody. The district court
sustained Ray’s motion, finding that “there’s insufficient evidence for a change in custody as
requested by [Wendy].” Subsequently, the court entered a temporary order concerning Ray’s
request for modification of Wendy’s visitation with Alexx.
In the temporary order, the district court found that a material change in circumstances
had occurred since the March 2006 custody order such that “[Alexx] has experienced significant
anxiety as a result of [Wendy] putting pressure on Alexx to make choices, which are
inappropriate for a child of her age, relating to which parent she should spend time with.” The
court recognized that both Ray and Wendy love Alexx very much; however, the court
summarized the evidence presented in the case as follows:
The central problem in this case is Wendy’s completely inappropriate pressuring of
Alexx and her apparent inability to “get it” that Alexx should not be subjected to the kind
of severe pressure Wendy has brought to bear. It is evident that Wendy is very frustrated
with Alexx’s interest in horse shows, which is an activity Alexx apparently became
interested in through Ray’s wife. Wendy has also pressured Alexx about other matters
including making choices regarding church attendance and communion, Ray being
Catholic and Wendy being Lutheran.
As a result of the court’s findings, it ordered Wendy to participate in counseling to learn
how her behavior has increased Alexx’s stress and anxiety, to learn about Alexx’s developmental
states and emotional development, and to develop skills to avoid placing Alexx in situations
where she is forced to choose between her parents. The court permitted Wendy to have
unsupervised visitation with Alexx while she completed her counseling. The court indicated it
would enter a final order concerning Wendy’s visitation with Alexx after Wendy had completed
the counseling requirement.
Less than 1 month after the district court filed its temporary order, Alexx’s attorney filed
a motion to suspend Wendy’s visitation with Alexx and a motion requesting that Alexx be
permitted to speak with the trial judge in chambers. The court permitted Alexx to testify. During
her testimony, Alexx told the court that during her previous weekend visitation with Wendy,
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Wendy became very angry with Alexx and accused her of lying about things that had happened
at Wendy’s home. Wendy indicated that these lies came up during the modification trial. Alexx
was very upset after her visit. She told the court that she feels a great deal of stress when she is
with Wendy and that she got a severe headache and started to itch after the last visit. She told the
court that she did not want to attend visitation with Wendy for the next month. Alexx testified
that although she loves Wendy, she does not trust her.
The district court found Alexx to be a credible witness and temporarily suspended
Wendy’s visitation time.
Subsequently, Wendy submitted evidence to the district court demonstrating that she had
participated in counseling. After the court received this evidence, it entered a final order
concerning Ray’s request for modification of Wendy’s visitation with Alexx. In the order, the
district court noted that Wendy’s visitation with Alexx had been suspended for approximately 3
months. The court went on to find:
Wendy has engaged in counseling as provided in the Court’s order . . . and . . . Alexx is
still in therapy. It is in Alexx’s best interest that there be parenting time in the presence of
Alexx’s counselor . . . and Wendy and her counselor, . . . giving the therapists an
opportunity to offer guidance and suggestions. Thereafter, for a period of two months,
Wendy should have parenting time once a month to allow Alexx to transition back into
normal parenting time.
The court specifically indicated that Wendy and Alexx should participate in two therapeutic
visitation sessions sometime during the 45 days after the order had been entered. The court
stated, “These sessions of parenting time are not optional.” The court then indicated that after the
two therapeutic sessions had been completed, Wendy and Alexx should have one weekend of
visitation per month for the next 2 months. The court also indicated that Wendy could have
regular telephone visitation time with Alexx as provided for in the March 2006 order.
After the therapeutic visitations and the two monthly, unsupervised visitations, Wendy’s
parenting time returned to the time she had previously received pursuant to the March 2006 order
except that her summer visitation time was reduced from 6 continuous weeks to 4 continuous
weeks.
The court also ordered Wendy to pay $15,000 toward Ray’s attorney fees.
Wendy appeals from the district court’s order here.
III. ASSIGNMENTS OF ERROR
On appeal, Wendy alleges that the district court erred in (1) denying her motion for a
custody evaluation; (2) permitting Alexx’s therapist to provide expert testimony; (3) denying her
motion to change custody; (4) altering the prior visitation schedule, such that she must
participate in temporary supervised visitation with Alex and such that her summer visitation time
is decreased by 2 weeks; and (5) awarding Ray attorney fees.
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IV. ANALYSIS
1. STANDARD OF REVIEW
Child custody determinations, and visitation determinations, are matters initially
entrusted to the discretion of the trial court, and although reviewed de novo on the record, the
trial court’s determination will normally be affirmed absent an abuse of discretion. Vogel v.
Vogel, 262 Neb. 1030, 637 N.W.2d 611 (2002).
A judicial abuse of discretion exists when a judge, within the effective limits of
authorized judicial power, elects to act or refrains from acting, and the selected option results in a
decision which is untenable and unfairly deprives a litigant of a substantial right or a just result
in matters submitted for disposition through a judicial system. Peter v. Peter, 262 Neb. 1017, 637
N.W.2d 865 (2002).
2. MOTION FOR INDEPENDENT
PSYCHOLOGICAL EVALUATION
At the outset of the modification proceedings, Wendy filed a motion requesting that the
district court appoint a mental health professional to conduct a custody evaluation. In her motion,
Wendy alleged that such an evaluation would “greatly aid the court in making a determination as
to who should have custody of the minor child of the parties.” After a hearing on the matter, the
court asked Alexx’s court-appointed attorney to provide her opinion concerning whether such an
evaluation was necessary. Counsel indicated to the court her opinion that “I [don’t] really feel it
[is] probably necessary given the cost . . . .” However, counsel also told the court that she was
“not going to object either way.”
Ultimately, the district court denied Wendy’s motion for a custody evaluation. The court
stated that during the initial paternity proceedings, it had made a finding that both Ray and
Wendy were fit, proper, and good parents. The court went on to state that although custody
evaluations can be useful, given its previous findings about the parties’ parenting abilities and
given the costs associated with such an evaluation, it would not order the evaluation. Wendy
appeals from the court’s decision.
On appeal, Wendy alleges that the district court erred in denying her motion for a custody
evaluation because “[t]he court requires an objective and unbiased expert opinion in order to
determine the best interests of the child . . . .” Brief for appellant at 26. She further alleged that
the only expert opinion the court heard was that of Sharer-Mohatt, who was clearly biased in
favor of Ray because he hired her and because he provided her with background information
about Alexx’s behavior and feelings. We conclude that Wendy’s assertion lacks merit.
Before we address the district court’s decision not to order a custody evaluation in this
case, we must first address the basic contention contained in Wendy’s brief that a trial court must
receive expert testimony about a child’s best interests in order to make a decision about custody.
Such a contention is simply not true. In fact, this court has previously stated in another custody
modification case, Boamah-Wiafe v. Rashleigh, 9 Neb. App. 503, 510, 614 N.W.2d 778, 784
(2000), that “we do not agree with the trial court’s statements that a witness testifying as to
children’s best interests must be a psychologist, psychiatrist, or someone with a Ph.D or master’s
degree in child development.” A custody evaluation performed by a licensed mental health
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professional is not required in every custody case. Lay witnesses, including, and especially, the
parents of the child or children at issue, may testify concerning their opinions about custody and
about best interests.
In this case, both Ray and Wendy provided detailed and extensive testimony concerning
their opinions about the custody and best interests of Alexx. In addition, each parent provided the
testimony of other witnesses to aid the court in determining what would be in Alexx’s best
interests. Included in such evidence was the testimony of Alexx’s therapist, Sharer-Mohatt.
Sharer-Mohatt, who had counseled Alexx for almost 3 years, testified concerning her
observations about Alexx and about her opinions as to Alexx’s best interests. Wendy argues that
Sharer-Mohatt’s testimony was biased in favor of Ray, which makes it even more important to
have an independent evaluation done on Alexx. However, there is no evidence in the record to
support Wendy’s contention that Sharer-Mohatt was biased. Ray did provide Sharer-Mohatt
background information prior to Alexx’s first appointment; however, there was evidence that
such information was limited to Ray’s observations about Alexx’s recent behavior and about
there being a “custody issue” with Wendy. Moreover, a reading of Sharer-Mohatt’s testimony
reveals that she based her opinions solely on her extensive discussions with Alexx and on her
own observations of Alexx’s behavior and struggles. In addition, Sharer-Mohatt testified that she
made herself available to Wendy so that Wendy could be involved in Alexx’s therapy and
provide her own background information.
Based on our review of the record, we cannot say that the district court erred in denying
Wendy’s request for a custody evaluation. There was ample evidence presented for the court to
make a determination regarding Alexx’s best interests. Such evidence included the testimony of
Alexx’s long-time counselor, who, contrary to Wendy’s assertions, was seemingly unbiased and
only concerned about Alexx and her emotional development. Moreover, given the evidence
presented, we do not think there would have been much gained from forcing Alexx to visit
another counselor or mental health professional due to her parents’ fight over her custody. We
affirm the decision of the district court to deny Wendy’s request for a custody evaluation.
3. EXPERT TESTIMONY OF CHILD’S THERAPIST
Prior to trial, Wendy filed a motion to exclude the testimony of Sharer-Mohatt in its
entirety. Her motion was based on the principles of Daubert v. Merrell Dow Pharmaceuticals,
Inc., 509 U.S. 579, 113 S. Ct. 2786, 125 L. Ed. 2d 469 (1993), and Schafersman v. Agland Coop,
262 Neb. 215, 631 N.W.2d 862 (2001). The district court overruled the motion, stating, “I’m
going to overrule the motion to exclude . . . . However, certainly . . . there is a right to object on
foundation and on many other appropriate objections at the time of trial. I won’t enter an order
excluding the testimony of [Sharer-Mohatt] at this point . . . .”
Sharer-Mohatt testified at trial. During her testimony, she discussed the “splitting
process.” She defined this theory as
a psychological defense that we all employ in the process of our normal coping and
protecting ourselves. It’s a process by where we all, as human beings, have our good and
our bad parts, our good and not so good parts. But when an individual has difficulty
accepting their own not-so-good or bad parts, they tend to disavow them and split them
out and locate them somewhere else, normally, in another person.
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A parent who uses this coping mechanism to deal with the strain of an on-going custody battle
by believing the other parent to be “all bad” can impose these feelings on his or her child.
Sharer-Mohatt testified:
Because the child is placed in the position of trying to decide, okay, I, for example, I love
my mom and I love my dad. But if mom says dad is all bad or dad is, you know, dad
causes problems, but the child’s experience isn’t that, then it creates conflict and anxiety
within the child, and under some circumstances, children begin to feel, then, that they
have to make a choice between parents.
Ray’s counsel asked Sharer-Mohatt if this type of pressure was being placed on Alexx.
Before Sharer-Mohatt answered the question, Wendy’s counsel objected and requested an
opportunity to voir dire Sharer-Mohatt. During this voir dire, Sharer-Mohatt testified that the
theory of the splitting process had been tested on clinical populations and had been subjected to
peer review. In addition, she testified that the methodology for the theory was observation.
However, Sharer-Mohatt also indicated that she could not provide specific publications or dates
where the theory was discussed nor could she report the rate of error for the theory.
Based on the voir dire, Wendy objected to any further testimony about the splitting
process because Sharer-Mohatt was not an expert in this field. The court overruled the objection
and allowed Sharer-Mohatt to testify that Wendy was putting pressure on Alexx to view Ray as
“all bad.”
Sharer-Mohatt also testified that she believed that Alexx’s scratching was a physical
symptom of the amount of stress and anxiety Alexx was currently experiencing. Wendy objected
to this testimony on the basis of improper foundation. The court overruled her objection.
On appeal, Wendy asserts that the district court erred in permitting Sharer-Mohatt to
testify about the splitting process and about the cause of Alexx’s scratching. Specifically, Wendy
argues in her brief that Sharer-Mohatt was not qualified to testify as an expert concerning the
splitting process and that she is not a medical doctor who can diagnose or determine the cause of
Alexx’s skin condition. We find Wendy’s assertions to be without merit.
(a) Splitting Process
An expert’s opinion is ordinarily admissible under Neb. Rev. Stat. § 27-702 (Reissue
2008), if the witness (1) qualifies as an expert, (2) has an opinion that will assist the trier of fact,
(3) states his or her opinion, and (4) is prepared to disclose the basis of that opinion on
cross-examination. Heistand v. Heistand, 267 Neb. 300, 673 N.W.2d 541 (2004). The Nebraska
Supreme Court held in Schafersman v. Agland Coop, 262 Neb. 215, 631 N.W.2d 862 (2001), that
when the opinion involves scientific or specialized knowledge, Nebraska courts should apply the
principles of Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 113 S. Ct. 2786, 125
L. Ed. 2d 469 (1993). Under our recent Daubert/Schafersman jurisdiction, the trial court acts as a
gatekeeper to ensure the evidentiary relevance and reliability of an expert’s opinion. Robb v.
Robb, 268 Neb. 694, 687 N.W.2d 195 (2004). This entails a preliminary assessment of whether
the reasoning or methodology underlying the testimony is valid and whether that reasoning or
methodology can be applied to the facts at issue. Id. In addition, the trial court must determine if
the witness has applied the methodology in a reliable manner. Id.
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In evaluating expert opinion testimony under Daubert, where such testimony’s factual
basis, data, principles, methods, or their application are called sufficiently into question, the trial
judge must determine whether the testimony has a reliable basis in the knowledge and experience
of the relevant discipline. Schafersman v. Agland Coop, supra. In determining the admissibility
of an expert’s testimony, a trial judge may consider several more specific factors that Daubert
said might “bear on” a judge’s gatekeeping determination. Schafersman v. Agland Coop, supra.
These factors include whether a theory or technique can be (and has been) tested; whether it has
been subjected to peer review and publication; whether, in respect to a particular technique, there
is a high known or potential rate of error; whether there are standards controlling the technique’s
operation; and whether the theory or technique enjoys general acceptance within a relevant
scientific community. Id. These factors are, however, neither exclusive nor binding; different
factors may prove more significant in different cases, and additional factors may prove relevant
under particular circumstances. Id.
Wendy contends that Sharer-Mohatt’s testimony failed to establish that the splitting
process theory has any validity or reliability and that, as a result, she should not have been
permitted to testify about the splitting process as it relates to Wendy and Alexx’s relationship.
Prior to providing any testimony about her therapy with Alexx or about her clinical
impressions, Sharer-Mohatt testified about her extensive background in psychology. She testified
that she was a clinical psychologist who had been practicing for more than 15 years. Much of her
practice had been dedicated to treating children and adolescents, including working with schools
and with the juvenile court system. She indicated that she had treated well over 100 children. In
addition, in her curriculum vitae, submitted as an exhibit to the court, she detailed the many
papers she had published during the course of her career and the many conferences and
professional associations she had been a part of during that same time.
After explaining the splitting process and the possible implications in these custody
proceedings, Sharer-Mohatt testified that the theory of the splitting process had been tested on
clinical populations and had been subjected to peer review. In addition, she testified that the
methodology for the theory was observation. And, even though Sharer-Mohatt also indicated that
she could not provide specific publications or dates where the theory was discussed nor could
she report the rate of error for the theory, the court found that her testimony regarding the theory
was admissible.
Generally, a trial court’s ruling in receiving or excluding an expert’s testimony which is
otherwise relevant will be reversed only when there has been an abuse of discretion. See City of
Lincoln v. Realty Trust Group, 270 Neb. 587, 705 N.W.2d 432 (2005). We cannot say that the
court abused its discretion in permitting Sharer-Mohatt’s testimony about the splitting process.
Sharer-Mohatt is clearly a qualified child psychologist. And, though she was not extremely
detailed in providing the basis behind the splitting process theory, she did affirmatively state that
the theory had been tested and peer reviewed. In addition, she provided some basis for believing
that the theory is generally accepted in the psychological community.
Moreover, Sharer-Mohatt testified that Alexx had been one of her patients since
November 2009, or almost 3 years by the time of the modification trial. Clearly, then,
Sharer-Mohatt had spent a great deal of time talking with Alexx and observing her behaviors and
emotional state. The court did not abuse its discretion in permitting Sharer-Mohatt to testify
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regarding the splitting process or in how such process had affected Alexx’s emotional
well-being. Wendy’s assertions to the contrary are without merit.
(b) Skin Condition
Wendy also asserts that the district court erred in permitting Sharer-Mohatt to testify that
Alexx’s scratching was the result of her aniexty and stress. Wendy argues that only a physician
would be able to provide such a diagnosis.
Wendy’s assertion is without merit. As we detailed above, Sharer-Mohatt is an
experienced child psychologist who is qualified to offer an opinion about the physical effects of
Alexx’s extreme stress and anxiety. The fact that Sharer-Mohatt is not a medical doctor and that
there are other possible causes for Alexx’s skin condition should go to the weight of
Sharer-Mohatt’s testimony and not to its admissibility.
4. MOTION TO CHANGE CUSTODY
At the close of the modification trial, Ray made an oral motion for a directed verdict as to
Wendy’s request for a change in custody. The district court granted Ray’s request for a directed
verdict on the custody issue. The court stated: “I think there is -- even giving every reasonable
inference to the nonmoving party [--] that there’s insufficient evidence for a change in custody as
requested by [Wendy].”
On appeal, Wendy asserts that the district court erred in denying her motion for a change
in custody. Wendy’s argument in support of this contention is essentially based on her renewed
assertion that the court erred in permitting the testimony of Sharer-Mohatt and in failing to
appoint an independent psychologist to conduct a custody evaluation.
In our analysis above, we concluded that the district court did not err in permitting
Sharer-Mohatt’s testimony or in failing to appoint an independent mental health professional to
conduct a custody evaluation. Accordingly, we also conclude that to the extent Wendy
challenges the district court’s decision to deny her motion for a change in custody because of its
decisions regarding Sharer-Mohatt’s testimony and regarding the custody evaluation, her
assertion has no merit.
Moreover, we also conclude that the district court did not abuse its discretion in finding
that Wendy failed to demonstrate that a change in custody was warranted. Ordinarily, custody of
a minor child will not be modified unless there has been a material change in circumstances
showing that the custodial parent is unfit or that the best interests of the child require such action.
Vogel v. Vogel, 262 Neb. 1030, 637 N.W.2d 611 (2002). In her complaint to modify custody,
Wendy generally alleged that a change in custody was warranted because Ray had actively
interfered in her relationship with Alexx.
However, at the modification trial, Wendy did not provide any evidence to prove that Ray
was an unfit parent or that a change in custody was in Alexx’s best interests. Wendy testified that
her relationship with Ray was strained and that they communicated only through e-mail. In
addition, she testified that Ray was often unwilling to be flexible with her visitation time or to
give her any additional time not required by the court’s order. However, she did not provide any
evidence to prove how her strained relationship with Ray affected Alexx or how such behavior
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made him an unfit parent. Instead, Wendy testified that while Alexx was in Ray’s custody, she
was a good student who excelled in athletics.
Wendy also testified concerning Ray’s monitoring and recording of her telephone calls
with Alexx. She testified that she did not give him permission to listen in on her conversations
with Alexx and that he had done so without her knowledge. Again, though, there was no
evidence about how this behavior negatively affected Alexx. Instead, the evidence suggested that
Ray was monitoring Alexx’s conversations with Wendy in order to make Alexx feel more
comfortable and that, in fact, Alexx appreciated Ray’s involvement in these conversations.
Wendy simply failed to provide sufficient evidence to demonstrate that a material change
of circumstances had occurred which would warrant a change in custody. Accordingly, upon our
review of the evidence presented, we cannot say that the district court erred in denying her
motion for a change in custody.
5. ALTERATION OF VISITATION SCHEDULE
Wendy asserts that the district court erred in modifying her visitation with Alexx by (1)
ordering her to participate in two visitation sessions supervised by her therapist and by Alexx’s
therapist and (2) permanently altering her summer visitation time such that it decreased from 6
continuous weeks to 4 continuous weeks. We will separately address each of Wendy’s assertions
regarding the modifications to her visitation. However, first, we recount the pertinent principles
of law relating to modification of a noncustodial parent’s visitation time.
Visitation relates to continuing and fostering the normal parental relationship of the
noncustodial parent. See Fine v. Fine, 261 Neb. 836, 626 N.W.2d 526 (2001); Walters v.
Walters, 12 Neb. App. 340, 673 N.W.2d 585 (2004). The best interests of the child are the
primary and paramount considerations in determining and modifying visitation rights. Id. The
best interests inquiry has its foundation in both statutory and case law.
Neb. Rev. Stat. § 43-2923(6) (Cum. Supp. 2012) provides that in determining custody
and parenting arrangements:
[T]he court shall consider the best interests of the minor child, which shall
include, but not be limited to, consideration of . . . .
(a) The relationship of the minor child to each parent prior to the commencement
of the action or any subsequent hearing;
(b) The desires and wishes of the minor child, if of an age of comprehension but
regardless of chronological age, when such desires and wishes are based on sound
reasoning; [and]
(c) The general health, welfare, and social behavior of the minor child.
In addition to these factors, the Nebraska Supreme Court has previously held that in
determining a child’s best interests, courts
“‘may consider factors such as general considerations of moral fitness of the child’s
parents, including the parents’ sexual conduct; respective environments offered by each
parent; the emotional relationship between child and parents; the age, sex, and health of
the child and parents; the effect on the child as the result of continuing or disrupting an
existing relationship; the attitude and stability of each parent’s character; parental
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capacity to provide physical care and satisfy educational needs of the child; the child’s
preferential desire regarding custody if the child is of sufficient age of comprehension
regardless of chronological age, and when such child’s preference for custody is based on
sound reasons; and the general health, welfare, and social behavior of the child.’”
Davidson v. Davidson, 254 Neb. 357, 368, 576 N.W.2d 779, 785 (1998).
With these principles in mind, we turn to a discussion of Wendy’s specific assertions.
(a) Temporary Supervised Visitation
Wendy asserts that the district court erred in ordering her to participate in two visitation
sessions supervised by her therapist and by Alexx’s therapist. Specifically, Wendy asserts that
any restriction on a parent’s visitation is an extreme measure that is simply not merited by the
facts of this case. Upon our review of the record, we find that Wendy’s assertion has no merit.
The trial court has discretion to set a reasonable visitation schedule. See Maranville v.
Dworak, 17 Neb. App. 245, 758 N.W.2d 70 (2008). The determination of reasonableness is to be
made on a case-by-case basis. Id. The Nebraska Supreme Court has previously stated that limits
on visitation are an extreme measure. Fine v. Fine, supra. However, the court has also stated that
such limits may be warranted where they are in the best interests of the children. Id.
In its final order, the district court ordered Wendy and Alexx to participate in two
sessions of supervised visitation with their therapists present. The court indicated its belief that
such visitation sessions would help to repair Wendy and Alexx’s relationship and would help
Wendy learn to communicate better with Alexx. After these therapeutic sessions occurred,
Wendy’s regular visitation with Alexx was gradually restored.
Upon our de novo review of the record and given the facts of this specific case, we
cannot say that the district court abused its discretion in requiring Wendy to participate in two
therapeutic visitation sessions. Although this requirement does amount to a restriction on
Wendy’s visitation, it is a fairly limited and brief restriction. And, our reading of the evidence
presented by the parties reveals that, at a minimum, Alexx has experienced extreme stress as a
result of her relationship with Wendy. Whether that stress is caused by Wendy, as Ray suggests,
or whether that stress is simply caused by Alexx’s being shuffled back and forth between her
parents, as Wendy suggests, Alexx is clearly suffering. There was evidence that Alexx feels
more comfortable interacting with Wendy when someone else is present. These therapeutic
sessions are clearly meant to assist Alexx in regaining trust in Wendy and in repairing their
relationship.
Based on our reading of the record, we affirm the order of the district court concerning
the therapeutic visitation sessions.
(b) Summer Visitation
Wendy asserts that the district court erred in reducing her summer visitation time with
Alexx from 6 continuous weeks to 4 continuous weeks. In her brief on appeal, Wendy does not
provide much argument in support of her assertion. In fact, she really only argues that the court
erred in reducing her summer visitation time because it did not provide a rationale for its
decision.
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We first note that Wendy does not point us to any authority to suggest that the district
court must detail its rationale for making specific modifications to a visitation schedule. And,
while we agree with Wendy’s assertion that the district court did not provide any explanation for
its specific decision to decrease her summer visitation time, we do not agree that the reasons for
the court’s decision are unclear when we read the court’s order as a whole. Given the evidence
presented at the modification trial and the subsequent hearings, and given the court’s specific
findings about Wendy and Alexx’s current relationship, the reasons for the court’s decision
regarding the summer visitation time are clear.
The court found that Wendy had acted inappropriately in her relationship with Alexx by
placing Alexx in a position which forced her to make age-inappropriate decisions, including
pressuring Alexx to come live with Wendy in Kansas. The court also found that Wendy’s
behavior had negatively affected Alexx’s physical and emotional well-being. The court found
that Alexx was a credible witness when she testified that she was feeling stress about her
relationship with Wendy and felt that she needed a break in their visitation time.
Given these findings, we can assume that the court decreased Wendy’s summer visitation
time with Alexx’s best interests in mind. The court clearly believed that it would be in Alexx’s
best interests to spend more time with Ray during her summer visitation because of the current
strain existing in Wendy and Alexx’s relationship as a result of Wendy’s inappropriate behavior.
We cannot say that the district court abused its discretion in this regard.
6. ATTORNEY FEES
At the modification trial, Ray’s attorney submitted an affidavit concerning the time he
had expended in preparing for the proceedings. That affidavit indicated that Ray’s attorney fees
totaled approximately $22,000 for his attorney’s work on the case. At the final hearing, held 6
months after the modification trial, Ray’s attorney submitted an updated affidavit concerning the
time he had expended in preparing for the trial and the subsequent hearings. That affidavit
indicated that Ray’s attorney fees totaled approximately $30,600. Ray asked that he be awarded
$30,000 in attorney fees. Wendy argued that she should not have to pay any of Ray’s fees
because the amount of fees incurred was unreasonable and because Ray initiated the case by
filing his complaint to modify visitation.
In the district court’s order, it awarded Ray $15,000 in attorney fees. The court ordered
Wendy to pay $500 per month toward the attorney fees until they were paid in full. Wendy
appeals from the court’s award of attorney fees to Ray. Specifically, she argues that the award is
excessive and that Ray was not the “‘prevailing’ party” and is not entitled to attorney fees. Brief
for appellant at 31.
In a paternity action, attorney fees are reviewed de novo on the record to determine
whether there has been an abuse of discretion by the trial judge. Drew on behalf of Reed v. Reed,
16 Neb. App. 905, 755 N.W.2d 420 (2008). Absent such an abuse, the award will be affirmed.
Id.
A trial court’s award of attorney fees depends on multiple factors that include the nature
of the case, the services performed and results obtained, the earning capacity of the parties, the
length of time required for preparation and presentation of the case, customary charges of the
bar, and the general equities of the case. See id.
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Ray’s attorney submitted an affidavit to the trial court which detailed the work he
completed on the case and the number of hours he spent completing that work. As his counsel
noted at the final hearing, the case spanned a period of 25 months, during which time there were
numerous hearings concerning Wendy’s temporary visitation schedule and various discovery
motions. In addition, the proceedings did not end after the trial was held. Instead, the litigation
continued and Wendy’s visitation with Alexx continued to be altered and reviewed while she
completed her counseling as ordered by the court. And, contrary to Wendy’s assertions on
appeal, Ray was the “prevailing party,” because Wendy was ordered to attend counseling and to
participate in supervised visitation with Alexx for a period of time, as Ray requested. Moreover,
Wendy did not submit any evidence to demonstrate that she was not able to pay any portion of
Ray’s attorney fees. In fact, neither party submitted any evidence to demonstrate his or her
current financial circumstances.
Given the nature and extent of the proceedings and the general equities of the case, we
cannot say that the court abused its discretion in awarding Ray $15,000 in attorney fees. Based
on Ray’s evidence, the amount was fair and reasonable and constituted only half of Ray’s total
accumulated attorney fees and half of the requested amount. Accordingly, we affirm the award of
attorney fees.
V. CONCLUSION
We find that the district court did not err in denying Wendy’s request for an independent
custody evaluation or in permitting Sharer-Mohatt to testify regarding her opinions about
Alexx’s best interests. In addition, we conclude that the district court did not abuse its discretion
in denying Wendy’s request to change custody or in granting Ray’s request for a modification in
the visitation schedule. Finally, we conclude that the court did not err in awarding Ray a portion
of his attorney fees.
AFFIRMED.
- 16 -
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191 Ill. App.3d 1034 (1989)
548 N.E.2d 509
THE PEOPLE OF THE STATE OF ILLINOIS, Plaintiff-Appellant,
v.
WILFRED DECATUR, Defendant-Appellee.
No. 1-88-0992.
Illinois Appellate Court First District (1st Division).
Opinion filed December 4, 1989.
*1035 Richard M. Daley, State's Attorney, of Chicago (Gael M. O'Brien, Special Assistant State's Attorney, and Inge Fryklund, Assistant State's Attorney, of counsel), for the People.
Randolph N. Stone, Public Defender, of Chicago (Timothy J. Leeming and James H. Reedy, Assistant Public Defenders, of counsel), for appellee.
Reversed and remanded.
JUSTICE CAMPBELL delivered the opinion of the court:
The State appeals from the circuit court's order dismissing defendant's indictment for delivery of a controlled substance (Ill. Rev. Stat. 1985, ch. 56 1/2, par. 1401(c)), arguing that the circuit court erred when it determined that defendant's statutory right to a speedy trial had been denied.
On January 20, 1987, defendant was arrested for possession of a controlled substance. At the preliminary hearing on February 9, 1987, defendant was in custody and demanded trial. The State advised the court that the laboratory analysis of the substance recovered from defendant had not yet been completed. Since defendant refused to enter a stipulation regarding the substance, the State requested a continuance *1036 to obtain the results. The court denied the request, and for this reason the State chose to nol-pros the charge. Defendant was released from custody.
Eleven days later, on February 20, 1987, the State obtained the laboratory analysis of the substance that had been recovered from defendant. Despite the fact that all of the evidence was within the State's control as of that date, defendant was not reindicted and rearranged on the same charge until October 13, 1987, nearly eight months later. On January 28, 1988, defendant filed a motion requesting that this new indictment against him be discharged based upon the State's failure to comply with the statutory provision that guarantees a speedy trial. (Ill. Rev. Stat. 1985, ch. 38, par. 103-5.) On March 1, 1988, the circuit court granted defendant's motion, ruling that defendant's right to a speedy trial had been "usurped" by the State's actions. The circuit court found that the delay in bringing defendant to trial had been occasioned by the State's lack of due diligence in prosecuting the case and that the State's decision to nol-pros the case at the time of the preliminary hearing was clearly a measure calculated and designed to circumvent the statutory provisions that guarantee a defendant a speedy trial once he has been charged with a crime. We must disagree.
1 Sections 103-5(a) and (b) of the Code of Criminal Procedure of 1963 (Ill. Rev. Stat. 1987, ch. 38, pars. 103-5(a), (b)), known as the speedy-trial statute, provide, in general, that a person who is incarcerated must be tried within 120 days from the date he was taken into custody and that a person who is released on bail or recognizance must be tried within 160 days of his demand for trial. The speedy-trial statute is not operative unless charges are pending against the defendant. The 120-day period may be invoked only when the defendant is "in custody," and the 160-day period may be invoked only when the defendant is out on bail or recognizance and has demanded trial. People v. Freedman (1987), 155 Ill. App.3d 469, 474, 508 N.E.2d 326.
2 In People v. Sanders (1980), 86 Ill. App.3d 457, 466, 407 N.E.2d 951, the court recognized that cases involving the application of the speedy-trial provisions when charges have been dismissed and reinstated typically fall into one of three categories: (1) those cases where the charges are dismissed upon a judicial determination at the preliminary hearing that no probable causes exists and the State subsequently refiles the charges; (2) those cases where the charges are dismissed upon the State's request that they be stricken with leave to reinstate (SOL) and the State later reinstates the charges; and (3) those cases where the State chooses to nol-pros the charges that have *1037 been filed and then later refiles the same charges. Whether the statutory term under the speedy-trial statute continues to run, whether it is tolled or whether it begins to run anew with the subsequent filing has usually turned on a determination of which of the three above-described dispositions is involved. As will be discussed below, there is clearly a rationale for distinguishing between the treatment of the cases based on the type of disposition obtained or requested by the State.
When charges against a defendant are dismissed by the court for a lack of probable cause, a judicial determination has been made in favor of the defendant. It is not a voluntary act by the State. The State may begin to prosecute the defendant again only by refiling the charges after obtaining additional evidence. Because a defendant would no longer be in custody or on bail or recognizance after a dismissal for lack of probable cause, the speedy-trial statute no longer is applicable. Furthermore, in this type of dismissal, the State clearly has little opportunity to manipulate the proceeding or purposely evade the operation of the statutory term. (People v. Toney (1978), 58 Ill. App.3d 364, 368, 374 N.E.2d 695; see also People v. Gimza (1977), 56 Ill. App.3d 477, 371 N.E.2d 1135.) For these reasons the statutory period has been held to begin anew with the new filing.
When charges have been SOL, it has been said that "the charges continue to lie against the accused, albeit in a dormant state, and they may be resurrected upon the State's motion at any time." (People v. Griffin (1978), 58 Ill. App.3d 644, 646, 374 N.E.2d 1031.) Because charges that are SOL are still pending against the defendant and the prosecution is not effectively terminated, but merely suspended for a time, the statutory speedy-trial term will be deemed to continue to run, assuming of course that defendant is in custody or has demanded trial. People v. Griffin, 58 Ill. App.3d at 646.
In the third situation, where the State requests a nolle prosequi on charges that have been brought against a defendant, the effect is to terminate the proceedings with respect to those charges. As a result, defendant is free to go and to do as he pleases and is not required to post bond or to enter into a recognizance to appear at another time. Furthermore, if the charges are nol-prossed before jeopardy attaches, subsequent prosecution of the identical charges is permitted. People v. Watson (1946), 394 Ill. 177, 68 N.E.2d 265.
Because charges that have been nol-prossed are not pending and because defendant is neither in custody, nor on bail or recognizance, the situation is akin to an involuntary dismissal for lack of probable cause. By the same token, because the decision to nol-pros lies within *1038 the "unfettered discretion" of the State's Attorney and could be used to manipulate the proceedings, charges that have been nol-prossed are treated somewhat differently. (People v. Sanders, 86 Ill. App.3d at 467.) In these instances the speedy-trial term is tolled during the period of time that the charges are no longer pending and defendant is neither in custody nor on bail or recognizance. The clock will continue to run once again with the refiling of the charges that were previously nol-prossed. People v. Sanders (1980), 86 Ill. App.3d 457.
3 Notwithstanding the fact that the statutory term will generally be deemed tolled by a nolle prosequi, the State's absolute power to request this type of disposition requires an additional inquiry to determine whether the State is abusing this power and whether the refiling was vexatious, repetitious or employed to manipulate the proceedings in order to evade or frustrate the purpose of the speedy-trial statute. (People v. Freedman, 155 Ill. App.3d at 474; People v. Olson (1984), 128 Ill. App.3d 560, 470 N.E.2d 1176; People v. Verstat (1983), 112 Ill. App.3d 90, 444 N.E.2d 1374.) If it is determined that the State engaged in technical maneuvering or that the State procured the nolle prosequi to cause delay or avoid statutory limitations, the speedy-trial term will not be deemed tolled. Rather, in those instances the statutory term will continue to run as of the date of the first filing or the first demand for trial. See People v. Christensen (1984), 102 Ill.2d 321, 329, 465 N.E.2d 93; People v. Fosdick (1967), 36 Ill.2d 524, 528, 224 N.E.2d 242.
4 In the present case, the trial court held that the State engaged in technical maneuvering and purposeful evasion of the speedy-trial statute as evidenced by the State's failure to resume prosecution of defendant until October 1987. Because the State nol-prossed the charges brought against defendant on February 9, 1987, due to the unavailability of the chemical analysis of the substance allegedly possessed by defendant and believed to be a controlled substance, and because the State subsequently received the completed laboratory report on February 20, 1987, within 11 days of the nolle prosequi, the trial court held that the State had "usurped" defendant's rights and refused to toll the statutory term after the nolle prosequi had been obtained. Instead, the court held that the statutory term had continued to run from the time of defendant's first speedy-trial demand and, thus, discharged him.
We agree that the State's motivation for requesting a nolle prosequi is relevant, material and sometimes crucial to the inquiry when determining whether there has been a violation of defendant's statutory right to a speedy trial. A mechanical application of the rules *1039 should not be employed based upon the language used or the type of disposition requested by the State. By the same token, we fail to see how the State's decision to nol-pros charges brought against defendant, which was necessitated by the lack of sufficient competent evidence against him at the time of the preliminary hearing, may be equated to a purposeful evasion or tactical maneuvering employed by the State to avoid the restrictions of the speedy-trial statute.
When a defendant is arrested for the alleged commission of a crime, a timetable is automatically set into motion. This timetable requires that certain events take place in order to assure that the accused is not being held without cause and is afforded his due process rights under the laws of this State as well as under the United States Constitution. If the State is admittedly unable to meet this timetable and to go forward, it has an obligation to release defendant. At the same time, the State has an obligation to the community at large to prosecute violations of the law so as to protect its citizenry. We believe that in order for the State to be able to meet these dual obligations, there must be a higher standard or greater showing to indicate that the dismissal of charges lodged against an accused was occasioned by the State for the sole purpose of delay, harassment of the defendant or to deliberately avoid the statutory restrictions. The mere fact that the State was unable to go forward at the time of the preliminary hearing because of the unavailability of certain proofs does not, in our view, equate with a deliberate stall tactic or purposeful evasion. Furthermore, once the State possesses all the evidence that is necessary to obtain a conviction, the State need not commence prosecution immediately, the only limitations being the statutory ones applicable to the type of offense being charged.
In short, we find that when the prosecutor requests a nolle prosequi on charges filed against a defendant and this request is granted by the court and the defendant is released from custody, bail or recognizance, the statutory speedy-trial term is tolled until such time as the identical charges are refiled and defendant is once again taken into custody or otherwise held within the jurisdiction of the court. In order for this tolling of the statute to be inoperative, there must be a clear showing that the State sought the nolle prosequi to gain some tactical advantage over defendant that would place him in a more disadvantageous position, or to otherwise harass or to prejudice defendant so as to avoid or frustrate his interests which the speedy-trial right was designed to protect. These interests are: (1) to prevent oppressive pretrial incarceration; (2) to minimize the accused's anxiety and concern; and (3) to limit the possibility that the defense may be impaired. *1040 Barker v. Wingo (1972), 407 U.S. 514, 532, 33 L.E. 2d 101, 118, 92 S.Ct. 2182, 2193; People v. Sanders (1980), 86 Ill. App.3d 457, 472, 407 N.E.2d 951.
5 Clearly, in this case no such showing was made. There is no evidence that the State's delay in refiling the charges against defendant was motivated by anything other than time restraints occasioned by a high volume of cases. In addition, there is no showing that the purposes of the speedy-trial right were frustrated by the nolle prosequi requested in this case. Defendant did not suffer the oppression of extensive pretrial incarceration, nor was he made to live under a constant threat or anxiety of prosecution, as he would have been had the charges been still pending. Even though the accused was probably aware that the State intended to pursue the matter at a later date, the fact remains that the State was required to obtain another indictment or otherwise to commence the proceedings anew. In the meantime, defendant was in no better or worse position than he was before the original charges were brought. Furthermore, the fact that the State could have commenced prosecution sooner but did not do so does not necessarily mean that the State was derelict in its duty, nor does it imply that some sinister motivation was at play. We note that our decision on this matter is in agreement with the recent opinion issued by the sixth division of this court in People v. Daniels (1989), 190 Ill. App.3d 224.
6 For similar reasons defendant has not shown an infringement of his State constitutional right to a speedy trial. Relying on Barker v. Wingo (1972), 407 U.S. 514, 33 L.Ed.2d 101, 92 S.Ct. 2182, and People v. Henry (1970), 47 Ill.2d 312, 265 N.E.2d 876, the court in Sanders held that "[d]etermination of whether [a] defendant's constitutional right to a speedy trial has been violated requires consideration of four factors: (1) the length of the delay; (2) the reason for the delay; (3) defendant's assertion of his right; and (4) prejudice to defendant." (Sanders, 86 Ill. App.3d at 471.) The delay of approximately eight months is not presumptively prejudicial, and defendant has not demonstrated how his case was prejudiced by the delay.
The order of the circuit court is reversed and the cause remanded for further proceedings.
Reversed and remanded.
O'CONNOR and BUCKLEY, JJ., concur.
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United States Court of Appeals
Fifth Circuit
F I L E D
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT December 17, 2004
Charles R. Fulbruge III
Clerk
No. 04-10794
Conference Calendar
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
ISAIAS DIAZ-REYES,
Defendant-Appellant.
--------------------
Appeal from the United States District Court
for the Northern District of Texas
USDC No. 3:04-CR-47-ALL-D
--------------------
Before KING, Chief Judge, and DeMOSS and CLEMENT, Circuit Judges.
PER CURIAM:*
Appealing the Judgment in a Criminal Case, Isaias Diaz-Reyes
raises arguments that are foreclosed by Almendarez-Torres v.
United States, 523 U.S. 224, 235 (1998), which held that a prior
conviction is a sentencing factor under 8 U.S.C. § 1326(b)(2) and
not a separate criminal offense. The Government’s motion for
summary affirmance is GRANTED, and the judgment of the district
court is AFFIRMED.
*
Pursuant to 5TH CIR. R. 47.5, the court has determined that
this opinion should not be published and is not precedent except
under the limited circumstances set forth in 5TH CIR. R. 47.5.4.
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751 P.2d 75 (1988)
Michael N. MILLIGAN, Petitioner-Appellant,
v.
COLORADO DEPARTMENT OF CORRECTIONS, Respondent-Appellee.
No. 86CA0740.
Colorado Court of Appeals, Div. II.
January 28, 1988.
*76 Michael N. Milligan, Pro Se.
Duane Woodard, Atty. Gen., Charles B. Howe, Chief Deputy Atty. Gen., Richard H. Forman, Sol. Gen., Terrence A. Gillespie, Asst. Atty. Gen., Denver, for respondent-appellee.
BABCOCK, Judge.
Petitioner, Michael N. Milligan, an inmate in the custody of respondent, the Colorado Department of Institutions, appeals the judgment of the trial court dismissing his C.R.C.P. 106(a)(2) petition for relief in the nature of mandamus and prohibition. He alleges that his continued medium security classification violates his rights under the due process and equal protection provisions of the Fourteenth Amendment. We conclude that the trial court did not err in dismissing the action because defendant has failed to state a claim upon which relief may be granted. See Gramiger v. Crowley, 660 P.2d 1279 (Colo.1983); McDonald v. Lakewood County Club, 170 Colo. 355, 461 P.2d 437 (1969).
Where, as here, inmate classification decisions are within the discretion of Department of Corrections officials, see Department of Corrections Regulation No. 202-1, defendant's particular classification implicates no liberty interest protected by the Fourteenth Amendment due process clause. Milligan v. McGoff (Dist.Colo. No. 86-2-1131, February 27, 1987). See Meachum v. Fano, 427 U.S. 215, 96 S.Ct. 2532, 49 L.Ed.2d 451 (1976); Olim v. Wakinekona, 461 U.S. 238, 103 S.Ct. 1741, 75 L.Ed.2d 813 (1983); Kinney v. Young, 689 P.2d 614 (Colo.1984).
Further, because a fundamental interest is not implicated, classification decisions do not violate equal protection so long as they bear a rational relationship to a legitimate state purpose. See Milligan v. McGoff, supra; Kinney v. Young, supra. Here, the 80-year length of defendant's sentence following his convictions of first degree sexual assault, second degree burglary, and forgery, the seriousness of these crimes, and his refusal to participate in recommended mental health treatment are rationally related to the state's interest in maintaining internal prison security and offender rehabilitation. See Milligan v. McGoff, supra; Kinney v. Young, supra.
Judgment affirmed.
SMITH and PLANK, JJ., concur.
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890 F.2d 1167
Evans (Ray), Jones (Jim)v.Pall Corporation, C.C.W. Systems, Ltd., Regal Ware, Inc.,Club Watermaster Paul (Canada) Ltd.
NO. 89-7129
United States Court of Appeals,Eleventh Circuit.
NOV 03, 1989
N.D.Ala., 888 F.2d 1396
1
DENIALS OF REHEARING EN BANC.
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928 F.2d 407
Unpublished DispositionNOTICE: Seventh Circuit Rule 53(b)(2) states unpublished orders shall not be cited or used as precedent except to support a claim of res judicata, collateral estoppel or law of the case in any federal court within the circuit.UNITED STATES of America, Plaintiff/Appellee,v.James KOBS, Defendant/Appellant.
No. 90-2246.
United States Court of Appeals, Seventh Circuit.
Argued March 5, 1991.Decided March 12, 1991.
Appeal from the United States District Court for the Eastern District of Wisconsin, No. 89 CR 153, J.P. Stadtmueller, Judge.
E.D.Wis.
AFFIRMED.
Before BAUER, Chief Judge, POSNER, Circuit Judge and Eschbach, Senior Circuit Judge.
ORDER
James Kobs pled guilty to conspiracy to possess marijuana with intent to deliver. Kobs appeals the enhancement of his sentence for obstruction of justice under Section 3C1.1 of the United States Sentencing Commission Guidelines (the "Guidelines"). We affirm.
While free on bond and awaiting sentencing, Kobs submitted to a urinalysis test by the United States Probation Office, which tested positive for the presence of valium, marijuana, and cocaine. When his probation officer confronted him with the positive test results, Kobs initially denied using any of the drugs. Later, Kobs admitted using valium for muscle spasms, but he continued to deny using cocaine or marijuana.
At sentencing, the district court heard testimony and found that Kobs lied to the probation officer when he denied using marijuana and cocaine even after his probation officer informed him that his urine specimen tested positive for those drugs. Kobs' counsel did not dispute the court's conclusion. Relying on United States v. Jordan, 890 F.2d 968, 973 (7th Cir.1989), the court determined that Kobs' conduct amounted to an obstruction of justice under Guidelines Sec. 3C1.1 and enhanced his sentence.
Guidelines Sec. 3C1.1 requires that the district court increase the defendant's base offense level by two if the defendant "willfully impeded or obstructed, or attempted to impede or obstruct the administration of justice during the investigation or prosecution of the instant offense." A sentencing court's determination that a defendant obstructed justice is a finding of fact which will be overturned only if it is clearly erroneous. United States v. Jordan, 890 F.2d at 973. "However, the interpretation of a term of the Sentencing Guidelines, like statutory interpretation, is a question of law subject to de novo review on appeal." United States v. Teta, 918 F.2d 1329, 1332 (7th Cir.1990).
Kobs contends that the court erred in enhancing his sentence because lying to the probation office about his drug use while awaiting sentencing is not a material falsehood, thus it can not serve as a basis for a finding of obstruction of justice. Kobs argues that in order for a falsehood to be material under Guidelines Sec. 3C1.1 it must be made in furtherance of the conviction. This circuit does not define "materiality" so narrowly. We recently upheld a Guidelines Sec. 3C1.1 enhancement for providing false information to a probation officer preparing a pre-sentence report. In Jordan, the defendant was convicted of possession with intent to distribute cocaine. 890 F.2d at 969. The district court enhanced Jordan's sentence under Sec. 3C1.1, finding that Jordan obstructed justice when he lied to his probation officer about using cocaine while awaiting sentencing. Id. at 973. We affirmed the sentence imposed by the district court. Id.
1
In finding Jordan's conduct to be material, this court stated "Jordan's drug abuse during the pendency of his drug dealing prosecution was directly relevant to both the Probation Office and the district court in determining how Jordan's case should be handled." Id. We also found that Jordan's actions in lying to the probation officer about drug use were material because that type of conduct impeded the court's and the Probation Office's ability to monitor the behavior of convicted defendants. Id. See also United States v. Ojo, 916 F.2d 388, 393 (7th Cir.1990) (holding that the defendant's "action in providing false information to the pretrial services officer, who was conducting the bail investigation for the court, falls squarely within" the conduct prescribed by Guidelines Sec. 3C1.1).
2
Jordan controls this case. The facts in Kobs' case are indistinguishable from the facts in the Jordan case. Kobs argues that Jordan's other conduct while he awaited sentencing, two incidents of drug dealing, distinguish the cases. However, the district court relied only on Jordan's lies to the probation officer in enhancing his sentence under Guidelines Sec. 3C1.1. 890 F.2d at 973. While this court noted that Jordan's convictions for drug dealing bolstered the district court's determination that Jordan willfully obstructed justice, we did not hold that they were dispositive of its determination. Id. Kobs further attempts to distinguish Jordan by arguing that his false statements regarding drug use while on bond were not linked to the prosecution because they did not affect his sentence. We disagree. As in Jordan, Kobs' false statement about drug use was relevant to the Probation Office's pre-sentence investigation and the court's determination of Kobs' sentence. See United States v. Herrera-Figueroa, 918 F.2d 1430, 1434 (9th Cir.1990) (probation officer's presentence investigation and report is conducted to assist the district court in sentencing).
3
Kobs' conduct was sufficiently linked to his prosecution to merit an enhancement under Guidelines Sec. 3C1.1. Kobs' action in lying to the probation officer impeded the Probation Office's ability to conduct an accurate pre-sentence investigation and hindered the court's ability to fairly assess Kobs' conduct in sentencing him. Reviewing the record regarding the district court's factual findings deferentially and in plenary fashion with respect to the Guideline's term "material falsehood", the district court correctly enhanced Kobs' sentence under Guidelines Sec. 3C1.1.
4
Kobs' other arguments merit less discussion. Kobs contends that he lied to the probation officer because he was embarrassed; therefore his conduct was not a "willful" obstruction of justice as required by Guidelines Sec. 3C1.1. The sentencing transcripts do not indicate that the district court made an explicit finding that Kobs' conduct amounted to a willful obstruction of justice. However, Kobs never made this argument before the district court; therefore, review of it on appeal is waived. See United States v. Lewis, 896 F.2d 246, 249 (7th Cir.1990). Additionally, Kobs' argument that his counsel was ineffective because he never challenged the accuracy of the urine test is a non-issue. Kobs conceded that he used drugs while free on bond at his sentencing hearing; therefore, the accuracy of the urine test is immaterial.
Accordingly, we
5
AFFIRM.
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426 F.2d 969
George P. SHULTZ, Secretary of Labor, Plaintiff-Appellant, Cross-Appellee,v.LOCAL UNION 6799, UNITED STEELWORKERS OF AMERICA, AFL-CIO, et al., Defendants-Appellees, Cross-Appellants.
No. 24759.
No. 24800.
United States Court of Appeals, Ninth Circuit.
May 8, 1970.
Ralph A. Fine (argued), Robert V. Zener, Dept. of Justice, Washington, D. C., Wm. Matthew Byrne, Jr., U. S. Atty., Los Angeles, Cal., for plaintiff-appellant, cross-appellee.
Michael H. Gottesman (argued) of Bredhoff, Gottesman & Cohen, Washington, D. C.; Jerome Smith, of Arnold, Smith & Schwartz, Los Angeles, Cal., Bernard Kleiman, Chicago, Ill., Carl Frankel, Pittsburgh, Pa., for defendants-appellees, cross-appellants.
Before BARNES, KOELSCH and KILKENNY, Circuit Judges.
KOELSCH, Circuit Judge.
1
The Secretary of Labor brought this action in the district court pursuant to § 402(b) of the Labor Management Reporting and Disclosure Act against Local Union 6799, United Steel workers of America, to secure judgment setting aside an election of officers and directing the Local to conduct a new election under supervision of the Secretary.
2
That section authorizes the Secretary to commence and prosecute such an action on timely complaint of a union member who has exhausted the available internal remedies afforded by the union whenever the Secretary, upon an investigation, finds probable cause to believe that the election was not in compliance with Section 401 of the Act; Section 402(c) empowers the court to order a new election if it finds the violation "may have affected the outcome of an election."1
3
The Secretary asserted three separate claims;
4
(1) that a rule of the International, applicable to all locals, including Local 6799, prescribing qualifications for candidate eligibility, exceeded the permissible limits of provisions in Section 401(e) and tainted the whole election, thus requiring a complete new election for all officers;
5
(2) that the eligibility rule (even if valid) was not uniformly applied, as required by Section 401(e), to prospective candidates for the office of Financial Secretary, thus requiring a new election for that office;
6
(3) that the International had used union funds to promote the candidacy of one of the candidates for the office of President in violation of Section 401(g), thus requiring a new election for that office.2
7
The district court allowed the International Union to intervene and, after a hearing, held the election invalid solely as to the office of president. Judgment was entered ordering a limited new election. The matter is here on the Secretary's appeal and the union's cross-appeal.
8
Appellees make a threshold objection to the consideration of the Secretary's appeal. They urge that the Secretary lacked standing to assert the two Section 401(e) claims upon which judgment went against him. Their contention, in substance, is: that Section 402 of the Act does not permit the Secretary to allege a particular violation of Section 401 in a suit to set aside an election unless a union member first unsuccessfully protests that violation to the union and that this statutory precondition was not met. The Secretary, although conceding that the union member's protest was silent as to any 401(e) violation, argues that this fact is immaterial; his position is that Section 402 imposes no such limitation but permits the Secretary to assert any violation of Section 401 disclosed by his own investigation even though not so protested by the union member.3
9
The issue poses difficult problems and any answer is not entirely free of doubt; however, we are convinced and therefore conclude that Congress intended to empower the Secretary to assert those violations that are fairly apparent from a member's protest to the union and no others.4
10
Section 402 is ambiguous. Its exhaustion of remedies precondition logically suggests that the union must be afforded fair notice of the purported wrong and a reasonable time ["three calendar months" is the period designated in 402 (a) (2)] to take corrective measures through its own internal machinery before complaint may be filed with the Secretary;5 yet the section also provides that the complaint (to the Secretary) may allege "any" violation and the Secretary must bring a civil action to set aside the invalid election within sixty days after receiving the complaint. To allow the Secretary wide ranging power to urge "any" violation would in effect nullify the exhaustion requirement; not only might the union be completely unaware of the asserted violation prior to the suit but, even if the Secretary gives notice before filing suit, the "three calendar months" period allowed for corrective action by the union would be rendered virtually meaningless. However, if the broad language appearing in the section is more narrowly construed, these inconsistencies disappear and the several provisions become harmonious.6
11
Moreover, we believe the background and legislative history of the Act also support our construction. As said in Wirtz v. Local 153, Glass Bottle Blowers Association of United States and Canada, AFL-CIO, 389 U.S. 463, 470, 88 S.Ct. 643, 648, 19 L.Ed.2d 705 (1968):
12
"Title IV's special function in furthering the overall goals of the LMRDA is to insure `free and democratic' elections. The legislative history shows that Congress weighed how best to legislate against revealed abuses in union elections without departing needlessly from its long-standing policy against unnecessary governmental intrusion into internal union affairs. The extensive and vigorous debate over Title IV manifested a conflict over the extent to which governmental intervention in this most crucial aspect of internal union affairs was necessary or desirable. In the end there emerged a `general congressional policy to allow unions great latitude in resolving their own internal controversies, and, where that fails, to utilize the agencies of Government most familiar with union problems to aid in bringing about a settlement through discussion before resort to the courts.'"7
13
We turn to the union's appeal. The agreed facts fully justify the district court's finding of a union violation of Section 401(g) with respect to the election for the office of president. They disclose that the International donated materials, secretarial help and the use of its facilities to print advertising leaflets for Kenneth Rose, the Local's incumbent president, which Rose used in conducting his successful campaign for reelection.
14
The expense was undoubtedly "minimal," as appellees argue, but it nevertheless reflected the outlay of a sensible sum of union money. Indeed the International, shortly after the Secretary began his investigation and made known his interest in the matter, presented Rose a bill for $13.04, which he immediately paid.
15
The legislative history of the Act does not indicate that Congress intended to place a limit on the amount that a union might lawfully spend to aid a candidate for office or that it meant to encourage troublesome factual disputes over how much (or little) money constitutes a "de minimis" amount; and the language of the provision itself is clear and unambiguous. It provides in terms that "no moneys" of a union shall be spent to promote the candidacy of any person for union office.
16
Likewise unconvincing is appellees' argument that a union is not in violation unless it grants the request of one candidate for financial aid and rejects that of another. Granted that the object of the section is to prohibit discrimination between candidates and that this condition would not exist if a union contributed equally to all candidates for a particular office, the inference is plain that the unlikely probability of even handed union financial aid to several candidates, as well as financial aid to an individual candidate, is equally prohibited. Congress declared in the second of the two sentences comprising the provision that "Such moneys of a labor organization may be utilized for notices, factual statements of issues not involving candidates and other expenses necessary for the holding of an election."
17
We also approve, as not "clearly erroneous" the district court's companion finding that the violation "may have affected" the outcome of the presidential election. The financial aid was reflected in the form of three separate campaign dodgers or pamphlets; in all some 1200 were printed; obviously they were calculated to secure voter support for Rose. Although the record does not disclose the approximate number circulated and posted, it is clear that many were. Whether they produced the desired result is of course impossible to determine, but proof of that fact is not required. Wirtz v. Hotel, Motel & Club Employees Union, Local 6, 391 U.S. 492, 505-508, 88 S.Ct. 1743, 20 L.Ed.2d 763 (1968). However, it does appear that the number of dodgers was double that of the Local's membership and that Rose won the election by a narrow margin. Thus it is not improbable that the financial aid "may have affected" the election.
18
The judgment is affirmed.
Notes:
1
Section 402 (29 U.S.C. § 482) provides:
"(a) A member of a labor organization — (1) who has exhausted the remedies available under the constitution and bylaws of such organization and of any parent body, or (2) who has invoked such available remedies without obtaining a final decision within three calendar months after their invocation, may file a complaint with the Secretary within one calendar month thereafter alleging the violation of any provision of section 481 (section 401) of this title * * *.
(b) The Secretary shall investigate such complaint and, if he finds probable cause to believe that a violation of this subchapter has occurred and has not been remedied, he shall, within sixty days after the filing of such complaint, bring a civil action against the labor organization * * * to set aside the invalid election * * *.
(c) If, upon a preponderance of the evidence after a trial upon the merits, the court finds * * * (2) that the violation of section 481 (section 401) of this title may have affected the outcome of an election, the court shall declare the election * * * to be void and direct the conduct of a new election under supervision of the Secretary and, so far as lawful and practicable, in conformity with the constitution and bylaws of the labor organization, * * *."
2
Section 401 (29 U.S.C. § 481) provides:
"(e) In any election * * * a reasonable opportunity shall be given for the nomination of candidates and every member in good standing shall be eligible to be a candidate and to hold office (subject * * * to reasonable qualifications uniformly imposed).
* * *
(g) No moneys received by any labor organization by way of dues, assessment, or similar levy, and no moneys of an employer shall be contributed or applied to promote the candidacy of any person in an election subject to the provisions of this subchapter. Such moneys of a labor organization may be utilized for notices, factual statements of issues not involving candidates, and other expenses necessary for the holding of an election.
3
The sole member-protest of the election to either the local or international union was made by Nicholas Hantzis, a candidate for the office of president of the Local; his protest concerned an alleged diversion of union funds to defray expenses of Kenneth Rose, the incumbent president, in conducting his successful campaign for reelection. The Secretary acknowledged that this protest did not afford the unions "fair notice" that the union's candidacy eligibility requirement might be invalid or that it was not uniformly imposed; he further acknowledged that Hantzis made no demand on the union to act on those matters
4
Both parties rely on and quote extensively from Wirtz v. Local Union etc. Laborers Union, 389 U.S. 477, 88 S.Ct. 639, 19 L.Ed.2d 716 (1968). But in that decision the Court declined to express an opinion on the subject, and was careful to so note
5
The Court's observation in Wirtz v. Local 153, Glass Bottle Blowers Association of the United States and Canada, 389 U.S. 463, 472, 88 S.Ct. 643, 649 (1968) is relevant; "The stated commitment is to postpone governmental intervention until the union is afforded the opportunity to redress the violation."
6
Section 601 should also be noted. Although vesting the Secretary with broad powers to conduct, on his own initiative, investigations into union affairs, it does not authorize him to commence an action even if his investigation leads him to believe a union is violating the Act. He may only report the matter to interested persons. Wirtz v. Local Union etc. Laborers Union, 389 U.S. 477, 482 f.n. 5, 88 S.Ct. 639
7
Since we hold that an accommodation of the public interest and union autonomy can best be achieved by requiring a member to invoke a union's internal remedies before the Secretary can act, we deem it immaterial that in this case the Local had notice from the Secretary of the two asserted violations for more than ninety days before he commenced this action
Neither are we persuaded by the Secretary's argument, that affirmance of the judgment ordering a new election for president under the supervision of the Secretary, requires a present judicial determination of the validity of the candidate-eligibility rule. If, as we concluded, the issue is not properly before the court, an opinion on that matter would be merely advisory.
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229 Ga. 746 (1972)
194 S.E.2d 405
GRANTLING
v.
THE STATE.
27342.
Supreme Court of Georgia.
Submitted July 10, 1972.
Decided November 20, 1972.
Thomas M. Jackson, John H. Ruffin, Jr., for appellant.
Ben J. Miller, District Attorney, Arthur K. Bolton, Attorney General, Harold N. Hill, Jr., Executive Assistant Attorney General, Courtney Wilder Stanton, Assistant Attorney General, Daniel I. MacIntyre, Deputy Assistant Attorney General, for appellee.
GUNTER, Justice.
The appellant was convicted of rape in the trial court and was given a death sentence. He filed a motion for new trial which was overruled by the trial court, and he has now come here for review.
The appellant has insisted on four alleged errors here. We deem those errors to be without merit, and the judgment below must be affirmed except for that part of the judgment imposing the death penalty.
1. The first error insists that the jury that tried the appellant was not representative of the community in which he was tried. The first part of this complaint is that the State used its peremptory challenges to remove all black jurors from the jury finally selected for the trial. We have consistently held that peremptory challenges in selecting a jury may be arbitrarily made by either party, and no reason needs to be given for the exercise of this right given by law. Watkins v. State, 199 Ga. 81 (33 SE2d 325). This case does not fall within the very narrow exception to the general rule as set forth in Swain v. Alabama, 380 U. S. 202 (85 SC 824, 13 LE2d 759).
The second part of this alleged error complains that jurors *747 opposed to capital punishment were excluded from the jury. The decision of the Supreme Court of the United States abolishing the death penalty under present capital punishment statutes makes this contention moot. See Stewart v. Massachusetts, 408 U. S. 845 (92 SC 2845, 33 LE2d 744). See also in this connection this court's decision in Fountain v. State, 228 Ga. 306 (185 SE2d 62) (1971).
2. Appellant's second contention is that the State's Exhibits 16 and 17, a scrap of cloth and a hair barrette, should not have been admitted in evidence over objection by the appellant. The basic claim here is that no proper foundation was laid to connect these items with similar items worn by the victim of the crime. A review of the transcript convinces us that there was sufficient foundation for the introduction of these items in evidence, and the weight or persuasive value of this evidence was within the domain of the jury. The trial court did not commit error in admitting these items in evidence over the objection offered.
3. Appellant further objected to the introduction of State's Exhibits 12 and 13, a strip of chrome from a vehicle and the license tag from a vehicle, on the ground that they were procured by a warrantless and illegal search in violation of the 4th and 14th Amendments to the United States Constitution. These items were from a vehicle that was not owned by the appellant. The Supreme Court of the United States has held that "a 4th Amendment violation can be successfully urged only by those whose rights were violated by the search itself, and not those who are aggrieved solely by the introduction of damaging evidence." Alderman v. United States, 394 U. S. 165 (1) (89 SC 961, 22 LE2d 176). It was not error to admit these items in evidence.
4. The fourth alleged error insisted upon complains of two parts of the court's charge to the jury. We have reviewed the entire charge very carefully, and it is not susceptible to the criticisms offered here by appellant. This alleged error is without merit.
*748 The judgment of conviction is affirmed except for that portion thereof which imposes the death penalty. Stewart v. Massachusetts, 408 U. S. 845, supra.
Direction is given to the trial court as follows: The presiding judge in the trial court shall enter a judgment sentencing the appellant to be imprisoned for the balance of his life, this being the only lawful sentence which may be entered upon the conviction and finding of the jury that the appellant should receive the maximum sentence permitted by law.
Further direction is given that the appellant and his counsel of record be served with a copy of the life sentence within five days from the date of entry.
Judgment affirmed with direction. All the Justices concur.
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209 F.3d 854 (6th Cir. 2000)
JAY D. SCOTT, PETITIONER-APPELLEE/ CROSS-APPELLANT,V.BETTY MITCHELL, WARDEN, RESPONDENT-APPELLANT/ CROSS-APPELLEE.
Nos. 98-4272, 98-4321
UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT
Argued: January 24, 2000Decided and Filed: April 19, 2000
Appeal from the United States District Court for the Northern District of Ohio at Cleveland. No. 95-02037--Kathleen McDonald O'Malley, District Judge.[Copyrighted Material Omitted][Copyrighted Material Omitted][Copyrighted Material Omitted][Copyrighted Material Omitted]
John S. Pyle, Gold, Schwartz & Co., Cleveland, Ohio, Timothy F. Sweeney, Law Office OF Timothy Farrell Sweeney, Cleveland, Ohio, for Appellee.
Stuart A. Cole, Jonathan R. Fulkerson, Office Of The Attorney General OF Ohio, Capital Crimes Section, Columbus, Ohio, for Respondent-Appellant/Cross-Appellee.
Before: Boggs, Siler, and Batchelder, Circuit Judges.
OPINION
Alice M. Batchelder, Circuit Judge.
1
Respondent Betty Mitchell ("the Warden") appeals the district court's grant of a writ of habeas corpus under 28 U.S.C. § 2254 to Ohio death row inmate Jay D. Scott. The district court granted the writ on the basis of only one of the grounds raised in his petition, finding all of the other grounds either defaulted or meritless. Scott cross-appeals the court's rejection of his remaining arguments. After having the benefit of lengthy oral argument, and having given the careful consideration to the record and the parties' arguments that the gravity of the question before us demands, we are convinced that the district court erred in holding that the ground on which it granted the writ was not procedurally barred. Because we conclude that the district court correctly held that the other grounds raised by Scott's petition were either defaulted or without merit, we will reverse the issuance of the writ.
I. Factual and Procedural Background
A. Factual History
2
The facts of the underlying crime are not in significant dispute, except to the extent that Scott challenges the sufficiency of the evidence presented at trial to prove these facts. The following summary is largely taken from the district court's Order, which in turn quoted it from the opinion of the Ohio Supreme Court.
3
On May 6, 1983, Vinnie Prince, owner and operator of the V&E Delicatessen at East 86th Street and Quincy Avenue in Cleveland, was shot and killed during an attempted robbery of her shop. An autopsy revealed that Prince died from a gunshot wound to the chest.
4
Octavia Hickman, who lived near the delicatessen, testified that on the day of the shooting, while walking back to her home after shopping at the nearby Sav-More Market, she noticed a greenish-blue Cadillac without a rear license plate pullup across from her house. She observed two black males inside the car, one behind the wheel and the other in the back seat. She later observed another black male come over a nearby fence and dive through the open window of the Cadillac. The car then drove away.
5
Another witness near the deli when the incident occurred was Clifford Roberson. Roberson was heading toward the store with a female companion when they heard a shot fired inside the store. He immediately grabbed his friend and pushed her up against the wall of the building, in an effort to protect her. When he heard a screen door slam, he turned around and saw two black males running from the store. Roberson testified that the taller man was about 5'11" tall, wearing "some type of rag around his head," and holding a long-barreled pistol. Upon opening the store's door, Roberson observed Prince lying "almost to the door as if she was trying to chase them or something." Roberson flagged down a nearby police car and informed the officers of the situation.
6
Solomon Smith, another witness to this incident, testified that he saw "two men run across the street, and run down to the corner of Mr. Cooper's house, and turn through the alley, and jump the fence." He described the assailants as two black males, one 5'10 " tall, the other "a little shorter." Smith did not observe anything in the fleeing men's hands.
7
Sometime after this incident, Detective Robert Moore received a telephone call from Ricky Tramble, and arranged to meet with him. Tramble testified that, at this meeting, he informed Officer Moore that on the day Prince was killed, Tramble was with Edward O'Neal, Michael Streeter, Danny Jones, and Scott; they were all at O'Neal's girlfriend's house "to get high." Tramble said he overheard Scott say, "Well I did what I had to do. She shouldn't have made me move like that. F__k it. It's over with." Tramble testified that, later that day, Scott told Tramble, "[t]hese niggers don't know what they're doing. [T]hey get to crying about this and crying about that. This is what I do." Scott professed to Tramble that he was "a stick-up man." Tramble related further that the next day O'Neal informed him that Scott and O'Neal were involved in the V&E Deli incident, including the shooting of Prince.
8
On the basis of this information, the police apprehended and arrested Danny Jones and confiscated Jones's automobile, an older model, blue, turquoise-bottom Cadillac with a white top, bearing a thirty-day tag but no license plate. Jones signed a typewritten statement stating that he and O'Neal, Streeter, and Scott had been driving around looking for a place to rob. After selecting the V&E Deli as a target, Scott requested "front money" in order to fabricate a purchase, and asked for someone to go into the store with him. O'Neal finally agreed to accompany Scott into the store. At this time, Jones observed that Scott was armed with a .38-caliber pistol that looked like a police revolver, and O'Neal was carrying a .25-caliber automatic handgun. Jones pulled his car around the corner from the V&E Deli, and O'Neal and Scott got out of the car while Jones and Streeter waited for them. Shortly thereafter, Scott and O'Neal came running through a yard and climbed over a fence. O'Neal ran to the car and got in and Scott dived into the car through a window. Jones was told to "pull off." Later, Jones asked O'Neal what happened and O'Neal replied "that J.D. [Scott] shot her [...] cause she went for her [gun]." When Jones asked Scott if he had killed her, Scott replied, "naw she was still standing up when we ran out the door." At trial, Jones repudiated the part of his typewritten statement in which he acknowledged their intent to rob the V&E Deli, contending instead that Scott and O'Neal had gone into the store to get cold beer.
9
The police also apprehended O'Neal, who also gave them a typewritten statement. O'Neal stated that he, Jones, Streeter and Scott were driving around inJones's Cadillac. They stopped in front of the V&E Deli because Scott told them he wanted to get some bologna and crackers. O'Neal followed Scott into the store. Scott asked for bologna and crackers and, when the old woman minding the store turned to obtain them, Scott pulled out a pistol. Scott told the woman to "freeze" and when the woman began to "holler" and "yell," Scott fired a single shot at the woman, striking her. O'Neal related that he was momentarily stunned by this occurrence and it was not until Scott grabbed him and pulled him out of the store that he began to run. They jumped the fence and ran to the car. O'Neal stated that he did not see the old woman in the store reach for a weapon.
10
At trial, O'Neal's testimony differed somewhat from this written statement in that he testified it was he--rather than Scott--who ordered the bologna and crackers in the store. O'Neal further testified that he was unarmed throughout this ordeal and that it was Michael Streeter who had the .25-caliber weapon in his possession while waiting in the car. O'Neal confirmed that he had talked with Tramble about what happened at the V&E Deli.
11
Barbara Campbell, a trace-evidence analyst with the Cuyahoga County Coroner's Office, testified that the results of a "Walker Nitrate Test" revealed that the muzzle of the gun which killed Prince was approximately 12 inches from her body when it was fired. Campbell further testified that a trace metal test conducted on the victim's hands indicated that Prince did not handle or fire a weapon prior to her death. Detective David Hicks, however, testified that Prince had a fully loaded .38-caliber revolver on her person when she was found.
12
On May 17, 1983, the grand jury returned its indictments. Scott was apprehended six months later in Philadelphia by Detective James Svekric of the Cleveland Police Department. During the trip back to Cleveland, Scott inquired who was using his name in connection with a homicide and robbery. Up to that point, the arresting officers had informed Scott only that he was wanted in connection with a homicide; they had made no mention that Scott was also charged with aggravated robbery. Scott maintained that he had been in Reading, Pennsylvania, when the incident occurred.
B. Procedural History
13
Scott and his three accomplices1 were indicted by the Cuyahoga County Grand Jury on two counts: (1) aggravated robbery in violation of Ohio Rev. Code § 2911.01, and (2) aggravated murder in violation of Ohio Rev. Code § 2903.01. The grand jury added two specifications to the murder count: (1) a death-penalty specification for violation of Ohio Rev. Code § 2929.04(A)(7),2 and (2) a firearm specification for violating Ohio Rev. Code § 2941.141.
14
Scott pled not guilty, proceeded to trial, and was convicted. The trial court then held a sentencing hearing as prescribed by Ohio Rev. Code § 2929.022(A) and 2929.03, and the jury recommended the death penalty. The trial judge adopted the recommendation and sentenced Scott to death for his murder conviction. Scott was also sentenced to 7-25 years of imprisonment for his aggravated robbery conviction and 3 years of imprisonment for the firearm specification.
15
Scott timely appealed his convictions and death sentence. Both were affirmed by the Ohio Court of Appeals and the Ohio Supreme Court. The United States Supreme Court denied Scott a writ of certiorari, though Justices Marshall and Brennan filed a dissenting opinion. See Scott v. Ohio, 480 U.S. 923, 923 (1987).
16
Scott then secured a stay of execution and petitioned the Cuyahoga County Common Pleas Court for post-conviction relief pursuant to Ohio Rev. Code § 2953.21. The Warden successfully moved to dismiss, but the Ohio Court of Appeals reversed the dismissal in part and remanded for a hearing on the issue of whether Scott was denied effective assistance of counsel at the mitigation phase of the sentencing hearing. Both parties unsuccessfully appealed this ruling to the Ohio Supreme Court, and the case was returned to the common pleas court for the hearing. At the conclusion of the hearing, at which Scott's family members and trial counsel testified, the trial court issued findings of fact and conclusions of law to the effect that Scott had not been denied effective assistance in the mitigation phase of his sentencing. Specifically, the court found that trial counsel's testimony was more credible than that of Scott's family members, that Scott and his family were primarily to blame for their failure to provide mitigating evidence, and that the "residual doubt" strategy pursued in the mitigation hearing was in Scott's best interest. Scott unsuccessfully appealed, and was denied a writ of certiorari on the ineffective assistance of counsel issue by the United States Supreme Court.
17
In addition to these post-conviction proceedings, Scott also pursued post-conviction relief pursuant to State v. Murnahan, 584 N.E.2d 1204, 1209 (Ohio 1992), which allows appellants claiming denial of effective assistance of appellate counsel to seek relief by applying for delayed reconsideration in the Court of Appeals, or by filing a delayed appeal directly with the Ohio Supreme Court. Scott first filed a motion to reopen his appeal in the Ohio Court of Appeals, which was denied. The Ohio Supreme Court affirmed, denied rehearing, and the United States Supreme Court denied certiorari. Scott also filed a delayed direct appeal with the Ohio Supreme Court, which was refused.
18
The Ohio Supreme Court, on the Warden's motion, set October 25, 1995, as the date for Scott's execution. On September 20, 1995, Scott filed a notice of intent to file a habeas petition with the federal district court. The district court granted an indefinite stay of execution while Scott pursued his federal habeas relief, and appointed Scott's current counsel.
19
Scott's petition presented twenty-one grounds for relief, divided into three categories: (1) constitutional violations tainting the entire course of the state court proceedings (Grounds 1-6); (2) constitutional violations prejudicing Scott during specific stages of the proceedings (Grounds 7-19); and (3) constitutional violations relating generally to the Ohio death-penalty scheme (Grounds 20-21). Scott requested leave to conduct discovery and an evidentiary hearing, but both were denied for failure to show good cause. The court also made clear that because Scott filed his petition before the effective date of the Anti-Terrorism and Effective Death Penalty Act of 1996 (AEDPA), it would not apply the demanding standards of review mandated by that statute.
20
The court heard lengthy oral arguments from both parties and received post-hearing briefs on certain issues. On September 30, 1998, the court issued its opinion denying habeas relief on all grounds except one: Ground 18, which challenged the trial court's penalty-phase jury instruction regarding unanimity of the sentencing recommendation3. Scott was granted a certificate of appealability to cross-appeal thedenial of the remaining grounds, and both sides filed timely notices of appeal.
21
Before this court, Scott defends the district court's reasoning that the unanimity instruction could have had the impermissible effect of causing one or more jurors to believe that unanimity was required not only as to the net weight of the mitigating factors versus the aggravating factors, but also as to the existence of each mitigating factor. The Warden, on the other hand, maintains that Scott's challenge to this instruction is procedurally barred from habeas review for failure to lodge a contemporaneous objection to the instruction in the trial court, and that, in any case, the instruction had no such effect on the finding of mitigating factors. Scott's cross-appeal further argues that (1) two other penalty-phase instructions, namely those telling the jury to ignore considerations of mercy in reaching its decision and advising that its recommendation of death would not be binding on the court, were unconstitutional; (2) Scott was prejudiced by comments made by the trial judge to the jury venire regarding media coverage of Prince's shooting and Scott's involvement in it; (3) Scott's trial counsel were ineffective in the penalty phase for failing to interview or present witnesses in mitigation and instead pursuing a residual doubt strategy; (4) the cumulative effect of two allegedly erroneous jury instructions violated Scott's due process rights; and (5) Ohio's death penalty is unconstitutional on its face and as applied to Scott for a variety of reasons. We will address each of these issues in turn.
II. Analysis
22
When reviewing a district court's disposition of a petition for a writ of habeas corpus filed before AEDPA's effective date, we presume primary, or historical, factual findings by the state courts to be correct, rebuttable only by clear and convincing evidence under one of the eight conditions listed in the pre-AEDPA version of 28 U.S.C. § 2254(d)(1-8). See Byrd v. Collins, 209 F.3d 486, 511 (6th Cir. Apr. 6, 2000) (citing McQueen v. Scroggy, 99 F.3d 1302, 1310 (6th Cir. 1996)). We review de novo determinations involving matters of law or mixed questions of law and fact. See Mapes v. Coyle, 171 F.3d 408, 413 (6th Cir. 1999). We afford "complete deference to evidence-supported state court findings of fact. [...] But the more substantive standard by which our de novo review is conducted is the determination whether the trial errors asserted by the petitioner resulted in a trial so devoid of fairness as to have amounted to a denial of the due process guaranteed by the fourteenth amendment." Lundy v. Campbell, 888 F.2d 467, 469 (6th Cir. 1989) (citing Sumner v. Mata, 455 U.S. 591 (1982) (per curiam)).
23
A. The Trial Court's Penalty-Phase Jury Instructions
24
Because the state claimed that nearly half of Scott's claims, including his challenges to the penalty-phase jury instructions, had been procedurally defaulted, the district court began its legal analysis with a discussion of the law of procedural default, including a discussion of Wainwright v. Sykes, 433 U.S. 72 (1977), Coleman v. Thompson, 501 U.S. 722 (1991), and Maupin v. Smith, 785 F.2d 135 (6th Cir.1986), this circuit's seminal case applying the law of procedural default in federal habeas cases in which the state argues that an habeas claim is barred by the petitioner's failure to observe a state procedural rule. Maupin laid out a 4-part test that, as the district court correctly noted, we have consistently applied4 since its issuance:When a state argues that a habeas claim is precluded by the petitioner's failure to observe a state procedural rule, the federal court must go through a complicated analysis. First, the court must determine that there is a state procedural rule that is applicable to the petitioner's claim and that the petitioner failed to comply with the rule. [...] Second, the court must decide whether the state courts actually enforced the state procedural sanction. [...] Third, the court must decide whether the state procedural forfeiture is an "adequate and independent" state ground on which the state can rely to foreclose review of a federal constitutional claim. [...] This question generally will involve an examination of the legitimate state interests behind the procedural rule in light of the federal interest in considering federal claims. [Fourth], the petitioner must demonstrate under Sykes that there was "cause" for him to not follow the procedural rule and that he was actually prejudiced by the alleged constitutional error.
25
Id. at 138 (citations omitted). For purposes of the procedural-default analysis, the district court grouped Scott's eighteenth ground for relief--the claim that the penalty-phase jury instruction on unanimity is unconstitutional--with his challenges to two other penalty-phase jury instructions--that the jury's recommendation of death was not binding on the trial court (Ground 14) and that the jury was to disregard emotions of mercy or sympathy (Ground 16)--because no contemporaneous objection to any of the three instructions had been raised. The district court noted that Scott had raised these three arguments for the first time on direct appeal. The Ohio Court of Appeals noted the default and plain error standard of review, but went on to address the merits of the claims. See Scott, 1985 WL 9047 at *8. The Ohio Supreme Court more explicitly relied on the procedural default, but nonetheless allowed for the possibility that Scott could prove plain error. The Ohio Supreme Court conducted a lengthy review of the record for plain error as to Ground 14, and a shorter review as to Ground 16. As to the unanimity instruction claim, however, the Ohio Supreme Court said only this:
26
Appellant next argues that the requirement of unanimity in recommending a life sentence denies a capital defendant his right to a fair trial and freedom from cruel and unusual punishment.
27
Again, appellant neglected to object to the trial court's instruction in this regard and has accordingly waived any objections with regard to this alleged error. State v. Fanning, supra. More importantly, in State v. Jenkins, [...], this court ruled that a jury's recommendation of a life sentence under R.C. 2929.03(D)(2) must be unanimous.
28
State v. Scott, 497 N.E.2d 55, 69 (Ohio 1986).
29
The district court concluded that none of these three claims had been procedurally defaulted. The court first noted that in examining Scott's fourteenth and sixteenth grounds and "arguably in examining Scott's eighteenth ground, as well," the Ohio Supreme Court had not simply relied on Ohio's contemporaneous-objection rule, but had conducted a plain-error analysis; hence, the Ohio Supreme Court "did not wholly overlook Scott's procedural default." Relying on an unpublished decision of this circuit, Knuckles v. Rogers, No. 92-3208, 1993 WL 11874 (6th Cir. Jan 21, 1993) (per curiam), the district court further concluded that in any event, Ohio's contemporaneous-objection rule is not an adequate and independent state ground on which thestate could rely to foreclose review of these claims because that rule is not independent of federal law.
30
1. The Trial Court's Penalty-Phase Instruction on Jury Unanimity
31
With regard to Scott's challenge to the penalty-phase unanimity instruction--the only ground on which the district court granted the writ--we hold that the district court erred. It is undisputed here that the first Maupin prong has been established; Scott does not question the applicability of Ohio's contemporaneous-objection rule and he does not claim to have made such an objection. Scott does not address in this appeal the fourth Maupin prong, the cause and prejudice test, although the district court did address that issue. Rather, Scott focuses on the second and third Maupin prongs, arguing that the Ohio courts did not actually enforce the state contemporaneous-objection rule and that the rule is neither an adequate nor an independent state ground.
32
(a). The Second Maupin Prong - Application of the Rule
33
The determination of whether a state court decision was based on a state procedural rule is a legal question that we review de novo. See Couch v. Jabe, 951 F.2d 94, 96 (6th Cir. 1991) (per curiam). Scott argued to the district court that by conducting a plain-error review, the Ohio Supreme Court had excused the procedural default and hence had not enforced the state procedural sanction. The district court did not entirely agree: "It is questionable whether the Ohio Supreme Court truly overlooked Scott's procedural defaults and examined the merits of Scott's three grounds regarding jury instructions. [...] A plain error analysis is not tantamount to a review on the merits, so the Ohio Supreme Court did not wholly overlook Scott's procedural default."
34
On appeal, Scott cites the Supreme Court's holding in Harris v. Reed, 489 U.S. 255, 257 (1989), that federal habeas courts are to apply the "plain statement rule" of Michigan v. Long to determine whether a state court decision was based on a state law ground, and that any ambiguity as to whether the holding was based on or intertwined with federal law requires the application of the Long rule. Scott urges us to find that the Ohio Supreme Court decided his challenge to the jury unanimity instruction on its merits, not on the basis of the procedural bar, citing as evidence the fact that in its three-sentence disposition of this claim, the Ohio Supreme Court began the last sentence with the words "More importantly."
35
Scott's argument is meritless. The issued addressed in Harris, as we explain below in relation to the third Maupin factor, is whether the state court decision actually relies on a state procedural ground that is both adequate and independent from federal law; Harris does not preclude a finding that the state procedural rule was actually enforced where the state court decision also relies on an alternative ground. Scott's only arguable basis for asserting that the Ohio Supreme Court did not enforce the contemporaneous-objection rule is its "More importantly" sentence. The district court viewed this sentence as only "arguably"amounting to a plain error review, and did not accept Scott's argument that this was the primary holding. We conclude that the Ohio Supreme Court's adversion to Ohio's substantive law regarding jury unanimity with regard to the recommendation of a life sentence was not even arguably a plain error review, but was simply a supplement to its holding that Scott had waived any objection to the jury instruction by failing to object at the time the instruction was given.
36
(b). The Third Maupin Prong - Adequate and Independent State Ground
37
Scott claims not only that the Ohio Supreme Court did not enforce the contemporaneous-objection rule and hold his challenge to the unanimity instructionbarred; he claims that because the contemporaneous-objection rule does not preclude the state appellate courts from performing a plain-error review, the rule itself is dependent on federal law and is therefore not an "independent and adequate state ground" under Maupin. Here the district court agreed. For support, it turned to our unpublished decision in Knuckles v. Rogers, No. 92-3208, 1993 WL 11874, at **2-3 (6th Cir. Jan. 21, 1993) (per curiam):
38
[I]t is clear that Ohio has a contemporaneous objection rule, and that the Ohio courts treat the failure to object to a claimed error as a procedural default. Ohio R. Crim. P. 52; State v. Williams, 304 N.E.2d 1364 (Ohio 1977). Since Knuckles failed to object contemporaneously to the allegedly improper remarks, he violated Ohio's contemporaneous objection rule and committed a procedural default. However, the procedural default did not foreclose all consideration by the Ohio appellate court; the Ohio court examined the record to determine if the allegedly improper remarks were "plain error."
39
The basic inquiry in the plain error analysis in Ohio is whether the defendant has been denied a "fair trial." Whether a person is denied a fair trial is a question to be resolved by applying principles of federal constitutional law. Therefore, we conclude that the Ohio appellate court's decision was not independent of federal law.
40
(footnote omitted). The district court concluded that "[g]iven the reasoning in Knuckles, this court must conclude that Ohio's application of its contemporaneous objection rule in this case was not independent of federal law." For the reasons that follow, we hold that the district court erred in holding that the Ohio Supreme Court's dismissal of this claim does not rest on an adequate and independent state ground.
41
In the recent published opinion in Coe v. Bell, 161 F.3d 320 (6th Cir. 1998), this circuit addressed the issue of whether a federal habeas court is required to disregard a state court's finding of procedural bar because the state court also issued an alternative holding. We explained in Coe that, in contrast to the state court's statements in Harris that the state had a "well-settled" principle of law that issues which could have been raised on direct appeal but were not are considered waived, and that petitioner's claim "could have been raised in [his] direct appeal," id. at 330 (quoting Harris, 489 U.S. at 258 (alteration in original)), the state court in Coe "took things one step further, . . . and explicitly and clearly said that Coe had no cognizable claim. There was, therefore, a sufficiently clear and express statement here." Id. at 330-31. It is Coe that governs our analysis here.
42
Knuckles, on the other hand, is an unpublished opinion, and therefore is not binding upon subsequent panels of the court. See 6 Cir. R. 206 (1998). And, in any event, in Knuckles we did not hold that Ohio's contemporaneous-objection rule or the Ohio court's application of that rule was not independent of federal law; rather, we held that in that case the Ohio court's decision that there was no plain error was not independent of federal law.
43
Here, the district court itself acknowledged that its "adequate and independent state ground" analysis was "more tenuous" with regard to the unanimity instruction than the other two claims, because "the Ohio Supreme Court did not clearly apply a plain error analysis to Scott's eighteenth ground . . ."5 As we have indicated, however, the concluding sentence in the relevant Ohio Supreme Court passage simply did not amount to any type of review, much less one dependent on or intertwined with federal law.
44
More importantly--and we use that term advisedly--Harris specifically instructed state courts that theyneed not fear reaching the merits of a federal claim in an alternative holding. By its very definition, the adequate and independent state ground doctrine requires the federal court to honor a state holding that is a sufficient basis for the state court's judgment, even when the state court also relies on federal law. Thus, by applying this doctrine to habeas cases, Sykes curtails reconsideration of the federal issue on federal habeas as long as the state court explicitly invokes a state procedural bar rule as a separate basis for decision. In this way, a state court may reach a federal question without sacrificing its interests in finality, federalism, and comity.
45
Harris, 489 U.S. at 264 n. 10 (citations omitted). Further, the Supreme Court instructed in Coleman that "[a] predicate to the application of the Harris presumption is that the decision of the last state court to which the petitioner presented his federal claims must fairly appear to rest primarily on federal law or to be interwoven with federal law." Coleman, 501 U.S. at 735. As Coleman makes very clear, to apply Harris any more broadly would eviscerate the very foundations of the adequate and independent state ground doctrine, which are federalism, finality and comity. See id. at 730-32, 738-39, 749.
46
The state court decision in the case before us here relied more obviously on adequate and independent state procedural grounds than did the state court decision in Coleman itself. There, the Virginia Supreme Court granted the state's motion that requested summary dismissal purely on state procedural grounds, although the court's use of the phrase "[u]pon consideration whereof [referring to the parties' briefs]" suggested that the court may have considered the merits of the filings as well. Coleman, 501 U.S. at 728. The Supreme Court refused to read this ambiguity as "overriding the court's explicit grant of a dismissal motion based solely on procedural grounds. Those grounds are independent of federal law." Id. at 744.
47
Nothing in the Ohio Supreme Court's analysis with regard to the unanimity instruction suggests that the court relied on federal law. That court explicitly said that Scott had waived the error by failing to object at trial, and that it had previously interpreted a state statute to require unanimity anyway. There is no mention of a plain-error analysis, and not even a hint that federal law played a role in dismissing this claim. And the Ohio Supreme Court's concluding sentence in ruling on the unanimity instruction, even if it could be viewed as related to federal law, was in addition to and separate from its explicit holding on state procedural grounds.
48
Finally, in Engle v. Isaac, 456 U.S. 107, 124-29 (1982), the Supreme Court specifically found that default imposed for failure to object contemporaneously as required by Ohio's Rule 30 is an adequate and independent state ground to bar federal habeas review absent a showing of cause and prejudice. In so holding, the Court specifically rejected Scott's argument:
49
Relying upon State v. Long, [...] respondents argue that the Ohio Supreme Court has recognized its power, under Ohio's plain-error rule, to excuse Rule 30 defaults. Long, however, does not persuade us that the Ohio courts would have excused respondents' defaults. First, the Long court stressed that the plain-error rule applies only in "exceptional circumstances," such as where, "but for the error, the outcome of the trial clearly would have been otherwise." [...] Second, the Long decision itself refused to invoke the plain-error rule for a defendant who presented a constitutional claim identical to the one pressed by respondents.
50
See id. at 125 n. 27. In Coleman, the Court also very strongly implied its continued disapproval of the rule the district court here ascribes to Knuckles. As a preamble to its discussion of independent state grounds, the Court acknowledgedthat it had previously held that Oklahoma's review for "fundamental trial error" before applying state procedural defaults "was not independent of federal law so as to bar direct review because the State had made application of the procedural bar depend on an antecedent ruling on federal law." Coleman, 501 U.S. at 741 (citing Ake v. Oklahoma, 470 U.S. 68 (1985)) (quotations and alterations omitted). The Coleman Court then distinguished that holding by observing simply that "Ake was a direct review case. We have never applied its rule regarding independent state grounds in federal habeas. But even if Ake applies here, it does Coleman no good because the Virginia Supreme Court relied on an independent state procedural rule." Id. The Supreme Court, then, does not find the mere reservation of discretion to review for plain error in exceptional circumstances sufficient to constitute an application of federal law. Neither Scott nor Knuckles points to any change in Ohio law that could distinguish Engle or Coleman from the present case, and as in Ohio's Long case that Engle cites, the Ohio Court here did not invoke its plain-error review for this claim.
51
We issued a similar ruling in Paprocki v. Foltz, 869 F.2d 281, 284-85 (6th Cir. 1989). There we enforced a default for failure to object contemporaneously in a Michigan court, although the state courts reserved the right to excuse the default for "manifest injustice." We noted that
52
[w]e would be loath to adopt an exception to the "cause and prejudice" rule that would discourage state appellate courts from undertaking the sort of inquiry conducted by the Michigan court, and we do not believe that the state court's explanation of why the jury instructions resulted in no manifest injustice can fairly be said to have constituted a waiver of the procedural default.
53
Id. at 285. Although this statement appears addressed more towards the determination of whether the state courts actually enforced the bar (Maupin's second prong) instead of its independence from federal law, the reasoning is equally applicable to this discussion.
54
All in all, we think it is clear that Knuckles, an unpublished decision of this court, cannot provide persuasive authority to support a finding that the Ohio Supreme Court did not rely on an independent state procedural ground in disposing of Scott's challenge to the trial court's penalty-phase instruction on jury unanimity.
55
In addition to his claim that Ohio's contemporaneous-objection rule is not independent of federal law, Scott also argues that it is not "adequate" because it is not consistently enforced. The Supreme Court has held that an independent state rule must be firmly established and regularly followed in order to be adequate. See Ford v. Georgia, 498 U.S. 411, 423-24 (1991); Byrd v. Collins, 209 F.3d 486, 520-21 (6th Cir. Apr. 6, 2000) (following Ford). Scott claims that the Ohio Supreme Court has retained "unfettered discretion" to waive the rule and has been "remarkably inconsistent" in applying it. He points to cases where the court ignored potential defaults and dismissed on the merits. In State v. Zuern, 512 N.E.2d 585, 592 (Ohio 1987), the capital defendant raised his nine constitutional challenges to the state's death penalty statute by a general oral objection rather than by a specific motion. The Ohio Supreme Court held that although this technically constituted waiver under Ohio law, "because of the nature of the case and the exacting review necessary where the death penalty is involved, [it] reserve[d] the right to consider the constitutional challenges in particular cases." Id. This somewhat relaxed approach to reviewing a claim that was raised, but in an incorrect manner, is a separate matter entirely from Scott's complete failure to object contemporaneously. In State v. Hamblin, 524 N.E.2d 476, 479 (Ohio 1988), the capital defendant raised in the appellate court two grounds for ineffective assistance of counsel, and added three new grounds in the SupremeCourt. Although the new grounds were technically waived, the court said that "[b]ecause this is a capital case, we will review all five arguments relating to the claim of ineffective assistance of counsel." Id. As was the case in Zuern, Hamblin did not involve a completely forfeited issue. In State v. Williams, 528 N.E.2d 910, 914 (Ohio 1988), the Court observed that "[b]ecause of the gravity of the sentence that has been imposed on appellant, we have reviewed the record with care for any errors that may not have been brought to our attention. In addition, we have considered any pertinent legal arguments which were not briefed or argued by the parties." Despite this observation, the court affirmed the sentence and did not discuss any specific error that the parties had not raised. None of these cases involved the contemporaneous-objection rule. Finally, in State v. Coleman, 544 N.E.2d 622, 627 (Ohio 1989), the court did apparently waive the default resulting from the defendant's failure to object contemporaneously to a jury instruction: "However, since this is a capital case we have reviewed the jury instructions and find not only that there was a correct statement of the law but also that the trial court additionally instructed the jury it could not convict the defendant of aggravated murder unless it found [specific intent to kill]."
56
These cases do indicate that the Ohio Supreme Court employs an abundance of caution in capital cases, and, on occasion, has relaxed its enforcement of default. They do not, however, indicate that Ohio reserves so much leeway in capital cases that we are justified here in ignoring its sovereign decision founded upon its own procedural rule. In cases where state procedural grounds have not been enforced by federal courts because they were not firmly established and regularly applied, the facts have been much more extreme than these isolated examples of discretion. See, e.g, Ford, 498 U.S. at 423-24 (finding state rule governing timing of Batson challenges to racial makeup of jury not even remotely close to being "firmly established and regularly followed" because it was a novel rule applied retroactively); Barr v. City of Columbia, 378 U.S. 146, 149 (1964) (rejecting state court's explanation that petition was worded too generally to have raised an issue because that court had recently accepted an identically worded appeal); Warner v. United States, 975 F.2d 1207, 1213-14 (6th Cir. 1992) (rejecting Ohio Supreme Court's reliance on failure to raise ineffective assistance on direct appeal as reason for default because there was no such requirement at the time). Rather, this case is more like those in which some minor inconsistency in applying the rule has been noted but held not to be severe enough to override the federalism, finality and comity interests served by enforcing the bar. See, e.g., Coleman, 501 U.S. at 758 (White, J., concurring) ("Petitioner argues that the Virginia court does in fact waive the rule on occasion, but I am not now convinced that there is a practice of waiving the rule when constitutional issues are at stake, even fundamental ones. The evidence is too scanty to permit a conclusion that the rule is no longer an adequate and independent state ground"); Dugger v. Adams, 489 U.S. 401, 410 n. 6 (1989) ("respondent asserts . . . that the Florida Supreme Court has failed to apply its procedural rule consistently and regularly because it has addressed the merits in several cases raising Caldwell claims on post-conviction review. In the vast majority of cases, however, the [court] has faithfully applied its rule that claims not raised on direct appeal cannot be raised on post-conviction review"); Byrd, 209 F.3d at 520-21 (following Dugger in holding that four examples of waiver of default by Ohio courts are not enough to overcome the vast majority of cases enforcing the default); Coe, 161 F.3d at 331 ("The few [cases that are not adverse or too old to be relevant] are isolated and unpublished, and so are . . . insufficient to defeat an otherwise 'strict and regular' practice"); Shepard v. Foltz, 771 F.2d 962,966 (6th Cir. 1985) ("we [recently] questioned our prior determination whether Michigan enforces a contemporaneous objection rule with respect to Sandstrom violations, and, in any event, we held that a federal habeas petitioner must meet the Sykes test if the Michigan courts in fact applied such a rule").
57
Application of the adequate and independent state ground doctrine in this case also requires an assessment of the specific state interest served by enforcing the contemporaneous-objection rule. See Wesselman v. Seabold, 834 F.2d 99, 101 (6th Cir. 1987) (noting that resolution of this prong "turns on the substantiality of the state interest involved"); Maupin, 785 F.2d at 138 (same). This consideration reinforces the need to enforce the procedural default here, because the contemporaneous-objection rule has been lauded as few other procedural requirements have been. Not only did the Court expressly endorse Ohio's Rule 30 in Engle, but the sweeping language of cases such as United States v. Frady, 456 U.S. 152 (1982) (raising the issue under the Federal Rules), suggests that the Court places high importance on the contemporaneous-objection rule regardless of jurisdiction:
58
Orderly procedure requires that the respective adversaries' views as to how the jury should be instructed be presented to the trial judge in time to enable him to deliver an accurate charge and to minimize the risk of committing reversible error. It is the rare case in which an improper instruction will justify reversal of a criminal conviction when no objection has been made in the trial court.
59
Id. at 165-66 (quoting Henderson v. Kibbe, 431 U.S. 145, 154 (1977)). Perhaps nowhere, however, has this conviction been stated more strongly than in Sykes:
60
The contemporaneous-objection rule itself is by no means peculiar to Florida, and deserves greater respect than Fay gives it, both for the fact that it is employed by a coordinate jurisdiction within the federal system and for the many interests which it serves in its own right. A contemporaneous objection enables the record to be made with respect to the constitutional claim when the recollections of witnesses are freshest, not years later in a federal habeas proceeding. It enables the judge who observed the demeanor of those witnesses to make the factual determinations necessary for properly deciding the federal constitutional question. While the 1966 amendment to § 2254 requires deference to be given to such determinations made by state courts, the determinations themselves are less apt to be made in the first instance if there is no contemporaneous objection to the admission of the evidence on federal constitutional grounds.
61
A contemporaneous-objection rule may lead to the exclusion of the evidence objected to, thereby making a major contribution to finality in criminal litigation. Without the evidence claimed to be vulnerable on federal constitutional grounds, the jury may acquit the defendant, and that will be the end of the case; or it may nonetheless convict the defendant, and he will have one less federal constitutional claim to assert in his federal habeas petition. If the state trial judge admits the evidence in question after a full hearing, the federal habeas court pursuant to the 1966 amendment to § 2254 will gain significant guidance from the state ruling in this regard. Subtler considerations as well militate in favor of honoring a state contemporaneous-objection rule. An objection on the spot may force the prosecution to take a hard look at its hole card, and even if the prosecutor thinks that the state trial judge will admit the evidence he must contemplate the possibility of reversal by the state appellate courts or the ultimate issuance of a federal writ of habeas corpus based on the impropriety of the state court'srejection of the federal constitutional claim.
62
We think that the rule of Fay v. Noia, broadly stated, may encourage "sandbagging" on the part of defense lawyers, who may take their chances on a verdict of not guilty in a state trial court with the intent to raise their constitutional claims in a federal habeas court if their initial gamble does not pay off. The refusal of federal habeas courts to honor contemporaneous-objection rules may also make state courts themselves less stringent in their enforcement. Under the rule of Fay v. Noia, state appellate courts know that a federal constitutional issue raised for the first time in the proceeding before them may well be decided in any event by a federal habeas tribunal. Thus, their choice is between addressing the issue notwithstanding the petitioner's failure to timely object, or else face the prospect that the federal habeas court will decide the question without the benefit of their views.
63
The failure of the federal habeas courts generally to require compliance with a contemporaneous-objection rule tends to detract from the perception of the trial of a criminal case in state court as a decisive and portentous event. A defendant has been accused of a serious crime, and this is the time and place set for him to be tried by a jury of his peers and found either guilty or not guilty by that jury. To the greatest extent possible all issues which bear on this charge should be determined in this proceeding: the accused is in the court-room, the jury is in the box, the judge is on the bench, and the witnesses, having been subpoenaed and duly sworn, await their turn to testify. Society's resources have been concentrated at that time and place in order to decide, within the limits of human fallibility, the question of guilt or innocence of one of its citizens. Any procedural rule which encourages the result that those proceedings be as free of error as possible is thoroughly desirable, and the contemporaneous-objection rule surely falls within this classification.
64
We believe the adoption of the Francis rule in this situation will have the salutary effect of making the state trial on the merits the "main event," so to speak, rather than a "tryout on the road" for what will later be the determinative federal habeas hearing. There is nothing in the Constitution or in the language of § 2254 which requires that the state trial on the issue of guilt or innocence be devoted largely to the testimony of fact witnesses directed to the elements of the state crime, while only later will there occur in a federal habeas hearing a full airing of the federal constitutional claims which were not raised in the state proceedings. If a criminal defendant thinks that an action of the state trial court is about to deprive him of a federal constitutional right there is every reason for his following state procedure in making known his objection.
65
Sykes, 433 U.S. at 88-90 (footnote omitted, emphasis added). Certainly, Ohio's rule passes the third Maupin prong in this case.
66
(c). The Fourth Maupin Prong - The Cause and Prejudice Test
67
The district court's primary rationale for excusing procedural default as to the unanimity instruction claim was that Scott had shown cause and prejudice to excuse his failure to object. The court's only explanation of cause is that "Scott reasonably believed a contemporaneous objection would be futile" because, as demonstrated in the Ohio Supreme Court's three-sentence disposition of this claim, that court's precedent at the time required jury verdicts as to both guilt and life sentences to be unanimous. The United States Supreme Court, however, has explicitly rejected this idea:the futility of presenting an objection to the state courts cannot alone constitute cause for a failure to object at trial. If a defendant perceives a constitutional claim and believes it may find favor in the federal courts, he may not bypass the state courts simply because he thinks they will be unsympathetic to the claim. Even a state court that has previously rejected a constitutional argument may decide, upon reflection, that the contention is valid. Allowing criminal defendants to deprive the state courts of this opportunity would contradict the principles supporting Sykes.
68
Engle, 456 U.S. at 130 (footnotes omitted). Scott does not address cause and prejudice on appeal,6 and even if he did he would be hard-pressed to distinguish this holding; it was made in the context of Ohio's contemporaneous-objection rule, and the Court has said "that the standard for cause should not vary depending on the timing of a procedural default or on the strength of an uncertain and difficult assessment of the relative magnitude of the benefits attributable to the state procedural rules [involved]." Murray v. Carrier, 477 U.S. 478, 491 (1986).
69
The district court's finding of prejudice was based on the merits of Scott's claim, and on its conclusion that the sentencing proceedings might reasonably have come to a different result absent the instruction of which Scott complains. Of course, evaluating the merits to determine the applicability of procedural default is circular and undermines the federalism concerns behind the doctrine. Moreover, while Sykes left open the definition of "prejudice," Frady "eliminate[d] any doubt about its meaning for a defendant who has failed to object to jury instructions at trial," Frady, 456 U.S. at 168:
70
[Henderson] summarized the degree of prejudice we have required a prisoner to show before obtaining collateral relief for errors in the jury charge as "whether the ailing instruction by itself so infected the entire trial that the resulting conviction violates due process, not merely whether the instruction is undesirable, erroneous, or even universally condemned." We reaffirm this formulation, which requires that the degree of prejudice resulting from instruction error be evaluated in the total context of the events at trial. As we have often emphasized[,] a single instruction to a jury may not be judged in artificial isolation, but must be viewed in the context of the overall charge. Moreover, a judgment of conviction is commonly the culmination of a trial which includes testimony of witnesses, argument of counsel, receipt of exhibits in evidence, and instruction of the jury by the judge. Thus not only is the challenged instruction but one of many such instructions, but the process of instruction itself is but one of several components of the trial which may result in the judgment of conviction.
71
Id. at 169 (internal quotations, citations, and alterations omitted). Presumably, this same approach applies to jury instructions in the sentencing phase as well. Our review of the briefs and record leaves us convinced that there is no such prejudice here. Scott offers no help in making that assessment, however, and, in any event, we find that Scott cannot show cause for his default.
72
Although neither the district court nor Scott mentions it, it is worth noting that an exception to the requirement that a federal habeas petitioner demonstrate cause and prejudice in order to obtain review of his defaulted claims may bemade when the petitioner is able to demonstrate that failure to consider those claims will result in a "fundamental miscarriage of justice." Coleman, 501 U.S. at 750; Engle, 456 U.S. at 135. The Court has explained that although, ordinarily, petitioners who can show a fundamental miscarriage of justice will also be able to meet the cause and prejudice requirement, in extraordinary cases, "where a constitutional violation has probably resulted in the conviction of one who is actually innocent, a federal habeas court may grant the writ even in the absence of a showing of cause for the procedural default." Carrier, 477 U.S. at 496; Dugger, 489 U.S. at 410 n. 6. In Dugger, the Court noted that this exception will apply to death sentences only in extraordinary cases, given the difficulty of translating the concept of actual innocence from the guilt phase to the sentencing phase of a capital trial. See id. The Court observed that although it would not attempt to define "what it means to be 'actually innocent' of a death sentence," id., it could not find such extraordinary injustice under the facts of that case, where the mitigating and aggravating factors had been found to be equal. See id. Scott has made no attempt to demonstrate this kind of fundamental miscarriage of justice, and we are confident that he cannot do so.
73
Accordingly, we hold that the district court erred in concluding that Scott's claim of constitutional error with regard to the penalty-phase unanimity instruction was not procedurally defaulted, and in further concluding that even if the claim were defaulted, Scott demonstrated cause and prejudice to excuse the procedural default. We further hold that the Ohio Supreme Court relied on Ohio's contemporaneous-objection rule--an adequate and independent state ground--in holding that this claim had been defaulted; that Scott failed to demonstrate cause and prejudice to excuse the default, and that the district court erred in reaching the merits of this claim. We therefore REVERSE the district court's issuance of a writ of habeas corpus.
74
(d). The Merits of Scott's Challenge to the Unanimity Instruction
75
Nevertheless, out of an abundance of caution and in order to clarify our precedents governing sentencing-phase instructions on jury unanimity, we will consider in the alternative the merits of Scott's challenge. The unanimity instruction given to Scott's jury read:
76
If all 12 members of the jury find, by proof beyond a reasonable doubt, that the aggravating circumstances which Jay Scott was found guilty of committing outweigh the mitigating factors, then you must return such a finding to the Court. I instruct you as a matter of law that if you make such a finding, then you have no choice and must recommend to the Court that the sentence of death be imposed upon the defendant, Jay Scott. [...]
77
On the other hand, if after considering all of the relevant evidence raised at trial, the testimony, other evidence, the statement of Jay Scott, and the arguments of counsel, you find that the State of Ohio failed to prove that the aggravating circumstances which the defendant, Jay Scott, was found guilty of committing, outweigh the mitigating factors, then you will return your verdict reflecting your decision.
78
In this event, you will then proceed to determine which of two possible life imprisonment sentences to recommend to the Court. [...]
79
Now, ladies and gentlemen, let me, first of all, before we continue, before I read to you what your verdict is, you see it is almost identical, and when I say "It is almost identical," to the forms that you have received before. It says, and I just picked them up the way they were, "Sentencing Proceeding" on the top, and it identifies the case, the case number, and then it says, "Verdict: We, the jury in this case being duly empaneled and sworn, do find beyond a reasonable doubt that the aggravating circumstances which the defendant, Jay Scott,was found guilty of committing, are sufficient to outweigh the mitigating factors presented in this case.
80
"We, the jury, recommend that the sentence of death be imposed upon the defendant, Jay Scott," and, again, signed by the foreman or forelady and all 12 of you must sign.
81
The second form is: "We, the jury in this case being duly empaneled and sworn, do find that the aggravating circumstances which the defendant, Jay Scott, was found guilty of committing, are not sufficient to outweigh the mitigating factors present in this case.
82
"We, the jury, recommend that the defendant, Jay Scott, be sentenced to life imprisonment with parole eligibility after sentencing," and then there's a blank with an asterisk which refers down and says, "insert years of imprisonment," and again, the signatures, and the first line is reserved for the foreman or forelady, and the remainder of the eleven of you must sign that verdict form. It must be unanimous. [...]
83
After you have retired, first, select a foreman or forelady and when all 12 of you - I repeat - all 12 of you agree upon a verdict, you will sign the verdict in ink, and advise the Court of this fact. You will remain in the jury room until summoned back into the courtroom. When you return to the courtroom, your verdict will be returned to me, as you did before, and I will read it for you. (emphasis added by district court). This was based on the following provision of Ohio law:
84
If the trial jury unanimously finds, by proof beyond a reasonable doubt, that the aggravating circumstances the offender was found guilty of committing outweigh the mitigating factors, the trial jury shall recommend to the court that the sentence of death be imposed on the offender. Absent such a finding, the jury shall recommend that the offender be sentenced to [one of the following life imprisonment terms].
85
Ohio Rev. Code § 2929.03(D)(2) (emphasis added by district court). It was clear to the district court that the statute did not require unanimity in recommending a life sentence, but rather mandated life imprisonment if the jury reached anything but unanimity on death. The court also reviewed three decisions of the Ohio Supreme Court interpreting § 2929.03(D)(2). The first, State v. Jenkins, 473 N.E.2d 264, 270 (Ohio 1984) (syllabus ¶ 10), held that a jury's recommendation of life imprisonment under that section must be unanimous.7 In State v. Springer, 586 N.E.2d 96, 97 (Ohio 1992) (syllabus), the court held that when the jury became hopelessly deadlocked as to sentence, the court is required to impose a life sentence. In State v. Brooks, 661 N.E.2d 1030 (Ohio 1996), the court reviewed a sentencing instruction that the jury must unanimously agree that the death penalty is inappropriate before recommending a life sentence. The courtfound this contrary to § 2929.03(D)(2). See id. at 1040-41. Brooks purported to "harmonize" the Jenkins and Springer holdings by requiring an instruction to be given thenceforth that a solitary juror could prevent the imposition of the death penalty. See id. at 1041-42. The district court found it "notable" that Springer and Brooks were decided after Scott's sentence was imposed, but decided that Brooks had simply clarified, not altered, Ohio law on the subject. It thus found the trial court's instruction requiring unanimity on life to be inconsistent with Ohio law.
86
Since "the fact that the instruction was allegedly incorrect under state law is not a basis for habeas relief," see Estelle v. McGuire, 502 U.S. 62, 71-72 (1991), the district court went on to observe that the "instructions left no room for the jury to believe the court could accept anything other than a unanimous recommendation, and gave no direction to the jury as to the effect a jury split would have on the jury's prior determination of guilt, or on the sentence the trial court could or would then impose on Scott." The court then followed Kubat v. Thieret, 867 F.2d 351 (7th Cir. 1989), which found a similar instruction to create the impermissible possibility that individual jurors would believe that unanimity was required as to the existence of mitigating factors, the result condemned by Mills v. Maryland, 486 U.S. 367 (1988). The district court saw the fact that a minority of this Court had followed Kubat, and the majority had merely distinguished it factually, in Kordenbrock v. Scroggy, 919 F.2d 1091 (6th Cir. 1990) (en banc), as evidence that we would follow Kubat here. Therefore, the court found a substantial possibility that the "faulty jury instruction which created this mis-impression violated Scott's Fourteenth Amendment right to be free from deprivation of life without due process of law."
87
We think that the court's likening of the instruction given here to those at issue in Mills and Kubat was incorrect. Those instructions required the jury to be unanimous in its finding of each mitigating factor, whereas this instruction plainly applies only to the overall weighing of mitigating and aggravating factors. In this regard, Scott's argument is indistinguishable from the one we recently rejected in Coe v. Bell, 161 F.3d 320, 336-39 (6th Cir. 1998). In that case,
88
The jury was then given the form its verdict should take:
89
(1) We, the Jury, unanimously find the following listed statutory aggravating circumstance or circumstances;
90
(2) We, the Jury, unanimously find that there are no mitigating circumstances sufficiently substantial to outweigh the [aggravating circumstances] so listed above.
91
(3) Therefore, we, the Jury, unanimously find that the punishment shall be death.
92
The alternate result was then provided for and explained:
93
If you unanimously determine that no statutory aggravating circumstance has been proved by the State beyond a reasonable doubt; or if the Jury unanimously determine that [aggravating circumstances] have been proved by the State beyond a reasonable doubt; but that said [aggravating circumstances] are outweighed by one or more mitigating circumstances, the sentence shall be life imprisonment.
94
For both the death verdict and the life imprisonment verdict, the jury was told that its verdict must be unanimous.
95
Id. at 337 (alterations in original). As in this case, the district court in Coe found this instruction to be unacceptable under, inter alia, Mills, "because there was a reasonable probability that the jurors believed that they could consider only those mitigating circumstances that they unanimously agreed were present." Id. Coe upheld the instruction because requiring unanimity only as to the results of the weighing process "is a far different matterthan requiring unanimity as to the presence of a mitigating factor . . . . The instructions say clearly and correctly that in order to obtain a unanimous verdict, each juror must conclude that the mitigators do not outweigh the aggravators." Id. at 338 (emphasis in original). In this regard, Coe specifically distinguished that instruction from those at issue in Mills, 486 U.S. at 387 (reviewing a verdict form that read "Based upon the evidence we unanimously find that each of the following mitigating circumstances which is marked 'yes' has been proven to exist by a preponderance of the evidence and each mitigating circumstance marked 'no' has not been proven by a preponderance of the evidence" (emphasis omitted)), and Kubat, 867 F.2d at 369 ("If . . . you unanimously conclude that there is a sufficiently mitigating factor or factors to preclude imposition of the death sentence, you should sign the verdict form which so indicates."), which much more clearly required unanimity in the finding of mitigating factors.
96
Similarly, Scott's jury was instructed to recommend death if it unanimously found "that the aggravating circumstances which Jay Scott was found guilty of committing outweigh the mitigating factors," and to choose an appropriate life sentence if it was unanimous in finding "that the State of Ohio failed to prove that the aggravating circumstances which the defendant . . . was found guilty of committing, outweigh the mitigating factors." This instruction pertains only to the weighing process, and not to the existence of individual mitigating or aggravating factors. Indeed, the instruction references these factors in the past tense, which suggests that the jurors were to have formed their opinions on the factors' existence before attempting to reach unanimity on their net weight. As in Coe, "[n]othing in this language could reasonably be taken to require unanimity as to the presence of a mitigating factor." 161 F.3d at 338. Whether or not the district court was correct that the instruction violated Ohio law by not conforming with the Ohio Supreme Court's subsequent decision in Brooks (which we find doubtful, given that court's approval of Scott's sentence), it does not violate Scott's federal constitutional rights under Mills and therefore cannot justify habeas relief.
97
Our conclusion is not altered by the portion of the opinion in Mapes v. Coyle, 171 F.3d 408 (6th Cir. 1999), which suggests that such unanimity instructions are erroneous. In that Ohio capital case, we reviewed a similar challenge to a virtually identical unanimity instruction. See Mapes, 171 F.3d at 416 ("[Y]ou must unanimously find that the State has failed to prove beyond a reasonable doubt that the aggravating circumstances of which the defendant was found guilty of committing outweigh the mitigating factors."). We stated in dicta that this instruction was erroneous because Brooks had found such instructions to violate the Eighth and Fourteenth Amendments, but we declined to issue a writ on this ground because the petitioner had procedurally defaulted that claim. See id. at 416-17, 419. The only reliance on federal constitutional law in Brooks, however, is its citation to Mills in explaining why it would thenceforth require that Ohio jurors be explicitly instructed that "a solitary juror may prevent a death penalty recommendation by finding that the aggravating circumstances in the case do not outweigh the mitigating factors." Brooks, 661 N.E.2d at 1042. Although the Brooks case was remanded for resentencing because the Ohio Supreme Court could not be sure of the effect that the instruction to "determine unanimously that the death penalty is inappropriate before you can consider a life sentence" had on that jury, id. at 1040, its requirement of an explicit instruction that "a solitary juror may prevent a death penalty recommendation" was prospective only; Brooks did not hold that all instructions requiring unanimous recommendations of life or death in previously decided Ohio death-penalty cases were unconstitutional. See id. at 1042. There is nothing in the Brooks opinion to cast doubt on the Ohio Supreme Court's previous approval ofScott's sentence (or, for that matter, Mapes's). As we have explained, our Coe decision, which well preceded Mapes, explicitly held that unanimity instructions like those in this case do not violate Mills. The Mapes dicta cannot preclude us from following Coe in this case.
98
We further note that the district court was clearly incorrect in finding error in the trial court's failure to advise the jury in its unanimity instruction as to the consequences of deadlock. The Supreme Court has chastised such instructions as encouraging deadlock and undermining the strong governmental interest in unanimous verdicts. See Jones v. United States, 119 S.Ct. 2090, 2099-2100 (1999). We did the same in Coe, 161 F.3d at 339-40.
99
2. The Trial Court's Penalty-Phase Instructions Regarding Considerations of Mercy and Effect of Recommendation of Death
100
As with the challenge to the unanimity instruction, the State claims that Scott's challenges to these two jury instructions are defaulted because Scott made no contemporaneous objection. The district court held that these claims had not been procedurally defaulted because the Ohio Supreme Court had performed a plain-error review of each of them. The district court determined, however, that the claims were without merit.
101
We think that the district court erred in holding that these claims were not procedurally defaulted. As to each of them, the Ohio Supreme Court explicitly stated that Scott had failed to raise any contemporaneous objection, and under its precedent of State v. Fanning, 437 N.E.2d 583, 585 (Ohio 1982), any error was waived. As was the case in Coe, the state court's statement could have been clearer and more express, but the test is not whether the state court could have said it better. It is enough that the court specifically held that the claims were waived; the court's alternative holding that there was no plain error "does not require us to disregard the state court's finding of procedural bar." Coe, 161 F.3d at 330.
102
We further conclude, however, that the district court correctly determined that neither of these claims had merit. The trial judge instructed the jury that its recommendation of death would be "just that - a recommendation," while a recommendation of life imprisonment "is binding upon the Court, and I, the Judge, must impose the specific life sentence which you recommend." Scott claims that this violates the principle established in Caldwell v. Mississippi, 472 U.S. 320 (1985), that courts must not mislead the jury into believing it has less responsibility than it actually does for choosing the death sentence.
103
We recently rejected this precise claim in Mapes v. Coyle, 171 F.3d 408, 414-15 (6th Cir. 1999). Moreover, as the district court correctly held, Caldwell is limited to situations in which the jury is misled as to its role "in a way that allows [it] to feel less responsible than it should for the sentencing decision. Thus, to establish a Caldwell violation, a defendant necessarily must show that the remarks to the jury improperly described the role assigned to the jury by local law." Romano v. Oklahoma, 512 U.S. 1, 9 (1994) (citations and alterations omitted); see also Dugger, 489 U.S. at 407; Kordenbrock, 919 F.2d at 1101. As Mapes points out, this instruction accurately describes Ohio law. There is no error with regard to this instruction.
The trial court also instructed the jury:
104
You must not be influenced by any consideration of sympathy or prejudice. It is your duty to carefully weigh the evidence to decide all disputed questions of fact, to apply the instructions of the Court to your findings, and to render your verdict accordingly. In fulfilling your duty, your efforts must be to arrive at a just verdict. Consider all the evidenceand make your finding with intelligence and impartiality, without bias, sympathy or prejudice, so that the State of Ohio and the defendant will feel that their case was fairly and impartially tried.
105
We rejected a challenge to the substance of this instruction in Mapes as well:
106
Third, an instruction to a death-sentence jury that it may disregard the statutory criteria for imposing a death sentence may be constitutionally impermissible in light of the probability that such an instruction would result in arbitrary and unpredictable results. See California v. Brown, 479 U.S. 538, 541, 107 S.Ct. 837, 93 L.Ed.2d 934 (1987). According to the Court, "sentencers may not be given unbridled discretion in determining the fates of those charged with capital offenses." Id. Thus, an instruction that the jury should not be swayed by "mere sentiment, conjecture, sympathy, passion, prejudice, public opinion or public feeling" was not only unobjectionable in Brown, it "serve[d] the useful purpose of confining the jury's imposition of the death sentence by cautioning it against reliance on [irrelevant,] extraneous emotional factors." Id. at 542, 543, 107 S.Ct. 837. Thus, there is no merit whatsoever to Mapes's claimed entitlement to a "merciful discretion" instruction, in light of the likely tendency of such an instruction to lead to arbitrary differences in whom is selected to be sentenced to death.
107
171 F.3d at 415-16 (emphasis omitted, alterations in original). The district court also correctly relied on Brown, reasoning that the instruction followed that decision by warning against all emotional responses, both in favor of and against Scott. There was no error as to this instruction either.
108
B. The Trial Judge's Comments to the Jury Venire
109
We examine this claim de novo, with deference to facts found in state court, for denial of fundamental fairness. It is not procedurally barred.
110
Scott challenges a remark made by the trial judge which he claims communicated to the jury the court's belief that Scott participated in the crime. During voir dire, the judge explained to the jury that the court knew there was notoriety surrounding the case because he had seen a newspaper article on it. The judge mentioned some details of the crime, then continued, "Not only was Mr. Scott - at least from the newspaper reports that I think I had read - was involved in this, there were three other--. . . ." At that point, the defense objected, and received a sidebar. The Court gave a curative instruction explaining the court's lack of knowledge on the case beyond the article. Scott moved for a mistrial, which the prosecution reluctantly joined. Denying the motion, the Court gave another instruction reiterating its neutrality and the jury's duty to decide based solely on the evidence.
111
Dissenting from Scott's denial of certiorari, Justices Marshall and Brennan lambasted the Ohio courts for upholding such an "extraordinary error" that "overwhelmed the presumption of innocence." Scott v. Ohio, 480 U.S. at 925. They also pointed out that empaneling another jury would have been easy at the voir dire stage. For this reason and because the prosecutor joined the mistrial motion, the district court found this issue a "close call." Nonetheless, the court found no fundamental unfairness. It viewed the comments as reporting to the jury the media's conclusion, and the fact that even the judge had seen the coverage, in an attempt to determine the jury's ability to be impartial. It concluded by noting that the verdict would likely have been upheld under Supreme Court precedent even if the jury themselves had read the article.
112
We find no error in the district court's conclusion. The threat of prejudicial comments from the court usually arises in response to evidence presented at trial. In this context, we have said
113
It is the duty of the trial judge to conduct an orderly trial with the goal ofeliciting the truth and attaining justice between the parties. In charging the jury, the trial judge is not limited to instructions of an abstract sort. It is within his province, whenever he thinks it necessary, to assist the jury in arriving at a just conclusion by explaining and commenting upon the evidence, by drawing their attention to the parts of it which he thinks important; and he may express his opinion upon the facts, provided he makes it clear to the jury that all matters of fact are submitted to their determination. The district judge may not assume the role of a witness. He or she may, however, analyze and dissect the evidence, as long as the district judge does not distort or add to it. When commenting on the evidence, the trial judge must take great care to avoid undue prejudice of the jury.
114
United States v. Blakeney, 942 F.2d 1001, 1013 (6th Cir. 1991) (citations, quotations and alterations omitted). Hence, the judge did not exceed his authority merely by pointing out the existence of the article and discussing its contents as a basis to judge juror impartiality.
115
Allegations of jury bias must be viewed with skepticism when the challenged influence occurred before the jurors took their oath to be impartial. Holding that pretrial publicity did not bias a juror in Patton v. Yount, 467 U.S. 1025, 1036 (1984), the Court said that the partiality of a juror "is plainly a question of historical fact: did a juror swear that he could set aside any opinion he might hold and decide the case on the evidence, and should the juror's protestation of impartiality have been believed." Accordingly, the Court held that such a determination by a state court was entitled to a presumption of correctness on habeas review under 28 U.S.C. § 2254(d). This is especially so in light of the two curative instructions the court gave, which we must presume to have been effective unless there is an "overwhelming probability" that they were ignored. Richardson v. Marsh, 481 U.S. 200, 208 (1987).
116
Scott's scenario of jury bias is not nearly tenable enough to overcome these presumptions. Scott and Justice Marshall cited Quercia v. United States, 289 U.S. 466 (1933), for the proposition that the judge's comments warped the jury's perception beyond all hope of repair. The extremity of that case's facts, however, provide a perfect foil to demonstrate the mildness of the instant case. In Quercia, the trial judge instructed the jury that he believed every word the defendant said to be a lie because the defendant had wiped his hands while on the stand. See id. at 468-69. Here, we have only Scott's inference that the court's facially innocuous statement may have been understood as a "frank, unguarded admission" of the judge's opinion, which would then have a prejudicial effect on a juror's verdict. All we know for certain is that the court communicated the existence of pretrial publicity, which Patton held not to be an indelible influence on a juror's mind. See also United States v. Peters, 754 F.2d 753, 762-63 (7th Cir. 1985) (recounting several studies demonstrating capital jurors' ability to put media reports out of their minds and vote exclusively on the evidence). This alone does not destroy fundamental fairness.
117
C. Ineffective Assistance of Trial Counsel During the Penalty Phase
118
We apply to this claim the same de novo standard listed above. For Scott's counsel to have deprived him of his Sixth Amendment right to effective assistance, the counsel's performance must have "so undermined the proper functioning of the adversarial process that the trial cannot be relied on as having produced a just result." Strickland v. Washington, 466 U.S. 668, 686 (1984). It is Scott's burden to show his attorneys' performance fell below an objective standard of reasonablenessand that Scott was thereby prejudiced. See id. at 687-88. Counsel's performance is strongly presumed to be effective. See id. at 690; Kimmelman v. Morrison, 477 U.S. 365, 381 (1986).
119
The district court found all but one of the several grounds for ineffectiveness of his trial counsel that Scott raised before it to be procedurally barred, and Scott does not pursue those defaulted allegations on appeal. The sole remaining argument is that Scott's sentencing-phase counsel were ineffective because they failed to research possible mitigating factors, and also failed to interview Scott's several family members who often attended the trial. Scott's attorneys did not present any mitigating evidence other than Scott's own unsworn statement to the jury.8 They pursued a "residual doubt" strategy, in which the defendant appeals to the jury's lingering doubt regarding the conviction in an attempt to dissuade them from imposing the death penalty. The state trial court held a post-conviction evidentiary hearing on this issue, and determined that: (1) trial counsel's testimony was more reliable than that of the family members; (2) the intransigence of Scott and his family was responsible for his counsel's failure to identify and obtain mitigating evidence from the family members; (3) the family members made no attempt to offer assistance until after Scott's conviction; and (4) had Scott chosen to have a pre-sentence investigation report prepared or had the family members testified, the jury would have learned of Scott's extensive criminal history. The court also made two other mixed findings of law and fact, namely that the family's testimony was unreliable and unhelpful and that Scott's lawyers acted in his best interest. The district court appropriately acknowledged its deference to the hearing's findings on the primary, historical facts, which Scott could not come close to rebutting with clear and convincing evidence. Moreover, while acknowledging the questionable amount of research done by counsel, the court decided that the second Strickland prong could not be met because Scott could not show a "reasonable probability" that the sentence would have been different otherwise. Strickland, 466 U.S. at 694. The court ended its discussion, however, with a footnote, noting that this too was a close call since one juror might always have been persuaded, and that the question was ultimately mooted by the court's grant of the writ on another ground.
120
The district court was correct to focus on the second Strickland prong. It is clear that, in its words, the "mitigating circumstances Scott wishes his counsel had presented . . . are largely, even overwhelmingly, negated by evidence that his background includes commission of robbery, assault, kidnaping, and other violent acts upon innocent citizens," and that prosecutors would have elicited such information from any family members who testified for Scott. The mitigating evidence would have revealed Scott's personal loyalty to his siblings, girlfriend, and children, and an exceedingly violent environment throughout his upbringing. As the district court said, it is impossible to say for certain that one juror would not have been swayed by this evidence, but certainty is not required here; we must ask only whether Scott has met his burden of demonstrating a reasonable probability that this would happen. None of the profferedmitigating evidence reduces Scott's culpability for the Prince murder or the string of violence that preceded it. Scott can only offer a hypothetical juror, not a reasonable probability, and hence cannot show prejudice.
121
As to the first Strickland prong, were we to reach it, it is not clear that the lawyers' performances fell below the objective standard. The state court fact findings that we are bound by indicate that neither Scott nor any proposed witness made any attempt to assist the attorneys in finding mitigating evidence, and that this made the job more difficult. This difficulty, of course, does not excuse a lack of attempt on the lawyers' part. It was their responsibility to present Scott's defense, not Scott's family's or even Scott's. In Glenn v. Tate, 71 F.3d 1204, 1207-08 (6th Cir. 1995), we held lawyers' conduct to be objectively unreasonable when they waited until after the verdict to prepare for the sentencing phase, failed to interview any family members or friends, and conducted no research at all into mitigation except to prepare one inadmissible videotape. We followed Glenn in Austin v. Bell, 126 F.3d 843, 848-49 (6th Cir. 1997), to find a lawyer ineffective when he failed to investigate or present any mitigating evidence despite the availability and willingness of several relatives and friends. We characterized counsel's performance there as not a "strategic decision, but rather an abdication of advocacy." Id. at 849; see also Byrd, 209 F.3d at 526 (following Austin and Glenn)); O'Guinn v. Dutton, 88 F.3d 1409, 1424 (en banc) (Merritt, C.J., concurring) (finding attorneys' near-complete failure to investigate or present mitigating evidence, because each attorney thought the other was preparing it, to go beyond ineffectiveness into total incompetence). In Mapes, we remanded for a hearing on the effectiveness of appellate counsel, in part because he failed to raise the fact that the sentencing phase counsel conducted no research into mitigating factors.
122
Scott's penalty-phase attorneys would certainly have been well-advised to conduct more research into mitigating factors than they did. Unlike in Austin and O'Guinn, however, these lawyers had a credible reason for not presenting testimony: a desire to keep Scott's extensive criminal history from the jury. See also Byrd, 209 F.3d at 526-27 (same). The state trial and appeals courts found this strategy to be in Scott's best interest, given his claim of actual innocence throughout trial and sentencing and the magnitude of his criminal past. Moreover, both the Ohio and United States Supreme Courts have endorsed a residual doubt strategy when warranted by the circumstances. See Lockhart v. McCree, 476 U.S. 162, 181 (1986) (recognizing the strategy as "an extremely effective argument for defendants in capital cases" (citation omitted)); State v. Johnson, 494 N.E.2d 1061, 1065 (Ohio 1986) ("omission of [mitigating] evidence in an appropriate case could be . . . the result of a tactical, informed decision by counsel, completely consonant with his duties to represent the accused effectively"). Without effective research into the available mitigating testimony, of course, it would be impossible for the lawyers to have made an informed decision either way, even if residual doubt was a viable option in retrospect. If we were to hold Scott's lawyers to be ineffective, then, it would have to be on the grounds of their failure to research mitigating evidence, not their failure to present it. Otherwise, there would be merit to the district court's concern in this case that to condone the lawyers' performance would be to create a post-hoc exception for faulty lawyering. Regardless, the Constitution guarantees competent counsel and a fair trial, not perfection. In light of the finding of the state common pleas court's evidentiary hearing that the lawyers' testimony is more credible than that of Scott's family, and that Scott's criminal history would have been known to the attorneys even without further research, we believe thatthe decision of Scott's attorneys to pursue a residual-doubt strategy in this case was not objectively unreasonable, because it was adequately (if not ideally) informed and was quite arguably the best course of action available.
123
D. Cumulative Error From Two Allegedly Erroneous Guilt-Phase Jury Instructions
124
As noted above, to warrant habeas relief, jury instructions must not only have been erroneous, but also, taken as a whole, so infirm that they rendered the entire trial fundamentally unfair. See Coe, 161 F.3d at 329. This burden is even greater than that required to demonstrate plain error on direct appeal. See Frady, 456 U.S. at 166; Henderson, 431 U.S. at 154 ("The question in such a collateral proceeding is whether the ailing instruction by itself so infected the entire trial that the resulting conviction violates due process, not merely whether the instruction by itself is undesirable, erroneous, or even universally condemned" (citations and internal quotations omitted)). Allegations of "trial error" raised in challenges to jury instructions are reviewed for whether they had a substantial and injurious effect or influence on the verdict, and are subject to harmless-error analysis.9 See Gilliam v. Mitchell, 179 F.3d 990, 994-95 (6th Cir. 1999) (citing Brecht v. Abrahamson, 507 U.S. 619, 638 (1993)).
125
Also as with the challenge to the unanimity instruction, the State claims that both of these claims are defaulted because they were not objected to contemporaneously. Scott has made no response. The district court reached the merits of the first instruction challenged here, relating to witness credibility, without discussing its potential default. Regardless of whether this claim was defaulted, it is easily disposed of on the merits. The court also correctly held the second ground, regarding the definition of reasonable doubt, not to be waived, because the Ohio Supreme Court itself said so in a later opinion that discussed Scott's case. See State v. Van Gundy, 594 N.E.2d 604, 607 (Ohio 1992).
126
1. Instruction on Credibility of Addicts and Accomplices
127
Tramble admitted being an addict when he gave his information to the police, and Jones and O'Neal also testified against Scott as accomplices. Scott proposed specific instructions on the particular unreliability of accomplices, and that the testimony of drug addicts should be "considered with great care" because of their constant need of drug money and abnormal fear of imprisonment. Instead, the court gave general instructions on the jury's duty to determine witness motivation and credibility, and instructed that accomplice testimony must be corroborated "by other credible, believable evidence."
128
The district court, relying on United States v. Howard, 590 F.2d 564, 570 (4th Cir. 1979), found no error in rejecting the addict instruction because there was no evidence that Tramble was still addicted at the time of trial, and could not have had an abnormal fear of imprisonment since he was already incarcerated at the time. The Ohio Supreme Court also relied on Howard in rejecting Scott's appeal. See State v. Scott, 497 N.E.2d 55, 63 (Ohio 1986). We have never directly followed or contradicted Howard, although we have acted consistently with it by dismissing a claim of error for failure to produce any evidence that the witnesses were addicted at trial. See United States v. Freeman, Nos. 91-1011, 91-1012, 1991 WL 203088, at *3 (6th Cir. Oct. 4, 1991) (unpublished). Instead, in an unpublished opinion, when an appellant challenged the refusal to give a similar instruction for awitness who was an addict-informer but not addicted at trial, we relied on our authority governing addict-informer instructions. See United States v. Anderson, Nos. 97-5352, 97-5382, 1998 WL 833701, at **4 (6th Cir. Nov. 20, 1998). "This court has long recognized the importance of an addict-informant instruction in appropriate cases." United States v. Brown, 946 F.2d 1191, 1195 (6th Cir.1991). However, there is no per se rule requiring such instructions to be given in all cases involving addict testimony; instead, "the need for such an instruction depends on the circumstances of each case." Id. (internal quotation omitted). The district court errs by failing to give a requested instruction only when the requested instruction is correct, not substantially covered by the actual jury charge, and when not giving the instruction would substantially impair defendant's defense. See United States v. Sassak, 881 F.2d 276, 279 (6th Cir.1989).
129
We agree with the district court, and adopt the reasoning of Howard. It is certainly consistent with our handful of unpublished decisions on the issue, none of which has been receptive to requiring the addict instruction, and it is sensible; there is no reason to believe that Tramble's former drug use impaired his testimony at trial. But Scott's argument is lacking even under our prior case law. The requested instruction is correct, as it is remarkably similar to the Sixth Circuit pattern instruction for addict-informers. But the trial court's instruction to consider the witnesses' motives should have been sufficient, and there was no impairment to Scott's defense significant enough to be cognizable on post-conviction review.
130
Nor did the court err in refusing Scott's accomplice instruction. In United States v. Carr, 5 F.3d 986 (6th Cir. 1993), an appellant challenged the trial court's refusal to give anything more than a general instruction on judging witness credibility. In dismissing the argument, we said
131
The court's instruction adequately informed the jury regarding the credibility of witness testimony, and so we are not troubled simply because the court chose not to explicitly highlight the credibility problems inhering in accomplice testimony. The instructions alerted the jury to the various considerations that it should take into account in weighing testimony, and it had an ample basis for rejecting the testimony of the accomplice witnesses if it had chosen to do so. In short, because the instructions given by the court substantially covered the same material as the instruction requested by the defendant, there was no reversible error.
132
Id. at 992. We have since followed Carr in not requiring accomplice instructions as a general matter, a rule that is significantly less favorable to defendants than the approaches of some of our sister circuits. See, e.g., United States v. Hill, 627 F.2d 1052 (10th Cir.1980) (finding reversible plain error when no accomplice instruction was given and no other evidence corroborated the accomplice testimony); United States v. Davis, 439 F.2d 1105 (9th Cir.1971) (same); Tillery v. United States, 411 F.2d 644 (5th Cir.1969) (same); United States v. McCabe, 720 F.2d 951, 956 (7th Cir. 1983) (holding lack of accomplice instruction to be error when corroborating evidence was insufficient "to overcome the inherent unreliability of accomplice testimony"); United States v. Lee, 506 F.2d 111, 120 (D.C. Cir.1974) (holding failure to give instruction harmless because accomplice's testimony was "materially corroborated"); United States v. Williams, 463 F.2d 393, 396 (10th Cir.1972) ("considerable evidence" corroborated the accomplice's testimony). Scott received an accomplice instruction that required the jury to look for additional corroboration, just not in the language he proposed. There is no error here, much less one justifying a writ.
2. Definition of Reasonable Doubt
133
The trial judge read Ohio's statutory definition of reasonable doubt to the jury, which included the phrase "firmlyconvinced," and added some concluding remarks that essentially repeated the same language:
134
Now, the Legislature of Ohio has specifically established the legal meaning of the term "reasonable doubt," and I will read that definition to you: "Reasonable doubt is present when, the jurors, after they have carefully considered and compared all evidence, cannot say they are firmly convinced of the truth of the charge. It is a doubt based upon reason and common sense. Reasonable doubt is not mere possible doubt, because everything relating to human affairs or dependent upon moral evidence is open to some possible or imaginary doubt.
135
"Proof beyond a reasonable doubt is proof of such character that an ordinary person would be willing to rely and act upon it in the most important of his affairs."
136
All of the evidence should be examined carefully and conscientiously by you, and, if after a full and impartial consideration of all the evidence, you are firmly convinced beyond a reasonable doubt of the truth of the charge or charges, then the State has proved its case and you must find the defendant guilty.
137
If you are not firmly convinced of the truth of the charge, then the State has not proved its case and you must find the defendant not guilty.
138
Scott claims that this definition unconstitutionally conflates the reasonable doubt standard with the less demanding "clear and convincing" standard.
139
The district court correctly relied on Thomas v. Arn, 704 F.2d 865, 867-69 (6th Cir. 1983), which held this precise definition to not violate due process. We recently did the same in Byrd, 209 F.3d at 527-28. Scott provides no reason to ignore this precedent.
140
E. Alleged Unconstitutionality of Ohio's Death-Penalty Scheme Facially and As Applied
141
Scott raised before the district court a number of reasons why the death penalty in general and in Ohio is unconstitutional. He focuses his argument on appeal only on two: that the fact that felony murder is used both as an element of the offense and a ground for capital sentencing fails to narrow the class of persons eligible for the death penalty, and that electrocution is cruel and unusual punishment. The rest are incorporated by reference in a footnote. The great majority of these incorporated issues, and the electrocution issue, were mentioned and rejected summarily in Byrd. See 209 F.3d at 527-28. We will do the same, for substantially the same reasons expressed in the district court's Order. Although Byrd also rejected the claim that Ohio fails to narrow the class of death-eligible convicts, it did not explicitly address Scott's ground for this argument. Hence, it merits brief discussion here.
142
The Warden has not argued that Scott's argument on the overlap of felony murder between the underlying crime and aggravating circumstance is procedurally defaulted, and the district court dismissed it on the merits. Even if Scott were right that the same act was the basis of his conviction and aggravating circumstance, this alone would not justify habeas relief. See Lowenfield v. Phelps, 484 U.S. 231, 244-46 (1988). There, the Supreme Court instructed that aggravating circumstances are not ends unto themselves, but simply one means by which a state may perform the narrowing function. See id. at 244. Lowenfield upheld the Texas death-penalty scheme, in which the narrowing function was performed by the legislature when it circumscribed the range of offenses eligible for the death penalty. See id. at 245-46. "The fact that the sentencing jury is also required to find the existence of an aggravating circumstance in addition is no part of theconstitutionally required narrowing process, and so the fact that the aggravating circumstance duplicated one of the elements of the crime does not make this sentence constitutionally infirm." Id. at 246. Similarly, the Ohio Legislature "narrow[ed] the class of felony murders subject to the death penalty by excluding those who commit [murder in the course of an] arson, robbery, burglary or escape, unless they are charged with a different aggravating circumstance." State v. Buell, 489 N.E.2d 795, 807 (Ohio 1986); see also Ohio Rev. Code § 2929.04(A) (1996) ("Imposition of the death penalty for aggravated murder is precluded, unless one or more of the following is specified in the indictment . . . and proved beyond a reasonable doubt:"). Scott fell within the narrowed category of death-eligible felony murderers because he committed or attempted to commit aggravated robbery. See Ohio Rev. Code § 2929.04(A)(7) (1996).
143
Moreover, even if an overlap were problematic, there is none here. Pursuant to Ohio Rev. Code § 2929.04(A)(7), Scott's indictment for aggravated murder added that "either [he] was the principal offender in the commission of the Aggravated Murder or, if not the principal offender, committed the Aggravated Murder with prior calculation or design." The Ohio Supreme Court has held that this language is distinct from the definition of felony murder, because in addition to causing a death during a felony, the defendant must also be proved to have caused the death personally and directly10 or in a premeditated manner. See State v. Jenkins, 473 N.E.2d 264, 280 n.17 (Ohio 1984); State v. Barnes, 495 N.E.2d 922, 925 (Ohio 1986) (per curiam).
144
F. Sufficiency of the Evidence Used to Convict Scott
145
An habeas court reviews claims that the evidence at trial was insufficient for a conviction by asking "whether, after viewing the evidence in the light most favorable to the prosecution, any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt. This familiar standard [views evidence] in the light most favorable to the prosecution[, and] thus impinges upon jury discretion only to the extent necessary to guarantee the fundamental protection of due process of law." Jackson v. Virginia, 443 U.S. 307, 319 (1979) (internal quotations, citations and footnotes omitted). This claim is not procedurally defaulted.
146
Scott argues that the evidence adduced at trial was insufficient to prove that he committed or attempted to commit aggravated robbery. If true, this would invalidate his death sentence, as the only specification that made him death-eligible was "caus[ing] the death of another . . . while committing or attempting to commit, or while fleeing immediately after committing or attempting to commit Aggravated Robbery." To support his argument, Scott notes that nothing was taken from the V&E Delicatessen, that he entered the store with money, and that O'Neal testified that there had been no discussion of robbery before arriving at the store.
147
We agree with the district court and Ohio Supreme Court that ample evidence was presented to allow a rational jury to find Scott guilty of the specification:
148
[U]nder R.C. § 2911.01, [...] an attempt to commit armed theft constitutes aggravated robbery. [...] This felonious objective is evidenced by the secretive manner in which Jones parked his car around the corner after dropping off [Scott] and O'Neal. Of further relevance is the fact that [Scott] was aware of a pending robbery charge against him upon his apprehension.
149
State v. Scott, 497 N.E.2d at 64. There is no ground here for habeas relief.
III. Conclusion
150
Because we conclude that there was no manifest miscarriage of justice in Scott's trial or sentencing that would authorize us to issue a federal writ of habeas corpus countermanding the judgment of the Ohio courts, we REVERSE the order of the district court granting Scott's petition for a writ of habeas corpus; we AFFIRM the judgment of the district court in all other respects.
Notes:
1
O'Neal, Jones, and Streeter each pled guilty to robbery offenses and received shock probation and/or suspended sentences.
2
This section provides a death-penalty-qualifying specification if The offense was committed while the offender was committing, attempting to commit, or fleeing immediately after committing or attempting to commit kidnapping, rape, aggravated arson, aggravated robbery, or aggravated burglary, and either the offender was the principal offender in the commission of the aggravated murder or, if not the principal offender, committed the aggravated murder with prior calculation and design. Ohio Rev. Code § 2929.04(A)(7) (1996).
3
In its Order, the district court felt "compelled to mention" that Cleveland attorneys Timothy F. Sweeney and John S. Pyle, serving pursuant to the Criminal Justice Act, have done an exceptional job defending Scott. They have also performed commendably on appeal.
4
The Maupin test is essentially a group of enumerated factors that is identical to the approach subsequently endorsed by Coleman: that the cause and prejudice/actual innocence test is to be applied in all federal habeas cases where the state court decision is based on an independent and adequate state ground. See Coleman, 501 U.S. at 750. Although we have remained faithful to the analysis endorsed by Maupin, our more recent decisions have not always employed a "Maupin test" per se. See, e.g., Byrd, 209 F.3d at 520-21 (articulating the factors from Maupin and related cases differently but analogously); Jones v. Toombs, 125 F.3d 945, 946 (6th Cir. 1997) (applying the Coleman formulation without mentioning Maupin, although reaching the same result). In this case, however, we find it useful to follow Maupin's enumerated factors.
5
The court alleviated this concern by finding that the Warden also failed the fourth Maupin prong, the cause and prejudice test. That conclusion was also erroneous, as we will address below.
6
Instead, Scott argues that even if we find procedural default, we should at least review his claim for plain error. The Supreme Court rejected precisely this contention in Frady, 456 U.S. at 164-65, noting that to apply the same "plain-error" review to a habeas petition that would apply on direct appeal destroys any respect for the finality of the state court judgment and allows the petition to function as a second appeal. The Court was very clear that the cause and prejudice test must be used instead.
7
The district court suggested in its Order that the Jenkins decision was available to the trial court when it sentenced Scott, but we think this is clearly wrong. Scott's sentencing-phase jury recommended the death penalty on March 28, 1984, and the court adopted the recommendation on April 4, 1984, but Jenkins was not released until December 17, 1984. Nevertheless, the Ohio Supreme Court approved of the unanimity instruction in Jenkins with such sweeping language as to suggest that the question was well-settled under Ohio law. See Jenkins, 473 N.E.2d at 307. The Court relied almost exclusively on Ohio Crim. R. 31(A), which provided: "The verdict shall be unanimous. It shall be in writing, signed by all jurors concurring therein, and returned by the jury to the judge in open court." Id. This rule was available to Scott's trial court. Even without this rule, moreover, the Jenkins court found that any potential ambiguity in the unanimity instruction was resolved by the "well-recognized [rule] that when statutes allow a jury in a criminal proceeding to influence punishment, such as the recommendation of life imprisonment in place of death, and the statute fails to expressly authorize a nonunanimous vote, the jury cannot secure the lesser punishment absent unanimity." Id.
8
Scott had the right under Ohio law to testify under oath or make an unsworn statement to the jury, and he chose the latter. Scott used this opportunity to continue to deny his guilt ("I feel insulted, and that's what I wanted to reflect to you. Insult when you charged me."), and explicitly told the jury that he was not going to tell them any reasons that they should show him mercy since he was not guilty and that was all they needed to know ("I don't have to sit here and say 'Give me mercy.' What I mean, I don't want no mercy . . . I don't care what they say out of they [sic] mouths, and I'm telling you, it is me now talking for me . . . . I didn't care that you found me guilty, but it was up to you. I felt you couldn't because the truth has got to rise, but . . . you did, and it don't scare me when they say you are going to give me the death penalty.").
9
Scott cites an Eighth Circuit case for the proposition that Brecht's harmless-error test does not apply if the state courts did not conduct a Chapman harmless error test, but Gilliam squarely rejects this contention.
10
In Ohio, the "principal offender" is the one who actually caused the death. See Byrd, 209 F.3d at 496 n. 2 (citing State v. Penix, 513 N.E.2d 744, 746 (Ohio 1987)).
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