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864 F.2d 619
117 Lab.Cas. P 56,423, 13 Fed.R.Serv.3d 154
Paul PUCKETT, Appellant,v.Sandy COOK, Darrell Carter, Sanyo Manufacturing Corp., Appellees.
No. 88-1656.
United States Court of Appeals,Eighth Circuit.
Submitted Nov. 15, 1988.Decided Jan. 3, 1989.
Keith Blackman, Jonesboro, Ark., for appellant.
Donna S. Galchus & Charles W. Reynolds, Little Rock, Ark., for appellees.
Before McMILLIAN, JOHN R. GIBSON and MAGILL, Circuit Judges.
McMILLIAN, Circuit Judge.
1
Paul Puckett appeals from the final order of the District Court1 for the Eastern District of Arkansas granting appellees' motion for summary judgment on Puckett's state claims arising out of his termination of employment from appellee Sanyo Manufacturing Corporation (Sanyo). For reversal, Puckett argues that the magistrate abused his discretion in exercising pendent jurisdiction over the state claims; alternatively, Puckett argues that summary judgment was improper because of existing issues of material fact, the magistrate's misapplication of the law, and the pendency of a discovery motion. For the reasons discussed below, we affirm.
2
On April 14, 1982, Puckett commenced employment as an industrial engineer with Sanyo. After Puckett confronted management with what he perceived to be kickback and bid-rigging schemes and made it clear that he would not participate in them, appellee Sandy Cook was allegedly promoted ahead of him and made his immediate supervisor. According to Puckett, Cook and appellee Darrell Carter, a vice president at Sanyo, were involved in these alleged schemes and conspired to force Puckett's resignation because he refused to go along with them. Puckett claims that appellees demoted him, denied him raises, and gave him a defamatory work-performance evaluation that left him no alternative but to resign, which he did on June 5, 1985.
3
Thereafter, Puckett filed a request for unemployment benefits with the Arkansas Employment Security Division (AESD), which was denied on the ground that he had voluntarily quit his job without good cause. On appeal, this decision was affirmed by the Arkansas Court of Appeals. Puckett v. Director, No. E85-136 (Ark.Ct.App. Apr. 9, 1986).
4
Puckett then filed suit against appellees in state court alleging wrongful termination, defamation, constructive discharge, and outrage. He later amended his petition to allege deprivation of his fifth amendment due process rights, as well as bid-rigging in violation of federal antitrust laws and the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. Secs. 1961-1968 (RICO). Based on the federal claims, appellees removed the case to federal district court.
5
The magistrate granted appellees' motion for summary judgment on all federal claims, concluding (1) Puckett's due process claim was meritless because he did not allege government involvement; (2) his RICO claim was insufficiently pleaded to state a cause of action; and (3) he lacked standing to assert the antitrust claim. The magistrate also entered summary judgment in favor of appellees on all state claims. Specifically, the magistrate held (1) Puckett was collaterally estopped from pursuing his constructive discharge claim in federal court because the AESD and Arkansas Court of Appeals determined that he had voluntarily terminated his employment; (2) his contractual wrongful termination claim was barred by the statute of frauds; (3) his defamation claim was meritless because no publication occurred; and (4) he failed to state a cause of action for outrage under Arkansas law.
6
In this timely appeal which followed, Puckett "denies" that the magistrate properly dismissed his federal claims and argues that even if he did, the magistrate erred in ruling on the motion for summary judgment because discovery was not complete. He further argues that the magistrate had abused his discretion in exercising pendent jurisdiction.2 On the merits of the pendent claims, Puckett argues that (1) he was not collaterally estopped from asserting a constructive discharge claim; (2) he fell within the Arkansas public policy exception to the at-will employment doctrine, and Sanyo breached the implied and stated policies of good faith and fair dealing; (3) his contractual wrongful termination claim was not barred by the statute of frauds; (4) employer privilege did not defeat his defamation claim because some statements were made with malice; and (5) his deposition testimony that he suffered emotional distress, sleeplessness, and a nervous stomach created material fact issues sufficient to preclude summary judgment on his claim for outrage. Finally, he argues that summary judgment was premature, because appellees had not yet complied with Puckett's motion for production of documents.
7
At the outset, we find that Puckett's federal antitrust claim was jurisdictionally substantial, see Koke v. Stifel, Nicolaus & Co., 620 F.2d 1340, 1346 (8th Cir.1980) (claim is insubstantial only if inescapably rendered frivolous by prior decisions), and that the federal and state claims would be expected to be tried together because they arose out of a common nucleus of operative fact, i.e., Puckett's refusal to go along with the alleged bid-rigging scheme. Accordingly, the constitutional prerequisites to the exercise of pendent jurisdiction set forth in United Mine Workers of America v. Gibbs, 383 U.S. 715, 725, 86 S.Ct. 1130, 1138, 16 L.Ed.2d 218 (1966), were satisfied.
8
The exercise of pendent jurisdiction is dependent upon considerations of judicial economy, and convenience and fairness to litigants, see id., 383 U.S. at 726, 86 S.Ct. at 1139, including "the difficulty of the state claim, the amount of judicial time and energy already invested in it, the amount of additional time and energy necessary for its resolution, and the availability of a state forum." Koke, 620 F.2d at 1346.
9
In Koke, 620 F.2d at 1345-46, this court considered the above-stated factors in an appeal from a summary judgment dismissing a complaint alleging federal and state law causes of action. While affirming the dismissal of the federal claims, we vacated the ruling on the state claim and remanded with instructions to dismiss without prejudice. Specifically, we stated that although not determinative, "the 'early dismissal of the federal claim is one factor tending to support dismissal of the state claim as well.' " Id. at 1346 (quoting Kuhn v. National Ass'n of Letter Carriers, 528 F.2d 767, 771 n. 6 (8th Cir.1976)). With regard to the case at bar and upon consideration of the relevant factors, we conclude that the magistrate's failure to remand the state claims to state court does not warrant reversal at this stage. See Hartman v. Hallmark Cards, 833 F.2d 117, 121 (8th Cir.1987) (abuse of discretion standard of review). Thus, we will address the merits of the pendent claims.
10
As to Puckett's wrongful discharge claims, we hold that summary judgment was proper, because the Arkansas Court of Appeals's affirmance of the agency decision that Puckett voluntarily quit his job without good cause precluded further litigation of these claims.3 See Gahr v. Trammel, 796 F.2d 1063, 1066 (8th Cir.1986).
11
A defamatory statement is not actionable under Arkansas law unless there is an abuse of privilege or communication to a non-privileged third party. See Braman v. Walthall, 215 Ark. 582, 589, 225 S.W.2d 342, 346-47 (1949). Arkansas law recognizes a qualified privilege for employers and supervisory employees. See Ikani v. Bennett, 284 Ark. 409, 411, 682 S.W.2d 747, 748-49 (1985). Upon review of the record, we find no material issue of fact relative to appellees' alleged abuse of privilege, and we note that Puckett's own deposition testimony confirmed the lack of publication or communication to anyone outside of Sanyo management. Thus, we hold that the magistrate properly granted summary judgment on Puckett's defamation claim.
12
Under Arkansas law, one is subject to liability for outrage for willfully or wantonly causing severe emotional distress through conduct "so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency, and to be regarded as atrocious, and utterly intolerable in a civilized society." M.B.M. Co. v. Counce, 268 Ark. 269, 280, 596 S.W.2d 681, 687 (1980). The magistrate properly granted summary judgment on this claim. See Sterling Drug, Inc. v. Oxford, 294 Ark. 239, 743 S.W.2d 380, 382-83 (1988) (employer's conduct allegedly designed to force suspected "whistle blower" to resign was insufficient to support jury verdict for outrage); cf. Counce, 268 Ark. at 281, 596 S.W.2d at 688 (summary judgment was inappropriate where employer withheld discharged employee's paycheck even after employee successfully passed lie detector test).
13
Last, under Federal Rule of Civil Procedure 56(f), a party opposing summary judgment may request the court to postpone ruling on the motion until discovery is had. A party invoking the protections of this rule, however, must do so by affirmatively demonstrating why he cannot respond to the motion, and how postponement of a ruling will enable him to rebut the movant's showing of the absence of a genuine issue of fact. United States v. Light, 766 F.2d 394, 397-98 (8th Cir.1985) (per curiam). Upon review of the record, we conclude that Puckett did not comply with Rule 56(f).
14
Accordingly, the district court's judgment is affirmed.
1
The Honorable John J. Forster, Jr., United States Magistrate for the Eastern District of Arkansas. The case was presented to the magistrate for final disposition pursuant to 28 U.S.C. Sec. 636
2
To the extent that Puckett is challenging the magistrate's dismissal of his federal claims, he has "fail[ed] to demonstrate precisely and with reference to the record why the findings * * * are clearly wrong," and this court will not search the record for error relative to these claims. McDowell v. Safeway Stores, 753 F.2d 716, 717 (8th Cir.1985)
3
The magistrate may have erroneously determined that Puckett's contractual wrongful discharge claim was barred by the statute of frauds, as we find no record evidence that Puckett's at-will employment agreement was of a definite duration. See Country Corner Food and Drug, Inc. v. Reiss, 22 Ark.App. 222, 225, 737 S.W.2d 672, 673 (1987) (statute of frauds does not apply to oral at-will employment contracts of indefinite duration). Nevertheless, there is no need to remand, because the Arkansas law of claim preclusion forecloses litigation of this claim
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14-4641
Vargas De Leon Ortiz v. Lynch
BIA
Owens, IJ
A024 029 154
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY
ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF
APPELLATE PROCEDURE 32.1 AND THIS COURT=S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER
IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN
ELECTRONIC DATABASE (WITH THE NOTATION ASUMMARY ORDER@). A PARTY CITING TO A SUMMARY
ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.
1 At a stated term of the United States Court of Appeals for the Second Circuit,
2 held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of
3 New York, on the 5th day of February, two thousand sixteen.
4
5 PRESENT:
6 GUIDO CALABRESI,
7 GERARD E. LYNCH,
8 RAYMOND J. LOHIER, JR.,
9 Circuit Judges.
10 _____________________________________
11
12 ARGENTINA VARGAS DE LEON ORTIZ,
13 a/k/a ARGENTINA ORTIZ
14
15 Petitioner,
16
17 v. No. 14-4641
18
19 LORETTA E. LYNCH, United States Attorney
20 General,
21
22 Respondent.
23 _____________________________________
24
25 FOR PETITIONER: Michael E. Marszalkowski, Esq., Buffalo, NY.
26
27 FOR RESPONDENT: JENNIFER R. KHOURI (Benjamin C. Mizer, Shelley
28 R. Goad, Jennifer P. Levings, on the brief), Office of
29 Immigration Litigation, United States Department of
30 Justice, Washington, D.C.
1 UPON DUE CONSIDERATION of this petition for review of a Board of
2 Immigration Appeals (“BIA”) decision, it is hereby ORDERED, ADJUDGED, AND
3 DECREED that the petition for review is DENIED.
4 Petitioner Argentina Vargas de Leon Ortiz (“Vargas”), a native and citizen of the
5 Dominican Republic, seeks review of a November 18, 2014, decision of the BIA affirming
6 an October 31, 2012, decision of an Immigration Judge (“IJ”) pretermitting her application
7 for relief under former Immigration and Nationality Act § 212(c), 8 U.S.C. § 1182(c)
8 (1994) (“212(c) relief”). In re Argentina Vargas de Leon Ortiz, No. A024 029 154 (B.I.A.
9 Nov. 18, 2014), aff’g No. A024 029 154 (Immig. Ct. Buffalo Oct. 31, 2012). We assume
10 the parties’ familiarity with the underlying facts and procedural history in this case.
11 Prior to April 24, 1996, 212(c) relief was available to any lawful permanent resident
12 (“LPR”), subject to conditions and exceptions not relevant here, who had been convicted of
13 an aggravated felony but had not served five years’ imprisonment. See Pub. L. No.
14 101-649, § 511. On April 24, 1996, all LPRs convicted of an aggravated felony were
15 barred from 212(c) relief, regardless of the term of imprisonment. See Pub. L. No.
16 104-132, § 440(d). On April 1, 1997, 212(c) relief was eliminated altogether. See Pub.
17 L. No. 104-208, Div. C., § 304(b).
18 In 2001, the Supreme Court held that 212(c) relief remains available to aliens who
19 pleaded guilty to removable offenses when such relief existed, even if they were not placed
20 in removal proceedings until after its elimination. INS v. St. Cyr, 533 U.S. 289 (2001).
2
1 The Court concluded that aliens who entered guilty pleas in possible reliance on the
2 existence of 212(c) relief could not later be deprived of the opportunity to seek such relief.
3 In the wake of St. Cyr, the Executive Office for Immigration Review, Department of
4 Justice, promulgated a regulation providing that an alien who pled guilty to an aggravated
5 felony remains eligible for 212(c) relief without regard to the later restriction or repeal of
6 that provision if “the alien’s plea agreement was made before April 24, 1996,” and that “the
7 date of the plea agreement will be considered the date the plea agreement was agreed to by
8 the parties.” 8 C.F.R. § 1212.3(h). As Vargas was found removable by reason of an
9 aggravated felony for which she did not serve a prison term she would be eligible for
10 212(c) relief if her plea agreement was “agreed to” or “made” before April 24, 1996.
11 §§ 1212.3(f)(4)(i), (h)(1).
12 Vargas was arrested and charged with an aggravated felony before April 24, 1996;
13 she eventually entered a guilty plea, but not until November 20, 1996. On a prior appeal,
14 we remanded this matter to the agency to determine the date when Vargas entered a plea
15 agreement with the government. The IJ found, based on an analysis of the docket entries
16 in Vargas’s criminal case, that she did not enter a plea agreement until after April 24, 1996.
17 Vargas argues that she is nevertheless eligible for 212(c) relief because she indicated her
18 intention to pursue a plea agreement, and agreed to enter negotiations with the government
19 to that end, prior to April 24, 1996.
3
1 Because Vargas is removable based on a conviction for an aggravated felony and
2 controlled substance offense, we lack jurisdiction to review the IJ’s factual findings, but
3 retain jurisdiction to review constitutional claims and questions of law, which we review
4 de novo. 8 U.S.C. § 1252(a)(2)(C), (D); Higgins v. Holder, 677 F.3d 97, 100 (2d Cir.
5 2012).
6 As we lack jurisdiction over factual findings, we must accept the IJ’s finding (which
7 in any event is consistent with the docket entries) that Vargas did not enter a formal plea
8 agreement with the government until after the critical date. We retain jurisdiction to
9 decide, as a matter of law, whether Vargas’s agreement to negotiate regarding a plea
10 agreement constitutes a “plea agreement” within the meaning of the regulation. We find
11 no legal error in the IJ’s conclusion that the parties had not entered into or made a plea
12 agreement by April 24, 1996, notwithstanding discussions that occurred between the
13 parties prior to that date. A mutual decision to explore a possible disposition of a case is
14 not a “plea agreement.” A plea agreement results from such negotiations when the parties
15 agree on the terms of a plea. Before that point, neither a defendant’s unilateral decision to
16 plead guilty on the best terms offered by the government, nor the parties’ mutual decision
17 to explore such terms, constitutes an agreement between the parties that a plea will be
18 entered. To the extent Vargas argues that St. Cyr requires a different conclusion, we
19 disagree. A defendant who has undertaken to consider the possibility of a guilty plea if
20 appropriate terms can be agreed upon has not committed to enter a plea, and so there is no
4
1 reason to assume that such a defendant may have detrimentally relied on the existence of
2 any particular provision of the immigration law in ultimately entering a plea agreement.
3 See Vartelas v. Holder, 132 S. Ct. 1479, 1490-91 (2012) (“While the presumption against
4 retroactive application of statutes does not require a showing of detrimental reliance,
5 reasonable reliance has been noted among the familiar considerations animating the
6 presumption”) (internal citation and quotation marks omitted). We cannot say that the
7 agency’s adoption of the date of the plea agreement represents an unreasonable
8 interpretation of the reasoning or holding of St. Cyr.
9 Although we find no legal error in the agency’s decision in this case, we note that
10 the government may have reason to consider exercising its discretion not to prioritize
11 Vargas’s removal. Vargas is a 71 year old woman, who has been a lawful permanent
12 resident of the United States since 1981, more than thirty-five years. She has five living
13 United States citizen children and is the primary caretaker of her youngest son, who has
14 multiple disabilities, resides with Vargas, and is dependent on her for his daily care.
15 Vargas suffers from serious health issues including heart disease, hypothyroidism,
16 diabetes, and high blood pressure. There is no doubt that she committed a serious offense
17 in possessing heroin with intent to distribute. That crime was committed in 1994, more
18 than twenty-one years ago. Even at that time, the sentencing court concluded that under
19 all the facts and circumstances of the case, a prison sentence was not warranted – Vargas
5
1 was sentenced to five years’ probation, which she successfully completed. Since that
2 time, she has never run afoul of the law.
3 We fully recognize that considerations of discretion are entirely the prerogative of
4 the executive branch, and we express no opinion on how that prerogative should be
5 exercised in this case. We make these observations only because the relevant
6 governmental authorities may have misperceived the extent of their discretion. At oral
7 argument, the government represented to the court that “prosecutorial discretion also has
8 guidelines that were set forth in [a memorandum issued on November 20, 2014 by
9 Secretary of Homeland Security Jeh Charles Johnson] (“the Johnson Memo”), and one of
10 those very distinct guidelines is that aggravated felons cannot be considered for
11 prosecutorial discretion.” Oral Argument at 3:05:16 (emphasis added). In fact, however,
12 the Johnson Memo directs the agency to exercise prosecutorial discretion even in the case
13 of noncitizens convicted of aggravated felonies. Specifically, the Johnson Memo directs
14 that “aliens in Priority l,” including those convicted of an “aggravated felony,” like Vargas,
15 must be prioritized for removal . . . unless, in the judgment of
16 an ICE Field Office Director, CBP Sector Chief, or CBP
17 Director of Field Operations, there are compelling and
18 exceptional factors that clearly indicate the alien is not a threat
19 to national security, border security, or public safety and
20 should not therefore be an enforcement priority. . . .
21
22 In making such judgments, DHS personnel should consider
23 factors such as: extenuating circumstances involving the
24 offense of conviction; extended length of time since the
25 offense of conviction; length of time in the United States;
26 military service; family or community ties in the United States;
6
1 status as a victim, witness or plaintiff in civil or criminal
2 proceedings; or compelling humanitarian factors such as poor
3 health, age, pregnancy, a young child, or a seriously ill relative.
4
5 Memorandum from Jeh Charles Johnson, Secretary, U.S. Department of Homeland
6 Security, Policies for the Apprehension, Detention and Removal of Undocumented
7 Immigrants, 3, 5-6 (Nov. 20, 2014) (emphasis in original), available at
8 https://www.dhs.gov/sites/default/files/publications/14_1120_memo_prosecutorial_discre
9 tion.pdf. Thus, the governing memorandum to which the government refers appears to
10 leave open the possibility of exercising discretion when considering the removal of a
11 person like Vargas. Whether to do so is in the hands of the government, but any decision
12 should not be made under a misapprehension of the governing departmental policy.
13 For the foregoing reasons, the petition for review is DENIED.
14
15 FOR THE COURT:
16 Catherine O=Hagan Wolfe, Clerk
7
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838 F.Supp. 232 (1992)
Frances W. BRIGGS, Plaintiff,
v.
The NEWBERRY COUNTY SCHOOL DISTRICT; Vance O. Johnson, in his individual capacity; Mitchell Strickland, in his individual capacity; Donna Elmore, in her individual capacity, Defendants.
Civ. A. No. 8:92-0179-3.
United States District Court, D. South Carolina.
June 9, 1992.
*233 James Lewis Cromer, Columbia, SC, for plaintiff.
Kenneth Lendrem Childs, Mary Jane Turner, Allen D. Smith, Childs & Duff, P.A., Columbia, SC, for defendants.
ORDER
GEORGE ROSS ANDERSON, Jr., District Judge.
INTRODUCTION
This case arises from the nonrenewal of Plaintiff's employment contract with the Newberry County School District in May 1990. Plaintiff, Frances W. Briggs, initiated this action under 42 U.S.C. § 1983 against Defendants, Newberry County School District, Vance O. Johnson, Mitchell Strickland, and Donna Elmore, alleging violations of her constitutional rights of free speech and procedural due process.
Specifically, Plaintiff asserts that Defendants terminated her employment in retaliation for her criticism of her supervisors, allegedly an exercise of her First Amendment right of free speech. In addition, Plaintiff contends that Defendants failed to accord her procedural due process in the conduct of the pre-termination administrative hearing before the District Board of Education.
This matter is presently before the Court upon Defendants' motion to dismiss Plaintiff's complaint pursuant to Fed.R.Civ.P. 12(b)(6).[1] Defendants contend that the doctrines of res judicata and collateral estoppel preclude or bar Plaintiff's federal claims. The Court agrees that principles of claim preclusion prevent the litigation of Plaintiff's present claims and, therefore, grants Defendants' motion to dismiss.
STATEMENT OF FACTS
The District first employed Plaintiff in 1984 as the Coordinator and Phase I Instructor in the Licensed Practical Nursing (LPN) program at its Vocational Center. During Plaintiff's tenure, district administration received numerous complaints about Plaintiff's lack of professionalism in her dealings with students, colleagues, and clinical site staff. Plaintiff's supervisors, the individual defendants in this case, also found Plaintiff to be uncooperative and insubordinate, and they believed her performance impacted negatively upon the LPN program. Because of the dissatisfaction with Plaintiff's job performance, Defendant Johnson, then the Superintendent of the District, recommended to the District Board of Education that Plaintiff's employment not be continued beyond the end of the 1989-90 school year.
Subsequent to the Superintendent's recommendation, Plaintiff requested and received a quasi-judicial evidentiary hearing before the Board as provided by S.C.Code Ann. §§ 59-25-460, -470 (Rev.1990). At the hearing Plaintiff was afforded the right to be represented by legal counsel, the right to produce witnesses and other documentary evidence, and the right to cross-examine the District's witnesses. At the conclusion of the hearing, the Board determined that the testimony and evidence demonstrated good and sufficient cause for nonrenewal and voted to uphold the Superintendent's recommendation.
On May 30, 1990, Plaintiff appealed the Board's decision to the circuit court of South Carolina pursuant to § 59-25-480. The circuit court examined the record of the Board hearing and concluded that there was substantial evidence to support the Board's decision to accept Defendant Johnson's recommendation of contract nonrenewal. Thereafter, Plaintiff filed a motion to alter or amend the judgment pursuant to S.C.R.Civ.P. 59, raising for the first time the claims now asserted in this federal cause of action. On November 5, 1991, the state court issued an order denying Plaintiff's motion. No appeal to the state court decision was taken by Plaintiff. This action ensued.
DECISION AND ORDER
A. Judicial Notice May Be Taken Of The Prior Administrative And Judicial Proceedings
Fed.R.Evid. 201 provides that a court shall take judicial notice of adjudicative *234 facts when requested by a party and supplied with the necessary information, when the judicially noticed fact is "capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned." Facts subject to judicial notice may be considered by a court on a motion to dismiss. Dickinson v. Indiana State Election Bd., 740 F.Supp. 1376 (S.D.Ind.1990), rev'd on other grounds, 933 F.2d 477 (7th Cir.1991); Nejad v. United States, 724 F.Supp. 753 (C.D.Cal.1989). When entertaining a motion to dismiss on the ground of res judicata or collateral estoppel, a court may judicially notice facts from a prior judicial proceeding. Mehlar Corp. v. City of St. Louis, Missouri, 530 F.Supp. 85 (E.D.Mo. 1981) (dismissing an action on a Rule 12(b)(6) motion on the basis of res judicata).
The record of the prior administrative and state court hearings in this case is a source whose accuracy cannot reasonably be questioned. Accordingly, this Court takes judicial notice of the prior proceedings between the District and Plaintiff and, further, hereby considers those proceedings in ruling on Defendants' motion to dismiss.
B. Preclusive Effect Must Be Afforded To The Prior State Judicial Proceeding If South Carolina Courts Would Afford That Proceeding Preclusive Effect
Under 28 U.S.C. § 1738, the records or judicial proceedings of a state court "shall have the same full faith and credit in every court within the United States ... as they have by law or usage in the courts of such state...." Section 1738 "does not allow federal courts to employ their own rules of res judicata in determining the effect of state judgments"; rather, it "commands a federal court to accept the rules chosen by the state from which the judgment is taken." Kremer v. Chemical Constr. Corp., 456 U.S. 461, 481-82, 102 S.Ct. 1883, 1898, 72 L.Ed.2d 262 (1982). Further, the state court judgment is not required to follow a trial de novo to operate as a bar to subsequent actions; the judicial affirmance of an administrative decision is entitled to preclusive effect under § 1738. Kremer, 456 U.S. at 480 n. 21, 102 S.Ct. at 1896 n. 21. Therefore, this Court must analyze the law of South Carolina to determine whether the prior state court judgment affirming the Board's decision to nonrenew Plaintiff's employment contract operates as res judicata.
The doctrine of res judicata embodies two distinct preclusion concepts: (1) claim preclusion; and (2) issue preclusion. Marrese v. American Academy of Orthopaedic Surgeons, 470 U.S. 373, 376 n. 1, 105 S.Ct. 1327, 1329 n. 1, 84 L.Ed.2d 274 (1985); Migra v. Warren City School Dist. Bd. of Educ., 465 U.S. 75, 77 n. 1, 104 S.Ct. 892, 894 n. 1, 79 L.Ed.2d 56 (1984). Claim preclusion refers to the preclusive effect of a judgment in foreclosing litigation of matters which should have been raised in an earlier suit, while issue preclusion refers to the effect of a judgment in precluding the relitigation of a matter actually litigated and decided. Id. In this case the Court does not need to consider the applicability of issue preclusion and, therefore, bases its decision upon the concept of claim preclusion.
In a case very similar to this one, Button v. Harden, 814 F.2d 382 (7th Cir.1987), the Seventh Circuit applied the rule of claim preclusion to bar a plaintiff's federal § 1983 claim based upon the First Amendment. In Button, a school board passed a resolution to dismiss Button, a tenured public school teacher. An evidentiary hearing was held, and a hearing officer found that the dismissal was warranted. Button then appealed to the Illinois state court, which affirmed his dismissal. After the state court affirmance, Button brought a § 1983 action alleging that he was fired in retaliation for exercising his right of free speech.
In holding that claim preclusion barred Button's federal claim because it could have been asserted before the state court, the Seventh Circuit noted that Button had two options following the administrative hearing. He could have filed an action in federal court, or he could have pursued his appeal in the state court. If he elected to pursue his state remedy, the Seventh Circuit noted, Button would be required to allege every ground for relief which the state court had authority to consider. 814 F.2d at 384. The Seventh *235 Circuit held that Button, having chosen to go into state court, could have raised the First Amendment ground in that proceeding. If his dismissal had been in violation of the Constitution, the state court would have set it aside. Id. Consequently, the federal action was precluded by the previous judgment affirming Button's dismissal.
The Court finds Button to be persuasive in this case. As in Button, Plaintiff's dismissal could have been set aside by the circuit court if it had been in violation of her constitutional rights to free speech or procedural due process. See Kizer v. Dorchester County Voc. Educ. Bd. of Trustees, 287 S.C. 545, 340 S.E.2d 144 (1986) (teacher appeal wherein the court expressly considered and rejected a teacher's due process claims). Cf. S.C.Code Ann. § 1-23-380(g)(1) (Rev.1986) (stating that a circuit court may reverse the decision of an administrative agency if the administrative conclusion or decision is in violation of constitutional or statutory provisions).
Plaintiff contends that Button is distinguishable on the ground that there is a critical difference between the law of South Carolina and the law of Illinois on the question of res judicata or claim preclusion. Based upon an examination of the law of each state, however, the Court concludes that the doctrines are very similar in the two jurisdictions. See Jimmy Martin Realty Group, Inc. v. Fameco Distrib., Inc., 300 S.C. 192, 386 S.E.2d 803 (Ct.App.1989); Wessinger v. Rauch, 288 S.C. 157, 341 S.E.2d 643 (Ct.App. 1986); Edwards v. City of Quincy, 124 Ill. App.3d 1004, 80 Ill.Dec. 142, 464 N.E.2d 1125 (4 Dist.1984). Both states apply essentially the same prerequisites of claim preclusion.
C. The Law Of Claim Preclusion In South Carolina Would Bar Plaintiff's Relitigation of Her Constitutional Claims
Under the principles of claim preclusion, a final judgment on the merits in a prior action will absolutely bar the parties and their privies from litigating in a subsequent action issues actually litigated and issues that could have been raised in the first action. Jaynes v. County of Fairfield, 303 S.C. 434, 401 S.E.2d 183 (Ct.App.1991); Calvert v. Calvert, 287 S.C. 130, 336 S.E.2d 884 (Ct.App.1985). To raise the bar of claim preclusion, the following three elements must be shown: (1) identity of the parties or their privies; (2) identity of the subject matter of the litigation; and (3) a final determination on the merits of the claim in the former proceeding. H.G. Hall Constr. v. J.E.P. Enterprises, 283 S.C. 196, 321 S.E.2d 267 (Ct. App.1984).
As noted above, Plaintiff could have presented her constitutional claims to the circuit court, and, in fact, she attempted to do so, albeit belatedly, as the basis of her motion to alter or amend the judgment. Because Plaintiff could have raised her present claims in the prior action, they are precluded by the doctrine of claim preclusion if its three elements exist in this case.
1. Identity of parties or their privies
The first prerequisite of claim preclusion, identity of the parties or their privies, is present in this case. At the very least, each of the named Defendants in this case is in privity with the parties to the administrative and state court actions. The term "privy," as used in the context of res judicata, refers to a person "so identified in interest with another that he represents the same legal right." Richburg v. Baughman, 290 S.C. 431, 351 S.E.2d 164, 166 (1986). The concept of privity focuses upon a person's relationship to the subject matter of the litigation. Wyndham v. Lewis, 292 S.C. 6, 354 S.E.2d 578 (Ct.App. 1987). As stated in H.G. Hall Constr. Co., 321 S.E.2d at 267, an individual in privity with a party is "one whose legal interests were litigated in the former proceeding."
The first named Defendant in this case, the District, clearly is in privity with the respondents in the circuit court appeal, the members of the District Board of Education in their official capacities. The Board is the governing body of the District and has the statutory authority to manage and control the District. See S.C.Code Ann. § 59-19-10 (Rev.1990). An action against the Board, in essence, is an action against the District. Moreover, a governmental entity is generally held to be in privity with its officers who are named in their official capacities in a judicial *236 proceeding. Cf. Gray v. Lacke, 885 F.2d 399 (7th Cir.1989); Conner v. Reinhard, 847 F.2d 384 (7th Cir.1988).
The remaining individual Defendants are or were district employees directly involved in the decision to nonrenew Plaintiff's contract. Defendant Johnson served as the Board-appointed Superintendent and the chief administrator of the District. As such, he implemented the Board's policies and directives, and his interests coincide with that of the District and the Board. In addition, Defendant Johnson, in effect, was the adverse party to Plaintiff in the administrative hearing, as he initiated the nonrenewal proceedings by recommending Plaintiff's contract nonrenewal to the Board. The final two Defendants, Strickland and Elmore, were appointed by the Board and served under the direction of the Superintendent as administrative level employees. Each individual Defendant also offered testimony at the Board hearing adverse to Plaintiff. The interests of each individual Defendant in the subject matter of this litigation are the same as those of the District and the Board, i.e., the validity of the Plaintiff's nonrenewal, and those interests were litigated in the former proceeding.
Another principle of law relevant to this issue provides as follows:
[One] who prosecutes or defends a suit in the name of another, to establish and protect his own right, or who assists in the prosecution or defense of an action in aid of some interest of his own, and who does this openly, to the knowledge of the opposing party, is as much bound by the judgment, and as fully entitled to avail himself of it, as an estoppel against an adversary party, as he would be if he had been a party to the record.
Patterson v. Saunders, 194 Va. 607, 74 S.E.2d 204, 209 (1953). See also Thompson v. Lassiter, 246 N.C. 34, 97 S.E.2d 492 (1957).
In this case each individual Defendant openly prosecuted the action before the Board and, as administrators of the District, each had an interest to protect in the nonrenewal of Plaintiff's employment, that interest being the lawfulness of their actions in connection with the nonrenewal. Hence, an identity of parties or their privies exists, and Defendants are entitled to avail themselves of the defense of claim preclusion.
2. Identity of subject matter
The second element that must exist to raise the bar of claim preclusion is an identity of subject matter. The test applied by South Carolina courts to determine whether there is an identity of subject matter for res judicata purposes focuses upon the primary right and duty in each case. If the primary right and duty and alleged wrong are the same in each action, there is an identity of subject matter. See Jimmy Martin Realty Group, 386 S.E.2d at 805.
In this suit Plaintiff asserts two causes of action, based upon her rights to free speech and procedural due process. The alleged wrongs committed by the District are the nonrenewal of Plaintiff's employment contract in retaliation for the exercise of her protected First Amendment right and in violation of her right to procedural due process prior to the deprivation of a property interest. In essence, the primary right involved in the administrative and state judicial proceedings, and in this action, was Plaintiff's right to continued employment. The alleged wrong in both cases was the District's nonrenewal of her employment contract.
The expansive approach which South Carolina courts take in addressing the question of the identity of subject matter for res judicata purposes, and in applying the doctrine of claim preclusion generally, is illustrated by the decision in Earle v. Aycock, 276 S.C. 471, 279 S.E.2d 614 (1981). In Earle, the plaintiff, who had been terminated from the Department of Health and Environmental Control because of unauthorized absences, challenged the validity of his discharge before the State Grievance Committee. The committee upheld the termination, and the plaintiff did not appeal the committee's decision to the state court. However, the plaintiff subsequently instituted an original action in state circuit court, challenging his termination on the ground that it was discriminatory (as well as erroneous).
In holding that the decision of the committee prevented the plaintiff from again litigating *237 the lawfulness of his termination, the Court in Earle stated: "[h]e is precluded from raising the validity of the discharge in a collateral action as the decision of the committee became the law of the case, and the doctrine of res judicata bars the relitigation of this issue." 279 S.E.2d at 616. Just as there was an identity of the subject matter of the claims in Earle based on successive challenges to the plaintiff's termination, so in this case is there an identity of the subject matter and claims based on the present Plaintiff's successive attacks on the lawfulness of her dismissal.
Because the claims in this action are identical to the subject matter involved in the previous administrative hearing and circuit court appeal, an identity of subject matter is present.
3. Final determination on the merits
The third requisite of claim preclusion, a final determination on the merits, also is present in this matter, as the circuit court rendered a final decision upon the merits of Plaintiff's appeal.[2]
Accordingly, all three elements of claim preclusion are satisfied in this case, and Plaintiff's claims are barred the rule of claim preclusion.
D. Principles Of Judicial Estoppel Also Preclude Plaintiff's First Amendment Claim
While not necessary to the disposition of the present motion, the Court is somewhat troubled by what appears to be inconsistent positions taken by the Plaintiff during the state proceedings and in the present action regarding the basis for her constitutional claims.
In Allen v. Zurich Ins. Co., 667 F.2d 1162 (4th Cir.1982), the Fourth Circuit stated the following concerning judicial estoppel:
In certain circumstances a party may properly be precluded as a matter of law from adopting a legal position in conflict with one earlier taken in the same or related litigation. "Judicial estoppel" is invoked in these circumstances to prevent the party from "playing fast and loose" with the courts, and to protect the essential integrity of the judicial process.
667 F.2d at 1166-67.
There is some indication in the record that, during the earlier state proceedings, Plaintiff denied that certain statements made by her were directed toward her supervisors, and which she now claims constitute protected speech as a criticism of her supervisors. If such is the case, then there clearly is a conflict in the legal positions which Plaintiff previously took in the state proceedings and which she now takes before this Court, and, if so, this action is an appropriate case for the application of judicial estoppel as well as claim preclusion. See Allen, supra.
Accordingly, for the above reasons, the Court concludes that the Defendants' motion to dismiss should be granted, and, therefore, Plaintiff's complaint is hereby dismissed.
AND IT IS SO ORDERED.
NOTES
[1] Plaintiff also has filed a motion to strike Defendants' Reply Memorandum. In light of the Court's ruling below, this motion has been rendered moot and will not be considered.
[2] For purposes of applying the doctrine of claim preclusion in this case, the Court concludes the state court's rejection of Plaintiff's belated attempt to raise constitutional claims in her state court appeal, through a motion to alter the judgment, constitutes a decision "on the merits."
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994 So.2d 1123 (2007)
William WITT, M.D., Appellant,
v.
R.K. ASSOCIATES VIII, INC., d/b/a R.K. Associates, and Barry T. Shevlin, PA., and Barry T. Shevlin, individually, and Daniel Katz, individually, and Andrew S. Atkins, Esquire, individually, Appellees.
No. 3D07-410.
District Court of Appeal of Florida, Third District.
October 3, 2007.
William Witt, M.D., in proper person.
Shevlin & Atkins, and Barry T. Shevlin, Bal Harbour, and Andrew S. Atkins, Bay Harbour Islands, for appellees.
Before COPE, SUAREZ, and CORTIÑAS, JJ.
SUAREZ, J.
It appears to the Court that no final judgment has been rendered and the appeal is premature. See Lidsky Vaccaro & Montes, P.A. v. Morejon, 813 So.2d 146, 149 (Fla. 3d DCA 2002).
The Court grants appellant thirty days in which to obtain entry of a final judgment and file same with this Court, failing which the appeal will be dismissed as premature.
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991 P.2d 98 (2000)
98 Wash.App. 662
STATE of Washington, Respondent,
v.
J.A.B., Appellant.
State of Washington, Respondent,
v.
K.L.P., Appellant.
State of Washington, Respondent,
v.
R.P., Appellant.
State of Washington, Respondent,
v.
J.J., Appellant.
Nos. 43897-2-I, 43975-8-I, 44218-0-I, 44219-8-I, 44459-0-I.
Court of Appeals of Washington, Division 1.
January 3, 2000.
Reconsideration Denied February 22, 2000.
*99 Gregory Charles Link, Washington Appellate Project, Seattle, for Appellants J.A.B. & R.P.
Cheryl D. Aza, Washington Appellate Project, Seattle, for Appellant K.P.
Andrew J. Ries, Julie Dee Cook, William Karl Kirk, King County Pros. Atty Ofc., Seattle, for Respondent.
PER CURIAM.
In these linked cases, four juveniles for the first time on appeal challenge the proof of their criminal history for purposes of calculating their standard range dispositions. In particular, they argue the probation counselor's statement of criminal history in their predisposition reports is not sufficient evidence of their history. Having failed to object to the predisposition reports at disposition, appellants waived this argument. Therefore, we affirm.
FACTS
In the cases of J.J., J.B., and R.P., the State moved to supplement the record on appeal with the probation counselor's report. A commissioner of this court granted the motions based on evidence that the reports were part of the record considered by the juvenile court. In the fourth case, K.P. provided a copy of his counselor's report along with his motion for accelerated review. In all cases, the reports listed numerous prior offenses, with the dates of offense and dates and nature of disposition. At disposition the court and/or the parties referred to the standard range but did not specify the prior offenses. In no case did defense counsel object to the calculation of the standard range or the accuracy of the report of criminal history.
DECISION
Initially, J.B.[1] argued there is no evidence of prior adjudications. However, the *100 appellate record now includes the probation counselor's report, which the trial court has certified was in the record below. The report details ten prior convictions. J.B. has moved to modify the commissioner's ruling, arguing that the State seeks to introduce "additional evidence" or "new evidence" not previously offered at any prior hearing. This characterization is incorrect.
The issues involving the disposition report ultimately challenge the unique dual nature of juvenile court record keeping. Juvenile records are divided into the "official juvenile court file" (RCW 13.50.050(2)) and the "social file" (RCW 13.50.010(1)(c)). The official juvenile court file is the "legal file of the juvenile court containing the petition or information, motions, memorandums, briefs, findings of the court, and court orders." RCW 13.50.010(1)(b). The social file is "the juvenile court file containing the records and reports of the probation counselor." RCW 13.50.010(1)(d). All records "other than the official juvenile court file" are confidential. RCW 13.50.050(3). Thus, the contents of the social file are confidential and not available to public inspection.
The policy of confidentiality is designed to protect the privacy of the juvenile's personal and family matters. E.g., RCW 13.50.050(3) (information not in the official file may be released only when the information could not reasonably be expected to identify the juvenile or his family.) But the Juvenile Justice Act expressly provides that at the disposition hearing the court may rely on all relevant and material evidence, including written and oral reports such as the predisposition report. RCW 13.40.150(1).
Thus, J.B.'s argument that the report is not properly a part of the appellate record fails. The law regarding juvenile court record keeping shows that the report was part of the trial record. When the predisposition report is designated as part of the record below, and there is confirmation that the report was before the disposition court, it is properly considered by the appellate court. Accordingly, we deny the motion to modify the commissioner's ruling and the motion to strike the attachment of the disposition report to the respondent's brief.
J.B. argues he has no duty to produce anything "outside the trial court record." But this argument fails because we have determined that the disposition report is properly part of the trial record. He has not established that the usual rule should not apply: if the appellant challenges the disposition, it is his burden to produce an adequate record for review. State v. Armstrong, 91 Wash.App. 635, 959 P.2d 1128 (1998).
Next, J.B. argues that basing his standard range on the criminal history in the disposition report violates his right to due process because the report is insufficient proof. In particular, he argues the counselor's report of his criminal history is only a bare assertion and does not rise to the level of proof by a preponderance of the evidence. He argues that the record is "unverifiable" because it contains no cause numbers or county names.[2]
The State argues appellant may not raise a challenge to the report for the first time on appeal. J.B. suggests that he may raise the issue of the sufficiency of the report for the first time on appeal because it concerns an "erroneous sentence." Yet, he does not point to any specific error in the report. Further, the record clearly reveals that J.B.'s counsel had received a copy of the report before the hearing and raised no objection to its contents.
J.B. waived the challenge to the disposition report by not raising it below. He implies that the State must offer "proof" of prior offenses by introducing the prior orders of disposition. But this is an evidentiary matter. RCW 13.40.150(1) provides that both defense counsel and the prosecutor "shall be afforded an opportunity to examine and controvert" the written reports received by the *101 court and to cross-examine persons submitting the reports. See also JuCR 7.12(b).[3] J.B. does not allege, nor does the record suggest, that counsel were not afforded this opportunity.
In an analogous case, the Supreme Court has held that even where an element of the crime was a prior conviction, a DOC officer's unchallenged testimony that the defendant had two prior convictions was sufficient evidence of his history. State v. Descoteaux, 94 Wash.2d 31, 35-37, 614 P.2d 179 (1980). Although the best evidence rule required certified copies of the judgments, the defense failed to object on this basis or on the ground of hearsay. Consequently, the trial court did not err, and the testimony was sufficient evidence. Descoteaux, 94 Wash.2d at 36, 614 P.2d 179.
In this case, as in Descoteaux, the defense failed to object on any ground to the evidence offered in support of the criminal history or to the calculation of the standard range. While the report may have been objectionable, J.B. waived any objection.
In sum, J.B.'s due process argument fails. Requiring the defendant to object to the report of criminal history does not shift the burden of proof to the juvenile. State v. Descoteaux, 94 Wash.2d at 31, 614 P.2d 179. Due process requires that the evidence relied upon by the sentencing court must be reliable and that the defendant must have an opportunity to refute the evidence. State v. Cannon, 130 Wash.2d 313, 332, 922 P.2d 1293 (1996). Appellants fail to show that these requirements were not met. Assuming that the preponderance of the evidence standard applies, we hold that the record is sufficient.
J.B. relies on State v. Ford, 137 Wash.2d 472, 973 P.2d 452 (1999) for his contention that due process requires the State to prove his criminal history regardless of whether he objected. Ford is not dispositive.
The Supreme Court held that Ford could raise the issue of error in calculating the offender score for the first time on appeal where there was no evidence in the record to support classifying the out-of-state convictions as felonies under Washington law. Ford, 137 Wash.2d at 484-85, 973 P.2d 452. The court emphasized that both the court and the State have the duty to establish the classification of the out-of-state conviction. Ford, 137 Wash.2d at 479-81, 973 P.2d 452. But in Ford there was no evidence to support the State's "bare assertions" that Ford had three California convictions. Further, the court and the State failed completely in their duty to compare the elements of an out-of-state conviction with elements of possible comparable Washington offenses.
Unlike Ford, here there is no suggestion that the offenses were committed outside the state. Consequently, there is no need to establish the elements of the crimes, which in any event are easily discernible by reference to Washington statutes. Furthermore, the counselor, the official charged with the statutory duty of keeping accurate records[4] of J.B.'s case, provided a summary of his criminal history. Thus, unlike Ford, the criminal history had a "basis in the record." Ford at 482, 973 P.2d 452.
Ford does not require reversal where the probation counsel has submitted a summary of the juvenile's criminal history, the defense fails to show that it did not have an opportunity to review the report and fails to challenge the admissibility or accuracy of the report.
J.B. also raises an ex post facto argument. In his opening brief, he argued that his standard range under the disposition standards in effect on the date of his offense *102 would have been 13-16 weeks. The actual disposition of 103-129 weeks "would require a substantial criminal history." Because he maintained there was no evidence of criminal history, he concluded the standard range was incorrect. Amendments to RCW 13.40.0357 (the sentencing standards for juveniles) took effect after his offense, raising the starting standard range to 15-36 weeks. He argues that each additional prior conviction "significantly increases his standard range," thus disadvantaging him for purposes of ex post facto analysis.
J.B.'s argument is speculative because it is based on the alleged absence of any proof of criminal history. After the record was supplemented with the probation counselor's report, he failed to renew the argument by showing how amendments to the statute affected his sentence in light of the counselor's reported history. We therefore decline to address the matter.
Finally, K.P. raises a similar argument that his manifest injustice disposition is "inherently excessive" because the court never properly determined his prior history and thus his correct standard range. He suggests that the court erred in failing to make findings of fact regarding the nature of his criminal history but cites no authority requiring such findings by the court. The court stated that it had read the probation counselor's dispositional report, which listed six prior offenses. Again, there was no indication that the defense had not seen the report. The verbatim report of proceedings reveals that the prosecutor clearly stated that the standard range for each of the current offenses was "local sanctions." The defense did not object to this statement or dispute it in any way.
We reiterate that on appeal K.P. still does not challenge the accuracy of the report; nor does he challenge the standard range of "local sanctions" in view of the reported criminal history. This court will not find error where none is assigned. If the defense genuinely disputes or even questions the accuracy of the criminal history listed in the report, then it is the responsibility of the defense to raise the issue in the trial court, where factual matters are properly determined.
In the absence of a direct challenge to the report's accuracy either on appeal or in the juvenile court, we find no error.
Affirmed.
NOTES
[1] For the sake of simplicity, this opinion will use only J.B.'s initials to represent appellants, all of whom make the same central arguments regarding sufficiency of the counselor's disposition report. Any factual differences between the cases are immaterial and do not affect our decision.
[2] The record suggests no reasonable explanation why the report does not include this additional information. But because of the posture of these cases, we do not decide here whether it is required.
[3] The rule provides: "Probation officers shall provide the prosecutor and defense counsel with a copy of their written disposition recommendation at least two days prior to the disposition hearing."
[4] RCW 13.50.010(3) provides that it is the duty of the court or juvenile justice agency to maintain accurate records. To discharge this duty the court must take reasonable steps to ensure the security and completeness of its records. RCW 13.50.010(3)(b), (c). "Where no evidence indicating otherwise is produced, the presumption of regularity supports the official acts of public officers, and courts presume that they have properly discharged their official duties." Gallego v. United States, 276 F.2d 914, 917 (9th Cir.1960).
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547 N.W.2d 748 (1996)
Martha Jane STRATTON and Terry Stratton, Plaintiffs and Appellants,
v.
MEDICAL CENTER REHABILITATION HOSPITAL formerly doing business as the University of North Dakota Medical Center Rehabilitation Hospital; and the State of North Dakota doing business as the University of North Dakota Medical Center Rehabilitation Hospital, Defendants and Appellees.
Civil No. 950318.
Supreme Court of North Dakota.
May 14, 1996.
Rehearing Denied June 27, 1996.
*749 Richard A. Ohlsen (argued), Brainerd, MN, for plaintiffs and appellants.
Robert J. Hovland (argued), of McGee, Hankla, Backes & Wheeler, Ltd., Minot, for defendants and appellees.
MESCHKE, Justice.
Martha Jane Stratton and Terry Stratton appeal from a summary judgment dismissing their claims against the Medical Center Rehabilitation Hospital [Center] and the State of North Dakota. We affirm, concluding that the Center and the State are immune from liability under the pre-Bulman doctrine of sovereign immunity.
Martha Jane injured herself in a fall while leaving the Center after completion of treatment on December 13, 1989. Strattons sued the Center and the State, alleging the Center was negligent in allowing Martha Jane to leave the treatment room without assistance. Strattons also alleged that, at the time of the incident, the Center was owned and operated by the State. The Center and the State moved for summary judgment. The trial court concluded that Strattons' claims were barred by sovereign immunity and entered judgment dismissing all claims. Strattons appealed.
The State's sovereign immunity from tort liability, except for discretionary acts, was abolished by a majority of this court in Bulman v. Hulstrand Construction Co., 521 N.W.2d 632 (N.D.1994). That decision applies prospectively only, except as to Bulman and two companion cases. See Bulman, 521 N.W.2d at 640. Since then, we have refused to apply Bulman to actions arising before its effective date. Levey v. State Developmental Center, 533 N.W.2d 707, 708 (N.D.1995); Burr v. Kulas, 532 N.W.2d 388, 392 (N.D. 1995). Thus, the doctrine of sovereign immunity still applies in this case.
Strattons argue that the trial court erred in concluding that the Center was protected by sovereign immunity. They assert that, because the Center was engaged in a proprietary function at the time of Martha Jane's injury, the Center was not immune.
Strattons argue that we recognized a distinction between proprietary and governmental functions under sovereign immunity in Leadbetter v. Rose, 467 N.W.2d 431 (N.D. 1991). They also rely upon two cases cited in Leadbetter, Durham v. Parks, 564 F.Supp. 244 (D.Minn.1983), and Vaughn v. Regents of the University of California, 504 F.Supp. *750 1349 (E.D.Cal.1981). Each of those three cases considered whether a university was an arm of the state entitled to sovereign immunity, and recited a list of six factors to be used in making that determination. One of the six factors is "whether the university is performing a governmental or proprietary function." Leadbetter, 467 N.W.2d at 432. In Leadbetter, relying upon the list of six factors from Durham and Vaughn, a majority of this court concluded that the University of North Dakota is an arm of the State entitled to sovereign immunity.
The Center is unquestionably an arm of the State in this case. In their complaint, Strattons alleged that the Center "was owned and operated by the State of North Dakota doing business as the University of North Dakota Medical Center Rehabilitation Hospital at the time of the negligence complained of herein, and therefore the State of North Dakota is a proper party Defendant." In a stipulation of facts, Strattons further conceded that the Center is "a division of the University of North Dakota," and "is a state owned institution over which the ultimate authority is the State Board of Higher Education." Because Strattons concede that the Center was owned and operated by the State, that the State is a proper party defendant, and that the Center is a division of the University of North Dakota that was held to be an arm of the State in Leadbetter, 467 N.W.2d at 434, the Center is clearly an arm of the State entitled to sovereign immunity.
Even if the Center is an arm of the State, Strattons rely upon Leadbetter and cases from other jurisdictions to argue that the State should not be immune when it engages in proprietary, as distinct from governmental, functions. Thus, Strattons assert, the State and the Center should be liable when they engage in delivering medical services to paying patients.
But Leadbetter does not support the assertion of a broad exemption from sovereign immunity when an arm of the State engages in a proprietary function. This court's recognition in Leadbetter of a distinction between proprietary and governmental functions related only to the preliminary question of whether the University was an arm of the State. As Schloesser v. Larson, 458 N.W.2d 257, 258-259 (N.D.1990), illustrates, a majority of this court consistently rejected the argument, before Bulman, that the State, or an arm of the State, may be held liable in tort for actions committed while engaged in a proprietary function.
Strattons assert that, even if sovereign immunity applies, the Center waived its immunity by procuring insurance. The Center participated in the North Dakota Insurance Reserve Fund [Reserve Fund], a government self-insurance pool. Strattons assert this waived the Center's immunity under NDCC 15-10-17(14). That section authorized the State Board of Higher Education or institutions under its control to purchase insurance, and also declared:
If the board or any institution under its control purchases insurance pursuant to this subsection, the purchaser shall waive immunity to suit for liability only to the types of insurance coverage purchased and only to the extent of the policy limits of such coverage.
In Burr, 532 N.W.2d at 392, we concluded that the University of North Dakota did not waive its sovereign immunity by participating in the Reserve Fund, relying upon two statutes that specifically declare participation in the Reserve Fund does not constitute the purchase of insurance that waives sovereign immunity:
Government self-insurance pools not insurers. Any government self-insurance pool organized under chapter 32-12.1 is not an insurance company or insurer. The coverages provided by such pools and the administration of such pools does not constitute the transaction of insurance business. Participation in a self-insurance pool under this chapter does not constitute a waiver of any existing immunities otherwise provided by the constitution or laws of this state.
NDCC 26.1-23.1-02. Similarly, under NDCC 32-12.1-15, participation in a government self-insurance pool by the State or a state agency may not be construed as a waiver of any existing immunity to suit. We conclude that the Center did not waive its *751 sovereign immunity when it participated in the Reserve Fund.
The trial court correctly concluded that this action was barred by sovereign immunity. We affirm the judgment dismissing Strattons' claims.
VANDE WALLE, C.J., NEUMANN and SANDSTROM, JJ., and LEVINE, S.J., concur.
The Honorable Mary Muehlen Maring was not a member of the Court when this case was heard and did not participate in this decision.
SANDSTROM, Justice, concurring.
A private attorney represented the State in this proceeding. This was contrary to N.D.C.C. §§ 54-12-01 and 54-12-08a fact not recognized until oral argument. Courts should not permit a private attorney, without an appointment of that individual by the Attorney General, to represent the State of North Dakota in litigation.
VANDE WALLE, C.J., and NEUMANN, J., concur.
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JUDGMENT
Court of Appeals
First District of Texas
NO. 01-13-00635-CV
D. PATRICK SMITHERMAN, Appellant
V.
COMMISSION FOR LAWYER DISCIPLINE, Appellee
Appeal from the 129th District Court of Harris County. (Tr. Ct. 2010-10256).
This case is an appeal from the final judgment signed by the trial court on July 19,
2013. After submitting the case on the appellate record and the arguments properly raised
by the parties, the Court holds that the trial court’s judgment contains no reversible error.
Accordingly, the Court affirms the trial court’s judgment.
The Court orders that the appellant, D. Patrick Smitherman, pay all appellate costs.
The Court orders that this decision be certified below for observance.
Judgment rendered February 26, 2015.
Panel consists of Justices Massengale, Brown, and Huddle. Opinion delivered by Justice
Huddle.
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496 F.Supp. 132 (1980)
James CLARK, d/b/a Jim's Service Center, Plaintiff,
v.
MOBIL OIL CORPORATION, Defendant.
No. 80-629C (B)
United States District Court, E. D. Missouri, E. D.
August 4, 1980.
*133 James K. Oppenheimer, Koenigsdorf, Kusnetzky & Wyrsch, Kansas City, Mo., George A. Dorsey, Clayton, Mo., for plaintiff.
John H. Quinn, III, St. Louis, Mo., for defendant.
JUDGMENT
REGAN, District Judge.
The Court having this day entered its MEMORANDUM herein, NOW THEREFORE, in accordance therewith and for the reasons therein stated, IT IS HEREBY ORDERED and ADJUDGED
1. That defendant be and it is hereby enjoined and restrained from terminating and failing to renew the franchise relationship between plaintiff and defendant pursuant to its Notice of Nonrenewal dated February 7, 1980.
2. That the franchise relationship between plaintiff and defendant be continued and remain in effect without prejudice to the rights of defendant pursuant to 15 U.S.C. Section 2802 with respect to the non-renewal of franchise relationships and the termination of franchises.
3. That plaintiff's claims for actual and punitive damages and for attorney's fees be and the same are hereby dismissed.
*134 4. That defendant's counterclaim be and the same is hereby dismissed.
MEMORANDUM
In this action, tried to the Court, plaintiff, the operator of a Mobil Gasoline Service Station, seeks injunctive relief to prevent defendant from terminating or nonrenewing his one-year trial franchise, as well as damages. Defendant has counterclaimed for ejectment. By agreement of the parties, plaintiff has remained in possession of the filling station premises, and plaintiff's operation of the station under the provisions of the franchise has been continued pursuant to a temporary restraining order.
After successfully completing a three-week course of instruction in defendant's dealer training school, plaintiff was granted a one-year trial franchise beginning May 14, 1979 and ending May 13, 1980. Thereafter, under date of February 7, 1980, defendant mailed to plaintiff by certified mail, a notice that defendant "hereby elects not to renew its franchise relationship with (plaintiff) and that relationship will terminate on May 13, 1980." The issue is whether this notice effectively served to terminate plaintiff's franchise relationship as of May 13, 1980. The resolution of this issue is dependent in large part upon the application and construction of Title I of the Petroleum Marketing Practices Act (PMPA).
That the franchise in question was a "trial franchise" as defined in the PMPA is not in dispute. Plaintiff was fully aware that he was being given only a trial franchise which was subject to defendant's right to nonrenew by giving plaintiff notice "of its intention to renew in accordance with Section 104 (15 U.S.C. § 2804) of the Petroleum Marketing Practices Act. He was also aware that the provisions of 15 U.S.C., Section 2802 "limiting the right of a franchisor to fail to renew a franchise relationship are not applicable to the Trial Franchise." Inter alia, Section 2802 permits a franchisor to terminate a franchise relationship only upon certain grounds specified therein, none of which are here applicable.
Section 2803 provides that "(i)f the notification requirements of Section 2804 . . are met" the franchisor may fail to renew the franchise relationship under a trial franchise at the conclusion of the initial term thereof. Section 2804(c)(3) mandates that the notification of nonrenewal "shall contain . . . a statement of intention to terminate the franchise or not to renew the franchise relationship, together with the reasons therefor.
The notice which defendant gave to plaintiff in this case stated, "The reason or reasons for our nonrenewal decision are that Mobil has determined that it does not wish to continue its franchise relationship with you." In our judgment this is not a "reason" within the contemplation of the law. Rather, it is a statement of the result of defendant's unstated reason or reasons for nonrenewal.
Obviously, the so-called "reason" provides no information whatever to the franchisee which he would not know from the mere fact alone that he had been notified that the franchise was not renewed. A determination adverse to continuing the franchise relationship would necessarily be made in every case prior to serving a notice of nonrenewal. What the statute mandates is that the franchisor include in his notice the reason or reasons which impelled him to decide not to renew the relationship. To construe the statute otherwise would be to render meaningless and without purpose the requirement that the notice state the reasons for the nonrenewal. We cannot convict the Congress of enacting a useless provision.
The notice in question wholly fails to provide any reason and so does not conform to the notification requirements of Section 2804(c). And since the statute explicitly permits a franchisor to fail to renew a trial franchise only if the notification requirements of section 2804 have been met, it follows that plaintiff is entitled to relief. See Wojciechowski v. Amoco Oil Co., 483 F.Supp. 109, D.C.Wis.1980. It also follows from our finding for plaintiff on his claim that defendant may not recover on its counterclaim *135 for possession of the filling station premises.
Before considering the nature of the relief to be accorded plaintiff, we rule other contentions made by plaintiff, in particular (1) that the PMPA has not preempted Missouri common law relating to termination of franchises and (2) that defendant's "Dealer Relations Policy" and its "How Review System Works to Protect Mobil Dealers", together with statements made by defendant's representatives in relation thereto precluded termination of his trial franchise.
Section 2806 of the PMPA provides that no state may adopt, enforce or continue in effect any law or regulation with respect to termination or nonrenewal of any franchise relationship which differs from the applicable provisions of the PMPA. Missouri follows the common law rule that even though a principal has the right to terminate an agency relationship at will, if it does so before the agent has the opportunity to recoup the benefit of his work, labor and expenses, the principal will be liable for that portion of the agent's investment of labor and expenses he has not had a reasonable opportunity to recoup. See e. g. Gibbs v. Bardahl Oil Company, 331 S.W.2d 614 (Mo.1960).
It must not be overlooked that even if this common-law principle is otherwise applicable, it does not bar the franchisor from terminating a franchise relationship under the terms of the contract. It simply makes him liable in damages to the extent the franchisee has not been afforded an opportunity to recoup his investment. However, plaintiff has made no showing that he will be unable to recoup his investment.[1] Moreover, plaintiff has made a very substantial profit in operating the station,[2] so that plaintiff has already recouped his investment of time and labor. In addition, plaintiff was aware at all times that his trial franchise would expire by its terms in one year absent the requirement of the PMPA that a 90-day notice of renewal be given, so that if the notice of nonrenewal was valid, he would not be entitled to continue the franchise relationship.
We turn next to the documents and representations allegedly affecting defendant's right to refuse to renew the franchise relationship. We have no doubt that if in fact defendant made representations, oral or written, or both, respecting the future exercise of its right to terminate the relationship, on the faith of which plaintiff entered into the relationship, then defendant is bound thereby, even if the requirements of the PMPA for termination or nonrenewal are less stringent than such representations.
Defendant's "Dealer Relations Policy" was given to plaintiff at the training school. It states that before any decision is made by defendant not to renew the relationship, a formal Lease Review Panel consisting of five levels of management must review the dealer's case for renewal wherever requested. And the related document entitled "How Lease Review System Works to Protect Mobil Dealers", which was handed to plaintiff during the session at which he executed the franchise papers, amplifies the foregoing, stating, inter alia, that "(t)o provide additional assurance that each nonrenewal is handled on a fair and equitable basis, a Lease Review Panel at the Region level will meet with the dealer when requested by him to review his case for renewal." We find that neither of these documents constituted a part of the franchise contract.
The evidence demonstrates that plaintiff had already signed the franchise documents before he was given the sheet entitled "How Lease Review System Works to Protect Mobil Dealers", and in view of plaintiff's testimony that he was not aware of Mobil's policy described therein at the time he signed the station lease agreement, *136 we cannot hold that plaintiff relied thereon in entering into the franchise relationship. This conclusion is equally applicable to the statements of defendant's representative in relation to such policy, namely, that under said policy, defendant would need strong and stiff reasons not to review the franchise. Hence, defendant's refusal to convene a lease review panel does not accord plaintiff any enforceable legal rights.
The Court having found that the notification requirements of Section 2804 as incorporated in Section 2803 were not met, it follows that defendant had no right to fail to renew plaintiff's trial franchise, and so, whatever may have been the actual reasons impelling defendant to terminate the trial relationship, it may not now rely thereon to justify its action. We make no ruling concerning the adequacy or sufficiency of defendant's reasons as stated in the trial of this action, had such reasons been set forth in the notice of renewal. It is, however, clear that inasmuch as the provisions of Section 2803 do not apply to the nonrenewal of a franchise relationship under a trial franchise, the reasons for nonrenewal are not limited to the grounds upon which other franchises may be terminated or nonrenewed.
Section 2805 provides that if a franchisor fails to comply with the requirements of Section 2803, and the franchisee timely brings an action based on such failure, the Court shall grant such equitable relief as is necessary to remedy the effects of such failure. In the circumstances of this case, we deem it necessary to compel defendant to continue its franchise relationship with plaintiff subject to defendant's right to terminate the franchise for cause and only upon grounds set forth in Section 2802. It is to be noted that Section 2803 provides that if the notification requirements are met, the franchisor may fail to renew the franchise relationship at the conclusion of the initial term of the trial franchise. Once that term elapses, Section 2803 no longer is applicable.
We find that inasmuch as plaintiff has continued to operate the filling station, he has sustained no actual damages other than nominal. We further find that although defendant's conduct in relation to the notice of nonrenewal was violative of the requirements of Section 2803, it was not in willful disregard thereof, and so we do not deem that an award of punitive damages is appropriate. Section 2805(d)(1)(C) provides for an award of attorney's fees to be paid by the franchisor if more than nominal damages are assessed. If only nominal damages are awarded, the Court in its discretion need not direct that such fees be paid by the franchisor. We have concluded in the exercise of our discretion not to require defendant to pay plaintiff's attorney's fees.
The foregoing MEMORANDUM constitutes our findings of fact and conclusions of law. A judgment in accordance herewith will be entered.
NOTES
[1] He testified that if the termination is effective, he will not be able to dispose of equipment for which he paid $5,000, except for a relatively small sum. However, this would be true without regard to the length of his franchise relationship.
[2] Plaintiff make a profit of over $36,000 in his first 7½ months of operation.
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United States Court of Appeals
For the Eighth Circuit
___________________________
No. 13-1771
___________________________
Edilmar Mateo Alonzo-Castro
lllllllllllllllllllllPetitioner
v.
Eric H. Holder, Jr., Attorney General of the United States
lllllllllllllllllllllRespondent
____________
Petition for Review of an Order of the
Board of Immigration Appeals
____________
Submitted: December 17, 2013
Filed: December 30, 2013
[Unpublished]
____________
Before MURPHY, SMITH, and SHEPHERD, Circuit Judges.
____________
PER CURIAM.
Guatemalan citizen Edilmar Alonzo-Castro petitions for review of an order of
the Board of Immigration Appeals, which upheld an immigration judge’s decision
denying him withholding of removal.1 After careful review, we conclude that the
denial of withholding of removal was supported by substantial evidence on the record
as a whole. See Malonga v. Holder, 621 F.3d 757, 764 (8th Cir. 2010) (substantial-
evidence standard for reviewing denial of withholding of removal). Accordingly, we
deny the petition for review. See 8th Cir. R. 47B.
______________________________
1
Alonzo-Castro was also denied asylum and relief under the Convention
Against Torture, but he does not raise these claims in his brief. See Chay-Velasquez
v. Ashcroft, 367 F.3d 751, 756 (8th Cir. 2004) (petitioner waives claim that is not
meaningfully raised in opening brief).
-2-
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Case: 18-60592 Document: 00515387630 Page: 1 Date Filed: 04/20/2020
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
No. 18-60592 April 20, 2020
Lyle W. Cayce
Clerk
BAPTIST MEMORIAL HOSPITAL - GOLDEN TRIANGLE,
INCORPORATED; CALHOUN HEALTH SERVICES; DELTA REGIONAL
MEDICAL CENTER; MERIT HEALTH BATESVILLE, formerly known as
Tri-Lakes Medical Center, Mississippi; BAPTIST MEDICAL CENTER,
INCORPORATED; SAINT DOMINIC-JACKSON MEMORIAL HOSPITAL;
TISHOMINGO HEALTH SERVICES, INCORPORATED; GRENADA LAKE
MEDICAL CENTER,
Plaintiffs - Appellees
v.
ALEX M. AZAR, II, SECRETARY, U.S. DEPARTMENT OF HEALTH AND
HUMAN SERVICES; SEEMA VERMA, in her official capacity as
Administrator, Centers for Medicare and Medicaid Services; CENTERS FOR
MEDICARE AND MEDICAID SERVICES,
Defendants - Appellants
Appeal from the United States District Court
for the Southern District of Mississippi
Before HIGGINBOTHAM, DENNIS, and HO, Circuit Judges.
PATRICK E. HIGGINBOTHAM, Circuit Judge:
The Medicaid Act provides each state with a fixed pool of funds to make
supplemental payments to hospitals that serve a disproportionate share of
indigent patients. These “disproportionate share hospital” (“DSH”) payments
are limited to a hospital’s “costs incurred” in caring for indigent patients. The
Case: 18-60592 Document: 00515387630 Page: 2 Date Filed: 04/20/2020
18-60592
Secretary of the United States Department of Health and Human Services (the
“Secretary”) has significant discretion to determine how these costs are
calculated. In 2017, the Secretary issued a final rule (the “2017 Rule”)
clarifying that hospitals’ “costs incurred” are net of payments from third
parties, like Medicare and private insurers. 1
Eight Mississippi hospitals (the “Hospitals”) challenged the 2017 Rule,
contending that its definition of “costs incurred” conflicts with the Medicaid
Act. The district court granted summary judgment for the Hospitals and
enjoined enforcement of the 2017 Rule. The Secretary appealed. As have the
three other circuit courts to consider the issue, we conclude that the 2017 Rule
was consistent with the Act. We reverse.
I.
Medicaid is a joint state-federal program that pays medical expenses for
low-income patients. 2 Each state administers its own program, but is subject
to federal standards and oversight as a condition of receiving federal funding
for a portion of its costs. 3 The care of Medicaid patients and the uninsured
present financial challenges for hospitals serving a disproportionate number
of these patients. In 1981, Congress authorized states to make the
supplemental payments to “disproportionate share hospitals” to offset their
losses on Medicaid and uninsured patients. 4 To finance these DSH payments,
the Medicaid Act annually provides each state with a fixed pool of funds. 5
1 See Medicaid Program; Disproportionate Share Hospital Payments—Treatment of
Third Party Payers in Calculating Uncompensated Care Costs, 82 Fed. Reg. 16,114 (2017)
(“2017 Rule”).
2 42 U.S.C. §§ 1396-1, 1396a.
3 Id. § 1396b(a)(1).
4 See H.R. REP. NO. 103–111, at 211 (1993), as reprinted in 1993 U.S.C.C.A.N. 378,
538 (DSH payments “assist those facilities with high volumes of Medicaid patients in meeting
the costs of providing care to the uninsured patients that they serve[.]”).
5 42 U.S.C. § 1396r-4(f).
2
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In the early 1990s, some states were reportedly making DSH payments
to hospitals “in amounts that exceed the net costs, and in some instances the
total costs, of operating the facilities.” 6 So in 1993 Congress imposed a
“hospital-specific limit” on annual DSH payments to each hospital. 7 Under the
limit, payments are capped at a hospital’s “costs incurred” by serving Medicaid-
eligible and uninsured patients, net of other Medicaid payments and payments
from uninsured patients. 8
In 2010, the Centers for Medicare and Medicaid Services (“CMS”) issued
guidance clarifying that the “costs incurred” are also net of payments from
third parties (e.g., Medicare, private health insurance) for serving indigent
patients. 9 Some patients are covered by Medicaid and a third party. In such
cases, Medicaid is the “payer of last resort,” meaning that typically only the
third party pays the hospital. For example, when an individual enrolled in both
Medicaid and Medicare has a hospital stay, typically only Medicare will pay
for the stay. Under the 2010 guidance, when a third party reimburses a
hospital for serving a Medicaid patient, the third-party payments are excluded
from the “costs incurred.”
After hospitals filed suits around the country, four courts of appeals held
that the guidance represented a policy change and enjoined CMS from
enforcing it. 10 With these decisions, CMS withdrew the guidance, effective
6 H.R. REP. NO. 103–111, at 211, 1993 U.S.C.C.A.N. at 538.
7 Omnibus Budget Reconciliation Act of 1993, Pub. L. No. 103–66, § 13621(b), 107 Stat.
66, 630 (1993).
8 42 U.S.C. § 1396r-4(g)(1)(A).
9 See CMS, Additional Information on the DSH Reporting and Audit Requirements, at
18 (2018), https://www.medicaid.gov/sites/ default/ files/2020-01/part-1-additional-info-on-
dsh-reporting-and-auditing.pdf.
10 Tenn. Hosp. Ass’n v. Azar, 908 F.3d 1029, 1037 (6th Cir. 2018); Children’s Health
Care v. CMS, 900 F.3d 1022 (8th Cir. 2018); Children’s Hosp. of the King’s Daughters, Inc. v.
Azar, 896 F.3d 615 (4th Cir. 2018); N.H. Hosp. Ass’n v. Azar, 887 F.3d 62 (1st Cir. 2018).
3
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December 30, 2018. 11 Meanwhile, in April 2017, the Secretary promulgated the
2017 Rule, clarifying that “costs incurred” are net of third-party payments.
That is, the 2017 Rule implements the same policy as the rescinded guidance. 12
The Hospitals sued the Secretary, claiming the 2017 Rule exceeds his
authority in violation of 5 U.S.C. § 706(2)(C). The district court agreed, relying
almost entirely on Children’s Hospital Association of Texas v. Azar, a district
court decision invalidating the 2017 Rule. 13 After the Secretary appealed and
the parties briefed this case, the D.C. Circuit overturned the district court
decision in Children’s Hospital and upheld the 2017 Rule. 14
II.
In reviewing a challenge to an administrative agency’s statutory
construction in a final rule, we apply Chevron’s two-step framework. 15 We first
employ the “traditional tools of statutory construction” to determine “whether
Congress has spoken to the precise question at issue.” 16 “If the intent of
Congress is clear, that is the end of the matter; for the court, as well as the
agency, must give effect to the unambiguously expressed intent of Congress.” 17
But if “the statute is silent or ambiguous with respect to the specific issue,” we
must defer to the agency’s interpretation so long as it “is based on a permissible
construction of the statute.” 18 We also must defer when the statute expressly
delegates an agency authority “to elucidate a specific provision of the statute
11 See CMS, Additional Information on the DSH Reporting and Audit Requirements
(2018), https://www.medicaid.gov/sites/default/files/2020-01/part-1-additional-info-on-dsh-
reporting-and-auditing.pdf (announcing withdrawal of FAQ No. 33 and No. 34 as of
December 30, 2018).
12 Treatment of Third Party Payers, 82 Fed. Reg. 16,114.
13 300 F. Supp. 3d 190 (D.D.C. 2018).
14 Children’s Hosp. Ass’n of Tex. v. Azar, 933 F.3d 764 (D.C. Cir. 2019).
15 Chevron, U.S.A. Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837, 843 (1984).
16 Id. at 842, 843 n.9.
17 Id. at 842–43.
18 Id. at 843.
4
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by regulation.” 19 The agency’s “legislative regulations are given controlling
weight unless they are arbitrary, capricious, or manifestly contrary to the
statute.” 20
III.
The parties dispute the proper method for calculating the hospital-
specific limit for annual DSH payments. The Medicaid Act sets the hospital-
specific limit at:
the costs incurred during the year of furnishing hospital services
(as determined by the Secretary and net of payments under this
subchapter, other than under this section, and by uninsured
patients) by the hospital to individuals who either are eligible for
medical assistance under the State plan or have no health
insurance (or other source of third party coverage) for services
provided during the year. 21
Under the 2017 Rule, “costs incurred” are also net of payments from
third-party payers, such as Medicare and private insurers. The Secretary
asserts that its Rule is consistent with the statute’s ambiguous language. The
Hospitals disagree, arguing that the Medicaid Act unambiguously specifies the
method for calculating the hospital-specific limits, and that method does not
account for payments from third parties.
Section 1396r-4(g)(1)(A) expressly delegates gap-filling authority to the
Secretary through the “as determined by the Secretary” clause. 22 The Hospitals
do not dispute this point, instead arguing that the gap is narrow and the
statute is clear. As they see it, the hospital-specific limit is set at a hospital’s
gross costs net of other Medicaid payments and payments made by uninsured
19 Id.
20 Id.
21 42 U.S.C. § 1396r-4(g)(1)(A).
22 See Children’s Hosp. Ass’n of Tex., 933 F.3d at 770; Tenn. Hosp. Ass’n, 908 F.3d at
1039 (quoting Chevron, 467 U.S. at 843–44) (concluding that the phrase “as determined by
the Secretary” represented an “‘express delegation of authority to the agency to elucidate a
specific provision of the [Medicare] statute by regulation’”).
5
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18-60592
patients, and the Secretary only has discretion to determine the calculation of
gross costs. In support of their reading of the Act, the Hospitals marshal
several arguments. We reject each one.
First, we cannot agree that the ordinary meaning and dictionary
definitions of “costs” and “payments” render the disputed language
unambiguous. Able judges employing these tools have reached opposing
interpretations of this provision. 23 As the Supreme Court recognized, the word
“cost” is “a chameleon,” a “virtually meaningless term” with a “protean”
nature. 24 Agencies therefore “have broad methodological leeway” to interpret
the word, 25 and courts have repeatedly upheld the Secretary’s authority to
account for offsetting payments when construing “costs” or “costs incurred.” 26
We are also unpersuaded by the Hospitals’ argument that the statute
draws a “clear line” between costs and payments. In their view, the statute
grants the Secretary discretion to determine the calculation of gross costs, but
23 Compare Mo. Hosp. Ass’n v. Azar, 941 F.3d 896, 901 (8th Cir. 2019) (Stras, J.,
concurring in the judgment) (citing THE AMERICAN HERITAGE DICTIONARY OF THE ENGLISH
LANGUAGE 891 (5th ed. 2016) and WEBSTER’S THIRD NEW INTERNATIONAL DICTIONARY 1146
(2002)) (concluding that the 2017 Rule is consistent with the plain meaning of the text), with
Tenn. Hosp. Ass’n, 908 F.3d at 1048 (Kethledge, J., concurring in the judgment) (citing
OXFORD ENGLISH DICTIONARY (online ed. 2018)) (concluding that CMS’s 2010 guidance,
which pursued the same policy as the 2017 Rule, violated the plain meaning of the text).
24 Verizon Commc’ns, Inc. v. FCC, 535 U.S. 467, 500–01 (2002) (internal quotations
omitted).
25 Id. at 500.
26 See Dana–Farber Cancer Inst. v. Hargan, 878 F.3d 336, 341 (D.C. Cir. 2017)
(deferring to agency’s determination that a provider’s “‘actually incurred’ cost” of tax liability
must reflect offsetting payments that “reduc[e] the cost” of the taxes); Abraham Lincoln
Mem’l Hosp. v. Sebelius, 698 F.3d 536, 549–50 (7th Cir. 2012) (explaining that CMS policy
requiring providers to offset refunds is consistent with the statutory directive limiting
reimbursement to “costs that are ‘actually incurred’”) (quoting 42 U.S.C. § 1395x(v)(1)(A));
Kindred Hosps. E., LLC v. Sebelius, 694 F.3d 924, 928–29 (8th Cir. 2012) (noting that hospital
was “effectively reimbursed” for its taxes by an offsetting payment); cf. Sta-Home Home
Health Agency, Inc. v. Shalala, 34 F.3d 305, 308–10 (5th Cir. 1994) (concluding that “amounts
paid back” are refunds that CMS may offset because they were not “‘costs actually incurred,’”
as doing otherwise would “have the effect of inflating the provider’s costs”) (quoting 42 U.S.C.
§ 1395x(v)(1)(A)).
6
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not to select payments to subtract from those costs. This argument “flies in the
teeth of the statutory text.” 27 Because “‘costs incurred’ are both ‘as determined
by the Secretary’ and “net of payments under [Medicaid] and by uninsured
patients[,] . . . the statute requires that some payments be considered in
calculating a hospital’s ‘costs incurred.’” 28 For this reason, “costs incurred”
refers to net costs, not gross costs. And because the statute does not direct the
Secretary to exclude “only” payments from Medicaid and uninsured patients,
it is within the Secretary’s expressly delegated authority to interpret “costs
incurred” to exclude other payments as well. 29
We likewise reject the Hospitals’ contention that Congress, by expressly
excluding payments from Medicaid and the uninsured, meant to exclude only
those payments and no others. The Hospitals rely on the canon of Expressio
Unius Est Exclusio Alterius, which provides that “expressing one item of [an]
associated group or series excludes another left unmentioned.” 30 This canon
“applies only when circumstances support a sensible inference that the term
left out must have been meant to be excluded.” 31 Such an inference is not
warranted here. Congress may have wanted to ensure the deduction of “the
most common sources of payment”—Medicaid and the uninsured—while
allowing the Secretary “to decide whether less-common sources of payment
should be [deducted] as well.” 32 Affording the Secretary this discretion makes
27 Children’s Hosp. Ass’n of Texas, 933 F.3d at 772.
28 Id.
29 See id. at 770 (“Although the statute establishes that payments by Medicaid and
the uninsured must be considered, it nowhere states that those are the only payments that
may be considered.”) (original emphases omitted and emphasis added); see also Mo. Hosp.
Ass’n, 941 F.3d at 899 (same, quoting Children’s Hosp. Ass’n of Tex., 933 F.3d at 770); Tenn.
Hosp. Ass’n, 908 F.3d at 1038 (“[T]he statute does not instruct CMS to deduct only those
payments from the determination of costs; the fact that certain payments must be deducted
from costs does not mean that other payments cannot be.”).
30 NLRB v. Sw. Gen., Inc., 137 S. Ct. 929, 940 (2017) (alteration in original).
31 Id.
32 Children’s Hosp. Ass’n of Tex., 933 F.3d at 771.
7
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sense given the array of private and public payers (Medicare, private health
insurance, TRICARE, etc.) and the potential for unforeseeable changes in how
these payers reimburse hospitals. 33
We also reject the Hospitals’ argument that the express exclusion of
third-party payments in a related Medicaid provision indicates that Congress
chose not to deduct third-party payments in § 1396r-4(g)(1)(A). They point to
§ 1396r-4(g)(2)(A), which allowed states to make extra DSH payments to
certain hospitals until 1995. But states had to certify that the extra
payments—i.e., payments in excess of the hospital-specific limit “as described
in paragraph (g)(1)(A)”—were “used for health services.” 34 Under subsection
(g)(2), the amount “used for health services” excluded “any amounts
received . . . from third party payors (not including the State plan under this
subchapter).” 35 The Hospitals claim that “it is compelling that Congress did
not include payments by third-party insurers in subsection (g)(1), despite
excluding precisely such payments in . . . subsection (g)(2).”
The Supreme Court has explained that the Hospitals’ presumption—
“that the presence of a phrase in one provision and its absence in another
reveals Congress’s design—grows weaker with each difference in the
formulation of the provisions under inspection.” 36 Here, there are significant
differences between subsections (g)(1)(A) and (g)(2)(A). 37 Unlike subsection
33 For example, in 2003, Congress appropriated funds to reimburse hospitals for
providing emergency care to undocumented aliens. Medicare Prescription Drug,
Improvement, and Modernization Act of 2003, Pub. L. No. 108–173, § 1011, 117 Stat. 2066,
2432. In 2008, CMS clarified that these payments are excluded from the calculation of the
Medicaid shortfall. See Medicaid Program; Disproportionate Share Hospital Payments, 73
Fed. Reg. 77,904, 77,912 (Dec. 19, 2008).
34 42 U.S.C. § 1396r-4(g)(2)(A).
35 Id.
36 Columbus v. Ours Garage & Wrecker Serv., Inc., 536 U.S. 424, 435-36 (2002).
37 Children’s Hosp. Ass’n of Tex., 933 F.3d at 772 (describing these subsections as
“fundamentally different”).
8
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(g)(1)(A), subsection (g)(2)(A) did not exclude third-party payments from the
limit on payments to a hospital; rather, it required states to account for third-
party payments when determining whether the extra DSH payments were
“used for health services.” Further, we see “no tension . . . in Congress
requiring third-party payment deductions in subsection (g)(2)(A) and allowing
third-party payment deductions in subsection (g)(1)(A).” 38 Because “[t]he DSH
payments provided for in (g)(2)(A) are above and beyond those mandated by
(g)(1)(A),” Congress may have wanted to impose tighter limits on these extra
payments “while giving CMS more discretion to calibrate the appropriate cap
on the ‘standard’ DSH payments discussed in (g)(1)(A).” 39
Finally, we see no basis for the Hospitals’ argument that the 2017 Rule
conflicts with the statutory purpose of the hospital-specific limit. The Hospitals
contend that the DSH payments are designed to offset the financial burden of
treating not only Medicaid patients but also uninsured patients. They rely
heavily on a committee report to the 1987 bill creating the Medicaid DSH
payments. It explained that the DSH payments are meant “at a minimum [to]
meet the needs of those facilities which . . . serve a large number of Medicaid-
eligible and uninsured patients who other providers view as financially
undesirable.” 40 It signifies that when Congress created the hospital-specific
limit in 1993, that same House committee was “concerned by reports” of states
making DSH payments “in amounts that exceed the net costs, and in some
instances the total costs, of operating the facilities.” 41 “In essence, Congress
was concerned that hospitals were double dipping by collecting DSH payments
38 Tenn. Hosp. Ass’n, 908 F.3d at 1039.
39 Id.
40 H.R. REP. NO. 100–391(I) at 524 (1987), as reprinted in 1987 U.S.C.C.A.N. 2313–1,
2313–344 (emphasis added).
41 H.R. REP. NO. 103–111, at 211, 1993 U.S.C.C.A.N. at 538.
9
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to cover costs that had already been reimbursed.” 42 The 2017 Rule addresses
this concern by safeguarding against states paying hospitals for costs that have
already been reimbursed by a third party. 43 It “ensures that DSH payments
will go to hospitals that have been compensated least and are thus most in
need.” 44 We conclude that the 2017 Rule is a reasonable reading of the
Medicaid Act and does not violate § 706(2)(C).
IV.
For these reasons, we reverse and remand for further proceedings
consistent with this opinion.
42 Tenn. Hosp. Ass’n, 908 F.3d at 1040.
43 See id. at 1039–40; Children’s Hosp. Ass’n of Tex., 933 F.3d at 772.
44 Children’s Hosp. Ass’n of Tex., 933 F.3d at 772.
10
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978 So.2d 782 (2007)
C.D.S.
v.
K.S.S.
2060907.
Court of Civil Appeals of Alabama.
July 27, 2007.
*784 Bryant F. Williams, Jr., Ozark, for appellant.
John C. White of Cobb, Derrick, Boyd & White, Dothan, for appellee.
PER CURIAM.
On July 9, 2007, C.D.S. ("the father") filed a notice of appeal and a motion in this court to vacate a circuit court's June 28, 2007, judgment and to stay that court's proceedings pending the appeal of that court's judgment modifying custody. We grant the father's motion to vacate; we also remand this case and order that it be reassigned to a different circuit court judge upon remand. Further proceedings in this case shall be stayed until the circuit court judge to whom the case is reassigned has had an opportunity to conduct an evidentiary hearing on the matter of the children's custody pursuant to the Ex parte McLendon, 455 So.2d 863 (Ala.1984),[1] standard and this court's order of June 27, 2007. Our action in reassigning this case is not intended to disparage the circuit court judge in this case; instead, as we further explain below, it is merely intended to preserve the appearance of justice.
As an initial observation, we note that this is not the first time we have been called to address the postdivorce custody dispute between the father and K.S.S. ("the mother"). On March 2, 2007, this court dismissed a previous appeal by the father as being from a void judgment. C.D.S. v. K.S.S., 963 So.2d 125 (Ala.Civ. App.2007). In that case, the circuit court, on January 19, 2006, entered an order determining that the children of the mother and the father, K.S. and R.P.S., were *785 dependent. As we noted in C.D.S., the circuit court did not have jurisdiction to find the children dependent. Section 12-15-30(a), Ala.Code 1975, provides that "`[t]he juvenile court shall exercise exclusive original jurisdiction of proceedings in which a child is alleged to be . . . dependant. . . .'" C.D.S., 963 So.2d at 127 n. 1. The circuit court on that same day then entered another order transferring the proceedings to the juvenile court. The Houston County circuit judge presiding over this matter is also designated to serve as the juvenile court judge in Houston County. The juvenile court hearing the matter entered an order on March 14, 2006, "returning physical custody of the children to the father; maintaining legal custody in the Department of Human Resources (`DHR'); and denying, as moot, the guardian ad litem's petitions to find the children dependent." C.D.S., 963 So.2d at 127. The juvenile court then heard evidence, and, on July 20, 2006, entered a judgment purporting to, among other things, relieve DHR of custody of K.S. and R.P.S.; return K.S. to the custody of the father; find the father unfit to have custody of R.P.S.; and grant custody of R.P.S. to the mother. In addressing this court's appellate jurisdiction over the father's appeal from the juvenile court's July 20, 2006, judgment, we stated:
"[T]he juvenile court's denial of the dependency petitions on March 14, 2006, not only terminated the dependency proceedings but also constituted a determination on the allegations of circumstances constituting an emergency with regard to the emotional welfare of the children. Those allegations were the sole basis for the juvenile court's concurrent jurisdiction over custody issues under the circumstances of this case. Thus, when it entered its purported judgment on July 20, 2006, the juvenile court did not have subject-matter jurisdiction over the parties' custody dispute, and, therefore, that purported judgment is void.
"Under the circumstances of this case, the only court that had subject-matter jurisdiction over the parties' custody dispute after the juvenile court denied the dependency petitions was the circuit court. Consequently, the juvenile court should have transferred case no. DR-03-752.02 back to the circuit court for it to adjudicate the custody dispute in accordance with the standard enunciated by the Alabama Supreme Court in Ex parte McLendon, 455 So.2d 863 (Ala. 1984), instead of proceeding further.
"Because the juvenile court's purported July 20, 2006, judgment is void, we dismiss the father's appeal insofar as it seeks review of the purported July 20, 2006, judgment of the juvenile court, and we direct the juvenile court (1) to set aside its purported judgment of July 20, 2006, and (2) to transfer case no. DR-03-752.02 back to the circuit court for it to adjudicate the custody dispute in accordance with the McLendon standard."
C.D.S., 963 So.2d at 130 (footnote omitted). Subsequent to this court's dismissal of the appeal in C.D.S., the proceedings at the circuit court level have led the father to file in this court a petition for a writ of mandamus directing, among other things, the circuit court judge to recuse himself (case no. 2060633),[2] as well as motions for stays of the circuit court's orders and motions *786 to vacate those orders (case no. 2060779 and case no. 2060907).[3] However, what is most pertinent to our decision today is the circuit court judge's difficulty in putting out of his mind his previously expressed views or findings as to custody that we have determined are based, at least in part, on evidence received by the juvenile court in proceedings it did not have jurisdiction to conduct.
Significantly, after this court dismissed the father's appeal in C.D.S. and apparently after the juvenile court transferred the case to the circuit court, the circuit court heard ore tenus evidence on April 25, 2007. At that April 25, 2007, hearing the circuit court only permitted the presentation of evidence regarding events that had occurred subsequent to the entry of the juvenile court's July 20, 2006, judgment purporting to resolve the custody dispute. Therefore, the father moved to introduce the records of all previous proceedings concerning the custody dispute, and the circuit court admitted them.
On May 7, 2007, the circuit court entered an order that stated: "The court adopts the statement of facts contained in its Juvenile Order of July 20, 2006." Continuing, the May 7, 2007, order also stated that "[t]he evidence is clear that unless the Department of Human Resources and this court remain involved with [the father, who had physical custody of the children], there will be no meaningful visitation" allowed the mother. The circuit court's order further found "[t]hat it would materially promote the best interest of the minor child [R.P.S.] if the mother . . . had custody." The circuit court ordered that custody of R.P.S. be transferred to the mother, but it also ordered that the custody of K.S. shall remain with the father.
On June 5, 2007, the father filed a notice of appeal from the May 7, 2007, order (case no. 2060779), and this court ordered a stay of that order. Then, on June 7, 2007, the mother filed in the juvenile court a motion for a temporary order placing R.P.S. with the mother pending the resolution of the father's appeal. The circuit court then entered an order on June 8, 2007, purportedly in both cases case no. JU-06-019 and case no. DR-03-752 that stated that upon this court's stay of the May 7, 2007, order, "the previous order [apparently referring to the circuit court's January 19, 2006, order] adjudicating dependency and granting custody of the children to DHR is now effective." The circuit court continued: "Therefore, [the] mother's motion for temporary custody is denied. The children remain dependent and custody is given to DHR with placement of [R.P.S.] with [the] mother."
On June 14, 2007, the father filed in case no. 2060779 a motion to vacate the circuit court's order and to enforce the decision of this court issued on March 2, 2007. After informing the parties that we would treat the father's motion as a petition for a writ of mandamus and requesting and receiving answers to the father's petition from the mother and the guardian ad litem, this court entered an order on June 27, 2007, in case no. 2060779 stating:
"IT IS ORDERED that the petition be, and the same is hereby, granted. Pursuant to this court's order of June 19, 2007, appellant's motion to vacate lower court order and enforce order of this Court is treated as a petition for *787 writ of mandamus. Petition for writ of mandamus is granted. This court, having previously found in its opinion of March 2, 2007, that the January 19, 2006, order of the circuit court adjudicating dependency and placing custody of the children with DHR to be void, now finds that the June 8, 2007, temporary order in which the circuit court revived the January 19, 2006, order is void. The court further finds the May 7, 2007, order of the circuit court to be void due to its adoption of the juvenile court's July 20, 2006, order which this court also determined was void in our March 2, 2007, opinion. The circuit court is to follow the March 2, 2007, opinion of this court wherein it was stated: `[T]he circuit court [is] to adjudicate the custody dispute in accordance with the McLendon [Ex parte McLendon, 455 So.2d 863 (Ala.1984) ] standard.' (Emphasis added.) Until such time, the circuit court's January 18, 2005, order[[4]] is in effect."
The day after this court issued the above order the circuit court entered an order finding that K.S. had visited the mother only once since August 2006, that the father continued a pattern of alienating the affections of the children toward the mother, and that "it would materially promote the best interests of [R.P.S.] if [the] mother were to be granted custody." The circuit court also ordered that physical custody of R.P.S. be transferred to the mother, that K.S. remain in the custody of the father, that the parties exchange income affidavits and compute child support within 30 days of the date of the order, and that the father pay the mother attorney fees.
In entering its order on June 28, 2007, the day after this court had vacated the May 7, 2007, order, the circuit court did not "adjudicate" the custody dispute in a manner consistent with this court's instructions in its March 2, 2007, opinion, given the context in which those instructions were issued. Significantly, in our opinion of March 2, 2007, we noted that on March 14, 2006, the juvenile court had entered an order denying the dependency petitions, which "not only terminated the dependency proceedings, but also constituted a determination of the allegations of circumstances constituting an emergency with regard to the emotional welfare of the children." C.D.S., 963 So.2d at 130. It was after the juvenile court entered its March 14, 2006, order that the juvenile court proceeded to conduct a hearing and receive ore tenus testimony regarding the mother's petition seeking a modification of the order determining custody. As stated in our previous opinion, "the juvenile court should have transferred case no. DR-03-752.02 back to the circuit court for it to adjudicate the custody dispute in accordance with the standard enunciated by the Alabama Supreme Court in Ex parte McLendon, 455 So.2d 863 (Ala.1984), instead of proceeding further." 963 So.2d at 130.
Given the context in which we made the above statement, "adjudicate" means more than merely permitting the presentation of evidence regarding events that had occurred subsequent to the entry of the juvenile court's July 20, 2006, judgment purporting to resolve the custody dispute. Because the juvenile court lacked jurisdiction to conduct any hearing regarding the children's custody following the entry of its March 14, 2006, order, and because the juvenile court's judgment of *788 July 20, 2006, was void for lack of subject-matter jurisdiction, the circuit court in this case must allow the parties to conduct a full trial in the circuit court without reliance upon the void juvenile court proceedings to properly "adjudicate" the issue of the children's custody. See Summerhill v. Craft, 425 So.2d 1055, 1056 (Ala.1982) (holding that a circuit court had erred in admitting a probate court's order when the probate court's order was void because of a lack of jurisdiction); see also 32A C.J.S. Evidence § 863 (2007) (noting that when proceedings are void, the record thereof is inadmissible); cf. Charles W. Gamble, McElroy's Alabama Evidence § 484.02(2) (5th ed.1996) (noting that "circuit courts do not take judicial notice of the records of another court").[5]
Although the circuit court conducted an ore tenus hearing on April 25, 2007, the circuit court only allowed the presentation of evidence regarding events that had occurred subsequent to the entry of the juvenile court's July 20, 2006, judgment purporting to resolve the custody dispute. In this situation the father was faced with an unenviable "catch-22" dilemma. The father had to choose between, on the one hand, introducing the records from the previous proceedings and risking this court's determining that his action had invited error and, on the other hand, not introducing the records from the previous proceedings and risking this court's determining that the judgment must be affirmed because the record on appeal was incomplete. We decline to hold that the father invited error by electing to introduce the records from the previous proceedings in the custody dispute under these circumstances.
The circuit court's June 28, 2007, judgment, entered the day after the entry of this court's order vacating the May 7, 2007, judgment, also appears to have been made in reliance, at least in part, upon proceedings in the juvenile court that the juvenile court was without jurisdiction to conduct and without affording the father an opportunity to conduct a full evidentiary hearing.
In summation, by considering evidence presented in the proceedings that the juvenile court was without jurisdiction to conduct and by not allowing the father to present evidence of events that occurred before the entry of the juvenile court's July 20, 2006, judgment purporting to resolve the custody dispute, the circuit court has not adjudicated this dispute in a manner consistent with this court's March 2, 2007, opinion.[6]
Considered as a whole, the circuit court judge's errors in this custody dispute indicate that the circuit court judge may have had some difficulty in putting aside the views regarding custody that he expressed when he acted as a juvenile court judge in performing the task at hand as a circuit court judge. Therefore, we find it advisable to order the reassignment of the case to a different circuit court judge. We take the opportunity presented by this situation to explain the necessity and the basis for our action.
*789 As an initial matter, we note that this court's power to order the reassignment of a case upon remand derives from several subsections of Art. VI, § 141, Ala. Const. 1901 (Official Recomp.).[7] Article VI, § 141(c), provides: "The court of criminal appeals and the court of civil appeals shall have no original jurisdiction except the power to issue all writs necessary or appropriate in aid of appellate jurisdiction of the courts of appeals." Thus, under § 141(c), this court may issue an order reassigning a case to a different trial judge when such an order is in aid of our appellate jurisdiction to enforce compliance with this court's previous opinions or orders.
Our authority to order a reassignment is also derived from Art. VI, § 141(b), which provides: "The court of civil appeals shall consist of such number of judges as may be provided by law and shall exercise appellate jurisdiction under such terms and conditions as shall be provided by law and by rules of the supreme court." (Emphasis added.) The law governing the exercise of our appellate jurisdiction includes § 12-3-11, Ala.Code 1975. Under § 12-3-11 this court, like the Court of Criminal Appeals, has the authority to grant injunctions and to issue such writs as "are necessary to give it a general superintendence and control of jurisdiction inferior to it and in matters over which it has exclusive appellate jurisdiction."
Despite the facts that what is now Art. VI was ratified after § 12-3-11, Ala.Code 1975, was enacted and that Art. VI, § 141(d), which tracks the language of § 12-3-11, pertains only to the Court of Criminal Appeals, the ratification of what is now Art. VI should not be construed to eviscerate this court's authority under § 12-3-11. Indeed, we have invoked that section in numerous cases. See State Health Planning & Dev. Agency v. Baptist Med. Ctr., 446 So.2d 619, 622 (Ala.Civ.App. 1983) (invoking § 12-3-11 and stating that this court is empowered to issue necessary remedial orders or writs to prevent judicial disorder and ordering the consolidation of numerous appeals from an administrative agency into one circuit court); Department of Indus. Relations v. Pickett, 437 So.2d 1303, 1304-05 (Ala.Civ.App.1983) (remanding a case for the trial court to follow this court's mandate within 14 days); and Abbett v. Treadwell, 816 So.2d 477, 482-83 (Ala.Civ.App.2000) (Crawley, J., joined by Thompson, J., concurring in the result)(noting that this court has general superintendence and control of trial courts in domestic-relations matters under Ala.Code 1975, § 12-3-11). Additionally, in Ex parte Department of Mental Health, 511 So.2d 181, 185 (Ala.1987), our supreme court quoted with approval portions this court's opinion in Ex parte Department of Mental Health & Mental Retardation, 491 So.2d 956, 959 (Ala.Civ.App.1986), in which this court stated that, when trial courts do not cooperate concerning concurrent jurisdiction over a juvenile, "`this court will not hesitate to exercise its supervisory powers over these courts pursuant to Ala.Code (1975), § 12-3-11.'" 511 So.2d at 185.
Typically, the appellate courts in this state have not ordered the reassignment of a case as much as they have ordered trial judges to recuse themselves from cases when necessary. One scholar has described the difference between recusal and reassignment in the context of federal actions as follows:
*790 "The reassignment procedure is distinct from the recusal procedures. Recusal arises either from a litigant's petition, under Section 144 of 28 U.S.C., or by the district judge, under Section 455 of 28 U.S.C. The recusal statutes direct the judge to recuse herself when there is a conflict of interest, when there is `an opinion that derives from an extrajudicial source,' or when there is `a high degree of favoritism or antagonism as to make fair judgment impossible.' Reassignment arises when an appellate panel determines that it would further justice for a different district judge to proceed on remand."
James A. Worth, Destigmatizing the Reassignment Power, 17 Geo. J. Legal Ethics 565, 565 (2004) (footnotes omitted). In United States v. White, 846 F.2d 678 (11th Cir.1988), the United States Court of Appeals for the Eleventh Circuit explained:
"In cases where there is no proof of personal bias, the Second Circuit has persuasively enumerated factors which should be considered by an appellate court in deciding whether to exercise its supervisory authority to reassign a case. These criteria include:
"`(1) whether the original judge would reasonably be expected upon remand to have substantial difficulty in putting out of his or her mind previously-expressed views or findings determined to be erroneous or based on evidence that must be rejected, (2) whether reassignment is advisable to preserve the appearance of justice, and (3) whether reassignment would entail waste and duplication out of proportion to any gain in preserving the appearance of fairness.'
"United States v. Robin, 553 F.2d 8, 10 (2d Cir.1977) (en banc). Although this Court has not explicitly adopted these criteria, we have cited Robin with approval. See United States v. Long, 656 F.2d 1162, 1166 n. 7 (5th Cir. Unit A Sept.1981). Moreover, other circuits have applied these principles. See, e.g., United States v. Garcia, 694 F.2d 294 (1st Cir.1982); United States v. Sears, Roebuck & Co., 785 F.2d 777 (9th Cir.), cert. denied, [479] U.S. [988], 107 S.Ct. 580, 93 L.Ed.2d 583 (1986)."
846 F.2d at 696. Recently, the Alabama Court of Criminal Appeals applied a similar test in addressing the issue of the recusal of a trial judge in State v. Moore, [Ms. CR-06-0747, May 11, 2007] ___ So.2d ___, ___ (Ala.Crim.App.2007). We adopt and apply the factors set out in United States v. Robin, 553 F.2d 8 (2d Cir.1977), to this matter. In doing so, we are mindful of the statement the United States Court of Appeals for the Second Circuit made in Robin, i.e., that reassignment on remand "does not imply any personal criticism of the trial or sentencing judge." 553 F.2d at 10. That being noted,
"[i]n the rare case where a judge has repeatedly adhered to an erroneous view after the error is called to his attention, see, e.g., United States v. Brown, 470 F.2d 285, 288 (2d Cir.1972) (court twice used improper sentencing procedure), reassignment to another judge may be advisable in order to avoid `an exercise in futility in which the Court is merely marching up the hill only to march right down again.' United States v. Tucker, 404 U.S. 443, 452, 92 S.Ct. 589, 594, 30 L.Ed.2d 592 (1972) (Blackmun, J., dissenting)."
Robin, 553 F.2d at 11. Applying the Robin factors to this case, we have determined that reassignment of this case to a different circuit court judge is warranted because it is likely that "`the original judge would have difficulty putting his previous views and findings aside.'" United States v. Martin, 455 F.3d 1227, 1242 (11th *791 Cir.2006)(quoting United States v. Torkington, 874 F.2d 1441, 1447 (11th Cir. 1989)). The reassignment of this case to a different circuit court judge is also "advisable to preserve the appearance of justice." Robin, 553 F.2d at 10. Additionally, we do not believe that reassigning this case to a different circuit court judge would entail "waste . . . out of proportion to any gain in preserving the appearance of fairness." White, 846 F.2d at 696.
To summarize, our June 27, 2007, order vacated the May 7, 2007, judgment appealed from, and we now vacate the June 28, 2007, order of the circuit court because of the circuit court judge's difficulty in putting out of his mind his previously expressed views as to custody that we have determined are based, at least in part, on evidence received by the juvenile court in proceedings it did not have jurisdiction to conduct and because the circuit court has not held a full evidentiary hearing in order to apply the McLendon test to determine custody. We also remand the case and order the reassignment of this case upon remand to a different circuit court judge, in order to conduct the full evidentiary hearing and apply the McLendon standard to the custody dispute. In reassigning the case to a different circuit court judge, we instruct the circuit court judge to take into consideration the principles regarding reassignment our Supreme Court established in Ex parte Jim Walter Homes, Inc., 776 So.2d 76 (Ala.2000). Finally, as we noted in our June 27, 2007, order, the original judgment divorcing the father and the mother will govern the custody of the children until a new circuit court judge has been appointed and has had an opportunity to conduct a hearing.
MOTION TO VACATE JUNE 28, 2007, ORDER, GRANTED; CASE REMANDED AND REASSIGNMENT ORDERED; STAY ISSUED PENDING REASSIGNMENT OF CASE ON REMAND.
All the Judges concur.
NOTES
[1] We have summarized the holding of Ex parte McLendon in numerous cases; for example, in Barber v. Moore, 897 So.2d 1150, 1153 (Ala.Civ.App.2004), we stated:
"In Ex parte McLendon, supra, our supreme court held that the proper standard to be applied in child-custody cases wherein a parent has either voluntarily forfeited custody or has lost custody due to a prior judgment is whether there has been a material change in circumstances since the prior judgment; whether a change in custody will materially promote the best interests of the child; and whether the benefits of the change in custody will more than offset the inherently disruptive effect caused by uprooting the child. 455 So.2d at 865."
Other cases that similarly reiterate the Ex parte McLendon standard include: Ex parte Martin, 961 So.2d 83, 87 (Ala.2006) (stating the McLendon standard); Bratton v. Romine, 819 So.2d 58, 61-62 (Ala.Civ.App.2001) (reciting the McLendon standard and noting that it is well-established); and Sims v. Sims, 515 So.2d 1, 3 (Ala.Civ.App.1987) (noting the McLendon standard).
[2] Among the facts alleged by the father in his petition for the writ of mandamus seeking the recusal of the circuit court judge are his claims that the circuit court judge refused to allow the father to impeach the credibility of the mother and, according to the father, "deemed that the father had abandoned his case when [the father] insisted on making an offer of proof." This court denied that petition.
[3] Incidentally, we also note that during the course of the father's appeal in C.D.S., this court granted a stay of the juvenile court's judgment. Subsequent to that stay being ordered, the juvenile court issued an order on August 3, 2006, that stated that the custody of the youngest child would remain with the mother pending appeal. This court then granted the father's motion to vacate that order.
[4] The January 18, 2005, order divorced the mother and the father; awarded the parties joint legal custody of the two children; awarded the father primary physical custody of the children; and awarded the mother visitation.
[5] In this case the circuit court indicated at the April 25, 2007, proceeding that it was taking judicial notice of the evidence presented in the juvenile court; indeed, as noted above, the circuit court's May 7, 2007, judgment stated: "The court adopts the statement of facts contained in its Juvenile Order of July 20, 2006."
[6] In addition, we note that the circuit court's June 28, 2007, judgment is not a final judgment because it does not address the issue of child support, except to require the parties to submit income affidavits to the circuit court within 30 days.
[7] What is currently Art. VI, Ala. Const. 1901, was formerly, i.e., before the "Official Recompilation of the Constitution of Alabama of 1901, as amended" was completed in 2005, Amendment No. 328 to Alabama's Constitution, which was proposed by Acts 1973, No. 1051, p. 1676. Amendment No. 328 was ratified on December 27, 1973.
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UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 95-5491
UNITED STATES OF AMERICA,
Plaintiff - Appellee,
versus
DWAYNE EDDIE JUSTUS,
Defendant - Appellant.
Appeal from the United States District Court for the Western Dis-
trict of North Carolina, at Charlotte. Richard L. Voorhees, Chief
District Judge. (CR-94-94-V)
Submitted: January 11, 1996 Decided: January 29, 1996
Before RUSSELL, HALL, and WILKINSON, Circuit Judges.
Affirmed by unpublished per curiam opinion.
Randolph Marshall Lee, Charlotte, North Carolina, for Appellant.
Mark T. Calloway, United States Attorney, H. Thomas Church,
Assistant United States Attorney, Charlotte, North Carolina, for
Appellee.
Unpublished opinions are not binding precedent in this circuit.
See Local Rule 36(c).
PER CURIAM:
Dwayne Eddie Justus pled guilty to conspiracy to distribute
and possess with intent to distribute marijuana, 21 U.S.C.A. § 846
(West Supp. 1995). He appeals his sentence of 87 months, contending
that the district court clearly erred in finding that he had not
accepted responsibility for his offense. United States Sentencing
Commission, Guidelines Manual, § 3E1.1 (Nov. 1994). We affirm.
Justus was arrested while co-defendants Donald and Mandy
Griffin were delivering 100 pounds of marijuana to him. In his
first statement to investigators, Justus said he had bought about
700 pounds of marijuana from the Griffins between 1991 and 1994.
This statement agreed with information from the Griffins that they
had been involved with about 800 pounds of marijuana since 1991 and
had sold the majority of it to Justus. However, in a later state-
ment, Justus admitted to buying only 240 pounds of marijuana. His
last estimate was a mere 108 pounds, 70 pounds of which he said he
was holding for Griffin.
The adjustment for acceptance of responsibility may be denied
to a defendant who falsely denies or frivolously contests relevant
conduct which the district court determines to be true. USSG §
3E1.1, comment. (n.1(a)). We find that the district court did not
clearly err in denying the reduction to Justus on this basis.
The sentence imposed by the district court is therefore
affirmed. We dispense with oral argument because the facts and
2
legal contentions are adequately presented in the materials before
the court and argument would not aid the decisional process.
AFFIRMED
3
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Electronically Filed
Intermediate Court of Appeals
30479
30-NOV-2011
08:45 AM
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82 F.3d 708
109 Ed. Law Rep. 30
USA GROUP LOAN SERVICES, INCORPORATED, USA Group GuaranteeServices, Incorporated, and USA Group Enterprises,Incorporated, doing business as USA Group EnrollmentFinancial Aid Services, Plaintiffs-Appellants,v.Richard W. RILEY, in his official capacity as Secretary ofthe United States Department of Education, and theUnited States Department of Education,Defendants-Appellees.
No. 95-3095.
United States Court of Appeals,Seventh Circuit.
Argued Feb. 9, 1996.Decided April 25, 1996.
Appeal from the United States District Court for the Southern District of Indiana, Indianapolis Division. No. 94 C 902--Larry J. McKinney, Judge.
Max W. Hittle, Matthew C. Breman, Krieg, Devault, Alexander & Capehart, Indianapolis, IN, Fred F. Fielding, Samuel D. Walker (argued), David R. Hill, Lara Levinson, Wiley, Rein & Fielding, Washington, DC, David B. Boodt, Fishers, IN, Edward R. Schmidt, USA Group, Incorporated, Office of General Counsel, Fishers, IN, for Plaintiffs-Appellants.
Sue Hendricks Bailey, Office of the United States Attorney, Indianapolis, IN, Barbara C. Biddle, Lowell Sturgill (argued), Department of Justice, Civil Division, Appellate Section, Washington, DC, Sheila Lieber, Department of Justice, Civil Division, Washington, DC, Howard D. Sorenson, United States Department of Education, Washington, DC, for Defendants-Appellees.
Before POSNER, Chief Judge, and DIANE P. WOOD and EVANS, Circuit Judges.
POSNER, Chief Judge.
1
The federal government has an enormous program, administered by the Department of Education, of subsidizing student loans. The loans are made by banks but are guaranteed by state and private agencies that have reinsurance contracts with the Department, making it the indirect guarantor of the loans and thus inducing banks to make what would otherwise be risky loans. The proceeds of the loans are used to pay tuition and other expenses; so the colleges and other schools whose students are receiving these loans are also involved in the federal program. Like so many government programs, the student loan program places heavy administrative burdens on the entities involved in it--the lenders, the guarantors, and the institutions. A whole industry of "servicers" has arisen to relieve these entities of some of the administrative burdens. As agents of the educational institutions, the servicers maintain records of the institution's student loans. As agents of the banks, they collect the loans from the students as the loans come due and dun the students when they are slow in paying. As agents of the guarantors, the servicers keep track of defaults and make sure that the banks comply with the various conditions for triggering the guarantees. In any of these roles a servicer who makes a mistake can end up costing the federal government money. If the servicer remits loan moneys to a school for the tuition of a student not eligible for a loan, or fails to pursue a defaulting student, or honors an invalid claim by a bank for reimbursement from a guarantor, federal money is disbursed in violation of the regulations governing the student loan program.
2
Mistakes and outright fraud by servicers, some resulting in large losses of federal money, led Congress in 1992 to amend Title IV of the Higher Education Act to authorize the Secretary of Education to "prescribe ... regulations applicable to third party servicers (including regulations concerning financial responsibility standards for, and the assessment of liabilities for program violations against, such servicers) to establish minimum standards with respect to sound management and accountability." 20 U.S.C. § 1082(a)(1). See S.Rep. No. 58, 102d Cong., 1st Sess. 2225 (1991). The Secretary has done this, see 34 C.F.R. Parts 668, 682 (1994); Dept. of Education, Student Assistance General Provisions, 59 Fed.Reg. 22348 (Apr. 29, 1994), esp. pp. 22405, 22408-10, and the servicers have brought this suit to invalidate portions of the regulations on substantive and procedural grounds. The district court rejected the challenge, and the servicers appeal.
3
The challenged provisions make servicers jointly and severally liable with their customers (lenders, guarantors, and institutions) for violations of the statutes, regulations, or contracts governing the student loan program. To be liable, the servicer must itself have violated a statute, regulation, or contract. But it is not a defense that the violation was inadvertent or even that it could not have been avoided at reasonable cost, though given the complexity of the rules and regulations governing the program, and the volume of transactions, mistakes are inevitable even if all due care is used. Although liability is thus strict, as the servicers complain, the regulations use the term "joint and several liability" in a special sense. The usual meaning is that if two or more tortfeasors produce a single injury, the victim can sue any of the tortfeasors for the full amount of his damages and collect that amount from the tortfeasor he has sued. That tortfeasor may or may not have a right to obtain contribution or indemnification--a right to a sharing or shifting of the cost of liability--from the other tortfeasors. But under the challenged regulation the Department may go against a servicer only if unable to collect the overpayment from the servicer's customer. The servicer's liability is thus a back-up liability.
4
The servicers have led with their weakest argument, indeed an argument so weak as to border on the frivolous. It is that the word "minimum" in the statute means "minimal," so that the regulations are invalid if they impose on the servicers more than the bare minimum of duties that is consistent with the statutory purpose. For this argument they offer no authority, because there is none. A minimum is a floor, not a ceiling. The statute requires the Secretary of Education to establish standards of accountability below which the servicers may not fall but nowhere says or hints that he must set those standards at the lowest possible level. What is true is that if he set them unreasonably high the servicers would have a compelling argument that the standards were invalid, but this argument, which the servicers also make, would owe nothing to the inclusion of the word "minimum" in the statute. This is not to say that the word does no work, only that it does not do the work that the servicers think it does. Had the word been deleted, it would be arguable that the standards set by the Secretary are exclusive, so that no other agency, state or federal, could impose additional standards. Cf. Campbell v. Hussey, 368 U.S. 297, 82 S.Ct. 327, 7 L.Ed.2d 299 (1961). The standards would be both floor and ceiling. "Minimum" shows they are just a floor. Florida Lime & Avocado Growers, Inc. v. Paul, 373 U.S. 132, 147-48, 83 S.Ct. 1210, 1219-20, 10 L.Ed.2d 248 (1963).
5
Is it unreasonable to impose on the servicers the extent of liability that the Secretary's standards impose? A question not mentioned by either party though clearly germane is how much less the servicers' liability would be in the absence of the standards. Perhaps not much less; perhaps no less. It is true that even a negligent mistake in servicing a transaction is unlikely to give rise to common law liability for consequential damages. Evra Corp. v. Swiss Bank Corp., 673 F.2d 951 (7th Cir.1982); Rardin v. T & D Machine Handling, Inc., 890 F.2d 24 (7th Cir.1989). A student loan goes sour. The bank that made it asks the guarantor to reimburse it for the loss. The servicer hired by the guarantor to process claims fails, through negligence, to notice that the bank has not complied with all the conditions of the guaranty. As a result of the oversight the money is paid to the bank and the guarantor is reimbursed by the government. The government later discovers the mistaken payment, is unable to obtain repayment from either the bank or the guarantor, and sues the servicer in tort. The suit would be to recover the amount of money that the servicer had mistakenly authorized to be paid to the bank, rather than the much greater amount of damages, classically consequential, resulting from an unforeseeable disruption of the student loan program--the sort of "for want of a nail the kingdom was lost" liability that cases like Evra and Rardin cut off.
6
The common law liability in the example that we have just given would not be strict in theory, because the government would have to prove that the servicer had been negligent. But it would be likely to be strict in fact, by reason of the doctrine of respondeat superior. A clerk's careless mistake in overlooking the condition that the bank in our hypothetical example had failed to satisfy would be attributed to his employer, the servicer, even if the servicer had done everything it possibly could have done, through care in the hiring, training, and supervision of its employees, to prevent its clerks from being careless. The servicer's liability would be joint and several with the guarantor's and the bank's because joint and several liability is the rule in tort law. The servicer's liability might even be primary, if the bank or guarantor were thought merely to have broken their contract rather than to have committed a tort. As regards shared or primary liability the regulatory scheme that the servicers are challenging does not go as far as the common law, because the scheme makes their liability secondary--so maybe it is here that "minimum" has its bite. The scheme goes further than the common law with regard to the standard of liability, however, since there could be cases in which no one employed by the servicer had been careless--the mistake in authorizing payment might be due entirely to unverifiably false data furnished by the customer--yet the regulation would make the servicers liable, as the common law would not. How many such cases there are likely to be, however, can only be conjectured.
7
This excursus into tort law has not been a digression. It bears directly on the servicers' argument that the regulatory scheme will actually harm rather than benefit the student loan program in the long run. It will, they argue, force them to raise the price of their services in order to offset the expected cost of the additional liability created by the regulation, and the higher price will eventually be shifted forward in one way or another to the students and the schools. Maybe yes, maybe no. Higher costs of servicers need not in fact translate into significantly higher interest rates for student loans or into other cost increases to students or schools, and this apart from the fact that fees chargeable to students are regulated and interest rates set by statute. 20 U.S.C. § 1077a; 34 C.F.R. § 682.202. Liability will raise the costs of the less careful servicers relative to the more careful, and competition will force the former to swallow much or all of their higher costs or else lose their business to the more careful servicers, whose own costs may be little affected by the increased liability.
8
And to the extent that the regulation merely codifies, rather than adds to, the servicers' common law liability, there will be no additional costs to the servicers, costs they might be able to shift to their customers or might have to swallow. Probably there will be some additional costs--if there were none, it would be difficult to understand why the servicers are fighting the regulation so tenaciously. The regulatory scheme creates an administrative procedure that is less cumbersome than ordinary civil litigation for enforcing the servicers' liability, and adds fines to the usual tort remedy of compensatory damages. 34 C.F.R. §§ 668.84(b), 668.88-.92, 668.95, 682.413. Again, though, these costs may be passed forward to the servicers' customers. Or may not; and anyway a regulation can be challenged as arbitrary or capricious even if the regulated firms can deflect the costs of compliance onto their customers. Still, the lower the cost of the added liability either to the servicers or to their customers, the less vulnerable the regulation is to the servicers' challenge. It was their burden to show what increment of liability the regulation imposes over and above their ordinary common law liabilities for the careless mistakes of their employees and that the increment is so great as to make the regulation arbitrary and capricious. They have not even tried to carry this burden.
9
The other half of the servicers' challenge to the reasonableness of the regulation attempts to raise a question about the regulation's effect on care. The argument here is that strict liability and even the bobtailed form of joint and several liability that the regulation imposes are unnecessary to minimize mistakes in the administration of student loans. The principal difference between liability for negligence and strict liability is that the latter imposes liability for those mistakes that could not be avoided by the exercise of due care--mistakes, in other words, the costs of which fall short of the costs of preventing them. The mistakes will therefore be no fewer. Strict liability will merely shift the cost of the mistakes from the government to the servicers, who may be able to shift them forward to their customers, from thence to the students and schools, and perhaps eventually back to the government, making the regulation futile. All this is possible but ignores the fact that the servicers' preferred position is not negligence liability rather than strict liability but either no liability or liability capped at the fees charged to their customers. This position if accepted would impair their incentive to avoid making mistakes--would give them less incentive to do so than common law liability might do. Had they proposed to the Secretary, if only as a back-up to their preferred position, the alternative of negligence liability, their argument against strict liability would have greater force. Strict liability does not necessarily create any greater incentive to take care than negligence liability. But it does create a greater incentive to take care than no liability, or liability with a ceiling lower than the cost of the harm inflicted by a liable defendant.
10
The servicers also complain about the scanty articulation by the Secretary of the grounds for the challenged parts of the regulation. They point out that he did not conduct or commission studies on the likely impact of the regulation on the servicers. And that is true. But since this was notice and comment rulemaking, the servicers had every opportunity to conduct their own studies and put the results before the Secretary for his consideration. They failed to do so, and we have warned elsewhere than when an industry opposes a regulation on a ground that requires data for the ground to be convincing, they had better obtain and submit the data. Morales v. Yeutter, 952 F.2d 954, 960 (7th Cir.1991). And the Secretary can hardly be faulted for having failed to expound on the differences between strict liability and negligence liability, since negligence liability was not the alternative urged by the industry.
11
The remaining arguments are procedural and the main one is that the Secretary adopted the challenged regulation in violation of the conditions of "negotiated rulemaking," a novelty in the administrative process. The 1992 amendment to the Higher Education Act, under which the regulation was promulgated, required that the Secretary submit any draft regulation to a process of negotiated rulemaking, to be conducted in accordance with recommendations made by the Administrative Conference of the United States and codified in 1 C.F.R. §§ 305.82-4 and 305.85-5 and with "any successor recommendation, regulation, or law." 20 U.S.C. § 1098a(b). A "successor law" to the Administrative Conference's recommendations had in fact been enacted in 1990. It is the Negotiated Rulemaking Act, 5 U.S.C. §§ 561 et seq. It is to expire later this year but was applicable to the servicer rulemaking. The Act and the Administrative Conference's recommendations authorize the agency, in advance of the notice and comment rulemaking proceeding, to submit draft regulations to the industry or other groups that are likely to be significantly affected by the regulations and to negotiate with them over the form and substance of the regulations. The hope is that these negotiations will produce a better draft as the basis for the notice and comment proceeding. The 1992 amendment to the Higher Education Act made negotiated rulemaking mandatory in proceedings implementing the amendment, as we have seen.
12
The servicers argue that the Department negotiated in bad faith with them. Neither the 1992 amendment nor the Negotiated Rulemaking Act specifies a remedy for such a case, and the latter act strongly implies there is none. 5 U.S.C. § 570. But even if a regulation could be invalidated because the agency had failed to negotiate in good faith, this would not carry the day for the servicers.
13
During the negotiations, an official of the Department of Education promised the servicers that the Department would abide by any consensus reached by them unless there were compelling reasons to depart. The propriety of such a promise may be questioned. It sounds like an abdication of regulatory authority to the regulated, the full burgeoning of the interest-group state, and the final confirmation of the "capture" theory of administrative regulation. At all events, although the servicers reached a firm consensus that they should not be liable for their mistakes the Department refused to abide by its official's promise. What is more, the draft regulations that the Department submitted to the negotiating process capped the servicers' liability at the amount of the fees they received from their customers, yet when it came time to propose a regulation as the basis for the notice and comment rulemaking the Department abandoned the cap. The breach of the promise to abide by consensus in the absence of compelling reasons not here suggested, and the unexplained withdrawal of the Department's proposal to cap the servicers' liability, form the basis for the claim that the Department negotiated in bad faith.
14
We have doubts about the propriety of the official's promise to abide by a consensus of the regulated industry, but we have no doubt that the Negotiated Rulemaking Act did not make the promise enforceable. Natural Resources Defense Council, Inc. v. EPA, 859 F.2d 156, 194 (D.C.Cir.1988) (per curiam). The practical effect of enforcing it would be to make the Act extinguish notice and comment rulemaking in all cases in which it was preceded by negotiated rulemaking; the comments would be irrelevant if the agency were already bound by promises that it had made to the industry. There is no textual or other clue that the Act meant to do this. Unlike collective bargaining negotiations, to which the servicers compare negotiated rulemaking, the Act does not envisage that the negotiations will end in a binding contract. The Act simply creates a consultative process in advance of the more formal arms' length procedure of notice and comment rulemaking. See 5 U.S.C. § 566(f).
15
The complaint about the Secretary's refusal to adhere to the proposal to cap the servicers' liability misconceives the nature of negotiation. The Secretary proposed the cap in an effort to be accommodating and deflect the industry's wrath. The industry, in retrospect improvidently, rejected the proposal, holding out for no liability. So, naturally, the Secretary withdrew the proposal. A rule that a rejected offer places a ceiling on the offeror's demands would destroy negotiation. Neither party would dare make an offer, as the other party would be certain to reject it in order to limit the future demands that his opponent could make. This concern lies behind the principle that settlement offers are not admissible in litigation if the settlement effort breaks down. Fed.R.Evid. 408. By the same token, the negotiating position of the parties in negotiated rulemaking ought not be admissible in a challenge to the rule eventually promulgated when the negotiation failed.
16
The servicers argue that they should be allowed to conduct discovery to uncover the full perfidy of the Department's conduct in the negotiations. Discovery is rarely proper in the judicial review of administrative action. The court is supposed to make its decision on the basis of the administrative record, not create its own record. There are exceptions, summarized in Animal Defense Council v. Hodel, 840 F.2d 1432, 1436 (9th Cir.1988), amended, 867 F.2d 1244 (1989), and the main one has some potential applicability here: discovery is proper when it is necessary to create a record without which the challenge to the agency's action cannot be evaluated. E.g., Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 420, 91 S.Ct. 814, 825-26, 28 L.Ed.2d 136 (1971); Edgewater Nursing Center, Inc. v. Miller, 678 F.2d 716, 718-19 (7th Cir.1982). Negotiated rulemaking does not usually produce a comprehensive administrative record, such as notice and comment rulemaking, or a cease and desist order proceeding, or a licensing proceeding would do, any more than a settlement conference will usually produce a full record. Some discovery was conducted in the district court in order to present a picture of what went on at the negotiations between the servicers and the Department. The servicers argue that if only they could get access to the notes of certain participants in the negotiating sessions they could demonstrate additional instances of bad faith on the part of the Department.
17
Their conception of "bad faith" reflects, as we have noted, a misconception of the negotiation process. It is not bad faith to withdraw an offer after the other side has rejected it. If as we doubt the Negotiated Rulemaking Act creates a remedy as well as a right, we suppose that a refusal to negotiate that really was in bad faith, because the agency was determined to stonewall, might invalidate the rule eventually adopted by the agency. But we do not think that the Act was intended to open the door wide to discovery in judicial proceedings challenging regulations issued after the notice and comment proceeding that followed the negotiations. If as in this case the public record discloses no evidence of bad faith on the part of the agency, that should be the end of the inquiry. Cf. Citizens to Preserve Overton Park, Inc. v. Volpe, supra, 401 U.S. at 420, 91 S.Ct. at 825-26. A contrary conclusion would stretch out such judicial proceedings unconscionably. The Act's purpose--to reduce judicial challenges to regulations by encouraging the parties to narrow their differences in advance of the formal rulemaking proceeding--would be poorly served if the negotiations became a source and focus of litigation.
18
AFFIRMED.
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NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS FILED
FOR THE NINTH CIRCUIT APR 18 2014
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
DOUGLAS A. BROWN, No. 12-35881
Plaintiff - Appellant, D.C. No. 1:10-cv-00536-BLW
v.
MEMORANDUM*
CITY OF CALDWELL, a subdivision of
the State of Idaho,
Defendant - Appellee.
Appeal from the United States District Court
for the District of Idaho
B. Lynn Winmill, Chief District Judge, Presiding
Argued and Submitted April 10, 2014
Seattle, Washington
Before: KOZINSKI, Chief Judge, and RAWLINSON and BEA, Circuit Judges.
We review the district court’s rejection of Plaintiff-Appellant Douglas
Brown’s proposed jury instruction de novo because the rejection was based on a
question of Idaho law. See Snake River Valley Elec. Ass’n v. PacifiCorp, 357 F.3d
1042, 1052 n.11 (9th Cir. 2004). The Idaho Supreme Court has not held that the
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Circuit Rule 36-3.
causation standard for retaliatory discharge claims under the Idaho Protection of
Public Employees Act, Idaho Code § 6-2101 et seq., is less stringent than the
standard of “but for” causation. See Curlee v. Kootenai Cnty. Fire & Rescue, 224
P.3d 458 (Idaho 2008). Moreover, while Jury Instruction 18 did require “but for”
causation, it also stated that the protected activity “need not be the only cause” of
the employment action. Because the district court’s jury instruction did not
conflict with Idaho law, we AFFIRM.
We do not review Brown’s claim regarding the burden-shifting framework
articulated in McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973), because
Brown has not proved he challenged this aspect of the jury instructions at the
district court. See Bird v. Lewis & Clark College, 303 F.3d 1015, 1022 (9th Cir.
2002).
AFFIRMED.
2
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9 F.3d 120
Euphrates, Inc.v.Habersham
NO. 92-9183
United States Court of Appeals,Eleventh Circuit.
Nov 02, 1993
1
Appeal From: M.D.Ga.
2
REMANDED.
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Order Michigan Supreme Court
Lansing, Michigan
October 31, 2005 Clifford W. Taylor,
Chief Justice
128800 Michael F. Cavanagh
Elizabeth A. Weaver
Marilyn Kelly
Maura D. Corrigan
PEOPLE OF THE STATE OF MICHIGAN, Robert P. Young, Jr.
Plaintiff-Appellee, Stephen J. Markman,
Justices
v SC: 128800
COA: 251975
Genesee CC: 03-012050-FC
RODERICOL ANTONIO MURPHY,
Defendant-Appellant.
_________________________________________/
On order of the Court, the application for leave to appeal the April 28, 2005
judgment of the Court of Appeals is considered, and it is DENIED, because we are not
persuaded that the questions presented should be reviewed by this Court.
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.
October 31, 2005 _________________________________________
t1024 Clerk
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In the United States Court of Federal Claims
No. 10-859C
(Filed: January 30, 2013)
************************
MICHAEL E. STUART, * Tucker Act, 28 U.S.C. § 1491(a); Military
* Pay Act, 10 U.S.C. §§ 204, 206; Discharge
Plaintiff, * from Active Duty; Medical Evaluation;
* Documentation of Medical Treatment
v. * During Active Duty; Department of the
* Army Personnel Policy Guidance ¶¶ 7-2,
THE UNITED STATES, *
7-8, and 7-12; Army Regulations 40-400,
*
* 40-501, 635-40 and 635-200; Remand;
Defendant. * Army Board for Correction of Military
* Records; Medical Evaluation Board.
************************
Jason E. Perry, 114 South Main Street Suite 27, Cheshire, CT, for Plaintiff.
Tony West, Jeanne E. Davidson, Martin F. Hockey, Jr., and Jane C. Dempsey, U.S.
Department of Justice, Commercial Litigation Branch, Civil Division, PO Box 480, Ben Franklin
Station, Washington, DC, for Defendant. Captain Rachel A. Landsee, U.S. Army Litigation
Division, 9275 Gunston Road, Fort Belvoir, VA, Of Counsel.
__________________________________________________________________
OPINION AND REMAND ORDER
__________________________________________________________________
WILLIAMS, Judge.
Plaintiff, Michael E. Stuart, claims that he was wrongfully discharged from active duty in
the United States Army after he became disabled in the line of duty. Plaintiff seeks back pay,
payment for medical care since his removal from active duty, and restoration to active duty until
he is afforded a medical evaluation.
The case is currently before the Court on Cross-Motions for Judgment on the
Administrative Record. The Court concludes that the Army failed to follow its procedures
regarding Plaintiff’s medical treatment, documentation of medical conditions, and discharge
from active duty. Specifically, the Army failed to document Plaintiff’s medical treatment while
he was deployed and to provide Plaintiff with a medical briefing when he was redeployed, and
delayed affording Plaintiff a Post-Deployment Health Reassessment until almost one year after
his deployment, in violation of the Army’s requirement that this assessment be done within 30
days. As a result of the Army’s failure to follow its procedures, Plaintiff was discharged
administratively, for completion of term of service, when he may have been eligible for a
discharge because of physical disability.
Accordingly, the Court remands this matter to the Army Board for Correction of Military
Records for a determination of whether Plaintiff should have been discharged for medical
disability in 2006, under applicable Army Regulations. The Court defers consideration of
Plaintiff’s requests for monetary relief until the Board issues its determination.
Findings of Fact1
Sgt. Stuart’s Military Service
Michael Stuart honorably served in the United States Army and Army National Guard for
over 20 years, rising to the rank of Staff Sergeant. AR 186, 232. He originally joined the Army
in 1985, and served on active duty for nine years until 1994, when he joined the Army National
Guard as a Sergeant. AR 279-89. Sgt. Stuart remained in the National Guard until he was
mobilized in 2004, as part of Operation Iraqi Freedom. AR 232-33, 245-46. Sgt. Stuart was
deployed in Iraq from January to December of 2005, serving as an armor crewman in the 98th
Cavalry. AR 232, 245-46.
While in Iraq, Sgt. Stuart served in a “designated imminent danger pay area.” AR 232.
On May 20, 2005, Sgt. Stuart was riding in a military convoy when it came under attack and was
hit by an improvised explosive device (“IED”). Sworn Statement of Dennis Adams, DA Form
2823, June 25, 2005, AR 77-78. The IED severely injured the gunner who was atop Sgt. Stuart’s
vehicle, causing the gunner to fall inside the vehicle and “bleed all over.” AR 77-78. Sgt. Stuart
immediately began providing first aid to the gunner. AR 77. Despite being “disoriented and
dazed due to the blast,” once a “safe distance” away, Sgt. Stuart climbed out of the disabled
vehicle, and provided security to prevent a follow-up attack while other members of his unit
treated his wounded squadmate. AR 77. A helicopter soon arrived to medevac the gunner away.
AR 77-78. According to Sgt. Adams, Sgt. Stuart’s superior, Plaintiff and two other
crewmembers sought treatment for “headache, very loud ringing in the ears, and hearing loss” at
the Battalion Aid Station the next morning, May 21, 2005. AR 77-78. No medical records
reflecting this treatment are in the Administrative Record.
Describing a different incident, Sgt. Stuart alleges that on an unspecified date, he
witnessed an ordnance expert and an Iraqi interpreter being killed by the bomb they were
inspecting when it exploded as he accompanied them on a security detail. Defendant denies that
this occurred, and no documents in the Administrative Record independently verify this
incident.2
1
The findings of fact are derived from the Administrative Record (“AR”).
2
Sgt. Stuart also alleges that he served as a “member of the General’s personal security
detachment and various escort units, and participated in house-to-house searches in the region.”
Compl. ¶ 7. Defendant avers that it has no knowledge of any such service, and there is no record
of such service in the Administrative Record.
2
Sgt. Stuart’s Medical Examination Form 2173 Dated January 1, 2006
Sgt. Stuart’s unit left Iraq in late 2005, and he returned to Camp Shelby, Mississippi on
December 27, 2005. AR 71, 232. On January 1, 2006, Sgt. Stuart underwent a medical
examination at Camp Shelby. AR 76. The examination was documented on DA Form 2173,
“Statement of Medical Examination and Duty Status.” AR 76.3 Capt. Moore, the examining
nurse, checked the boxes on Form 2173 to indicate that Sgt. Stuart “was mentally sound,” that
Sgt. Stuart’s unidentified injury would not likely result in a claim against the Government for
future medical care, and that his injury “was incurred in line of duty.” AR 76. As to the details
of any injuries which Sgt. Stuart reported at the time, Capt. Moore noted “see Block 30.” AR 76.
Block 30 was filled out by Sgt. Stuart’s Unit Commander, Col. William Glasgow, and provides:
Service member was deployed to Kuwait and Iraq (Jan 2005 to Jan 2006).
[Service Member] was subjected to continuous operational conditions and
exposure to: human waste, indigenous plants and animals, composite material
fires, petrochemical waste and fumes, gases, fumes and dust of unknown origins,
continuous loud [noise] exposure >85db, blood borne pathogens, and airborne
pathogens. SM was also exposed to infectious diseases to include but not limited
to the following: Leptospirosis, Leishmaniasis, Tuberculosis, Hepatitis, and
Malaria. SM was also subjected to extreme exposure to sun and ambient
temperatures. Personal hygiene with nonpotable water was conducted throughout
SM[’]s one year deployment. Soldiers were required to wear body armor,
ceramic ballistic plates and Kevlar continuously throughout deployment which
may result in claims of knee injuries, shoulder and back pains or problems or
other ailments related to continuous wear . . . .
AR 76. Col. Glasgow and Capt. Moore characterized Sgt. Stuart’s injuries as having been
incurred in the line of duty. AR 76.
On January 21, 2006, Sgt. Stuart was honorably released from active duty pursuant to
Army Regulation 635-200, Chapter 4 because he had completed “required active service.” AR
232. Sgt. Stuart’s orders noted he was being released from active duty “not by reason of
physical disability.” AR 234. Although Sgt. Stuart alleges that “he was referred for further
medical evaluation” at this time, the January 1, 2006 DA Form 2173 does not indicate whether
Sgt. Stuart was referred for further medical care or treatment. Compl. ¶ 10; AR 76.
Sgt. Stuart’s Service in the National Guard and Post Active Duty Medical History
Upon release from active duty in January 2006, Sgt. Stuart returned to service in the
Army National Guard. AR 232. Some six months later, on July 22, 2006, while in the National
Guard, Sgt. Stuart met with Hankl Mazarek, a Veteran’s Administration (“VA”) physician’s
assistant, as part of the Post-Deployment Health Reassessment Screening Program. AR 69. As a
3
The medical provider completes the first part of Form 2173, and the soldier’s unit
commander signs the second part. If a medical consultation is needed, the unit commander is
instructed to write “SOLDIER REQUIRES FURTHER MEDICAL EVALUATION [IN
ACCORDANCE WITH] PDHRA DIRECTIVE.” PDHRA Directive MILPER Message 05-273.
3
result of this appointment, the Army generated a second Form 2173, Statement of Medical
Examination and Duty Status, dated July 22, 2006, filled out by a physician’s assistant and Sgt.
Stuart’s National Guard unit commander. AR 69. The physician’s assistant wrote that Sgt.
Stuart complained of “social and physical symptoms” and requested to see a medical provider.
Id. On the second half of the form, Sgt. Stuart’s National Guard unit commanding officer noted
that Sgt. Stuart required “further medical evaluation [in accordance with] [Secretary of Defense]
PDHRA Directive MILPER Message 05-273.” AR 69.4 MILPER Message 05-273 provided
that reserve soldiers returning from deployment in a combat zone must be evaluated by a medical
provider during a post-deployment health reassessment. If the reassessment revealed a need for
a medical consultation, then a DA Form 2173, Statement of Medical Examination and Duty
Status, was to be processed. No records in the Administrative Record reflect any medical
appointments or consultations between Sgt. Stuart and any medical provider until over four
months later, in December 2006.
On December 4, 2006, almost 11 months after his release from active duty, Sgt. Stuart
and a provider identified as Diane Gevinski, filled out DD Form 2900, entitled “Post-
Deployment Health Reassessment” or “PDHRA.” AR 71-75.5 The purpose of the PDHRA is to
assess a service member’s “state of health after deployment in support of military operations and
to assist military healthcare providers, including behavioral health providers, in identifying
present and future medical care needs [the service member] may have.” AR 71. On the DD
2900, Ms. Gevinski certified that the Post-Deployment Health Reassessment had been completed
on December 4, 2006. AR 74. On the DD 2900, Sgt. Stuart indicated that he was experiencing
health difficulties related to his deployment. AR 72. Specifically, Sgt. Stuart identified
“headaches,” “back pain,” “chest pain or pressure,” “dizziness, fainting, light headedness,”
“problems sleeping or still feeling tired after sleeping,” “increased irritability,” and “taking more
risks such as driving faster” as conditions related to his deployment. AR 72. He also indicated
that during his deployment he had been exposed to “smoke from burning trash or feces,”
“vehicle or truck exhaust fumes,” “loud noises,” “excessive vibration,” “sand/dust,” and “blast or
motor vehicle accident.” AR 72. Sgt. Stuart wrote that he had “persistent major concerns” about
the health effects of conditions he was exposed to in Iraq, that he had nightmares about his
deployment, and that he was feeling “constantly on guard or watchful” and “numb or detached
from others.” AR 72-73. Further, Sgt. Stuart answered “yes” to the question “Would you like to
schedule a visit with a healthcare provider to further discuss your health concern(s)?” AR 73.
After completing this DD Form 2900, Post-Deployment Health Reassessment, Ms.
Gevinski consulted with Sgt. Stuart and confirmed that the answers that Sgt. Stuart had provided
on the form were accurate. AR 74. On the same form, Ms. Gevinski noted that Sgt. Stuart
exhibited symptoms of depression and post-traumatic stress disorder (“PTSD”) that were a
“Major Concern,” and wrote that Sgt. Stuart was “Undercare [sic] for all issues and concerns.”
4
MILPER Message 05-273 supplemented Army Regulation 600-8-4, Line of Duty
Policy, Procedures, and Investigations.
5
The instructions on the Post-Deployment Health Reassessment Form provide that the
service member was to complete the first three pages and report symptoms and concerns. A
health care provider was to complete the second half of the form.
4
AR 74.6 The form gave the health care provider the option of referring the patient to 12 different
types of facilities, including “Mental Health Specialty Care,” but Ms. Gevinski did not make any
referrals for further treatment. AR 74. The record does not contain a DA Form 2173 (Statement
of Medical Examination and Duty Status) generated as a result of this consultation. Pursuant to
MILPER Message 05-273, a DA Form 2173 must be processed when “THE PHDRA
SCREENING REVEALS A NEED FOR MEDICAL CONSULTATION.” There is no
indication in the Administrative Record that there was a review of this medical evaluation by an
appropriate medical authority, as required by MILPER Message Number 05-273.
On December 26, 2006, Sgt. Stuart underwent an audiological evaluation at a VA facility
where he complained of bilateral tinnitus, which he described as “cricket-like,” and first noticed
upon leaving Iraq. AR 70. Sgt. Stuart also complained at the audiological exam of having
trouble sleeping, constant pressure within his inner ears, and difficulty understanding speech.
AR 70. The audiologist provided Sgt. Stuart with information to apply for a service-connected
disability but did not refer him to any other treatment or provider. AR 70.
On June 19, 2007, Dr. Terako Amison, a VA psychiatrist, diagnosed Sgt. Stuart with
PTSD. AR 14-15. Dr. Amison treated Sgt. Stuart for PTSD through at least early July 2008.
AR 5-17.
On June 29, 2007, Col. Robert May of the Mississippi National Guard completed a
physical profile of Sgt. Stuart indicating that Sgt. Stuart had PTSD and was not responsive to
treatment. AR 20. Col. May filled out similar physical profile forms in November 2007, and in
February 2008, noting that Sgt. Stuart was suffering from “[m]ajor depression” and had been
under care for that condition for over one year. AR 18-19. These physical profiles were part of
a Standards of Medical Fitness assessment, completed pursuant to Army Regulation 40-501, and
indicated that Sgt. Stuart had a medical condition that could prevent deployment. Col. May
answered no to the question “IS SOLDIER HEALTHY WITHOUT ANY MEDICAL
CONDITION THAT PREVENTS DEPLOYMENT?” AR 18. In the final profile, dated
February 26, 2008, over two years after Plaintiff’s release from active duty, in response to a
question whether the soldier met retention standards in accordance with Army Regulation 40-
501, Col. May wrote: “Needs [Medical Evaluation Board]/[Physical Evaluation Board].” AR 18.
There is a third DA Form 2173 (Statement of Medical Examination and Duty Status) in
the record. AR 181. Section I, the portion to be completed by a health care provider, is dated
July 22, 2006, as was the second DA 2173, and contains largely the same information as the first
form. Compare AR 69, with AR 181. Specifically, Mr. Mazarek wrote that Sgt. Stuart was
examined as part of the PDHRA Screening Program, reported PTSD, complained of social and
physical symptoms, and wanted to see a VA medical provider. AR 181. Maj. Chad Gore, Sgt.
Stuart’s National Guard unit commander, completed Section II of the third DA 2173 on March
29, 2010, and wrote: “[Service Member] requires further medical evaluation [in accordance with
Secretary of Defense] PDHRA directive MILPER Message 05-273 dated 03 Nov 05.” AR 181.
Maj. Gore also checked the box indicating that the injury at issue was incurred in the line of
duty. AR 181.
6
The record contains no documentation regarding Sgt. Stuart’s treatment, or the identity
of the care provider.
5
On September 25, 2009, Sgt. Stuart was honorably discharged from the Army National
Guard because he had fulfilled his obligation. AR 184. The VA subsequently concluded that
Mr. Stuart was 100% disabled because of his injuries. AR 21.
The Army’s Procedures on Discharge from Active Duty
Under applicable Army Regulations at the time of Plaintiff’s discharge, if a soldier had a
medical condition that could make him unfit for duty, then “disposition through medical
channels [would take] precedence over administrative separation proceedings” such as discharge
for expiration of term of service. Army Reg. 635-200 ¶ 1-33(a). Further, a soldier who had
completed his term of service, but who was also physically unfit for retention, could not be
separated for completion of service unless the soldier waived processing for separation due to
physical disability. Army Reg. 635-200 ¶ 4-2(c).
When Sgt. Stuart was discharged, disposition through medical channels was governed by
Army Regulation 635-40, Physical Evaluation for Retention, Retirement, or Separation.7
Pursuant to that regulation, a soldier had to be discharged as physically unfit for duty when he
did not meet the Army’s retention standards in Army Regulation 40-501. To be eligible for a
medical discharge and disability, a soldier must have sustained an injury that required separation
in the line of duty. Army Reg. 635-40 ¶ 3-4. There was a presumption that a disease or injury
discovered after the soldier entered active service was incurred in the line of duty. Army Reg.
635-40 ¶ 3-2(a)(2). Once a soldier was identified as potentially unfit for duty, the Army was
required to make a case-by-case determination regarding whether a soldier was unfit due to
disability, and to consider all relevant evidence, and make findings with respect to fitness or
unfitness for military service on the basis of the preponderance of the evidence. Army Reg. 635-
40 ¶ 3-1(a) and (c).
If a soldier was identified as not meeting retention standards, a Medical Evaluation
Board, or “MEB,” had to be convened to document a soldier’s medical status and any related
duty limitations. Army Reg. 40-400 ¶ 7-1. The Medical Evaluation Board, the first step in the
process of evaluation for disability and separation, was composed of two or more physician
members and was required to make its determination expeditiously. Army Reg. 40-400 ¶¶ 7-1
and 7-3. If the Medical Evaluation Board determined that a soldier did not meet retention
standards, the soldier was to be referred to a Physical Evaluation Board. Army Reg. 40-400 ¶ 7-
22. Medical Evaluation Boards were not authorized to make conclusions or findings regarding
disability -- Physical Evaluation Boards were tasked with such responsibilities and were to
“evaluate an individual’s impairments primarily on the basis of the records.” Army Reg. 40-400
¶¶ 7-1, 7-8(c). A soldier could not receive disability payments from the military unless this
process was completed. See Army Reg. 40-400, Chapter 7; Dept. of Defense Directive No.
1332.18, Nov. 4, 1996 ¶ 3.
7
Army Regulation 635-40 has been amended since Sgt. Stuart’s release from active duty.
A copy of the regulation in effect at the time of Plaintiff’s release from active duty is an
attachment to Defendant’s Motion for Judgment on the Administrative Record, and all references
are to that version of the regulation.
6
The Army’s Standards of Medical Fitness, set forth in Army Regulation 40-501, also
delineated numerous circumstances that mandated referral to a Medical Examination Board. For
instance, when a service member exhibited anxiety or dissociative disorders, referral to a
Medical Evaluation Board was required if the symptoms necessitated limitation of duty or
resulted in interference with effective military performance. Army Reg. 40-501 ¶ 3-33.
Additionally, a soldier’s unit commander was required to refer a soldier to a medical treatment
facility for medical evaluation “when the soldier [was] believed to be unable to perform the
duties of his or her office, grade, rank, or rating.” Army Reg. 635-40 ¶ 2-9(c). Similarly, if a
physician identified a soldier with a medical condition that did not meet retention standards, the
physician was charged with referring that soldier to the Physical Disability Evaluation System,
and a Medical Evaluation Board was mandatory. Army Reg. 40-501 ¶ 3-3(d). Army Regulation
40-400, Patient Administration, provided broader grounds for a referral, stating: “[s]ituations that
require Medical Evaluation Board consideration are - [t]hose involving patients whose medical
fitness for return to duty is questionable, problematical, or controversial. When a member’s
fitness for further military duty is questionable, it becomes essential that all abnormalities in his
or her condition be thoroughly evaluated.” Army Reg. 40-400 ¶ 7-5(b)(3).
The Army’s Personnel Policy Guidance
The Army’s “Personnel Policy Guidance” (“PPG”) containing the Army’s procedures for
overseeing its soldiers was in effect when Sgt. Stuart was discharged. Joint Status Report, Feb.
23, 2012. Part 7-12, which set forth the requirements for medical procedures during Release
from Active Duty or “REFRAD,” provided, in pertinent part:
7-12 Requirements for REFRAD/Demobilization.
a. Medical Benefits and Entitlements Briefing:
Each Soldier will receive a medical benefits and entitlements briefing. Briefing
information should include, but is not limited to, the following topics:
• The right to request a REFRAD physical.
• MRP
• Tricare benefits following REFRAD.
• Points of contact for TRICARE claim issues.
• Department of Veterans Affairs (VA) access.
• Two forms must be completed: Department of Defense (DD Form
2796, Post-deployment health assessment to be completed within 5
days of redeployment or demobilization, and DD Form 2697,
Report of medical assessment).
• TRICARE Reserve Select (TRS)
b. Medical Record Review:
A health care provider (physician, physician assistant, or nurse practitioner) will
conduct a complete medical record review including DD Forms 2796, 2697, and 2795
(pre-deployment health assessment) and all medical records to determine if a
consultation, physical examination, or further medical care is required. (Note: review of
7
DD Forms 2795 and 2796 may be completed [in accordance with] paragraph 3.h.(7).
Personnel undergoing REFRAD, review of the DD Form 2697 and medical records must
be accomplished by a physician, physician assistant, or nurse practitioner). If the Soldier
has not requested a separation physical and the medical review of the Soldier’s
documentation does not indicate a need for a physical exam, then a physical exam is not
required. The health care provider at the demobilization site will determine if follow-on
medical care is required and initiate the appropriate referral.
c. DA Form 2173:
The health care provider will ensure part I of DA Form 2173, statement of
medical examination and duty status, was initiated at the time of treatment to include in
country (AOR) for each injury and/or disease (to include those related to dental care).
This form is utilized to document line of duty determination.
(1) If a DA Form 2173 is required and none is present, the health care
provider will initiate one at the time of the medical/dental out-processing. The DA Form
2173 will then be forwarded to the RC Soldier’s unit for completion. AR 600-8-4, Line
of Duty Policy . . .
...
f. Medical Health Record:
The original DD Forms 2795, 2796 and 2697, as well as any completed DA
Form 2173 will be placed in the Soldier’s health record. All documentation related to
medical treatment received during the period of active duty (ad) will be included in the
health record which will be forwarded back to the appropriate records custodian at the
service member’s unit.
(1) A copy of all DA Form 2173s and DD Form 261s will be given to
the Soldier for his/her personal records.
(2) A copy of DD Form 2796 will be sent to the Army Medical
Surveillance Activity (AMSA) per paragraph 3.h.(8).
...
h. Medical Retention Standards:
All RC Soldiers who do not meet the medical retention standards of AR 40-501,
chapter 3, must be referred to a medical evaluation board/physical evaluation board
(MEB/PEB). If it is determined that the condition is pre-existing without permanent
service aggravation, the service member may still be covered for disability severance or
retired pay if the Soldier has accumulated 8 years of AD. To be eligible for this benefit,
the Soldier must have his PEB completed prior to release from AD.
PPG 7-12.
8
The PPG set forth the policies governing how the Army would handle medical treatment
for its active duty soldiers. Part 7-2(i) of the PPG read, “All episodes of health care will be
documented in the individual’s permanent or deployment health record while participating in
contingency operations.” PPG ¶ 7-2(i). Paragraph 7-8(b) required that Form 2796, Post-
Deployment Health Assessment, “[m]ust be completed in the theater of operation prior to
redeployment, ideally within 5-days but not more than 30-days, before departure from theater.”
PPG ¶ 7-8(b). This requirement applied to reserve component soldiers “activated to active duty
status greater than 30 days in support of any contingency operation.” Id. Finally, the PPG
required that service members deployed overseas receive their Post-Deployment Health
Assessment at the deployment platform. PPG ¶ 7-11(a).
Discussion
Plaintiff claims that he was wrongfully discharged from active duty resulting in a denial
of military pay. Specifically, Mr. Stuart alleges that he was injured while on active duty and as a
result, was suffering from traumatic brain injury, malfunction of his acoustic nerve, and PTSD at
the time of his discharge. Plaintiff further alleges that despite his injuries, “a mandatory Medical
Evaluation Board (MEB) was never convened for further evaluation of his condition and
[Plaintiff] was never referred into the physical disability evaluation system as prescribed by
Army Regulation 40-400, § 7-1, and 40-501, ¶ 3-33 . . . .” Compl. ¶ 16. Plaintiff argues that if
the Army had evaluated him as required when he returned from Iraq, he would have been
referred to the Medical Examination Board and been retained in service until a disability
determination was made. Plaintiff seeks pay and allowances, out of pocket expenses for medical
care, and restoration of active duty status until his disability case is decided by the Army.
Standard Of Review
When the Court resolves a motion for judgment on the administrative record, “the court
must determine whether, given all the disputed and undisputed facts, a party has met its burden
of proof based on the evidence in the record.” Stine v. United States, 92 Fed. Cl. 776, 791
(2010) (internal quotations omitted). “The Court of Federal Claims . . . is required to make
factual findings under RCFC [52.1] from the record evidence as if it were conducting a trial on
the record.” Bannum, Inc. v. United States, 404 F.3d 1346, 1357 (Fed. Cir. 2005). Judicial
review is limited to the administrative record already in existence. Boyer v. United States, 81
Fed. Cl. 188, 191 (2008).
“A decision by a branch of the military to discharge an officer comes before [the Court]
with a limited standard of review. The former service member must establish that the military’s
decision to separate him or her was arbitrary, capricious, unsupported by substantial evidence, or
contrary to law.” Sobczak v. United States, 93 Fed. Cl. 625, 632 (2010), aff’d, 415 F. App’x 247
(Fed. Cir. 2011) (citing Martinez v. United States, 333 F.3d 1295, 1314 (Fed. Cir. 2003)). The
Court is not to substitute its judgment for that of the military officials who made the discharge
decision because determining who is fit or unfit to serve in the armed services is not the province
of the judiciary. See Heisig v. United States, 719 F.2d 1153, 1156 (Fed. Cir. 1983).
Furthermore, “military administrators are presumed to act lawfully and in good faith . . . and the
military is entitled to substantial deference in the governance of its affairs.” Dodson v. United
States, 988 F.2d 1199, 1204 (Fed. Cir. 1993). When “reasonable minds could reach different
9
conclusions from the same evidence, the Court will not substitute its judgment.” See Hwang v.
United States, 94 Fed. Cl. 259, 269 (2010) (citations omitted).
The military is a “specialized community governed by a separate discipline from that of
the civilian.” Murphy v. United States, 993 F.2d 871, 872 (Fed. Cir. 1993) (quoting Orloff v.
Willoughby, 345 U.S. 83, 93–94 (1953)). As a result, courts do not interfere with legitimate
military matters. Id. (citations omitted). Concerns regarding the separations of powers limit the
judicial branch’s ability to oversee military matters. Id. at 872–73. To be mindful of these
concerns, courts have held that judicial review of military decisions is limited to situations where
the Secretary’s discretion is constrained and there are tests and standards to measure the service
branch’s conduct. See Adkins v. United States, 68 F.3d 1317, 1323 (Fed. Cir. 1995); Murphy,
993 F.2d at 873.
Courts may review military decisions when a plaintiff argues that the military did not
comply with a governing statute or regulation. See Roth v. United States, 378 F.3d 1371, 1385
(Fed. Cir. 2004); see also Wells v. United States, 46 Fed. Cl. 178, 183 (2000) (remanding to
Army Personnel Command when the Army failed to follow mandatory procedures during a line
of duty investigation); French v. United States, 42 Fed. Cl. 49, 55 (1998) (stating the court would
not review the evidence and findings of the corrections board to evaluate the board’s decision but
would determine if the board failed to comply with its own directives); Ferrell v. United States,
23 Cl. Ct. 562 (1991) (adjudicating whether the Army followed the required procedures for
discharge). Similarly, courts will consider whether the military decision was adequately
supported or justified. See Rominger v. United States, 72 Fed. Cl. 268, 273 (2006) (remanding a
case when the corrections board did not explain why the Army would not reconsider the
disability standard it used).
The Army Did Not Follow Its Regulations Requiring Documentation of Medical Treatment
When Plaintiff Was Injured While on Active Duty
Contrary to the Army’s PPG, the Army failed to document treatment Sgt. Stuart sought or
received after the IED incident. “Where the rights of individuals are affected, it is incumbent
upon agencies to follow their own procedures. This is so even where the internal procedures are
possibly more rigorous than otherwise would be required.” Morton v. Ruiz, 415 U.S. 199, 235
(1974); see, e.g., Service v. Dulles, 354 U.S. 363, 388 (1957); Wagner v. United States, 365
F.3d. 1358, 1361 (Fed. Cir. 2004); Vogue v. United States, 844 F.2d 776, 779 (Fed. Cir. 1988).
The record contains DA Form 2823, dated June 25, 2005, a sworn statement from Sgt. Dennis
Adams, Sgt. Stuart’s superior, documenting the IED incident on May 20, 2005. AR 77-78. The
only reference to Sgt. Stuart’s medical condition and treatment occurs in the last sentence of the
statement, where Sgt. Adams relates that Sgt. Stuart sought medical treatment at the Battalion
Aid Station the next morning “complaining of headache, very loud ringing in the ears, and
hearing loss.” AR 77. There is no document in the record reflecting such medical treatment. As
Defendant admits:
On May 20, 2005, an improvised explosive device detonated under Mr. Stuart’s
convoy. AR 77-78. While other members of the convoy set up security around
the area of the explosion, Mr. Stuart helped to stabilize and evacuate an injured
soldier. AR 77. The following morning, Mr. Stuart and two others involved in
the attack complained of headache, ringing in the ears, and hearing loss to the unit
10
aid station. Id. Mr. Stuart’s official military record lacks certain documentation
regarding this incident. Specifically, no Line of Duty report was completed and
no documentation establishes whether combat action badges or purple hearts were
awarded.
Def.’s Mot. 2. The record also contains DA Form 2173 (Statement of Medical Examination and
Duty Status) dated January 1, 2006, several months after the May 5, 2005 IED incident, but this
form does not appear to address the IED incident. AR 76. This Statement of Medical
Examination and Duty Status, indicating that Sgt. Stuart was injured in the line of duty, was
filled out by Capt. Troy Moore, but the only medical injuries described are generalized potential
injuries listed in Block 30 -- knee, shoulder, and back pain, or other similar problems related to
continuously wearing body armor and being exposed to dire combat conditions including fumes,
pathogens and infectious diseases. AR 76. The form does not reference the IED incident or any
injuries related to it. Block 30 indicates that Sgt. Stuart was exposed to human waste, indigenous
plants and animals, composite material fires, petrochemical waste and fumes, gases, and dusts of
unknown origins, continuous loud noise exposure, blood- and air-borne pathogens, infectious
diseases, extreme sun and ambient temperatures. AR 76. Defendant characterizes Block 30 as
“boilerplate language describing deployment conditions.” Def.’s Mot. for J. on the AR 3; Def.’s
Reply 3. The Army’s failure to document Sgt. Stuart’s medical treatment following the IED
incident violated PPG ¶ 7-2(i), which requires documentation of “all episodes of healthcare” in
the individual’s permanent or deployment health record while participating in contingency
operations. PPG ¶ 7-2(i).
The Army Violated Its Procedures in Releasing Sgt. Stuart from Active Duty
The Army failed to follow its procedures by not providing Plaintiff a timely Post-
Deployment Health Reassessment, as required by MILPER Message 05-273 and Chapter 7 of the
PPG. Specifically, MILPER Message 05-273 provides that every soldier returning from a
combat zone must be evaluated by a medical provider in a Post-Deployment Health
Reassessment. The PPG amplifies this requirement, stating that the health assessment must be
completed no more than 30 days before, but ideally within five days before, departure from
theater. PPG ¶ 7-8(b). The PPG requires the Army to ensure that service members who are
redeployed from overseas receive the health assessment at the deployment platform. PPG 7-11.
A soldier’s deployment health record and Post-Deployment Health Assessment are to be
integrated into the soldier’s permanent health record. The PPG also requires that each soldier
receive a medical benefits and entitlements briefing, and be informed of his right to request a
physical examination. PPG 7-12. Sgt. Stuart was redeployed from Iraq in December of 2005,
and the Army failed to conduct a Post-Deployment Health Assessment, failed to brief Sgt. Stuart
about his medical benefits and entitlements, and failed to integrate any such health assessment
into his permanent health record. Sgt. Stuart was released from active duty on January 21, 2006,
and returned to the Reserves. Plaintiff did not receive any treatment until July 22, 2006, some
six months after he had been discharged from active duty.
Defendant admits that it did not conduct a Post-Deployment Health Reassessment within
the required time period or inform Sgt. Stuart of his right to request a physical examination but
contends that these failures should not be detrimental to its case. Defendant argues:
11
The Army did not conduct a [Post-Deployment Health Assessment] within five
days of redeployment nor did it appear that it briefed Mr. Stuart regarding his
right to request a [Release from Active Duty] physical. However, the Army did
conduct deployment related medical assessments of Mr. Stuart. In light of these
evaluations and the substantial record evidence supporting that Mr. Stuart
successfully performed his duties during his active duty service, the Army’s
oversight does not necessitate a finding that Mr. Stuart should have been referred
to a medical evaluation board prior to his release from active duty service.
Def.’s Reply 2 (citing AR 71-76, 81-82); see also Def.’s Supp. Br. 6.
Defendant identifies two such “deployment related medical assessments” that it did
conduct -- the January 1, 2006 examination at Camp Shelby and the December 4, 2006 Post-
Deployment Health Assessment. Defendant’s assertion that the Army “conduct[ed] deployment
related medical assessments” is not supported by the record. Defendant ignores the fact that the
January 1, 2006 examination resulted in a DA Form 2173 (Statement of Medical Examination
and Duty Status), which contains no discussion of any injuries or symptoms specific to Plaintiff.
AR 76. Rather, it contains language describing the conditions that service members in Iraq were
generally exposed to -- language that Defendant characterized as “boilerplate,” and made no
mention of the IED incident. The second alleged “deployment related medical assessment”
cannot be accurately characterized as “deployment related” as it was not performed until
December 2006, almost a year after Sgt. Stuart returned from Iraq, long after the five to 30-day
required timeframe for such an assessment. Importantly, this December 2006 medical
assessment identified Plaintiff’s major health concerns, but did nothing to address them. Sgt.
Stuart voiced “persistent major concerns” about the health effects of the conditions he
experienced in Iraq and requested a follow-up visit with a health care provider. The provider
conducting the assessment, Ms. Gevinski, wrote that Sgt. Stuart exhibited symptoms of
depression and PTSD that were a “major concern,” but did not make any referrals. No DA Form
2173 was generated, and the first indication that Plaintiff received a mental health evaluation
came almost seven months later when a VA psychiatrist diagnosed him with PTSD. AR 14-15,
74.
Contrary to Defendant’s assertions, the Army’s violations here had significant
ramifications for Sgt. Stuart. Plaintiff argues that a post-deployment physical would have
revealed his injuries, including PTSD, and he would have been referred to a Medical Evaluation
Board and Physical Evaluation Board and found to be disabled before he was discharged. While
this Court cannot make any findings as to what Plaintiff’s injuries may have been some seven
years ago, it is clear that the lack of medical examination and records prevented the Army and
Plaintiff from learning what Plaintiff’s medical condition was at the time of his discharge.
Because the Army did not follow its procedures, Mr. Stuart may have been discharged on the
wrong ground -- completion of service instead of disability -- and at the wrong time -- before his
medical condition was known.
Army Regulations provide that absent circumstances not present here, discharge through
medical channels takes precedence over administrative discharge, even if the service member has
completed his term of service. Army Reg. 635-200 ¶¶ 1-33(a) and 4-2(c). This means that the
Army is required to resolve questions concerning a soldier’s medical condition before addressing
other reasons for discharge.
12
When a service member does not meet the Army’s retention standards due to a medical
impairment, referral to a Medical Evaluation Board is mandatory. Army Reg. 40-400 ¶ 7-1.
Psychological problems, such as anxiety and dissociative disorders, which Plaintiff exhibited
during the Post-Deployment Health Reassessment he received months later from the VA, would
have been grounds for referral to a Medical Evaluation Board. AR 69; Army Reg. 40-501 ¶ 3-
33. Further, after the IED incident, Sgt. Stuart suffered headaches, ringing ears, and hearing loss,
which Plaintiff characterizes as “hallmarks of traumatic brain injury.” Pl.’s Opp’n to Def.’s Mot.
and Cross Mot. for J. on the AR 4, 5 (citing AR 77-78). These impairments were later
documented, and might have been cause for referral to a Medical Evaluation Board had they
been diagnosed before Sgt. Stuart was discharged. Army Reg. 40-501 ¶¶ 3-9(b), 3-30(j).
However, the Army discharged Sgt. Stuart from active duty without processing him through
medical channels. If Sgt. Stuart had been referred to a Medical Evaluation Board, he would have
continued to receive active duty pay while the Army determined if he should be medically
discharged. Finally, the Army’s failure to refer Plaintiff to a Medical Evaluation Board deprives
Plaintiff of any contemporaneous documentation of his condition at the time of discharge.
Defendant maintains that Plaintiff’s claim should be denied because Plaintiff cannot
prove that he was unfit for active duty at the time of discharge. This argument ignores the fact
that it is Defendant, not Plaintiff, that is the cause of the dearth of evidence. To deny Plaintiff’s
claim for lack of proof that he was unfit at the time of discharge would reward Defendant for
failing to perform and document required medical evaluations and would unfairly impose an
impossible evidentiary burden on Plaintiff. Defendant admittedly failed to create the only
documentation that could have addressed Plaintiff’s fitness for duty and met that evidentiary
burden.
Defendant, relying on personnel performance records and ignoring its failure to document
Plaintiff’s medical condition following the IED incident, asserts that because Sgt. Stuart was able
to perform his duties effectively, he did not meet the criteria for referral to a Medical
Examination Board at the time that he was discharged from active duty. Def.’s Reply 5-8.
However, these personnel performance evaluations do not constitute sufficient evidence of
Plaintiff’s medical condition here. In short, these performance reviews cannot pass as a
substitute for the medical evaluations Defendant failed to do. The Army prevented Plaintiff from
proving whether he was fit for active duty at the time of his discharge by failing to provide the
required medical evaluations and documentation both at the time Plaintiff’s vehicle was hit by
the IED, and again at the time of his redeployment.
The Court will not speculate that Plaintiff met retention standards when he was
discharged merely because the Army’s failure to follow its procedures resulted in a lack of
evidence to the contrary. See Ferrell, 23 Cl. Ct. at 570 (rejecting the Air Force’s argument that a
former serviceman should be presumed fit at time of discharge when the Air Force violated its
regulations by not placing the service member on a medical hold and not convening a Medical
Examination Board). The Ferrell Court rejected the Government’s argument that the absence of
a disability in the plaintiff’s medical records showed that he was not disabled when discharged,
stating:
Based on an anemic record, the Air Force retreats into a presumption of fitness,
and a presumption of correctness of the [Physical Evaluation Board’s]
unexplained finding. Yet it is the agency’s own procedural errors which put
13
plaintiff into a position of having to overcome this presumption. That the failure
to convene an MEB after a period of convalescence was prejudicial is in fact
conceded by the first AFBCMR report: “Since there was no [Medical Evaluation
Board], no official determination could be made concerning his qualification for
duty or whether or not referral to a [Physical Evaluation Board] was appropriate.”
Id. Similarly, the “anemic record” in this case does not support a presumption that Plaintiff was
fit for duty at the time of his discharge or provide a sufficient factual predicate for this Court to
accept Defendant’s determination of Plaintiff’s fitness for duty.
Remand to the Army Board for the Correction of Military Records
The Tucker Act gives the Court of Federal Claims the authority “to remand appropriate
matters to any administrative or executive body or official with such direction as it may deem
proper and just.” 28 U.S.C. § 1491(a)(2) (2000); see RCFC 52.2; accord Harris v. United States,
8 Cl. Ct. 299, 303 (1985). Under, Rule 52.2, “[a]n order of remand shall (A) delineate the area
of further consideration or action deemed warranted on the remand, (B) fix the duration of the
remand period, not to exceed 6 months, and (C) specify the extent to which court proceedings
shall be stayed during the remand period.” RCFC 52.2(a)(2). “Any remand must be consistent
with the statutory scheme under which the agency has taken action.” Richey v. United States,
322 F.3d 1317, 1323 (Fed. Cir. 2003). The Court is not given “unlimited authority to require
subordinate bodies to conduct investigations and find facts.” Id.
As the Supreme Court has explained:
If the record before the agency does not support the agency action, if the agency
has not considered all relevant factors, or if the reviewing court simply cannot
evaluate the challenged agency action on the basis of the record before it, the
proper course, except in rare circumstances, is to remand to the agency for
additional investigation or explanation. The reviewing court is not generally
empowered to conduct a de novo inquiry into the matter being reviewed and to
reach its own conclusions based on such an inquiry.
Florida Power & Light Co. v. Lorion, 470 U.S. 729, 744 (1985).
Remand is proper in this case because the record before the agency is inadequate to
support the Army’s conclusion that Sgt. Stuart was properly discharged for completion of
service. The Army failed to conduct a Post-Deployment Health Reassessment, which would
have indicated whether Sgt. Stuart should have been referred to a Medical Evaluation Board
before he was discharged, and it is unclear what Sgt. Stuart’s condition was at that time. This
error is compounded by the Army’s failure to document Sgt. Stuart’s medical condition during
his deployment.
It is the Army’s province not the Court’s to determine whether Plaintiff was fit for duty
when he was discharged from active duty. The Court does not sit as a “super correction board”
and it is not empowered to engage in a de novo review of Plaintiff’s fitness for duty.
Determinations concerning who is fit or unfit to serve in the military are matters for the military.
See Orloff v. Willoughby, 345 U.S. 83, 93-94 (1953) (“[J]udges are not given the task of running
the Army . . . Orderly government requires that the judiciary be as scrupulous not to interfere
14
with legitimate Army matters as the Army must be scrupulous not to intervene in judicial
matters.”). The Board is authorized by statute to correct any military record upon a finding of
error or injustice warranting relief. 10 U.S.C. § 1552 (2006). The Board has broad authority to
correct a service member’s military record and attempt to place the service member in the
position that he would have been in but for the injustice or error. See Porter v. United States,
163 F.3d 1304, 1311 (Fed. Cir. 1998); Dolan v. United States, 91 Fed. Cl. 111, 122 (2010).
The Court recognizes that seven years have passed since the Army failed to evaluate
Plaintiff’s fitness for duty at the time of discharge, and it may be difficult to reconstruct
Plaintiff’s medical condition post hoc. However, this difficulty is not insurmountable and does
not prevent the Court from directing the Army Board for Correction of Military Records to
assess Plaintiff’s medical condition at the time of his discharge. Indeed, the military has been
required to reconsider and make disability-at-time-of-separation determinations years after a
service member’s discharge. See Walden v. United States, 22 Cl. Ct. 532 (1991) (remanding to
the Army Board for the Correction of Military Records with the instruction to decide post hoc if
plaintiff was suffering from PTSD when he was discharged, and the Army’s failure to properly
evaluate plaintiff’s “physical condition upon separation from the service was in error and
unjust.”); see also Wells, 46 Fed. Cl. at 186 (stating “if, on remand, key medical documents and
testimony are now demonstrably unavailable, it will be incumbent on the Army to determine . . .
whether the [line of duty inquiry] was fatally flawed by the [investigating officer’s] failure to
pursue this information on a timely basis.”). Similarly, in Walters v. United States, 175 Ct. Cl.
215, 225 (1966), the Court of Claims found that a plaintiff’s claim for improper discharge could
be reviewed years after the fact, stating:
The petitioner may prevail if he can show that if the complete facts concerning his
condition had been known at the time he would have been entitled to retirement
by reason of physical disqualification under the pertinent laws and regulations . . .
. To this end, reference must of necessity be made to his subsequent medical
history insofar as it sheds light on the nature of his physical condition while in
service. Evidence of progressive deterioration and later discovered symptoms and
disabilities may be decisive if it can establish that plaintiff’s incapacity while in
service was substantially more serious than suspected and that previous diagnoses
were inadequate or incorrect.
Consistent with this precedent, this Court directs the Army Board for the Correction of Military
Records to determine Plaintiff’s fitness for duty at the time of discharge.
Conclusion
Plaintiff’s Cross-Motion for Judgment on the Administrative Record is GRANTED IN
PART. Defendant’s Motion for Judgment on the Administrative Record is DENIED.8
The Army did not comply with its procedures when it released Sgt. Stuart from active
duty and failed to conduct a Post-Deployment Health Reassessment, to document medical
8
In a joint status report, Defendant stipulated that it would agree to voluntarily remand
this matter to the Army Board for Correction of Military Records, but Plaintiff was not amenable
to such a remand. Joint Status Report 1, Jul. 24, 2012.
15
treatment provided during his tour of duty, to inform Plaintiff of his right to request a physical
examination, and to determine if Plaintiff needed to be referred to a Medical Evaluation Board.
The Court REMANDS this matter to the Army Board for Correction of Military Records
for further administrative action pursuant to RCFC 52.2 and orders:
1. Plaintiff shall submit all documentation that he believes supports his position that
he was entitled to a Medical Evaluation Board prior to his separation from active
duty to Defendant for transmission to the Army Board for Correction of Military
Records within 30 days of the date of this opinion.
2. The Army Board for Correction of Military Records is directed to reassess
Plaintiff’s separation from active duty and determine whether Plaintiff should
have been discharged due to medical disability in accordance with the Army’s
regulations. Such regulations include but are not limited to 40-400, Patient
Administration, and 635-40, Physical Evaluation for Retention, Retirement, or
Separation. Army Regulation 635-40 has been amended since Sgt. Stuart’s
release from active duty. The Board shall apply the version of Army Regulation
635-40 in effect when Plaintiff was discharged from active duty in January 2006.
3. The Board shall determine whether referral to a Medical Evaluation Board and
potentially a Physical Evaluation Board is appropriate at this time, and document
the rationale for its determination.
4. In the event that the Army Board for Correction of Military Records and/or a
Medical Evaluation Board and/or a Physical Evaluation Board determine(s) that
Plaintiff was unfit for duty at the time of his discharge, the Board shall identify
the date on which Plaintiff would have been discharged from active duty due to
disability. This will require the Army Board for the correction of Military
Records to determine how many days it would have taken to perform the requisite
Post-Deployment Health Reassessment, any follow-up evaluations by a Medical
Evaluation Board and/or Physical Evaluation Board, and any other requisite
actions before discharging Plaintiff.
5. Defendant shall provide the Court with the Army Board for Correction of Military
Records’ decision within 180 days of this opinion.
6. The case is STAYED for the duration of remand proceedings. The Court defers
Plaintiff’s other requests for relief until after the Army Board for Correction of
Military Records renders a decision.
s/Mary Ellen Coster Williams
MARY ELLEN COSTER WILLIAMS
Judge
16
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679 S.E.2d 111 (2009)
WASHINGTON
v.
The STATE.
No. A09A0477.
Court of Appeals of Georgia.
May 22, 2009.
*112 William J. Mason, Atlanta, for Washington.
John Gray Conger, Dist. Atty., LaRae D. Moore, Asst. Dist. Atty., for appellee.
ADAMS, Judge.
Tony Washington was convicted by a jury of simple assault, false imprisonment and battery with substantial visible bodily harmfamily violence. He appeals following the denial of his motion for new trial, arguing in his sole enumeration of error on appeal that his trial counsel was ineffective for failing to file a demurrer to Count 3 of the indictment. We find no merit to this enumeration and, accordingly, affirm.
Count 3 of the indictment charged Washington with the offense of false imprisonment in that he "did unlawfully [and] in violation of the personal liberty of [the victim], confine said person without legal authority, contrary to the laws of [this] State. ..." The indictment further specified that the alleged crime was committed "in the State of Georgia and County of Muscogee."
As to this crime, the evidence, construed to support the verdict showed that Washington and the victim, who was the mother of his twin boys, began arguing when the victim came home one evening. The argument escalated and Washington began throwing shoes at the victim, who was trying to leave to go to her mother's house until things cooled off. Washington pushed the victim up against the wall and then threw her in a bedroom closet. He then grabbed her out of the closet and threw her onto the bedroom floor and began punching her in the face and head, striking and cutting her with a ring that he was wearing. The victim began bleeding, and Washington stopped hitting the victim. He then dragged her into the bathroom *113 and made her change her clothes; he also instructed the victim to sit there and not to move. The victim remained sitting on the bathroom floor for 30 to 45 minutes, during which time she requested to be taken to the emergency room because she was still bleeding. Washington put bandages on the victim's wounds and then took her by her arm and made her go back into the bedroom. There he used neckties to bind the victim's wrists and ankles; he also taped her mouth shut with duct tape. Washington carried the victim into the living room and put her on the sofa while he gathered things in the house. He then wrapped a comforter around her and carried her to the car, placing her in the back seat. Washington went back inside the house and the victim was able to escape and run to a neighbor's house. The victim further testified that she got six stitches in the left side of her head because of the injuries Washington inflicted.
On appeal, Washington argues that his trial counsel should have filed a demurrer to the indictment because it did not specify whether the victim was falsely imprisoned in the closet, the bedroom, the bathroom, the living room or the car. But Washington does not show how he was harmed by this failure. "[T]o succeed on his ineffective assistance claim, [Washington] was required to show that his trial counsel's failure to specially demur materially impacted his ability to present a defense, thereby creating a reasonable probability that counsel's deficiency changed the outcome of the case." Driggers v. State, 295 Ga.App. 711, 717(4)(a), 673 S.E.2d 95 (2009). Washington has thus failed to show that the trial court erred by denying his motion for new trial on this basis. See also Stillwell v. State, 294 Ga. App. 805, 809(2)(f), 670 S.E.2d 452 (2008). Further, as we have previously noted, because a defendant can be re-indicted after the grant of a special demurrer, a failure to file such a demurrer generally will not support a finding of ineffective assistance of counsel. Bowden v. State, 279 Ga.App. 173, 177(2), 630 S.E.2d 792 (2006); see also Cotton v. State, 279 Ga. 358, 361(5), 613 S.E.2d 628 (2005).
Moreover, the indictment as crafted contained the essential elements of the offense of false imprisonment and properly notified Washington of the county where the offense was allegedly committed. Thus, this present case is distinguishable from cases in which the indictment has been found to be fatally defective because an essential element of the crime alleged had been omitted; in that situation trial counsel has been deemed ineffective because his failure to file a demurrer resulted in the defendant improperly being tried and convicted on a void count. Polk v. State, 275 Ga.App. 467, 469(1), 620 S.E.2d 857 (2005).
Judgment affirmed.
BLACKBURN, P.J., and DOYLE, J., concur.
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Order entered April 21, 2016
In The
Court of Appeals
Fifth District of Texas at Dallas
No. 05-16-00462-CV
IN RE SUSAN HAWK, Relator
Original Proceeding from the County Criminal Court No. 4
Dallas County, Texas
Trial Court Cause No. M15-52765-E
ORDER
Before Chief Justice Wright, Justice Lang, and Justice Brown
Before the Court is the State’s petition for writ of mandamus, which includes a request
that the Court temporarily stay the trial court’s April 7, 2014 Order on Defendant’s Motion for
Inspection of Evidence. We ORDER the April 7, 2014 Order on Defendant’s Motion for
Inspection of Evidence STAYED pending further order of the Court. The State’s petition for
writ of mandamus remains pending. The Court requests that real party in interest and respondent
file their responses to the petition, if any, on or before April 29, 2016.
/s/ CAROLYN WRIGHT
CHIEF JUSTICE
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205 Or. 209 (1955)
286 P.2d 651
CLEVENGER
v.
SCHALLHORN
Supreme Court of Oregon.
Argued May 4, 1955.
Affirmed August 3, 1955.
*210 Geo. H. Brewster, of Redmond, argued the cause for appellant. With him on the briefs was J.J. Thalhofer, of Redmond.
Wm. G. Dick, of The Dalles, argued the cause for respondent. On the brief were Dick & Dick.
Before WARNER, Chief Justice, and ROSSMAN, LUSK, and PERRY, Justices.
AFFIRMED.
PER CURIAM.
This is an action for damages for personal injuries received in an automobile accident. In the trial court the plaintiff recovered, and the defendant has appealed.
*211 The accident occurred on August 28, 1952, on U.S. Highway 97, commonly referred to as The Dalles-California highway, at a point just south of Redmond, Oregon. The plaintiff was riding in an automobile driven by her husband in a southerly direction in highway 97. Where the accident occurred, there is a roadway leading from an auction sales ground in an easterly direction to highway 97, and on this roadway at a point some 15 to 17 feet from the edge of the paved portion of the highway there was erected a "stop" sign. The defendant, after leaving the sales ground, had proceeded along the roadway leading from the sales ground, and without stopping at the "stop" sign, had driven either upon the traveled portion of the highway and stopped, as contended by plaintiff's witnesses, or had stopped a few feet west thereof, as contended by defendant and his witnesses. The automobile in which plaintiff was riding was following behind another automobile; this automobile swerved to the left to avoid striking the defendant's automobile, and as the Clevenger automobile approached the stopped vehicle of the defendant another automobile approached from the opposite direction creating a situation which Mr. Clevenger stated left him only three choices, either (1) to swerve over into the left lane and collide with the oncoming car, (2) to drive directly into the car of the defendant, or (3) to attempt to make a right turn into the private road leading to the auction yard. He chose this latter course, and in so doing "sideswiped" the automobile driven by the defendant.
The defendant complains of the failure of the court to take from the jury the specifications of negligence "in failing to keep a proper outlook, or any outlook for south bound vehicles, and in particular the vehicle in *212 which plaintiff was riding"; and further complains of the trial court's failure to take from the consideration of the jury the question of whether or not the defendant failed to bring his automobile to a stop before entering the highway.
1. The answer to both of these contentions is found in the question as to whether or not the defendant stopped his automobile upon the traveled portion of the highway. It is evident from the verdict of the jury on behalf of the plaintiff that they believed the defendant had stopped his automobile upon the traveled portion of the highway.
The trial court instructed the jury that "the driver of a vehicle entering a public highway from a private road or drive shall stop and yield the right of way to all vehicles approaching on such highway, * * *".
2, 3. In entering a highway from a private roadway no exact place is designated for stopping. However, the party approaching the highway must stop prior to entering into and upon the traveled portion of the roadway. Biddle v. Mazzocco, 204 Or 547, 284 P2d 364. One of the duties to be observed in stopping is to maintain a lookout. Cameron v. Goree, 182 Or 581, 189 P2d 596.
Plaintiff and her husband both testified they observed the defendant's automobile upon the traveled portion of the highway; that an automobile just preceding their automobile was compelled to swerve to avoid striking defendant's car; and, although they attempted to avoid the automobile of the defendant, they were unable to do so. This would lead to a conclusion that the defendant had not maintained a lookout for all vehicles immediately approaching upon the highway before he himself drove thereon.
The defendant also states the court erred in refusing *213 to instruct the jury that "the driver of any vehicle who has stopped as required by law at the entrance to a through highway shall yield to other vehicles within the intersection or approaching so closely on the through highway as to constitute immediate hazard. Having so yielded, such driver may proceed and other vehicles approaching the intersection on the through highway shall yield to the vehicle so proceeding into or across the through highway. Sub-division 2, Sec. 483.202, ORS".
4. The requested instruction has no applicability to the facts in this case. The defendant testified that he drove to the spot where the collision occurred. There is not a scintilla of evidence that, after having stopped for others upon the highway, he was attempting to claim a right of way over that of the automobile in which plaintiff was riding.
The defendant assigns as error the refusal of the trial court to give the following instruction:
"In this case, the testimony of plaintiff has been taken by deposition, pursuant to an agreement of counsel. The witness was under oath at the time the deposition was taken and the testimony in that deposition does not constitute an oral admission, but is to be considered by you with the same force and effect as testimony which plaintiff may give while a witness in this case. In other words, as to any part of the testimony of plaintiff obtained in the deposition, you cannot consider such testimony as an oral admission."
The trial court, while not giving the requested instruction, gave the following instruction:
"Insofar as use is made in examining the witness of a deposition previously given by that witness, the deposition is not before you except upon specific questions and answers which were read. *214 The depositions are not before you except the questions read and answers read from the depositions, and those may be considered by you in determining whether conflicting statements were made at other times. * * *."
The court also gave the customary cautionary instruction on oral statements or admissions to the effect that they should be viewed with caution.
It is the contention of the defendant that the giving of the cautionary instruction "had the effect of telling the jury to consider the testimony of respondent [plaintiff] in her deposition with caution because she might not have clearly expressed what she intended to state or admit, or that her statements, which were actually given under oath and reduced to writing, were not correctly understood or remembered"; and that the court's instruction as given would not correct the impression a jury might have that the depositions were to be considered in the same light as oral admissions made by a party out of court.
5. While the court could have more clearly drawn the distinction between evidence given under oath and oral admissions made by a party out of court, we do not believe the jury could have been so misled, or that the rights of the defendant were materially prejudiced in this respect.
The defendant also assigns as error the trial court's refusal to permit the defendant to fully cross-examine the witness Scott Clevenger, husband of the plaintiff, as to his interests in or motive for testifying in this cause.
For this purpose the defendant desired to show that this witness had commenced an action on behalf of himself for personal injuries in the sum of $7,500 general damages and $150 special damages, and for damages *215 in the sum of more than $700 to his automobile; and that, also, as guardian for his minor son he had commenced an action for $5,139 damages against the defendant; all arising out of this same accident. The trial court sustained plaintiff's objections to the introduction of this evidence and defendant's offer.
6-8. The trial court was in error in its ruling for "It is always permissible to show the interest or bias of an adverse witness". Smith v. Pacific Truck Express, 164 Or 318, 329, 100 P2d 474. However, under the circumstances of this case, we do not believe the error is such as should cause a reversal of this case. The jury was well informed that this witness was very materially interested in the outcome of the case as the husband of the plaintiff, and, further, that he was interested as a guardian in the action brought for and on behalf of his son. The witness was asked:
"Q And you are vitally interested in the outcome of it [the case], aren't you?
"A Yes, sir.
"Q As Guardian of Thomas you are asking for $5139 for injuries to your son, aren't you?
"A Yes, sir."
While an objection was sustained to the last question asked and answer given, no motion was made to strike the answer or to have the jury disregard this testimony. Also, the witness was asked if he was injured in this same accident, and he answered that he was.
The defendant also assigns as error an instruction given by the trial court, but, as no exception was taken to the instruction as given, this court will not consider the assignment of error. ORS 17.510.
The judgment is affirmed.
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NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS AUG 11 2020
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
RICARDO MACIEL-PIMENTEL; No. 19-71037
ESTELA TORRES MACIEL,
Agency Nos. A099-854-281
Petitioners, A200-978-552
v.
MEMORANDUM*
WILLIAM P. BARR, Attorney General,
Respondent.
On Petition for Review of an Order of the
Board of Immigration Appeals
Submitted August 5, 2020**
Before: SCHROEDER, HAWKINS, and LEE, Circuit Judges.
Ricardo Maciel-Pimentel and Estela Torres Maciel, natives and citizens of
Mexico, petition for review of the Board of Immigration Appeals’ (“BIA”) order
dismissing their appeal from an immigration judge’s (“IJ”) decision denying their
applications for asylum, withholding of removal, and relief under the Convention
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
Against Torture (“CAT”). We have jurisdiction under 8 U.S.C. § 1252. We
review for substantial evidence the agency’s factual findings. Garcia-Milian v.
Holder, 755 F.3d 1026, 1031 (9th Cir. 2014). We review de novo questions of law
and claims of due process violations in immigration proceedings. Gonzalez-
Caraveo v. Sessions, 882 F.3d 885, 889 (9th Cir. 2018). We deny the petition for
review.
The record does not compel the conclusion that petitioners established
changed circumstances to excuse their untimely asylum applications. See 8 C.F.R.
§ 1208.4(a)(4). In light of the agency’s time bar determination, the agency did not
err in not reaching the merits of petitioners’ asylum and humanitarian asylum
claims. See Simeonov v. Ashcroft, 371 F.3d 532, 538 (9th Cir. 2004) (courts and
agencies are not required to decide issues unnecessary to the results they reach).
Substantial evidence supports the agency’s finding that petitioners failed to
establish that the harm they experienced or fear was or would be on account of a
protected ground. See Zetino v. Holder, 622 F.3d 1007, 1016 (9th Cir. 2010)
(applicant’s “desire to be free from harassment by criminals motivated by theft or
random violence by gang members bears no nexus to a protected ground”); see
also Ayala v. Holder, 640 F.3d 1095, 1097 (9th Cir. 2011) (even if membership in
a particular social group is established, an applicant must still show that
“persecution was or will be on account of his membership in such group”).
2 19-71037
Substantial evidence also supports the agency’s denial of CAT relief because
petitioners failed to show it is more likely than not they would be tortured by or
with the consent or acquiescence of the government if returned to Mexico. See
Aden v. Holder, 589 F.3d 1040, 1047 (9th Cir. 2009).
The record does not support petitioners’ contentions that the agency failed to
consider evidence or otherwise erred in the analysis of their asylum, withholding of
removal, or CAT claims.
Any error in the agency’s denial of administrative closure does not require
remand in the circumstances here. See Gonzalez-Caraveo, 882 F.3d at 894 (“In
sum, despite the IJ and BIA’s legal error, remand is not required here because
Petitioners no longer have any remaining claims for relief or pending petitions that
might affect their immigration proceedings.”).
Petitioners’ motion for stay of removal (Docket Entry No. 1) is denied as
moot.
PETITION FOR REVIEW DENIED.
3 19-71037
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385 U.S. 10 (1966)
TREFFRY ET AL.
v.
TAYLOR, DIRECTOR OF LICENSES FOR THE STATE OF WASHINGTON, ET AL.
No. 291.
Supreme Court of United States.
Decided October 10, 1966.
APPEAL FROM THE SUPREME COURT OF WASHINGTON.
Francis J. Conklin for appellants.
PER CURIAM.
The appeal is dismissed for want of a substantial federal question.
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COURT OF APPEALS
SECOND DISTRICT OF TEXAS
FORT WORTH
NO. 2-07-238-CV
IN THE INTEREST OF D.R.D., A CHILD
------------
FROM THE 211TH DISTRICT COURT OF DENTON COUNTY
------------
MEMORANDUM OPINION 1
------------
Appellant Tamara F. appeals the termination of her parental rights to her
daughter, D.R.D. In a single point, Appellant argues that her trial counsel was
ineffective for failing to contest and defend her against any of the assertions
made the basis of the suit to terminate her parental rights. We will affirm.
Appellee Texas Department of Family and Protective Services (“TDFPS”)
filed its petition for termination in suit affecting the parent-child relationship in
October 2006 seeking to terminate Appellant’s parental rights to nine-and-a-
1
… See T EX. R. A PP. P. 47.4.
half-year-old D.R.D. TDFPS alleged that termination was in D.R.D.’s best
interest and that Appellant had committed one or more of the acts or omissions
set forth in family code section 161.001(1)(A), (B), (C), (D), (E), (I), (K), (L),
(M), (N), (O), (P), and (Q). See T EX. F AM. C ODE A NN. § 161.001(1)(A), (B), (C),
(D), (E), (I), (K), (L), (M), (N), (O), (P), (Q) (Vernon Supp. 2007).
At trial, Appellant testified that she is addicted to methamphetamines,
that she has been dealing and using drugs for the last four years, that she uses
methamphetamines almost every day, that she stays high for long periods of
time, that everybody she knows uses drugs, and that she does not work.
Appellant’s parental rights to her daughter I.J.F. were terminated in Oklahoma
in 2005, and her parental rights to her son D.M.L. were terminated in 2006.
Appellant’s other son, C.D., was one year old when he choked on a screw and
died at home. At the time of trial, Appellant was in jail for possession of
methamphetamines, her second or third pending felony charge in Denton
County.
The jury found by clear and convincing evidence that termination of
Appellant’s parental rights to D.R.D. was in D.R.D.’s best interest and that
Appellant had knowingly placed or knowingly allowed D.R.D. to remain in
conditions or surroundings which endangered D.R.D.’s physical or emotional
well-being; had engaged in conduct, or knowingly placed D.R.D. with persons
2
who engaged in conduct, which endangered D.R.D.’s physical or emotional
well-being; and had had her parent-child relationship terminated with respect to
another child based on a finding that her conduct was in violation of family
code section 161.001(1)(D) or (E) or a substantially equivalent provision of the
law of another state. This appeal followed.2
In her sole point, Appellant argues that her trial counsel was ineffective
because he “failed to contest any assertions of [TDFPS] or provide a legal
defense by engaging in a trial strategy which was impossible.” She states that
“[t]he record is clear that the ‘strategy’ in this case was to convince the jury
that [her] brother, [Billy T. (“Billy”)], should receive D.R.D. and care for her as
a legal guardian in Ohio.” Appellant contends, however, that her counsel’s
strategy in arguing that D.R.D. should be placed with Billy was legally
impossible and essentially sought an unattainable result because Billy did not
intervene in the suit and because the jury charge did not provide for custody to
Billy. TDFPS responds that Appellant’s trial counsel was not ineffective
2
… The trial court signed an interlocutory order terminating the parent
child relationship between D.R.D. and her father, Jeremy D., on June 18, 2007.
The order became final when the trial court signed the order terminating
Appellant’s parental rights.
3
because he contested the best interest prong of the termination-of-parental-
rights inquiry.3 We agree with TDFPS.
There is a right to effective assistance of counsel in termination cases.
In re M.S., 115 S.W.3d 534, 544 (Tex. 2003). W e review ineffective
assistance claims under the Strickland standard. Id. at 549. To establish
ineffective assistance of counsel, appellant must show by a preponderance of
the evidence that her counsel’s representation fell below the standard of
prevailing professional norms and that there is a reasonable probability that, but
for counsel’s deficiency, the result of the trial would have been different.
Strickland v. Washington, 466 U.S. 668, 687, 104 S. Ct. 2052, 2064 (1984);
Salinas v. State, 163 S.W.3d 734, 740 (Tex. Crim. App. 2005); Mallett v.
3
… TDFPS initially argues that Appellant failed to preserve for appellate
review her argument that her trial counsel was ineffective because she did not
specifically include this argument in a timely filed statement of points or in a
statement combined with a motion for new trial. See T EX. F AM. C ODE A NN.
§ 263.405(i) (Vernon Supp. 2007) (stating that an appellate court may not
consider any issue that was not specifically presented to the trial court in a
timely filed statement of the points on which the party intends to appeal or in
a statement combined with a motion for new trial). In a recent en banc
decision, this court held that family code section 263.405(i) is void as a
violation of the separation of powers provision of the Texas constitution. See
In re D.W., No. 02-06-00191-CV, 2008 WL 467328, at *12 (Tex. App.—Fort
Worth Feb. 19, 2008, no pet. h.) (en banc). We are bound to follow our own
precedent, so we will consider the merits of Appellant’s ineffective assistance
argument.
4
State, 65 S.W.3d 59, 62–63 (Tex. Crim. App. 2001); Thompson v. State, 9
S.W.3d 808, 812 (Tex. Crim. App. 1999).
In evaluating the effectiveness of counsel under the first prong, we look
to the totality of the representation and the particular circumstances of each
case. Thompson, 9 S.W.3d at 813. The issue is whether counsel’s assistance
was reasonable under all the circumstances and prevailing professional norms
at the time of the alleged error. See Strickland, 466 U.S. at 688–89, 104 S.
Ct. at 2065. Review of counsel’s representation is highly deferential, and the
reviewing court indulges a strong presumption that counsel’s conduct fell within
a wide range of reasonable representation. Salinas, 163 S.W.3d at 740;
Mallett, 65 S.W.3d at 63. A reviewing court will rarely be in a position on
direct appeal to fairly evaluate the merits of an ineffective assistance claim.
Thompson, 9 S.W.3d at 813–14. “In the majority of cases, the record on
direct appeal is undeveloped and cannot adequately reflect the motives behind
trial counsel’s actions.” Salinas, 163 S.W.3d at 740 (quoting Mallett, 65
S.W.3d at 63).
The second prong of Strickland requires a showing that counsel’s errors
were so serious that they deprived the defendant of a fair trial, i.e., a trial
whose result is reliable. Strickland, 466 U.S. at 687, 104 S. Ct. at 2064. In
other words, appellant must show there is a reasonable probability that, but for
5
counsel’s unprofessional errors, the result of the proceeding would have been
different. Id. at 694, 104 S. Ct. at 2068.
In many cases, we are unable to determine whether counsel’s actions
were grounded in sound trial strategy because the record is silent as to possible
trial strategies. In this case, however, the record unequivocally demonstrates
that counsel’s trial strategy was to convince the jury that it was not in D.R.D.’s
best interest to have her parent-child relationship with Appellant terminated.
Counsel’s strategy thus entailed challenging an essential element of the
termination proceeding.4
In his opening statement, counsel argued that Appellant was in jail, that
Appellant did not want to take D.R.D. home with her, and that it would be in
D.R.D.’s best interest if she remained part of Appellant’s family but lived in
Ohio with Appellant’s brother, Billy. Counsel argued, “We’re asking you not to
terminate solely on the fact that there are family that are here for” D.R.D.
Appellant testified that she did not believe it was in D.R.D.’s best interest to
have her parental rights terminated, that she did not want to relinquish her
4
… In proceedings to terminate the parent-child relationship brought under
section 161.001 of the family code, the petitioner must establish one ground
listed under subdivision (1) of the statute and must also prove that termination
is in the best interest of the child. T EX. F AM. C ODE A NN. § 161.001(1), (2); In
re J.L., 163 S.W.3d 79, 84 (Tex. 2005).
6
parental rights to D.R.D. because she wanted Billy to have custody of D.R.D.,
and that she would give custody of D.R.D. to Billy if the jury chose not to
terminate her parental rights because she wanted D.R.D. to stay in the family.
Counsel questioned the Director of Public Safety for Oak Point whether he
knew anything about Billy; the Director did not. Referencing Billy, counsel
questioned a licensed professional counselor whether it is important for a child
to have a “family connection with a decent family”; the counselor agreed that
it is important. Billy testified that he lives in Ohio, that he moved there to get
away from his family and the lifestyle that they were living, that he would like
to raise D.R.D. if the jury did not terminate Appellant’s parental rights to her,
and that he would be able to care for D.R.D. if Appellant gave him custody of
her. Additionally, in his closing argument, counsel stressed that Billy is the one
who really cares about D.R.D. and that “[t]he only way to guarantee that Billy
has a shot of being in [D.R.D.’s] life is not to terminate.”
Considering the overwhelming evidence of Appellant’s narcotics-infused
lifestyle and that her parental rights to two other children had previously been
terminated, counsel could have reasonably concluded that it would have been
disingenuous to contest the section 161.001(1) termination grounds alleged.
Moreover, counsel’s zealous performance was not rendered ineffective solely
because Billy did not intervene in the case; the jury was still required to find by
7
clear and convincing evidence that termination was in D.R.D.’s best interest.
See T EX. F AM. C ODE A NN. § 161.001(2).
Counsel engaged in a sound trial strategy throughout trial by contesting
TDFPS’s assertion that it would be in D.R.D.’s best interest to terminate
Appellant’s parental rights to D.R.D. Thus, Appellant has failed to rebut the
strong presumption that counsel’s conduct fell within a wide range of
reasonable representation. Consequently, Appellant has failed to meet her
burden under the first Strickland prong. See Salinas, 163 S.W.3d at 740;
Mallett, 65 S.W.3d at 63. We overrule Appellant’s sole point and affirm the
trial court’s judgment.
PER CURIAM
PANEL F: HOLMAN, J.; CAYCE, C.J.; and MCCOY, J.
CAYCE, C.J. concurs without opinion.
DELIVERED: April 3, 2008
8
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662 S.W.2d 288 (1983)
WESTERN WATERPROOFING COMPANY, INC., Plaintiff-Appellant,
v.
The LINDENWOOD COLLEGES, Defendant-Respondent.
No. 46559.
Missouri Court of Appeals, Eastern District, Division Three.
November 29, 1983.
Miller & Glynn, P.C., Kansas City, for plaintiff-appellant.
Mogab & Hughes, St. Louis, for defendant-respondent.
REINHARD, Judge.
This appeal arises out of an arbitration award of $92,500.00 entered in favor of Lindenwood and against Western in connection with Western's installation of a soccer field for Lindenwood. Lindenwood has filed a motion to dismiss the appeal.
On March 12, 1976, Western and Lindenwood entered into an agreement whereby Western agreed to install a Hy-Play soccer field for Lindenwood. During the course of the work a dispute arose between Western and Lindenwood concerning whether the sidelines area was part of the contract. Western completed the field, including the *289 side lines, and presented a bill for the additional work of $20,760.00 to Lindenwood, which it refused to pay. Subsequently, Lindenwood complained that the field installed by Western was defective. Western filed suit in St. Louis City Circuit Court for the additional compensation. Lindenwood counterclaimed alleging Western failed to perform the work in a workman-like manner or in the alternative that Western breached an implied warranty that the field was fit for its intended use.
Western filed a demand for arbitration pursuant to an arbitration provision in their contract. Thereafter, Western and Lindenwood filed a joint stipulation in court that their claims would be resolved through arbitration in accordance with the Federal Arbitration Act, Title 9 U.S.C. Section 1, et seq. and the Missouri Uniform Arbitration Act, § 435.350, et seq. A hearing was held and on May 19, 1982, the arbitrators rendered their decision in favor of Lindenwood in the amount of $92,500.00.
On August 17, 1982, Western filed a motion to vacate the award in circuit court. Subsequently, Lindenwood filed a motion to confirm the award and stated, "in the event the Court overrules Western Waterproofing's Motion to vacate said award then defendant requests the Court thereafter confirm said award." On October 22, 1982, the circuit court denied Western's motion to vacate. Subsequently, Western filed its notice of appeal from the motion to vacate. On January 6, the trial court granted Lindenwood's application for confirmation of the award. Lindenwood argues that an appeal may not be taken from the denial of a motion to vacate citing section 435.440, RSMo.Supp.1982.[1]
An order granting a motion to vacate is appealable, however, we agree that the statute does not authorize an appeal from the denial of a motion to vacate. An order confirming the award is appealable. § 435.440.1(3). Rule 81.05(b) states that when "a notice of appeal has been filed prematurely, such notice shall be considered as filed immediately after the time the judgment becomes final for the purpose of appeal." As the Supreme Court noted in State ex rel. State Highway Commission v. Tate, 576 S.W.2d 529 (Mo. banc 1979), it has not always been clear when final judgment in a particular case appears. That is particularly true here. There are no reported cases interpreting this section of the Uniform Act in Missouri or any other jurisdiction. Rule 81.05(b) seeks to preserve appeals for litigants whose counsel in an abundance of caution or by mistake file premature notices of appeal in such situations. State ex rel. State Highway Commission v. Tate, 576 S.W.2d at 531. In its point relied on, Western attacks not only the failure of the trial court to vacate the award, but also the confirmation of the award. Since there is a final judgment, we will consider this a good faith effort to appeal from trial court's confirmation of the award. Wallace v. Hankins, 541 S.W.2d 82 (Mo.App.1976). Motion to dismiss the appeal is denied.
At the arbitration hearing, both parties presented witnesses and exhibits on their behalf. The evidence established that in March 1976, Lindenwood and Western entered into an agreement in which Western agreed to install a Hy-Play field in Lindenwood's stadium which was being extensively renovated. The primary tenant for the stadium was to be the St. Louis Football Cardinals who were to use the facility for training camp. In addition, the field was to be used as a soccer field for the Lindenwood *290 soccer team. The contract price was $115,550.
The Hy-Play system involved installation of drainage tubing, support systems and a natural growing surface. The Hy-Play sales brochure, promoted Hy-Play as an "exciting new concept in athletic field design and management ... [which] eliminates the muddy field by replacing soil with a scientifically blended growing medium." Hy-Play "never gets muddy ... water filters through immediately won't `stand,' even in a downpour."
After the field was installed in the spring of 1976, the St. Louis Football Cardinals began practicing on the field. Problems with the field became immediately apparent. Parts of the field were torn-up and holes and divots developed. The Cardinal Football Team suspended use of the field after only a short time, not only to prevent further damage to the field but for the safety of the players. A representative of Hy-Play viewed the field in the latter half of 1976 and was under the impression that rooting of the sod had not developed to adequate depths. The field experienced only moderate use until the spring of 1977. Jim Hart conducted a football camp in July 1977 and again damage to the field occurred. Large pools of standing water were observed on the field. The St. Louis Cardinals used the field in mid July after the Jim Hart football camp and again the field failed to adequately perform. Use of the field was discontinued. By late 1977 most of the grass had died and the field was considered useless. Lindenwood installed an artificial field in the summer of 1978.
Considerable evidence on failure of the field was presented. Lindenwood presented evidence that the trenches in which the drainage tubing was placed were not properly graded and the drainage tubing itself was defective. In addition, there was evidence that a fine layer of clay prevented proper drainage which prevented the turf from rooting to a proper depth. Western presented evidence that Lindenwood had not properly cared for the field and contributed significantly to its deterioration because of overwatering.
The arbitrators did not state the exact cause or causes of the field's failure but concluded they were predominantly "in fact caused by problems inherent in the Hy-Play system" and "were not predominantly contributed to by Lindenwood." Finally, the arbitrators stated that Lindenwood's care of the field after the 1976 season must share in the blame for the field's failure. The arbitrators awarded Lindenwood $92,500.00.
On appeal, Western asserts that the arbitrators found Lindenwood guilty of contributory negligence and in Missouri that completely bars an action for breach of implied warranty. Consequently, Western asserts the award must be set aside under the Federal Arbitration Act because it constituted a manifest disregard of the law and under the Uniform Arbitration Act, § 435.405.1(3) because the arbitrators exceeded their powers.
The Uniform Arbitration Act was adopted in Missouri in 1980. Laws 1980, p. 436. There have been no Missouri appellate court decisions interpreting the new act. Under the prior arbitration act, it was stated that the courts favored and encouraged arbitration because its object was to obtain a settlement that would put an end to a dispute and conclude the matter submitted. On appeal every reasonable intendment was indulged in favor of an arbitration award. Masonic Temple Association of St. Louis v. Farrar, 422 S.W.2d 95, 109 (Mo.App.1967); See Stix & Co., Inc. v. Schoor, 579 S.W.2d 160, 162 (Mo.App.1979). An arbitration award would not be vacated because it was against the law and the evidence. To justify setting aside the award, fraud, corruption or partiality or some misconduct of the arbitrators calculated to prejudice the rights of the parties had to be shown. Fernandes Grain Co. v. Hunter, 274 S.W. 901, 904 (Mo.App.1925).
Section 435.450 of the Uniform Act provides that the act shall be so construed as to effectuate the general purpose to make uniform the law of those states which *291 enact it. Consequently, opinions of the courts of other jurisdictions which have adopted the Act are shown greater than usual deference. Garver v. Ferguson, 76 Ill.2d 1, 27 Ill.Dec. 773, 389 N.E.2d 1181, 1183 (Ill.1979); See Southwest Parke Educational Assoc. v. Southwest Parke Community School Trustees Corp., 427 N.E.2d 1140, 1147 (Ind.App.1981). We find that for the propositions just stated above, the Uniform Act does not change Missouri law. It has been held that the purpose of the Uniform Arbitration Act is to afford parties the opportunity to reach a final disposition of differences in an easier more expeditious manner than by litigation. In order to facilitate this purpose, judicial review of arbitration awards is limited. Indianapolis Public Transportation Corp. v. Amalgamated Transit Union, 414 N.E.2d 966, 969 (Ind. App.1981). Section 435.405.1 of the Missouri Uniform Act provides that an arbitration award may be vacated where:
(1) The award was procured by corruption, fraud or other undue means;
(2) There was evident partiality by an arbitrator appointed as a neutral or corruption in any of the arbitrators or misconduct prejudicing the rights of any party;
(3) The arbitrators exceeded their powers;
(4) The arbitrators refused to postpone the hearing upon sufficient cause being shown therefor or refused to hear evidence material to the controversy or otherwise so conducted the hearing, contrary to the provisions of section 435.370, as to prejudice substantially the rights of a party; or
(5) There was no arbitration agreement and the issue was not adversely determined in proceedings under section 435.355 and the party did not participate in the arbitration hearing without raising the objection.
Western argues that a mistake of law by the arbitrators constitutes an act in excess of their powers under 435.405.1(3).
The courts of the states which have adopted the Uniform Act generally agree that an arbitrator's mistake of law or erroneous interpretation of the law does not constitute an act in excess of the arbitrator's power. University of Alaska v. Modern Construction, Inc., 522 P.2d 1132 (Alaska 1974); Smitty's Super-Valu, Inc. v. Pasqualetti, 22 Ariz.App. 178, 525 P.2d 309, 311-12 (1974); Garver v. Ferguson, 76 Ill.2d 1, 27 Ill.Dec. 773, 389 N.E.2d 1181 (Ill.1979); Southwest Parke Educational Assoc. v. Southwest Parke Community School Trustees Corp., 427 N.E.2d 1140 (Ind.1981); Evans Electrical Construction Co., Inc. v. University of Kansas Medical Center, 230 Kan. 298, 634 P.2d 1079, 1087 (1981); Board of Directors of Maine School Administrative Dist. v. Teachers Association, 395 A.2d 461, 463 (Me.1978); School Committee of West Springfield v. Korbut, 373 Mass. 788, 369 N.E.2d 1148, 1151 (1977); Chillum-Adelphi Volunteer Fire Dept., Inc. v. Button & Goode, Inc., 242 Md. 509, 219 A.2d 801, 806 (1966); Lanzo Construction Co. v. City of Port Huron, 88 Mich.App. 443, 276 N.W.2d 613 (1979); Grudem Bros. Co. v. Great Western Piping Corp., 297 Minn. 313, 213 N.W.2d 920, 922-23 (1973); Northwestern Security Insurance Co. v. Clark, 84 Nev. 716, 448 P.2d 39 (1968); Carolina Virginia Fashion Exhibitors, Inc. v. Gunter, 41 N.E. App. 407, 255 S.E.2d 414, 417-18 (1979).[2]
*292 We find no grounds for setting aside the award under the Uniform Act.
Section 10 of the Federal Arbitration Act sets forth the same grounds for vacating an award as in the Uniform Arbitration Act. In addition to the grounds specified in the Act, the court may also vacate an arbitrator's award for a manifest disregard of the law. Dundas Shipping & Trading Co. v. Stravelakis Bros. Co., Ltd., 508 F.Supp. 1000, 1003 (S.D.N.Y.1981); Reynold Securities Inc. v. Macquown, 459 F.Supp. 943 (W.D.Pa.1978). The application of this exception, though is severely limited. Office of Supplies, Government of Republic of Korea v. New York Navigation Co., 469 F.2d 377, 379-80 (2nd Cir.1972). In order to set aside an arbitration award on the ground of manifest disregard of the law, the complaining party must establish that the arbitrator understood and correctly stated the law but proceeded to ignore it. San Martine v. Saguenay Terminal Ltd., 293 F.2d 796, 801 (9th Cir.1961); Fukaya Trading Co. v. Eastern Marine Corp., 322 F.Supp. 278, 281 (E.D.La.1971); Fairchild & Co. Inc. v. Richmond F. & P.R. Co., 516 F.Supp. 1305, 1315 (D.C.1981).
We find no error of law, let alone a manifest disregard of the law. Western asserts that the arbitrators found Lindenwood guilty of contributory negligence and under Missouri law that is a complete bar to an action for breach of an implied warranty. Western first cites Mead v. Corbin Equipment, Inc., 586 S.W.2d 388 (Mo.App. 1979) in support of its contention. However, this was a products liability case based upon strict liability in tort. It has no application here.
Western also cites Southern Illinois Stone Co. v. Universal Engineering Corp., 592 F.2d 446 (8th Cir.1979) in support of its contention that the arbitrators have violated Missouri law. However, Southern Illinois Stone Co. involved the interpretation of Illinois law not Missouri law. Nonetheless, we have found no Missouri law on the point and find the Illinois law applied in that case sound. Contrary to plaintiff's assertion, this case does not establish that contributory negligence is a complete bar to a buyer's recovery. Illinois Stone, involved an action for breach of warranty for the sale of rock crushing equipment. There the court stated:
It is generally stated that the doctrine of contributory negligence, per se, is not a defense to a contract action based on breach of warranty. [Citations omitted]. However, the courts have recognized that recovery for breach of warranty may be denied where the buyer's misuse of the goods has been the proximate cause of the alleged breach; such misuse is beyond the scope of the seller's warranty.
592 F.2d at 452.
The court went on to note that it was "uncontroverted that the Buyer misused the primary system by setting off small dynamite charges in the mouth of the ... crusher to clear rock jams," but nonetheless rejected the seller's contention that such a misuse of the goods barred a buyer's right to recover for breach of warranty as a matter of law. Id. The court concluded that:
[I]mproper design was the principal cause of the primary system's deficiencies. And, while the buyer may have misused the equipment to some degree, such misuse was not sufficient to bar recovery for breach of warranty .... [T]he court was not clearly erroneous in refusing to accept the Sellers' theory of misuse as a total defense to this breach.
592 F.2d at 453.
This analysis is plainly applicable to our case under review. The arbitrators clearly found that the principal cause of the field's deficiencies were in the design of the field itself and not Lindenwood's misuse of the field. Problems with the field developed soon after its installation. Lindenwood's *293 misuse of the field (by overwatering) nine months after its installation was not a complete bar to recovery for breach of implied warranty. There was no error of law.
Affirmed.
KAROHL, P.J., and CRANDALL, J., concur.
NOTES
[1] Section 435.440.1 provides:
An appeal may be taken from:
(1) An order denying an application to compel arbitration made under section 435.355;
(2) An order granting an application to stay arbitration made under subsection 2 of section 435.355;
(3) An order confirming or denying confirmation of an award;
(4) An order modifying or correcting an award;
(5) An order vacating an award without directing a rehearing; or
(6) A judgment or decree entered pursuant to the provisions of sections 435.350 to 435.470.
[2] Arbitrators must follow the law if they are commanded to do so by the terms of the arbitration agreement. University of Alaska v. Modern Construction Co., Inc., 522 P.2d 1132, 1140 (Alaska 1974). See Country Mutual Insurance Co. v. National Bank of Decatur, 109 Ill.App.2d 133, 248 N.E.2d 299 (1969). Western has cited this latter case in support of its contention that misapplication of the law by the arbitrators constitutes an act in excess of their power.
In Country Mutual, the arbitration agreement expressly provided that arbitration was to determine whether the insured was legally entitled to recover damages. The Illinois Appellate Court held that since the claim was presented after the expiration of the statute of limitations the insured was not legally entitled to recover damages and the arbitrator's decision to the contrary was in excess of its power. We do not find this principle applicable to our case. Moreover, we note that in Garver v. Ferguson, 76 Ill.2d 1, 27 Ill.Dec. 773, 389 N.E.2d 1181 (Ill.1979) the Illinois Supreme Court ruled that a mistake of law would not justify setting aside an arbitration award rendered pursuant to the Uniform Arbitration Act. We find Detroit Automobile Inter-Insurance Exchange v. Spafford, 76 Mich.App. 85, 255 N.W.2d 780 (1977), also cited by Western in support of its contention to be similar to Country Mutual.
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55 F.3d 289
UNITED STATES of America, Plaintiff-Appellee,v.Jeffrey JONES, Defendant-Appellant.
No. 94-1970.
United States Court of Appeals,Seventh Circuit.
Argued April 14, 1995.Decided May 24, 1995.
Barry Rand Elden, George Jackson, argued, Pamela Pepper, Asst. U.S. Attys., Criminal Receiving, Appellate Div., Chicago, IL, for plaintiff-appellee.
Robert A. Handelsman, argued, Chicago, IL, for defendant-appellant.
Before ALDISERT,* BAUER and FLAUM, Circuit Judges.
FLAUM, Circuit Judge.
1
The district court sentenced the defendant, Jeffrey Jones, to thirty years imprisonment following his conviction on cocaine charges. On appeal, Jones argues that the court made several errors in sentencing him as a career offender under the United States Sentencing Guidelines ("Guidelines"). We dismiss in part and affirm in part.
I.
2
On July 9, 1993, Jose Hernandez and Miguel Sanchez, government informants working with the Drug Enforcement Administration ("DEA"), met Frederick Anderson at a gas station when they asked Anderson for directions. Hernandez told Anderson he was a beeper and telephone salesman who was in the Chicago area "to go see friends and talk business." The two men exchanged beeper and telephone numbers.
3
Four days later, Hernandez and Anderson spoke by telephone (the record does not disclose who placed the call). Hernandez stated he was ready to talk about business and the men agreed to meet the next day at a fast-food restaurant near the gas station where they first met. Anderson brought Jones, whom he introduced as "Jefferson," to the meeting. When Hernandez asked why Anderson brought a friend to a meeting where they would be discussing illegal business, Anderson responded that Jones was his partner.
4
Hernandez told Anderson and Jones that he was bringing "pianos" to Chicago and would sell them for $22,000 or $23,000 per kilogram for two or three, or $20,000 per kilogram if the men bought ten. Anderson asked Jones whether he could "get enough people together so that we could get the price of $20,000." Jones responded affirmatively.
5
After this meeting, Hernandez spoke with Anderson by telephone several times, but admitted at trial that he never talked to Jones. At one point, Anderson stated that he and Jones wanted to buy four kilograms and said they had "eighty-four [thousand dollars]." On August 2, 1993, Hernandez and Anderson agreed to meet at the same restaurant. Anderson said he would bring his friend, which Hernandez understood to mean Jones.
6
Jones and Anderson arrived at the restaurant in a car driven by Jones. Anderson informed Hernandez that they had only $46,000 and agreed with Hernandez when he said they would only be able to purchase two kilograms. When Hernandez asked about the money, both Jones and Anderson responded that it was in a small box in the trunk. Sanchez walked to the back of the car while Jones started the car so Anderson could press the trunk release button. Sanchez lifted the box out of the hatchback and showed it to Hernandez, who saw the money inside. Sanchez then began to walk away from the car and started taking his hat on and off. Jones stated "I don't like what your friend is doing. He's doing something that's not right." DEA agents promptly arrested Anderson and Jones.
7
After his arrest, while at the DEA offices, Jones made a statement admitting that he dealt cocaine. He said that since November, 1992, his income had come from cocaine trafficking and that he sold between 1/2 and 1 ounce of cocaine per day. Jones stated that he received most of his cocaine from Anderson. Jones informed the DEA how much he paid Anderson for the cocaine and how much he sold it for after using a cutting agent to increase its quantity. Finally, Jones discussed another dealer from whom he purchased cocaine, including a quarter-pound in November, 1992, and ounces on a daily basis.
8
Jones and Anderson were indicted in the Northern District of Illinois on one count of conspiracy to possess with intent to distribute cocaine and one count of attempting to possess cocaine, both in violation of 21 U.S.C. Sec. 846. After jury selection, Anderson pleaded guilty. Jones went to trial and was convicted of both counts. The district court sentenced him as a career offender under U.S.S.G. Sec. 4B1.1. The court refused to reduce Jones's sentence for being a minor participant or for acceptance of responsibility and also declined to depart downward from his sentence. The guidelines indicated a range of 360 months to life and the court sentenced Jones to 360 months imprisonment and 96 months supervised release.
II.
9
On appeal, Jones challenges virtually all of the district court's sentencing decisions. He argues that he should have received a downward departure from his sentence and objects to being sentenced as a career offender. He also contends that the court erred in refusing to reduce his sentence for being a minor participant and for accepting responsibility. Finally, Jones seeks a remand for resentencing in accord with recent amendments to the guidelines.
A.
10
Jones first contends that the district court erroneously concluded that it had no power to depart downward from his career offender sentence. We do not have jurisdiction to review a district court's exercise of its discretion to deny a departure from the guidelines. United States v. Wright, 37 F.3d 358, 361 (7th Cir.1994). We can, however, review its decision if the court's "refusal to depart ... is based on an erroneous legal conclusion about [its] authority to depart." United States v. Poff, 926 F.2d 588, 590-91 (7th Cir.) (en banc), cert. denied, 502 U.S. 827, 112 S.Ct. 96, 116 L.Ed.2d 67 (1991). At first glance, Jones's argument appears to have some merit, for if the court believed, as it stated several times, that the guideline sentence was too severe and the court knew it had the ability to depart, why did it refuse to do so? A review of the court's discussion of this issue illustrates, however, that the court thought it could depart but ultimately decided against taking that action.
11
This court has never directly addressed the question whether a court can depart from a career offender sentence because the guidelines significantly over-represent the seriousness of the defendant's criminal history or his future danger. But see United States v. Springs, 17 F.3d 192, 195 n. 3 (7th Cir.) (no jurisdiction to review court's refusal to depart since it recognized its ability to do so), cert. denied, --- U.S. ----, 115 S.Ct. 375, 130 L.Ed.2d 326 (1994). Other Circuits have determined that a district court can depart on these grounds. See, e.g., United States v. Fletcher, 15 F.3d 553, 556-57 (6th Cir.1994); United States v. Reyes, 8 F.3d 1379, 1383-88 (9th Cir.1993); United States v. Shoupe, 988 F.2d 440, 445-47 (3d Cir.1993); United States v. Beckham, 968 F.2d 47, 54 (D.C.Cir.1992); United States v. Bowser, 941 F.2d 1019, 1023 (10th Cir.1991); United States v. Pinckney, 938 F.2d 519, 520-21 (4th Cir.1991); United States v. Smith, 909 F.2d 1164, 1169-70 (8th Cir.1990), cert. denied, 498 U.S. 1032, 111 S.Ct. 691, 112 L.Ed.2d 682 (1991).
12
Based on the decision in Reyes, Jones argued to the district court that it should depart from the guideline range. The court then postponed Jones's sentencing hearing for 8 days in order to review the career offender argument he presented in his objections to the presentence report ("PSR"). At the rescheduled sentencing hearing, the court discussed Reyes and said it too may have departed in that case. See United States v. Gaines, 7 F.3d 101, 105-6 (7th Cir.1993) (reference to case allowing departure indicates an awareness of authority to depart); see also United States v. Morrison, 46 F.3d 127, 131 (1st Cir.1995) (same). Specifically, the court stated:
13
[E]ssentially what the majority did in [Reyes ] was say that departure was justified ... because you had somebody ... whose career offender status was essentially justified by small drug transactions, and it put him essentially in the same category as those trafficking in significantly larger amounts of drug[s].
14
And I do not say in this regard that I think that had I been the trial judge in Reyes I would have declined to depart. I may very well have departed. But so far as I can tell from Reyes, we're really not dealing with the same kind of defendant. This is a defendant who essentially stole more than once in his life. I think it would not be unfair to characterize him as a thief at least for a number of years of his life. He was a drug possessor. He was a deliverer of drugs. At a time when he was a convicted felon he was in possession of a gun. In addition to his conviction record, he has a very long arrest record.
15
It's very difficult to read this presentence report without coming to the conclusion that this defendant fits more closely with what Congress was after in terms of dealing with career offenders than the actual technical definition in which he also fits, and I think that was part of the problem with Reyes....
16
Leaving aside the technical definition, I don't think it is unjust, in fact I think it is perfectly just to call this defendant a career criminal. So I think the guideline is appropriate in this case.
17
Clearly, the court believed it had the power to depart from the career offender sentencing range, but determined, as it had complete discretion to do, that Jones did not warrant such a departure.
18
Jones points to other statements by the court that he contends show that the court believed it did not have the authority to depart. After stating that it thought the minimum guideline sentence was "very high," the court said:
19
the fact of the matter is that I will not depart from the guidelines in this case because I do not believe that I am authorized to depart simply because I would impose, for example, a 20-year sentence rather than the very stern sentence called for by the sentencing guidelines.
20
This statement does not negate the court's earlier recognition of its ability to depart based on certain factors that it did not find present in this case. Instead, the court acknowledged that it could not depart simply because it thinks the guidelines, as a whole, are too harsh. See, e.g., United States v. Scott, 914 F.2d 959, 964 (7th Cir.1990) (general dissatisfaction with the guidelines does not constitute a reasonable basis for departure); see also United States v. Nguyen, 1 F.3d 972, 974 (10th Cir.1993) (no error in court's recognition that it could not depart downward simply because it thought the guidelines were unfair and it would have imposed a lighter sentence pre-guidelines); Beckham, 968 F.2d at 54 ("[S]entences established for various crimes under the guidelines cannot be set aside based merely on their perceived severity."); United States v. Norflett, 922 F.2d 50, 53 (1st Cir.1990) (court could not depart from career offender sentence simply because it thought it incommensurate with the crime). Because the court exercised its discretion and denied the departure, we dismiss this portion of Jones's appeal for lack of appellate jurisdiction.
B.
21
Jones also contends that the crimes for which he was convicted, attempt and conspiracy, cannot support a career offender sentence because the enabling legislation for U.S.S.G. Sec. 4B1.1, 28 U.S.C. Sec. 994(h), does not include these offenses as among those requiring career offender status. We have rejected this argument twice recently and refuse to revisit those decisions. See United States v. Garrett, 45 F.3d 1135 (7th Cir.1995), cert. denied, --- U.S. ----, 115 S.Ct. 2015, 131 L.Ed.2d 1013 (1995); United States v. Damerville, 27 F.3d 254 (7th Cir.), cert. denied, --- U.S. ----, 115 S.Ct. 445, 130 L.Ed.2d 355 (1994).
C.
22
Jones next objects to the district court's refusal to reduce his sentence two-levels for being a minor participant in the criminal activity. U.S.S.G. Sec. 3B1.2 defines a minor participant as "any participant who is less culpable than most other participants, but whose role could not be described as minimal." A defendant "must be substantially less culpable than the average participant" in order to warrant this departure. United States v. Kerr, 13 F.3d 203, 206 (7th Cir.1993), cert. denied, --- U.S. ----, 114 S.Ct. 1629, 128 L.Ed.2d 353 (1994). We will uphold the district court's decision that Jones did not meet this standard unless it is clearly erroneous. United States v. Durman, 30 F.3d 803, 807 (7th Cir.1994), cert. denied, --- U.S. ----, 115 S.Ct. 921, 130 L.Ed.2d 801 (1995).
23
The evidence demonstrates that the district court did not err in refusing this reduction. While Anderson made the first contact with the Hernandez and Sanchez and later talked to them by telephone, Jones attended the next meeting at which the parties discussed the drug transaction. Anderson described Jones as his "partner," and asked Jones whether he could find enough people to join them in buying sufficient quantities of cocaine to receive a reduced price. Jones responded affirmatively. Moreover, on the day of the arrest, Jones drove Anderson to the transaction site. Jones and Anderson both directed Hernandez to a small box containing the money and Jones started the car so Anderson could open the trunk and Sanchez could remove the money. We agree with the district court that the fact that Jones drove to the transaction and did not talk to Hernandez or Sanchez in any depth does not mandate a finding that he was a minor participant. On the other hand, we will not adopt the government's position that these same aspects of Jones's behavior necessarily indicate his leadership role by showing that he was able to conceal his involvement in, and limit his liability for, the crimes. Instead, we look to all of the relevant facts, including Jones's post-arrest statement that Anderson supplied him with cocaine to sell, that demonstrate Jones was not "substantially less culpable" than Anderson. Thus, the district court did not err. See United States v. Rosalez-Cortez, 19 F.3d 1210, 1220-21 (7th Cir.1994); United States v. Gunning, 984 F.2d 1476, 1484 (7th Cir.1993); United States v. Johnson, 965 F.2d 460, 469 (7th Cir.1992).
D.
24
Jones also argues that the court erred by refusing to reduce his sentence two-levels for his acceptance of responsibility. U.S.S.G. Sec. 3E1.1. The acceptance of responsibility reduction "is not intended to apply to a defendant who puts the government to its burden of proof at trial by denying the essential factual elements of guilt, is convicted, and only then admits guilt and expresses remorse." United States v. Salvador, 18 F.3d 1380, 1382 (7th Cir.1994) (quoting U.S.S.G. Sec. 3E1.1 application note 2). A failure to plead guilty does not automatically preclude this reduction, but only in rare situations will a defendant who has been convicted after a trial receive it. United States v. Corral-Ibarra, 25 F.3d 430, 439-40 (7th Cir.1994). In these circumstances, the district court's determination whether to grant the reduction should "be based primarily upon pre-trial statements and conduct." U.S.S.G. Sec. 3E1.1 application note 2; see Corral-Ibarra, 25 F.3d at 440. Jones bears a high burden in proving his entitlement to a reduction for acceptance of responsibility. United States v. Curtis, 37 F.3d 301, 309 (7th Cir.1994), cert. denied, --- U.S. ----, 115 S.Ct. 1110, 130 L.Ed.2d 1075 (1995).
25
Because "[t]he sentencing judge is in a unique position to evaluate a defendant's acceptance of responsibility ... the determination of the sentencing judge is entitled to great deference on review and should not be disturbed unless it is without foundation." United States v. Tolson, 988 F.2d 1494, 1497 (7th Cir.1993) (quoting U.S.S.G. Sec. 3E1.1 application note 5). Therefore, we will affirm the court's decision unless it is clearly erroneous. Corral-Ibarra, 25 F.3d at 440.
26
Jones made no statements before trial about his guilt or remorse, and at trial he contested the factual predicates of the charged offenses. Attached to the PSR, Jones submitted his version of the events. He wrote:
27
Although I know that there is a possibility of a smaller sentence if I say that I am guilty of all that the government accused me of, I cannot do so because it is not true ...
28
I was not a member of any conspiracy with Frederick Anderson knowing in my own mind that he was going to buy drugs. I did not supply him with any of the money he brought to the [restaurant] and I was not going to receive the cocaine that he was going to buy.
29
Jones then made the following statement that he contends evinced his acceptance of responsibility:
30
I know that I shouldn't have gone with Anderson, and I am sorry for that. At the time of my arrest I was using drugs heavily, most of which I would buy from Anderson, and although Anderson didn't promise me anything, I hoped that he might give me some cocaine either for free or at least for a lot less money ...
31
I am sorry for the problems and the shame that I and my drug addiction have caused me, my family and my friends....
32
In addition, the PSR noted that Jones had completed a drug abuse education program before trial, a valid factor for the court to consider in awarding this reduction. United States v. Bruder, 945 F.2d 167, 173 (7th Cir.1991) (en banc); U.S.S.G. Sec. 3E1.1 application note 1.
33
Jones's version of the events unequivocally demonstrates that he has not accepted any responsibility for the crimes of which he has been convicted. The other language relied on by Jones merely indicates his remorse over using drugs and his "mistake" in accompanying Anderson to the transaction site. A " 'grudging and incomplete admission, accompanied by an excuse to minimize his own culpability, does not indicate acceptance of responsibility.' " Rosalez-Cortez, 19 F.3d at 1220 (quoting United States v. Aquilla, 976 F.2d 1044, 1053 (7th Cir.1992)). Jones had to demonstrate that he "clearly recognize[d] and affirmatively accept[ed] responsibility for his conduct." United States v. Dvorak, 41 F.3d 1215, 1217 (7th Cir.1994) (emphasis in original). He did not do so. Not only did the district court not err in refusing to reduce Jones's sentence for acceptance of responsibility, but the court probably could not have appropriately granted such a reduction. See, e.g. United States v. Martinson, 37 F.3d 353, 357 (7th Cir.1994) (error in reducing sentence where defendant went to trial and continued to deny any criminal intent), cert. denied, --- U.S. ----, 115 S.Ct. 1256, 131 L.Ed.2d 136 (1995); Salvador, 18 F.3d at 1382 (reversing reduction because defendant had been convicted of crimes and still portrayed himself as nothing more than a drug courier in an attempt to diminish his role in the conspiracy).
E.
34
Finally, Jones seeks a remand for resentencing under the 1994 amendment to U.S.S.G. Sec. 4B1.1 application note 2. The PSR indicated that Jones had two prior felony controlled substance offenses. The instant offense involved 2 kilograms of cocaine, resulting in a base offense level of 28. U.S.S.G. Sec. 2D1.1(c)(8). This amount, in light of Jones's prior drug convictions, dictated a statutory maximum sentence of life imprisonment. 21 U.S.C. Sec. 841(b)(1)(B).
35
The PSR suggested, and the district court agreed, that Jones qualified for sentencing as a career offender. U.S.S.G. Sec. 4B1.1.1 This section mandates different offense levels based on the defendant's "Offense Statutory Maximum," which, at the time Jones was sentenced, the guidelines defined as "the maximum term of imprisonment authorized for the ... controlled substance offense." U.S.S.G. Sec. 4B1.1 application note 2. The statutory maximum of life imprisonment under 21 U.S.C. Sec. 841(b)(1)(B) resulted in a base offense level of 37. As a career offender, Jones had a Criminal History Category of VI. U.S.S.G. Sec. 4B1.1. These figures dictated a sentencing range of 360 months to life. After noting that this range seemed high, the district court imposed a 360 month sentence.
36
In 1994, application note 2 to U.S.S.G. Sec. 4B1.1 was amended to define "Offense Statutory Maximum" as:
37
the maximum term of imprisonment authorized for the offense of conviction that is a crime of violence or controlled substance offense, not including any increase in that maximum term under a sentencing enhancement provision that applies because of the defendant's prior criminal record (such sentencing enhancement provisions are contained, for example, in 21 U.S.C. Sec. 841(b)(1)(A), 841(b)(1)(b), ...). For example, where the statutory maximum term of imprisonment under 21 U.S.C. Sec. 841(b)(1)(C) is increased from twenty years to thirty years because the defendant has one or more qualifying prior drug convictions, the "Offense Statutory Maximum" for the purposes of this guideline is twenty years and not thirty years.
38
Thus, if Jones were sentenced today, his offense statutory maximum under Sec. 4B1.1 would be 40 years, see 21 U.S.C. Sec. 841(b)(1)(B), mandating a base offense level of 34. This would result in a sentencing range of 262-327 months, the maximum of which is less than Jones's present sentence.
39
A court can resentence a defendant under amendments that reduce a guideline sentence that the Sentencing Commission has designated to apply retroactively. See 18 U.S.C. Sec. 3582(c), 28 U.S.C. Sec. 994(u). The Commission has determined that amendment 506, the amendment to application note 2, applies retroactively. U.S.S.G. Sec. 1B1.10(a), (c). Jones's argument thus may well have merit, but he has made it before the wrong court. The power to reconsider a sentence lies with the district court, see 18 U.S.C. Sec. 3582(c)(2), and not the court of appeals. We therefore dismiss this portion of Jones's appeal without prejudice to his right to move the district court for appropriate relief.
40
For the foregoing reasons, we dismiss in part and affirm in part.
*
The Honorable Ruggero J. Aldisert, of the United States Court of Appeals for the Third Circuit, sitting by designation
1
The career offender guideline applies to defendants who were eighteen at the time of the instant offense that was a crime of violence or a controlled substance offense and who have two or more prior felony convictions for crimes of violence or controlled substance offenses. U.S.S.G. Sec. 4B1.1
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687 So.2d 207 (1996)
Grady DOLLAR
v.
STATE.
CR-94-1853.
Court of Criminal Appeals of Alabama.
January 19, 1996.
Rehearing Denied March 8, 1996.
Mark Dutton, Moulton, for Appellant.
Jeff Sessions, Atty. Gen., and Gregory O. Griffin, Sr., Asst. Atty. Gen., for Appellee.
PATTERSON, Judge.
Grady Dollar appeals from the trial court's restitution order, which was entered pursuant to his convictions for arson in the second *208 and third degree. Dollar pled guilty, and was sentenced to 2 years' imprisonment for his conviction for second degree arson and to 12 months in jail for his conviction for third degree arson, the two sentences to be served concurrently. Dollar was also ordered to pay $50 to the victims' compensation fund, and restitution, if any was claimed. Subsequent to a restitution hearing, Dollar was ordered to pay the victim $23,403.00. The restitution order was later amended to order Dollar to pay additional restitution, in the amount of $25,403.00, to American Bankers Insurance Company. Dollar raises three issues on appeal.
I.
Dollar contends that the trial court erred by ordering him to pay restitution. He argues that his plea agreement was conditioned on restitution being paid only if the state submitted a restitution claim within 30 days of the entry of Dollar's plea. The record does not support Dollar's interpretation of these facts.
The record contains neither the plea agreement itself nor a transcript of the hearing at which he entered his plea. He relies on the judgment entry, reflected in the case action summary, in order to prove the alleged terms of the alleged plea agreement. In fact, the case action summary shows only that Dollar entered a guilty plea and that he was subsequently sentenced. It does not show that he relied upon any promise or agreement by the state. In fact, the case action summary does not show that the state promised or agreed to anything in exchange for the plea. This court cannot predicate error on a silent record. Walters v. State, 585 So.2d 206 (Ala.Cr.App.1991).
II.
Dollar contends that the trial court's restitution order is defective, because, he argues, it fails to state the factual basis upon which the trial court relied in setting the restitution. The record shows that Dollar has not presented this issue to the trial court in any form at any time. Therefore, this issue is not preserved for appellate review. See Edams v. State, 501 So.2d 574 (Ala.Cr. App.1986); and Stork v. State, 475 So.2d 622 (Ala.Cr.App.1984), reversed on other grounds, 475 So.2d 623 (Ala.1985).
III.
Dollar contends that the trial court erred by amending the restitution order, because, he contends, the trial court no longer had jurisdiction over the matter. The original restitution order was issued on May 18, 1995. The order was amended on June 27, 1995.
In Rose v. State, 598 So.2d 1040 (Ala.Cr. App.1992), we observed in a footnote:
"In Pickron v. State, 475 So.2d 599 (Ala. 1985), the Alabama Supreme Court affirmed this Court's holding in Pickron v. State, 475 So.2d 593 (Ala.Cr.App.1984), that a motion to amend or correct a sentence, another post-trial motion, falls within the coverage of Rule 13 (now Rule 24, A.R.Crim.P.), even though such a motion is not within the specific language of the rule."
Id., at 1044, n. 2. Rule 24.2(b), Ala.R.Crim. P., provides as follows:
"A motion in arrest of judgment shall be filed within thirty (30) days after sentence is pronounced. The court may act on its own motion in arresting judgment only during the period in which a motion to arrest would be timely."
In this case, the trial court, on it's own motion, amended the restitution order more than 30 days after the pronouncement of the final judgment. Based upon Pickron and Rule 24.2, we find that the trial court no longer had jurisdiction over the matter when it amended the restitution order. Therefore, we reverse the trial court's judgment with respect to the amended restitution order only. We remand this cause to the trial court with instructions that it vacate the amendment to the restitution order, and restore the restitution order as it stood before the amendment.
REVERSED AND REMANDED.
All Judges concur.
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78 U.S. 39 (1870)
11 Wall. 39
VIRGINIA
v.
WEST VIRGINIA.
Supreme Court of United States.
*51 The case was elaborately argued at December Term, 1866, by Messrs. B.R. Curtis and A. Hunter, in support of the bill, and by Messrs. B. Stanton and Reverdy Johnson, in support of the demurrer; and again at this term by Mr. Taylor, Attorney-General of Virginia, Messrs. B.R. Curtis, and A. Hunter, on the former side, and Messrs. B. Stanton, C.J. Faulkner, and Reverdy Johnson, contra.
*53 Mr. Justice MILLER delivered the opinion of the court.
The first proposition on which counsel insist, in support of the demurrer is, that this court has no jurisdiction of the case, because it involves the consideration of questions purely political; that is to say, that the main question to be decided is the conflicting claims of the two States to the exercise of political jurisdiction and sovereignty over the territory and inhabitants of the two counties which are the subject of dispute.
This proposition cannot be sustained without reversing the settled course of decision in this court and overturning the principles on which several well-considered cases have been decided. Without entering into the argument by which those decisions are supported, we shall content ourselves with showing what is the established doctrine of the court.
In the case of Rhode Island v. Massachusetts,[*] this question was raised, and Chief Justice Taney dissented from the judgment of the court by which the jurisdiction was affirmed, on the precise ground taken here. The subject is elaborately discussed in the opinion of the court, delivered *54 by Mr. Justice Baldwin, and the jurisdiction, we think, satisfactorily sustained. That case, in all important features, was like this. It involved a question of boundary and of the jurisdiction of the States over the territory and people of the disputed region. The bill of Rhode Island denied that she had ever consented to a line run by certain commissioners. The plea of Massachusetts averred that she had consented. A question of fraudulent representation in obtaining certain action of the State of Rhode Island was also made in the pleadings.
It is said in that opinion that, "title, jurisdiction, sovereignty, are (therefore) dependent questions, necessarily settled when boundary is ascertained, which being the line of territory, is the line of power over it, so that great as questions of jurisdiction and sovereignty may be, they depend on facts." And it is held that as the court has jurisdiction of the question of boundary, the fact that its decision on that subject settles the territorial limits of the jurisdiction of the States, does not defeat the jurisdiction of the court.
The next reported case, is that of Missouri v. Iowa,[*] in which the complaint is, that the State of Missouri is unjustly ousted of her jurisdiction, and obstructed from governing a part of her territory on her northern boundary, about ten miles wide, by the State of Iowa, which exercises such jurisdiction, contrary to the rights of the State of Missouri, and in defiance of her authority. Although the jurisdictional question is thus broadly stated, no objection on this point was raised, and the opinion which settled the line in dispute, delivered by Judge Catron, declares that it was the unanimous opinion of all the judges of the court. The Chief Justice must, therefore, have abandoned his dissenting doctrine in the previous case.
That this is so is made still more clear by the opinion of the court delivered by himself in the case of Florida v. Georgia,[] in which he says that "it is settled, by repeated decisions, that a question of boundary between States, is *55 within the jurisdiction conferred by the Constitution on this court." A subsequent expression in that opinion shows that he understood this as including the political question, for he says "that a question of boundary between States is necessarily a political question to be settled by compact made by the political departments of the government... . But under our form of government a boundary between two States may become a judicial question to be decided by this court."
In the subsequent case of Alabama v. Georgia,[*] all the judges concurred, and no question of the jurisdiction was raised.
We consider, therefore, the established doctrine of this court to be, that it has jurisdiction of questions of boundary between two States of this Union, and that this jurisdiction is not defeated, because in deciding that question it becomes necessary to examine into and construe compacts or agreements between those States, or because the decree which the court may render, affects the territorial limits of the political jurisdiction and sovereignty of the States which are parties to the proceeding.
In the further consideration of the question raised by the demurrer we shall proceed upon the ground, which we shall not stop to defend, that the right of West Virginia to jurisdiction over the counties in question, can only be maintained by a valid agreement between the two States on that subject, and that to the validity of such an agreement, the consent of Congress is essential. And we do not deem it necessary in this discussion to inquire whether such an agreement may possess a certain binding force between the States that are parties to it, for any purpose, before such consent is obtained.
As there seems to be no question, then, that the State of West Virginia, from the time she first proposed, in the constitution under which she became a State, to receive these *56 counties, has ever since adhered to, and continued her assent to that proposition, three questions remain to be considered.
1. Did the State of Virginia ever give a consent to this proposition which became obligatory on her?
2. Did the Congress give such consent as rendered the agreement valid?
3. If both these are answered affirmatively, it may be necessary to inquire whether the circumstances alleged in this bill, authorized Virginia to withdraw her consent, and justify us in setting aside the contract, and restoring the two counties to that State.
To determine these questions it will be necessary to examine into the history of the creation of the State of West Virginia, so far as this is to be learned from legislation, of which we can take judicial notice.
The first step in this matter was taken by the organic convention of the State of Virginia, which in 1861 reorganized that State, and formed for it what was known as the Pierpont government an organization which was recognized by the President and by Congress as the State of Virginia, and which passed the four statutes set forth as exhibits in the bill of complainant. This convention passed an ordinance, August 30, 1861, calling a convention of delegates from certain designated counties of the State of Virginia to form a constitution for a new State to be called Kanawha.
The third section of that ordinance provides that the convention when assembled may change the boundaries of the new State as described in the first section, so as to include the "counties of Greenbrier and Pocahontas, or either of them, and also the counties of Hampshire, Hardy, Morgan, Berkeley, and Jefferson, or either of them," if the said counties, or either of them, shall declare their wish, by a majority of votes given, and shall elect delegates to the said convention.
It is thus seen that in the very first step to organize the new State, the old State of Virginia recognized the peculiar condition of the two counties now in question, and provided that either of them should become part of the new State upon the *57 majority of the votes polled being found to be in favor of that proposition.
The convention authorized by this ordinance assembled in Wheeling, November 26, 1861. It does not appear that either Berkeley or Jefferson was represented, but it framed a constitution which, after naming the counties composing the new State in the first section of the first article, provided, by the second section, that if a majority of the votes cast at an election to be held for that purpose in the district composed of the counties of Berkeley, Jefferson, and Frederick, should be in favor of adopting the constitution, they should form a part of the State of West Virginia. That constitution also provided for representation of these counties in the Senate and House of Delegates if they elected to become a part of the new State, and that they should in that event constitute the eleventh judicial district. A distinct section also declares, in general terms, that additional territory may be admitted into and become part of the State with the consent of the legislature.
The schedule of this constitution arranged for its submission to a vote of the people on the first Thursday in April, 1862.
This vote was taken and the constitution ratified by the people; but it does not appear that either of the three counties of Jefferson, Berkeley, and Frederick, took any vote at that time.
Next in order of this legislative history is the act of the Virginia legislature of May 13, 1862, passed shortly after the vote above mentioned had been taken.[*] This act gives the consent of the State of Virginia to the formation of the State of West Virginia out of certain counties named under the provisions set forth in its constitution, and by its second section it is declared that the consent of the legislature of Virginia is also given that the counties of Berkeley, Jefferson, and Frederick, shall be included in said State "whenever the voters of said counties shall ratify and assent to said constitution, *58 at an election held for that purpose, at such time and under such regulations as the commissioners named in the said schedule may prescribe."
This act was directed to be sent to the senators and representatives of Virginia in Congress, with instructions to obtain the consent of Congress to the admission of the State of West Virginia into the Union.
Accordingly on the 31st of December, 1862, Congress acted on these matters, and reciting the proceedings of the Convention of West Virginia, and that both that convention and the legislature of the State of Virginia had requested that the new State should be admitted into the Union, it passed an act for the admission of said State, with certain provisions not material to our purpose.
Let us pause a moment and consider what is the fair and reasonable inference to be drawn from the actions of the State of Virginia, the Convention of West Virginia, and the Congress of the United States in regard to these counties.
The State of Virginia, in the ordinance which originated the formation of the new State, recognized something peculiar in the condition of these two counties, and some others. It gave them the option of sending delegates to the constitutional convention, and gave that convention the option to receive them. For some reason not developed in the legislative history of the matter these counties took no action on the subject. The convention, willing to accept them, and hoping they might still express their wish to come in, made provision in the new constitution that they might do so, and for their place in the legislative bodies, and in the judicial system, and inserted a general proposition for accession of territory to the new State. The State of Virginia, in expressing her satisfaction with the new State and its constitution, and her consent to its formation, by a special section, refers again to the counties of Berkeley, Jefferson, and Frederick, and enacts that whenever they shall, by a majority vote, assent to the constitution of the new State, they may become part thereof; and the legislature sends this statute to Congress with a request that it will admit the new *59 State into the Union. Now, we have here, on two different occasions, the emphatic legislative proposition of Virginia that these counties might become part of West Virginia; and we have the constitution of West Virginia agreeing to accept them and providing for their place in the new-born State. There was one condition, however, imposed by Virginia to her parting with them, and one condition made by West Virginia to her receiving them, and that was the same, namely, the assent of the majority of the votes of the counties to the transfer.
It seems to us that here was an agreement between the old State and the new that these counties should become part of the latter, subject to that condition alone. Up to this time no vote had been taken in these counties; probably none could be taken under any but a hostile government. At all events, the bill alleges that none was taken on the proposition of May, 1862, of the Virginia legislature. If an agreement means the mutual consent of the parties to a given proposition, this was an agreement between these States for the transfer of these counties on the condition named. The condition was one which could be ascertained or carried out at any time; and this was clearly the idea of Virginia when she declared that whenever the voters of said counties should ratify and consent to the constitution they should become part of the State; and her subsequent legislation making special provision for taking the vote on this subject, as shown by the acts of January 31st and February 4th, 1863, is in perfect accord with this idea, and shows her good faith in carrying into effect the agreement.
2. But did Congress consent to this agreement?
Unless it can be shown that the consent of Congress, under that clause of the Constitution which forbids agreements between States without it, can only be given in the form of an express and formal statement of every proposition of the agreement, and of its consent thereto, we must hold that the consent of that body was given to this agreement.
*60 The attention of Congress was called to the subject by the very short statute of the State of Virginia requesting the admission of the new State into the Union, consisting of but three sections,[*] one of which was entirely devoted to giving consent that these two counties and the county of Frederick might accompany the others, if they desired to do so. The constitution of the new State was literally cumbered with the various provisions for receiving these counties if they chose to come, and in two or three forms express consent is there given to this addition to the State. The subject of the relation of these counties to the others, as set forth in the ordinance for calling the convention, in the constitution framed by that convention, and in the act of the Virginia legislature, must have received the attentive consideration of Congress. To hold otherwise is to suppose that the act for the admission of the new State passed without any due or serious consideration. But the substance of this act clearly repels any such inference; for it is seen that the constitution of the new State was, in one particular at least, unacceptable to Congress, and the act only admits the State into the Union when that feature shall be changed by the popular vote. If any other part of the constitution had failed to meet the approbation of Congress, especially so important a part as the proposition for a future change of boundary between the new and the old State, it is reasonable to suppose that its dissent would have been expressed in some shape, especially as the refusal to permit those counties to attach themselves to the new State would not have endangered its formation and admission without them.
It is, therefore, an inference clear and satisfactory that Congress by that statute, intended to consent to the admission of the State with the contingent boundaries provided for in its constitution and in the statute of Virginia, which prayed for its admission on those terms, and that in so doing it necessarily consented to the agreement of those States on that subject.
*61 There was then a valid agreement between the two States consented to by Congress, which agreement made the accession of these counties dependent on the result of a popular vote in favor of that proposition.
3. But the Commonwealth of Virginia insists that no such vote was ever given; and we must inquire whether the facts alleged in the bill are such as to require an issue to be made on that question by the answer of the defendant.
The bill alleges the failure of the counties to take any action under the act of May, 1862, and that on the 31st of January and the 4th of February thereafter the two other acts we have mentioned were passed to enable such vote to be taken. These statutes provide very minutely for the taking of this vote under the authority of the State of Virginia; and, among other things, it is enacted that the governor shall ascertain the result, and, if he shall be of opinion that said vote has been opened and held and the result ascertained and certified pursuant to law, he shall certify that result under the seal of the State to the governor of West Virginia; and if a majority of the votes given at the polls were in favor of the proposition, then the counties became part of said State. He was also authorized to postpone the time of voting if he should be of opinion that a fair vote could not be taken on the day mentioned in these acts.
Though this language is taken mainly from the statute which refers to Berkeley County, we consider the legal effect of the other statute to be the same.
These statutes were in no way essential to evidence the consent of Virginia to the original agreement, but were intended by her legislature to provide the means of ascertaining the wishes of the voters of these counties, that being the condition of the agreement on which the transfer of the counties depended.
The State thus showed her good faith to that agreement, and undertook in her own way and by her own officers to ascertain the fact in question.
*62 The legislature might have required the vote to have been reported to it, and assumed the duty of ascertaining and making known the result to West Virginia; but it delegated that power to the governor. It invested him with full discretion as to the time when the vote should be taken, and made his opinion and his decision conclusive as to the result. The vote was taken under these statutes, and certified to the governor. He was of opinion that the result was in favor of the transfer. He certified this fact under the seal of the State to the State of West Virginia, and the legislature of that State immediately assumed jurisdiction over the two counties, provided for their admission, and they have been a part of that State ever since.
Do the allegations of the bill authorize us to go behind all this and inquire as to what took place at this voting? To inquire how many votes were actually cast? How many of the men who had once been voters in these counties were then in the rebel army? Or had been there and were thus disfranchised? For all these and many more embarrassing questions must arise if the defendant is required to take issue on the allegations of the bill on this subject.
These allegations are indefinite and vague in this regard. It is charged that no fair vote was taken; but no act of unfairness is alleged. That no opportunity was afforded for a fair vote. That the governor was misled and deceived by the fraud of those who made him believe so. This is the substance of what is alleged. No one is charged specifically with the fraud. No particular act of fraud is stated. The governor is impliedly said to have acted in good faith. No charge of any kind of moral or legal wrong is made against the defendant, the State of West Virginia.
But, waiving these defects in the bill, we are of opinion that the action of the governor is conclusive of the vote as between the States of Virginia and West Virginia. He was in legal effect the State of Virginia in this matter. In addition to his position as executive head of the State, the legislature delegated to him all its own power in the premises. It vested him with large control as to the time of taking the *63 vote, and it made his opinion of the result the condition of final action. It rested of its own accord the whole question on his judgment and in his hands. In a matter where that action was to be the foundation on which another sovereign State was to act a matter which involved the delicate question of permanent boundary between the States and jurisdiction over a large population a matter in which she took into her own hands the ascertainment of the fact on which these important propositions were by contract made to depend, she must be bound by what she has done. She can have no right, years after all this has been settled, to come into a court of chancery to charge that her own conduct has been a wrong and a fraud; that her own subordinate agents have misled her governor, and that her solemn act transferring these counties shall be set aside, against the will of the State of West Virginia, and without consulting the wishes of the people of those counties.
This view of the subject renders it unnecessary to inquire into the effect of the act of 1865 withdrawing the consent of the State of Virginia, or the act of Congress of 1866 giving consent, after the attempt of that State to withdraw hers.
The demurrer to the bill is therefore sustained, and the
BILL MUST BE DISMISSED.
Mr. Justice DAVIS, with whom concurred CLIFFORD and FIELD, JJ., dissenting.
Being unable to agree with the majority of the court in its judgment in this case, I will briefly state the grounds of my dissent.
There is no difference of opinion between us in relation to the construction of the provision of the Constitution which affects the question at issue. We all agree that until the consent of Congress is given, there can be no valid compact or agreement between States. And that, although the point of time when Congress may give its consent is not material, yet, when it is given, there must be a reciprocal and concurrent consent of the three parties to the contract. Without *64 this, it is not a completed compact. If, therefore, Virginia withdrew its assent before the consent of Congress was given, there was no compact within the meaning of the Constitution.
To my mind nothing is clearer, than that Congress never did undertake to give its consent to the transfer of Berkeley and Jefferson counties to the State of West Virginia until March 2, 1866. If so, the consent came too late, because the legislature of Virginia had, on the fifth day of December, 1865, withdrawn its assent to the proposed cession of these two counties. This withdrawal was in ample time, as it was before the proposal of the State had become operative as a concluded compact, and the bill (in my judgment) shows that Virginia had sufficient reasons for recalling its proposition to part with the territory embraced within these counties.
But, it is maintained in the opinion of the court that Congress did give its consent to the transfer of these counties by Virginia to West Virginia, when it admitted West Virginia into the Union. The argument of the opinion is, that Congress, by admitting the new State, gave its assent to that provision of the new constitution which looked to the acquisition of these counties, and that if the people of these counties have since voted to become part of the State of West Virginia, this action is within the consent of Congress. I most respectfully submit that the facts of the case (about which there is no dispute), do not justify the argument which is attempted to be drawn from them.
The second section of the first article of the constitution of West Virginia was merely a proposal addressed to the people of two distinct districts, on which they were invited to act. The people of one district (Pendleton, Hardy, Hampshire, and Morgan) accepted the proposal. The people of the other district (Jefferson, Berkeley, and Frederick) rejected it.
In this state of things, the first district became a part of the new State, so far as its constitution could make it so, and the legislature of Virginia included it in its assent, and *65 Congress included it in its admission to the Union. But neither the constitution of West Virginia, nor the assent of the legislature of Virginia, nor the consent of Congress, had any application whatever to the second district. For though the second section of the first article of the new constitution had proposed to include it, the proposal was accompanied with conditions which were not complied with; and when that constitution was presented to Congress for approval, the proposal had already been rejected, and had no significance or effect whatever.
NOTES
[*] 12 Peters, 724.
[*] 7 Howard, 660.
[] 17 Id. 478.
[*] 23 Howard, 505.
[*] Supra, p. 42.
[*] Supra, p. 42.
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582 F.2d 1242
Bob Dale McDANIEL, Petitioner-Appellant,v.STATE OF OKLAHOMA, Respondent-Appellee.
No. 76-2010.
United States Court of Appeals,Tenth Circuit.
Aug. 25, 1978.
Ray A. Gunning, Boulder, Colo., for petitioner-appellant.
John F. Fischer, II, Asst. Atty. Gen., Oklahoma City, Okl. (Larry Derryberry, Atty. Gen., Oklahoma City, Okl., with him on the brief), for respondent-appellee.
Before SETH, Chief Judge, and McWILLIAMS and McKAY, Circuit Judges.
McKAY, Circuit Judge.
1
Petitioner is appealing from an order of the United States District Court for the Western District of Oklahoma denying habeas corpus relief sought pursuant to 28 U.S.C. § 2254. We affirm for the reasons stated below.
2
Petitioner was convicted in the District Court of Oklahoma County of sodomy, rape and assault with a deadly weapon. Judgment and sentences were affirmed on direct appeal to the Oklahoma Criminal Court of Appeals. McDaniel v. State, 509 P.2d 675 (Okl.Cr.1973). He then petitioned the United States District Court for the Western District of Oklahoma for a writ of habeas corpus. His petition was dismissed for failure to exhaust remedies available in the state courts. He then filed an application for post-conviction relief in the District Court of Oklahoma County. Following a full evidentiary hearing, the state district court denied his application and the Oklahoma Criminal Court of Appeals affirmed the denial of post-conviction relief.
3
Having exhausted available state remedies, petitioner turned again to the federal courts for relief, claiming the state courts erred in allowing into evidence a pocket knife seized during a warrantless search of his parked car following his arrest. On appeal to this court petitioner claims the district court erroneously denied his petition for writ of habeas corpus.
4
This case is controlled by Stone v. Powell, 428 U.S. 465, 96 S.Ct. 3037, 49 L.Ed.2d 1067 (1976), and its progeny. In Stone v. Powell, the Supreme Court held that
5
where the State has provided an opportunity for full and fair litigation of a Fourth Amendment claim, a state prisoner may not be granted federal habeas corpus relief on the ground that evidence obtained in an unconstitutional search or seizure was introduced at trial.
6
Id. at 494, 96 S.Ct. at 3052. Petitioner contends the knife should have been excluded as the fruit of an unconstitutional search and seizure. Relying on Stone v. Powell, the federal district court held petitioner was not entitled to an evidentiary hearing and denied his petition for writ of habeas corpus.
7
The record does not show that petitioner moved to suppress the pocket knife prior to trial in the state courts. From the record it is apparent, however, that he objected to the introduction of this evidence at trial and that the court admitted the evidence over his objection. Petitioner subsequently presented this issue on direct appeal. McDaniel v. State, 509 P.2d at 681. Furthermore, the legality of the search and seizure producing the pocket knife was considered in a full evidentiary hearing conducted on his application for post-conviction relief pursuant to Okla. Stat. tit. XXII, §§ 1080 Et seq. (1971). The denial of post-conviction relief was affirmed on appeal to the Oklahoma Criminal Court of Appeals.
8
We are convinced by our careful examination of the record that the state provided and petitioner received an opportunity to fully and fairly litigate his Fourth Amendment claims. Petitioner's primary complaint on this appeal is that the Oklahoma Criminal Court of Appeals skirted the illegal search and seizure issue when it refused to rule directly on the admissibility of the pocket knife, and entered a harmless error ruling as follows:
9
Defendant lastly contends that the trial court erred in allowing the introduction of the pocket knife found on the front seat of defendant's car after defendant had been arrested and taken into custody. . . . A reasonable view of the record indicates other substantial evidence from which the jury could find the defendant guilty. It is thus apparent that the jury could not have been prejudiced by the admittance of the pocket knife.
10
McDaniel v. State, 509 P.2d at 681.
11
Petitioner contends that this harmless error ruling, absent a discussion of the pocket knife's inadmissibility, did not afford him full and fair consideration of his Fourth Amendment claim by the state court on direct appeal. It is clear, however, that Stone v. Powell was decided on facts essentially the same as those presented by this appeal. In Stone v. Powell,
12
(a)lthough the (Fourth Amendment) issue was duly presented (to the California District Court of Appeals), that court found it unnecessary to pass upon the legality of the arrest and search because it concluded that the error, if any, in admitting the testimony . . . was harmless beyond a reasonable doubt under Chapman v. California, 386 U.S. 18, (87 S.Ct. 824, 17 L.Ed.2d 705) (1967).
13
428 U.S. at 470, 96 S.Ct. at 3040. On these facts the Court held that petitioner Powell had been afforded "an opportunity for full and fair litigation" of his Fourth Amendment claim. Similar state court harmless error rulings have been held to preclude habeas relief under the Stone standard. E. g., Moore v. Cowan, 560 F.2d 1298, 1300 (6th Cir. 1977).
14
We therefore conclude that the challenges which petitioner makes to the fullness or fairness of state court litigation regarding his Fourth Amendment claims are insufficient to meet the threshold established in Stone. Accordingly, the district court's denial of habeas corpus relief is affirmed.
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906 F.2d 829
UNITED STATES of America, Appellant,v.James L. DAVIS, John L. Furyck and Linton Ivery, Defendants-Appellees.
No. 1261, Docket 90-1031.
United States Court of Appeals,Second Circuit.
Argued June 1, 1990.Decided June 20, 1990.
Patty Merkamp Stemler, Atty. U.S. Dept. of Justice, Washington, D.C. (Frederick J. Scullin, U.S. Atty. N.D.N.Y., Donald T. Kinsella, Asst. U.S. Atty., of counsel), for appellant.
Robert C. Hunter (Davis & Trotta, Millerton, NY, of counsel), for defendant-appellee James L. Davis.
Raymond A. Kelly, Jr., Albany, N.Y., for defendant-appellee John L. Furyck.
Richard L. Mott, Albany, N.Y., for defendant-appellee Linton Ivery.
Before KAUFMAN, KEARSE and MINER, Circuit Judges.
IRVING R. KAUFMAN, Circuit Judge:
1
As the challenge facing the nation's law enforcement authorities has grown in sophistication and complexity, cooperation between federal and local agencies has become increasingly important and increasingly commonplace. In particular, joint federal-state operations have proved a crucial weapon in the long struggle against those who deal in illegal drugs. The question before us today is under what circumstances such cooperation becomes so close that the federal government should be bound by a determination in a state case. Specifically, should suppression of evidence in a state case require the suppression of that same evidence in a later federal prosecution against the same defendants?
Background
2
This case arises from an investigation into illegal narcotics trafficking conducted by the Capital District Drug Enforcement Task Force ("the Task Force"). The Task Force, operating in an area surrounding Albany, New York, is one of a number of joint investigative units established throughout the nation to coordinate the efforts of federal, state and local enforcement agencies. State and local officers assigned to the Task Force are deputized as Special Deputy United States Marshals and operate under the direct control and supervision of the United States Drug Enforcement Administration. All of the officers assigned to the Task Force follow DEA policies and procedures. According to the agreement establishing the Task Force ("the agreement"), signed by representatives of the DEA and the local agencies, the use of federal procedures "insures the ability of the Task Force to elect prosecution in either state or federal court, whichever is most appropriate."
3
On January 29, 1988, the Task Force arranged for an undercover officer to purchase eight ounces of cocaine from appellee Linton Ivery. The Task Force agent, wearing a radio transmitter concealed on his body, met Ivery in a parking lot in the village of Catskill, New York, and finalized the transaction by exchanging $11,000 for the cocaine. He then signalled the other Task Force members to arrest Ivery.
4
As the back-up units moved in with police lights flashing, a white Pontiac pulled away quickly from the parking lot. Believing that its occupants might be involved with the drug deal, officers gave chase and ordered the Pontiac to stop. As they approached the car, the officers observed in plain view on the back seat a rifle and a shotgun, ammunition, and a bottle of white powder labeled inositol (a substance commonly used for cutting cocaine). The passenger identified himself as James Davis--a known associate of Ivery. At that point, both Davis and the driver, John Furyck, were arrested.
5
All three were indicted in Greene County Court for violating state narcotics and weapons laws. After Ivery began cooperating with the prosecution, Davis and Furyck moved to suppress the evidence seized from the white Pontiac. On March 2, 1989, after a hearing, County Court Judge John Fromer suppressed the evidence, ruling that the Task Force officers lacked reasonable cause to stop the white Pontiac. Instead of appealing the suppression order, the District Attorney moved to dismiss the charges and Judge Fromer so ordered.
6
On May 18, 1989, a federal indictment was returned in the Northern District of New York, charging Davis, Furyck and Ivery with conspiracy to possess and distribute cocaine, possession of cocaine with intent to distribute it, distribution of cocaine, and possession of a firearm in relation to a drug trafficking crime.
7
All the defendants moved to dismiss the indictment and, alternatively, for suppression of the evidence seized from the white Pontiac. Judge McAvoy denied the motion to dismiss, but ordered the evidence suppressed. He ruled that the doctrine of collateral estoppel prevented the introduction of the evidence in the federal prosecution. It was his view that the federal government should be deemed a party to the state prosecution and, accordingly, had a full and fair opportunity to litigate the admissibility of the evidence during the state proceedings. As a result, Judge McAvoy excluded the evidence without holding a suppression hearing of his own. The government appeals Judge McAvoy's order. 18 U.S.C. Sec. 3731. Appellees defend the order of suppression and ask this Court to dismiss the indictment because it violates fundamental notions of justice, decency and fair play.
Discussion
8
One of the by-products of our nation's federal system is the doctrine of "dual sovereignty." Under this well-established principle, a federal prosecution does not bar a subsequent state prosecution of the same person for the same acts, and a state prosecution does not bar a federal one. This doctrine rests upon the basic structure of our polity. The states and the national government are distinct political communities, drawing their separate sovereign power from different sources, each from the organic law that established it. Each has the power, inherent in any sovereign, independently to determine what shall be an offense against its authority and to punish such offenses. When a single act violates the laws of two sovereigns, the wrongdoer has committed two distinct offenses. See generally United States v. Wheeler, 435 U.S. 313, 316-20, 98 S.Ct. 1079, 1082-84, 55 L.Ed.2d 303 (1978).
9
In practice, successive prosecutions for the same conduct remain rarities. In the normal exercise of prosecutorial discretion, one sovereign usually defers to the other. For example, as a matter of policy the federal government ordinarily will not pursue criminal charges against a defendant who has already been prosecuted in state court. See United States Department of Justice, United States Attorneys' Manual, Tit. 9, Sec. 2.142; Petite v. United States, 361 U.S. 529, 531, 80 S.Ct. 450, 451, 4 L.Ed.2d 490 (1960) (per curiam); United States v. Catino, 735 F.2d 718, 725 (2d Cir.), cert. denied, 469 U.S. 855, 105 S.Ct. 180, 83 L.Ed.2d 114 (1984). However, this is not a limitation on the government's sovereign right to vindicate its interests and values, and nothing prevents a federal prosecution whenever the state proceeding has not adequately protected the federal interest.
10
The only legally binding exception to the dual sovereignty doctrine is a narrow one carved out by the Supreme Court in Bartkus v. Illinois. Successive prosecutions will be barred where one prosecuting sovereign can be said to be acting as a "tool" of the other, 359 U.S. 121, 123, 79 S.Ct. 676, 678, 3 L.Ed.2d 684 (1959), or where one prosecution is merely "a sham and a cover" for another, id at 124, 79 S.Ct. 678. Except for this extraordinary type of case, successive state and federal prosecutions may, in fact as well as form, be brought by different sovereigns and the outcome in a state proceeding is not binding upon the later prosecution.
11
For analogous reasons, the suppression of evidence in a state prosecution normally does not prevent the United States from using that evidence in a federal proceeding. Since the United States was not a party to the state action, was not present during the suppression hearing, and had no way of making its views on the issue known to the state judge, it cannot be fairly considered to have had its day in court. Because the two prosecutions are independent, "one sovereign should not be bound by the evidence or the strategy of the other." United States v. Ramirez, 404 F.Supp. 273, 275 (W.D.Tex.1974), quoted in W.La Fave, 4 Search and Seizure, Sec. 11.2(g) at 268 (2d ed. 1987).
12
Accordingly, it has long been the rule in this Circuit that "collateral estoppel never bars the United States from using evidence previously suppressed in a state proceeding in which the United States was not a party." United States v. Panebianco, 543 F.2d 447, 456 (2d Cir.1976), cert. denied, 429 U.S. 1103, 97 S.Ct. 1128, 51 L.Ed.2d 553 (1977); see also United States v. Mejias, 552 F.2d 435, 444 (2d Cir.), cert. denied, 434 U.S. 847, 98 S.Ct. 154, 54 L.Ed.2d 115 (1977); United States v. Beigel, 370 F.2d 751, 756 (2d Cir.), cert. denied, 387 U.S. 930, 87 S.Ct. 2049, 18 L.Ed.2d 989 (1967).
13
However, although the United States was not a party to the state action, appellees contend that the relationship between the federal and state prosecutors was so close that it placed the federal government in privity with the state prosecution. It would follow, it is argued, that we could fairly treat the United States as if it had been a party to the New York suppression hearing.
14
We recognize that pursuant to the doctrine of collateral estoppel, a non-party to an action can be bound by the determination of issues decided in that action if it "controls or substantially participates in the control of the presentation on behalf of a party." Restatement (Second) of Judgments Sec. 39 (1982); see also Montana v. United States, 440 U.S. 147, 154, 99 S.Ct. 970, 974, 59 L.Ed.2d 210 (1979) (one who assists in the prosecution or defense of an action in aid of some interest of his own is bound). When control is exercised and the opportunity to present proof and arguments on the issues litigated is afforded, one has had his day in court and should be bound by the outcome.
15
The parameters of this doctrine may well be more circumscribed in the criminal arena, see Standefer v. United States, 447 U.S. 10, 100 S.Ct. 1999, 64 L.Ed.2d 689 (1980) (nonmutual collateral estoppel not available in criminal cases), but it does apply. In Ashe v. Swenson, the Supreme Court held that collateral estoppel principles can be a bar to further litigation of an issue decided in a criminal defendant's favor. 397 U.S. 436, 90 S.Ct. 1189, 25 L.Ed.2d 469 (1970). The holding in Ashe rested squarely on the Fifth Amendment's guarantee against double jeopardy and does not control the instant case. This is so because of the dual sovereignty doctrine and, in addition, because jeopardy never attached in the local prosecution.
16
Our Circuit, however, has suggested that the due process clause, unaided by the double jeopardy clause, sometimes requires a state to apply collateral estoppel in favor of a criminal defendant. United States ex rel. DiGiangiemo v. Regan, 528 F.2d 1262, 1265 (2d Cir.1975), cert. denied, 426 U.S. 950, 96 S.Ct. 3172, 49 L.Ed.2d 1187 (1976). The extent to which collateral estoppel is applicable to pretrial orders granting suppression motions seems largely to be an open question. Significantly, DiGiangiemo dealt with a subsequent prosecution by the same sovereign. As Judge McAvoy recognized, no court has applied collateral estoppel to bar relitigation of a suppression issue in a later proceeding by a different sovereign. The difference in sovereigns--that is, the difference in parties--will foreclose the use of collateral estoppel against the second prosecution except in the most unusual circumstances. See Vestal, Issue Preclusion and Criminal Prosecutions, 65 Iowa L.Rev. 281, 290 (1980). Appellees contend that this case falls in that area. In essence, they argue that the nature of the joint federal-state Drug Enforcement Task Force was sufficient to create privity between the U.S. and the State of New York.
17
Task Force officers, as we have indicated, were deputized as federal agents and followed federal DEA procedures. According to the agreement establishing the combined operation (signed by representatives of the DEA and the local agencies), federal procedures were used so that the Task Force could "elect prosecution in either state or federal court, whichever [was] most appropriate."
18
Appellees argue that this language requires the election of one forum and one forum only for prosecution. In short, it is claimed that the DEA and the local police agencies have entered into an agreement barring successive prosecutions. We are asked to hold that because of the composition of the Task Force and the authority given it by this agreement, any prosecution, even one brought in state court, is in reality a federal prosecution and the Task Force should not be allowed a second bite at the apple by filing new charges in federal court. The agreement cannot fairly be read in this manner.
19
The authority to bring the state charges belonged exclusively to the District Attorney of Greene County; the authority to bring federal charges was vested solely in the United States Attorney for the Northern District of New York. While Task Force officers may choose to report their evidence initially to one prosecutor, that is not the same as initiating a prosecution. Filing charges remains a sovereign decision within the discretionary authority of the District Attorneys with respect to state court and the United States Attorneys with respect to federal court.
20
We would expect that any delegation of this authority to the Task Force, necessarily ceding to it substantial rights of both sovereigns and abrogating the doctrine of dual sovereignty, would be spelled out with much greater clarity than can be found in this agreement. All that the quoted language makes clear is that Task Force officers should follow federal procedures so that their evidence will be admissible wherever the defendants are tried.1
21
Because the Task Force officers do not file charges or otherwise control prosecutions, their status as federal agents is not determinative of the privity issue. Moreover, it has long been recognized that mere participation by federal agents in an investigation does not implicate the United States as a sovereign. See, e.g., United States v. Aboumoussallem, 726 F.2d 906, 910 (2d Cir.1984) and cases cited therein; United States v. Johnson, 516 F.2d 209, 211 (8th Cir.), cert. denied, 423 U.S. 859, 96 S.Ct. 112, 46 L.Ed.2d 85 (1975); see also Archer v. Commissioner of Correction, 646 F.2d 44, 48 (2d Cir.) (participation of local officers in an investigation that led to a federal prosecution did not implicate a state as sovereign), cert. denied, 454 U.S. 851, 102 S.Ct. 291, 70 L.Ed.2d 141 (1981).
22
For the same reason, this Court has refused to give collateral estoppel effect to a state suppression order where there was substantial federal participation in the initial investigation. Mejias, 552 F.2d 435 (cooperative investigation by federal and state authorities); Panebianco, 543 F.2d 447 (joint federal-state narcotics unit); see also United States v. Safari, 849 F.2d 891, 893 (4th Cir.) (federal government is not a party to state court suppression hearing despite DEA and U.S. Customs Service involvement in investigation), cert. denied, 488 U.S. 945, 109 S.Ct. 374, 102 L.Ed.2d 363 (1988).
23
Clearly, the focus of this inquiry must be on those with the authority to act in their sovereign's name, the prosecutors, and not the law enforcement officers assigned to the Task Force. As Judge McAvoy correctly noted, the pivotal question is whether "there was a close or significant relationship between the federal and New York State prosecutors during the local suppression hearing or whether the federal authorities controlled or actively participated in that hearing such that their interests in enforcing federal law were sufficiently represented."
24
In determining whether the federal government controlled a state prosecution in varying contexts, some courts have indicated that a defendant must demonstrate that the state proceeding was merely "a sham and a cover for a federal prosecution," meeting the dual sovereignty exception of Bartkus, 359 U.S. at 124, 79 S.Ct. at 678. See United States v. Ng, 699 F.2d 63, 68 (2d Cir.1983) (state must be tool of federal government); United States v. Liddy, 542 F.2d 76, 79 (D.C.Cir.1976) (state officials must have little or no independent volition in state proceedings). Others, however, have required only active participation by the federal government in the first proceeding, a finding that the United States had a "laboring oar" in the state court litigation sufficient to activate principles of estoppel. See United States v. Parcel of Land at 5 Bell Rock Road, 896 F.2d 605, 610 (1st Cir.1990); United States v. Nasworthy, 710 F.Supp. 1353, 1355 (S.D.Fla.1989); see generally Montana v. United States, 440 U.S. 147, 153-55, 99 S.Ct. 970, 973-74, 59 L.Ed.2d 210 (applying "laboring oar" analysis in civil context).
25
We need not refine the somewhat ambiguous contours of this test, since appellees' contentions fall far short of showing the kind of close relationship that would meet even the lower hurdle of active participation.
26
At a minimum, it must be shown that federal prosecutors actively aided the state prosecutors during the local suppression hearing. Only then can it be said that their interests in enforcing federal law were sufficiently represented. The record here is totally barren of evidence of such control or participation. No federal prosecutors were present in Judge Fromer's courtroom during the suppression hearing. Nothing indicates that they provided assistance or advice to the local authorities at any time, or were involved in any way with the local prosecution or the decision not to appeal the suppression order.
27
Accordingly, in the circumstances of this case, we cannot say that the federal government was in privity with the state prosecution. Appellees have not met their minimum burden, to establish that the United States played a role as a "laboring oar" in the conduct of the state proceedings.
28
We note that even if the necessary identity of parties existed through privity, collateral estoppel would be inappropriate unless the issue resolved in the first proceeding was the same as the issue sought to be relitigated. See Dowling v. United States, --- U.S. ----, 110 S.Ct. 668, 673, 107 L.Ed.2d 708 (1990); Montana, 440 U.S. at 153, 99 S.Ct. at 973. It is unclear whether the state suppression order was premised on the Fourth Amendment or on state law. In federal court, however, evidence should be suppressed only where federal law has been violated and the federal exclusionary rule applies. The Supreme Court has stressed that
29
a federal court must make an independent inquiry, whether or not there has been such an inquiry by a state court, and irrespective of how any such inquiry may have turned out. The test is one of federal law, neither enlarged by what one state court may have countenanced, nor diminished by what another may have colorably suppressed.
30
Elkins v. United States, 364 U.S. 206, 224, 80 S.Ct. 1437, 1447, 4 L.Ed.2d 1669 (1960).
31
For this reason as well, it would be improper to deny the government an opportunity to present its arguments at a federal suppression hearing.
32
We have considered all of appellees' additional arguments and have found them to be without merit.
CONCLUSION
33
In sum, we are not holding that a federal prosecution can never be precluded from offering evidence that has been suppressed in a state prosecution. We are holding that to justify such an order of suppression the level of federal participation in the state prosecution must be of substantially greater magnitude than displayed here.
34
The judgment of the district court is reversed and we remand for disposition consistent with this opinion.
1
Even if the agreement could be read as requiring the election of prosecution in one forum only, which it cannot, we do not believe that it would afford defendants any substantive rights. It is not a statute or regulation; nor is it constitutionally mandated. See United States v. Catino, 735 F.2d 718, 725 (2d Cir.) (discussing Justice Department policy requiring departmental approval for a federal prosecution that follows a state prosecution), cert. denied, 469 U.S. 855, 105 S.Ct. 180, 83 L.Ed.2d 114 (1984)
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957 F.Supp. 1230 (1997)
WESTERN PCS II CORPORATION, a Delaware Corporation, Petitioner,
v.
EXTRATERRITORIAL ZONING AUTHORITY OF THE CITY AND COUNTY OF SANTA FE, Richard Anaya, Santa Fe County Commissioner, Herman M. Rodriguez, Santa Fe County Commissioner, Frank Montaño, Santa Fe City Councilor, and Chris Moore, Santa Fe City Councilor, Respondents.
No. Civil 96-1473 LH/DJS.
United States District Court, D. New Mexico.
February 27, 1997.
*1231 *1232 *1233 John P. Eastham, James T. Reist, H. Nicole Schamban, Kemp, Smith, Duncan & Hammond, P.C., Albuquerque, NM, for Petitioner.
Steven Koplman, County Attorney, County of Santa Fe, NM, Peter Dwyer, Assistant Santa Fe City Attorney, City of Santa Fe, NM, for Respondents.
MEMORANDUM OPINION
HANSEN, District Judge.
THIS MATTER comes before the Court on the Petitioner's Verified Petition for Review of Zoning Decision, for Writ of Certiorari, and for Writ of Mandamus (Docket No. 1), Petitioner's Notice of Appeal (Docket No. 2), Petitioner's Statement of Appellate Issues (Docket No. 18), and Respondents' Statement of Appellate Issues and Response to Appellant's Statement of Appellate Issues (Docket No. 20). The Court, having considered the pleadings submitted by the parties, the arguments of counsel, and otherwise being fully advised, finds that the Petitioner's pleadings are well taken, and its request for a Writ of Mandamus will be granted.
I. JURISDICTION
Petitioner's claims arise under the Telecommunications Act of 1996 ("TCA"), 47 U.S.C. § 332, which permits any person adversely affected by a decision by any state or local government in violation of the Telecommunications Act to "commence an action in any court of competent jurisdiction." Therefore, this Court has jurisdiction over the parties pursuant to 28 U.S.C. § 1331, granting this Court original jurisdiction over "all civil actions arising under the ... laws ... of the United States." The Telecommunications Act "vests the court with sufficient authority to grant ... mandamus relief if such relief would be warranted under the circumstances." BellSouth Mobility Inc. v. Gwinnett County, Georgia, 944 F.Supp. 923, 929 (N.D.Ga.1996).
The procedural posture of this action is, however, unusual. The Petitioner filed a Verified Petition for Review of Zoning Decision, for Writ of Certiorari, and for Writ of Mandamus (Docket No. 1), seeking relief under the Telecommunications Act for Respondent Extraterritorial Zoning Authority of the City and County of Santa Fe and the Individual Respondents' (collectively the "EZA") failure to grant them a special exception request. The Petitioners sought review of the EZA's decision under the procedures set out in N.M.STAT.ANN. § 3-21-9 and Rule 1-074 NMRA 1997. While this Court is not required to follow state procedures because its jurisdiction is granted by federal law, the Court concluded at the hearing on the Respondent's Motion to Dismiss on December 13, 1996, that these state procedures would expedite these proceedings and would comport with the strictures of the Telecommunications Act and the intent of Congress. See H.R. CONF.REP. NO. 104-458, at 209 (1996) *1234 (noting the intent of the conferees "that the court to which a party appeals a decision under section 332(c)(7)(B)(v) may be the Federal district court in which the facilities are located or a State court of competent jurisdiction, ... and that the courts act expeditiously in deciding such cases") (emphasis added). Pursuant to Rule 1-074 NMRA 1997 and this Court's Order, the Respondents filed a Record on Appeal on January 13, 1997 (Docket No. 17).
II. THE PROCEEDINGS BELOW
The Petitioner, Western PCS II Corporation ("Western"), filed this action to challenge the decision of the EZA denying its application to mount an antenna array to a water tank and to place equipment cabinets beside that water tank on certain property[1] owned by the County of Santa Fe. The County's deed is subject to a reservation which states:
Reserving to grantors, their successors and assigns, the right to use so much of said Tract A as may be reasonably convenient or necessary for water utility, other utility purposes and fire protection purposes, including the erection of storage tanks, pump stations and related structures in connection with the Hondo Hills subdivision and other subdivisions served by the water utility serving Hondo Hills.
(R.Ex. A at 3.) The grantors, Sunlit Hills of Santa Fe, Inc. and Hondo Hills, Inc., have apparently "entered into an agreement with Western allowing Western to mount equipment cabinets and an antenna array on a water tank already existing on the property and owned by the grantors for the construction of a wireless telecommunications service facility." (Petitioner's Statement of Appellate Issues ¶ 2 at 3-4; see also R.Ex. E at 7 (noting that the EZA received a "letter from Ralph Vail, the president of Sunlit Hills Water Association, giving Koll Telecommunications the go ahead to mount these antennas array [sic] on the water tank ...").) Western, through its agent Koll Communications, filed an application on April 22, 1996, for a special exception to place its equipment on the site pursuant to its agreement with Sunlit Hills, Inc. and Hondo Hills, Inc. (R.Ex. A at 1-2.) Koll Communications explained in its application that the site was chosen because of its proximity to Interstate 25, which it noted required a "multi-site configuration to provide adequate coverage ... because of its length, topography, and traffic patterns...." (R.Ex. B at 5-6.) Koll also explained that "[t]he water tank site, located on a ridge top, will lend critical support to the Western PCS II configuration through this corridor." (Id. at 6.) Koll described the proposed facilities and the potential impact of those facilities as follows:
The proposed site will consist of antennas mounted on the sides of the water tank, each antenna painted to match the color of the tank. The radio equipment cabinets will be placed on a concrete slab and contained behind a 6-foot chain link fence next to the water tank. Utilities will be procured from existing power and telco on-site, or in the immediate area. An existing dirt road provides access to the site.
The equipment and facility described here produces no noise, dust, pollution, refuse, or other adverse effect on environmental health. The site is unmanned and requires no sewer, water, policing, or other services other than electrical power. It will be subject to monthly maintenance inspections by Western PCS personnel. In addition, it will not be unsightly or detract from the architectural integrity of the building and surrounding area, and it will not interfere with other licensed and operating broadcasting frequencies.
(Id. at 6; see also R.Ex. B at 7-8.)
The Petitioner's request was reviewed by the EZA's preliminary review body, the Extraterritorial Zoning Commission ("EZC"), on June 18, 1996, and the EZC, by unanimous voice vote, approved the application, subject to certain conditions. (R.Ex. B at 11.) In accordance with this EZC approval, Roman Abeyta, a Development Review Specialist II working for the EZA, wrote a memorandum to the EZA on August 27, 1996, *1235 noting the EZC's recommendation that the EZA approve the request. (R.Ex. C at 1-2.) In that memorandum, Mr. Abeyta stated that Section 7 of the City and County's Extraterritorial Zoning Ordinance ("EZO") applied to Western's proposed utility infrastructure and that requested exceptions such as Western's "can be granted based on an evaluation that the request will not be adverse or detrimental to the public health, safety, and welfare." (Id. at 2.) The recommendation also included the following conditions for approval:
1. The applicant must provide development submittal for the access road subject to approval by the County Staff.
2. Compliance with applicable franchise agreements.
3. This proposal is subject to a permit from the State of New Mexico Construction Industries Division.
4. Antenna height cannot exceed twenty-four feet (24').
5. A retention pond must be constructed [to] mitigate increased run-off created by the concrete pad for cabinets.
6. Graffiti on existing water tank must be removed.
7. A master plat must be prepared with signature lines for the Land Use Administrator, EZC and EZA Chairpersons, and recorded in the office of the County Clerk.
8. Any change of use or expansion of approved utility use is subject to review and approval by the EZC-EZA.
(R.Ex. C at 2-3.) These conditions were not contested by Western, and it agreed to comply with them at hearings before the EZC and the EZA. (R.Ex. B at 10, Ex. E at 45.)
The EZA had three meetings at which it considered Western's application and the EZC's recommendation that the request be approved. The first meeting was held on July 30, 1996. However, the matter was tabled because of a concern raised by City Councilor Chris Moore about whether the easement reserved in the deed was sufficient to permit Western's use of the property. (R.Ex. E at 9.) Prior to the tabling, County Commissioner Anaya instructed the EZA staff to determine if the County could override the agreement between Western and the holder of the easement. (Id. at 10.)
The EZA reconvened to consider the request on August 27, 1996. (R.Ex. E at 13.) The EZA again focused on the language in the deed and whether the reserved easement was a sufficient property interest for the use proposed by Western. (Id. at 15-37.) Even the statements by members of the community neighboring the site focused primarily on the extent of Western's property interest. (See id. at 31-35.) During this second meeting Chairman Montaño and the other members of the EZA discussed the Telecommunications Act and ultimately decided to table the request for another 30 days to permit the County and City attorneys to review the requirements of that Act. (Id. at 19, 35-37.)
The final meeting of the EZA to consider Western's request occurred on September 24, 1996, over five months after Western made its application for a special exemption request. (R.Ex. E at 39-40.) At this meeting Western, through its Agent Veronica Jones, the Zoning Manager for Koll Communications, gave a statement concerning the appropriateness of the site to Western's needs and Western's efforts to design the facility to minimize the impact of the facilities on the surrounding communities. (Id. at 43-46.) In particular, Ms. Jones noted that Western has "scouted [the Hondo Hills area] very thoroughly [and that t]here is very little in the way of alternatives to this site that will provide coverage through those nooks and crannies and that portion of [I-25] and hookup with other sites. It is a very difficult area, very difficult." (Id. at 48.) However, the meeting quickly returned to a discussion of the sufficiency of Western's property interest. (Id. at 46-69.) Ultimately, the EZA concluded the meeting by denying Western's request, based apparently on its conclusion that Western had an insufficient property interest to support its proposed activities and because the EZA did not hear "from a single resident of this subdivision who wants the service...." (Id. at 69.)
III. THE TELECOMMUNICATIONS ACT
While generally preserving the authority of local zoning boards, the TCA explicitly *1236 limits their ability to regulate the provision of personal wireless services by prohibiting any "unreasonable discrimina[tion] among providers of functionally equivalent service," and by requiring that regulations "shall not prohibit or have the effect of prohibiting the provision of personal wireless services." 47 U.S.C. § 332(c)(7)(B)(i)(I-II). The statute requires State and local governments to act "within a reasonable period of time" on requests to construct wireless facilities. 47 U.S.C. § 332(c)(7)(B)(ii). Moreover, the statute specifically requires that any denial of such a request be "in writing and supported by substantial evidence in a written record." 47 U.S.C. § 332(c)(7)(B)(iii) (emphasis added). It also prohibits state and local governments from making the denial "on the basis of the environmental effects of radio frequency." 47 U.S.C. § 332(c)(7)(B)(iv).
A. TCA Requirement of Written Denial Supported by Substantial Evidence
The Court finds that the EZA failed to comply with even the most basic of the Telecommunications Act's requirements that it produce a written denial, supported by substantial evidence in a written record when it denied the Petitioner's request. 47 U.S.C. § 332(c)(7)(B)(iii). The EZA made no written findings denying Western's request, and despite Respondents' contention that the transcript of the proceedings before the EZA is a sufficient written decision, this Court finds that a post-appeal transcription of the proceedings before the EZA is not sufficient to satisfy the requirements of Section 332(c)(7)(B)(iii). The requirement for a written denial was obviously included to permit a reviewing court to ascertain the rationale behind a denial so that it can determine if that denial comports with the requirements of the statute. See H.R.CONF.REP. NO. 104-458, at 208. The transcript of the proceedings below clearly indicates only the rationale of one member of the EZA. (R.Ex. E at 68.) Therefore, the purpose of this provision has been frustrated by the EZA's failure to comply with the law.
Moreover, the record does not provide any indicia of "substantial evidence" which would support a denial of the special exemption request on any legitimate ground. (R.Ex. E at 68.) As the BellSouth court noted, "[a]lthough the court is not free to substitute its judgment for that of the [local zoning board,] it must overturn the ... decision under the substantial evidence test if it `cannot conscientiously find that the evidence supporting that decision is substantial, when viewed in the light that the record in its entirety furnishes, including the body of evidence opposed to the [zoning board's] view.'" 944 F.Supp. at 928 (quoting Bickerstaff Clay Products Co. v. N.L.R.B., 871 F.2d 980, 984 (11th Cir.), cert. denied, 493 U.S. 924, 110 S.Ct. 292, 107 L.Ed.2d 272 (1989)). As discussed further below, the EZA spent the vast majority of its time discussing irrelevant issues of property law. The only other basis given by Councilor Moore was that he did not hear "from a single resident of this subdivision who wants the service," and he therefore concluded that the residents of the neighboring subdivision were of the opinion that the facility would "not serve them." (R.Ex. E at 69.) Even if this astounding conclusion based on the absence of public comment were correct, it would not provide "substantial evidence" to support the denial and to override the federal interests in this matter. See BellSouth, 944 F.Supp. at 928.
Substantial evidence must be "more than a mere scintilla. It means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Universal Camera Corp. v. NLRB, 340 U.S. 474, 477, 71 S.Ct. 456, 459, 95 L.Ed. 456 (1952). The question is not whether the neighboring residents would be served by Western's facility, but rather whether a denial would violate federal law and would be permitted under the EZO. This Court concludes that the "generalized concerns" expressed by the five neighbors who testified and the couple of others who wrote letters to the EZA, do not constitute "substantial evidence" to support the denial. I also note that the majority of these concerns, as expressed by the neighbors themselves, focussed on questions of property law. (See e.g. R.Ex. E at 32-35.) As I discuss below, the EZA is not the proper forum in which to address these concerns. The concerns properly *1237 before the EZA, that the facilities might be a visual blight in the neighborhood, while legitimate concerns, are not supported by the record.
The antennas, as described in the application, will not be noticeable as they will be the same color as the water tank and will not exceed the height of the water tank. (See R.Ex. B at 6-8.) The facilities also include two equipment cabinets which will be set beside the water tank. (Id.) The Court does not believe that there is "substantial evidence" in the record that these cabinets will significantly decrease the visual appeal of the water tank or the surrounding area. However, the EZA may, under Section 7 of the EZO and the Court's Writ of Mandamus, require Western to grow a screen of vegetation to eliminate any unsightliness the facility may cause. The Court also notes that Western has agreed to remove the graffiti currently causing a visual blight on the water tank. (R.Ex. B.) Finally, there is no evidence in the record that the proposed facilities will be "adverse or detrimental to the public health, safety, [or] welfare." (R.Ex. C at 2.) Thus, the Court must conclude that there is no "substantial evidence" which could form a legitimate basis for the EZA's denial of Western's request.
This Court would be inclined to remand this matter to the EZA for written findings if the record reflected any legitimate basis for a denial. However, the record indicates instead that the EZA is willing to ignore the requirements of federal law and reach far beyond its authority to create a reason to deny the Petitioner's request.[2] Moreover, the record clearly indicates not only that there is no evidence supporting the EZA's decision, but that there is substantial evidence supporting the Petitioner's application. Therefore, for the reasons set forth below, the Court will not remand this matter for further proceedings but will grant Petitioner's requested mandamus relief.
B. The TCA's Requirement that Competition Be Preserved
In addition to the EZA's failure to issue a written denial of Western's request, the EZA's decision violated the two substantive provisions of the TCA. Congress enacted the TCA with the intent to "increase competition in the telecommunications industry." BellSouth, 944 F.Supp. at 927. To that end, the Act provides that local zoning regulators "(I) shall not unreasonably discriminate among providers of functionally equivalent services; and (II) shall not prohibit or have the effect of prohibiting the provision of personal wireless services." 47 U.S.C. § 332(c)(7)(B)(i). The record clearly indicates that Western's two competitors in the Santa Fe area, U.S. West and Sprint, are currently providing analog cellular service in the Hondo Hills area, and most significantly, they provide uninterrupted service along the I-25 corridor. (R.Ex. E at 29.) The record also indicates that the proposed site was a unique site, or at least one of a very few possibilities in the area. (R.Ex. B at 5-6, Ex. E at 28, 48.)
It does not take a telecommunications engineer or a marketing expert to recognize that an inability to provide uninterrupted service along the I-25 corridor would seriously impede Western's ability to compete with its competitors in the Santa Fe area. While Western provides a digital technology, rather than the analog service its competitors provide, (R.Ex. E. 43-44), they are "functionally equivalent service[s]." 47 U.S.C. § 332(c)(7)(B)(i)(I). The EZA's denial of Western's exemption either denies Western the opportunity to compete with its competitors along the I-25 corridor (and arguably throughout Santa Fe as a result), or it significantly increases Western's costs, and *1238 thereby reduces its ability to compete, by requiring it to find an alternative site. As the record does not support a legitimate basis for the EZA's denial, the Court must conclude that the denial amounts to the "unreasonable discrimination" prohibited by the Telecommunications Act of 1996. Id.
Finally, the Court concludes that the denial also violated the Act's requirement that local regulation "shall not prohibit or have the effect of prohibiting the provision of personal wireless services." 47 U.S.C. § (c)(7)(B)(i)(II). While Western provides "functionally equivalent services," the record indicates that Western's digital technology is an advance in cellular communications technology. (R.Ex. E at 43-44.) Denial of Western's request has the effect of denying the provision of this new technology and its advantages to the Hondo Hills area. Most significantly, it denies this new technology to the I-25 corridor, as Western is the only provider of digital technology in the Santa Fe area. Id.
For the reasons outlined above, the Court concludes that the EZA violated the TCA by failing to issue a written denial, 47 U.S.C. § 332(c)(7)(B)(iii), by "unreasonably discriminating among providers of functionally equivalent services," 47 U.S.C. § 332(c)(7)(B)(i)(I), and by "having the effect of prohibiting the provision of ..." the new digital technology Western is advancing, 47 U.S.C. § 332(c)(7)(B)(i)(II). These violations, by themselves, require that the EZA's decision be revisited. The Court's initial inclination was to remand this matter to the EZA, for reconsideration in light of the TCA. However, as noted above, given the EZA's indications that it is willing to reach beyond its authority to avoid granting Western's request and to avoid the requirements of the TCA, this Court finds the Petitioner's requested mandamus relief to be the appropriate means to resolve this matter.
IV. AUTHORITY OF THE EZA
The EZA's authority is granted by state statute which gives the EZA the power to regulate and restrict the "(1) height, number of stories and size of buildings and other structures; (2) percentage of a lot that may be occupied; (3) size of yards, courts and other open space; (4) density of population; and (5) location and use of buildings, structures and land for trade, industry, residence or other purposes." N.M.STAT.ANN. § 3-21-1(A) (Repl.Pamp.1995). As the majority of the Record on Appeal is dedicated to a discussion of whether Western's property interest is sufficient to support its proposed activities, and given Councilor Moore's concluding comment that the deed reservation is sufficient to deny the special exemption request (R.Ex. E at 69), it is clear to this Court that the basis for the denial was, in large part, a result of the EZA's interpretation of property law. Respondents have given the Court no authority to indicate that the EZA has the power or the expertise to adjudicate questions of property law. The New Mexico Supreme Court has held that "it is not within the proper function of the zoning authority to condition an exception to the use of real property upon personal rights of ownership, rather than use." Mechem v. City of Santa Fe, 96 N.M. 668, 672, 634 P.2d 690, 694 (1981).
Moreover, to permit the EZA to adjudicate the question of the extent of Western's property interest would violate the most basic of due process requirements. The EZA's concern appears to have grown out of its recognition that Santa Fe County owns the property upon which Western's easement rests. What concerns the Court is that the majority of the EZA's voting members are representatives from the County of Santa Fe. To permit the EZA to act as a tribunal to adjudicate Western's interest in the property would allow the owner, whose interest is adverse to the interests of Western, to determine the scope of Western's easement. Under these circumstances, even if the EZA were qualified and/or empowered to make such a determination, it could hardly be considered an "impartial tribunal," as required by due process. Therefore, it is clear that the EZA improperly considered Western's property interest and this rationale must be excluded from any consideration of Western's request.[3] Moreover, the members of the *1239 EZA made it clear during the final hearing on Western's request that they were basing their denial on the sufficiency of Western's property interest because the TCA and the EZO restricted the EZA's ability to deny the request on other grounds. The Court is concerned that should it simply remand this matter to the EZA it will simply find alternative "reasons" for a denial, rather than basing its decision on the record before it. Therefore, mandamus relief will issue.
V. THE DETERMINATION OF THE EZC WAS BASED ON "SUBSTANTIAL EVIDENCE"
After a single meeting, the EZC, the preliminary hurdle for any application for a special exemption request under the EZO of the City and County of Santa Fe, promptly granted its approval of Western's special exemption request and, within three months of Western's application, formally recommended approval to the EZA. This approval was not a rubber stamping of Western's request, but a careful consideration of Western's application, the requirements of the EZO, and the interests of the community surrounding the proposed site. Moreover, the EZC recognized the limits on its and the EZA's authority and based its decision, appropriately, on the EZO rather than on allegations that Western's property interest was insufficient. (See generally R.Ex. B.) The EZC also recognized that it could improve the visual appeal of the water tank by requiring that Western remove graffiti which is currently on the water tank as a condition of its approval. (Id.) This was clearly within the authority the EZO grants the EZC to "impose appropriate conditions to promote compatibility and mitigate impacts." (R.Ex. B at 9.) The EZC or EZA also clearly could require Western to grow screening vegetation to block the view of the equipment on the hill as provided for in Section 7 of the EZO.
The conclusions of the EZC and its decision to recommend approval of Western's application are supported by "substantial evidence" in the record and should have been the basis for an EZA approval of Western's request. Instead, the EZA got distracted by concerns that Western's property interest was insufficient to support its proposed activities. While these are legitimate and serious concerns, the EZA is not the proper forum to adjudicate Western's property interest and the EZA should not have considered that issue. There is nothing in the record to indicate that Western's proposed antenna array would be "detrimental to the public health, safety, [or] welfare" as required by the EZO, nor is there anything to indicate that Western's proposal would detract visually from the current appearance of the site. (See generally R.Ex. B.) In other words, there is nothing in the record to support the denial of Western's request under the EZO or the authority of the EZA. However, the EZA did, and continues to have, the authority under Section 7 of the EZO to require Western to establish a visual screen to block the neighbor's view of the proposed facility.
VI. CONCLUSION
The Court concludes that a writ of mandamus, as requested by Western, is the appropriate remedy in this case. This matter needs to be resolved expeditiously as required by the Telecommunications Act, and Western has already suffered numerous unnecessary delays. 47 U.S.C. § 332(c)(7)(B)(v). The EZA gave no indication in the proceedings below that it would take seriously the Act's mandate that local governments act on requests such as Western's in a "reasonable period of time." 47 U.S.C. § 332(c)(7)(B)(ii). In fact, the EZA's willingness to repeatedly table the application to investigate irrelevant issues indicates just the opposite.
*1240 This Court has concluded that the TCA was violated by the EZA's failure to issue a written denial of Western's application, 47 U.S.C. § 332(c)(7)(B)(iii), by "unreasonably discriminating among providers of functionally equivalent services," 47 U.S.C. § 332(c)(7)(B)(i)(I), and by "having the effect of prohibiting the provision of ..." the new digital technology Western is advancing, 47 U.S.C. § 332(c)(7)(B)(i)(II). Moreover, I have concluded that the EZA's decision was based on determinations it made which went far beyond its authority. I have also concluded that the EZA's decision cannot be "supported by substantial evidence" contained in the record. In fact, I have concluded that the record supports the EZC's approval of Western's application. Therefore, I conclude, just as the BellSouth court concluded, that "simply remanding the matter to the [EZA] for their determination would frustrate the TCA's intent to provide aggrieved parties full relief on an expedited basis," and that mandamus relief is warranted under the circumstances. 944 F.Supp. at 929.
A Writ of Mandamus is entered contemporaneously with this Memorandum Opinion ordering the Extraterritorial Zoning Authority to grant Western's Special Exemption Request and to adopt the recommendation of the Extraterritorial Zoning Commission. The Extraterritorial Zoning Authority will comply with the Writ, forthwith.
WRIT OF MANDAMUS
THIS MATTER comes before the Court on the Petitioner's Verified Petition for Review of Zoning Decision, for Writ of Certiorari, and for Writ of Mandamus (Docket No. 1), Petitioner's Notice of Appeal (Docket No. 2), Petitioner's Statement of Appellate Issues (Docket No. 18), and Respondent's Statement of Appellate Issues and Response to Appellant's Statement of Appellate Issues (Docket No. 20). The Court entered a Memorandum Opinion contemporaneously with this Writ, finding that the Petitioner's pleadings are well taken, and granting its request for mandamus relief.
IT IS, THEREFORE, ORDERED that Respondent EXTRATERRITORIAL ZONING AUTHORITY of the City and County of Santa Fe ("EZA") and the individual respondents in their official capacities as members of the EZA, RICHARD ANAYA, Santa Fe County Commissioner, HERMAN M. RODRIGUEZ, Santa Fe County Commissioner, JAVIER M. GONZALES, Santa Fe County Commissioner, FRANK MONTAÑO, Santa Fe City Councilor, and CHRIS MOORE, Santa Fe City Councilor, ("Individual Respondents") will:
1. Approve the Petitioner Western PCS II Corporation's ("Western") Application for a Special Exemption Request, filed on April 22, 1996, with the EZA and referred to as EZ Case Z 96-4680, Koll Telecommunications Services, Inc., under the terms recommended by the Extraterritorial Zoning Commission in its July 30, 1996, Memorandum to the EZA, referred to in the Record on Appeal before this Court as Exhibit B. This approval is to be made pursuant to Section 7.D.4 of the Extraterritorial Zoning Ordinance of the City and County of Santa Fe (EZO).
2. Respondents will approve Petitioner's Application for a Special Exemption Request at the next regularly scheduled EZA meeting. However, in no event is this approval to be granted later than 30 days after this Writ is entered.
3. Respondents may require Western to make reasonable efforts to establish a visual screen of its facilities through the growth of vegetation, as provided for in Section 7.D.4 of the EZO. However, in no event is the approval to be contingent on Western's prior compliance with such a condition.
Respondents will comply with this Writ of Mandamus, forthwith.
NOTES
[1] The property in question is described in the Development Review Application as being situated east of the Old Las Vegas Highway, within Section 18, Township 16 North, Range 10 East in the Hondo Hills Subdivision Unit I, Tract A, Block 3. (See R.Ex. A at 1.)
[2] Councilor Moore indicated at the end of the last hearing before the EZA that he believed that the Telecommunications Act "was written mainly by the telecommunications industry in order to try to weaken the power of local governments" and that he was "especially annoyed that the act takes away from local governments the ability to regulate on the basis of environmental concerns." (R.Ex. E at 69.) The Councilor then argued, in the only statement that indicates the rationale for the denial, that the request could be denied on the grounds that the easement reserved in the deed is insufficient to support Western's proposal and on the basis of the statements of a few local residents. (Id.)
[3] The Court recognized this incongruity at the first hearing on this matter and recommended that if the County was concerned about Western's use of the easement on its property, it should file an action to quiet title in state court, the appropriate tribunal before which to challenge the scope of an easement. At the hearing on Petitioner's appeal on February 14, 1997, the County's Attorney indicated that it would likely challenge Western's property interest in a state action to quiet title. Had the County acted on this concern in the appropriate forum when it first learned of Western's claimed interest, Western's property interest could have been appropriately adjudicated in state court, the EZA could have acted promptly on Western's request, and this entire appeal could have been avoided.
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Reverse and Remand, and Opinion Filed August 5, 2014.
S In The
Court of Appeals
Fifth District of Texas at Dallas
No. 05-12-01586-CV
CATHIE REISLER, Appellant
V.
KEITH REISLER, Appellee
On Appeal from the 416th Judicial District Court
Collin County, Texas
Trial Court Cause No. 416-50508-2010
OPINION
Before Justices Moseley, Francis, and Lang
Opinion by Justice Lang
Cathie Reisler appeals the trial court’s final decree of divorce, dissolving her marriage to
Keith Reisler and dividing their marital property. Cathie Reisler raises four issues on appeal
arguing the trial court erred when it: (1) awarded Keith Reisler a disproportionate share of the
community estate because it made numerous calculation errors in the property division; (2) failed
to award her a disproportionate share of the community estate; (3) made her jointly and severally
responsible for the fees for Paul French’s services and for French’s attorney’s fees; and (4)
valued the community’s interest in the shares in medical investments for Plano Ambulatory
Surgery Associates and Texas Health Center for Diagnostics and Surgery based on Keith
Reisler’s income approach valuations. During oral argument, in this appeal, the parties advised
the Court that they had settled their dispute relating to issue three. Accordingly, we need not
address that issue.
We conclude the trial court erred when it divided the parties’ community estate. Also,
Cathie Reisler did not preserve for appellate review her complaint that the trial court erred when
it valued the community’s interest in the shares in medical investments for Plano Ambulatory
Surgery Associates and Texas Health Center for Diagnostics and Surgery based on Keith
Reisler’s income approach valuations. The portion of the trial court’s final decree of divorce
dissolving the marriage is affirmed and the portion dividing the parties’ community estate is
reversed and remanded for further proceedings consistent with this opinion.
I. FACTUAL AND PROCEDURAL BACKGROUND
In February 2010, Keith Reisler filed for divorce from Cathie Reisler. In his first
amended petition, Keith Reisler alleged insupportability and cruel treatment as grounds for the
divorce, requested a disproportionate division of the parties’ estate, and asserted a claim for
tortious interference of current and prospective business relations. In her second amended
counter-petition, Cathie Reisler alleged insupportability, adultery, and cruel treatment as grounds
for the divorce, requested a disproportionate division of the marital estate, and asserted claims
against Keith Reisler for constructive fraud, assault and battery, intentional infliction of
emotional abuse and mental distress, and defamation of character, libel, and slander.
In January 2011, the parties entered into a pre-divorce settlement agreement, dividing
$1,400,000 equally between them assigning it to their separate property. However, there is no
pre-final decree order confirming the pre-divorce settlement as either party’s separate property.
After a bench trial, the trial court took the division of the marital estate under advisement.
Then, the trial court signed a memorandum ruling granting the parties divorce on the ground of
insupportability, stating the values of the community assets, dividing the community estate, and
awarding a judgment to Paul French for which Keith and Cathie Reisler were jointly and
severally liable.
–2–
Cathie Reisler filed a motion for reconsideration of the trial court’s memorandum ruling,
which the trial court denied. Then, the trial court signed the final decree of divorce. The trial
court made written findings of fact and conclusions of law. Cathie Reisler filed a motion for new
trial, which was overruled by operation of law.
II. JUST AND RIGHT DIVISION OF THE COMMUNITY PROPERTY
In issue one, Cathie Reisler argues the trial court erred when it awarded Keith Reisler a
disproportionate share of the community estate because it made numerous calculation errors in
the property division. She contends the following:
Although the trial court attempted to make a 50/50 division of the community
estate, the trial court abused its discretion by making several calculation errors in
its findings of fact that, when corrected, show the trial court actually divided the
community estate disproportionately—38.24% to [Cathie Reisler] and 67.76% to
[Keith Resiler]. The evidence did not support a disproportionate division in
[Keith Reisler’s] favor.
Keith Reisler responds that there is nothing in the trial court’s findings of fact or conclusions of
law that states what percentage of the community estate each party was intended to receive or
what calculation the trial court made when dividing the community estate. He contends that any
assertion the trial court used the wrong values is pure conjecture, requiring the appellate court to
make assumptions it cannot make.
A. Standard of Review
An appellate court reviews a trial court’s division of property under an abuse of
discretion standard. Moroch v. Collins, 174 S.W.3d 849, 857 (Tex. App.—Dallas 2005, pet.
denied). The trial court is afforded broad discretion in dividing the community estate and an
appellate court must indulge every reasonable presumption in favor of the trial court’s proper
exercise of its discretion. Schlueter v. Schlueter, 975 S.W.2d 584, 598 (Tex. 1998); Murff v.
Murff, 615 S.W.2d 696, 698 (Tex. 1981); In re Marriage of C.A.S. and D.P.S., 405 S.W.3d 373,
384 (Tex. App.—Dallas 2013, no pet.). A trial court does not abuse its discretion if there is
–3–
some evidence of a substantive and probative character to support the decision. In re Marriage
of C.A.S., 405 S.W.3d at 383; Moroch, 174 S.W.3d at 857. To determine whether the trial court
abused its discretion, an appellate court considers whether the trial court: (1) had sufficient
evidence upon which to exercise its discretion; and (2) erred in its exercise of that discretion. In
re Marriage of C.A.S., 405 S.W.3d at 383; In re A.B.P., 291 S.W.3d 91, 95 (Tex. App.—Dallas
2009, no pet.). The applicable sufficiency review comes into play with regard to the first
question. In re Marriage of C.A.S., 405 S.W.3d at 383; Moroch, 174 S.W.3d at 857. An
appellate court then proceeds to determine whether, based on the elicited evidence, the trial court
made a reasonable decision. In re Marriage of C.A.S., 405 S.W.3d at 383; Moroch, 174 S.W.3d
at 857.
In family law cases, the abuse of discretion standard of review overlaps with the
traditional sufficiency standards of review. Moroch, 174 S.W.3d at 857; see also In re A.B.P.,
291 S.W.3d at 95 (discussing standard). When deciding if the trial court abused its discretion,
the legal and factual sufficiency of the evidence are not independent grounds of reversible error,
but instead constitute factors relevant to an appellate court’s assessment of whether the trial court
abused its discretion. In re Marriage of C.A.S., 405 S.W.3d at 383; Moore v. Moore, 383 S.W.3d
190, 198 (Tex. App.—Dallas 2012, pet. denied); Moroch, 174 S.W.3d at 857.
In an appeal from a bench trial, an appellate court reviews a trial court’s conclusions of
law de novo and will uphold them on appeal if the judgment of divorce can be sustained on any
legal theory supported by the evidence. Mays v. Mays, No. 13-05-00558-CV, 2007 WL 776684,
at *2 (Tex. App.—Corpus Christi Mar. 15, 2007, pet. denied) (mem. op.); Hailey v. Hailey, 176
S.W.3d 374, 383 (Tex. App.—Houston [1st Dist.] 2004, no pet.). An appellate court may not
challenge a trial court’s conclusions of law for factual sufficiency, but it may review the legal
conclusions drawn from the facts to determine their correctness. Hailey, 176 S.W.3d at 383. If
–4–
an appellate court determines that a conclusion of law is erroneous, but the trial court
nevertheless rendered the proper judgment, the error does not require reversal. Mays, 2007 WL
776684, at *2; Hailey, 176 S.W.3d at 383.
When the appellate record contains a complete reporter’s record, an appellate court
reviews the trial court’s findings of fact under the same standards for legal and factual
sufficiency that govern the review of jury findings. In re Marriage of C.A.S., 405 S.W.3d at 382;
Moroch, 174 S.W.3d at 857. A legal sufficiency challenge to the findings of fact fails if there is
more than a scintilla of the evidence to support the findings. See In re Marriage of C.A.S., 405
S.W.3d at 382. In conducting a factual sufficiency review, appellate courts may set aside the
trial court’s finding only if it is so contrary to the overwhelming weight of the evidence as to be
clearly wrong or unjust. Id. In evaluating the trial court’s findings of fact, an appellate court
must give substantial deference to the trial court’s determination of the weight and credibility of
the evidence. Pelzig v. Berkebile, 931 S.W.2d 398, 402 (Tex. App.—Corpus Christi 1996, no
pet.). In a bench trial, the trial court acts as the fact finder and is the sole judge of the credibility
of the witnesses. Murff, 615 S.W.2d at 700; Hailey, 176 S.W.3d at 383.
If an appellate court finds reversible error in any part of the trial court’s property division
that materially affects the just and right division of the community estate, it must remand for a
new division of the entire community estate. Jacobs v. Jacobs, 687 S.W.2d 731, 732–33 (Tex.
1985).
B. Findings of Fact and Conclusions of Law
Section 6.711(a) of the family code provides that in a suit for dissolution of marriage, on
request by a party, the court shall state in writing its findings of fact and conclusions of law
concerning: (1) the characterization of each party’s assets, liabilities, claims, and offsets on
which disputed evidence has been presented; and (2) the value or amount of the community
–5–
estate’s assets, liabilities, claims, and offsets on which disputed evidence has been presented.
TEX. FAM. CODE ANN. § 6.711(a) (West 2006); In re Marriage of C.A.S. and D.P.S., 405 S.W.3d
373, 380 (Tex. App.—Dallas 2013, no pet.). A trial court need not make findings of fact on
undisputed matters. Limbough v. Limbough, 71 S.W.3d 1, 6 (Tex. App.—Waco 2002, no pet.).
The obligation of the trial court is to make findings of fact and conclusions of law on the ultimate
or controlling issues, but not on evidentiary issues. Limbough, 71 S.W.3d at 6. The trial court is
not obligated to detail the facts that establish fault in the break-up of the marriage or one party’s
separate estate that forms the basis for the disproportionate division of the property. Limbough,
71 S.W.3d at 6.
C. Applicable Law
In a divorce decree, the trial court shall order a division of the parties’ estate in a manner
that the trial court deems just and right, having due regard for the rights of each party. TEX.
FAM. CODE ANN. § 7.001 (West 2006); In re Marriage of C.A.S., 405 S.W.3d at 384. The
property division need not be equal and the trial court may consider many factors when
exercising its broad discretion to divide the marital property. Murff, 615 S.W.2d at 699; In re
Marriage of C.A.S., 405 S.W.3d at 384. Mathematical precision in dividing property in a divorce
is usually not possible. Murff, 615 S.W.2d at 700. The party complaining of the division of the
community estate has the burden of showing from the evidence in the record that the trial court’s
division of the community estate was so unjust and unfair as to constitute an abuse of discretion.
In re Marriage of C.A.S., 405 S.W.3d at 384.
D. Application of the Law to the Facts
Cathie Reisler’s argument that the trial court made calculation errors, resulting in her
actually receiving 38.24% and Keith Reisler receiving 61.76% of the community estate, is
contained in four sub-arguments. Specifically, she asserts: (1) when the trial court identified the
–6–
parties’ community property in finding of fact number 18, the trial court erroneously included
both (a) the asset valued at $1,400,000, which represents the pre-divorce settlement of Keith
Reisler and Cathie Reisler, and (b) the funds in Cathie Reisler’s Merrill Lynch account number
XXX15629 valued at $554,408.69, which was part of her share of the pre-divorce settlement
funds; (2) the trial court erroneously assigned the debt on the medical office condominium to
Keith Reisler while at the same time awarding him the condominium at a zero net equity; (3) the
trial court failed to award either party the balance of a bank account, which it found was not held
solely in Cathie Reisler’s name and should not have included that account in the property
division calculation; and (4) the trial court erroneously included her separate property bank
account in the division of the community estate.
We first address what we have identified above as issue one, sub-argument 1, where
Cathie Reisler focuses our attention on finding of fact number 18 and her share of the pre-
divorce settlement funds. The trial court listed the $1,400,000 pre-divorce settlement, stating
Keith Reisler and Cathie Reisler each were assigned $700,000 to their “separate estate.”
However, Cathie Reisler claims Merrill Lynch account number XXX15629 valued at
$554,408.69, also listed in finding of fact number 18 as community property, was actually her
share of that pre-divorce settlement. According to Cathie Reisler, the result was the trial court
erroneously listed her portion of the pre-divorce settlement twice, once as part of the $1,400,000
pre-divorce settlement and again as the Merrill Lynch asset in her name. However, at the same
time, finding of fact number 18 only listed Keith Reisler’s portion of the pre-divorce settlement
as part of the $1,400,000. She asserts there is no evidence in the record to support this erroneous
listing of community property in finding of fact number 18. The result, she claims, was that the
division of the community was disproportionate in Keith Reisler’s favor. Keith Reisler responds
that Cathie Reisler did not offer evidence to support this claim or trace the funds in the account.
–7–
In substance, the parties’ arguments are focused on whether the trial court included Cathie
Reisler’s separate property in the community estate resulting in an unjust division.
In order to evaluate these contentions, we must review the trial court’s findings of fact. 1
The trial court’s finding of fact number 18 is a table listing the community property of the parties
and the values. The table lists the pre-divorce settlement funds as follows:
1
Finding of fact number 18 is reproduced here in order to show the trial court’s method of listing the parties’ community property:
Real Property - Residence located at 2704 Redding Drive, Plano, Texas $750,000.00
Real Property - Commercial Property located at 3108 Midway Road, Unit[] $0.00 (negative equity)
204, Plano, Texas
Household furniture, furnishings, goods, art objects, collectible, appliances $10,000.00
and equipment in the possession of [Keith Reisler] or subject to his sole
control.
Clothing, jewelry, personal effects in the possession of [Keith Reisler] or $0
subject to his sole control.
Household furniture, furnishings, goods, art objects, collectibles, appliances $30,000.00
and equipment in the possession of [Cathie Reisler] or subject to her sole
control.
Clothing, jewelry, furs, personal effects in the possession of [Cathie Reisler] $80,000.00
or subject to her sole control.
Funds on deposit in Schwab One checking account, Account number $601,109.56
XXX303
Funds on deposit in Schwab One checking account, Account number $1,400,000.00
XXX230 and in an account under the control of Cathie Reisler. These funds
were divided before the case was finalized as part of a pre-suit division. Each
party was awarded $700,000 as part of their separate estate.
Funds on deposit in Chase Bank checking account, Account number XXX797 $562.96
Funds on deposit in Chase Bank business checking account, Account number $21,018.00
XXX364
Funds on deposit in Chase Bank business checking account, Account number $2,185.67
XXX600
Funds on deposit in Schwab One checking account, Account number XXXl10 $262.22
Individual retirement account in [Keith Reisler’s] name managed by Schwab $482,000.00
with account number ending in 1115
2004 Lexus LS 430 motor vehicle $15,000.00
2008 Lexus RX 400 Motor vehicle $24,000.00
Shares in Lee Financial Borders - Real Estate Investment $85,000.00
Shares in Lee Financial Summit - Energy Partnership $35,000.00
Shares in Surgery Center of Plano $142,727.00
Shares in Texas Health Center for Diagnostics and Surgery $276,556.00
Shares in Patient-Physician Network Holding Company, LLC $23,668.00
Shares in AVEX Land Investments $140,375.00
–8–
Funds on deposit in Schwab One checking account, $1,400,000.00
Account number XXX230 and in an account under
the control of Cathie Reisler. These funds were
divided before the case was finalized as part of a
pre-suit division. Each party was awarded
$700,000 as part of their separate estate.
Also, the following portion of finding of fact no. 18, includes Cathie Reisler’s Merrill Lynch
account number XXX15629. She claims this account was shown by the evidence to be part of
the $700,000 assigned to her in the pre-divorce settlement described in the box above.
Merrill Lynch account xxx15629 (in Cathie $554,408.69
Reisler’s name)
During the trial, Cathie Reisler traced the funds set aside to her in the pre-divorce
settlement, which the trial court identified as being awarded to her as her separate property.
First, Cathie Reisler’s Exhibit No. 61 was admitted into evidence. That exhibit is a summary of
the relief sought by Cathie Reisler and paragraph 20 states that she seeks “The Court [to] confirm
as the separate property of [Cathie Reisler] the Merrill Lynch Account formerly, Charles Schwab
account, of Cathie Reisler, Account Number XX15629, which consists of funds previously
Shares in Methodist Hospital $60,000.00
Closely held business interest known as Keith J. Reisler, MD PA $273,000.00
UTMA account Unknown
UGMA account Unknown
Chase Bank College Account Unknown
IRA held in Cathie Reisler’s name, account no. xxx923 $278,000.00
Bank of America Account xxx3202 (in Cathie Reisler’s name) $7[,]811.33
Merrill Lynch account xxx15629 (in Cathie Reisler’s name) $554,408.69
Charles Schwab account xxx6353 (in Cathie Reisler’s name) $18,274.89
Fidelity account xxx129 (in Cathie Reisler’s name) $65,114.14
Fidelity account xxx370 (in the name of Cathie Reisler[] and David Berman) $157,998
–9–
partitioned by the parties [in the pre-divorce settlement agreement] on or about January 17,
2011.” Second, Cathie Reisler’s Exhibit No. 85 was admitted into evidence. It contained her
inventory, listing the Merrill Lynch account number XXX15629 as her separate property.
Attached to her Exhibit No. 85 were bank statements showing that: (1) in January 2011, she had
$708,272.55 in a Charles Schwab account number XXXX8221; (2) in November 2011, she
transferred $548,554.73 out of the Charles Schwab account number XXXX8221; and (3) in
November 2011, she transferred $548,545.01 into the Merrill Lynch account number
XXX15629, the asset listed in finding of fact number 18 “in Cathie Reisler’s name.”
In addition, Keith Reisler testified that the $700,000 assigned to Cathie Reisler in the pre-
divorce settlement was transferred by her out of the community property joint account to the
separate Charles Schwab account number XXXX8221. Afterward, according to Cathie Reisler’s
evidence, she transferred the funds from Charles Schwab account number XXXX8221 to Merrill
Lynch account number XXX15629. Below is the exchange, in relevant part, between Keith
Reisler and his counsel:
K.R.’s Counsel: I’m going to show you what I’ve marked as Exhibit 42.
It’s a little bit out of order. Is this the statement showing
the transfer of the 700,000 back into the joint account?
Keith Reisler: Yes. This is the statement. And if you—and there’s a
second statement you have also, which actually shows the
numbers. But if you go to Page 6 of 8 you’ll see all of the
funds that were transferred to Cathie. And if you add all
that up, it comes out to $698,500. The reason it’s not
700,000—700,000 is we used the values from the night
before. So those are the changes for the day.
On the next page, on Page 7 of 8, you see where she
transferred out all of that and to another account. So you
see the parentheses on the 26th. So it went in on the 10th.
She left it in there for 16 days. When she transferred it out
it actually had a value of 712,000. She testified yesterday
that I had used the funds in the joint account before she had
access to them. If you go to page—if you go to Page 5 of 8
you can see on 1/12/11 there was an autopayment to City of
–10–
Plano for $119 which she had set up, and that was the only
money that came out of that account.
....
Because, again, this is the $700,000 predivorce settlement
that Cathie got in January 2011. The previous—one of the
previous exhibits showed it going into the joint account. It
stayed there for a several days. Then she transferred it into
this account, 8221, and this shows the month she
transferred it. It says, “Transfer, $712,000.” On the left is
what—you know, when she transferred that was a value she
transferred, and that’s what I said a couple of minutes ago,
that when she transferred it out it had actually grown to
712,000. She testified it had been depleted by me before
she ever even got it.
(Emphasis added). Keith Reisler does not dispute that Cathie Reisler transferred the $708,272.55
pre-divorce settlement funds to Charles Schwab account number XXXX8221, and then
$554,408.69, the funds remaining from her pre-divorce settlement, into the Merrill Lynch
account number XX15629. Rather, Keith Reisler disputes only a collateral issue, not relevant
here, as to whether he paid bills from those funds before Cathie Reisler transferred the funds.
On this record, Cathie Reisler has shown from the evidence that she traced the funds
assigned to her in the pre-divorce settlement into the Merrill Lynch account number XXX15629.
The parties agreed those funds were to be awarded as Cathie Reisler’s separate property. She
has also shown that the trial court included the Merrill Lynch account number XXX15629 in
finding of fact number 18 as a community asset in addition to the pre-divorce settlement sum
referred to above. Further, the record shows that the trial court did not treat Keith Reisler’s
portion of the pre-divorce settlement in a similar way as it did Cathie Reisler’s portion as
described above. That is, the trial court did not include as an additional community asset Keith
Reisler’s Charles Schwab account number XXX230, which held his share of the pre-divorce
settlement funds awarded as separate property. The effect is that finding of fact number 18
erroneously lists an additional community asset as being held in Cathie Reisler’s name.
–11–
We conclude Cathie Reisler has shown there is no evidence to support the inclusion of
the Merrill Lynch account number XXX15629 in finding of fact number 18 in addition to the
pre-divorce settlement sums assigned to Cathie Reisler as her “separate estate.” Accordingly,
distribution of the community assets was so unjust and unfair as to constitute an abuse of
discretion. It is “probably impossible” to reconcile the inclusions of the Merrill Lynch account
number XXX15629 of Cathie Reisler and the pre-divorce settlement sums as described in
finding of fact number 18 in the community property division, absent a remand of the
community property division, because the community property is not represented in the divorce
decree by any specific, identifiable award to each party. See Jacobs, 687 S.W.2d at 733. Even if
we could, we cannot simply modify the decree by striking the Merrill Lynch account from the
community property because to do so would be to make a new division of the estate of the
parties, a matter within the discretion of the trial court. See id.
Whether the trial court abuses its discretion in dividing the property or commits
reversible error in defining what property is properly a part of the community estate and
therefore subject to division, the principle to be applied is the same. See id. Once reversible
error affecting the just and right division of the community estate is found, we must remand the
entire community estate for a new division. See id. Issue one, sub-argument 1, is decided in
Cathie Reisler’s favor. Accordingly, we need not address the remainder of issue one where
Cathie Reisler claims the trial court made calculation errors or issue two where she claims that
she should have received a disproportionate share of the community estate.
III. MEDICAL INVESTMENTS
In issue four, Cathie Reisler argues the trial court erred when it valued the community’s
interest in the shares in medical investments for Plano Ambulatory Surgery Associates and Texas
–12–
Health Center for Diagnostics and Surgery2 based on Keith Reisler’s income approach
valuations. Cathie Reisler asserts that there was no evidence to support the trial court’s finding
of fact number 18 as to these valuations because Keith Reisler’s expert, “[Elizabeth] Schrupp’s
valuations of the [Plano Ambulatory Surgery Associates] and [Texas Health Center for
Diagnostics and Surgery] are unreliable.” Specifically, Cathie Reisler argues Schrupp “made
numerous computational errors in valuing [the shares], including errors in determining the
entities’ cash flows and an improper application of the small stock premium,” and her error lies
in her selection of the industry risk premium because she used the 2011 edition of the Ibbotson
Stocks, Bonds, Bills and Inflation Valuation Yearbook (“SBBI”), instead of the 2012 edition.
Keith Reisler argues that Cathie Reisler has failed to preserve this issue for appellate review
because Schrupp’s testimony was admitted without objection.
Generally, to preserve a complaint that an expert’s testimony is unreliable, a party must
object to the testimony before trial or when it is offered. Guadalupe–Blanco River Auth. v.
Kraft, 77 S.W.3d 805, 807 (Tex. 2002); Maritime Overseas Corp. v. Ellis, 971 S.W.2d 402, 409
(Tex. 1998); Moore v. Moore, 383 S.W.3d 190, 198 (Tex. App.—Dallas 2012, pet. denied). In
particular, a party must object to or complain that the expert’s underlying methodology,
technique, or foundational data is not reliable. Coastal Transp. Co. v. Crown Cent. Petroleum
Corp., 136 S.W.3d 227, 232–33 (Tex. 2004); Moore, 383 S.W.3d at 198. A timely objection is
required to give the trial court an opportunity to analyze the underlying basis of the opinion and
to allow the offering party the opportunity to cure any defect that may exist. Ellis, 971 S.W.2d at
409 (objection required to give proponent of evidence opportunity to cure defect); Coastal, 136
S.W.3d at 233 (objection required to allow trial court opportunity to analyze underlying
methodology, technique, or foundational data.); Moore, 383 S.W.3d at 198–99. Thus, as a
2
The record refers to Texas Health Center for Diagnostics and Surgery as “Presby.”
–13–
general rule, when an expert opinion is admitted in evidence without objection, it may be
considered probative evidence even if the basis for the opinion is unreliable. See City of San
Antonio v. Pollock, 284 S.W.3d 809, 818 (Tex. 2009); Moore, 383 S.W.3d at 199. However, an
exception exists if the expert either provides no basis for his opinion or if the basis offered does
not support the expert’s opinion. Pollock, 284 S.W.3d at 818; Moore, 383 S.W.3d at 199. In
such cases, the testimony is a mere conclusion and constitutes no evidence. Pollock, 284 S.W.3d
at 818; Moore, 383 S.W.3d at 199.
The record shows that Schrupp provided a factual basis for her opinion. Schrupp testified
she did not obtain the financial statements as to Plano Ambulatory Surgery Associates and Texas
Health Center for Diagnostics and Surgery. However, she stated that she reviewed information
on the dividends received from these investments, prior sales of the companies’ stock, the
contracts, and conversations with the Director of Plano Ambulatory Surgery Associates. Further,
Schrupp stated she did a calculation engagement, rather than a business valuation engagement,
because without the financial statements she could not “analyze [the] profitability compared to
debt ratio compared to receivable turnover.” With regard to Texas Health Center for Diagnostics
and Surgery, Schrupp testified she used “both the income approach, capitalization of earnings,
and market approach, prior sales method[s].”
On this record, we conclude the analysis of Cathie Reisler’s complaint requires a review
of the underlying methodology and foundational data that Schrupp used in forming her opinion.
In particular, Cathie Reisler does not complain that Schrupp did not express a basis for her
opinion or that the basis that Schrupp did offer was contradicted by the facts. Rather, relying on
her own expert’s testimony, Cathie Reisler asserts Schrupp should have used additional or
different data, and the 2012 edition of the SBBI to select an industry risk premium. Cathie
Reisler was required to make a timely objection, or assert this complaint to the trial court. She
–14–
did not do so. See Moore, 383 S.W.3d at 199–200; Graves v. Tomlinson, 329 S.W.3d 128, 146
(Tex. App.—Houston [14th Dist.] 2010, pet. denied).
Issue four was not preserved for appellate review.
IV. CONCLUSION
The trial court erred when it divided the parties’ community estate. Also, Cathie Reisler
did not preserve for appellate review her complaint that the trial court erred when it valued the
community’s interest in the shares in medical investments for Plano Ambulatory Surgery
Associates and Texas Health Center for Diagnostics and Surgery based on Keith Reisler’s
income approach valuations.
The portion of the trial court’s final decree of divorce dissolving the marriage is affirmed
and the portion dividing the parties’ community estate is reversed and remanded for further
proceedings consistent with this opinion.
/Douglas S. Lang/
DOUGLAS S. LANG
121586F.P05 JUSTICE
–15–
S
Court of Appeals
Fifth District of Texas at Dallas
JUDGMENT
CATHIE REISLER, Appellant On Appeal from the 416th Judicial District
Court, Collin County, Texas
No. 05-12-01586-CV V. Trial Court Cause No. 416-50508-2010.
Opinion delivered by Justice Lang. Justices
KEITH REISLER, Appellee Moseley and Francis participating.
In accordance with this Court’s opinion of this date, the trial court’s final decree of
divorce is REVERSED and this cause is REMANDED to the trial court for further proceedings
consistent with this opinion.
It is ORDERED that appellant CATHIE REISLER recover her costs of this appeal from
appellee KEITH REISLER.
Judgment entered this 5th day of August, 2014.
–16–
| {
"pile_set_name": "FreeLaw"
} |
23 F.Supp.2d 1363 (1998)
Aaron W. BINNS, Plaintiff,
v.
THE PRIMARY GROUP, INC., Defendant.
No. 98-499-CIV-ORL-22A.
United States District Court, M.D. Florida, Orlando Division.
July 16, 1998.
*1364 S. Gordon Hill, Fisher, Rushmer, Werrenrath, Wack & Dickson, P.A., Orlando, FL, for Plaintiff.
Alan M. Gerlach, Jr., Broad & Cassel, Orlando, FL, for Defendant.
ORDER
CONWAY, District Judge.
This cause comes before the Court for consideration of Defendant The Primary Group, Inc.'s Motion to Dismiss (Doc. 6) and Plaintiff Aaron W. Binns' Response (Doc. 8). Plaintiff seeks damages for Defendant's alleged violation of Title I of the Americans With Disabilities Act of 1990 ("ADA"), 42 U.S.C. § 12101 et seq.
I. Standard for Motion to Dismiss
The accepted rule is that "a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957). A trial court, in ruling on a motion to dismiss, must accept the allegations of the complaint as true and must construe the facts alleged in the light most favorable to the plaintiff. Hunnings v. Texaco, Inc., 29 F.3d 1480, 1484 (11th Cir.1994). Therefore, the material allegations of the complaint are taken as true for the purpose of deciding a motion to dismiss. St. Joseph's Hosp. v. Hospital Corp. of Am., 795 F.2d 948 (11th Cir.1986).
II. Background
In January 1997, Plaintiff was diagnosed as having epilepsy. Defendant, who owns and operates an employment agency, hired him as an account executive on April 21, 1997. Plaintiff's duties included "seeking out candidates for positions of employment, interviewing applicants for positions of employment, contacting employer-clients to ascertain their personnel requirements, and assisting employer-clients and [sic] fulfilling their personnel requirements." Complaint at 3. Plaintiff claims that during the course of his employment, Defendant discriminated against him because of his disability in regard to his advancement, compensation, training, and other terms, conditions, and privileges of employment. Plaintiff alleges that he was constructively discharged on May 5, 1997.
On October 16, 1997, Plaintiff filed a Charge of Discrimination with the Equal Employment Opportunity Commission ("EEOC"). Subsequently, on January 30, 1998, Plaintiff received a Dismissal and Notice of Right to Sue letter from the EEOC. On April 29, 1998, Plaintiff filed a complaint in this Court alleging that Defendant violated his rights under the ADA.
III. Analysis
In its motion, Defendant argues that the Court lacks subject matter jurisdiction because Plaintiff has not alleged that Defendant had fifteen or more employees in 1997. Plaintiff responds that because Defendant was an "employment agency," it was covered under the ADA regardless of the number of employees. The Court finds that it lacks subject matter jurisdiction over an employment agency that is sued in its capacity as an employer when the agency has fewer than fifteen employees.
Pursuant to 42 U.S.C. § 12112(a):
No covered entity shall discriminate against a qualified individual with a disability because of the disability of such individual in regard to job application procedures, the hiring, advancement, or discharge of employees, employee compensation, job training, and other terms, conditions, and privileges of employment.
A "covered entity" is defined as "an employer, employment agency, labor organization, or joint labor-management committee." 42 U.S.C. § 12111(2). An "employer" means "a person engaged in an industry affecting commerce who has 15 or more employees for each working day in each of 20 or more calendar weeks in the current or preceding *1365 calendar year, and any agent of such person ...." 42 U.S.C. § 12111(5)(A). An "employment agency" is defined as "any person regularly undertaking with or without compensation to procure employees for an employer or to procure for employees opportunities to work for an employer and includes an agent of such a person." 42 U.S.C. § 2000e(c).[1] Because an employment agency under the Act is not required to have a minimum number of employees, the issue in this case is whether an employment agency must meet the statutory definition of an "employer" when sued in its capacity as an employer.
Although there is no case law directly on point, courts have addressed this issue in the Title VII context. Because the statutory framework of the ADA incorporates by reference many provisions of Title VII and because courts have used Title VII case law as persuasive authority, the principles developed in those cases are instructive on issues concerning the ADA. See 42 U.S.C. § 12117 (adopting the powers, remedies, and procedures set forth in Title VII for ADA cases); 42 U.S.C. § 12111(7) (adopting definitions of Title VII); Huck v. Mega Nursing Serv., Inc., 989 F.Supp. 1462, 1463 (S.D.Fla.1997) ("The ADA adopts in large part the Title VII case precedent"); DeLuca v. Winer Indus., Inc., 53 F.3d 793, 797 (7th Cir.1995) ("courts have allowed ADA plaintiffs to prove discrimination indirectly by using the prima facie case and burden shifting method originally established for Title VII cases").
In a case brought under Title VII, the Fifth Circuit in Greenlees v. Eidenmuller Enter., Inc., 32 F.3d 197 (5th Cir.1994), addressed the issue of whether the court had subject matter jurisdiction over an employment agency sued in its capacity as an employer. The defendant in that case screened and placed temporary workers in companies. Id. at 198. The plaintiff was hired by the defendant as a permanent placement specialist and an employee supervisor. Id. The defendant paid her wages and benefits, assigned her job duties, and established the terms and conditions of her employment. Id. The plaintiff was terminated, and she sued under Title VII, alleging discrimination in her employment. Id. The district court dismissed the case for lack of subject matter jurisdiction because the defendant did not meet the statutory definition of an "employer." Id. The plaintiff appealed. Id.
The Fifth Circuit affirmed the dismissal and held that "[t]he capacity in which the employment agency is sued determines whether the court has jurisdiction." Id. The court explained that because the plaintiff was not the defendant's client, but was an employee, the defendant was acting as an "employer" and not as an "employment agency." Id. at 199. Accordingly, because the defendant employed fewer than fifteen employees, the court lacked subject matter jurisdiction. Id.
Similarly, in the instant case, because Plaintiff worked as a permanent employee for the employment agency, Plaintiff sues the agency as his employer. Plaintiff alleges that Defendant hired him, constructively discharged him, paid his salary, demoted him, trained him, assigned his duties, had the authority to discipline him, and established the terms and conditions of his employment. (Doc. 1). Defendant's responsibilities clearly establish its role as an "employer" in this case. Thus, because Plaintiff is suing Defendant as its employee and not as its client, Defendant must employ 15 or more employees to be held liable under the ADA. See Kellam v. Snelling Personnel Serv., 866 F.Supp. 812, 816-17 (D.Del.1994) (holding that under Title VII an employment agency not otherwise meeting the definition of "employer" cannot be sued by an employee in its capacity as an employer), aff'd, 65 F.3d 162 (3rd Cir.1995).[2]
*1366 In his response, Plaintiff argues that the prohibitions under the ADA are broader than Title VII and encompass an employment agency's conduct in its capacity as both an employment agency and an employer regardless of the number of employees. For support, Plaintiff compares Title VII's general provisions with the ADA's general provision. Compare 42 U.S.C. § 2000e-2(a) (b) with 42 U.S.C. § 12112(a). Title VII describes discriminatory conduct as it relates to "employer practices," and "employment agency practices," whereas the ADA refers to conduct as it relates to a "covered entity," which includes both employers and employment agencies. 42 U.S.C. § 2000e-2(a)-(b); 42 U.S.C. § 12112(a). Therefore, because the ADA does not make a distinction between employer practices and employment agency practices, Plaintiff contends that an employment agency is covered when sued in its capacity as an employer even though it does not meet the jurisdictional requirement of 15 or more employees.
The Court finds this argument to be unavailing. There is no reason that an employment agency when acting in its capacity as an employer should be treated differently under the ADA from an "employer" simply because of its status as an employment agency. If an employment agency with less than 15 employees were covered under the ADA when acting as an employer, a permanent employee could hold it liable for discrimination even though an employee of an employer with less than 15 employees could not. Plaintiff offers no support for its proposition that some employees have greater rights than others based on the employer's type of business. Accordingly, the Court finds that Plaintiff must demonstrate that Defendant had fifteen or more employees in order to be held liable under the ADA.
In the complaint, Plaintiff alleges that Defendant "now has 15 or more employees and, therefore, may qualify as an `employer' within the meaning of 42 U.S.C. § 12111(5)." Complaint (Doc. 1) at 2. Defendant argues in its motion that Plaintiff failed to allege that Defendant employed 15 or more persons for twenty weeks during the relevant time period. Plaintiff does not address this issue in his response.
The ADA requires that an "employer" must employ fifteen or more employees "for each working day in each of 20 or more calendar weeks in the current or preceding calendar year ...." 42 U.S.C. § 12111(5)(A) (emphasis added). The "current" calendar year is the year in which the alleged discrimination occurred. See Vick v. Foote, Inc., 898 F.Supp. 330 (E.D.Va.1995) (stating that the current calendar year in a Title VII case is the year the alleged discrimination occurred), aff'd, 82 F.3d 411 (4th Cir.), cert. denied, ___ U.S. ___, 117 S.Ct. 311, 136 L.Ed.2d 228 (1996); EEOC v. Pettegrove Truck Serv., Inc., 716 F.Supp. 1430 (S.D.Fla.1989) (holding that the "current" year is the year in which the alleged discrimination occurred). In the instant case, Plaintiff alleges that the discrimination occurred from April 21, 1997 to May 5, 1997. Therefore, the "current" year is 1997, and the "preceding" year is 1996. Plaintiff failed to allege that Defendant met the statutory definition of an employer during this period. Accordingly, Defendant's motion to dismiss is due to be granted because the Court lacks subject matter jurisdiction.
IV. Conclusion
Based on the foregoing, it is ORDERED as follows:
1. Defendant's Motion to Dismiss (Doc. 6), filed May 20, 1998, is GRANTED.
2. All pending motions are DENIED AS MOOT.
3. This case is removed from the November 1999 trial docket.
4. The Clerk shall close this case.
NOTES
[1] The ADA provides that "[t]he terms `person', `labor organization', [and] `employment agency' ..., shall have the same meaning given such terms in section 2000e of this title." 42 U.S.C. § 12111(7).
[2] In Switalski v. International Ass'n. of Bridge Structural and Ornamental Iron Workers, Local Union No. 3, 881 F.Supp. 205 (W.D.Pa.1995), the Western District of Pennsylvania indirectly addressed the issue of whether a labor organization must meet the jurisdictional requirement under the ADA when it is sued in its capacity as an employer. The court explained that because the labor union was sued in this capacity, it must meet the jurisdictional number of employees to be held liable under the ADA. Id. at 207. The court then determined whether the labor union satisfied this requirement. Id. at 208-09.
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642 F.2d 1213
*U. S.v.Walker
80-7442
UNITED STATES COURT OF APPEALS Fifth Circuit
3/25/81
1
S.D.Ga.
2
AFFIRMED***
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539 U.S. 903
Salugav.Turek.
No. 02-1435.
Supreme Court of United States.
June 2, 2003.
1
Appeal from the C. A. 6th Cir.
2
Certiorari denied. Reported below: 47 Fed. Appx. 746.
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890 So.2d 465 (2004)
STATE of Florida, Appellant,
v.
Norris RIGGS, Jr., Appellee.
No. 2D03-2961.
District Court of Appeal of Florida, Second District.
December 29, 2004.
*466 Charles J. Crist, Jr., Attorney General, Tallahassee, and Richard M. Fishkin, Assistant Attorney General, Tampa, for Appellant.
James Marion Moorman, Public Defender, and Bruce P. Taylor, Assistant Public Defender, Bartow, for Appellee.
KELLY, Judge.
Norris Riggs Jr., was charged with the manufacture of cannabis and possession of drug paraphernalia. He entered a plea of not guilty and moved to suppress evidence and statements obtained by the police after a warrantless entry into his apartment. Relying on Eason v. State, 546 So.2d 57 (Fla. 1st DCA 1989), the trial court rejected the State's contention that the entry was lawful based on exigent circumstances and granted Riggs' motion. The State now appeals from that order. We reverse.
The facts giving rise to the seizure of the evidence against Riggs are not in dispute. At three o'clock in the morning on January 2, 2003, two Polk County sheriff's deputies were summoned to an apartment complex where a four-year-old girl had been seen walking around naked and alone. When the officers arrived, some residents of the complex had the child in their custody. The child did not know from which apartment she had come. In an attempt to find the child's caregiver, the officers searched the building. On the second floor of the three-story complex, all the apartment doors were closed except one, which was open a couple of centimeters and through which a light was visible.
The officers pounded on the door of the apartment at least three dozen times and identified themselves as Polk County sheriff's officers. Although they received no response from within the apartment, some of the neighbors came out of adjoining apartments to see what was occurring. Concerned that something had happened to the child's caregiver, the officers entered *467 the apartment. They continued to call to the occupants but received no response. They did, however, see a light coming from a closed door. They also saw seeds in a plastic cigar tube on a coffee table in the living room. Still receiving no response to their calls, they inspected a room where the door was open and no light was on. Not finding anyone there, the officers opened the door to the lit room and found seven potted marijuana plants with a light suspended above them. They proceeded to another room in the apartment where they found Riggs and a woman who they later learned was the lost child's babysitter. Riggs was arrested and confessed that he had cultivated the marijuana.
At the suppression hearing, the State claimed that the officers had properly entered the apartment under the exigent circumstances exception to the warrant requirement and that the officers were justified in seizing the items in plain view. The trial court disagreed and granted the motion to suppress. The trial court based its decision on Eason, a case in which a small child was also found wandering around unsupervised at an apartment complex. 546 So.2d at 58. In that case, a child pointed to the front door of an apartment and told police officers that his mother was inside. The officers entered the apartment after having received no response to their knocks and calls and found marijuana and paraphernalia in plain view. The trial court in Eason denied the motion to suppress on the ground that the officers' entry was lawful. Id.
The First District reversed, finding that there was no emergency because the child was in the custody of a responsible adult, and because the officers did not see any evidence that the child had been abused, that medical intervention for the caregiver was necessary, or that there had been a robbery or a murder. Because there were no exigent circumstances to enter the apartment without a warrant, the court held that entry was illegal and all evidence found as a result should have been suppressed. Id. at 59.
We respectfully disagree with the result reached in Eason for the reasons articulated in Judge Smith's dissent. The dissent focused not on the welfare of the child, who was not in danger, but on the welfare of the child's mother. Id. at 61. The dissent states:
[U]pon receiving no response to their knock and announcement of their presence, the officers justifiably entered the apartment for further investigation as to the condition of the child's mother. The need to act was therefore clear, and neither logic nor reason, in my opinion, support the majority's holding that under these circumstances the police should have simply walked away from the scene.
Id. The same reasoning applies here. The officers believed it was their duty to see that the child's caregiver was not incapacitated and justifiably entered the residence.
As the State argues, police entry into a home to check on the safety of its residents constitutes exigent circumstances for purposes of the exception to the search warrant requirement for entry into a home. Davis v. State, 834 So.2d 322 (Fla. 5th DCA 2003). This exception to the warrant requirement is premised on the generally accepted notion that "[t]he right of police to enter and investigate in an emergency, without an accompanying intent either to seize or arrest, is inherent in the very nature of their duties as peace officers and derives from the common law." Webster v. State, 201 So.2d 789, 792 (Fla. 4th DCA 1967). The reasonableness of the belief of the police as to the existence of an emergency is measured by the totality of existing circumstances. Lee v. *468 State, 856 So.2d 1133 (Fla. 1st DCA 2003). In this case the officers were summoned to the apartment complex because a naked child was found wandering alone at three o'clock in the morning. During their investigation, the officers noticed that an apartment door was ajar and logically surmised that the child had wandered out of that apartment. No one came to the door when the officers knocked and announced their presence. Out of concern for the well-being of the residents they entered the apartment. Therein they found marijuana and paraphernalia in plain view before concluding that no emergency existed.
"[I]f the police enter a home under exigent circumstances and, prior to making a determination that the exigency no longer exists, find contraband in plain view, they may lawfully seize the illegal items." Davis, 834 So.2d at 327. Because the officers justifiably felt that exigent circumstances required their investigation, their entry into the apartment and seizure of the contraband was lawful. Accordingly, we reverse the trial court's order granting the motion to suppress and remand for further proceedings.
Reversed.
FULMER and SILBERMAN, JJ., concur.
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COURT OF APPEALS OF VIRGINIA
Present: Judges Humphreys, Chafin and Senior Judge Clements
UNPUBLISHED
Argued at Richmond, Virginia
MARK STADLER
MEMORANDUM OPINION* BY
v. Record No. 1920-15-2 JUDGE ROBERT J. HUMPHREYS
APRIL 26, 2016
THYSSENKRUPP ELEVATOR CORPORATION AND
INDEMNITY INSURANCE COMPANY
OF N. AMERICA
FROM THE VIRGINIA WORKERS’ COMPENSATION COMMISSION
Louis D. Snesil (Marks & Harrison, P.C., on brief), for appellant.
Roberta A. Perko (Christopher M. Kite; Lucas & Kite, PLC, on
brief), for appellees.
Mark Stadler (“Stadler”) appeals the decision of the Virginia Workers’ Compensation
Commission (the “Commission”) denying his claim for medical benefits and temporary total
disability benefits for a right shoulder injury resulting from two falls on July 22, 2014. Stadler
argues that the Commission erred in determining he failed to carry his burden of proof that his
right shoulder condition was causally related to the two falls and in disregarding the credibility
determination of the deputy commissioner of his own testimony.
Stadler first asserts that the Commission erred in determining he failed to prove that his
shoulder injury was causally related to the accident on July 22, 2014. It is well settled under
Virginia law that the claimant bears the burden of establishing, by a preponderance of the
evidence, that he sustained a compensable injury. Woody v. Mark Winkler Mgmt., Inc., 1
Va. App. 147, 150, 336 S.E.2d 518, 520 (1985). In order to prove that a claimant suffered a
*
Pursuant to Code § 17.1-413, this opinion is not designated for publication.
compensable injury by accident, the claimant must prove, “(1) an identifiable incident; (2) that
occurs at some reasonably definite time; (3) an obvious sudden mechanical or structural change
in the body; and (4) a causal connection between the incident and the bodily change.”
Chesterfield Cnty. v. Dunn, 9 Va. App. 475, 476, 389 S.E.2d 180, 181 (1990). On appeal from
the Commission, “we review the evidence in the light most favorable to the prevailing party.”
R.G. Moore Bldg. Corp. v. Mullins, 10 Va. App. 211, 212, 390 S.E.2d 788, 788 (1990). The
Commission’s determination of causation is a factual finding that will not be disturbed on appeal
if supported by credible evidence. Corning, Inc. v. Testerman, 25 Va. App. 332, 339, 488 S.E.2d
642, 645 (1997). “In determining whether credible evidence exists, the appellate court does not
retry the facts, reweigh the preponderance of the evidence, or make its own determination of the
credibility of the witnesses.” Pruden v. Plasser American Corp., 45 Va. App. 566, 574-75, 612
S.E.2d 738, 742 (2005). “The fact that there is contrary evidence in the record is of no
consequence if there is credible evidence to support the commission’s finding.” Wagner Enters.,
Inc. v. Brooks, 12 Va. App. 890, 894, 407 S.E.2d 32, 35 (1991).
In this case, there is ample evidence in the record to support the Commission’s factual
finding that Stadler failed to meet his burden to establish that his right shoulder injury was
causally related to one or both of his falls on July 22, 2014. When Stadler returned to the office
after his falls on the job site, he told his supervisor that he had fallen twice on his right shoulder,
that it was “sore,” and that it “hurt,” but declined to seek medical care because he believed the
injury would resolve itself. Stadler continued to work for the next week and a half to two weeks
after his falls before leaving on a scheduled vacation.
Stadler did not seek medical attention for his shoulder until September 8, 2014, when
Dr. Nordt noted he was treating Stadler for “ongoing right shoulder pain” in addition to a knee
injury Stadler sustained while on vacation two weeks after his falls. On September 23, 2014,
-2-
Dr. Nordt completed his portion of a National Elevator Industry Health Benefit Plan form,
indicating that Stadler’s disability was not “in any way related to” his “employment.” Stadler
followed up with Dr. Nordt on October 8, 2014. The office note indicates that Stadler “made it
clear that this is a work-related injury that happened about July 23rd.” Stadler reported injuring
his shoulder twice on that day, but the note does not describe how the injury occurred, nor does it
contain any medical opinion linking the shoulder injury to an accident at work. The
pre-operatory note from October 28, 2014 specifically states that Stadler’s shoulder surgery was
not “Work Comp” related. Thus, the Commission did not err in finding that the medical
evidence did not establish any causal link between Stadler’s accident on July 22, 2014 and the
injury to his right shoulder he was subsequently treated for.
Stadler’s second assignment of error claims that the Commission erred by “disregarding
the credibility determination of the [d]eputy and the testimony of Stadler.” Specifically, Stadler
argues that because the deputy commissioner found Stadler’s testimony to be “credible in all
facets,” the Commission erred in disregarding his testimony where the medical evidence was not
conclusive as to the causation of his injury. We agree that the causal link may be established
through the testimony of the claimant, particularly in cases where the medical testimony is
inconclusive. See Dollar Gen. Store v. Cridlin, 22 Va. App. 171, 176, 468 S.E.2d 152, 154
(1996). Here, however, the medical causation was not inconclusive, as the medical evidence
consistently reported that the injury was not related to Stadler’s two falls on July 22, 2014.
Further, the Commission clearly considered claimant’s testimony in reaching its decision.
In its opinion, the Commission noted that it “fully agree[d] that the claimant’s testimony was
credible” and it did “not dispute that the claimant fell twice while at work on July 22, 2014.” It
is noteworthy that Stadler’s testimony described his falls and his shoulder injury, but never
explicitly stated that his injury was caused by the falls. After considering all of the evidence, the
-3-
Commission simply did not find Stadler’s testimony to be persuasive in light of the clear medical
causation opinion of Dr. Nordt provided on the National Elevator Industry Health Benefit Plan
form on September 23, 2014 and on the pre-operatory note from October 28, 2014. To find in
Stadler’s favor would require us to reweigh the evidence, which we will not do.
Therefore, we conclude that the Commission’s factual finding that Stadler failed to meet
his burden to establish that his right shoulder injury was caused by his falls on July 22, 2014 was
supported by credible evidence in the record. Accordingly, we affirm the decision of the
Commission.
Affirmed.
-4-
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IN THE
TENTH COURT OF APPEALS
No. 10-16-00361-CV
IN RE JORDAN RENEE HAMONS
Original Proceeding
MEMORANDUM OPINION
Relator’s petition for writ of mandamus is denied.
AL SCOGGINS
Justice
Before Chief Justice Gray,
Justice Davis, and
Justice Scoggins
(Chief Justice Gray dissenting)
Petition denied
Opinion delivered and filed January 11, 2017
[OT06]
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57 Cal.Rptr.3d 18 (2007)
149 Cal.App.4th 285
Leonard O. PARKER, Plaintiff and Appellant,
v.
WOLTERS KLUWER UNITED STATES, INC., et al., Defendants and Respondents.
No. B190805.
Court of Appeal of California, Second District, Division Seven.
April 3, 2007.
*21 Leonard O. Parker, in propria persona, for Plaintiff and Appellant.
Pillsbury Winthrop Shaw Pittman LLP, George S. Howard, Jr., San Diego, and Daphne P. Bishop, Los Angeles, for Defendants and Respondents.
Certified for Partial Publication.[*]
JOHNSON, Acting P.J.
After previous orders and monetary sanctions failed to bring about Parker's compliance with the discovery process the trial court sanctioned Parker by dismissing his complaint against all defendants and entered his default on the cross-complaint brought by two of the defendants. Parker appeals from the ensuing judgment and challenges the validity of the underlying discovery orders which led to it.
We affirm the judgment in part and reverse it in part. We reverse one of the monetary sanction orders. We hold the trial court erred in imposing terminating sanctions in favor of parties who did not propound discovery themselves or show how they were prejudiced by Parker's failure to comply with the discovery requests propounded by others.
FACTS AND PROCEEDINGS BELOW
Parker brought an action against his former employer, Wolters Kluwer United States (WKUS), its subsidiary CCH, Inc.,[1] and three of its employees, Cyndi Andreu, Jackie Staley and Kathy Baker, alleging various employment-related torts and breaches of contract. Defendants answered the complaint and WKUS filed a cross-complaint to recover excess benefits paid to Parker under its short-term disability plan.
In response to the cross-complaint, Parker filed demurrers, motions to strike and a motion to quash service. He also demurred and moved to strike the defendants' answer to his complaint. The trial court denied Parker's motions and overruled his demurrers. Parker then answered the cross-complaint.
WKUS attempted to obtain discovery from Parker. As we discuss more fully *22 below, Parker failed to properly respond to interrogatories and to submit to a deposition. After monetary sanctions did not result in Parker's cooperation the trial court struck Parker's complaint as to all four defendants and entered his default on the cross-complaint.
Following a default prove-up the trial court entered judgment in favor of WKUS on its cross-complaint in the amount of $3,698.14 plus prejudgment interest and included in the judgment a $2,200 discovery sanction in favor of WKUS for Parker's refusal to respond to WKUS's interrogatories.[2] The judgment also dismissed Parker's complaint as to all four defendants.
The trial court denied Parker's motions to vacate, set aside and reconsider its judgment and orders. Parker filed a timely appeal from the judgment through which he also challenges the trial court's orders with respect to the pleadings and discovery.
DISCUSSION
I. AN APPELLATE BRIEF INCORPORATING BY REFERENCE POINTS AND AUTHORITIES FILED IN THE TRIAL COURT DOES NOT SATISFY THE REQUIREMENT A BRIEF "SUPPORT EACH POINT BY ARGUMENT AND, IF POSSIBLE, BY CITATION OF AUTHORITY." (CAL. RULES OF COURT, RULE 8.204(a)(1)(B).)
Throughout his brief on appeal Parker alludes to arguments he made in the trial court and purports to incorporate these arguments by reference in his appellate brief. It is well-established, however, this practice does not comply with rule 8.204(a)(1)(B)[3] of the California Rules of Court which requires an appellate brief "support each point by argument and, if possible, by citation of authority."[4]
While incorporation by reference might seem to make sense ecologically, by reducing the amount of paper used in appellate briefs, the actual result would be to increase the amount of paper used in an appeal. The rules require an original and four copies of the appellate brief.[5] The original brief stays with the record on appeal. Each of the three justices on the panel deciding the case receive copies of the briefs which they can use at their desks, work on at home, or take with them when traveling for an engagement outside the court. The fourth copy remains in the clerk's office for public inspection. Only one copy of the trial court record is filed in the appellate court, however.[6] If all three justices had to share this single record in order to review, research and evaluate a party's arguments the time it would take for the court to decide the appeal would considerably increase. This would work a hardship on the parties to that appeal and to the parties in other appeals awaiting their turn for consideration and decision. Alternatively, four copies of the trial court record would have to be filed with the Court of Appeal. Because these records often consist of thousands of pages it is *23 easy to see how the amount of paper used in the appeal would increase significantly.
Therefore, in deciding the issues in this appeal we have not considered Parker's "incorporated" arguments.[7]
II.-IV.[**]
V. THE TRIAL COURT DID NOT ABUSE ITS DISCRETION IN IMPOSING A TERMINATING SANCTION BY DISMISSING PARKER'S COMPLAINT AGAINST WKUS.
A. Events Leading Up To The Terminating Sanction.
1. Failure to respond to interrogatories.
In June 2005 WKUS served Parker with a set of form interrogatories and a set of special interrogatories. Parker did not answer these interrogatories within the time provided by statute. After several telephone calls and e-mails from counsel for WKUS, Parker promised to serve his responses by August 5, 2005. When no responses arrived by August 17 WKUS filed a motion to compel. This motion was taken off calendar when Parker served his responses later in August. Parker did not verify his responses and objected to some interrogatories although all objections were waived because the responses were late.[19] In addition, WKUS found many of Parker's responses inadequate.
Parker ignored WKUS's efforts to meet and confer concerning his responses. Therefore, in October 2005 WKUS filed a motion to compel further answers to the form and special interrogatories. In his opposition to the motion Parker argued his responses were adequate and proper but did not deny his failure to meet and confer with WKUS regarding those responses.
In November 2005 the trial court ordered Parker to provide supplemental responses, properly verified, within ten days of its order. It sanctioned Parker in the sum of $2,220.00. At the time of the motion for terminating sanctions in December 2005 Parker still had not served his supplemental responses.
2. Failure to attend and participate in depositions.
WKUS noticed Parker's deposition for August 29, 2005. Parker appeared 40 minutes late, refused to be sworn or testify and left stating: "This deposition is over." After Parker refused to reconsider his position, and with trial three months away and the deadline for filing a motion for summary judgment one month away, WKUS filed a motion to compel Parker's deposition. The trial court granted this motion and ordered Parker to appear for his deposition on October 24, 2005. The court denied WKUS's request for monetary sanctions.
Parker arrived for his October 24 deposition with his one or two year old granddaughter whom he brought with him into the deposition room. The child was sick and by Parker's own admission had "been crying all day" and was "screaming and hollering" throughout the deposition. After being deposed for approximately an hour Parker informed defense counsel he was leaving to take his granddaughter to a doctor and would not return to Los Angeles "for no deposition ... unless you pay for it." Defense counsel stated to Parker:
*24 "[I]f you need to take your granddaughter to the doctor, you should take her to the doctor" but counsel notified Parker he would seek an order from the trial court directing him to return to resume his deposition.
On October 26, 2005 the trial court issued an ex parte order directing Parker to appear for his deposition on November 8 "unaccompanied by his granddaughter or any other person other than an attorney" and awarded sanctions against Parker in the sum of $1,619.75.
Parker failed to appear for his court-ordered deposition on November 8. He gave no prior warning he intended to disobey the trial court's order and did not respond to telephone calls from defense counsel regarding his whereabouts.
By this time the date for filing a summary judgment motion had passed, trial was less than 30 days away, the status conference was 20 days away and WKUS had not received Parker's supplemental responses to interrogatories nor had it been able to complete his deposition. The trial court granted defendants' ex parte motion to continue the pretrial and trial dates.
On November 16 all four defendants moved for terminating, evidence and monetary sanctions against Parker. The motion was based on Parker's conduct described above as well as other less serious violations of the discovery rules. The trial court granted the motion finding "the failure of plaintiff to provide written responses to discovery and the failure of plaintiff to appear for his deposition, pursuant to the October 26, 2005 order, to be willful and without justification." As a sanction the court struck Parker's complaint as to all four defendants and his answer to the WKUS cross-complaint and entered his default on the cross-complaint.
Prior to the default prove-up on the cross-complaint Parker made, and the trial court denied, a motion to vacate the default and reinstate his complaint and his answer to the cross-complaint.
At the prove-up hearing on the cross-complaint the trial court awarded damages to WKUS in the sum of $3,698.14 plus prejudgment interest. The court also added to the judgment the $2,200 sanction for failing to file supplemental responses to interrogatories.
Following entry of judgment Parker moved to set aside the judgment and to reconsider the judgment and orders of the court. This motion was denied.
B. The Trial Court Did Not Err When It Imposed A $2,200.00 Sanction On Parker For His Unsuccessful Opposition To The Motion To Compel Further Responses To Interrogatories.
Parker contends the trial court erred when it sanctioned him $2,200 in connection with its order requiring him to provide further answers to interrogatories because there had been no previous order compelling him to respond; the court did not make a finding his opposition lacked substantial justification; and the amount of the sanction was unreasonable and excessive. We reject Parker's contentions.
Monetary sanctions are allowed against a party refusing to make discovery even if the party has not refused to obey a previous order. The trial court is not required to make a specific finding the party's opposition to a motion to compel further responses was without substantial justification.
Section 2030.300, subdivision (d) states: "The trial court shall impose a monetary sanction ... against any party, person, or attorney who unsuccessfully makes or opposes *25 a motion to compel a further response to interrogatories, unless it finds that the one subject to the sanction acted with substantial justification or that other circumstances make the imposition of the sanction unjust." (Italics added.) Nothing in the statute suggests a party is entitled to one free refusal to serve further responses before a monetary sanction can be imposed. On the contrary, the plain language of the statute requires the trial court to impose a monetary sanction even for the first offense. The only exception to this requirement is for a circumstance constituting a "substantial justification" for failing to respond. The trial court must make a finding this exception exists. The court need not make an explicit finding the exception does not exist as this is implied in the order awarding sanctions.
Furthermore, WKUS established without contradiction Parker refused to meet and confer regarding further responses to the interrogatories. This is a separate offense entitling the moving party to monetary sanctions "[notwithstanding the outcome of the particular discovery motion[.]"[20]
As to the amount of sanctions, section 2023.030, subdivision (a) authorizes the trial court to impose an amount representing "the reasonable expenses, including attorney's fees, incurred by anyone as a result" of a party's misuse of the discovery process. In support of the request for sanctions in this case defense counsel submitted a declaration stating they had expended an hour reviewing Parker's responses to interrogatories, four hours attempting to meet and confer with Parker and drafting a formal meet and confer letter, and ten hours preparing and reviewing the motion to compel further responses. Counsel estimated they would spend an additional three hours reviewing and preparing a reply to Parker's opposition to the motion and attending the hearing on the motion. Counsel billed their client a blended rate of $370.00 per hour. Accordingly, counsel asked for sanctions in the sum of $6,600.00. The trial court cut that request by two-thirds. We cannot say the court abused its discretion in making this award.[21]
C. The Trial Court Did Not Err When It Ordered Parker To Appear For His Deposition On November 8 But Did Err In Its Ex Parte Imposition of Monetary Sanctions For His Disruption And Refusal To Proceed With The October 24 Deposition.
Parker contends the trial court erred in granting WKUS's ex parte motion ordering him to attend the October 24 deposition in Los Angeles "2000 miles from his place of residence" and in sanctioning him $1,619.75 for disrupting and refusing to proceed with his deposition.
A party desiring to take the deposition of a natural person who is a party at a place more distant than otherwise permitted under section 2025.250 (generally 75 miles from the deponent's residence) should first obtain a court order under section 2025.260. Parker, however, waived any objection to the location of the deposition by failing to serve a written objection on WKUS at least three calendar days prior to the date of the deposition.[22] Furthermore, *26 Parker failed to submit a declaration or any other evidence his residence is 2,000 miles from Los Angeles. We note Parker used an address in Torrance, a Los Angeles suburb, on his complaint and answer to the cross-complaint. The notice of deposition was sent to this Torrance address and Parker obviously received it because he presented himself on the date and at the place noticed.
Parker further contends the ex parte order of October 26 directing him to appear for his deposition on November 8 and imposing a monetary sanction for not submitting to his deposition on October 24 was invalid because it was issued without notice and an opportunity to be heard.
The discovery law contemplates a need may arise for an ex parte motion to compel a witness to appear and answer questions at a deposition. Section 2025.480, subdivision (c) provides notice of a motion to compel answers at a deposition "shall be given to all parties and to the deponent either orally at the examination, or by subsequent service in writing."
Ex parte applications to the superior court are authorized by the California Rules of Court, rules 3.1200 through 3.1207. Upon reviewing the record we conclude WKUS complied with the requirements for an ex parte application to compel Parker's attendance at a deposition.
With respect to notice, rule 3.1203 of the court rules provides in relevant part "[a] party seeking an ex parte order must notify all parties no later than 10:00 a.m. the court day before the ex parte appearance...." The record shows that as Parker walked out on his Monday October 24 deposition[23] counsel for WKUS told him: "We are going to notice and are noticing an ex parte appearance on Wednesday before Judge Willett to seek a protective order to have you ordered to come back." Counsel further informed Parker he would seek the order at 8:30 a.m. Parker replied, "I don't care what you do ... I'm not going to be participating. I'm going to be back in Atlanta." Thus, the record shows Parker received two court days advance notice of WKUS's ex parte appearance, longer than the rules require.[24]
Discovery sanctions, however, cannot be awarded ex parte. Section 2023.030 states in relevant part: "[T]he court, after notice to any affected party, person, or attorney, and after opportunity for hearing, may impose [monetary] sanctions against anyone engaging in conduct that is a misuse of the discovery process." In Alliance Bank v. Murray we held when a discovery statute requires a notice and opportunity for hearing before the imposition of sanctions the statute requires a written notice served in accordance with the time frames set out in section 1005.[25] A sanction order issued ex parte is void.[26]*27 Therefore, the $1,619.75 sanction against Parker for disrupting and refusing to proceed with his deposition on October 24 must be reversed.[27]
A detailed analysis of Parker's lesser contentions with respect to the trial court's underlying discovery orders is not necessary. We have examined his points and find them to be without merit.[28]
D. The Trial Court Did Not Abuse Its Discretion In Imposing A Terminating Sanction In Favor Of WKUS By Dismissing Parker's Complaint.
"The power to impose discovery sanctions is a broad discretion subject to reversal only for arbitrary, capricious or whimsical action."[29] A decision to impose the ultimate sanctiona judgment in the opposing party's favorshould not be made lightly. "But where a violation is willful, preceded by a history of abuse, and the evidence shows that less severe sanctions would not produce compliance with the discovery rules, the trial court is justified in imposing the ultimate sanction."[30] Here, the record provides ample support for the trial court's actions.
The undisputed facts show Parker refused to testify at his August 29 deposition; disrupted and unilaterally terminated his October 24 deposition; violated the trial court's order to appear for his November 8 deposition; and violated the court's November 3 order to provide verified supplemental answers to interrogatories. In addition, Parker unsuccessfully made or opposed five discovery motions; failed to timely respond to interrogatories and then filed untimely objections; and failed to meet and confer with opposing counsel regarding compliance with discovery requests. Two previous orders awarding monetary sanctions against Parker did not affect his willingness to cooperate in the discovery process.
In light of Parker's refusal to cooperate with WKUS's discovery with respect to his complaint against WKUS the trial court did not abuse its discretion in dismissing his complaint against this defendant.
VI. THE TRIAL COURT ABUSED ITS DISCRETION IN IMPOSING TERMINATING SANCTIONS IN FAVOR OF PARTIES WHO DID NOT PROPOUND DISCOVERY THEMSELVES OR SHOW HOW THEY WERE PREJUDICED BY PARKER'S FAILURE TO COMPLY WITH THE DISCOVERY REQUESTS PROPOUNDED BY OTHERS.
For the reasons explained in Part V, above, we have no difficulty affirming the judgment dismissing Parker's complaint against WKUS as a sanction for Parker's misuse of the discovery process. WKUS, as a defendant in Parker's action, propounded interrogatories to Parker, noticed his deposition and moved to compel his responses to the interrogatories and his attendance at his deposition.
*28 The circumstances are different with respect to the individuals named as defendants in Parker's complaint, Andreu, Staley and Baker, and with respect to WKUS's cross-complaint against Parker. Andreu, Staley and Baker did not propound discovery nor did they join in the motions to compel Parker's answers to interrogatories or attendance at his deposition. Their only involvement in the discovery proceedings was to join in WKUS's motion for terminating sanctions. Furthermore, WKUS did not propound discovery with respect to its cross-complaint against Parker but only as to Parker's complaint against WKUS.
The appellate courts have given conflicting answers when asked whether discovery sanctions can be awarded in favor of parties who did not propound the discovery which triggered the sanctions.
In Calvert Fire Ins. Co. v. Cropper the court held defendants who did not propound interrogatories to the plaintiff were nevertheless entitled to a dismissal of the action against them as a sanction for the plaintiffs failure to respond to interrogatories propounded by another defendant.[31] In Townsend v. Superior Court, which did not mention Calvert, the court reversed an order awarding monetary sanctions to defendants who "neither having noticed the deposition nor initiated the motion to compel, were but incidental beneficiaries to both proceedings."[32]
Calvert, which upheld a terminating sanction in favor of the non-propounding parties, relied in part on language in the governing statute, former section 2034,[33] and in part on the fact the parties who did not propound the interrogatories were nevertheless harmed by the plaintiffs refusal to answer. The court explained: "[T]he sanction at issue was imposed under [section 2034] subdivisions (b) and (d). Subdivision (a) does, as appellant contends, provide that the `proponent' of the discovery may move for sanctions; but subdivisions (b) and (d) empower the court to sanction the `party [who] refuses to obey' or the `party [who] willfully fails' to comply, respectively, without any limitation as to who may request the sanction."[34] Therefore, the court concluded, "[o]n the face of subdivisions (b) and (d), there is no limitation of the potential beneficiaries of the sanction" and "[t]he plain implication is that an opposing party who did not initiate the discovery may benefit from the sanction without even requesting relief."[35] The court did not have to decide, however, whether subdivisions (b) and (d) would permit a non-propounding party who had no stake in the discovery to benefit from the sanction awarded to the propounding party because the court found the interests of the non-propounding parties were "identical" to those of the propounding parties.[36] Under those circumstances, the court reasoned, requiring the non-propounding par discovery orders in the present case were made under the 2005 statute. *29 to duplicate the propounding party's discovery merely to perfect the non-propounding party's right to sanctions would result in "a proliferation of identical discovery requests ... serv[ing] no legitimate discovery purpose[.]"[37] Nothing "in the language of section 2034 or in reason ... would support such a strained rationale," the court concluded.
Townsend, which reversed a monetary sanction in favor of the non-propounding parties, relied on language from former section 2025, subdivision (o) which provided: "If a deponent fails to answer any question ... the party seeking discovery may move the court for an order compelling that answer...."[38] As previously mentioned, the court did not acknowledge the Calvert opinion nor did it expressly evaluate the concurrence of interests between the propounding and non-propounding parties. The court did observe "[m]onetary sanctions are designed to recompense those who are the victims of misuse of the Discovery Act"[39] suggesting it found the non-propounding parties were not adversely affected by the opposing party's misuse of the discovery process.
As Calvert and Townsend illustrate, the discovery statutes do not provide a clear answer to the question whether a party who did not propound the discovery may nevertheless be awarded sanctions against the party who failed to respond to it. Each opinion relied on a different provision of the discovery law to support its conclusion. In Calvert the court acknowledged subdivision (a) of former section 2034 [now section 2030.300, subdivision (a)] provided the "proponent" of the discovery may move for sanctions but relied instead on subdivisions (b) and (d) [now section 2030.300, subdivision (e)] which, it concluded, empowered the trial court to sanction a party who "refuses to obey" and a party who "willfully fails" to comply with discovery orders "without any limitation as to who may request the sanction."[40] In contrast, the Townsend court relied exclusively on the language in former section 2025, subdivision (o) [now section 2025.480, subdivision (a)] stating "the party seeking discovery may move the court for an order compelling [an] answer" which the court concluded meant "outsiders [are] not entitled to be awarded sanctions."[41] In reaching this conclusion the court ignored another provision of subdivision (o) [now section 2025.480, subdivision (g)] which, like former section 2034, subdivision (b) relied on in Calvert, authorized the trial court to sanction "a deponent [who] fails to obey an order" to respond to discovery.
Complicating matters further, neither opinion discussed section 2023.030 [formerly section 2023] which provides in relevant part: "To the extent authorized by the chapter governing any particular discovery method ... (a) The court may impose a monetary sanction ordering that one engaging in the misuse of the discovery process ... pay the reasonable expenses, including attorney's fees, incurred *30 by anyone as a result of that conduct. ... (b) The court may impose an issue sanction ordering that designated facts shall be taken as established in the action in accordance with the claim of the party adversely affected by the misuse of the discovery process .... (d) The court may impose a terminating sanction by one of the following orders: (1) An order striking out the pleadings or parts of the pleadings of any party engaging in the misuse of the discovery process.... (3) An order dismissing the action, or any part of the action, of that party. (4) An order rendering a judgment by default against that party." (Italics added.) On its face section 2023.030 appears to say monetary sanctions and issue sanctions can only be imposed in favor of a party who has suffered harm as the result of the sanctioned party's misuse of the discovery process but the most extreme sanctionthe terminating sanctioncan be imposed in favor of all parties regardless of whether they suffered harm as the result of the sanctioned party's conduct.
We believe the answer to the question whether a non-propounding party can benefit from the sanction awarded a propounding party is not to be found in the ambiguous statutory language of sections 2025.480, 2030.300 or 2023.030 quoted above. Rather, we believe the answer is found in the statutory language instructing the trial court, when imposing discovery sanctions, to "make those orders that are just."[42]
For the reasons explained below in the case of a party who did not propound the discovery an award of sanctions is justified only if the non-propounding party shows it suffered a detriment as the result of the sanctioned party's misuse of the discovery process.
It is well established "the purpose of discovery sanctions `is not "to provide a weapon for punishment, forfeiture and the avoidance of a trial on the merits,'" ... but to prevent abuse of the discovery process and correct the problem presented[.]"[43] Consistent with this statement of purpose the appellate courts have held "[t]he penalty should be appropriate to the dereliction, and should not exceed that which is required to protect the interests of the party entitled to but denied discovery."[44] Awarding sanctions in favor of a party who propounded no discovery, had little or no interest in the discovery which was propounded, and waited "`to get inta de act'"[45] until the propounding party moved for sanctions is not consistent with the purpose of discovery sanctions discussed above. Because the party propounded no discovery there was no discovery process to be "abused" and no "problem" to be "corrected." Furthermore, to dismiss an action in favor of a party who took no part in the discovery dispute until it was time to join the motion for sanctions would be to grant a windfall judgment to a party who had done nothing to deserve it. Surely this is not what the Legislature had in mind *31 when it instructed the courts to issue "orders that are just."
This is not to say a non-propounding party should never be awarded discovery sanctions. As the court recognized in Calvert there can be circumstances in which the discovery interests of the propounding party and a co-party are so closely aligned it would be a useless duplication of effort for both parties to pursue the same discovery and invoke the same remedies against an opposing party.[46] It is up to the trial court in the exercise of its discretion to determine whether in a particular case the interests of the propounding party and a co-party are sufficiently aligned so that a sanction award to both would be just.
In the present case, the non-propounding parties Andreu, Staley and Baker bore the burden of showing their interests in WKUS's discovery were sufficiently aligned so that they were prejudiced in the preparation of their defense by Parker's failure to respond to WKUS's interrogatories and submit to WKUS's deposition. Similarly, WKUS bore the burden of showing Parker's responses to WKUS's discovery propounded in its role as a defendant in Parker's action would have been relevant evidence or could have led to the discovery of relevant evidence in WKUS's cross-action against Parker.
Andreu, Staley, Baker and WKUS failed to carry these burdens even after Parker pointed out in his opposition to their motion for sanctions and in his appellate brief that the individual defendants never sought any discovery from Parker and WKUS sought discovery in its role as defendant only. In the trial court the individual defendants and WKUS merely argued "[t]he discovery that should have been obtained by defendant WKUS could have been used by all parties in the case" and "[a]ll defendants were adversely affected by Mr. Parker's discovery abuses and sanctions in their favor are appropriate." On appeal these parties make the same argument adding only that they are "closely related" because the individual defendants are present or former employees of WKUS.
The extent to which Parker's responses to interrogatories and his deposition testimony would have benefited the individual defendants and benefited WKUS in its cross-action against Parker required an analysis by the individual defendants and WKUS not mere legal conclusions they "could have used" Parker's responses and they were "adversely affected" by Parker's discovery abuses. Without such analysis and citation to the record showing how and why these conclusions were valid the trial court was in no position to determine whether the terminating sanctions were just.
For the reasons discussed above we hold the trial court abused its discretion in dismissing Parker's complaint against Andreu, Staley, Baker and awarding a default judgment to WKUS on its cross-complaint.
DISPOSITION
The judgment and monetary sanction of $2,200 in favor of WKUS on Parker's complaint is affirmed. In all other respects the judgment is reversed. The monetary sanction of $1,619.75 in favor of WKUS is *32 reversed. The parties are to bear their own costs on appeal.
We concur: WOODS and ZELON, JJ.
NOTES
[*] Pursuant to California Rules of Court, rules 8.1100 and 8.1110, this opinion is certified for publication with the exception of parts II, III and IV.
[1] We consider WKUS and CCH a single defendant and refer to them collectively as WKUS.
[2] The court's minute order reflects a sanction in the sum of $2,220. The judgment controls and to avoid confusion we will refer to the sanction amount as $2,200.
[3] Formerly California Rules of Court, rule 14(a)(1)(B).
[4] People v. Stanley (1995) 10 Cal.4th 764, 793, 42 Cal.Rptr.2d 543, 897 P.2d 481; Paterno v. State of California (1999) 74 Cal.App.4th 68, 109, 87 Cal.Rptr.2d 754.
[5] California Rules of Court, rule 8.44(b)(1).
[6] California Rules of Court, rule 8.150(a).
[7] People v. Stanley, supra, 10 Cal.4th at page 793, 42 Cal.Rptr.2d 543, 897 P.2d 481; Tilbury Constructors, Inc. v. State Comp. Ins. Fund (2006) 137 Cal.App.4th 466, 482, 40 Cal.Rptr.3d 392.
[**] See footnote *, ante.
[19] Section 2030.290, subdivision (a).
[20] Section 2023.020.
[21] Compare Ghanooni v. Super Shuttle (1993) 20 Cal.App.4th 256, 262, 24 Cal.Rptr.2d 501.
[22] Section 2025.410, subdivision (a) states in relevant part: "Any party served with a deposition notice that does not comply with Article 2 [which includes the travel limitation of section 2025.250] waives any error or irregularity unless that party promptly serves a written objection specifying that error or irregularity at least three calendar days prior to the date for which the deposition is scheduled...."
[23] See discussion at pages 9-10, above.
[24] Technically the deposition officer should have been the one to give Parker oral notice of the motion to compel and direct his attendance. (Code Civ. Proc., § 2025.480, subd. (c).) Failure to comply with this provision was harmless error, however, because Parker clearly heard and understood the notice and responded he would not be there.
[25] Alliance Bank v. Murray (1984) 161 Cal. App.3d 1, 5-6, 207 Cal.Rptr. 233. Accord, Sole Energy Co. v. Hodges (2005) 128 Cal. App.4th 199, 208, 26 Cal.Rptr.3d 823.
[26] Sole Energy Co. v. Hodges, supra, 128 Cal. App.4th at page 208, 26 Cal.Rptr.3d 823. Our ruling does not apply to the $2,200 sanction against Parker for failing to respond to WKUS's interrogatories. That sanction was imposed after a regularly noticed motion to compel further responses and for sanctions.
[27] The trial court could have imposed a monetary sanction for Parker's misbehavior at the October 24 deposition when it ruled on defendants' regularly noticed motion for sanctions on December 30 but it did not do so.
[28] See People v. Rojas (1981) 118 Cal.App.3d 278, 290, 174 Cal.Rptr. 91.
[29] Calvert Fire Ins. Co. v. Cropper (1983) 141 Cal.App.3d 901, 904, 190 Cal.Rptr. 593.
[30] Mileikowsky v. Tenet Healthsystem (2005) 128 Cal.App.4th 262, 279-280, 26 Cal.Rptr.3d 831.
[31] Calvert Fire Ins. Co. v. Cropper, supra, 141 Cal.App.3d at page 905, 190 Cal.Rptr. 593.
[32] Townsend v. Superior Court (1998) 61 Cal. App.4th 1431, 1438, 72 Cal.Rptr.2d 333.
[33] Repealed by Statutes 1986, chapter 1334, section 1 and subject matter moved to section 2030, subdivisions (k) and (l). Section 2030 was repealed effective July 1, 2005 and its provisions reenacted without substantive change in sections 2030.010 through 2030.410. (Stats.2004, ch. 182, § 23.) The discovery orders in the present case were made under the 2005 statute.
[34] Calvert Fire Ins. Co. v. Cropper, supra, 141 Cal.App.3d at page 905, 190 Cal.Rptr. 593; first bracket added.
[35] Calvert Fire Ins. Co. v. Cropper, supra, 141 Cal.App.3d at page 905, 190 Cal.Rptr. 593.
[36] Calvert Fire Ins. Co. v. Cropper, supra, 141 Cal.App.3d at page 905, 190 Cal.Rptr. 593.
[37] Calvert Fire Ins. Co. v. Cropper, supra, 141 Cal.App.3d at page 905, 190 Cal.Rptr. 593.
[38] Townsend v. Superior Court, supra, 61 Cal. App.4th at page 1438, 72 Cal.Rptr.2d 333. Effective July 1, 2005, section 2025, subdivision (o) was repealed and renumbered without substantive change as section 2025.480, subdivision (a). (Stats.2004, ch. 182, § 23.)
[39] Townsend v. Superior Court, supra, 61 Cal. App.4th at page 1438, 72 Cal.Rptr.2d 333.
[40] Calvert Fire Ins. Co. v. Cropper, supra, 141 Cal.App.3d at page 905, 190 Cal.Rptr. 593.
[41] Townsend v. Superior Court, supra, 61 Cal. App.4th at page 1438, 72 Cal.Rptr.2d 333.
[42] Section 2025.480, subdivision (g); section 2030.300, subdivision (e).
[43] McGinty v. Superior Court (1994) 26 Cal. App.4th 204, 210, 31 Cal.Rptr.2d 292, citations omitted.
[44] Deyo v. Kilbourne (1978) 84 Cal.App.3d 771, 793, 149 Cal.Rptr. 499, quoted in Wilson v. Jefferson (1985) 163 Cal.App.3d 952, 958, 210 Cal.Rptr. 464 among other decisions.
[45] Townsend v. Superior Court, supra, 61 Cal. App.4th at page 1434, 72 Cal.Rptr.2d 333, quoting a line often used by the late comedian Jimmy Durante.
[46] Calvert Fire Ins. Co. v. Cropper, supra, 141 Cal.App.3d at page 905, 190 Cal.Rptr. 593. In Calvert the court observed the interests of the propounding party and the coparty were "identical," (ibid.), but we do not interpret Calvert as holding the parties' interests need always be identical so long as they are close enough the non-propounding party can demonstrate prejudice from the sanctioned party's violation of the discovery rules.
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FILED
NOT FOR PUBLICATION
JAN 10 2017
UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
DANIEL RIBOWO, No. 13-72168
Petitioner, Agency No. A078-020-413
v.
MEMORANDUM*
LORETTA E. LYNCH, Attorney General,
Respondent.
On Petition for Review of an Order of the
Board of Immigration Appeals
Argued and Submitted May 4, 2016
Pasadena, California
Before: PREGERSON, BYBEE, and N.R. SMITH, Circuit Judges.
Daniel Ribowo, a native and citizen of Indonesia, petitions for review of the
denial by the Board of Immigration Appeals (“BIA”) to reopen his removal
proceedings in light of changed country conditions. We have jurisdiction under 8
U.S.C. § 1252. We review for abuse of discretion the BIA’s denial of a motion to
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
reopen. Najmabadi v. Holder, 597 F.3d 983, 986 (9th Cir. 2010). We deny the
petition for review.
Ribowo’s motion to reopen was untimely. See 8 C.F.R. § 1003.2(c)(2).
Thus, in order to prevail on the motion to reopen, Ribowo must “clear four hurdles:
(1) he had to produce evidence that conditions had changed in [Indonesia]; (2) the
evidence had to be material; (3) the evidence must not have been available and
would not have been discovered or presented at the previous proceeding; and (4)
he had to demonstrate that the new evidence, when considered together with the
evidence presented at the original hearing, would establish prima facie eligibility
for the relief sought.” Toufighi v. Mukasey, 538 F.3d 988, 996 (9th Cir. 2008)
(internal quotation marks omitted). Here, the BIA did not abuse its discretion in
finding that Ribowo failed to establish materially changed circumstances in
Indonesia to qualify for a motion to reopen. See 8 C.F.R. § 1003.2(c)(3)(ii);
Najmabadi, 597 F.3d at 987-88 (evidence must be “qualitatively different” to
warrant reopening).
2
Although Ribowo is a member of a disfavored group in Indonesia (Christian
Indonesians),1 he failed to present evidence that he would be individually targeted
based on his Christian faith. See Wakkary v. Holder, 558 F.3d 1049, 1053 (9th Cir.
2009). Membership alone in a disfavored group is not enough. Id. at 1066. The
BIA concluded that Ribowo did not produce sufficient evidence of materially
changed country conditions or individualized risk. The BIA recognized that
religious extremism and violence in Indonesia is on-going and that the government
has been criticized for failing to prevent it. However, the BIA concluded that
current conditions in Indonesia are substantially similar to those that existed at the
time of Ribowo’s merits hearing (rather than changed conditions). Ribowo failed
to present the quantum of evidence necessary to show that his “predicament [was]
appreciably different from the dangers faced by [his] fellow [Indonesians].” Singh
v. INS, 134 F.3d 962, 967 (9th Cir. 1998) (quoting Kotasz v. INS, 31 F.3d 847, 852
1
Ribowo also asserts that he will be perceived as a “westerner” with United
States citizen children. We have not recognized that a person with American ties
qualifies as a member of a social group. Cf. Delgado-Ortiz v. Holder, 600 F.3d
1148, 1151-52 (9th Cir. 2010). Even so, Ribowo did not present significant
changes in Indonesia with regard to anti-American sentiment. Although the
Innocence of Muslims film was released in September 2012 and caused some
uprising against Westerners, it was not significantly different from what Ribowo
had previously claimed.
3
(9th Cir. 1994)). These conclusions were not an abuse of discretion.2 See
Najmabadi, 597 F.3d at 986 (noting that the court “defer[s] to the BIA’s exercise
of discretion unless it acted arbitrarily, irrationally, or contrary to law”).
PETITION FOR REVIEW DENIED.
2
Because we find that the BIA did not abuse its discretion by concluding
that Ribowo failed to show changed circumstances sufficient to reopen his case, we
need not address the BIA’s alternative conclusion that Ribowo did not show that he
was prima facie eligible for asylum, withholding of removal, or protection under
the Convention Against Torture.
4
FILED
Ribowo v. Lynch, No. 13-72168
JAN 10 2017
Pregerson, J., dissenting:
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
I dissent. This case is another example of the cruelty that besets our
immigration laws.
Daniel Ribowo came to the United States in 2000. For over sixteen years, he
has worked to build his life here. He married his wife, Idapola, in California in
2002. Together, they have three United States citizen children: Michael (age 13),
Maureen (age 10), and Meredith (age 8). These children were born in the U.S. and
have bright futures. The family is active in their Seventh Day Adventist Church:
Daniel serves as the Deputy Director of the Pathfinders, where he mentors children
at his church; Idapola teaches the bible study class for children under the age of
five. They fear returning to Indonesia where Christians are a recognized
disfavored group. Tampubolon v. Holder, 610 F.3d 1056, 1058 (9th Cir. 2010). In
Indonesia, Christians are “‘subject to violence and official discrimination,’ and the
[Indonesian] government has largely acquiesced in their persecution by those
following ‘militant expressions of Islam.’” Salim v. Lynch, 831 F.3d 1133, 1140
(9th Cir. 2016) (quoting Tampubolon, 601 F.3d at 1060).
Despite the equities in this case, the government has declined to exercise
prosecutorial discretion and has chosen to prosecute Ribowo. In doing so, the
government has effectively chosen to prosecute the whole family. Ribowo’s
children will either grow up in America without their father or be compelled by
circumstances beyond their control to move to a country that they do not know and
where they will be in danger because they are Christians. I decline to be a party to
such an unkind result.
2
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202 B.R. 277 (1996)
David Wayne SMITH, Plaintiff-Appellee,
v.
UNITED STATES of America, Defendant-Appellant.
Cause No. EV 94-22-C, Bankruptcy No. 93-70341-BHL-7, Adversary No. 93-7028.
United States District Court, S.D. Indiana, Evansville Division.
June 19, 1996.
*278 Robert P. Doolittle, Jr., Emison Doolittle Kolb & Roellgen, Vincennes, IN, for David Wayne Smith.
Thomas E. Kieper, United States Attorney's Office, Indianapolis, IN, Samuel D. Brooks, U.S. Dept. of Justice, Tax Div., Steven E. Cole, U.S. Department of Justice, Washington, DC, for United States of America.
ORDER REVERSING AND REMANDING BANKRUPTCY COURT DECISION
BROOKS, District Judge.
This matter comes before the Court on appeal from the United States Bankruptcy Court for the Southern District of Indiana, The Honorable Basil H. Lorch, III, presiding.
The Brief For Appellant, United States Of America was filed April 11, 1994. The Brief For Appellee, David Wayne Smith was filed April 22, 1994, and the Reply Brief For Appellant, United States Of America was filed May 19, 1994.
Statement Of Relevant Facts
There appears to be no significant disagreement on the facts. For the tax years 1984-89 the debtor-appellee, filed tax returns which substantially reflected his income, and he accurately reported his exemptions on all of the returns. There were certain tax liabilities and assessments for the years in question, but detailed examination of the debtor's obligations and payments are not relevant to the Court's present inquiry.
The court's primary focus will be on the debtor's filing of false W-4 forms for each of the taxable years in question, by claiming excessive exemptions. In 1986 he claimed fourteen (14) exemptions. He claimed four (4) in 1987 and nine (9) in 1989.
There is no dispute that the underpayment of the appellee's tax liabilities was directly related to his overstating his exemptions. Mr. Smith, the appellee, was a single person with no children during the relevant years in question.
The debtor admits that the claimed exemptions were false but says that he believed he could do so as long as he claimed the correct exemption on his tax returns. The debtor admits that he did so in order to have less taxes withheld from his wages or earnings, and therefore realize more spendable income throughout the year. (Transcript Of Trial Before The Honorable Basil H. Lorch, III, *279 J.U.S.B.C. at 66-67, hereinafter "Tr. at ___".)
Issues Presented On Appeal
The issue to be decided is whether the debt is dischargeable under Section 523(a)(1)(C) of the Bankruptcy Code. That is, as this section provides, did the debtor "willfully attempt[] in any manner to evade or defeat such tax"? Appellant specifically claims that the bankruptcy judge, in interpreting "willfulness," improperly applied the criminal standard rather than the civil standard.
Jurisdiction
This Court has jurisdiction to review this matter pursuant to 28 U.S.C. § 158(a) and Bankruptcy Rule 8001 as a direct appeal from a final order and judgment of the United States Bankruptcy Court for the Southern District of Indiana, Evansville Division.
Standard Of Review
This Court reviews the Bankruptcy Court's conclusions of law de novo and factual findings are reviewed for clear error. Bankruptcy Rule 8013; In Matter of West, 22 F.3d 775 (7th Cir.1994); Matter of Bonnett, 895 F.2d 1155, 1157 (7th Cir.1989). The appellant has the burden of proving non-dischargability by a preponderance of the evidence. Grogan v. Garner, 498 U.S. 279, 281, 111 S.Ct. 654, 656, 112 L.Ed.2d 755 (1991).
Discussion
Section 727 of the Bankruptcy Code broadly proclaims that the court shall grant the debtor a discharge, but Section 523 notes that
(a) A discharge under section 727 . . . does not discharge an individual debtor from any debt
(1) for a tax or a customs duty
(C) with respect to which the debtor made a fraudulent return or willfully attempted in any manner to evade or defeat such tax.
11 U.S.C. § 523(a)(1)(C).
Since the terms "willfully," "attempted," and "in any manner" are not defined in the Bankruptcy Code, courts have looked for guidance to corresponding sections of the Internal Revenue Code ("I.R.C."). Section 7201 of the I.R.C., a criminal section, imposes a standard on the government that is higher than would be required in the civil context. Section 7201, as clarified in Cheek v. United States, 498 U.S. 192, 111 S.Ct. 604, 112 L.Ed.2d 617 (1991), requires the Government to demonstrate that the tax evader acted with "a bad purpose" or "an evil motive." See 26 U.S.C. § 7201; 498 U.S. at 196, 111 S.Ct. at 607-08. However, the Supreme Court noted in Cheek that its holding was limited to the criminal context. 498 U.S. at 200, 111 S.Ct. at 609-10. Courts in the Civil tax realm have rejected application of Cheek's "bad motive" requirement to define "willfully" as a voluntary, conscious and intentional violation of a known legal duty. See Cheek, 498 U.S. at 196-200, 111 S.Ct. at 607-10; Toti v. United States (In re Toti), 24 F.3d 806, 809 (6th Cir.1994) ("§ 523(a)(1)(C) includes both acts of commission and acts of omission"), cert. den'd, ___ U.S. ___, 115 S.Ct. 482, 130 L.Ed.2d 395 (1994); In re Ketchum, 177 B.R. 628 (E.D.Mo.1995); United States v. Haas (In re Haas) 173 B.R. 756, 758-59 (S.D.Ala.1993), Gilder v. United States (In re Gilder), 122 B.R. 593, 595-96 (Bankr.M.D.Fla.1990). Therefore, there is no requirement of an affirmative act of fraud with evil motive under § 523. See Id.; see also Domanus v. United States, 961 F.2d 1323, 1326 (7th Cir.1992) ("The special definition of `willfully' for criminal tax statutes is not required in applying civil tax statutes. Taxpayer errors in the civil context are corrected by the assessment of the deficiency and its collection with interest for delay.").
Moreover, the phrase "in any manner," is interpreted broadly and regularly includes attempts to evade payment of tax as well as actions to avoid assessment of tax. See, e.g., In re Ketchum, 177 B.R. at 631; United States v. Haas (In re Haas), 173 B.R. 756, 758 (S.D.Ala.1993); United States v. *280 Sumpter (In re Sumpter), 170 B.R. 908, 913 (E.D.Mich.1994); Jones v. United States (In re Jones), 116 B.R. 810, 814-15 (Bankr. D.Kan.1990). In this case "in any manner" will be read to include the debtor's attempts to evade payment of taxes through excessive exemptions.
In re Gilder, Fernandez v. I.R.S. (In re Fernandez), 112 B.R. 888 (Bankr.N.D.Ohio 1990), and In re Ketchum are factually similar to the case at bar. In each case the debtor claimed excessive exemptions and did so for the express purpose of eliminating the withholding of federal income taxes from his wages. By signing the W-4 form and claiming the excessive exemptions, the debtor is saying under penalty of perjury that he is entitled to the claimed exemptions, that he incurred no federal income tax liability for the prior year and did not anticipate any tax liability for the current year. In this and other cases the debtor's filing of the false withholding forms was done with the intention of disrupting the orderly process of income tax correction, and by not doing so, the mechanism for collecting taxes is defrauded. See In re Gilder, In re Fernandez, and In re Ketchum. As the Toti court emphasized, "the purpose of the Bankruptcy Code is to allow the honest debtor a fresh start." Toti, 24 F.3d at 809.
The Bankruptcy Court found that "[t]he debtor intentionally claimed an increased withholding allowances on some of the W-4s submitted to employers during the taxable years in question for the purpose of maximizing disposable income for family support and had a good faith intention to file accurate returns and pay the tax liability due as reflected herein." (Findings Of Fact, ¶ 9.) From this factual finding the Bankruptcy Court concluded that the underwithholding on the Form W-4 was insufficient to constitute a willful attempt to evade or defeat liability for purposes of dischargability under § 523(a)(1)(C).
In the view of this Court, the Bankruptcy Court applied the wrong legal standard. The Bankruptcy Court cited Cheek for the proposition that "[W]illful connotes an act done with a bad purpose or with an evil motive." (Order And Judgment at 8.) It is this Court's position that "willful" in this context requires only a voluntary, conscious and intentional violation of a known legal duty. The Bankruptcy Court therefore erroneously granted the debtor a discharge.
IT IS HEREBY ORDERED that the final order and judgment of the bankruptcy court dated January 10, 1994 is REVERSED and this matter is REMANDED for factual findings through application of the proper legal standard.
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(2008)
Bruce W. MAJER, et al.
v.
SONEX RESEARCH, INC., et al.
Civil Action No. 05-606.
United States District Court, E.D. Pennsylvania.
January 31, 2008.
MEMORANDUM AND ORDER
McLAUGHLIN, District Judge.
This case involves the claims of Bruce W. Majer, Allen W. Fortna, and the Hermitage Partnership ("Hermitage"), against Sonex Research, Inc. ("Sonex") and four affiliated individuals: Roger D. Posey, Jim Z.I. Williams, George E. Ponticas, and Andrew A. Pouring. The plaintiffs invested in Sonex through a private placement in 2004. They allege that the defendants misrepresented Sonex's financial and personnel situation while soliciting the plaintiffs investment. The plaintiffs claim that their investments are now worthless, and have alleged that the defendants' actions constitute fraud in violation of federal securities law, Pennsylvania securities law, and common law. In addition, the plaintiffs make state law claims of negligent misrepresentation, breach of contract, and rescission of their subscription agreements.
On July 17, 2006, the Court granted the individual defendants' motion to dismiss for failure to state a claim upon which relief can be granted. The Court concluded that the plaintiffs' allegation of misrepresentation and omissions failed to state a claim under the federal and state securities laws and under the common law. Majer v. Sonex Research, Inc., No. 05-606, 2006 WL 2038604, at *8, *13 (E.D.Pa. July 19, 2006).
The plaintiffs have amended their complaint and added detail to their allegations. These additional details do not add enough to state a claim, and the Court will dismiss with prejudice the amended complaint for failure to state a claim under which relief can be granted.
I. Facts
The plaintiffs allege the following facts in the amended complaint.[1]
Sonex, founded in 1980, is an engineering research and development firm that holds patented technology for in-cylinder control of ignition and combustion in various kinds of engines. The company went public in the mid-1980s, but remained a small operation, with only one office/warehouse in Annapolis, Maryland and a small staff. By the late 1980s, Sonex's focus had narrowed into studying the effects of changes in the chemical and fuel disbursement characteristics within the combustion chamber. Am. Compl. ¶¶ 21-22, 24, 40.
Defendant Andrew Pouring, a former aerospace engineering professor, co-founded Sonex and at the time of the filing of the amended complaint served as its Chairman, Chief Executive Officer, and President. Defendant George Ponticas is a Certified Public Accountant. Sonex hired him as its Comptroller and Assistant Secretary in 1987, and he because the Chief Financial Officer and Secretary in 1991. Id. ¶¶ 22-23, 25.
In 2003, Pouring and Ponticas hired Global Equity Consultants ("Global"), led by Jim Rose, to help reposition Sonex's business from a research and development firm to a full-service firm that brought the technologies it developed to market. Id. ¶¶ 26, 29.
On Global's recommendation, Sonex hired Roger Posey as President in 2004. Rose had known Posey in the context of a sound-dampening project for one of Posey's prior employers. According to Posey's CV, he had experience in industrial operations and with the commercialization of innovative technologies. He had expertise in noise and vibration control, an area that Sonex was eager to pursue. Id. ¶¶ 30-31.
Sonex knew that Posey had recently worked as a sales representative for BRD Noise and Vibration Control ("BRD"). Despite the overlap in BRD's and Sonex's interest in noise control products, Sonex did not ask Posey to make any representations about his prior employment in his employment agreement. The law firm of Winderweedle, Haimes, Ward & Woodman, P.A., of Orlando, Florida ("the Winderweedle firm") represented Posey during his employment negotiations with Sonex. Posey's employment agreement with Sonex contained a covenant not to compete with Sonex during his employment or for a period of time after the termination of his employment. Id. ¶¶ 34-35, 37.
The press release announcing Posey's hiring stated:
We are delighted to have Roger join Sonex as our President. Roger brings a wealth of management and industry turnaround experience to Sonex and with his efforts we look forward to profitable growth as we continue to provide products to the marketplace. At our 2003 Shareholder Meeting in September, we announced the Company was focusing on business re-positioning, strengthening its internal capabilities, and planning for growth. Roger will play a major role in the continuing implementation of this strategy.
Id. ¶¶ 38.
Sonex experienced cashflow difficulties in its transition from a research and development firm to a commercialization firm. Pouring, Ponticas, and Posey all agreed to defer portions of their salary and looked for ways to raise short-term and long-term capital. They were motivated by their desire to recoup their deferred income, protect the value of their stock holdings, and keep Sonex afloat. Id. ¶¶ 42-43.
Posey sought out a long-time friend and colleague to help in the effort to raise cash: Jim Z.I. Williams, president of E.I. Williams Steel Division ("EIW") of Toronto, Canada, a manufacturer of noise control products. Williams offered to try to arrange a $40 million capital investment by a group of Canadian investors. Williams said that he had a personal relationship with Fred Hunter, a prominent Toronto businessman who Williams thought would be interested in Sonex. Williams cautioned, though, that any financing would not be available until, at the earliest, the summer of 2004, which was four months away. Id. ¶¶ 45-47.
In February of 2004, Pouring, Ponticas, Posey, and Williams decided to pursue a private placement of equity marketed to individuals. The private placement allowed Sonex to raise cash while avoiding SEC and state regulatory requirements associated with public offerings. They wrote a plan called "Business Content 2004" (hereafter "the Business Plan") to be used as a solicitation piece for the private placement. Sonex also hired the Winderweedle firm, which had represented Posey in his employment negotiations with Sonex, to prepare documents and to counsel Sonex on the private placement. Id. ¶¶ 50-53.
The defendants developed a set of talking points emphasizing two themes to appeal to investors: the first focused on new noise and vibration control technologies, including a cutting-edge process called active noise concealment. The second message emphasized Sonex's long-term prospects. The defendants agreed to overstate and exaggerate the prospect of the long-term financing Williams was seeking; they knew that the financing was speculative, but that the best way to entice the private placement investors was to assure them that it was imminent. Id. ¶¶ 53-54.
The defendants solicited potential investors by telling them that: 1) Sonex was poised to become a leader in active noise concealment, and that Posey would be able to implement the Business Plan because of his expertise in active noise concealment and his experience with firms developing innovative technologies; 2) to achieve that, Canadian investors led by Fred Hunter had committed up to $43 million in loans that were expected to close during the summer of 2004; 3) Sonex sought a short-term capital infusion as a bridge until the financing closed, and was looking to raise a few hundred thousand dollars through a private placement; 4) the company had entered into a strategic alliance with EIW to serve as exclusive United States distributor of EIW's noise control products, which had already led to a purchase order of $200,000 and other qualified sales leads; 5) once the financing arrived, Sonex would implement the business plan and all shareholders would reap the benefits. Id. ¶¶ 55, 59.
Despite what the defendants told potential investors, Sonex never had a strategic alliance with EIW, a set of qualified sales leads, or a $200,000 purchase order. Williams said he would consider the arrangement, but never committed to it. The $200,000 purchase order was for a referral Posey had made to EIW; the order was with EIW directly, not with Sonex. Posey and Williams discussed treating this as Sonex's order, should the exclusive distributor arrangement ever materialize. Williams admitted that once he learned, in March of 2004, that Posey had a restrictive covenant with BRD and had refused to furnish it to Sonex, he did not further consider the strategic alliance, because he believed that Posey's covenant would prevent Sonex from entering a distribution agreement for EIW's products. Id. ¶¶ 62-64.
Around February of 2004, Posey approached Bruce Majer, a former colleague living in Pennsylvania, to solicit his investment. Majer spoke to Posey, Rose, Pouring, Ponticas, and Williams over the next several months, and received the business plan. Id. ¶¶ 67-68.
Majer was concerned that Sonex had hired Global and the Winderweedle firm without sufficient cash flow to compensate them. Posey told Majer in several conversations in the spring of 2004 that both firms had agreed to accept stock in lieu of cash for all services. Sonex's Form 10-KSB for fiscal year 2003, published around April 2004, stated that Sonex had agreed to pay 1,000,000 shares to an unidentified law firm, and that Sonex had agreed to pay the firm a cash retainer by June 30, 2004. Posey assured Majer that the Winderweedle firm had agreed to accept only stock as payment for its services going forward. Majer did not question this representation. Id. ¶ 69-70.
Majer expressed concern to others at Sonex and received reassurance. In the spring of 2004 Williams told Majer that the Canadian financing would come through and that it was only a matter of time. Majer asked Posey whether he had a restrictive covenant from his former employer that might affect his work at Sonex. Posey acknowledged that he had such a covenant, but said that it was not implicated by his Sonex employment. In addition, Posey told Majer that the covenant had been reviewed by his attorney, Lipson, and was inapplicable. Id. ¶¶ 72-73.
Contrary to Posey's representation, Lipson had not reviewed Posey's covenant with BRD. Lipson, concerned about the status of Posey's restrictive covenant after reviewing Sonex's business plan, asked Posey for a copy of his employment agreement with BRD, which Posey refused to provide. Lipson then advised Sonex that it should not go through with the private placement and accept money from investors. Sonex disregarded this advice and proceeded with the private placement. Id. ¶ 74-78.
On February 23, 2004, Majer traveled to Sonex's office in Annapolis to tour the facility and meet with Pouring, Ponticas, Posey, and Rose. They discussed the business plan and the private placement, reviewing the talking points: Posey's qualifications; the imminent Canadian financing; the strategic alliance with EIW and the $200,000 purchase order; and the Winderweedle firm's acceptance of stock in lieu of cash. Based on these representations, Majer was impressed with Sonex. He told friends, family members, and colleagues that he was considering an investment, and referred those who expressed interest to the defendants. Id. ¶¶ 79-82.
The defendants arranged a series of investor meetings at a hotel conference center in Plymouth Meeting, Pennsylvania, on February 27, 2004, March 26, 2004, and in early April, 2004. Posey and Rose led the meetings. They described the company, explained the investment terms, presented a Power Point of the Business Plan, and left a copy of the Business Plan with the prospective investors. They discussed the major talking points: Posey's ability to implement the business plan and his experience with active noise concealment technology; the strategic alliance with EIW; the imminence of the Canadian financing; and the stock-payment arrangement with the Winderweedle firm. Majer attended all three meetings; Fortna attended the first two meetings; Hermitage representatives came to all three meetings. Id. ¶¶ 83-86.
Majer purchased 1.2 units of private placement equity (240,000 shares of common stock and a warrant to purchase an additional 240,000 shares). Around April 21, 2004, he wired $60,000 to Sonex and delivered a completed and signed subscription agreement and a confidential purchaser questionnaire.[2]Id. ¶ 88.
Allen Fortna bought 1.4 units (280,000 shares of common stock and a warrant to purchase 280,000 more). Around April 28, 2004, he delivered a check for $70,000 to Sonex, along with a completed and signed subscription agreement and a confidential purchase questionnaire. Id. ¶ 89.
William P. McKinney, George McClennen, Donald E. Wynne, Alan S. Lurty, Jay Feinschil, and Jeffrey J. Craighead formed Hermitage, a Pennsylvania partnership, to make their investment. Through it, they bought 0.9 units (180,000 shares of common stock and a warrant to purchase an additional 180,000). Hermitage delivered a check for $45,000 to Sonex in July 2004, along with a completed and signed subscription agreement and a confidential purchase questionnaire. Id. ¶ 90.
Majer and Fortna's subscription agreements are dated April 21, 2004. Hermitage's subscription agreement is dated July 2, 2004. In those agreements, the plaintiffs represented and warranted that they were "capable of evaluating the merits and risks of an investment in the Units," that they had "read and understood the Company Information [defined in the agreements to include Sonex's Annual Report on Form 10-KSB for the year ending December 31, 2003]," that in connection with their review, they had "consulted with such independent legal counsel, accountants and other advisers considered appropriate to assist [them] in evaluating [their] proposed investment in the Company," and that they had:
taken full cognizance of and underst[ood]:
A) the Company's Annual Report on Form 10-KSB for the year ended December 31, 2003; ...
C) the Company's business plan entitled "Business Content 2004";
D) the form of the warrant;
E) this Subscription Agreement;
F) that there are substantial risk factors to be considered in connection with an investment in the Units, including without limitation those set forth in the Company Information;
G) that the Units constitute a speculative investment and involve a high degree of risk, including the loss of the subscriber's entire investment in the Company; and
H) that there are substantial restrictions of the transferability of the shares of Common Stock and the Warrants ... accordingly, the undersigned may be required to hold the shares of Common Stock and the Warrants comprising the Units indefinitely and it may not be possible for an investor to liquidate an investment in the Company.
Defs'. Mot. to Dismiss Complaint Exs. 2-A, 2-B, and 2-C at 5, 10.[3]
The 2003 Form 10-KSB that the plaintiffs warranted that they had "taken full cognizance of and understood" in the subscription agreements included the following disclosures:[4]
Since its inception in 1980, the company has generated cumulative net losses of approximately $23 million and anticipates continuing to incur operating losses for the foreseeable future....
Operating funds have been raised primarily through the sale of equity securities....
The continued deferral of portions of current wages by the Company's officers cannot be expected to continue indefinitely, and the Company will be required to pay amounts outstanding as soon as cash flow permits....
[A]s of January 1, 2004, the Company's chief financial officer is no longer deferring any portion of his current salary....
[Sonex has a] history of operating losses....
[Sonex's] prospects beyond [approximately June 30, 2004] are dependent upon its ability to enter into significant funded contracts ... or secure a major capital infusion....
The[] uncertainties [of] ... the Company's ability to generate sufficient revenue and ultimately achieve profitable operations... raise substantial doubt about the Company's ability to continue as a going concern....
The agreement with new legal counsel also requires the Company to remit a cash retainer of $50,000 by June 30, 2004.
Id. Ex. 1 at 15, 16, 35-36, 41.
With $175,000 of the private placement money, Sonex paid operating expenses, including the salaries of the officers. During the weeks following the investments, the investors' confidence waned. Am. Compl. ¶¶ 91.
Sonex's Form 10-QSB, filed with the SEC in August of 2004, revealed that Sonex had agreed to pay the Winderweedle firm in cash, and that the firm had sent invoices to Sonex in May 2004 and a default notice for $102,000 in June of 2004.[5] Given the Winderweedle firm's role in both the private placement and the Canadian financing, the investors were concerned both with the short-term financing and the long-term capital investment. Id. ¶¶ 96-98.
The Form 10-QSB explained that Sonex disputed the Winderweedle firm's fees and had engaged separate counsel on a pro bono basis. The form stated that Sonex "believes that the amounts invoiced by [Winderweedle] are far in excess of what is reasonable based on the limited services requested by the Company and the limited work product produced by [Winderweedle]." It described Sonex's demand for return of the common stock issued to Winderweedle, and Sonex's reservation of rights against the firm. The form concluded: "While the outcome of this dispute is uncertain and may have an adverse effect on the Company's financial condition, management believes that the Company has a defensible position. Accordingly, no liability for any amounts related to this dispute has been recorded in the accompanying financial statements as of June 30, 2004." Def's. Mot. Ex. 4 at 15.
By late in the summer of 2004, the Canadian financing still had not arrived. When the plaintiffs pressed Williams, he told them that the financing deal was dead by the time Hermitage made its investment in Sonex. Ponticas had always been skeptical about the financing. Posey, Williams, and Rose met with Hunter before the plaintiffs made their investments, and Hunter said he would consider only an initial investment of $1.5 to $2 million, not the $43 million promoted to the plaintiffs. In about March of 2004, Ponticas and Williams disagreed about how to use the financing proceeds: Ponticas wanted to pay off Sonex's liabilities, but Williams wanted to use the money for Sonex's new business ventures. Williams told the other defendants that the use proposed by Ponticas would "kill the deal." Am. Compl. ¶¶ 101-05.
In early April of 2004, the defendants held a conference call with Fred Hunter, who said that he had been delayed in considering the financing because of restrictions imposed by the Patriot Act. After Hunter hung up, Ponticas said that he thought the Patriot Act was an excuse and that the financing would not come through. At a later board meeting, in June of 2004, Williams said that he was not prepared to facilitate a direct loan from the Canadian investors to Sonex. Rather, the loan would be made directly to Williams or to EIW, which would re-lend the funds to Sonex at a higher interest rate, and only if Sonex agreed to escrow the loan proceeds, use the proceeds only for specified purposes acceptable to Williams (not for paying down Sonex's debts), and to grant Williams a substantial amount of stock and warrants. Rose and Lipson objected to those terms, and Lipson pointed out that Williams would be breaching his fiduciary duty as a Sonex director if he took the loan on such personally advantageous terms. Id. ¶¶ 106-10.
In July of 2004, after Sonex had received the check from Hermitage, but before it deposited the check, Rose met with Ponticas and Pouring and told them that he and Lipson both believed that the check could not be lawfully deposited and needed to be returned to Hermitage. This was necessary, Rose said, because the investors had never been told that: the financing had been speculative and was now dead; Posey had a restrictive covenant with BRD and refused to furnish it to Sonex, which cast doubt on his ability to lead the company; and that Sonex had a cash obligation to the Winderweedle firm and was now in default. Sonex ignored Rose's advice and deposited the check. Id. ¶¶ 111-12.
In October of 2004, Sonex announced that Posey was stepping down as President and CEO. About two weeks later Sonex announced that Posey was leaving the Board of Directors. The formal announcements did not include a reason for Posey's departure, but the plaintiffs learned that there was a conflict with BRD, Posey's previous employer, about his restrictive covenant, which prohibited him from competing with BRD in the area of sound-dampening and noise management. While the defendants were soliciting the plaintiffs by stressing Posey's qualifications, the defendants knew or should have known that Posey could not implement the business plan and that if BRD ever pressed the matter, Posey would be forced to resign. Id. ¶¶ 114-16.
If Sonex had been as the defendants represented, the securities that the plaintiffs purchased would have been well worth what they had paid. Because Sonex was so far from what the defendants represented it to be, the plaintiffs securities are essentially worthless. On December 9, 2004, the plaintiffs demanded that Sonex return their investments. The plaintiffs tendered the equity they had purchased in exchange for a refund of their money. Sonex, through Pouring and Ponticas, denied their request. Id. ¶¶ 117-19.
II. The Amended Complaint and the Motions to Dismiss
The amended complaint contains six counts: Count One, violation of § 10(b) of the Securities Exchange Act of 1934 and 17 C.F.R § 240.10b-5(b), (collectively, "Rule 10b-5"); Count Two, violation of the Pennsylvania Securities Act ("PSA"); Count Three, fraudulent misrepresentation; Count Four, negligent misrepresentation; Count Five, rescission; and Count Six, breach of contract.
Sonex, Pouring, and Ponticas have filed a motion to dismiss the amended complaint, arguing that the amended complaint fails to state a claim upon which relief can be grated. Posey also filed a motion to dismiss the amended complaint for failure to state a claim.[6]
The Court will grant the motions to dismiss for failure to state a claim. The Court concludes that the allegations of misrepresentations and omissions fail under the standards for claims of securities fraud under Rule 10b-5, the PSA, and Pennsylvania common law. The plaintiffs have not demonstrated that the defendants had scienter, that the misrepresentations and omissions were material, or that the misrepresentations and omissions were the proximate cause of the plaintiffs' losses. The plaintiffs' allegations of negligent misrepresentation, breach of contract, and rescission also fail to state a claim.
The defendants request an order by the Court directing Sonex to issue share certificates to the plaintiffs for the shares they purchased. The Court will issue this order.
III. Analysis
A. 10b-5 Claims
Section 10(b) of the Securities Exchange Act of 1934 forbids the use or employment of any deceptive device in connection with the purchase or sale of any security. 15 U.S.C. § 78j(b) (2000). Rule 10b-5 forbids the making of any "untrue statement of a material fact" or the omission of any material fact needed to make the statements not misleading. 17 C.F.R. § 240.10b-5 (2004).
Courts have implied a private damages action from the statute and the rule, and Congress has imposed statutory requirements on that private action. The basic elements of the action are: 1) a material misrepresentation or omission, 2) scienter, 3) a connection with the purchase or sale of a security, 4) reliance on the misrepresentation, 5) economic loss, and 6) loss causation a causal connection between the material misrepresentation and the loss. Dura Pharm. v. Broudo, 544 U.S. 336, 341-42, 125 S.Ct. 1627, 161 L.Ed.2d 577 (2005).
Rule 10b-5 claims are governed by the Private Securities Litigation Reform Act of 1995, 15 U.S.C. § 78u-4 ("PSLRA"). The PSLRA heightened the pleading requirements in private securities actions. In re Rockefeller Ctr. Props., Inc. Sec. Litig., 311 F.3d 198, 217 (3d Cir.2002). It requires securities plaintiffs to specify with particularity at the outset of litigation all facts upon which they base their allegations or upon which they form their belief (if an allegation is made on information and belief). 15 U.S.C. § 78u-4(b)(1)(B). They must "specify each statement alleged to have been misleading [and] the reason or reasons why the statement is misleading." In re NAHC, Inc. Sec. Litig., 306 F.3d 1314, 1328 (3d Cir.2002) (quoting In re Advanta Corp. Sec. Litig., 180 F.3d 525, 530 (3d Cir.1999)).
To survive a motion to dismiss, the misstatements or omissions alleged by a plaintiff must be material to the reasonable investor. There must be a "substantial likelihood that, under all the circumstances, the [statement or omission] would have assumed actual significance in the deliberations of the reasonable shareholder." In re Aetna Inc. Sec. Litig., 34 F.Supp.2d 935, 945 (E.D.Pa.1999) (quoting TSC Indus., Inc. v. Northway, Inc., 426 U.S. 438, 449, 96 S.Ct. 2126, 48 L.Ed.2d 757 (1976)). The issue is whether there is a substantial likelihood that the disclosure would have been viewed by the reasonable investor as having significantly altered the "total mix" of information available to that investor. Basic, Inc. v. Levinson, 485 U.S. 224, 231-32, 108 S.Ct. 978, 99 L.Ed.2d 194 (1988); Shapiro v. UJB Fin. Corp., 964 F.2d 272, 280 n. 11 (3d Cir.1992) (citations omitted).
"[V]ague and general statements of optimism constitute no more than puffery and are understood by reasonable investors as such.... Such statements, even if arguably misleading, do not give rise to a federal securities claim because they are not material." Advanta, 180 F.3d at 538.
The PSLRA also heightened the standard for pleading scienter. 15 U.S.C. § 78u-4(b)(2). With respect to each act or omission, a plaintiff must: 1) specify each statement alleged to have been misleading and the reasons why it is misleading; and 2) state with particularity facts giving rise to a strong inference that the defendant acted with the required state of mind. Id., Tellabs v. Makor Issues & Rts., Ltd., ___ U.S. __, ___, 127 S.Ct. 2499, 2508, 168 L.Ed.2d 179 (2007). According to the Tellabs Court, the strong inference standard unequivocally raised the bar for pleading scienter. The inference must be more than merely reasonable or permissible. The Court held that a complaint will survive only if a reasonable person would deem the inference of scienter cogent and at least as compelling as any opposing inference that could be drawn from the facts alleged. Id. at 2509.
In its earlier decision the Court concluded that the plaintiffs failed to adequately allege materiality or scienter for any of the defendants' alleged misrepresentations.[7] The plaintiffs' allegations failed to alter the total mix of information available to investors when considered with the subscription agreements that the plaintiffs signed, in which they warranted that they had read and understood Sonex's 2003 Form 10-KSB. The only allegations of motive in the complaint were allegations that Pouring, Ponticas, and Posey had deferred portions of their salaries and income and were motivated by a desire to recoup that deferred income and ensure their personal well-being going forward. An officer's desire to reap the financial rewards of a successful transaction is not sufficient motive to survive a motion to dismiss. The plaintiffs allegations did not give rise to a strong inference of scienter.
The Court discussed four claims of misrepresentation in its earlier decision.
The first two claims of misrepresentation dealt with the defendants' promotion of Posey as uniquely qualified to implement Sonex's business plan when he was subject to a restrictive covenant with a former employer that would force him to resign. The Court observed that Posey's qualifications had not been misstated just because he was subject to a restrictive covenant and that Posey's declaration that he had such a covenant made it impossible for the plaintiffs to argue that nondisclosure of the covenant was a material omission. In addition, the statements that the defendants made about Posey's qualifications constituted puffery.
The third claim addressed the defendants' representations that a loan from Canadian investors was imminent when in fact it was speculative and had no realistic chance of being consummated. The Court held that an allegation that the defendants "knew" that the financing was speculative or tenuous was insufficient as an allegation of scienter.
The fourth alleged misrepresentation dealt with the defendants' statements that the Winderweedle firm had agreed to accept payment in stock rather than in cash, when in fact the fee agreement required cash payment, the company had agreed to pay a cash retainer of $50,000, and the law firm had invoiced the company for $102,000 for services rendered. The Court pointed to the disclosure in Sonex's 2003 Form 10-KSB, which the plaintiffs warranted that they read and understood in their subscription agreements, that the agreement with Winderweedle required a cash retainer. Sonex's 2004 Form 10-QSB disclosed that Sonex disputed the $102,000 bill. The Court held that Sonex's obligation to pay the Winderweedle bill was not material because it was contingent upon Sonex's success or failure in disputing the bill.
In addition, the 2003 Form 10-KSB disclosed that Sonex was in financially unstable position: the company was operating at a loss, it would continue to operate at a loss for the foreseeable future, and the plaintiffs might lose their investments. Given the magnitude of Sonex's problems, the disputed Winderweedle bill would not have altered the total mix of available information.
The Court will now address the allegations in the amended complaint. The allegations fit into four categories, three of which are the same as those used by the Court in its previous opinion: Posey's unique qualifications to lead Sonex and his covenant with BRD; the Canadian financing; and the relationship with the Winderweedle firm. The new allegation involves the strategic alliance with Williams's company EIW and the purchase order and sales leads that resulted.
1. Materiality
The Supreme Court requires the Court to consider these allegations in the context of the "total mix" of information available to a reasonable investor at the time of investment. Basic, Inc. v. Levinson, 485 U.S. 224, 231-32, 108 S.Ct. 978, 99 L.Ed.2d 194 (1988). In this case, as discussed in the Court's previous opinion and above, the total mix includes the disclosures plaintiffs received from Sonex in their 2004 subscription agreements. The plaintiffs signed the agreements, representing that they were "capable of evaluating the merits and risk of an investment," that they had "read and understood the Company Information [including the Annual Report on Form 10-KSB for 2003]," and that they had "consulted with such independent legal counsel, accountants and other advisers considered appropriate to assist [them] in evaluating [their] proposed investment in the Company." Def's. Mot. Ex. 2-A, Ex. 2-B, Ex. 2-C at pp. 5, 10.
The 2003 Form 10-KSB disclosed that Sonex was in a financially tenuous position: it was operating at a loss and it would continue to operate at a loss for the foreseeable future. "Management recognizes that the Company's history of operating losses, level of available funds, and revenue from current and future contracts, in relation to projected expenditures, raise substantial doubt as to the Company's ability to commence generation of significant revenues from the commercialization of the [proprietary technology] and ultimately achieve profitable operations." Id. Ex. 1 at 4.
The amended complaint fleshes out the details of the plaintiffs' allegations, but none of the allegations would so alter the "total mix" of information to state a claim under the PSLRA.
a. Posey's Qualifications and the Covenant Not to Compete
The allegations regarding Posey's qualifications and the non-compete agreement are mostly repeated from the first complaint. As discussed in the Court's previous opinion, Posey disclosed that he had a restrictive covenant. The plaintiffs have added details about Posey's experience and an allegation that the defendants failed to disclose legal advice from Lipson that Sonex should not proceed with the private placement, in part because of Posey's restrictive covenant. Lipson had never seen the covenant. His advice to Sonex was based only upon what he thought might be in the covenant, and Sonex's decision to proceed despite this advice does not rise to the level of materiality required by the PSLRA. Am. Compl. ¶¶ 76-77.
b. The Canadian Financing and the EIW Strategic Alliance
The plaintiffs allege that the both the Canadian financing and the EIW strategic alliance were dead at the time the defendants represented that the financing was "imminent" and the strategic alliance was a "done deal." Am. Compl. ¶¶ 81, 87, 126.
As discussed in the Court's previous decision, representations about possible events that are contingent on the actions of a third party are immaterial. In re Rockefeller Ctr. Props., 184 F.3d at 290; In re CDnow Inc. Sec. Litig., 138 F.Supp.2d 624, 632 (E.D.Pa.2001). In addition, the timeline of events laid out in the amended complaint belies the plaintiffs' allegation that the defendants knew that the Canadian financing was dead before the plaintiffs invested. Between February and April of 2004, Fred Hunter, the leader of the Canadian group, told the defendants that he would consider an initial investment of $1.5 to $2 million, not $43 million, and in early April he told the defendants that he had been delayed in considering and committing to the financing because of the Patriot Act. In October of 2004, the plaintiffs allege, "it became apparent that the financing would not be consummated." Am. Compl. ¶¶ 102, 106, 57.
Plaintiffs Majer and Fortna invested in Sonex in April of 2004; plaintiff Hermitage in July of 2004. Although the Patriot Act problems and the scaling back of the investment were signs that the financing was in trouble, the allegations in the amended complaint do not lead to the conclusion that the financing was "dead" when the plaintiffs invested. The subscription agreements signed by the plaintiffs disclosed Sonex's tenuous financial position, and financing contingent on the decision of another outside group of investors does not change the total mix of information available.
The strategic alliance with EIW, like the Canadian financing, is a contingent event. In addition, phrases like "strategic alliance" or "strategic partner" are promotional language that often constitutes puffery. See Winer Family Trust v. Queen, No. 03-4318, 2004 WL 2203709 at *8 (E.D.Pa. Sept.27, 2004) ("Queen's characterization of Smithfield as Pennexx's `strategic partner' is immaterial puffery that is inactionable under the securities laws").
The plaintiffs emphasize the importance of the alliance with EIW to Sonex's business plan, which included references to "qualified sales leads" from EIW and the $200,000 purchase order. The amended complaint states that Posey had referred a potential customer to EIW, and that that customer had placed a $200,000 order with EIW. Posey and Williams discussed the possibility of attributing that order to Sonex in the event they reached an agreement where Sonex became EIW's exclusive distributor in the United States, but they never reached a deal. Like the Canadian investments, Sonex's strategic alliance with EIW and the leads it received never materialized, but at the time the plaintiffs signed their subscription agreements, it was a possibility. A projection of $200,000 in income in the 4th quarter of 2004, in the face of $23 million in cumulative operating losses, does not change the total mix of information that the plaintiffs had, and is not material. Am. Compl. ¶¶ 60-64.
c. The Winderweedle Firm
The plaintiffs' allegations about the Winderweedle firm are largely the same in the amended complaint as they were in the first complaint. The plaintiffs claim that the defendants told them that Winderweedle had agreed to accept stock in lieu of cash for all services. As discussed in the Court's previous opinion, the materiality of this representation is negated by the disclosure in Sonex's 2003 Form 10-KSB that "the agreement with the new legal counsel ... requires the Company to remit a cash retainer of $50,000 by June 30, 2004." Defs'. Mot. Ex. 1 at 41.
The claim from Winderweedle that Sonex was in default could only have been material to Hermitage, because Majer and Fortna signed their subscription agreements before Winderweedle sent the invoices to Sonex. Sonex disputed Winderweedle's bill, and did not record liability for any amounts related to the dispute, which it believed was "defensible." As discussed in the previous opinion, Sonex's dispute over the bill makes the obligation contingent, and a disputed liability of $102,000 does not alter the total mix of available information.
The plaintiffs' allegations do not rise to the level of materiality required to state a claim under the PSLRA.
2. Scienter
Since the Court dismissed the plaintiffs' first complaint, the United States Supreme Court and the United States Court of Appeals for the Third Circuit have issued opinions that address the pleading requirements of the PSLRA. These decisions clarify the stringent standard for pleading scienter. "The Court's Tellabs decision removes any doubt the PSLRA's scienter pleading requirement is a significant bar to litigation...." Globis Capital Partners, L.P., v. Stonepath Group, Inc., 241 Fed. Appx. 832, 836-37 (3d Cir.2007).
In Tellabs, Inc. v. Makor Issues & Rts., Ltd., the Supreme Court held that an inference of scienter in a securities fraud complaint must be more than just "reasonable" under the PSLRA; it must be "cogent and at least as compelling as any opposing inference one could draw from he facts alleged." ___ U.S. ___, ___, 127 S.Ct. 2499, 2510, 168 L.Ed.2d 179 (2007). The Court outlined a three-step process for considering motions to dismiss under § 10(b): A district court must accept all factual allegations as true, as with any motion to dismiss. Then the court considers the complaint in its entirety, including documents incorporated into the complaint by reference, and examines whether all of the facts alleged, taken collectively, give rise to a strong inference of scienter. Finally, the court considers plausible opposing inferences to determine whether the pleaded facts meet the PSLRA's strong inference standard. Id. at 2509.
The United States Court of Appeals for the Third Circuit cited the Tellabs pleading standards in its recent decision in Winer Family Trust v. Queen, 503 F.3d 319 (3d Cir.2007). The plaintiffs appealed the district court's dismissal of their complaint, claiming that the court had inappropriately resolved disputed facts. The court of appeals affirmed the district court's decision, finding that the district court had accepted the plaintiffs' alleged facts as true. Viewing those facts holistically, "a reasonable person would not deem the inference of scienter as cogent and at least as compelling as any non-culpable inference based upon the omitted facts." Id. at 330.
Winer Family Trust adds clarity to a line of cases addressing scienter in the Third Circuit by applying the Tellabs test. A previous case in the Third Circuit had held that plaintiffs "may establish a `strong inference' that the defendants acted with scienter either by alleging facts that constitute strong circumstantial evidence of conscious misbehavior or recklessness." GSC Partners CDO Fund v. Washington, 368 F.3d 228, 239 (3d Cir.2004). In Tellabs, the Supreme Court specifically reserved the question of whether recklessness could give rise to civil liability under Rule 10b-5. The Court said that although every court of appeals that has considered the issue has held that a plaintiff may meet the scienter requirement by showing that the defendant acted intentionally or recklessly, the question of whether recklessness satisfies the scienter requirement was not presented in Tellabs. 127 S.Ct. at 2507 n. 3.
In Winer Family Trust, the United States Court of Appeals for the Third Circuit affirmed the district court's finding that the pleaded facts failed to support the requisite strong inference of reckless conduct, much less intentional conduct. The court of appeals said that, "[s]tated differently, Winer's purported inference, that the statements ... were knowingly false, was not as compelling or as strong as the opposing inference cited by the District Court. Thus, Winer's inference is neither cogent, nor compelling, nor strong in light of competing inferences." 503 F.3d at 331. In the Third Circuit, a plaintiffs purported inference that a defendant's actions were reckless or intentional is compared against any non-culpable inference and must be cogent and at least as compelling as that inference in order to satisfy the scienter requirement.
The facts supporting motive and opportunity to commit fraud must be stated with particularity. In re Advanta Corp. Sec. Litig., 180 F.3d 525, 535 (3d Cir.1999). A plaintiff must allege the "who, what, when, where and how" of the events at issue to establish scienter; allegations that the defendants "knew" or "must have known" that statements were fraudulent are insufficient. GSC Partners, 368 F.3d at 239. Motives that are common to most directors and officers do not give rise to a strong inference of scienter. "In every corporate transaction, the corporation and its officers have a desire to complete the transaction, and officers will usually reap financial benefits from a successful transaction. Such allegations alone cannot give rise to a strong inference of fraudulent intent." Id. at 237.
To support a charge of recklessness, a statement must be a material misrepresentation or omission that is "an extreme departure from the standards of ordinary care, and which presents a danger of misleading buyers or sellers that is either known to the defendant or is so obvious that the actor must have been aware of it." Id. at 239.
a. Posey's Covenant Not to Compete
As discussed above, the plaintiffs have added claims that Posey represented that the covenant had been reviewed by his attorney, Lipson, when in fact it had not, and that Lipson advised Sonex not to proceed with the private placement because of the potential problems with the covenant. The plaintiffs claim that Posey's purposes, while selfish, also included a motive to benefit the corporation by raising funds from the plaintiffs. Am. Compl. ¶¶ 76-77.
Even interpreting the facts as alleged in the light most favorable to the plaintiffs, the inference that defendant Posey was trying to get a job and avoid conflict with his potential employer is more compelling than the plaintiffs' proposed inference that Posey was trying to benefit Sonex by raising money from the plaintiffs through a fraudulent scheme. Tellabs, 127 S.Ct. at 2504.
Lipson never reviewed Posey's covenant not to compete with BRD, although he represented both Posey (in his employment negotiations with Sonex) and Sonex itself (in its pursuit of the private placement). Am. Compl. ¶ 74. His advice to Sonex not to proceed with the private placement was based on a document he had never seen. Sonex's decision to disregard its attorney's advice, when the attorney had never seen the document in question, does not rise to the level of scienter needed for fraud under the PSLRA. Under Tellabs, even assuming that the allegation is true, all the facts as alleged do not give rise to an inference of scienter that is cogent and compelling as any opposing inference that could be drawn. Nor does it rise to the level of "an extreme departure from the standard of care" as required by the recklessness standard laid out in GSC Partners. Id. at 239.
b. The Strategic Alliance With EIW
The plaintiffs add a claim about a "strategic alliance" with Williams's Canadian firm, EIW, and a putative purchase order for $200,000. The plaintiffs allege that the Sonex business plan fraudulently promoted a strategic alliance between Sonex and EIW. The Business Plan stated that the two companies "have allied in order to execute a private label arrangement" and that the alliance would facilitate EIW's "gracious feeding of qualified sales leads to Sonex" including a purchase order for $200,000 to be executed in the fourth quarter of 2004. Am. Compl. ¶ 60. Language in the Business Plan like "strategic alliance" and "sales leads" are classic puffing statements which are immaterial to a scienter analysis. See Winer Family Trust v. Queen, 2004 WL 2203709 at *8 (E.D.Pa. Sept.27, 2004).
Defendant Williams acknowledged in August 2004 that the agreement had never been finalized and that the purchase order was placed with EIW rather than directly with Sonex. The Business Plan was prepared in the spring of 2004, before the plaintiffs signed their Subscription Agreements. The plaintiffs seek an inference that the individual defendants knew prior to Williams's disclosure that the alliance had not been completed and that they either consciously or recklessly kept this fact from the plaintiffs. The plaintiffs do not plead specific facts sufficient to support this inference. Am. Compl. ¶¶ 62, 63, 68, 83-85.
c. The Canadian Financing
The plaintiffs allege that the Canadian investor, Fred Hunter, considered an initial investment of $1.5 to $2 million, not the $43 million that the defendants claimed. According to the plaintiffs, Hunter expressed concern about completing the financing because of new regulations in the Patriot Act, and defendant Ponticas wondered whether his hesitation was really due to the regulations and that he did not think the financing would come through. An initial investment amount does not give rise to an inference that the total investment amount will be the same, and a deal is not "dead" just because one director thinks it will not come through. Am. Compl. ¶ 106.
The plaintiffs also allege that a Sonex director, Williams, breached his duty of loyalty to the company by proposing that, the Canadian investment should be made directly to him or to his company, EIW, which would lend the money to Sonex at a higher interest rate and under unattractive conditions. The claims that detail Williams's breach of fiduciary duty do not allege injuries to the plaintiffs, but rather to Sonex itself. This is not a derivative suit; injuries to Sonex must be claimed by Sonex, not the plaintiff investors. Sonex never accepted Williams's proposal to pursue financing on those terms. Am. Compl. ¶¶ 108, 110.
d. The Winderweedle Firm
As discussed above, the plaintiffs add little new information to their allegations about Sonex's arrangements with the Winderweedle law firm. The plaintiffs reiterate their claims about Sonex's cash obligations to the firm and add the claim that Sonex's attorney (Lipson) and its investment advisor (Rose) recommended that the company not proceed with the private placement because the financing was "dead," Posey had a restrictive covenant, and Sonex had a cash obligation to the Winderweedle firm. Am. Compl. ¶¶ 77, 112.
The cash obligation and timing allegations were addressed in the Court's dismissal of the complaint. Assuming that the plaintiffs' allegation that Sonex disregarded the advice of their advisers is true, this decision does not rise to the level of recklessness required for scienter. All of these allegations have been addressed above; none of the facts associated with them lead to an inference of fraud that is more compelling than an opposing inference.
The plaintiffs have not satisfied the PSLRA's scienter standard for the claims that they have added to their amended complaint.
3. Loss Causation
The defendants also argue that the amended complaint should be denied because the plaintiffs have not pleaded facts sufficient to establish loss causation.
In Dura Pharm., Inc. v. Broudo, 544 U.S. 336, 125 S.Ct. 1627, 161 L.Ed.2d 577 (2005), the United States Supreme Court held that a private plaintiff claiming securities fraud must prove that the defendant's fraud caused an economic loss. The Court overturned the United States Court of Appeals for the Ninth Circuit, which had held that a plaintiff could establish loss causation by showing that the price on the purchase date was inflated because of a misrepresentation. Id. at 340, 125 S.Ct. 1627. The Court held that an inflated purchase price alone was not sufficient to proximately cause the relevant economic loss. Id. at 342, 125 S.Ct. 1627.
The United States Court of Appeals for the Third Circuit held, even before Dura, that an investor seeking to satisfy the loss causation element must establish that the alleged misrepresentations proximately caused the decline in the security's value. Semerenko v. Cendant Corp., 223 F.3d 165, 185 (3d Cir.2000).
Dura was a fraud-on-the-market case, but its analysis is broadly applicable. The Court noted that when a purchaser resells shares for a lower price than the one she paid, the lower price "may reflect, not the earlier misrepresentation, but changed economic circumstances, changed investor expectations, new industry-specific or firmspecific facts, conditions, or other events, which taken separately or together account for some or all of that lower price." Dura, 544 U.S. at 343, 125 S.Ct. 1627. The Court cautioned that the securities statutes deter fraud by providing private rights of action, but are not meant to "provide investors with broad insurance against market losses."
The plaintiffs' amended complaint contains one allegation with respect to loss causation: "if Sonex had been as the defendants represented, the securities purchased by Plaintiffs would have been well worth what they paid for them. Because Sonex was far from what defendants represented it to be, the securities are essentially worthless." Am. Compl. ¶ 118. As in Dura, the plaintiffs allege that they relied on erroneous information and omissions and therefore paid more than the actual value of the securities.
This allegation does not show proximate cause of economic loss. The Dura Court noted that "the logical link between the inflated share purchase price and any later economic loss is not invariably strong," pointing to other factors such as a shift in the economy, changes in the industry or the firm, and revised investor expectations. Dura, 544 U.S. at 342, 125 S.Ct. 1627.
An examination of the plaintiffs' allegation of loss causation, even at the motion to dismiss stage, must consider these other factors. In this case, the plaintiffs were warned in writing about the tenuous nature of Sonex's finances, and they signed statements warranting that they understood those warnings. Sonex's representations about itself included that it was operating at a loss and would continue to operate at a loss for the foreseeable future, and that its senior employees had foregone their salaries. In addition, there were significant specific restrictions on the stock the plaintiffs purchased: it was restricted stock and could not be sold for a minimum of two years, and the subscription agreements limited the stock's transferability, warning that "the undersigned may be required to hold the shares ... indefinitely and it may not be possible for an investor to liquidate an investment in the Company." The value of the plaintiffs' stock, at the time that they purchased it, included the risk that liquidation of the stock might never be possible. Defs'. Mot. Ex. 2-A, 2-B, 2-C at ¶ III(e)(1).
The plaintiffs emphasize that Dura was a fraud-on-the-market case and that their case against Sonex is not. They cite a case from the Ninth Circuit, Livid Holdings Ltd. v. Salomon Smith Barney, Inc., 416 F.3d 940 (9th Cir.2005), as parallel to their own. In Livid, the plaintiffs alleged that the defendants misrepresented whether or not the proceeds of a private equity sale had been received. There was general cautionary language in the offering memorandum received by the plaintiffs that stated that "the Company may have undergone ... management changes, ownership changes and business strategy changes." Livid, 416 F.3d at 945. The court held that the cautionary language was insufficient warning and that the defendant's misrepresentation concealed the company's dire financial situation, causing the plaintiff to lose the entire value of its investment. Id. at 949.
The language in the offering memorandum at issue in Livid is far more general than the warnings Sonex included in its 2003 Form 10-KSB and the subscription agreements signed by the plaintiffs. Those warnings covered Sonex's past operating losses, its current and potential future financial problems, the constraints on its management from liquidity problems, the prospect that it might never be able to implement its business plan, and the fact that the shares the plaintiffs were purchasing might not be transferable. When the plaintiffs signed the subscription agreements, they warranted that they understood "that the Units constitute a speculative investment and involve a high degree of risk, including the loss of the subscriber's entire investment in the Company." Defs'. Mot. Ex. 1 at 16; Ex. 2-a, 2-b, 2-c at § III(e)(1). In Livid, the court held that the defendants had concealed the "true nature" of the company. Sonex disclosed its true nature to the defendants in the written materials they were given prior to investing.
The Dura court observed that although the pleading rules are not meant to impose a great burden on a plaintiff, it should not prove burdensome for a plaintiff who has suffered an economic loss to provide a defendant with some indication of the loss and the causal connection that the plaintiff asserts. Dura, 544 U.S. at 347, 125 S.Ct. 1627. The Court cautioned that allowing a plaintiff to forgo giving any indication of the economic loss and proximate cause would transform a private securities action into a "partial downside insurance policy." Id. at 347-48, 125 S.Ct. 1627.
The plaintiffs' allegations do not establish that the misrepresentations of the defendants proximately caused their own economic loss. The plaintiffs took on a high degree of risk by investing in a faltering company. They knew that Sonex was in financial trouble, that Sonex employees were forgoing their salaries, and that investors might never be able to sell their shares in the company. These specific warnings, which the plaintiffs warranted they had read and understood when they signed their subscription agreements, make it impossible for the plaintiffs to establish, on the facts alleged in the amended complaint, that the defendants caused their economic losses. The plaintiffs decided to invest despite these warnings, and their economic losses are theirs to bear.
The plaintiffs have not stated a claim under Rule 10b-5. Their pleadings on materiality, scienter, and loss causation were insufficient. Therefore, the Court will dismiss Count One, the plaintiffs' federal securities law claims.
B. Other Fraud Claims
The Court will also grant the motions to dismiss Counts Two and Three, the allegations of violations of the Pennsylvania Securities Act ("PSA") and fraudulent misrepresentation. 70 Pa.S. §§ 1-401(a), 501(a). The PSA, like Rule 10b-5, prohibits false statements and omissions of material fact in connection with the sale of securities in Pennsylvania. The elements of a claim of fraudulent misrepresentation or omission under Pennsylvania law are: 1) a representation or omission; 2) which is material to the transaction at hand; 3) made or concealed falsely, with knowledge of its falsity or recklessness as to whether it is true or false; 4) with the intent of misleading another into relying on it; 5) justifiable reliance on the misrepresentation; and 6) the resulting injury was proximately caused by the reliance. Gibbs v. Ernst, 538 Pa. 193, 647 A.2d 882, 889 (1994).
The elements of common law fraud are "almost identical" to the elements of Rule 10b-5 claims and claims under the PSA. Sunquest Info. Sys., Inc. v. Dean Witter Reynolds, Inc., 40 F.Supp.2d 644, 659 (W.D.Pa.1999). The plaintiffs' claims under these doctrines fail for the same reason their 10b-5 claims fail.
C. Negligent Misrepresentation
The Court will dismiss Count Four, the plaintiffs' allegation of negligent misrepresentation. Under Pennsylvania law, the elements of a negligent misrepresentation claim are: 1) a misrepresentation of material fact, 2) made under circumstances in which the misrepresenter ought to have known of its falsity; 3) made with an intent to induce another to act on it; 4) which results in an injury to the party acting in justifiable reliance on the misrepresentation. Gilmour v. Bohmueller, 2005 WL 241181 at *3 (E.D.Pa. Jan.27, 2005). The plaintiffs say that if the misrepresentations in the amended complaint were not made knowingly or recklessly, they were made negligently, with a lack of reasonable care. Am. Compl. ¶¶ 154, 158. They restate their claims from the fraud section of the amended complaint, but, as in the fraud section, the plaintiffs do not plead facts to support their contention that the defendants made misrepresentations with the intent to induce the plaintiffs to act on them. Therefore, the negligent misrepresentation claim is dismissed.
D. Rescission and Breach of Contract
The Court will dismiss Counts Five and Six, Rescission and Breach of Contract.
The plaintiffs allege that the subscription agreements require that the defendants deliver stock certificates to the plaintiffs. The defendants have not delivered the stock certificates, and the plaintiffs seek rescission of the subscription agreements and specific performance compelling the immediate delivery of the stock certificates. Under Maryland law, which governs the subscription agreements, rescission is a "radical remedy." Cutler v. Sugarman Org., Ltd., 88 Md.App. 567, 596 A.2d 105, 110 (Md.1991). This remedy, and the specific performance requested in the breach of contract claim, are unnecessary because the defendants have agreed to transfer the share certificates to the plaintiffs. The defendants have requested an order by the court directing Sonex to issue share certificates to the plaintiffs for the shares they purchased. The Court will grant this request.
An appropriate Order follows.
ORDER
AND NOW, this 31st day of January, 2008, upon consideration of the Motion to Dismiss Plaintiffs' Amended Complaint for Failure to State a Claim Upon Which Relief Can Be Granted as to Defendants Sonex, Pouring, and Ponticas (Docket No. 41), the Motion to Dismiss Plaintiffs' Amended Complaint for Failure to State a Claim Upon Which Relief Can Be Granted as to Defendants Sonex and Roger D. Posey[8] (Docket No. 48), the Supplemental Memoranda of Law in Further Support of the Motion to Dismiss Plaintiffs' Complaint as to Defendants Sonex, Pouring, and Ponticas, the responses to all of the above documents, and the replies thereto, it is HEREBY ORDERED that:
1. Sonex, Ponticas, and Pouring's motion to dismiss for failure to state a claim is GRANTED.
2. Posey's motion to dismiss for failure to state a claim is GRANTED.
3. Sonex, Ponticas, and Pouring's request for an order to transfer the share certificates to the plaintiffs is GRANTED. Sonex shall issue and transfer share certificates to each plaintiff representing the shares that each plaintiff purchased pursuant to the subscription agreements.
4. This case is dismissed with prejudice. The case is CLOSED.
NOTES
[1] In considering the defendants' motion to dismiss, the Court must accept the allegations in the amended complaint as true and draw all reasonable inferences in favor of the plaintiffs. Miller Yacht Sales, Inc. v. Smith, 384 F.3d 93, 97 (3d Cir.2004); In re Rockefeller Or. Props., Inc., Sec. Litig., 311 F.3d 198, 215 (3d Cir.2002).
[2] The plaintiffs do not attach copies of the subscription agreements to their amended complaint. Sonex, Pouring, and Ponticas attached copies to their original motion to dismiss. The United States Court of Appeals for the Third Circuit has held that although "[a]s a general matter, a district court ruling on a motion to dismiss may not consider matters extraneous to the pleadings, ... an exception to the general rule is that a document integral to or explicitly relied upon in the complaint may be considered without converting the motion to dismiss into one for summary judgment." In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1426 (3d Cir.1997) (internal quotations omitted). This approach was recently confirmed by the United States Supreme Court, which held that courts analyzing motions to dismiss claims under the PSLRA must examine the complaint in its entirety, as well as documents incorporated into the complaint by reference or matters of which a court may take judicial notice. Tellabs v. Makor Issues & Rts., Ltd., ___ U.S. ___, ___, 127 S.Ct. 2499, 2509, 168 L.Ed.2d 179 (2007).
The subscription agreements form the basis for the plaintiffs' claims of rescission and breach of contract. In addition, they are intimately involved with the plaintiffs' other claims. For example, in order to succeed with their claims of material omissions, the plaintiffs need to show the absence of statements from the materials with which they concede they were provided. The Court will consider the subscription agreements.
[3] Hereafter Defs'. Br.
[4] The Court will consider the 2003 Form 10-KSBs for two reasons. First, these forms are essentially incorporated into the subscription agreements, which the Court has already explained it will consider. Second, when considering a motion to dismiss in a securities action, a court may "take judicial notice of properly authenticated public disclosure documents filed with the SEC." Oran v. Stafford, 226 F.3d 275, 289 (3d Cir.2000). The court in Oran took judicial notice of such documents even though they had not been included in the complaint.
[5] This form was not attached to the complaint, but, like the Form 10-KSB, forms the basis for many of the plaintiffs' claims. The defendants attached it to their original motion to dismiss as Exhibit 4, and the Court will consider it.
[6] Posey is pro se. He purported to move to dismiss the amended complaint on behalf of both himself and Sonex. Sonex is represented by separate counsel, and the court will consider Posey's motion only as to himself.
[7] Because the plaintiffs did not make out their claims on scienter or materiality, the Court did not address loss causation in its previous opinion. The Court will address loss causation in this decision.
[8] As explained in the Memorandum, the Court considered Posey's Motion only as to himself, and not to Sonex, because Sonex is represented by separate counsel.
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428 B.R. 533 (2010)
In re Stanley R. PEARSON, Donna M. Pearson, Debtors.
Stanley R. Pearson, Donna M. Pearson Movants,
v.
Security Properties, LLC, Respondent.
No. 08-24291-SBB.
United States Bankruptcy Court, D. Colorado.
April 16, 2010.
*534 Barton Balis, John H. Barrett, Balis & Barrett, P.C., Boulder, CO, for Stanley R. Pearson and Donna M. Pearson.
Richard A. Marsh, Samson, Pipis & Marsh, LLC, Longmont, CO, for Security Properties, LLC.
MEMORANDUM OPINION AND ORDER
SIDNEY B. BROOKS, Bankruptcy Judge.
THIS MATTER is before the Court on the Verified Motion to Avoid Fixing of Judicial Lien of Security Properties, LLC ("Creditor")[1] pursuant to 11 U.S.C. § 522(f)(1)(A) filed by the debtors, Stanley R. Pearson and Donna M. Pearson ("Debtors"); a Response filed thereto by Creditor; [2] evidence and argument presented at a hearing before the Court on September 22, 2009;[3] and the Creditor's and Debtors' proposed Findings of Fact and Conclusions of Law.[4]
I. Background
Donna and Stanley Pearson ("Debtors" or "Movants"), filed for bankruptcy on September 17, 2008.[5] Pursuant to Colo. Rev.Stat. XX-XX-XXX(1)(b),[6] the Debtors are entitled to a homestead exemption of $90,000.00 because Mr. Pearson is over 60 years of age. Mr. Pearson presently is the only Debtor residing in the home, although Ms. Pearson has not abandoned her homestead interest in their marital residence (hereafter "the Residence").[7] The parties have stipulated to the value of the Residence being $273,500.00.
At the time of the Debtors' filing, the Residence was encumbered by a first mortgage in favor of Countrywide in the amount of $127,781.00 and a second mortgage in favor of Charter One Bank for $48,433.00. In addition, at the time of filing there existed a judgment lien against the Residence in favor of Creditor in the amount of $86,852.75. This results in the total amount of liens with the homestead *535 exemption reaching a figure of $353,066.75, thus exceeding the value of the property.
At issue in this matter is whether the Creditor's judicial lien should be avoided in its entirety or only partially. As discerned above from the figures, the sum of the first and second mortgages and the exemptions leaves a net equity with the Residence of $7,286.00. The Debtors assert in their Motion that under 11 U.S.C. § 522(f)[8] the entirety of Creditor's judicial lien is avoidable. Creditor responds that its judicial lien is only avoidable up to the amount their lien exceeds the Debtors' net equity after deducting unavoidable liens and the Debtors' homestead exemption. That is, Creditor's argument goes, $7,2860.00 is not avoidable.
II. Issue
The question before the Court is whether a debtor can avoid a judicial lien, in its entirety or only "to the extent that such lien impairs an exemption," when only part, or a portion, of the lien actually impairs the debtor's exemption. For the reasons set forth herein, the Court concludes that a debtor can only avoid a judicial lien to the extent the lien exceeds a debtor's equity in the property subject to such lien.
III. Discussion
A. Overview of 11 U.S.C. 522(f)
In accordance with the policy objective of providing a "fresh start," bankruptcy law allows a debtor to invoke certain exemptions to avoid debts that otherwise survive bankruptcy.[9] The homestead exemption set forth at 11 U.S.C. § 522 protects the debtor and the debtor's dependents by helping them to preserve an interest in their home.[10] Specifically § 522(f) controls the "availability of lien avoidance."[11]
Under 11 U.S.C. § 522(f)(1), "the Debtors may avoid the fixing of a lien on an interest of the Debtors in property to the extent that such lien impairs an exemption to which the Debtors would have been entitled. . . ."[12] Divergent interpretations of what the language "to the extent that such lien impairs an exemption" was intended to convey gave rise to disputes among courts in applying the statute.[13] As *536 a result of this confusion, in 1994 Congress amended the statute through passage of the Bankruptcy Reform Act of 1994 ("Reform Act") and defined "impairment" of an exemption.[14]
The statute now includes under 11 U.S.C. § 522(f)(2)(A) language stating:
a lien shall be considered to impair an exemption to the extent that the sum of
(i) the lien;
(ii) all other liens on the property; and
(iii) the amount of the exemption that the debtor could claim if there were no liens on the property;
exceeds the value that the debtor's interest in the property would have in the absence of any liens.[15]
Leading up to this amendment, the Supreme Court addressed the appropriate calculation to ascertain whether a lien impairs an exemption.[16] In so doing, the Supreme Court favorably cited the case of In re Brantz, "[f]or a more precise formulation."[17]
The Brantz case utilized the following formula:
1. Determine the value of the property on which a judicial lien is sought to be avoided.
2. Deduct the amount of all liens not to be avoided from (1).
3. Deduct the Debtors' allowable exemptions from (2).
4. Avoidance of all judicial liens results unless (3) is a positive figure.
5. If (3) does result in a positive figure, do not allow avoidance of liens, in order of priority, to that extent only.[18]
In reviewing the House Report to the Reform Act (the "House Report") discussing the amendment of 522(f), it states that "[t]his amendment would provide a simple arithmetic test to determine whether a lien impairs an exemption, based upon [the] decision . . . In re Brantz . . . ."[19] As shown above, the Brantz opinion limited a debtor's avoidability of a judicial lien to the amount it exceeded the debtor's equity with the property after deducting the debtor's exemption and unavoidable liens.
Applying the Brantz calculation to the facts here results in the following computation:
1. Value of Property: $273,500.00
2. Less All Liens Not to Be Avoided $176,214.00
(First and Second Consensual Liens)
3. Less Homestead Exemption $ 90,000.00
____________________________________
4. Total (Amount which cannot be avoided) $ 7,286.00
Since the total is a positive figure, the Court should, using this equation, allow the avoidance of $79,566.75 of the $86,852.75 sought to be avoided because that is the extent to which the exemption is impaired. Thus, $7,286.00 of the lien would remain as secured debt with the Residence.
Previously, this Court concluded that this result "would seem to conflict with the legislative history and the express language of 11 U.S.C. § 522(f)(2)(A)."[20] In *537 concluding such liens should be avoided in their entirety:
[t]his conclusion makes sense because if the Debtor were to later sell his homestead, a portion of the judicial lien would remain after discharge. The judicial lien would have to be satisfied at the time of the sale in order to transfer clear title. "Thus, the mere existence of a judicial lien impairs the homestead exemption because it constitutes a cloud on the title."[21]
Nonetheless, the majority of the courts addressing § 522(f) partial avoidance hold contrary to the In re Saal opinion.[22] For this reason the Court believes a fresh review of the conclusions reached in In re Saal, including the language of § 522(f), its progeny of case law, and its legislative history, are warranted to determine this matter.
B. The Statutory Language
To interpret and apply 522(f), the Court must look to the plain meaning of the statutory language.[23] A court's primary task in interpreting statutes is "to determine congressional intent, using `traditional tools of statutory construction.'"[24] The Tenth Circuit described the process of statutory construction as follows:
As in all cases requiring statutory construction, "we begin with the plain language of the law." United States v. Morgan, 922 F.2d 1495, 1496 (10th Cir. 1991). In so doing, we will assume that Congress's intent is expressed correctly in the ordinary meaning of the words it employs. Park 'N Fly, Inc. v. Dollar Park and Fly, Inc., 469 U.S. 189, 194, 105 S.Ct. 658, 83 L.Ed.2d 582 (1985). Therefore, "[i]t is a well established law of statutory construction that, absent ambiguity or irrational result, the literal language of a statute controls." Edwards v. Valdez, 789 F.2d 1477, 1481 (10th Cir.1986). Where the language of the statute is plain, it is improper for this Court to consult legislative history in determining congressional intent. United States v. Richards, 583 F.2d 491, 495 (10th Cir.1978). Furthermore, legislative history may not be used to create ambiguity in the statutory language. Id. Our role in construing statutes was summarized by Justice Holmes: "`We do not inquire what the legislature meant; we ask only what the statute means.'" Edwards, 789 F.2d at 1481 n. 7 (quoting OLIVER WENDELL HOLMES, COLLECTED LEGAL PAPERS 207 (1920)).[25]
*538 Section 522(f)(2)(A) clearly states "a lien shall be considered to impair an exemption to the extent that the sum . . . exceeds the value that the debtor's interest in the property would have in the absence of any liens."[26] The Debtors possess full ownership of the Residence, thus their interest is the full value of the Residence. As the statute plainly states, the judicial lien of Secured Properties, is avoidable "to the extent" the sum of liens exceed the value ($273,000.00) of the debtors' interest in the Residence in the absence of any liens. If there were no liens, the Debtors' interest would be the full value of the Residence, which is $273,000.00. The Court thus reads the plain meaning of the statute to pronounce liens are avoidable "to the extent" such liens exceed the $273,000.00; thus, resulting portions of a judicial lien that falls below the value are unavoidable.
The Court's interpretation of the phrase "to the extent" is essential to this conclusion. The Court is not resigned to rely upon its own understanding of this phrase, but rather need only follow guidance provided by the Tenth Circuit's interpretation of the phrase. In the opinion, In re Sanders, the Tenth Circuit interpreted the implication the phrase "to the extent" placed upon impairment within § 522(f)(1).[27] The Sanders opinion incorporated the statutory construction principles of interpreting words "as taking their ordinary, contemporary, common meaning," and endorsed what it called "the majority view" in concluding "to the extent" within § 522(f)(1) to mean "a lien is . . . not avoidable beyond the amount of the exemption."[28] The opinion went on to say "[t]here is simply no room within the limiting language of § 522(f) to conclude other than the extent to which the exemption is impaired is coincident with the amount of the exemption. (footnote omitted)."[29]
Despite the Sanders opinion being a case wherein the Reform Act of 1994 was not effective and having its order overruled by the Reform Act's passage, the pertinent statutory language added in (f)(2) fails to provide evidence that leads this Court to believe the straightforward analysis and conclusions of the Sanders' opinion concerning the meaning of "to the extent" should be read any differently today.[30]
*539 Pertinent here, the 1994 amendment added, among other things, what is presently 522(f)(2).[31] The three subsections within (f)(2) did three things: (A) it defined when a lien is impairing an exemption, which again utilized the term "to the extent," (B) provided that a lien that has been avoided is not to be considered in making the calculation to determine impairment, and (C) it precluded the new subsection from applying to a judgment arising out of a mortgage foreclosure. None of these conflict with Sanders' conclusions regarding when an exemption is impaired. To not impart consideration to the Tenth Circuit's statements on this term would seem irresponsible. Furthermore, if the Court only treats this interpretation as persuasive, it still would support this Court's interpretation.[32]
This reading is further solidified by the simplicity with which an alternative interpretation could have been achieved. If the plain meaning of the statute was to apply the statute so as to avoid the lien in its entirety, Congress would have substituted "to the extent" with "if" or "upon" or "when" or any number of words or phrases that would easily and unequivocally communicate this to be its intent.[33] Congress instead chose the words "to the extent."
The Court should not dismiss the language Congress affirmatively implemented.
Moreover, a set of hypotheticals contained within the First Circuit's opinion in In re Silveira reinforces the pragmatism engendered in the application of 522(f) that this Court now endorses.
Hypothetical A: The debtor owns a primary residence with a market value of $100,000, subject to an outstanding mortgage balance of $55,000, a judicial lien of $30,000 (not securing a debt), and no other liens. The debtor is entitled, under § 522(d)(1), to claim an exemption of $15,000 with respect to the property.
Hypothetical B: Same as Hypothetical A, except that the debtor's property is subject to a judicial lien of $30,001 instead of $30,000.
In Hypothetical A, we can see that the sum of the judicial lien ($30,000), other liens ($55,000) and the debtor's exemption ($15,000) does not exceed the value of the debtor's property ($100,000). Thus the judicial lien in Hypothetical A does not impair the debtor's exemption within the meaning of § 522(f)(2)(A), and the debtor is not entitled to avoid any portion of that lien under § 522(f)(1).
In Hypothetical B, however, the sum of the judicial lien ($30,001), other liens *540 ($55,000) and the debtor's exemption ($15,000) does exceed the property's value (by $1), and so the targeted judicial lien is deemed under § 522(f)(2)(A) to impair the debtor's exemption.[34]
Under the Debtors' interpretation, this impairment requires that the debtor in Hypothetical B be permitted to avoid the $30,001 judicial lien in its entirety. Thus, a $1 increase in the amount of the (unavoidable) judicial lien in Hypothetical A would result in the debtor's acquiring the power to avoid the lien in full. The Silveira opinion also added that under this interpretation the debtor in Hypothetical A would also acquire full avoidance power if the value of the debtor's property was reduced, or the amount of consensual liens was increased by $1.[35]
For the reasons above, the Court reads the language of 522(f) to be unambiguous in its support of partial avoidance and recognizes that its analysis may rightfully stop here.[36]
C. Legislative History
Still, courts often turn to the legislative history, which in light of inconsistencies, is of little benefit to interpreting Congress' intention on this section.[37] The holding of Saal was admittedly assisted through this Courts' review of the statute's legislative history, namely the aforementioned House Report. In the House Report, subsequent to directing the statute's application mirror the mathematical formula utilized in Brantz, it went on to state that it was overruling the decisions In re Gonzalez, 149 B.R. 9 (Bankr.D.Mass.1993), vacated on appeal, 191 B.R. 2 (D.Mass.1996); and In re Chabot, 992 F.2d 891 (9th Cir.1993).[38] The opinions of Gonzalez and Chabot both read 522(f) to allow partial lien avoidance.
However, as the Bankruptcy Court within the Northern District of Illinois pointed out in In re Sheth, a reading of the House Report in its entirety lends more confusion than assistance in interpreting when a lien impairs an exemption under § 522(f). The Court there stated:
The House Report states that Gonzalez and Chabot wrongly refused to avoid a judicial lien when there was no equity after payment of the senior lien or when there was no equity after payment of the senior lien and the exemption. These cases, however, actually dealt with the situation where there was some equity after payment of senior liens and the exemption. Gonzalez, 149 B.R. at 10-11; Chabot, 992 F.2d at 894-95. Based upon this partial equity, the judicial lien *541 was only partially avoided in Gonzalez and Chabot. The House Report mischaracterizes the facts and the holdings of these cases when it says they failed to avoid the judicial lien in a no equity situation. Based upon these apparent errors and inconsistencies, the majority of the courts who have looked at the legislative history underlying the 1994 amendments have concluded that it does not definitively resolve the issue of partial lien avoidance. See In re Silveira, 141 F.3d 34 (1st Cir.1998); In re Ryan, 210 B.R. 7 (Bankr.D.Mass.1997); In re Moe, 199 B.R. 737 (Bankr.D.Mont.1995).[39]
In addition, none of the examples of "situations" cited in the House Report for which the legislation was to address involved facts where net equity remained after deduction of unavoidable liens and the debtor's exemption.[40]
*542 Courts have interpreted the House Report to reach different conclusions on partial lien avoidance.[41] The line of cases championing partial avoidance note its endorsement of Brantz, which utilized partial avoidance.[42] Still, another line of cases find the House Report's language overruling opinions wherein partial avoidance was utilized to support the position of avoidance of liens in their entirety.[43] The House Report consequently has only served to prolong disputes as to what constitutes impairment, which the Reform Act was intended to remedy. From these conflicting interpretations this Court finds the legislative history contained in the House Report to be an "untrustworthy indicator of Congress' intent" regarding partial avoidance within 522(f).[44] "In the absence of clear congressional intent to the contrary, the language . . . must be applied, not interpreted or modified."[45] No "clear" intent can be derived to sustain the Debtors' position from the House Report, as it is not a reliable source in supporting an intent contrary to the statute's clear language.[46]
D. Bankruptcy Policy
This Court's rejuvenated interpretation is also consistent with bankruptcy policy. First, Saal held that to allow a lien to remain impairs a "right to fully realize any homestead exemption" and "the debtor's right to a fresh start."[47] However, in reviewing the language of the statute, it speaks of the impairment not of rights but of the exemption itself.[48] The excess of a judgment lien over the exemption amount logically and by definition cannot impair the exemption itself. As Sanders notes, "to reach the result suggested, one must *543 add language to § 522(f) which has not been provided by Congress."[49]
This application still benefits the Debtors and provides them with a "fresh start."[50] Under this approach the Debtors have claimed a $90,000 exemption, and have gotten a $90,000 exemption. In addition, although the Debtors have been unable to totally avoid the Secured Properties judicial lien, they have been able to reduce the amount of the lien by $79,566.75. Consequently, the Debtors retain the $90,000.00 homestead exemption they are entitled to under Colorado law.
As well, partial avoidance would provide certainty and clarity by setting the creditor's lien at a fixed amount and permit the Debtor to retain any future appreciation in the property, further enhancing their "fresh start."
Another issue courts discuss are fears that such an interpretation does not allow the debtor to enjoy the future appreciation. The practical effect of this holding is to allow any appreciation in the property or retirement of principal to be subject to the lien. Such an effect, however, is in accord with the general principle that a debtor cannot use the protection of bankruptcy to avoid a lien on the value of an interest that arises after the lien is attached or after the bankruptcy proceedings have concluded.[51]
Additionally, it would be inconsistent with the policy of exemptions to permit the Debtor to avoid the lien in full despite the existence of non-exempt equity to which the lien could attach. To do so would in effect allow the Debtor an unlimited exemption. To this end the Court need only refer to the above mentioned hypothetical to illustrate such pitfalls.[52]
Lastly, the interpretation urged by the Debtors possess an incentive for manipulation by creditors and debtors. Complete lien avoidance "could be easily avoided by the creditor's voluntary reduction in the amount of the claim secured by the lien."[53] Creditors may, independently or through collusion with a debtor, disingenuously utilize full avoidance to ensure securities of their debts are free from judicial lien(s). Also, debtors may manipulate debt payments to engineer complete lien avoidance through surreptitiously creating disproportionate debt equity ratios on applicable liens or have consensual liens intentionally increased to avoid a large judicial liens in its entirety. "This kind of claims gamesmanship is surely not what this amendment was intended to invite."[54] The interpretation this Court now announces as set forth herein diminishes the incentive for such abuses.
IV. Conclusion and Order
For the reasons set forth above the Debtors' Motion[55] is GRANTED, in part, *544 and DENIED, in part. Security Properties, LLC's judicial lien is avoided in the amount of $79,566.75. This same judicial lien is not avoided in an amount of $7,286.00 and remains secured to the Residence.
NOTES
[1] Docket #32
[2] Docket #40
[3] Docket #56
[4] Docket #58 and Docket #59
[5] Docket #1.
[6] Colo. Rev. Stat XX-XX-XXX(1)(b) provides: (1) Every homestead in the state of Colorado shall be exempt from execution and attachment arising from any debt, contract, or civil obligation not exceeding in actual cash value in excess of any liens or encumbrances on the homesteaded property in existence at the time of any levy of execution thereon: (b) The sum of ninety thousand dollars if the homestead is occupied as a home by an elderly or disabled owner, an elderly or disabled spouse of an owner, or an elderly or disabled dependent of an owner.
[7] The Residence is found at 1344 Flannagan Court in Erie, Colorado.
[8] All future section references will refer to Title 11 of the United States Code unless otherwise stated.
[9] In re Sanders, 39 F.3d 258, 260 (10th Cir. 1994).
[10] Id. (citing In re Niemyjski, 26 B.R. 466, 468 (Bankr.D.N.M.1983)).
[11] Id. at 260-61 (citing Heape v. Citadel Bank of Independence (In re Heape), 886 F.2d 280, 282 (10th Cir.1989)).
[12] Emphasis added.
[13] See also In re Saal, 338 B.R. 501, 503 (Bankr.D.Colo.2006) ("In 1994, Congress amended 11 U.S.C. § 522(f)(2) to resolve difficulties and inconsistencies in construing what constituted an impairment.")(footnote omitted); In re Newell, 311 B.R. 268, 270 (Bankr. D.Colo.2004)("In 1994, Congress added § 522(f)(2)(A), a definition of what constitutes impairment of an exemption, in order to resolve the conflicting judicial interpretations which had arisen under the prior law." (footnote omitted)); In re Finn, 211 B.R. 780, 781 (1st Cir.BAP1997)("Prior to the enactment of the formula in section 522(f)(2)(A), the extent to which a lien could be avoided if it impaired an exemption varied from court to court. . ."); Lawrence Ponoroff, EXEMPTION IMPAIRING LIENS UNDER BANKRUPTCY CODE SECTION 522(F): ONE STEP FORWARD AND ONE STEP BACK, 70 U. Colo. L.Rev. 1, 27 (Winter 1999)("As Congress approached the question of bankruptcy reform in 1993 and 1994, there was very little doubt that the lack of uniformity involving the interpretation of section 522(f) was impeding the efficiency and effectiveness of the consumer bankruptcy system.")(footnote omitted).
[14] Pub.L. No. 103-394, 108 Stat 4106, § 303 (1994).
[15] 11 U.S.C. § 522(f)(2)(A).(italics added).
[16] Owen v. Owen, 500 U.S. 305, 313, n. 5, 111 S.Ct. 1833, 1838, n. 5, 114 L.Ed.2d 350 (1991).
[17] Owen, 500 U.S. at 313, n. 5, 111 S.Ct. at 1833, n. 5. (citing In re Brantz, 106 B.R. 62, 68 (Bankr.E.D.Pa.1989)).
[18] Brantz, 106 B.R. at 68.(emphasis in Brantz).
[19] H.R.Rep. No. 835, 103rd Cong.2d Sess. 52 (1994), reprinted in 1994 U.S.C.C.A.N. 3340, 3361.
[20] In re Saal, 338 B.R. 501, 505 (Bankr. D.Colo.2006).
[21] Id. at 504-505 (citation omitted).
[22] See, e.g., In re Brinley 403 F.3d 415 (6th Cir.2005); In Kolich v. Antioch Laurel Veterinary Hospital (In re Kolich), 328 F.3d 406, 410 (8th Cir.2003); In re Silveira, 141 F.3d 34 (1st Cir.1998); In re Finn, 211 B.R. 780 (1st Cir. BAP 1997); In re Hastings, 185 B.R. 811 (9th Cir. BAP 1995); In re Keenan, 364 B.R. 786 (Banrk. D.N.M 2007); In re Barrett, 370 B.R. 1 (Bankr.D.Me.2007); In re Saucier, 353 B.R. 383 (Bankr.D.Conn.2006); In re Varallo, 2006 WL 2433469 (Bankr.N.D.Ind.); In re Ryan, 210 B.R. 7 (Bankr.D.Mass.1997); In re Sheth, 225 B.R. 913, 917 (Bkrtcy. N.D.Ill.,1998) In re Corson, 206 B.R. 17 (Bankr.D.Conn.1997); In re Todd, 194 B.R. 893 (Bankr.D.Mont.1996); In re Johnson, 184 B.R. 141 (Bankr.D.Wyo.1995); InreMoe, 199 B.R. 737, 739-40 (Bankr.D.Mont.1995); In re Thomsen, 181 B.R. 1013 (Bankr.M.D.Ga. 1995).; see also 3 Norton Bankr.L. & Prac.3d § 56:28 (2009)("Under the formula now provided for determining impairment, the judicial impairment remains in place only to the extent that it is supported by value after satisfaction of the exemption.(footnote omitted").
[23] See United States v. Ron Pair, 489 U.S. 235, 241, 109 S.Ct. 1026, 103 L.Ed.2d 290 (1989).
[24] St. Charles Investment Co. v. Commissioner of Internal Revenue, 232 F.3d 773, 776 (10th Cir.2000) (quoting NLRB v. United Food & Commercial Workers Union, 484 U.S. 112, 123, 108 S.Ct. 413, 98 L.Ed.2d 429 (1987)).
[25] St. Charles Investment, 232 F.3d. at 776.
[26] Section 522(f)(2)(A).
[27] In re Sanders, 39 F.3d 258.
[28] Sanders, 39 F.3d at 261 (citing Perrin v. United States, 444 U.S. 37, 42, 100 S.Ct. 311, 62 L.Ed.2d 199 (1979)); See also In re Silveira, 141 F.3d at 36 ("The statutory directive that a debtor may avoid a judicial lien "to the extent that" the lien impairs an exemption favors-or is at least readily amenable to-reading the definition of "impairment" in § 522(f)(2)(A) not only as a condition of avoidability, but also as a proportional measure of the scope of the debtor's avoidance power.").
[29] Sanders, at 261-262.
[30] See In re Brinley, 403 F.3d at 421("The language of the relevant statute, however, authorizes avoidance of judicial liens only to the extent that those liens impair an exemption. An exemption is impaired, moreover, "to the extent that the sum of [the liens and the exemption] exceeds the value the debtor's interest in the property" absent the liens. 11 U.S.C. § 522(f)(2)(A). Because the amount of the impairment in this case is $98,763.44, [the creditor's] lien may be avoided only by that amount, thus allowing [the debtor] to take advantage of the statutory exemption afforded him. Consequently, [the creditor] retains a lien on the debtor's property in the amount of [the remaining equity]). (citation omitted)."; In re Kolich, 328 F.3d at 409 n. 2 (8th Cir.2003)("Under § 522(f), only the portion of a judicial lien that impairs the exemption may be avoided by the debtor. Thus, to the extent the debtor has equity in the exempt property that exceeds the allowed bankruptcy exemption, the judicial lien may not be avoided.") (citation omitted).
[31] See supra footnote 14.
[32] But see In re Cisneros, 257 B.R. 332, 336-340 (Bankr.D.N.M.2000) ("This third step of the Sanders test [to determine whether the lien actually impairs the exemption] is not directly addressed by the 1994 amendment, and therefore it might be argued that Sanders is still good law and binding. . . ."). The Cisneros opinion ultimately found the Reform Act had overridden Sanders and its statements were not binding, but still the opinion endorsed the use of partial lien avoidance.
[33] See also In re Silveira, 141 F.3d 34, 36 (1st Cir.1998)("If Congress intended for avoidance of judicial liens to be an `all-or-nothing' matter, one might wonder why the provisions' drafters chose to use the connective phrase `to the extent that,' in lieu of the word `if,' which obviously would have been a simpler construction."); In re Furkes, 65 B.R. 232, 235 (D.R.I.1986) ("The `to the extent that' clause cannot be seen as some sort of legislative slip of the pen. . . . [H]ad Congress intended . . . an all-or-nothing proposition, it would have drafted the statutory language more infrangibly. . . ."); See also In re Duvall, 218 B.R. 1008, 1013-1014 (Bankr.W.D.Tex.1998)(citing a number of cases and statutes that view "to the extent" as words of limitation).
[34] Silveira, 141 F.3d at 37.
[35] Id. at 36.
[36] See Ron Pair, 489 U.S. at 241, 109 S.Ct. 1026 (citing Caminetti v. United States, 242 U.S. 470, 485, 37 S.Ct. 192, 61 L.Ed. 442 (1917)("In this case it is also where the inquiry should end, for where, as here, the statute's language is plain, `the sole function of the courts is to enforce it according to its terms.'"); see also In re Brinley, 403 F.3d at 422 (citing In re Kolich, 328 F.3d at 410)(noting "the competing equities [of 522(f) are] both hard to weigh and finely balanced, our task is simply to apply § 522(f)(2)(A) as Congress wrote it."); Tedeschi v. Falvo (In re Falvo), 227 B.R. 662, 666 (6th Cir.BAP1998)("partial lien avoidance is appropriate in these circumstances and . . . full avoidance is inconsistent with the language and intent of the statute.").
[37] In re Spade, at 228 (citing St. Charles Investment, 232 F.3d at 776)("Furthermore, legislative history may not be used to create ambiguity in the statutory language." (additional citations omitted)).
[38] The House Report referenced other court decisions applying 522(f) that it was intending to overrule, however for the purposes of this issue these are the only pertinent cases discussed.
[39] In re Sheth, 225 B.R. 913, 918 n. 4 (Bankr. N.D.Ill.1998); see also In re Finn, 211 B.R. 780, 782 (1st Cir.BAP 1997)("We agree . . . that the cases cited in the legislative history do not fit the examples discussed there.")(footnote omitted).
[40] The House Report to the 1994 amendments to the Bankruptcy Code, related to section 522(f)(2), provided, in part:
Because the Bankruptcy Code does not currently define the meaning of the words "impair an exemption" in section 522(f), several court decisions have, in recent years, reached results that were not intended by Congress when it drafted the Code. This amendment would provide a simple arithmetic test to determine whether a lien impairs an exemption, based upon a decision, In re Brantz, 106 B.R. 62 (Bankr.E.D.Pa. 1989), that was favorably cited by the Supreme Court in Owen v. Owen, 500 U.S. 305, 111 S.Ct. 1833, 1838, n. 5, 114 L.Ed.2d 350.
The decisions that would be overruled involve several scenarios. The first is where the debtor has no equity in a property over and above a lien senior to the judicial lien the debtor is attempting to avoid, as in the case, for example of a debtor with a home worth $40,000 and a $40,000 mortgage. Most courts and commentators had understood that in this situation the debtor is entitled to exempt his or her residual interest, such as a possessory interest in the property, and avoid a judicial lien or other lien of a type subject to avoidance, in any amount, that attaches to that interest. Otherwise, the creditor would retain the lien after bankruptcy and could threaten to deprive the debtor of the exemption Congress meant to protect by executing on the lien. Unfortunately, a minority of court decisions, such as In re Gonzalez, 149 B.R. 9 (Bankr.D.Mass.1993), have interpreted section 522(f) as not permitting avoidance of liens in this situation. The formula in the section would make clear that the liens are avoidable.
The second situation is where the judicial lien the debtor seeks to avoid is partially secured. Again, in an example where the debtor has a $10,000 homestead exemption, a $50,000 house and a $40,000 first mortgage, most commentators and courts would have said that a judicial lien of $20,000 could be avoided in its entirety. Otherwise, the creditor would retain all or part of the lien and be able to threaten postbankruptcy execution against the debtor's interest which, at the time of the bankruptcy is totally exempt. However, a few courts, including the Ninth Circuit in In re Chabot, 992 F.2d 891 (9th Cir.1993), held that the debtor could only avoid $10,000 of the judicial lien in this situation, leaving the creditor after bankruptcy with a $10,000 lien attached to the debtor's exempt interest in property. This in turn will result, at a minimum, in any equity created by mortgage payments form the debtor's postpetition income-income which the fresh start is supposed to protect-going to the benefit of the lienholder. It may also prevent the debtor from selling his or her home after bankruptcy without paying the lienholder, even if that payment must come from the debtor's $10,000 exempt interest. The formula in the section would not permit this result.
The third situation is in the Sixth Circuit, where the Court of Appeals, in In re Dixon, 885 F.2d 327 (6th Cir.1989), has ruled that the Ohio homestead exemption only applies in execution sale situations. Thus, the court ruled that the debtor's exemption was never impaired in a bankruptcy and could never be avoided, totally eliminating the right to avoid liens. This leaves the debtor in the situation where, if he or she wishes to sell the house after bankruptcy, that can be done only by paying the lienholder out of the equity that should have been protected as exempt property. By focusing on the dollar amount of the exemption and defining "impaired," the amendment should correct this problem. By defining "impairment," the amendment also clarifies that a judicial lien on a property can impair an exemption even if the lien cannot be enforced through an execution sale, thereby supporting the result in In re Henderson, 18 F.3d 1305 (5th Cir.1994), which permitted a debtor to avoid a lien that impaired the homestead exemption even though the lien could not be enforced through a judicial sale.
[41] In re Kolich, 328 F.3d at 408 ("In 1994, Congress added the formula in § 522(f)(2)(A), intending to bring order out of the prior chaos. Unfortunately . . . the formula has itself generated inconsistent judicial interpretations.").
[42] See, e.g., In re Sheth, 225 B.R. at 917-918 ("This Court concludes that the plain meaning of the statutory language, as well as the reference to Brantz formula in legislative history, allow for partial avoidance of a judicial lien to the extent that the lien only partially impairs the debtor's exemption.").
[43] See e.g., In re Allard, 196 B.R. 402, 411 (Bankr.N.D. Ill.1996); In re Jakubowski, 198 B.R. 262 (Bankr.N.D.Ohio 1996).
[44] See In re Spade, 258 B.R. 221, 229 n. 4 (Bankr.D.Colo.2001)("The legislative history of § 305 is an untrustworthy indicator of Congress' intent regarding the scope of a court's discretion in § 305 matters as courts have interpreted the Committee's report differently.").
[45] Id. at 229. (emphasis added).
[46] See U.S. v. LTV Steel Co., Inc., 269 B.R. 576 (W.D.Pa.2001)(Provides that a court may depart from the plain language of a statute where there is an extraordinary showing of a contrary congressional intent in the legislative history).
[47] Saal at 505.
[48] See In re Sanders, 39 F.3d at 262.
[49] Id.
[50] See Finn, at 783.
[51] See Farrey v. Sanderfoot, 500 U.S. 291, 300, 111 S.Ct. 1825, 114 L.Ed.2d 337, (1991); Finn, 783-784.
[52] See also Finn, 784-785 ("For example, if the property in this case were worth $500,000 instead of $225,000, the Debtor-Appellee would exit bankruptcy with $154,897.34 in consensual liens, a $15,700 exemption, plus an additional $329,402.66 in equity. If Congress had wanted the Debtor-Appellee to receive an exemption in the amount of $345,102.66, section 522(d) would not contain dollar limits.")(footnotes omitted).
[53] In re Thomsen, 181 B.R. at 1016.
[54] Id.
[55] Docket # 32.
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[Cite as State v. Minifee, 2013-Ohio-3146.]
Court of Appeals of Ohio
EIGHTH APPELLATE DISTRICT
COUNTY OF CUYAHOGA
JOURNAL ENTRY AND OPINION
No. 99202
STATE OF OHIO
PLAINTIFF-APPELLEE
vs.
PATRICK A. MINIFEE
DEFENDANT-APPELLANT
JUDGMENT:
AFFIRMED
Criminal Appeal from the
Cuyahoga County Court of Common Pleas
Case No. CR-562160
BEFORE: Celebrezze, P.J., E.A. Gallagher, J., and Kilbane, J.
RELEASED AND JOURNALIZED: July 18, 2013
ATTORNEY FOR APPELLANT
Anna Markovich
The Palm Aire Building
18975 Villaview Road
Suite 3
Cleveland, Ohio 44119-3053
ATTORNEYS FOR APPELLEE
Timothy J. McGinty
Cuyahoga County Prosecutor
BY: Marc D. Bullard
Assistant Prosecuting Attorney
The Justice Center
1200 Ontario Street
Cleveland, Ohio 44113
FRANK D. CELEBREZZE, JR., P.J.:
{¶1} Defendant-appellant, Patrick Minifee, appeals the judgment of the common
pleas court denying his presentence motion to withdraw his guilty plea. After careful
review of the record and relevant case law, we affirm the trial court’s judgment.
I. Factual and Procedural History
{¶2} This case arises out of the aggravated robbery and shooting of off-duty
Cleveland Police Officer Dwayne Borders on April 26, 2012. Officer Borders was
traveling in his vehicle when he stopped at a private residence in Cleveland, Ohio. As
Officer Borders exited his vehicle, he was approached by appellant, who was brandishing
a weapon and attempting to carry out a robbery. During the incident, a number of shots
were exchanged. As a result, Officer Borders was shot in the back, and appellant was
shot in the chest. Officer Borders was treated and released in connection with his
injuries. Appellant was abandoned inside his vehicle at a nearby hospital, where
life-saving measures allowed his survival. Inside appellant’s vehicle, officers discovered
two firearms underneath the gear box of the vehicle.
{¶3} As a result of the incident, the Cuyahoga County Grand Jury returned a
multi-count indictment, charging appellant with kidnapping in violation of R.C.
2905.01(B)(2), a felony of the first degree; attempted murder in violation of R.C.
2923.02 and 2903.02(A), a felony of the first degree; felonious assault in violation of
R.C. 2903.11(A)(1), a felony of the first degree; felonious assault in violation of R.C.
2903.11(A)(2), a felony of the first degree; aggravated robbery in violation of R.C.
2911.01(A)(1), a felony of the first degree; aggravated robbery in violation of R.C.
2911.01(A)(3), a felony of the first degree; and discharge of firearm on or near prohibited
premises in violation of R.C. 2923.162(A)(3), a felony of the first degree; all of which
also included one- and three-year firearm specifications and forfeiture of weapons
specifications. Appellant was also charged with carrying a concealed weapon in
violation of R.C. 2923.12(A)(2), a felony of the fourth degree; improperly handling
firearms in a motor vehicle in violation of R.C. 2923.16(B), a felony of the fourth degree;
and tampering with evidence in violation of R.C. 2921.12(A)(1), a felony of the third
degree; all of which also included forfeiture of weapon specifications.
{¶4} On September 26, 2012, appellant withdrew his previous not guilty plea and
pled guilty to the charges as stated in the indictment. In exchange for pleading guilty to
all charges, including all the specifications, the state agreed to recommend a
nineteen-and-one-half-year sentence.
{¶5} On October 1, 2012, appellant’s sentencing hearing was held. Prior to the
imposition of his sentence, however, appellant orally requested that the trial court allow
him to withdraw his guilty plea. Appellant explained that he was coerced into taking the
plea agreement by his attorney, who he argued had only spent two weeks on his case and
did not have sufficient time to prepare for trial. Appellant stated that he felt pressured by
his attorney to enter the plea and that his attorney did not represent his best interests.
Appellant also requested that the trial court appoint new counsel. After careful
consideration of appellant’s arguments, the trial court denied his motion to withdraw his
plea and his request for new counsel. Thereafter, the trial court sentenced appellant to
the agreed sentence of a nineteen-and-one-half-year term of imprisonment.
{¶6} Appellant now brings this timely appeal, raising four assignments of error for
review:
I. The trial court violated defendant’s due process rights as guaranteed by
the Fifth and Fourteenth Amendments to the United States Constitution and
erred under Ohio Crim.R. 11(C).
II. The trial court erred and abused discretion in denying defendant’s
presentence motion to withdraw his guilty plea under Crim.R. 32.1.
III. The trial court abused discretion in assessing the court costs to [an]
indigent defendant.
IV. Defendant was denied his constitutional right to effective assistance of
counsel pursuant to the Sixth and Fourteenth Amendments to the United
States Constitution and Article I, Section X of the Ohio Constitution.
II. Law and Analysis
A. Crim.R. 11(C)
{¶7} In his first assignment of error, appellant argues that the trial court failed to
comply with Crim.R. 11, and therefore his plea was not knowingly, voluntarily, or
intelligently made.
{¶8} Crim.R. 11(C) governs the process by which a trial court must inform a
defendant of certain constitutional and nonconstitutional rights before accepting a felony
plea of guilty or no contest. The underlying purpose of Crim.R. 11(C) is to convey
certain information to a defendant so that he can make a voluntary and intelligent decision
regarding whether to plead guilty. State v. Schmick, 8th Dist. No. 95210,
2011-Ohio-2263.
{¶9} Crim.R. 11(C)(2) provides:
In felony cases, the court may refuse to accept a plea of guilty or a plea of
no contest, and shall not accept a plea of guilty or no contest without first
addressing the defendant personally and doing all of the following:
(a) Determining that the defendant is making the plea voluntarily, with
understanding of the nature of the charges and of the maximum penalty
involved, and, if applicable, that the defendant is not eligible for probation
or for the imposition of community control sanctions at the sentencing
hearing.
(b) Informing the defendant of and determining that the defendant
understands the effect of the plea of guilty or no contest, and that the court,
upon acceptance of the plea, may proceed with judgment and sentence.
(c) Informing the defendant and determining that the defendant understands
that by the plea the defendant is waiving the rights to jury trial, to confront
witnesses against him or her, to have compulsory process for obtaining
witnesses in the defendant’s favor, and to require the state to prove the
defendant’s guilt beyond a reasonable doubt at a trial at which the defendant
cannot be compelled to testify against himself or herself.
{¶10} In resolving whether a criminal defendant knowingly, intelligently, and
voluntarily entered a plea, we review the record to determine whether the trial court
adequately advised the defendant of his constitutional and nonconstitutional rights set
forth in Crim.R. 11(C). State v. Nero, 56 Ohio St.3d 106, 564 N.E.2d 474 (1990).
{¶11} The standard of review we use differs depending on the rights appellant
raises on appeal. Strict compliance is required if the appellant raises a violation of a
constitutional right delineated in Crim.R. 11(C)(2)(c). Alternatively, if the appellant
raises a violation of a non-constitutional right found in Crim.R. 11(C)(2)(a) and (b), we
look for substantial compliance. State v. Joachim, 8th Dist. No. 90616, 2008-Ohio-4876,
¶ 7. “Substantial compliance means that under the totality of the circumstances the
defendant subjectively understands the implication of his plea and the rights he is
waiving.” Nero at 108. Moreover, there must be some showing of prejudicial effect
before a guilty plea may be vacated. State v. Stewart, 51 Ohio St.2d 86, 364 N.E.2d
1163 (1977). The test for prejudice is “whether the plea would have otherwise been
made.” Nero at 108.
{¶12} In the case at hand, appellant contends that his guilty plea was not
knowingly, intelligently, and voluntarily made because the trial court failed to make a
sufficient inquiry into whether he understood the nature of the attempted murder and
kidnapping charges. Thus, our review is limited to determining whether the trial court
substantially complied with the procedures set forth in Crim.R. 11(C)(2)(a).
{¶13} With regard to his attempted murder charge, appellant specifically argues
that the trial court did not adequately explain the elements of “purposefully” and
“complicity.” Similarly, appellant argues that the trial court failed to expressly inquire
on the record as to whether he understood the nature of his kidnapping charge.
{¶14} In determining whether a defendant is making a plea with an understanding
of the nature of the charge, a trial court is not necessarily required to advise the defendant
of the elements of the crime or to specifically ask the defendant if he understands the
charge, provided the totality of the circumstances support the trial court’s determination
that the defendant understands the charge. See State v. Esner, 8th Dist. No. 90740,
2008-Ohio-6654, ¶ 3; State v. Carpenter, 8th Dist. No. 81571, 2003-Ohio-3019, ¶ 2.
Indeed, “[w]here a defendant indicates that he understands the nature of the charge, in the
absence of evidence to the contrary or anything in the record that indicates confusion, it is
typically presumed that the defendant actually understood the nature of the charge against
him.” State v. Wangul, 8th Dist. No. 84698, 2005-Ohio-1175, ¶ 10, citing State v.
Dickey, 7th Dist. No. 03 CA 94, 2004-Ohio-3198, ¶ 11. Thus, appellant’s reliance on
State v. Blair, 128 Ohio App.3d 435, 715 N.E.2d 233 (2d Dist.1998), for the proposition
that the record must reflect that the defendant was advised as to “what the state would
have to prove to convict him” lacks merit. See State v. Parker, 8th Dist. No. 82687,
2004-Ohio-2976, ¶ 26, citing State v. Philpott, 8th Dist. No. 74392, 2000 Ohio App.
LEXIS 5849 (Dec. 14, 2000) (rejecting Blair’s holding that defendant must be advised as
to “what the state would have to prove to convict”).
{¶15} A review of the plea hearing transcript in this case supports a determination
that appellant understood the nature of the charges against him. The record reflects that
the trial court began its Crim.R. 11 colloquy by identifying the charges and accompanying
specifications brought against appellant. The prosecutor then explained the plea
agreement and identified the charges to which appellant would plead guilty. The trial
court then asked appellant to answer general questions regarding his level of education,
whether he understood the prosecutor’s statements, whether he was under the influence of
drugs or alcohol, whether he was satisfied with his counsel, and whether he understood he
was withdrawing his previously entered plea of not guilty. Appellant responded
appropriately to each question and affirmatively stated that he understood what was
happening in the plea proceedings. In response to further questioning, appellant
indicated that he understood the constitutional rights he was waiving by pleading guilty.
{¶16} The trial court then identified the charges that appellant intended to plead
guilty to and their potential sentences. The record reflects that as the trial court began its
explanation of the nature of appellant’s charges, appellant interrupted the court to ask if it
was possible to reword his plea so that it did not contain the term “attempted murder.”
However, a close examination of the record demonstrates that appellant was not
“confused” about the actual nature of his attempted murder charge. Rather, appellant
was merely concerned that the trial court’s use of the term “attempted murder” would
make him ineligible for certain prison programs. In fact, during the plea colloquy, the
trial court explained to appellant, “the plea agreement is asking you to accept
responsibility to attempted murder, which means that you did attempt or purposefully
caused the death of CPD Officer Borders and that could include any aiding and abetting
you may have done with anyone else involved in this case”; appellant immediately
responded, “[y]eah, I understand that.” Thus, the trial court had no obligation to explain
the substantive elements of appellant’s attempted murder charge in further detail.
{¶17} Similarly, there is no indication that appellant failed to understand the nature
of his kidnapping charge. The record reflects that, during the plea colloquy, the trial
court explained that appellant was pleading guilty to kidnapping in violation of R.C.
2905.01(B)(2) and its accompanying firearm and forfeiture specifications. Thereafter,
the trial court expressly asked appellant if he understood the nature of each of the
offenses to which he was pleading guilty, and appellant affirmatively stated “yes.”
{¶18} Under the totality of these circumstances, we find that the trial court
substantially complied with Crim.R. 11(C)(2)(a). Accordingly, we find that appellant’s
plea was knowingly, voluntarily, and intelligently made. Moreover, appellant has failed
to demonstrate that he was prejudiced in any way by his pleas. He does not claim that he
would not have pleaded guilty if the trial court had defined each element of the offenses.
Without a showing of prejudice, appellant’s argument fails. See State v. Lomax, 8th Dist.
No. 98125, 2012-Ohio-4167.
{¶19} Appellant’s first assignment of error is overruled.
B. Crim.R. 32.1
{¶20} In his second assignment of error, appellant argues that the trial court abused
its discretion in denying his presentence motion to withdraw his guilty plea under Crim.R.
32.1.
{¶21} Under Crim.R. 32.1, “[a] motion to withdraw a plea of guilty or no contest
may be made only before sentence is imposed; but to correct manifest injustice the court
after sentence may set aside the judgment of conviction and permit the defendant to
withdraw his or her plea.”
{¶22} In general, “a presentence motion to withdraw a guilty plea should be freely
and liberally granted.” State v. Xie, 62 Ohio St.3d 521, 527, 584 N.E.2d 715 (1992). It
is well established, however, that “[a] defendant does not have an absolute right to
withdraw a guilty plea prior to sentencing. A trial court must conduct a hearing to
determine whether there is a reasonable legitimate basis for the withdrawal of the plea.”
Id. at paragraph one of the syllabus.
{¶23} The decision to grant or deny a motion to withdraw is within the trial court’s
discretion. Id. at paragraph two of the syllabus. Absent an abuse of discretion, the trial
court’s decision must be affirmed. Id. at 527. An abuse of discretion requires a finding
that the trial court’s decision was unreasonable, arbitrary, or unconscionable. Blakemore
v. Blakemore, 5 Ohio St.3d 217, 219, 450 N.E.2d 1140 (1983). This court has held that
[i]t is not an abuse of discretion to deny a presentence motion to withdraw a
guilty plea when a defendant: (1) is represented by competent counsel; (2) is
given a full Crim.R. 11 hearing before entering a plea; and (3) is given a
hearing on the motion to withdraw that plea during which the court
considers the defendant’s arguments in support of the motion.
State v. Bridges, 8th Dist. No. 87633, 2006-Ohio-6280, ¶ 5; see also State v. Peterseim,
68 Ohio App.2d 211, 428 N.E.2d 863 (8th Dist.1980), paragraph three of the syllabus.
{¶24} On review, we find the trial court did not abuse its discretion in denying
appellant’s motion to withdraw his guilty plea. The record shows that appellant was
represented by competent counsel and, as addressed in appellant’s first assignment of
error, he was given a full Crim.R. 11 hearing before entering his plea.
{¶25} Moreover, our review of the record demonstrates that the trial court gave
appellant a complete and impartial hearing on his presentence motion to withdraw his
guilty plea and gave full and fair consideration to the arguments raised in support of his
motion. Here, appellant orally requested that the trial court withdraw his guilty plea
because he was coerced into entering the plea by his defense attorney and he was innocent
of the attempted murder and kidnapping charges.
{¶26} Initially, the trial court addressed appellant’s contention that he was coerced
into entering his plea. When asked specifically how he was coerced, appellant provided
only blanket statements with no specifics on how counsel coerced him. Simply put, there
is nothing in the record that substantiates appellant’s claim that he was coerced to plead
guilty by his counsel. Instead, the record of the plea hearing demonstrates that there was
an extensive Crim.R. 11 colloquy between the judge and appellant, during which
appellant was given every opportunity to ask questions and indicated that he did not feel
comfortable entering a guilty plea.
{¶27} Lastly, we reject appellant’s argument that the trial court failed to consider
his claim of innocence. When confronted with a claim of innocence, “the trial judge
must determine whether the claim is anything more than the defendant’s change of heart
about the plea agreement.” State v. Kramer, 7th Dist. No. 01-C.A.-107,
2002-Ohio-4176, ¶ 58. See State v. McGowan, 8th Dist. No. 68971, 1996 Ohio App.
LEXIS 4384 (Oct. 3, 1996). This court has stated that a defendant’s protestations of
innocence are not sufficient, however frequently repeated, to warrant grounds for
vacating a plea voluntarily, knowingly, and intelligently entered. State v. Bloom, 8th
Dist. No. 97535, 2012-Ohio-3805, ¶ 13, citing State v. Abdelhag, 8th Dist. No. 71136,
1997 Ohio App. LEXIS 3394, *11 (July 31, 1997). “By inference, all defendants who
request a withdrawal of their guilty plea do so based upon some claim of innocence. * * *
A mere change of heart regarding a guilty plea and the possible sentence is insufficient
justification for the withdrawal of a guilty plea.” Id.
{¶28} On review, we agree with the trial court that appellant’s motion to withdraw
his plea was predicated on “buyers remorse” developed in anticipation of sentencing.
Thus, appellant’s claimed innocence was not sufficient to warrant the withdrawal of his
guilty plea where, as here, the record supports the trial court’s finding that appellant
entered his plea voluntarily, knowingly, and intelligently. State v. Creed, 8th Dist. No.
97317, 2012-Ohio-2627, ¶ 19.
{¶29} Based on the foregoing, appellant’s second assignment of error is overruled.
C. Court Costs
{¶30} In his third assignment of error, appellant argues that the trial court abused
its discretion in assessing court costs.
{¶31} R.C. 2947.23(A)(1) governs the imposition of court costs and provides in
pertinent part: “In all criminal cases * * * the judge * * * shall include in the sentence the
costs of prosecution * * * and render a judgment against the defendant for such costs.”
{¶32} “R.C. 2947.23 does not prohibit a court from assessing costs against an
indigent defendant; rather it requires a court to assess costs against all convicted
defendants.” State v. White, 103 Ohio St.3d 580, 2004-Ohio-5989, 817 N.E.2d 393, ¶ 8.
In that case, the Ohio Supreme Court held that “a trial court may assess court costs
against an indigent defendant convicted of a felony as part of the sentence.” Id. at
paragraph one of the syllabus. Therefore, a “defendant’s financial status is irrelevant to
the imposition of court costs.” State v. Clevenger, 114 Ohio St.3d 258, 2007-Ohio-4006,
871 N.E.2d 589, ¶ 3.
{¶33} Pursuant to R.C. 2947.23(A)(1), however, at the time the trial court imposes
sentence, the court “shall” notify the defendant that if he fails to pay, or make timely
payments against, the judgment of court costs rendered against him, the court “may order
the defendant to perform community service * * *.” The Ohio Supreme Court has held
that “a trial court may properly order community service as a means of payment [of court
costs] in accordance with R.C. 2947.23(A)(1)(a) and (b).” Clevenger at ¶ 10. See also
State v. Cardamone, 8th Dist. No. 94405, 2011-Ohio-818.
{¶34} Further, court costs may be waived at the discretion of the court if the court
first determines that the defendant is indigent. White at ¶ 14. It is also possible that,
during the collection process, the clerk of courts may waive the collection of court costs
for indigent defendants. Id. (noting that R.C. 2929.14 was silent as to the collection of
costs from indigent defendants).
{¶35} The “indigent defendant must move a trial court to waive payment of costs
at the time of sentencing. If the defendant makes such a motion, then the issue is
preserved for appeal and will be reviewed under an abuse-of-discretion standard.
Otherwise, the issue is waived and costs are res judicata.” State v. Threatt, 108 Ohio
St.3d 277, 2006-Ohio-905, 843 N.E.2d 164, ¶ 23.
{¶36} In the present case, the trial court informed appellant at the conclusion of the
sentencing hearing that he would be responsible for court costs and that he may be
required to do community service as a means of payment. On this determination,
appellant stated that he was indigent and wished to have his fines and court costs waived.
In response, the trial court found appellant to be indigent and informed him that it would
not be imposing a fine. However, the court did not grant appellant’s request to waive
court costs. These determinations were reflected in the sentencing journal entry dated
October 1, 2012. Accordingly, although the trial court found appellant to be indigent, it
acted within its discretion under R.C. 2947.23(A)(1) in imposing court costs regardless of
appellant’s financial status.
{¶37} Appellant’s third assignment of error is overruled.
D. Ineffective Assistance of Counsel
{¶38} In his fourth assignment of error, appellant argues that he received
ineffective assistance of counsel based on his trial counsel’s alleged failure to adequately
assist in defending his motion to withdraw his guilty plea.
{¶39} To establish ineffective assistance of counsel, a defendant must demonstrate
that counsel’s performance fell below an objective standard of reasonable performance
and that he was prejudiced by that deficient performance, such that, but for counsel’s
error, the result of the proceedings would have been different. Strickland v. Washington,
466 U.S. 668, 687-688, 104 S.Ct. 2052, 80 L.Ed.2d 674 (1984); State v. Sanders, 94 Ohio
St.3d 150, 151, 2002-Ohio-350, 761 N.E.2d 18. A reviewing court will strongly presume
that counsel rendered adequate assistance and made all significant decisions in the
exercise of reasonable professional judgment. State v. Bradley, 42 Ohio St.3d 136, 538
N.E.2d 373 (1989).
{¶40} After careful consideration of the record and the statements made during
appellant’s motion to withdraw hearing, we are unable to conclude that defense counsel’s
performance fell below an objective standard of reasonable performance. Here,
appellant’s motion to withdraw centered on his allegations that defense counsel coerced
him into entering his plea. In assessing the issue, the trial court expressly asked defense
counsel if he forced appellant to enter his plea. Defense counsel stated, “I’ve never
forced anyone to do anything in this courtroom or any other courtroom in this state.”
Furthermore, defense counsel expressly denied appellant’s allegations that he was not
prepared for trial.
{¶41} We recognize appellant’s argument that defense counsel did not make any
supporting arguments or present testimony to further appellant’s motion to withdraw his
guilty plea. However, given the basis of appellant’s motion to withdraw, we cannot find
ineffective assistance simply because defense counsel made a truthful statement to the
trial court defending his reputation and denying the allegations of coercion.
{¶42} Furthermore, even if this court were to conclude that defense counsel was
ineffective for failing to assist appellant during the motion to withdraw hearing, appellant
is unable to demonstrate that, but for counsel’s error, the result of the proceeding would
have been different. Here, appellant failed to present any credible evidence that he was
pressured into entering his plea and, as discussed, appellant’s claims of innocence appear
to be nothing more than a change of heart. Thus, we are unable to conclude that the trial
court would have granted appellant’s motion, regardless of defense counsel’s supporting
efforts.
{¶43} Appellant’s fourth assignment of error is overruled.
{¶44} Judgment affirmed.
It is ordered that appellee recover from appellant costs herein taxed.
The court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate issue out of this court directing the common
pleas court to carry this judgment into execution. The defendant’s convictions having
been affirmed, any bail pending appeal is terminated. Case remanded to the trial court
for execution of sentence.
A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of
the Rules of Appellate Procedure.
FRANK D. CELEBREZZE, JR., PRESIDING JUDGE
EILEEN A. GALLAGHER, J., and
MARY EILEEN KILBANE, J., CONCUR
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2 F.3d 48
L.M. EVERHART CONSTRUCTION, INCORPORATED, a West Virginiacorporation, Plaintiff-Appellee,v.The JEFFERSON COUNTY PLANNING COMMISSION, a municipalcorporation, Defendant-Appellant,andPaul J. Raco, Director of Planning of the Jefferson CountyPlanning Commission; H. Richard Flaherty; Robert N.Warren; Cambell E. Tabb; Betty Braxton; Scott Coyle;Charles Lutman; Robert L. Mason; D. Lee Morgan; WilliamSenseny; G. Page Wright, Jr.; Charles B. Clendening, III,Defendants.
No. 92-2168.
United States Court of Appeals,Fourth Circuit.
Argued May 4, 1993.Decided July 29, 1993.
Charles F. Printz, Jr., Bowles, Rice, McDavid, Graff & Love, Martinsburg, WV, argued for defendant-appellant.
Michael Lee Scales, Greenberg & Scales, Martinsburg, WV, argued for plaintiff-appellee.
Before MURNAGHAN and WILLIAMS, Circuit Judges, and BUTZNER, Senior Circuit Judge.
OPINION
WILLIAMS, Circuit Judge:
1
At issue in this case is whether the Jefferson County Planning Commission deprived L.M. Everhart Construction, Inc. (the Company) of vested property rights without due process of law. The Company claimed that the Planning Commission's conditional approval of a residential subdivision plat created a vested property right to develop the subdivision as approved, and that the application of a subsequently enacted zoning ordinance to the subdivision deprived it of that property right. The Company brought this action under 42 U.S.C. Sec. 1983 (1988), alleging that the Planning Commission deprived it of its right to substantive due process under the Fourteenth Amendment.1 A jury returned a verdict for the Company in the amount of $84,000. The Planning Commission moved for judgment as a matter of law, but the district court denied the motion. We conclude that the Company had no protectible property interest, and therefore reverse.
I.
2
The subdivision known as Patrick Henry Estates was controversial long before the Company acquired it in 1989. In 1977, the Company's predecessors in title submitted a proposed plat to the Planning Commission for approval. The Planning Commission refused to approve the plat because it did not comport with the Commission's comprehensive plan for development in the County and did not comply with the terms of the then-existing Subdivision Ordinance. The developers challenged that decision in state court and the state court ordered the Planning Commission to approve the plat and allow the developers to proceed. The Supreme Court of Appeals of West Virginia affirmed the decision of the lower court on the ground that the developers had fully complied with the subdivision regulations. Singer v. Davenport, 164 W.Va. 665, 264 S.E.2d 637, 641 (1980). Pursuant to the court order, the Planning Commission approved the subdivision plat on April 23, 1985, subject to the filing of a construction bond. The plat imposed no side setback requirements.2 Because no construction bond was filed at that time, the plat was neither sealed nor recorded in the county clerk's office.
3
In 1988, the Planning Commission drafted a proposed Zoning and Development Review Ordinance and conducted numerous public hearings regarding the adoption of the Ordinance. Lawrence Everhart, one of the Company's two shareholders, attended a June 1988 meeting of the Planning Commission but neither read the Zoning Ordinance nor inquired whether it would apply to existing subdivisions. He testified that he did not make such an inquiry because the "subdivisions that were in existence were always grandfathered whenever they changed the ordinance," (J.A. at 68), and that it was his "understanding" that the Zoning Ordinance would not apply to "anything on the record prior to the adoption" of the Ordinance, (J.A. at 60). Lawrence Everhart did not explain the basis for these beliefs; Jefferson County previously had never adopted a zoning ordinance.
4
Contrary to Lawrence Everhart's "understanding," the text of the Zoning Ordinance made clear that it would apply to all subdivisions in the County. Section 1.2 of the Zoning Ordinance stated, "[t]hese regulations shall apply to all properties within Jefferson County, West Virginia." Jefferson County, W.Va., Zoning & Development Review Ordinance Sec. 1.2 (1990) (Zoning Ordinance). Section 4.2 provided more specifically that "[e]xcept as hereinafter specified, no land, building, or premises shall hereafter be used, and no building or part thereof or other structure shall be located, erected, reconstructed, extended, enlarged, converted or altered except in conformity with the regulations herein specified." Zoning Ordinance Sec. 4.2.3 After the public hearings concluded, the Planning Commission recommended passage of the Zoning Ordinance by the County Commission of Jefferson County. The County Commission adopted the Zoning Ordinance on July 7, 1988, and it became effective on October 5, 1988.
5
Section 5.5(b) of the Zoning Ordinance imposed a side setback requirement of twelve feet for residential lots under 10,000 square feet. Zoning Ordinance Sec. 5.5(b). All of the lots in Section D of Patrick Henry Estates were under 10,000 square feet in size.
6
On December 19, 1988, several months after the Zoning Ordinance became effective, the Company purchased Section D of Patrick Henry Estates. At the time of purchase, Section D was nothing more than raw land.4 The Company posted the necessary construction bond and on February 3, 1989, officially recorded the final plat for Section D that had been approved by the Planning Commission in 1985. Shortly after the Company applied for its first building permits in June 1989, the Planning Commission informed it that the side setback requirements applied to its lots. The Company thereafter sought a variance from the side setback requirements for all of the lots in Section D because the setback requirements made it "difficult to locate a house on the lot." (J.A. at 545.) The Commission denied the blanket variance but agreed to consider requests for lot-by-lot variances from the setback requirements. The Company did not appeal the denial of the blanket variance, but did pursue a number of individual variances. Although the Company was granted two requests for a variance, at least ten others were denied after protests from several members of the public. The Company did not appeal the denial of the ten variance requests.
7
Exasperated by the variance process, Lawrence Everhart and other developers asked the Planning Commission to amend the Zoning Ordinance to reduce the side setback requirements. The Planning Commission acknowledged that the Zoning Ordinance had caused hardship for the developers, and recommended to the County Commission that it reduce the side setback requirements. In response to the Planning Commission's recommendation, the County Commission amended the Zoning Ordinance to reduce the side setback requirements for lots under 30,000 square feet from twelve feet to eight feet. Zoning Ordinance Sec. 9.7. The amendment alleviated the problems of many of the developers in the County, but did not satisfy the Company. The Company requested that the side setbacks be further reduced from eight feet to five feet. When the Planning Commission failed to act upon its request, the Company filed this lawsuit.
II.
8
In deciding a motion for judgment as a matter of law, the district court must determine, without considering the weight of the evidence or the credibility of witnesses, whether " 'there can be but one conclusion as to the verdict that reasonable jurors could have reached.' " Gairola v. Virginia Dep't of Gen. Servs., 753 F.2d 1281, 1285 (4th Cir.1985) (quoting Wheatley v. Gladden, 660 F.2d 1024, 1027 (4th Cir.1981)). We review the decision of the district court de novo. Id.
9
Section 1983 imposes civil liability upon anyone who
10
under color of any statute, ordinance, regulation, custom, or usage, of any State or Territory or the District of Columbia, subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws.
11
42 U.S.C. Sec. 1983. The Company contended at trial that the Planning Commission deprived it of substantive due process under the Fourteenth Amendment by arbitrarily and capriciously applying the Zoning Ordinance to Patrick Henry Estates, thereby depriving it of its vested property right to develop the property as it was approved by the Planning Commission. Specifically, the Company alleged that the Zoning Ordinance unlawfully imposed twelve-foot side setback requirements on the subdivision. The Company contended that the setback requirements prevented it from developing the subdivision as approved and rendered the lots in the subdivision "virtually worthless." (J.A. at 10.)
12
To establish a denial of substantive due process, the Company must show that it was arbitrarily and capriciously deprived of a "cognizable property interest, rooted in state law." Scott v. Greenville County, 716 F.2d 1409, 1418 (4th Cir.1983); see also United Land Corp. of Am. v. Clarke, 613 F.2d 497, 501 (4th Cir.1980). The property interest must be more than a "unilateral expectation"; it must be a "legitimate claim of entitlement." Biser v. Town of Bel Air, 991 F.2d 100, 104 (4th Cir.1993) (quoting Board of Regents v. Roth, 408 U.S. 564, 577, 92 S.Ct. 2701, 2709, 33 L.Ed.2d 548 (1972)) (internal quotations omitted). "If there is no cognizable property interest, there is no need to reach the question of whether a purported deprivation was arbitrary or capricious." Gardner v. City of Baltimore Mayor & City Council, 969 F.2d 63, 68 (4th Cir.1992).
13
To establish that it possessed a protectible property interest under West Virginia law, the Company relied on Sec. 8-24-50 of the West Virginia Code, which provides that no zoning ordinance may
14
prohibit the continuance of the use of any land, building or structure for the purpose for which such land, building or structure is used at the time such ordinance or ordinances take effect.
15
W.Va.Code Sec. 8-24-50 (Michie 1990).5 The statute exempts pre-existing, nonconforming uses of land from compliance with subsequently enacted zoning ordinances. Cf. Longwell v. Hodge, 171 W.Va. 45, 297 S.E.2d 820, 823 (1982) ("grandfather" exceptions alleviate hardship of immediate compliance with new ordinance). The protections of the statute generally extend to existing uses, although the West Virginia Supreme Court of Appeals has recently recognized that in certain limited circumstances something less than actual use may constitute an "existing" non-conforming use. H.R.D.E., Inc. v. Zoning Officer, 189 W.Va. 283, 430 S.E.2d 341, 345 (1993). In determining whether a landowner has acquired a vested right to a nonconforming use, the court must consider
16
(1) whether the landowner has made substantial expenditures on the project;
17
(2) whether the landowner acted in good faith;
18
(3) whether the landowner had notice of the proposed zoning ordinance before starting the project at issue; and
19
(4) whether the expenditures could apply to other uses of the land.
20
Mere contemplated use or preparation or preliminary negotiations with contractors or architects will not vest the right to a nonconforming use.
21
Id. at 346.
22
Even under the most generous application of this test, the Company cannot establish a pre-existing, nonconforming use. The Company purchased Section D of Patrick Henry Estates after the Zoning Ordinance took effect and with actual knowledge that the Ordinance had been in effect for several months. Moreover, at the time of purchase the property was nothing more than raw land. By Lawrence Everhart's own admission, there were no roads, sidewalks, or other improvements; as Everhart testified, "[t]here was nothing there," (J.A. at 59). Because the Company had not expended substantial sums on Section D before the Zoning Ordinance took effect, the Company failed to establish a pre-existing, nonconforming use. H.R.D.E., at 346; see also Daniel R. Mandelker, Land Use Law Sec. 6.20, at 220 (2d ed. 1988) (generally, actual physical construction is necessary for development rights to vest). Consequently, the Company has no legitimate claim of entitlement under Sec. 8-24-50 to develop Section D without side setback requirements.
23
The Company makes much of the fact that the Planning Commission "approved" the subdivision plat for Patrick Henry Estates in 1985 and argues that the approval created a vested right to develop Section D as approved, i.e., without side setback requirements. This argument is tantamount to an assertion that, once approved, a subdivision plat is exempt from all future zoning and subdivision regulations. We can find no court that has adopted such a broad conception of vested rights.6 The very cases upon which the Company relies recognize the majority rule that even the issuance of a building permit--a part of the construction process that occurs long after the approval of a subdivision plat--does not vest rights against future changes in zoning regulations. See Littlefield v. Inhabitants of Lyman, 447 A.2d 1231, 1233 (Me.1982); Western Land Equities, Inc. v. City of Logan, 617 P.2d 388, 394 (Utah 1980); Smith v. Winhall Planning Comm'n, 140 Vt. 178, 436 A.2d 760, 761 (1981); cf. Harding v. Board of Zoning Appeals, 159 W.Va. 73, 219 S.E.2d 324, 332 (1975) (landowner not deprived of substantial vested right when building permit revoked by administrative action). Although the courts of West Virginia have not specifically addressed the legal effects of the approval of a subdivision plat, most jurisdictions apply the general rule recognized in H.R.D.E. that a landowner must make substantial expenditures on a subdivision before it will obtain a vested right to complete the subdivision. See, e.g., Lakeview Dev. Corp. v. City of S. Lake Tahoe, 915 F.2d 1290, 1294, 1298 (9th Cir.1990), cert. denied, --- U.S. ----, 111 S.Ct. 2890, 115 L.Ed.2d 1055 (1991); Avco Community Developers, Inc. v. South Coast Regional Comm'n, 17 Cal.3d 785, 790, 132 Cal.Rptr. 386, 389, 553 P.2d 546, 550 (1976), cert. denied, 429 U.S. 1083, 97 S.Ct. 1089, 51 L.Ed.2d 529 (1977); Sanderson v. Town of Greenland, 122 N.H. 1002, 453 A.2d 1285, 1287 (1982); Ramapo 287 Ltd. Partnership v. Village of Montebello, 165 A.D.2d 544, 568 N.Y.S.2d 492, 494 (App.Div.1991); Crater Club, Inc. v. Adirondack Park Agency, 86 A.D.2d 714, 446 N.Y.S.2d 565, 566-67 (App.Div.), aff'd, 57 N.Y.2d 990, 457 N.Y.S.2d 244, 443 N.E.2d 492 (1982); Town of Hillsborough v. Smith, 276 N.C. 48, 170 S.E.2d 904, 909 (1969); Clackamas County v. Holmes, 265 Or. 193, 508 P.2d 190, 192 (1973); see also Donald G. Hagman & Julian C. Juergensmeyer, Urban Planning & Land Development Control Law Sec. 5.11, at 155 (2d ed. 1986). Since the Company expended no resources to develop Section D of Patrick Henry Estates before the Zoning Ordinance took effect, it acquired no vested rights. See In re McCormick Management Co., 149 Vt. 585, 547 A.2d 1319, 1321-22 (1988) (rejecting developer's argument that it obtained vested development rights by filing its subdivision plat before enactment of local zoning ordinance).
24
Having failed to establish any protectible property interest, the Company cannot claim that the enactment of the Zoning Ordinance deprived it of that property interest without due process of law.7 Accordingly, we reverse the district court's denial of the Planning Commission's motion for judgment as a matter of law.
25
REVERSED.
1
The Company also claimed that its property had been taken without just compensation, but the district court directed a verdict for the Planning Commission on that claim. The Company has not appealed that decision
2
A "side setback requirement" is a requirement that any building constructed on a lot be "setback" a certain distance from the side property line. Neither the plat nor the covenants and restrictions of record for Patrick Henry Estates contained any side setback requirements
3
The Company has essentially conceded that the Zoning Ordinance unambiguously applied to its subdivision. The Company admitted in its appellate brief that, had Lawrence Everhart read the Ordinance, he would have realized that the "setback restrictions in Sec. 5.5(b) applied to preexisting subdivisions." (Brief of Appellee at 10.)
4
Between 1985 and 1988, the Company built 49 homes in Sections A and B of Patrick Henry Estates, some as close as five feet to the side line
5
The Jefferson County Zoning Ordinance contains a comparable "grandfather" provision. Zoning Ordinance Sec. 4.3
6
Moreover, neither West Virginia nor Jefferson County has enacted any statute or ordinance that creates vested rights in a plat approval
7
Similarly, the Company cannot claim that the enactment of Sec. 9.7, even if it were arbitrary, deprived it of any vested property interest. To the contrary, Sec. 9.7 augmented the Company's ability to develop its subdivision by reducing the side setback requirement from twelve feet to eight feet
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28 F.3d 1216
NOTICE: 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.John ISENHOWER, Defendant-Appellant.
No. 93-3755.
United States Court of Appeals, Seventh Circuit.
Argued June 14, 1994.Decided July 8, 1994.
Before ESCHBACH, COFFEY and FLAUM, Circuit Judges.
ORDER
Background
1
A jury found defendant John Isenhower guilty of two counts of wire fraud in violation of 18 U.S.C. Sec. 1343, for causing wire transfers of money from the accounts of Armed Forces veterans pursuant to a fraudulent scheme, and six counts of embezzlement in violation of 38 U.S.C. Sec. 35011 for taking money from accounts of veterans. Isenhower was sentenced to one year and one day in prison, and one year probation. On appeal, Isenhower challenges the sufficiency of the evidence.
2
When an incompetent veteran does not have sufficient money to hire a bank or attorney as a guardian, the Veteran's Administration (V.A.) appoints a fiduciary, who is to make money available to the veteran for rent, utilities, food, or other needs and reasonable wants. A fiduciary simply oversees and manages V.A. benefits and does not manage private funds belonging to the veterans. The fiduciaries submit accountings to the V.A. once a year. In 1984, Congress for the first time provided that such fiduciaries could be paid for these services. They could receive a fee of up to 4-percent of the annual V.A. funds paid to the veteran. Also in 1984, Isenhower, who had been working for the V.A., decided to open his own business where he would act as a fiduciary for incompetent veterans. He started a non-for-profit Illinois corporation called the Illinois Guardianship Services (IGS).
3
Within a short time, Isenhower became the fiduciary for 32 veterans who had been rated incompetent to handle their financial affairs. Using direct deposit, he caused the veterans' V.A. benefits or Social Security benefits to be deposited into IGS's fiduciary accounts. In the next few years, Isenhower acquired control of $552,000 for the veterans' accounts; he took $134,063 for himself.
Standard of Review
4
Isenhower acknowledges that the standard of review under Jackson v. Virginia, 443 U.S. 307, 319, 99 S.Ct. 2781, 2789 (1979), is "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." Isenhower asks that we instead require "substantial evidence that there was sufficient proof," which would ensure that the reviewing court will not be satisfied with only a "mere modicum" of proof. Isenhower argues that the Jackson "rule may also result in a 'misapplication of the constitutional standard of beyond a reasonable doubt." (Appellant Brief, p. 9, quoting Jackson, at 316.) This argument makes little sense. Neither this court nor any other court requires a "mere modicum" to uphold a criminal conviction. See, e.g., United States v. Santos, 1994 WL 96043 (7th Cir. March 25, 1994) ("[t]he verdict of a jury must be sustained if there was substantial evidence to support it. Glasser v. United States, 315 U.S. 60, 80 (1942)").
Sufficiency of the Evidence
5
The elements of wire fraud require proof that defendant devised or participated in the scheme to defraud; that defendant caused the interstate wire communications to take place in the manner charged for the purpose of carrying out the scheme; and that he did so knowingly and with intent to defraud. 18 U.S.C. Sec. 1343; Federal Criminal Jury Instructions of the Seventh Circuit, Seventh Circuit Committee, Vol. II (1984) at 89. Wire fraud is a specific intent crime. United States v. LeDonne, 21 F.3d 1418, 1428-1429 (7th Cir.1994); United States v. Draiman, 784 F.2d 248, 254 (7th Cir.1986).
6
Isenhower only contends that there was insufficient evidence of intent. The evidence presented to the jury included proof of intent to defraud the veterans and convert the money to his own use. Isenhower does not dispute that he took $134,063 out of a total of $552,085; and does not dispute the evidence that he paid himself for services he never rendered,2 paid himself for expenses that were not within the fiduciary agreement,3 and paid himself for unauthorized charges.4 Isenhower also began draining veterans' accounts into his own account after the V.A. began the investigation into his activities.5
7
The jury was entitled to find from this extensive and detailed evidence that Isenhower intended to commit wire fraud and embezzlement.
8
Isenhower argues, however, that the mere fact that he received $134,063 out of a total amount of funds of $552,085 was insufficient to demonstrate an intent to defraud. "The government's case rests on the unsupported inference that the expenditures, because of their volume and size alone, constituted substantial evidence of an intent to defraud...." This argument is hardly persuasive since the evidence of intent did not need to rely on volume or size.
9
Isenhower argues that there was no "secrecy" involved to establish intent. The fact that some of his actions were blatant does not mean they were not fraudulent. The evidence also shows, however, that Isenhower frequently lied or misrepresented facts to the veterans and the V.A., and to the veterans' families. For example, lack of candor was apparent when Veteran Hollingsworth learned that Isenhower had paid himself $300 for visiting Veteran Hollingsworth downstate, although the veteran did not appear for the appointment. The veteran later asked the V.A. to investigate the matter. The V.A. was told by Isenhower that he only decided to visit Hollingsworth because he "wanted to become acquainted with his veterans that he was assigned as a representative payee for that he had a sister who lived in the St. Louis area...."
10
Isenhower also insists that there were no "false accountings" submitted by him. The evidence shows otherwise. Isenhower filed grossly inaccurate accountings. For example, he reported to the V.A. that Veteran Joyce had paid him $8,700; the records showed that Isenhower actually took $15,708 from Joyce.
11
Isenhower argues that no one "testified that any of the expenditures were improper." As detailed above, the record shows quite the contrary.
12
And, Isenhower says, to prove the expenditures to himself were proper, the vast majority of the 4500 checks "had a notation regarding services rendered." This makes little difference where the evidence clearly established that the "services" were either not rendered, not necessary, or otherwise inappropriate.
13
Isenhower also contends that the evidence does not indicate that he knew about the 4% rule. There was testimony before the jury, however, that Isenhower was informed several times about the 4% rule. Moreover, with or without the 4% rule, Isenhower's conduct violated the law.
14
Isenhower seems to imply that the government should not be allowed to prove intent because the V.A. approved expenditures. Isenhower concedes that the approvals were probably in error, but adds that if the payments he received were excessive and the V.A. "dropp[ed] the ball," Isenhower could not have "known better," because he never received "notice about what he should have known." Isenhower cites no authority for this novel estoppel-like concept.
15
The V.A. apparently decided to approve three accountings because Isenhower had "already spent the money" meant for Veterans Haralson, Parke and Cotton. At the same time, however, Isenhower was told not to perform any further services for the veterans. Moreover, the jury was aware of these approvals when it found Isenhower guilty.
16
Finally, Isenhower argues that the "government brought utterly unreliable witnesses" who testified they did not remember Isenhower visiting the veterans. The credibility of witnesses who testified regarding whether or not Isenhower visited certain veterans is a question for the jury, not for this court. See United States v. Campbell, 985 F.2d 341, 344 (7th Cir.1993).
Conclusion
17
For these reasons, we AFFIRM the judgment of the district court.
1
Now codified at 38 U.S.C. Sec. 6101
2
Examples of charges for services not rendered:
Veteran Joyce was charged $882.15 for "monthly compensation" through December 31, 1986, despite the fact that he died on September 22, 1986. Veteran Joyce was also charged for 70 unexplained instances of "special correspondence."
Veteran Brown was charged for 26 visits; employee of residence shelter testified that Isenhower visited only one time, for 10 or 15 minutes, and twice a man who said he worked for Isenhower visited for 10 to 20 minutes.
Veteran Haralson was charged for 80 instances of "special correspondence"; his mother testified that Isenhower visited ten times to take his shopping and to court, but never provided counseling or educational services. Haralson's mother also gave Isenhower her son's car to sell, but never received any money for the car.
Veteran Kolmar was charged for 26 visits at $150 each; two of the nursing facility employees [Cindy Murphy and Glenda Alexander] testified that Isenhower never visited.
3
Examples of expenses not within the fiduciary agreement:
Isenhower charged for 251 "downstate visits" at $150 each; these visits unnecessary because veterans are either in a nursing home, or are visited (without charge) by social workers and field examiners.
Despite the fact that a VA social worker visited Veteran Stalling once each month, Stalling was charged for 12 visits by Isenhower. The person he lived with testified that Isenhower only visited twice for 20 minutes, and his employees visited once for a few minutes; they provided no counseling to the veteran.
Veteran Brown was charged $6,825, despite the fact that he was living in a residential shelter and was so dysfunctional that he remained mute and was unable to communicate or cooperate with field agents who visited him.
4
Example of unauthorized charges: Isenhower took title to a car purchased with funds belonging to Veteran Parke, and had Parke pay him twice (over $1,600) for "negotiating the purchase."
5
Examples of draining of accounts:
Isenhower said he was returning $1,406 from Veteran Batts to the V.A.; in fact, he took the total amount.
Isenhower asked the V.A. for $800 for Veteran Gnuse, and wrote a check to himself for $500 and to his wife for $300.
Isenhower closed Veteran Joyce's account and told the V.A. he would return $1,879 in overpayments; however, he sent only $1,243 to the V.A. and wrote himself a check for $744. Later, he emptied the account by writing himself a check for the remaining $3,791.
Isenhower closed Veteran Spears' account by writing himself a check for the total of $3,888.
Isenhower took $8,000 out of Veteran Kolmar's account, leaving only 56 cents.
Isenhower told the V.A. he had returned all funds to Veteran Haralson; two days later he emptied Haralson's accounts by writing a check to himself for $2,858.
Isenhower drained Veteran Stalling's account of $2,670; when the V.A. sent another $1,355, Isenhower took that, too.
Isenhower drained the funds for Veteran Ciuffini's widow of $1,059.
Finally, Isenhower closed out 32 accounts in February 1987; he refunded money on only 11 of the accounts.
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637 F.3d 373 (2011)
FG HEMISPHERE ASSOCIATES, LLC, Appellee
v.
DEMOCRATIC REPUBLIC OF CONGO, Appellant *374
Societe Nationale D'Electricite, Appellee.
Nos. 10-7040, 10-7046.
United States Court of Appeals, District of Columbia Circuit.
Argued February 4, 2011.
Decided March 15, 2011.
*375 Sharon Swingle, Attorney, U.S. Department of Justice, argued the cause for amicus curiae United States for appellant. With her on the brief were Tony West, Assistant Attorney General, Ronald C. Machen Jr., U.S. Attorney, Douglas N. Letter, Attorney, and Harold Hongju Koh, Legal Adviser, U.S. State Department.
Jeremy C. Martin argued the cause for appellant. On the briefs were Stephen F. Malouf and Jonathan A. Nockels.
Eric A. Shumsky argued the cause for appellee FG Hemisphere Associates, LLC. With him on the brief were Bradford A. Berenson, James W. Coleman, and Angela M. Xenakis. Neil H. Koslowe entered an appearance.
Before: GINSBURG and GARLAND, Circuit Judges, and SILBERMAN, Senior Circuit Judge.
Opinion for the court filed by SILBERMAN, Senior Circuit Judge.
SILBERMAN, Senior Circuit Judge:
This case, once pared down, is really less than meets the eye. To be sure, we encounter for the first time a contempt sanction imposed on a foreign sovereign in a proceeding brought under the Foreign Sovereign Immunities Act ("FSIA"). But there has been as yet no attempt to enforce the sanction (which could prove problematic).
FG Hemisphere's predecessor-in-interest (which we will refer to along with FG Hemisphere as "Hemisphere"), brought suit against the Democratic Republic of Congo ("DRC") under a provision of the FSIA permitting a plaintiff to confirm an arbitration award secured against a foreign sovereign. Following entry of a default judgment, and after the DRC began participating in the litigation, the district court sanctioned the DRC for failing to respond to court-ordered discovery. The DRC, supported by the United States as amicus, argues that such contempt sanctions are unavailable under the FSIA, and, in any event, are an abuse of discretion. We disagree.
I
In 1980, the DRC and its state-owned electric company entered into a credit agreement with Hemisphere to finance construction of an electric power transmission facility. The DRC failed to make the payments required of it under the agreement, and in 2003 Hemisphere began arbitration proceedings for those delinquent payments, obtaining two awards against the DRC. The DRC did not participate in arbitration.
Hemisphere sought judicial recognition of the arbitration awards against the DRC in 2004. Although foreign states are generally immune from the jurisdiction of U.S. courts, 28 U.S.C. § 1604, the FSIA contains several exceptions to this rule. One permits a plaintiff to bring suit against a sovereign "to confirm an award made pursuant to . . . an agreement to arbitrate," 28 U.S.C. § 1605(a)(6). Proceeding under this exception, Hemisphere sued the DRC. The DRC did not appear before the district court either to contest the court's jurisdiction or to litigate the merits of the arbitration award. Accordingly, the district court entered two default judgments against the DRC.
Hemisphere then sought to execute on the judgments. The FSIA limits the assets that are available to satisfy a judgment against a foreign sovereign. Where "the judgment is based on an order confirming an arbitration award," a plaintiff may only execute on "[t]he property in the United States of a foreign state . . . used for a commercial activity in the United *376 States." Id. § 1610(a)(6). In 2005, Hemisphere propounded post-judgment discovery requests to identify the DRC's commercial property in the United States available for execution. The DRC, by now participating in the litigation, failed to respond to these discovery requests, and in 2006 the district court, with the consent of both parties, imposed a two-part discovery plan. In part one, the court required the DRC to turn over information regarding any real property it owned located in the District of Columbia. In part two, the court required the DRC to provide information on any DRC assets valued over $10,000 and located outside the District of Columbia, both within the United States and in other countries where Hemisphere might seek to execute on its judgments.
The DRC never complied with part two of the discovery order. It produced only documents identifying real property within the District (which it claimed were immune from execution).[1] The district court concluded, therefore, that the DRC's responses "fell woefully short of compliance." FG Hemisphere Assocs., LLC v. Democratic Republic of Congo, 603 F.Supp.2d 1, 2 (D.D.C.2009). In March 2009nearly three-and-one-half years after Hemisphere first sought discovery and two years after the court ordered the DRC to produce documents in response to part two of the court's discovery planthe court, on Hemisphere's motion, found the DRC in civil contempt. It again ordered the DRC to comply with the outstanding discovery requests, and granted Hemisphere's request for fees and expenses resulting from the DRC's failure to comply with its discovery obligations. The court gave the DRC thirty days to complete discovery, or to show cause why a fine payable to Hemisphere should not be imposed in the amount of $5,000 per week, doubling every four weeks until reaching a maximum of $80,000 per week, until DRC satisfied its discovery obligations. Id. at 2-3.
Before the sanctions began accruing, the DRC moved to vacate the contempt order, arguing that the FSIA does not authorize contempt sanctions against foreign sovereigns. The DRC indicated that it had asked the United States to participate in the litigation and express its position on whether the district court may impose sanctions on a foreign sovereign. The government, however, did not appear before the district court. The court denied the DRC's motion a year later. This appeal followed, in which the government (four years after the DRC's request) has filed an amicus brief supporting the DRC.
II
The DRC's brief here embraced the government's amicus brief filed in a Fifth Circuit case, Af-Cap Inc. v. Republic of Congo, 462 F.3d 417 (5th Cir.2006), which presented a question similar to the one we consider here. Thereafter, the government *377 filed its amicus brief in this case, which closely follows its prior amicus brief. We therefore must first parse the government's argumentsand that is no mean feat. The government's position is quite confusing, conflating a contempt order imposing monetary sanctions with an order enforcing such an award through execution. The government emphasizes that under the FSIA, a court is quite limited in executing a judgment against a foreign sovereign, and that no provision of the FSIA explicitly permits a plaintiff to execute on a sovereign's assets to enforce a contempt order. It argues that since the district court could not enforce its civil contempt order against the DRC, the court should not have issued it. It is unclear whether the government is contending that the district court lacked the power under the FSIA to issue the contempt order, or only that equitable considerations counsel restraint, or both.
In its appeal to equity, the government advances several considerations to illustrate why the contempt sanctions were improper. These range from the asserted unseemliness of a court ordering a contempt sanction it cannot enforce (and the supposed unnecessary severity of the sanctions), to principles of comity arising from both international practice and the government's international relations concerns. The government also raises another equitable issue, one not presented by the DRC to either the district court or to us on appeal: the discovery order is allegedly overbroad because it seeks discovery on DRC assets that are not available for execution under the FSIA.
Hemisphere responds that the district court has inherent authority to issue civil contempt orders to control proceedingswhich neither the government nor the DRC really disputesand that the FSIA does not restrict that authority. Then, and central to its argument, it contends that we do not have before us even a shadow of an enforcement question; the district court has not attempted to execute on its contempt order. Both the government and the DRC blithely ignore this last point. Finally, Hemisphere defends the district court's order as within the court's discretion because of the DRC's obdurate refusal to comply with the discovery order.
* * *
The FSIA is a rather unusual statute that explicitly contemplates that a court may have jurisdiction over an action against a foreign state and yet be unable to enforce its judgment unless the foreign state holds certain kinds of property subject to execution. See De Letelier v. Republic of Chile, 748 F.2d 790, 798-99 (2d Cir.1984) (plaintiff may hold a right without a remedy under the FSIA). Otherwise a plaintiff must rely on the government's diplomatic efforts, or a foreign sovereign's generosity, to satisfy a judgment. Therefore, it is not anomalous to divide, as Hemisphere does, the question of a court's power to impose sanctions from the question of a court's ability to enforce that judgment through execution. Hemisphere's contention that whether the court can enforce its contempt sanction is irrelevant to the availability of a contempt order is consistent with the statutory scheme.
* * *
It is incontrovertible that federal courts enjoy inherent contempt power. See Spallone v. United States, 493 U.S. 265, 276, 110 S.Ct. 625, 107 L.Ed.2d 644 (1990); Young v. United States ex rel. Vuitton et Fils, S.A., 481 U.S. 787, 795, 107 S.Ct. 2124, 95 L.Ed.2d 740 (1987); Shillitani v. United States, 384 U.S. 364, 370, 86 S.Ct. 1531, 16 L.Ed.2d 622 (1966). That power runs with a court's jurisdiction, see 11A Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 2960 (2d ed. 2010), and jurisdiction here *378 is undeniable. Although Congress can limit that authority, it must do so through a "clear and valid legislative command," Porter v. Warner Holding Co., 328 U.S. 395, 398, 66 S.Ct. 1086, 90 L.Ed. 1332 (1946), a command that will not be "`lightly assume[d],'" Chambers v. NASCO, 501 U.S. 32, 47, 111 S.Ct. 2123, 115 L.Ed.2d 27 (1991) (quoting Weinberger v. Romero-Barcelo, 456 U.S. 305, 313, 102 S.Ct. 1798, 72 L.Ed.2d 91 (1982)).
As the Seventh Circuit has recognized, there is not a smidgen of indication in the text of the FSIA that Congress intended to limit a federal court's inherent contempt power. Autotech Techs. v. Integral Research & Dev., 499 F.3d 737, 744 (7th Cir.2007). Nor is there any legislative history supporting such a claim. Indeed, the House Report to the FSIA demonstrates that Congress kept in place a court's normal discovery apparatus in FSIA proceedings. See H.R.Rep. No. 94-1487, at 23 (1976), 1976 U.S.C.C.A.N. 6604, 6621 ("The bill does not attempt to deal with questions of discovery. Existing law appears to be adequate in this area."). And the same report illustrates that Congress specifically contemplated that contempt sanctions would be available under the FSIA as a remedy for discovery violations:
[If] a private plaintiff sought the production of sensitive governmental documents of a foreign state, concepts of governmental privilege would apply. Or if a plaintiff sought to depose a diplomat in the United States or a high-ranking official of a foreign government, diplomatic and official immunity would apply. However, appropriate remedies would be available under Rule 37, F.R. Civ. P., for an unjustifiable failure to make discovery.
Id. (emphasis added); see also Fed. R.Civ.P. 37(b)(2)(A)(vii) (sanctions available for failure to abide by court-ordered discovery).
The government points only to the testimony of a State Department deputy legal advisor asserting that although the FSIA does not "explicitly preclud[e] a court from imposing a fine on a foreign state [for] failure to comply with a court order," the legislative history of the statute "suggests" that such sanctions would be unavailable. Foreign Sovereign Immunities Act: Hearing on H.R. 1149, H.R. 1689, and H.R. 1888 Before the Subcomm. on Admin. Law and Government Relations of the H. Comm. on the Judiciary, 100th Cong. 19 (1987), reprinted in 2 William H. Manz, Foreign Sovereign Immunities Act of 1976 with Amendments: A Legislative History of Pub.L. No. 94-583 (2000). But this statement seems to us to be more a wish than an interpretationthe legislative history supports precisely the opposite proposition. Paradoxically, the deputy legal advisor took a different position a year earlier, urging Congress to limit the availability of contempt sanctions against foreign states. See Arbitral Awards: Hearing on H.R. 3106, H.R. 3137, F.R. 4342, and H.R. 4592 Before the Subcomm. on Admin. Law and Government Relations of the H. Comm. on the Judiciary, 99th Cong. 52 (1986), reprinted in 1 Manz, supra.
To be sure, the Fifth Circuit in Af-Cap Inc., upon which the government and the DRC heavily rely, held that a contempt order requiring the Republic of Congo to pay money into the court's registry and send its business associates notice of an outstanding judgment was inconsistent with the FSIA. The court concluded that "[sections 1610 and 1611 of the FSIA] describe the available methods of attachment and execution against property of foreign states. Monetary sanctions are not included." Af-Cap, 462 F.3d at 428. *379 Although the Seventh Circuit in Autotech distinguished Af-Cap on the grounds that the Fifth Circuit did not purport to decide the antecedent "power" question, i.e. whether the statute precluded the contempt order, see Autotech Techs., 499 F.3d at 745, it does seem to us that the Fifth Circuit accepted the government's litigating effort to conflate the power to impose a contempt sanction with the authority to enforce it (as we noted, the government apparently filed a similarly confusing brief in that case). In any event, since the Fifth Circuit never considered the distinction between the two types of orders, we do not regard its decision as persuasive.[2] We agree with the Seventh Circuit that contempt sanctions against a foreign sovereign are available under the FSIA.
III
As we noted, both the DRC and the United States assert that principles of equity and comity demonstrate that the district court should not have imposed sanctions here. We review a district court's contempt finding and the imposed sanctions for abuse of discretion. In re Fannie Mae Secs. Litig., 552 F.3d 814, 818 (D.C.Cir.2009).
The government's and the DRC's reasons for appealing to equitable discretion are rather insubstantial. The firstthat a court should not issue an unenforceable ordersimply quarrels implicitly with the statutory scheme, and therefore can be easily dismissed. The second is that the district court's contempt order was excessive, because it is more onerous than necessary to cure appellant's intransigence. We do not see how that argument can seriously be advanced in light of the DRC's continued intransigence. The suggestion that adverse evidentiary presumptions could be employed seems puerile because judgment has already been rendered. Perhaps even more nonsensical is the government's assertion that the district court should have ordered "targeted discovery" as a sanction for the DRC's contemptuous failure to respond to discovery.
Third, the government argues, more seriously, that the discovery order is overbroad because it seeks information on property that is not subject to attachment or execution under the FSIAindeed it reaches property beyond the United States, outside of the district court's jurisdiction. We simply cannot entertain this argument because it was not raised before the district court in opposition to the contempt order and it was not even presented by the DRC before us; it was only raised in the government's amicus brief. Although, as we observe below, there might be unusual circumstances where the government could raise a new issue as amicus in the court of appeals, this is certainly not one of them. It would be patently unfair to Hemisphere, and disrespectful to the district judge, for us to entertain such an issue first in the court of appeals. See Eldred v. Reno, 239 F.3d 372, 378 (D.C.Cir.2001).[3]
* * *
We turn to the government's and the DRC's comity arguments based on international *380 practice and, as a separate although related matter, the government's foreign relations concerns. Although it may be true, as the government contends, that at least several countries have explicitly prohibited monetary sanctions against a foreign state for refusal to comply with a court order, that seems quite irrelevant because our Congress has not. And we should bear in mind that our discovery process is extraordinarily extensive compared to that of most foreign legal systems. See Joseph W. Dellapenna, Suing Foreign Governments and Their Corporations 652-53 (2d ed. 2003)
The government also suggests that we should be concerned about the consequences of affirming the district court's order given possible reciprocal treatment of the United States in foreign courts. Although we often give consideration to the government's assertion that a legal action involves sensitive diplomatic considerations, we only defer to these views if reasonably and specifically explained. See Altmann, 541 U.S. at 702, 124 S.Ct. 2240. The government does not explain how the United States would be harmed if it were found in contempt under reciprocal circumstances. The broad, generic argument that the government offers here seems to us to be appropriately presented to Congressnot us. The government, moreover, did not present its foreign policy concerns to the district court. We do recognize that there could be circumstances in which particular pressing foreign policy concerns involving a defendant country could affect a court's decision, and those concerns, depending on their timing, could justify the government's presenting those matters first in an amicus brief in the court of appeals, but the government has not presented any such argument in this case.[4]
IV
We hold today only that the FSIA does not abrogate a court's inherent power to impose contempt sanctions on a foreign sovereign, and that the district court did not abuse its discretion in doing so here. The district court's order is
Affirmed.
NOTES
[1] These documents identified two properties that had housed DRC diplomatic officials until the mid-1990s, when political disruptions resulted in their removal from office, but not from the residences. The district court entered an execution order to enforce the judgment against these properties. Several months later, the DRC filed a motion to quash the execution order, arguing that its failure to respond earlier was due to "excusable neglect," and that the properties were immune from execution under the FSIA. The district court denied the motion; we reversed and remanded, explaining that the DRC had shown excusable neglect. See FG Hemisphere Assocs., LLC v. Democratic Republic of Congo, 447 F.3d 835, 836 (D.C.Cir.2006). We also suggested that the properties likely were not subject to execution. See id. at 843. Hemisphere decided not to seek enforcement of its judgments against these properties. Nevertheless, the DRC reproduced the documents identifying the diplomatic properties in response to part two of the discovery orderan obvious non sequitur.
[2] The government requests that we give deference to its conclusion that the FSIA does not permit a court to enforce a contempt sanction. But that is not the issue before us, and in any event, the request for deference is doctrinally unsound. Although the views of the United States on the meaning of FSIA "are of considerable interest . . ., they merit no special deference." Republic of Austria v. Altmann, 541 U.S. 677, 701, 124 S.Ct. 2240, 159 L.Ed.2d 1 (2004).
[3] If the DRC were to comply with the discovery order regarding property in the United States, the district court might modify the contempt order.
[4] The DRC also opines that the contempt sanctions may be detrimental to the United States's relationship with the DRC. But the views of a party that is not the United Stateseven a foreign sovereignon the effect of a particular legal action on United States foreign policy are not entitled to deference.
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774 F.2d 1158
28 Ed. Law Rep. 33
*Fordv.Stone
84-3858
United States Court of Appeals,Fifth Circuit.
9/17/85
M.D.La.,599 F.Supp. 693
AFFIRMED
1
---------------
* Fed.R.App.P. 34(a); 5th Cir.R. 34.2.
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Case: 15-14934 Date Filed: 07/19/2016 Page: 1 of 5
[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 15-14934
Non-Argument Calendar
________________________
D.C. Docket No. 3:09-cr-00361-HES-JRK-1
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
OSBORNE COCKETT,
Defendant-Appellant.
________________________
Appeal from the United States District Court
for the Middle District of Florida
________________________
(July 19, 2016)
Before MARCUS, WILLIAM PRYOR and JULIE CARNES, Circuit Judges.
PER CURIAM:
Osborne Cockett, appealing pro se, appeals the district court’s denial of his
18 U.S.C. § 3582(c)(2) motion for a sentence reduction. On appeal, Cockett
argues that, despite his career-offender designation, he is eligible for a reduction
Case: 15-14934 Date Filed: 07/19/2016 Page: 2 of 5
because the district court fashioned his sentence based on his non-career-offender
guideline range. After careful review, we affirm.
We review de novo the district court’s legal conclusions regarding the scope
of its authority under 18 U.S.C. § 3582(c)(2) and for clear error the factual findings
underlying those legal conclusions. United States v. Davis, 587 F.3d 1300, 1303
(11th Cir. 2009). Pursuant to § 3582(c)(2), a district court may reduce a
defendant’s term of imprisonment if: (1) the defendant’s sentence was based upon
a guideline range that the Sentencing Commission subsequently lowered; and (2) a
reduction is consistent with applicable policy statements issued by the Sentencing
Commission. 18 U.S.C. § 3582(c)(2). A reduction is not consistent with the
Guidelines’ policy statement if the amendment does not have the effect of lowering
the defendant’s applicable guideline range. U.S.S.G. § 1B1.10(a)(2)(B). The
“applicable guideline range” is the range “determined before consideration of any
departure provision in the Guidelines Manual or any variance.” Id. § 1B1.10,
comment. (n.1). “[C]ommentary in the Guidelines Manual that interprets or
explains a guideline is authoritative unless it violates the Constitution or a federal
statute, or is inconsistent with, or a plainly erroneous reading of, that guideline.”
Stinson v. United States, 508 U.S. 36, 38 (1993).
In order to obtain a reduction in a term of imprisonment based on an
amendment to the Sentencing Guidelines, the relevant amendment must be listed in
2
Case: 15-14934 Date Filed: 07/19/2016 Page: 3 of 5
§ 1B1.10(d). See U.S.S.G. § 1B1.10(a)(1). Amendment 782 -- which is listed in §
1B1.10(d) -- therefore may serve as the basis for a sentence reduction. Id. §
1B1.10(d). Amendment 782 reduced by two levels the base offense levels that
apply to most drug offenses in § 2D1.1. See U.S.S.G. App. C, Amend. 782 (2014).
We’ve explained that § 3582(c)(2) only authorizes a reduction to sentences
that were “based on” sentencing ranges that were subsequently lowered. United
States v. Moore, 541 F.3d 1323, 1327 (11th Cir. 2008). Thus, because the
defendants in Moore were sentenced as career offenders under § 4B1.1, they were
ineligible for relief, since only their base offense levels, but not their guideline
ranges, were impacted by the retroactive guideline amendment. Id. at 1327-30.
In this case, the district court did not have the authority to reduce Cockett’s
sentence pursuant to § 3582(c)(2). Section 3582(c)(2) allows a sentence reduction
only if it is consistent with the applicable policy statement of the Sentencing
Guidelines. 18 U.S.C. § 3582(c)(2). The policy statement in § 1B1.10 requires a
court to determine the amended guideline range that would have been applicable to
the defendant if the amendment had been in effect at the time of sentencing.
U.S.S.G. § 1B1.10(b)(1). In Cockett’s case, that range is the career offender range.
Therefore, regardless of whether the district court based Cockett’s final variant
sentence, in part, on the guideline range that would have been applicable if he was
not a career offender, Cockett is a career offender and the guideline range
3
Case: 15-14934 Date Filed: 07/19/2016 Page: 4 of 5
applicable to Cockett has not been reduced by Amendment 782. U.S.S.G. §
1B1.10(a)(2)(B).
As for Cockett’s reliance on Freeman v. United States, 564 U.S. 522 (2011),
we are unpersuaded. There, a four-justice plurality of the Supreme Court
concluded that a defendant sentenced pursuant to a particular sentencing
recommendation in his Fed. R. Crim. P. 11(c)(1)(C) plea agreement typically
would still be eligible for relief under § 3582(c)(2). The plurality reached this
conclusion on the ground that, before a district court imposes a recommended
sentence, it is required to consider whether the sentence is reasonable in light of the
applicable guideline range. See Freeman, 564 U.S. at 530-34. In a concurring
opinion, however, Justice Sotomayor noted that, typically, a defendant sentenced
pursuant to a particular sentencing recommendation in his plea agreement is not
eligible for relief under § 3582(c)(2) because the recommended sentence is based
on the agreement itself, and not on the applicable guideline range. Id. at 534. She
recognized, on the other hand, that where an agreement expressly uses the
guideline range applicable to the charged offense to establish the term of
imprisonment, the term of imprisonment is based on the guideline range. In those
cases, she concluded, the defendant would be eligible for relief under § 3582(c)(2).
Id. We’ve said that this narrower concurring opinion can be viewed as the holding
of Freeman. United States v. Lawson, 686 F.3d 1317, 1321 n.2 (11th Cir. 2012).
4
Case: 15-14934 Date Filed: 07/19/2016 Page: 5 of 5
Regardless of its precise holding, we’ve made clear that Freeman did not
overrule Moore. Id. We’ve also held that Freeman is inapplicable to the issue of
whether a district court has authority to reduce a sentence in the case of a
defendant sentenced as a career offender. Id. at 1320-21. Freeman, therefore, did
not alter the analysis we use in cases like Cockett’s. See id. Accordingly, he is not
entitled to relief under § 3582(c)(2), and we affirm.
AFFIRMED.
5
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2017 IL App (3d) 160683
Opinion filed August 8, 2017
_____________________________________________________________________________
IN THE
APPELLATE COURT OF ILLINOIS
THIRD DISTRICT
2017
In re COMMITMENT OF ) Appeal from the Circuit Court
JAMES VANCE ) of the 10th Judicial Circuit,
) Tazewell County, Illinois,
(The People of the State of Illinois, )
)
Petitioner-Appellee, ) Appeal No. 3-16-0683
) Circuit No. 05-MR-91
v. )
)
James Vance, ) Honorable
) Paul P. Gilfillan,
Respondent-Appellant). ) Judge, Presiding.
_____________________________________________________________________________
JUSTICE LYTTON delivered the judgment of the court, with opinion.
Presiding Justice Holdridge and Justice Wright concurred in the judgment and opinion.
_____________________________________________________________________________
OPINION
¶1 Respondent, James Vance, appeals from the trial court’s order, finding that probable
cause did not exist to warrant an evidentiary hearing to determine if respondent was no longer a
sexually violent person. On appeal, respondent argues that the court erred in granting the State's
motion for a finding of no probable cause. We affirm.
¶2 FACTS
¶3 In September 2009, respondent was adjudicated a sexually violent person under the
Sexually Violent Persons Commitment Act (Act) (725 ILCS 207/1 et seq. (West 2008)) and
committed to the Department of Human Services (DHS). After a December 2009 dispositional
hearing, the court ordered respondent placed in a secure facility for institutional care and
custody.
¶4 On May 4, 2016, Dr. Richard Travis conducted a 77-month reevaluation as required by
the Act. Following his evaluation, the State filed a motion for a finding of no probable cause to
believe that respondent was no longer a sexually violent person under section 65 of the Act (725
ILCS 207/65(b) (West 2016)) and attached Dr. Travis’s reevaluation report in support of its
claim.
¶5 In his report, Dr. Travis concluded that respondent should continue to be found a sexually
violent person and remain in DHS custody. He based his evaluation on numerous sources,
including his review of respondent’s criminal history, an interview with respondent, and DHS
treatment progress reports.
¶6 Travis noted that respondent’s underlying sexual offense occurred from January to June
of 1993. During those six months, defendant sexually assaulted his five-year-old stepdaughter by
penetrating her mouth, vagina, and anus with his penis on several occasions. Respondent also
revealed to investigators that three years before he assaulted his stepdaughter he sexually
assaulted an eleven-year-old girl. He was charged with four counts of aggravated criminal sexual
assault and pleaded guilty to one count. The trial court sentenced him to 20 years in prison. After
his release in 2003, respondent violated his parole twice by leaving home without permission and
having direct contact with a minor.
¶7 Based on his review of the record and respondent’s interview, Travis concluded that
respondent met the American Psychiatric Association, Diagnostic and Statistical Manual of
Mental Disorders, Fifth Edition, DSM-5 (2013) criteria for (1) pedophilic disorder, nonexclusive
2
type, sexually attracted to females; (2) other specified personality disorder, with antisocial and
histrionic features; (3) alcohol use disorder and cannabis use disorder, in sustained remission in a
controlled environment; and (4) other specific anxiety disorder, limited-symptom attacks. Travis
opined that respondent continued to pose a substantial risk of reoffense and that “his current
dynamic risk factors and treatment needs fall within the high range.”
¶8 Travis also used the Static-99R and Static-2002R evaluations. Respondent’s scores on
both actuarial assessments placed him in the low to moderate risk category. However, respondent
displayed several additional factors shown to increase risk of reoffense, including (1) sexual
interest in children, (2) any personality disorder, (3) MMPI Pd Scale elevated, (4) general self-
regulated problems, (5) poor problem solving skills, (6) employment instability, (7) substance
abuse, (8) pro-criminal attitudes, (9) childhood behavior problems, (10) attitudes tolerant of
sexual crimes, and (11) violation of conditional release. In support of the additional risk factors,
Travis reported that respondent violated the conditions of his mandatory supervised release by
having contact with and kissing a minor female. He also noted that respondent was arrested in
2005 for a parole violation and that a search of his residence produced a videotape containing
numerous images of naked children. Travis concluded that these additional risk factors supported
the use of a “high risk/high needs” designation as respondent’s risk assessment.
¶9 Travis reported that no protective factors decreased respondent’s risk of reoffense. He
noted that respondent had not completed sex offender treatment and failed to attend treatment to
address his sex offense history. Although respondent began participating in sex offense specific
treatment, he withdrew from the program during the review period. Travis also stated that
respondent’s age of 49 did not merit reduction in his risk assessment beyond that already
reflected in his actuarial scores.
3
¶ 10 After reviewing respondent’s commitment history and DHS treatment reports, Travis
stated that respondent’s condition has not changed since the most recent reexamination. He
highlighted respondent’s sporadic participation in sex offense treatment and noted that
respondent “is not yet fully engaged in sex-offense-specific treatment.” He also noted that
respondent had previously reported disturbing sexual thoughts about his offending history and
recently indicated that those troubling thoughts and nightmares continued. Travis concluded that
respondent had not made sufficient progress in treatment to merit conditional discharge.
¶ 11 Respondent filed a motion seeking the appointment of an independent expert, which the
trial court granted. On June 17, 2016, respondent then filed his response to the State’s motion for
a finding of no probable cause. At a subsequent status hearing in September, counsel for
respondent informed the court that respondent would not be using the report authorized by his
independent expert, Jane Velez, and would only be using her as a consultant.
¶ 12 At the probable cause hearing, the State argued, based on Travis’s report, that there was
no probable cause to warrant an evidentiary hearing. Respondent countered that he had attended
treatment sessions, learned from those sessions, and made sufficient progress for conditional
release or discharge.
¶ 13 The trial court stated that it had read and considered the reexamination report and
concluded there was no probable cause for an evidentiary hearing. The court then granted the
State’s motion.
¶ 14 ANALYSIS
¶ 15 Respondent’s sole contention on appeal is that the trial court erred in finding no probable
cause was shown to warrant an evidentiary hearing to determine whether he is still a sexually
violent person.
4
¶ 16 Following a commitment under the Act, the DHS is responsible for evaluating the
individual's mental condition within 6 months of the initial commitment and again thereafter at
least every 12 months. 725 ILCS 207/55(a) (West 2016). The purpose of these examinations is to
determine if the committed individual has made sufficient progress to be conditionally released
or discharged. 725 ILCS 207/55(a) (West 2016).
¶ 17 At the time of each reexamination under the Act, the committed person receives notice of
the right to petition the circuit court for discharge. 725 ILCS 207/65(b)(1) (West 2016). If the
committed person does not affirmatively waive that right, like respondent in this case, the court
must “set a probable cause hearing to determine whether facts exist to believe that since the most
recent periodic reexamination ***, the condition of the committed person has so changed that he
or she is no longer a sexually violent person.” 725 ILCS 207/65(b)(1) (West 2016). At a probable
cause hearing, the court only reviews the reexamination reports and hears the parties' arguments.
725 ILCS 207/65(b)(1) (West 2016). If the court finds that probable cause does exist, it must set
an evidentiary hearing on the issue. 725 ILCS 207/65(b)(2) (West 2016). Since the trial court
only considers the reexamination reports and other documentary evidence, our review of the
court's finding of no probable cause is de novo. See In re Commitment of Wilcoxen, 2016 IL App
(3d) 140359, ¶ 28.
¶ 18 At a probable cause hearing, the trial court’s role is “to determine whether the movant has
established a plausible account on each of the required elements to assure the court that there is a
substantial basis for the petition.” (Emphasis in original and internal quotation marks omitted.) In
re Detention of Stanbridge, 2012 IL 112337, ¶ 62 (quoting In re Detention of Hardin, 238 Ill. 2d
33, 48 (2010)). For a respondent to receive an evidentiary hearing under section 65(b)(2) of the
Act, the court must find a plausible account exists that the respondent is “no longer a sexually
5
violent person.” 725 ILCS 207/65(b)(2) (West 2016). Thus, a respondent is only entitled to an
evidentiary hearing if plausible evidence shows that the respondent (1) no longer suffers from a
mental disorder or (2) is no longer dangerous to others because his or her mental disorder no
longer creates a substantial probability he or she will engage in acts of sexual violence.
Stanbridge, 2012 IL 112337, ¶ 68; 725 ILCS 207/5(f), 15(b) (West 2016)). Under the Act,
“substantially probable” means “much more likely than not.” In re Commitment of Curtner, 2012
IL App (4th) 110820, ¶ 37.
¶ 19 This case advanced to a discharge proceeding after respondent elected not to waive his
right to petition for discharge. See 725 ILCS 207/65(b)(1) (West 2016). After the filing of the
State's motion for a finding of no probable cause, which was accompanied by Travis's
reexamination report, the court set the matter for a probable cause hearing. Because respondent
did not actively petition for a discharge, the probable cause hearing consisted only of a review of
the reexamination report and arguments on behalf of the parties. See 725 ILCS 207/65(b)(1)
(West 2016).
¶ 20 At the hearing, respondent had to present sufficient evidence to warrant an evidentiary
hearing to determine whether he is “no longer a sexually violent person.” 725 ILCS 207/65(b)(2)
(West 2016). To satisfy this standard, respondent was required to present evidence that he no
longer meets the elements for commitment because he (1) no longer has a mental disorder or (2)
is no longer dangerous to others because his mental disorder no longer creates a substantial
probability that he will engage in acts of sexual violence. See Stanbridge, 2012 IL 112337, ¶ 68.
¶ 21 Respondent did not satisfy his burden. The evidence at the probable cause hearing
consisted only of the report provided by the State's evaluator, Dr. Travis. Travis’s report
diagnosed respondent with pedophilic disorder and other specified personality disorder. This
6
diagnosis was based on Travis’s review of respondent’s records, which indicated that respondent
suffered from recurrent intense sexually arousing thoughts about his offending history with his
five-year-old stepdaughter. Respondent’s records also showed that he violated his parole and that
a search of his residence revealed a videotape with images of naked children. Travis documented
that respondent was at a high risk of reoffending. Travis’s report also stated that respondent
withdrew from DHS treatment and failed to complete sex offense specific therapy. This evidence
established that respondent continued to suffer from a mental disorder and that his mental
disorder continued to create a substantial probability that he will engage in acts of sexual
violence. See 725 ILCS 207/5(f), 15(b) (West 2016). Therefore, the trial court did not err in
granting the State’s motion for a finding of no probable cause to warrant an evidentiary hearing.
¶ 22 CONCLUSION
¶ 23 The judgment of the circuit court of Tazewell County is affirmed.
¶ 24 Affirmed.
7
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273 Cal.App.2d 148 (1969)
THE PEOPLE, Plaintiff and Appellant,
v.
ROBINSON WHITING COULON et al., Defendants and Respondents.
Crim. No. 5105.
California Court of Appeals. Third Dist.
May 20, 1969.
Thomas C. Lynch, Attorney General, Jack R. Winkler and Michael H. Fabian, Deputy Attorneys General, for Plaintiff and Appellant.
James E. Kleaver and William Heidewald, Public Defenders, and Larry G. Bacon, Assistant Public Defender, for Defendants and Respondents.
FRIEDMAN, J.
Defendants were charged with possession of two marijuana cigarettes. At their preliminary examination and again by a motion to set aside the information, they *151 claimed invalidity of the search warrant which produced the cigarettes, urging unconstitutional vagueness of the warrant and supporting affidavits. The superior court granted the motion to set aside the information and the People appeal.
One of the two affidavits, that of a Siskiyou County deputy sheriff, reported information received by another police department from an informant who said that during the early morning hours of July 5, 1968, he had driven with four persons to a "hippy [sic] ranch" somewhere in the Iron Gate Dam area; that these persons delivered six kilos of marijuana, plus methedrine, "smack," mescaline and LSD to "some hippies who took it into the house on the ranch;" that darkness prevented the informer from describing the location in more detail.
The next day, July 6, another deputy sheriff executed an affidavit stating that he was familiar with all the ranches in the northeastern portion of Siskiyou County; that in January 1968 he had been at the "Old Quadros Ranch" assisting in a narcotics arrest. The affidavit continued: "[T]he Old Quadros Ranch ... is the only ranch in the northeast portion of the county which is regularly occupied by hippies. The owner of the ranch is absent, and the premises are leased or otherwise occupied with the consent of the owner by hippies. When I was on the premises in January, 1968, there were ten adults and two children who claimed to be living in the house. At that time the smell of marijuana was very strong in the house, but none was observed."
"The premises consist of 640 acres, approximately, upon which there is a house, barn, and two outbuildings. I have today [i.e., July 6, 1968] observed, in addition, 1 tepee and 5 campsites on the premises and seven adults who appeared to be at home on the place, some in typical hippy [sic] garb, some naked, doing gardening, carrying water, and other household chores."
On the basis of these affidavits a magistrate issued a search warrant commanding search of "the house, outbuildings, tepees, and campsites at the Old Quadros Ranch in Siskiyou County, as well as the persons in residence there for the following: Marijuana, methedrine, heroin, morphine, mescaline, and LSD. ..."
Armed with a search warrant, a group of peace officers raided the Old Quadros Ranch at about 5:30 a.m. the next day, July 7. Defendant Coulon and his codefendant, Miss Gooley, were living in a camp near a creek on the ranch. A *152 deputy sheriff came up the creek to the camp. They were in bed when he arrived. He told them why he was there and proceeded to search the area of their camp. Miss Gooley asked to make a pot of coffee. As she was doing so, the deputy saw her reach into a brown jar and withdraw two items. He asked her for them and she gave him two marijuana cigarettes, saying, "I guess you've got us."
In addition to the house and outbuildings, there were five campsites on the Old Quadros Ranch, three of which were occupied. The creekside camp of defendants was 300 yards upstream from the nearest campsite. No other inhabited place could be seen from defendants' camp. One officer estimated the number of ranch inhabitants at 18 to 20, but another observed only seven or eight adults and two children.
[1] Constitutional concepts condemn "general" search warrants with little or no restriction on the area of search; both the affidavit upon which it is based and the warrant itself must describe the place of search with particularity; the requirement of particularity is met if the description is such that the searching officers can, with reasonable effort, ascertain and identify the place intended. [fn. 1] [2] In the case of dwellings, the "place" is usually a single living unit, that is, the residence of one person or family; a warrant directing a search of an apartment house or dwelling place containing multiple living units is void unless issued on probable cause for searching each separate living unit or believing that the entire place is a single living unit; a group of adults, nevertheless, may share a single dwelling unit as a common residence, and a warrant describing that unit as the "place" to be searched is constitutionally adequate. [fn. 2]
In support of the warrant, the people argue that the activities of the hippies on the ranch "indicate a back-to-nature type of communal living" which qualified the entire ranch as a single living unit or household. We apply several criteria to *153 this contention. [3] The first is the general standard voiced by the federal Supreme Court for testing and interpreting search affidavits: "If the teachings of the Court's cases are to be followed and the constitutional policy served, affidavits for search warrants, such as the one involved here, must be tested and interpreted by magistrates and courts in a commonsense and realistic fashion. They are normally drafted by nonlawyers in the midst and haste of a criminal investigation. Technical requirements of elaborate specificity once exacted under common law pleadings have no proper place in this area. A grudging or negative attitude by reviewing courts toward warrants will tend to discourage police officers from submitting their evidence to a judicial officer before acting."
[4] "... where ... circumstances are detailed, where reason for crediting the source of the information is given, and when a magistrate has found probable cause, the courts should not invalidate the warrant by interpreting the affidavit in a hypertechnical, rather than a commonsense, manner." (United States v. Ventresca (1965) 380 U.S. 102, 108-109 [13 L.Ed.2d 684, 688-689, 85 S.Ct. 741].)
[5] A parallel notion is expressed in California rules which view issuance of a search warrant as a judicial act of the magistrate (Dunn v. Municipal Court (1963) 220 Cal.App.2d 858, 869 [34 Cal.Rptr. 251]) and enjoin a reviewing court to upset a warrant only if it fails as a matter of law. (People v. Govea, supra, 235 Cal.App.2d at p. 297.)
[6] Another criterion is the California doctrine of judicial notice. A court may recognize facts "of generalized knowledge that are so universally known that they cannot reasonably be the subject of dispute." (Evid. Code, 451, subd. (f).)
[7] Viewed by these criteria, the term "hippies" has a limited (but only a limited) significance here. "Hippie" has wide currency as a description of contemporary social phenomenon. The term denotes an unconventional young person in rebellion against competitive middle-class values, who usually consorts with his own kind and tends to symbolize his rebellion through hirsuteness and picturesque garb. [fn. 3] As a *154 group description, it signifies persons sharing a limited set of common characteristics. In college communities many students adopt the external appearance of hippies, making the term dubious as a physical identification. In a rural area such as Siskiyou County common sense and judicial notice combine to permit recognition of the term as a generalized description of external appearance, adequate for the purpose of group identification.
[8] In the trial court defendants urged that the informant had been able to identify only the general location of the narcotics delivery point; that the deputies had no probable cause to pinpoint the Old Quadros Ranch as the location of contraband; hence that the search warrant failed. The informant had provided the officers with two clues to the delivery point: first, that it was a ranch somewhere in the Iron Gate Dam area; second, that persons whom he described as hippies took the narcotics into the ranch house. The officers had several pieces of preexisting information: one, that Old Quadros Ranch was in the same general area; two, that this was the only ranch in the area regularly occupied by persons described as hippies; three, that the ranch house had once been redolent of marijuana. Since persons physically described as hippies were identified at the ranch where the narcotics were received and at the Old Quadros Ranch as well and since the latter had a past association with narcotics, the officers could reasonably entertain an honest and strong suspicion that the ranch visited by the informant had been the Old Quadros Ranch, a suspicion which the magistrate could appropriately accept as probable cause for accepting the latter as the contraband's location.
At that point the term "hippie" exhausts its value. To view the appellation as evidence of specific behavior at the specific time and place bursts the boundary of judicial notice. As an individual, the magistrate could reasonably suppose that some hippies live communally. (See fn. 3, supra.) Acting judicially, he could not accept that supposition as evidence *155 that the particular hippies inhabiting the Old Quadros Ranch were living in a single communal establishment. [9] Since no inference of communal living may be drawn from the term "hippies," the warrant's sufficiency must rest upon other factors.
[10] In determining the validity of the search warrant, the primary question is "whether the affiant had reasonable grounds at the time of his affidavit and the issuance of the warrant for the belief that the law was being violated on the premises to be searched ..." [fn. 4] [11] In brief, the warrant's validity depends upon the showing before the magistrate at the time it was issued. [fn. 5] Consequently, the courts hold that a warrant showing probable cause for searching an entire establishment has continued validity even after the search reveals the existence of separate dwellings within the establishment. [fn. 6] [12] If the affidavits show advance awareness of sufficient facts, the magistrate may justifiably find probable cause for the search of the entire premises even though occupied by different families or tenants. [fn. 7]
The present case is unlike those dealing with apartments or rooming houses physically and figuratively divided into separate households and separate tenancies. [13] The zones of privacy protected by the Fourth Amendment are not so much a product of physical or legal boundaries as of Fourth Amendment purpose. The constitutional demand for particularity seeks to protect the privacy of innocent persons by limiting the search to the place where there is probable cause to believe the search object is located. (See Camara v. Municipal Court, fn. 9, infra.) [14] The authority to search for contraband and seize it on described premises extends "to all parts of the premises used for the unlawful purpose." [fn. 8]*156
[15] The affidavits portrayed to the magistrate a single establishment, a large rural property occupied by a house, outbuildings and camps. The camps were separated by space alone, undivided by physical boundaries or the figurative lines of separate tenancies. Of so much the officers were aware. Beyond that, they knew only that a sizeable quantity of narcotics had been delivered at the ranch house and that a group of adults and children inhabited the house and surrounding ranch property. Concerning these people, their familial relationships, their living arrangements, their identification with one area or another of the ranch, their mobility or stability in relation to any particular sleeping and cooking site, the officers knew nothing. There was no reason to assume that the narcotics remained in the ranch house or that the persons who had taken it into the ranch house continued to inhabit that particular structure. Rather, there was probable cause to believe that the contraband, either in bulk or in distributed portions, might be found anywhere on the ranch. To trace the narcotics to compressed spheres of suspicion within the general confines of the ranch would have entailed an elaborate undercover investigation or a self-frustrating giveaway. [fn. 9] The entire ranch was suspect. *157
Since the magistrate did not err in finding probable cause for a search of the buildings and camps on the Old Quadros Ranch, the search warrant was valid.
Order reversed with instructions to deny the motion.
Janes, J., concurred.
PIERCE, P. J.
I dissent.
The majority opinion expands the scope of the search warrant beyond that justified by the affidavits which supported its issuance.
Courts in their appraisal of affidavits filed for such purpose take into consideration--and rightly so--that they are not prepared with the forethought, care and deliberation one may expect in the drafting of other legal instruments. Frequently they are prepared by laymen and usually--if they are to be effectual--they must be prepared in haste. But there are limits to tolerance. In drawing inferences, magistrates and courts may not take off into the wild blue yonder--not if any semblance of obedience to Fourth Amendment rights is to be observed.
The logic of the majority opinion breaks down in its next-to-last paragraph. After having demonstrated that no inferences of communal living can be drawn from use of the term "hippies," the majority opinion then states that the affidavits showed a "single establishment." That is just what the affidavits did not show. Both the prosecutor and the Attorney General recognized this and tried to correct the deficiency by attaching meaning to the term "hippies."
There is no basis in the affidavits for the majority's statement that the campsites were separated by space alone, for the affidavits described neither the topography of the ranch nor the physical relationship of the campsites to the main house. This was pertinent information if the house was a suspected distribution center for the ranch as the majority assumes. Nor is there a basis for the majority's statement that there were no separate tenancies. The affidavits reveal the officers' ignorance of the living arrangements and familial relationships of the inhabitants of the ranch. The majority opinion acknowledges that ignorance but concludes that there was probable cause to believe that the contraband might be found anywhere on the ranch. This conclusion does not logically follow from the officers' ignorance of the living patterns of the inhabitants. Rather than stating that the officers should have obtained *158 information linking the contraband to each person or place to be searched, the majority has declared that "[t]he entire ranch was suspect."
The majority opinion, in order to fill the gap between that declaration and the officers' apparent ignorance, asserts that Camara v. Municipal Court (1967) 387 U.S. 523 [18 L.Ed.2d 930, 87 S.Ct. 1727], is authority for the proposition that, in determining whether there is probable cause to make a search, the investigatory difficulties of law enforcement officers may be weighed against the breadth and character of the search to be made. Camara does not support the use to which the majority puts it. If that were indeed the law, the Fourth Amendment would bar few searches. The Fourth Amendment always hampers, and often frustrates, the investigatory aims of law enforcement. Camara dealt with administrative searches, and specifically disclaimed any intention to affect the rules applicable to searches in the enforcement of the criminal law. [fn. 1] Camara allowed a lesser standard of probable cause to justify administrative searches in the enforcement of housing, fire, health, etc., codes. Camara did not weigh enforcement difficulties against intensity of the search in deciding what constitutes probable cause. Rather it allowed a lesser standard of probable cause to justify an administrative search where there was unanimous consent in the administrative field that there could not be an acceptable level of code enforcement under the traditional probable cause test, and where the search involved a lesser invasion of personal privacy and dignity because it would focus on house facilities such as gas and plumbing systems and on possible accumulation of garbage and debris rather than on the person and his more personal property. [fn. 2] Thus these factors in Camara were added together and not weighed against each other as stated by the majority.
The decision in this case is far-reaching. Six hundred forty acres, besides being a square mile, is also a section of land. In the less populated areas and in the mountains of California there are no doubt thousands of "Old Quadros Ranches" where people either with the express or tacit permission of the owners hunt, fish, and camp. To the many persons pitching *159 camp on such lands, their camps--under the majority opinion--are no longer their castles.
The Britannica article cites an intensive sociological study of 50 residents of the Haight-Ashbury "scene" chosen because of their costume and manner: "... Only 14% lived alone, 25% shared quarters with 10 or more people; 2% were above the age of 30, 60% between 16 and 21, 36% between 22 and 30, and 2% under 16; 69% were employed; 70% were from outside California, 60% from cities; 68% had some college education; 44% had a father who went to college and 46% a mother who went to college; 96% stated that they at some time had smoked marijuana, 90% that they had taken LSD, but 'very few' had ever tried any of the addictive drugs, such as heroin." (Encyclopedia Britannica, 1968 Book of the Year, pp. 790-791; see also, Hughes v. Rizzo (1968) 282 F.Supp. 881, 882.)
Inferably, investigatory practicalities form a weight which, among others, is to be thrown on the scales.
NOTES
[fn. 1] 1. U.S. Const., Fourth Amendment; Penal Code, section 1525; Stanford v. Texas (1965) 379 U.S. 476, 481-483 [13 L.Ed.2d 431, 434-435, 85 S.Ct. 506]; Steele v. United States (1925) 267 U.S. 498, 503 [69 L.Ed. 757, 760, 45 S.Ct. 414]; People v. Fitzwater (1968) 260 Cal.App.2d 478, 486 [67 Cal.Rptr. 190]; People v. Estrada (1965) 234 Cal.App.2d 136, 145 [44 Cal.Rptr. 165, 11 A.L.R.3d 1307].
[fn. 2] 2. People v. Govea (1965) 235 Cal.App.2d 285, 300 [45 Cal.Rptr. 253]; People v. Layne (1965) 235 Cal.App.2d 188, 192 [45 Cal.Rptr. 110]; People v. Gorg (1958) 157 Cal.App.2d 515, 523 [321 P.2d 143]; see also United States v. Hinton (7th Cir. 1955) 219 F.2d 324, 326; People v. Rogers (1969) 270 Cal.App.2d 705, 711 [75 Cal.Rptr. 919]; Note, 11 A.L.R.3d 1330, at pp. 1341-1343.)
[fn. 3] 3. In an article entitled "The Flower Children," the Encyclopedia Britannica quotes the following definition: "The hippies are escapists from the affluent society that produces and sustains them. They are opposed to the everyday middle aged values of affluent America--its commercialism, mechanism and bureaucracy; its car culture, hygiene and unquestioned acceptance of the work ethic and the quick buck."
[fn. 4] 4. Dumbra v. United States (1925) 268 U.S. 435, 441 [69 L.Ed. 1032, 1036, 45 S.Ct. 546]; see also, United States v. Poppitt (D.C.Del. 1964) 227 F.Supp. 73, 77; Williams v. Justice Court (1964) 230 Cal.App.2d 87, 94 [40 Cal.Rptr. 724]; Arata v. Superior Court (1957) 153 Cal.App.2d 767, 773 [315 P.2d 473].
[fn. 5] 5. United States v. Hinton, supra, 219 F.2d at p. 326.
[fn. 6] 6. Minovitz v. United States (D.C. Cir. 1962) 298 F.2d 682, 684 [112 App. D.C. 21]; United States v. Santore (2d Cir. 1960) 290 F.2d 51, 66-67, cert. den. 365 U.S. 834 [5 L.Ed.2d 744, 81 S.Ct. 749]; Carney v. United States (6th Cir. 1935) 79 F.2d 821, 822; United States v. Poppitt, supra, 227 F.Supp. at pp. 77-78; United States v. Nagle (Dist. Ct. N.Y. 1929) 34 F.2d 952, 956.
[fn. 7] 7. Hogrefe v. United States (9th Cir 1929) 30 F.2d 640, 641; Tynan v. United States (9th Cir. 1924) 297 F. 177; see cases cited fn. 2, supra.
[fn. 8] 8. United States v. Rabinowitz (1950) 339 U.S. 56, 62 [94 L.Ed. 653, 658, 70 S.Ct. 430], quoting Marron v. United States (1927) 275 U.S. 192, 199 [72 L.Ed. 231, 238, 48 S.Ct. 74]. Our attention has been called to the "open fields" rule which, according to some authorities, denies Fourth Amendment protection to "enclosed or unenclosed grounds or open fields" around a house (see Hester v. United States (1924) 265 U.S. 57 [68 L.Ed. 898, 44 S.Ct. 445]; People v. Shields (1965) 232 Cal.App.2d 716, 719-721 [43 Cal.Rptr. 188]; see, however, Wattenburg v. United States (9th Cir. 1968) 388 F.2d 853, 856-858.) The rule has been invoked as an aid in determining whether a warrantless search violates permissible territorial limits. Here, in contrast, the problem is validity of the warrant, a problem created before the search and turning upon a determination whether the foray allowed by the magistrate is broader than the zone of probable cause revealed by the affidavits.
[fn. 9] 9. It is now clear that Fourth Amendment requirements of reasonableness and probable cause entail a weighing process, in which the governmental interest alleged to justify the official intrusion into privacy is weighed against the intrusion's breadth and character. "To apply this standard [of probable cause], it is obviously necessary first to focus upon the governmental interest which allegedly justifies official intrusion upon the constitutionally protected interests of the private citizen. ... In determining whether a particular inspection [search] is reasonable--and thus in determining whether there is probable cause to issue a warrant for that inspection--the need for the inspection must be weighed in terms of these reasonable goals of code [i.e., law] enforcement. ... [T]here can be no ready test for determining reasonableness other than by balancing the need to search against the invasion which the search entails." (Camara v. Municipal Court (1967) 387 U.S. 523, 534-537 [18 L.Ed.2d 930, 938-940, 87 S.Ct. 1727].)
[fn. 1] 1. "... Such an approach neither endangers time-honored doctrines applicable to criminal investigations nor makes a nullity of the probable cause requirement in this area." (18 L.Ed.2d at p. 941.)
[fn. 2] 2. See LaFave, Administrative Searches and the Fourth Amendment, 1967 Supreme Court Review 1, 11-20.
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740 F.2d 972
Ihlenfeldtv.Wisconsin Telephone Co.
83-2301
United States Court of Appeals,Seventh Circuit.
7/30/84
1
E.D.Wis.
DISMISSED
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United States Court of Appeals
FOR THE EIGHTH CIRCUIT
___________
No. 01-3697
___________
Laxman S. Sundae, *
*
Appellant, *
*
v. * Appeal from the United States
* District Court for the District
W.D. Schock Company; William D. * of Minnesota.
Schock; Ralph E. White; Robert B. *
Swenson; L. James Fortman; Dean C. * [UNPUBLISHED]
Larson, doing business as *
International Idea Institute, *
*
Appellees. *
___________
Submitted: April 25, 2002
Filed: April 30, 2002
___________
Before WOLLMAN, FAGG, and MORRIS SHEPPARD ARNOLD, Circuit Judges.
___________
PER CURIAM.
Laxman S. Sundae appeals the district court's order denying Sundae's Federal
Rule of Civil Procedure 60(b) motion. All of Sundae's arguments in support of
setting aside the district court's judgment could have been, but were not, raised in a
timely appeal from the underlying judgment. Because Sundae's motion raised only
"previously ruled upon legal matter[s] that he could have raised on a timely appeal,
the district court was not required to grant relief under Rule 60(b) as a substitute for
[Sundae's] exercising his right to appeal the alleged error[s]." See Sanders v. Clemco
Indus., 862 F.2d 161, 170 (8th Cir. 1988). We thus affirm the district court's order.
See 8th Cir. R. 47B.
A true copy.
Attest:
CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.
-2-
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442 F.2d 92
77 L.R.R.M. (BNA) 2067, 65 Lab.Cas. P 11,683
NATIONAL LABOR RELATIONS BOARD, Petitioner,v.INTERNATIONAL MOLDERS AND ALLIED WORKERS UNION, LOCAL No.125, AFL-CIO, Respondent.
No. 18439.
United States Court of Appeals, Seventh Circuit.
April 23, 1971.
Arnold Ordman, Gen. Counsel, Dominick L. Manoli, Associate Gen. Counsel, Marcel Mallet-Prevost, Asst. Gen. Counsel, Warren M. Davison, Deputy Asst. Gen. Counsel, Judith P. Wilkenfeld, Atty., N.L.R.B., Washington, D.C., for petitioner.
Robert E. Gratz, Milwaukee, Wis., Gratz & Shneidman, Milwaukee, Wis., for respondent.
Before KILEY, KERNER and STEVENS, Circuit Judges.
1
erner, c/ircuit Judge.
2
The National Labor Relations Board seeks enforcement of its cease and desist order and finding that the respondent, International Molders and Allied Workers Union, Local 125, AFL-CIO (Union), had violated 8(b)(1)(A) of the National Labor Relations Act, 29 U.S.C. 158(b)(1)(A). The Board decided that it was an unfair labor practice for the Union to assess a $100 fine against one of its members, Dorothy Strzyzewski, who had circulated a petition for decertification of the Union as the exclusive bargaining representative of the employees at the Blackhawk Tanning Company. The Union determined that her decertification activities were an attempt 'to undermine or injure the interests' of the Union, a violation under its constitution. Miss Strzyzewski was notified of the charge and chose not to appear at the hearings, commenting that 'if you feel you want to suspend me from your union-- be my guest.' She has not paid the fine, and the Union has taken no action to enforce collection.
3
Section 8(b)(1)(A) makes it an unfair labor practice for a union 'to restrain or coerce employees in the exercise of the rights' guaranteed to them by 7 of the Act, which includes the right not to organize or be represented by a union. However, 8(b)(1)(A) also contains a proviso which gives a union the right to prescribe rules governing the acquisition and retention of membership even though the enforcement of these rules may coerce employees in the exercise of their 7 rights. Thus, 8(b)(1)(A) and its proviso envision a balancing of the rights of the union against the rights of employees and members on a case by case basis. Some union practices which are inherently coercive under 8(b) (1)(A) such as fining or expulsion, are permissible under the proviso if they are within the legitimate interests of the union and do not contravene any other public policy enunciated in the Act. Scofield v. N.L.R.B., 394 U.S. 423, 89 S.Ct. 1154, 22 L.Ed.2d 385 (1969); N.L.R.B. v. Allis-Chalmers Mfg. Co., 388 U.S. 175, 87 S.Ct. 2001, 18 L.Ed.2d 1123 (1967).
4
The issue this appeal presents is whether the proviso to 8(b)(1)(A) allows a union to fine a member for attempting to secure its decertification under the procedures of 9 of the National Labor Relations Act, 29 U.S.C. 159.1
5
Both the imposition of fines and expulsion by a union have been recognized as inherently coercive within the meaning of 8(b)(1)(A). Although the proviso to 8(b)(1)(A) protects some union actions which coerce its members, it has been held that a union may not discipline a member, by fine or expulsion, for bringing a complaint against it under 8 of the Act. Cannery Workers Union (Van Camp Sea Food), 159 N.L.R.B. 843 (1966); Local 138, International Union of Operating Engineers, AFL-CIO and Charles S. Skura, 148 N.L.R.B. 679 (1964). A member who believes that the union has committed an unfair labor practice under 8 should not be punished for seeking the aid of the Board. The Board in Skura, after weighing the right of a union to govern its internal affairs against the rights of employees under 7, concluded that:
6
'* * * no private organization should be permitted to prevent or regulate access to the Board, and a rule * * * by means of which a union seeks to prevent or limit access to the Board's processes is beyond the lawful competency of a labor organization to enforce by coercive means.' 148 N.L.R.B. at 682.
7
See N.L.R.B. v. Industrial Union of Marine and Shipbuilding Workers of America, AFL-CIO, et al., 391 U.S. 418, 88 S.Ct. 1717, 20 L.Ed.2d 706 (1968).
8
On the other hand, it has been held that a union may expel a member for bringing a petition for its decertification before the Board under 9 of the Act. Price v. N.L.R.B., 373 F.2d 443 (9th Cir. 1967), cert. denied 392 U.S. 904, 88 S.Ct. 2051, 20 L.Ed.2d 1363 (1968); Tawas Tube Products, Inc., 151 N.L.R.B. 46 (1965). These cases explain that the filing of a petition for decertification, unlike the filing of an unfair labor practice charge under 8, attacks the very existence of the union as the exclusive bargaining agent. In light of this threat, the proviso to 8(b)(1)(A) justifies a defensive reaction by the union such as expulsion of a member who has filed a petition for decertification with the Board. Otherwise, these cases explain, a retained member would be privy to the union's tactics and other information during the pre-election campaign. Expulsion eliminates the presence of an antagonistic member whose disloyalty would pose such problems to the union.
9
The use of a fine, however, does not serve these defensive purposes. Once a member pays the fine, he retains his membership and is able to attend meetings and learn of union strategy during the decertification, pre-election and election periods. The assessment of a fine is not calculated to protect the threatened union. Its only effect is to punish a member who wishes to oust the union as the exclusive bargaining representative. This cannot be justified under the proviso to 8(b)(1)(A) in the face of the strong policy which allows union members unimpeded access to the Board. In contrast to the defensive nature of expulsion, the imposition of a fine on a member who has utilized the 9 decertification procedures would be as unfair as its imposition for those who proceeded before the Board under 8.
10
Punishment by a union of its members who have circulated a decertification petition would discourage them from utilizing the Board to settle disputes relating to their working conditions. See N.L.R.B. v. Industrial Union of Marine and Shipbuilding Workers of America, AFL-CIO, et al., at 424, 425, 88 S.Ct. 1717. For the Board to order a new election under 9, it must be presented with a petition signed by 'a substantial number' of the employees. Such was attempted in this case under the leadership of Miss Strzyzewski. This procedure requires that the employees who are dissatisfied with the union take independent action and carry on a campaign for signatures. Since the initiative of employees and union members is needed for 9 to operate effectively, the circulation of the petition should be conducted in an atmosphere free from union threats and coercion.
11
For these reasons, we hold that the fine in this case constituted an unfair labor practice under 8(b)(1)(A).
12
The Union additionally argues that it was denied due process by the Board because it believes that the issue we have just resolved-- the propriety of the fine under 8(b)(1)(A)-- was not framed in the complaint nor fully litigated. It claims that the only issue of which it had notice was whether Miss Strzyzewski was a full-fledged member of the Union and thus liable to pay the fine. A reading of the complaint and transcript of the hearing convinces us that the Union was fully apprised of all the issues disposed of in this case. The complaint, in clear language, charges that the fine was an unfair labor practice under 8(b)(1)(A). Granted, Miss Strzyzewski's membership status was an issue before the Board and, logically, was decided before the substantive question of the Union's liability under 8(b)(1)(A) could be reached. But, its relevance was as a threshold issue to the determination of the legality of the fine. We cannot believe that the Union did not have notice of the 8(b)(1)(A) issue, which formed the gravamen of the complaint.
13
Accordingly, we enforce the order of the Board.
14
Order enforced.
1
Section 102.60(a) of the Board's Rules and Regulations (Series 8), 29 C.F.R. 102.60, provides that a petition for decertification under 9 'may be filed by an employee or group of employees or any individual or labor organization acting in their behalf or by an employer.' After filing the Board may order an election, and the union may lose its power as the exclusive bargaining agent
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United States Court of Appeals
For the First Circuit
No. 02-2698
UNITED STATES OF AMERICA,
Appellant,
v.
LAWRENCE F. MAGUIRE,
Defendant, Appellee.
ERRATA
The opinion of this court issued March 3, 2004, should be
amended as follows:
On page 10, line 3, substitute "Medford" for "Malden"
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United States Court of Appeals
Fifth Circuit
F I L E D
IN THE UNITED STATES COURT OF APPEALS
September 14, 2007
FOR THE FIFTH CIRCUIT
Charles R. Fulbruge III
Clerk
No. 06-11192
In The Matter Of: JORGE L. QUINTANA, SR.,
Debtor,
-----------------------------------------
JORGE L. QUINTANA, SR.,
Appellant,
versus
AMERICAN GENERAL HOME EQUITY, INC.,
Appellee.
Appeal from the United States District Court
for the Northern District of Texas
(06-CV-699)
Before GARWOOD, JOLLY, and STEWART, Circuit Judges.
PER CURIAM:1
In a prior proceeding, Jorge Quintana (Quintana) moved to
vacate American General Home Equity, Inc.’s (AGHE) judgment lien
against his property. That motion was adjudicated and denied,
1
Per 5th Cir. R. 47.5, the court has decided that this
opinion should not be published and is not precedent except under
those limited circumstances set forth by 5th Cir. R. 47.5.4.
explicitly with prejudice, by the Bankruptcy Court for the Northern
District of Texas on January 9, 2006. In the subsequent bankruptcy
court proceedings that form the basis for this appeal, Quintana
renewed his claim that AGHE’s lien should be vacated because it had
been extinguished by a prior New York state court ruling;
additionally, he claimed that the lien was void because AGHE failed
to file a proof of claim. The bankruptcy court correctly denied
Quintana’s renewed claim because it was res judicata due to the
January 9, 2006 judgment, then currently pending appeal. Matter of
West Tex. Mktg. Corp., 12 F.2d 497, (5th Cir. 1994) (holding that
a dismissal with prejudice is a decision on the merits); Fidelity
Standard Life Ins. Co., v. First Nat’l Bank & Trust Co. of Vidalia
Ga., 510 F.2d 272, 273 (5th Cir. 1975) (holding that a judgment
pending appeal is res judicata unless and until reversed on
appeal). The bankruptcy court also correctly dismissed Quintana’s
second argument because a creditor need not file a proof of claim
in order to maintain his lien. 11 U.S.C. § 506(d); Matter of
Taylor, 132 F.3d 256, 260–61 (5th Cir. 1998).
For the foregoing reasons, the judgment of the district court
is affirmed.
AFFIRMED.
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IN THE COURT OF CRIMINAL APPEALS
OF TEXAS
NO. AP-76,647
EX PARTE JIMMIE MARK PARROTT, JR., Applicant
ON APPLICATION FOR WRIT OF HABEAS CORPUS
CAUSE NO. 1227343-B IN THE 230TH DISTRICT COURT FROM
HARRIS COUNTY
H ERVEY, J., filed a dissenting opinion in which K EASLER, J., joined.
DISSENTING OPINION
I respectfully dissent. The majority holds that Applicant has failed to show harm
because he “was previously convicted of other offenses that support the punishment range
within which he was admonished and sentenced,” but it discounts the unique nature of
plea-bargained agreements and is inconsistent with our treatment of other plea-bargain
situations. Applicant is facing an illegal sentence pursuant to his plea-bargain, and the
notions of due process require that we allow Applicant to withdraw his plea.
Parrott - 2
I. BACKGROUND
On October 5, 2009, Applicant was indicted for the third-degree-felony offense of
theft over $20,000 and less than $100,000. See T EX. P ENAL C ODE § 31.03(e)(5). The
indictment also alleged two enhancement paragraphs. The first paragraph alleged that
Applicant had been previously convicted of the unauthorized use of a motor vehicle in
Harris County on February 17, 1997, and the second alleged that Applicant had been
previously convicted of theft in Harris County on May 12, 1999. Both prior convictions
were state-jail felonies. See T EX. P ENAL C ODE § 31.03(e)(4)(A) (1999); T EX. P ENAL
C ODE § 31.07(b) (1997).
On January 21, 2010, Applicant entered into a plea agreement with the State. The
plea papers reflect that the State abandoned the first enhancement paragraph, which
alleged the unauthorized use of a motor vehicle. That enhancement paragraph was
scratched out, and a hand-written notation read, “State abandons this enhancement.”
However, the State proceeded with the second enhancement paragraph, which alleged
Applicant’s previous theft conviction. Although the State initially drew a single line
through the second enhancement paragraph and added a hand-written notation stating,
“State abandons enhancement,” that notation was subsequently crossed out, and another
notation was added confirming, “This enhancement is valid.” Consistent with the plea
papers, Applicant initialed the following admonishment:
THIRD DEGREE FELONY WITH ONE ENHANCEMENT: if a third
degree felony is enhanced with one prior felony conviction a term of not
Parrott - 3
more than 20 years or less than 2 years in the [I]nstitutional Division of the
Texas Department of Criminal Justice, and in addition, a fine not to exceed
$10,000.00 may be assessed[.]
On January 22, 2010, in accordance with the terms of the plea-bargain agreement,
the trial court sentenced Applicant to fifteen years’ confinement in the Texas Department
of Criminal Justice–Institutional Division (TDCJ-ID), a sentence within the second-
degree-felony punishment range.1 Initially, the face of the judgment was silent as to how
Applicant pled to the enhancement paragraphs and the trial court’s finding as to each.
However, the trial court, on its own motion, entered a judgment nunc pro tunc correcting
the judgment to reflect that the first enhancement paragraph was abandoned and that
Applicant entered a plea of true to the second enhancement paragraph.2
Applicant had been previously convicted of three felonies. Specifically, Applicant
was convicted of the felony offense of aggravated robbery in Harris County on November
12, 1982, the felony offense of theft by receiving in Harris County on June 14, 1985, and
the felony offense of arson in Montgomery County on March 12, 1998.
Applicant filed a notice of appeal, but the appeal was dismissed because he had no
right to appeal per the plea-bargain agreement. Parrott v. State, No. 14-10-00160-CR,
2010 Tex. App. LEXIS 2363 (Tex. App.—Houston [14th Dist.] Apr. 1, 2010, no pet.)
1
See TEX . PENAL CODE § 12.42(a) (1999). The punishment for a second-degree felony is
“imprisonment in the Texas Department of Criminal Justice for any term of not more than 20
years or less than 2 years.” Id. § 12.33(a).
2
The judgment nunc pro tunc also added two days of extra jail credit.
Parrott - 4
(memo. op., not designated for publication). A second appeal was also dismissed.
Parrott v. State, No. 14-10-00450-CR, 2011 Tex. App. LEXIS 4546 (Tex.
App.—Houston [14th Dist.] June 16, 2011, no pet.) (memo. op., not designated for
publication).
On December 27, 2010, Applicant filed this application for writ of habeas corpus 3
and alleged, inter alia, that his sentence was not authorized by statute. Applicant argues
that the two listed enhancements were state-jail felonies, which could not have been used
to enhance the punishment range for his third-degree felony offense. Thus, Applicant
alleges that his sentence was illegal because the range for a third-degree felony
(unenhanced) is two to ten years.
The trial court entered findings of fact and conclusions of law recommending that
relief be denied because Applicant has been previously convicted of other felony offenses
that could be substituted for the improper enhancements. We ordered that this application
be filed and set for submission to determine the following: (1) whether the consideration
of an illegal sentence claim raised on habeas corpus is confined to the enhancement
paragraphs listed in the charging instrument or whether, if other convictions were
available at the time of sentencing, the enhanced punishment range would be proper even
3
Applicant has filed two prior mandamus applications and one prior habeas application
regarding this cause. The prior habeas application was dismissed because it was filed while the
direct appeal was still pending in this case. Ex parte Parrott, No. WR-45,442-04 (Tex. Crim.
App. 2010). This application is therefore the first habeas application that will be addressed on
the merits for this case.
Parrott - 5
though the convictions listed as enhancements in the charging instrument were not
available for use for some reason; and (2) whether a defendant is estopped from raising an
illegal sentence claim when he knew at the time of sentencing that the enhancement
paragraph as alleged was improper, but agreed to the sentence pursuant to a plea bargain
agreement. Parrott v. State, No. AP-76,647, 2011 Tex. Crim. App. Unpub. LEXIS 728
(Tex. Crim. App. Sept. 28, 2011) (per curiam, not designated for publication). We also
requested that the parties brief these issues. Id.
II. ESTOPPEL
It is necessary to initially determine whether Applicant is estopped from raising his
illegal-sentence claim in this writ application. Rather than address the issue we granted,
the majority summarily dismisses it by failing to address it. I will address this point,
however, not only because we granted the issue but because it is a doctrine that could
prove important in future cases.
“[E]stoppel is a flexible doctrine that manifests itself in various forms that are not
limited to unilateral requests.” See Rhodes v. State, 240 S.W.3d 882, 891 (Tex. Crim.
App. 2007). In Rhodes, we addressed the two types of estoppel relied on by the State in
this case: estoppel by judgment and estoppel by contract. Estoppel by judgment provides
that “[o]ne who accepts the benefits of a judgment, decree, or judicial order is estopped to
deny the validity or propriety thereof, or of any part thereof, on any grounds; nor can he
reject its burdensome consequences.” Id. (quoting 31 C.J.S. Estoppel & Waiver § 130).
Parrott - 6
The only exception to this is for challenges to the subject-matter jurisdiction of the court
rendering the judgment. Id. Estoppel by contract means that “a party who accepts
benefits under a contract is estopped from questioning the contract’s existence, validity,
or effect.” Id. (citing 31 C.J.S. Estoppel & Waiver § 124).
In Rhodes, the appellant had received a judgment that was illegally lenient by
having his sentences run concurrently instead of consecutively.4 We held that he was
estopped from complaining of the illegal sentence because “[a] defendant who has
enjoyed the benefits of an agreed judgment prescribing a too-lenient punishment should
not be allowed to collaterally attack that judgment on a later date on the basis of the
illegal leniency.” Id. at 892. The applicant had agreed to the concurrent sentencing and
“then through his own conduct he helped procure and benefit from the illegality and he
should not now be allowed to complain.” Id.
In contrast to that case, Applicant is not estopped from complaining of an illegal
sentence here. The record is silent as to Applicant’s knowledge of the impropriety of the
enhancement. Further, when Applicant entered the plea agreement, the State had
abandoned the first enhancement paragraph, and only the second enhancement paragraph
remained. Thus, Applicant pled guilty to a third-degree felony enhanced by one prior
4
The defendant in Rhodes was sentenced to serve two additional felony convictions, for
escape and theft, while he was serving time in prison for two previous felonies. Rhodes, 240
S.W.3d at 884. The defendant’s escape sentence provided that it was to run concurrent with the
theft conviction. Id. However, Texas Code of Criminal Procedure Article 42.08 states that such
sentences must run consecutively. Id.
Parrott - 7
conviction, for which the appropriate punishment range was two to twenty years’
imprisonment. T EX. P ENAL C ODE §§ 12.33(a), 12.42(a)(3) (2009). The punishment term
bargained for, fifteen years, is within that range, so Applicant did not benefit from a “too-
lenient” plea agreement. To assume that Applicant benefitted from the terms of the plea
agreement because the State could have re-pled proper enhancements, potentially
subjecting Applicant to a minimum sentence of 25 years under the habitual offender
provision,5 is to engage in speculation regarding the various considerations that might
have factored into the plea bargaining and agreement. Accordingly, Applicant is not
estopped from raising his illegal-sentence claim.
III. ILLEGAL SENTENCE
Turning to the merits of Applicant’s claim, I believe that Applicant has shown that
he is entitled to relief because his sentence is illegal due to the improper use of a state-jail
felony for enhancement. This is true even though other convictions were available at the
time of sentencing that could have been properly used for enhancement.
A claim of an illegal sentence is cognizable on a writ of habeas corpus. Ex parte
Rich, 194 S.W.3d 508, 511 (Tex. Crim. App. 2006). A sentence that is outside the
maximum or minimum range of punishment is unauthorized by law and therefore illegal.
Mizell v. State,119 S.W.3d 804, 806 (Tex. Crim. App. 2003); see Ex parte Pena, 71
S.W.3d 336, 337 n.1 (Tex. Crim. App. 2002) (“A ‘void’ or ‘illegal’ sentence is one that is
5
See TEX . PENAL CODE § 12.42(d).
Parrott - 8
not authorized by law.”); Ex parte Seidel, 39 S.W.3d 221, 225 n.4 (Tex. Crim. App. 2001)
(explaining that a punishment exceeding the statutory maximum renders the judgment
void because it is illegal); see also Ex parte Beck, 922 S.W.2d 181, 182 (Tex. Crim. App.
1996).
Applicant’s sentence, entered into pursuant to a plea-bargain agreement, is illegal.
State-jail-felony convictions cannot be used to enhance the punishment of a third-degree
felony. T EX. P ENAL C ODE § 12.42(a)(3) (2009); Campbell v. State, 49 S.W.3d 874, 878
(Tex. Crim. App. 2001). Consequently, in this case, the third-degree-felony offense of
theft was illegally enhanced with Applicant’s prior state-jail-felony conviction for theft.
The statutory punishment range for a third-degree felony (unenhanced) is two to ten
years’ imprisonment. Id. § 12.34(a). Applicant’s sentence of fifteen years exceeds the
statutory maximum and, thus, is unlawful.
When parties have bargained for an illegal sentence, the appropriate remedy is to
return the parties to the positions occupied prior to the plea agreement because the error
in the indictment affected the entire criminal proceeding. Rich, 194 S.W.3d at 514-15;
Beck, 922 S.W.2d at 182. As we explained in Rich,
[W]hen a plea-bargain agreement calls for a sentence much greater than that
authorized by law, we must allow the defendant to withdraw his plea
because there is no way of knowing whether the State would have offered a
plea bargain within the proper range of punishment that he deemed
acceptable, or whether he would have decided to proceed to trial.
Furthermore, resentencing alone is not sufficient in this instance because by
“attack[ing] the sentence he received and for which he bargained,
[Applicant] is attacking the entire judgment of conviction.”
Parrott - 9
Id. (quoting Shannon v. State, 708 S.W.2d 850, 851 (Tex. Crim. App. 1986) (holding that
“the idea that error is ‘punishment error’ only is incompatible with the negotiated plea
and we therefore disavow such analysis in this specific area”)). Therefore, we should
allow Applicant to withdraw his plea and remand the case to the trial court.
At the time Applicant entered the plea agreement, he had three prior felony
convictions that could have been used to enhance Applicant’s third-degree felony. See
T EX. P ENAL C ODE § 12.42(a)(3), (d) (2009). However, this fact does not cure the
illegality of Applicant’s plea-bargained sentence. Generally, a habeas applicant must
demonstrate harm to receive relief. See Ex parte Tovar, 901 S.W.2d 484, 486 (Tex. Crim.
App. 1995). Our notions of due process support that Applicant was harmed in this
instance when the “stars aline” as they have—this is a plea-bargain case for an illegal
sentence in which the State concedes that there is no evidence that Appellant knew that he
was agreeing to an illegal sentence, and the question of ineffective assistance of counsel
is not before us.
The majority concludes that Rich stands for the proposition that “an applicant is
not harmed by an illegal sentence when the appellate and habeas records show that there
was another conviction that could properly support the punishment range within which he
was sentenced.” See Maj. Op. at 7. However, the applicant in Rich did not have any prior
felony convictions that could have been properly substituted. How can a case stand for a
proposition that was not even before the Court? Unlike Rich, the pertinent facts are
Parrott - 10
before the Court in this case, and under these facts, the parties certainly should be
returned to square one. The State should be required to do its job of presenting proper
evidence of valid enhancements, and the defendant should have an opportunity to
contemplate possible defenses to that evidence.
In Brooks, we held that “prior convictions used as enhancements must be pled in
some form, but they need not be pled in the indictment--although it is permissible and
perhaps preferable to do so.” See Brooks v. State, 957 S.W.2d 30, 34 (Tex. Crim. App.
1997). While we no longer require that an indictment contain the enhancement
allegations, the defense must be put on reasonable notice concerning the State’s intent to
prove facts necessary for the enhancement. Villescas v. State, 189 S.W.3d 290, 293 (Tex.
Crim. App. 2006). This notice requirement is rooted in due process. Id. (citing Oyler v.
Boles, 368 U.S. 448, 452 (1962)). As this Court has explained,
The accused is entitled to a description of the judgment of former
conviction that will enable him to find the record and make preparation of a
trial of the question of whether he is the named convict therein.6
...
This averment is necessary in order to give the accused notice that a greater
penalty is to be sought than for a first offense, and to enable him to take
issue thereon, and if possible show there is a mistake in identity, or that
there was no final former conviction or the like.7
Here, prior to entering into his plea-bargained agreement, Applicant was put on
6
Hollins v. State, 571 S.W.2d 873, 875 (Tex. Crim. App. 1978) (quoting Morman v. State,
127 Tex. Crim. 264, 75 S.W.2d 886 (1934)).
7
Id. at 876 (quoting Palmer v. State, 128 Tex. Crim. 293, 81 S.W.2d 76, 79 (1934)).
Parrott - 11
notice only that the State intended to enhance his punishment with the two state-jail-
felony convictions alleged in the indictment. Applicant was not notified of the potential
enhancement use of his felony convictions, so to allow the State to substitute in those
felony convictions to cure his illegal plea-bargained sentence would be contrary to
notions of due process.8
The majority contends that “[t]he State’s response to his application provided him
notice of the State’s intent to support the propriety of his sentence with his other prior
convictions.” See Maj. Op. at 11. But any post-conviction notice cannot serve the same
role as pre-plea notice. If the State is permitted to rely upon un-pleaded enhancement
allegations in post-conviction challenges, the procedures by which such allegations are
tested become essentially optional. See Wilson v. State, 671 S.W.2d 524 (Tex. Crim.
App. 1984) (“The state has the burden of proof to show the prior conviction was a final
conviction under the law and that appellant was the person previously convicted of that
8
Further, despite the majority’s assertion that Applicant cannot prove that he suffered
harm, in a similar situation in Ex parte Hall, 546 S.W.2d 303 (Tex. Crim. App. 1977), this Court
“decline[d] to hold that the error in using a void prior conviction for enhancement is rendered
harmless where the evidence reflects that there is another prior conviction which could have been
used.” In that case, the prior conviction used for enhancement was void because the appellant
had not been represented by counsel, and thus, that prior conviction could not have been used for
enhancement. Id. at 304. We explicitly rejected the State’s argument that “where an accused's
sentence could have been enhanced to life by another prior valid felony conviction, any error in
using an invalid one is deemed harmless in post-conviction habeas corpus proceedings.” Id.
And in doing so, we relied on White v. State, 500 S.W.2d 529 (Tex. Crim. App. 1973) for the
proposition that “to be used for enhancement of punishment . . . the prior convictions must be
alleged.” Hall, 546 S.W.2d at 304-05; see also White, 500 S.W.2d at 530 (stating that it cannot
be “presupposed that the jury will find the enhancement allegations [not alleged in the
indictment] true. It could well be that the jury would find the enhancement allegations untrue . . .
.”).
Parrott - 12
offense.”); see also Fletcher v. State, 214 S.W.3d 5, 9 (Tex. Crim. App. 2007) (holding
that the State cannot satisfy its burden to prove the final disposition of an appeal from an
enhancement conviction by requesting that a court of appeals take judicial notice of a
mandate because doing so would deprive the defendant of the opportunity to rebut the
State’s evidence and allow the State to circumvent its burden at trial). And permitting the
State to go beyond the pleadings allows the State to perpetually reopen and freshly litigate
additional sentencing enhancements that it failed to properly plead at the outset.
Moreover, although the majority is correct that in a direct-appeal context, a
defendant’s “due-process rights are not violated by post-guilt, pre-punishment-phase
notice of the State’s intent to enhance his punishment with a prior conviction,” applying
that concept to this case ignores the critical distinction between trial and plea-bargain
cases. Unlike a trial in which there are separate guilt and punishment phases, “once the
guilty plea is entered, the procedure becomes a ‘unitary trial’ to determine the remaining
issue of punishment. Therefore, in a unitary trial where a defendant has pled guilty there
exists no per se ‘punishment phase.’” Carroll v. State, 975 S.W.2d 630, 631 (Tex. Crim.
App. 1998) (citations omitted).
IV. CONCLUSION
Therefore, I believe that Applicant is entitled to relief. It is clear to me that
Applicant has shown that the notions of due process require that we allow Applicant to
withdraw his plea. For these reasons, I respectfully dissent.
Parrott - 13
Hervey, J.
Filed: January 9, 2013
Publish
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387 N.W.2d 234 (1986)
Renae DENNIS, Plaintiff and Appellee,
v.
Earl DENNIS, Defendant and Appellant.
Civ. No. 11059.
Supreme Court of North Dakota.
May 13, 1986.
Benjamin C. Pulkrabek, of Pulkrabek & Tuntland, Mandan, for plaintiff and appellee.
Judith A. Atkinson, Bismarck, for defendant and appellant.
VANDE WALLE, Justice.
Earl Dennis appealed from a district court judgment in which the court declined to exercise jurisdiction over Earl's motion to modify the child visitation provisions of a divorce decree. We affirm.
Earl and Renae Dennis were divorced in Burleigh County in September 1981. Renae was awarded custody of the parties' two minor children and Earl was granted visitation rights. It was contemplated at that time that Renae would move from North Dakota, and the decree contained alternative visitation provisions which were to take effect when she did so. Renae and the children have resided in Iowa since October 1981.
In July 1984, Earl filed a motion requesting modification of the original decree to allow increased visitation. The district court, by order dated September 13, 1984, held that it lacked jurisdiction to rule on the matter. Earl appealed from that order and we remanded for the district court to consider whether it had "significant connection" jurisdiction pursuant to Section 14-14-03(1)(b), N.D.C.C. Dennis v. Dennis, 366 N.W.2d 474 (N.D.1985).
On remand, the district court held an evidentiary hearing on the issues of significant *235 connections and inconvenient forum. See Sections 14-14-03(1)(b) and 14-14-07, N.D.C.C. The court determined that it had personal and subject-matter jurisdiction, but concluded that North Dakota was an inconvenient forum and that Iowa was the appropriate forum to exercise jurisdiction over this case.
The sole issue presented on appeal[1] is whether the court abused its discretion in determining that North Dakota is an inconvenient forum in which to litigate Earl's motion to modify the original custody decree. Resolution of this issue requires an analysis of the provisions of Chapter 14-14, N.D.C.C., which is our State's adoption of the Uniform Child Custody Jurisdiction Act [U.C.C.J.A.].
Section 14-14-07, N.D.C.C., contains the relevant inconvenient-forum provisions:
"1. A court which has jurisdiction under this chapter to make an initial decree or a modification decree may decline to exercise its jurisdiction any time before making a decree if it finds that it is an inconvenient forum to make a custody determination under the circumstances of the case and that a court of another state is a more appropriate forum.
* * * * *
"3. In determining whether it is an inconvenient forum, the court shall consider whether it is in the interest of the child that another state assume jurisdiction. For this purpose it may take into account the following factors, among others, whether:
"a. Another state is or recently was the child's home state;
"b. Another state has a closer connection with the child and his family or with the child and one or more of the contestants;
"c. Substantial evidence concerning the child's present or future care, protection, training, and personal relationships is more readily available in another state;
"d. The parties have agreed on another forum which is no less appropriate; and
"e. The exercise of jurisdiction by a court of this state would contravene any of the purposes stated in section 14-14-01."
In essence, Chapter 14-14, N.D.C.C., requires that a court make a two-pronged inquiry to determine whether it should entertain a child-custody proceeding having interstate implications: it must first determine whether it has jurisdiction under Section 14-14-03 [U.C.C.J.A. § 3], and, if so, the court must then determine whether it is appropriate to exercise jurisdiction under Section 14-14-07 [U.C.C.J.A. § 7]. See, e.g., Barden v. Blau, 712 P.2d 481 (Colo. 1986); Brown v. Brown, 195 Conn. 98, 486 A.2d 1116 (1985); In re Marriage of Bolton, 690 P.2d 401 (Mont.1984).
It is well settled that the decision whether to decline to exercise jurisdiction on inconvenient-forum grounds lies entirely within the trial court's discretion, and its decision will be reversed on appeal only for an abuse of discretion. See, e.g., Stevenson v. Stevenson, 452 So.2d 869 (Ala.Civ. App.1984); Barden v. Blau, supra; Brown v. Brown, supra; Larsen v. Larsen, 5 Kan.App.2d 284, 615 P.2d 806 (1980); Farrell v. Farrell, 133 Mich.App. 502, 351 N.W.2d 219 (1984); In re Marriage of Bolton, supra; Oehler v. Clinton, 282 S.C. 25, 317 S.E.2d 445 (1984). An abuse of discretion, which implies an unreasonable, arbitrary, or unconscionable attitude on the part of the trial court, never is assumed and must be affirmatively established. In the Matter of Estate of Vertin, 381 N.W.2d 199 (N.D.1986); Lange v. Cusey, 379 N.W.2d 775 (N.D.1985).
We cannot conclude that the district court abused its discretion in determining *236 that this State is an inconvenient forum to resolve this dispute. The district court specifically considered the statutory factors contained in Section 14-14-07(3), N.D.C.C., and concluded that Iowa is the home State of the children; that substantial evidence concerning the children's care, protection, training, and personal relationships is more readily available in Iowa; and that Iowa has a closer connection with the children.[2]
A paramount consideration in the balancing of these various factors is a determination of what court is most able to act in the best interests of the children. In re Marriage of Pavelcik, 138 Ill.App.3d 1060, 93 Ill.Dec. 589, 487 N.E.2d 33 (1985). A court should exercise jurisdiction over a child-custody proceeding only when it is in the child's best interest to do so. See Sections 14-14-01(1)(b) and 14-14-07(3), N.D. C.C. We further note the important policy statement contained in Section 14-14-01(1)(c), N.D.C.C.:
"1. The general purposes of this chapter are to:
* * * * *
"c. Assure that litigation concerning the custody of a child takes place ordinarily in the state with which the child and his family have the closest connection and where significant evidence concerning his care, protection, training, and personal relationships is most readily available, and that courts of this state decline the exercise of jurisdiction when the child and his family have a closer connection with another state; ..."
Under the circumstances presented in this case, we conclude that the trial court did not abuse its discretion when it declined to exercise jurisdiction based upon its determination that Iowa is a more appropriate forum. Accordingly, the judgment is affirmed.
ERICKSTAD, C.J., and GIERKE and LEVINE, JJ., concur.
MESCHKE, Justice, concurring.
In July, 1984, Earl Dennis asked the district court to extend his visitation rights with his two growing children, Mike and Marisa, beyond the twenty days set in the divorce decree issued by that court in 1981. Regrettably, two years and two appeals later, Earl has not yet had a hearing on the merits of his request.
When Earl and Renae were divorced in North Dakota in September, 1981, Renae was awarded custody of Mike (4½ months old) and Marisa (two years old). As contemplated, Renae promptly moved to Iowa with the two children. In keeping with the then tender years of the children, the decree authorized only ten days visitation for Earl in 1982 and 1983, increasing to 20 days a year in 1984 and 1985. Earl paid for Renae to fly back to North Dakota with the children for visitation in 1982. He paid her expenses to drive the children to North Dakota for visitation in 1983. In 1984, Earl and his new wife drove to Iowa and back to have the children, using four days out of the twenty for travel.
Earl moved to extend visitation through the three summer months and to share additional time at holidays and on other visits by the children with maternal relatives in North Dakota. Renae resisted, requesting that the trial court "exercise its discretionary power to decline jurisdiction," emphasizing that she and the children now have "significant connections with the State of Iowa." The trial court refused to *237 consider Earl's motion upon the grounds that it had "no jurisdiction to handle the matter" because North Dakota was no longer the "home state" of the children.
We reversed, but, in three separate opinions, we could not agree on a clear rationale concerning jurisdiction. Dennis v. Dennis, 366 N.W.2d 474 (N.D.1985) (Dennis I). Chief Justice Erickstad's opinion rejected "continuing jurisdiction" because Iowa was the current home state of the children, but remanded for a "redetermination of the jurisdictional issue" under the alternative "significant connection" jurisdictional formulation (subsection (1)(b) of Section 14-14-03). 366 N.W.2d at 476-477. My opinion, joined by Justice Levine, emphasized "continuing jurisdiction" (subsection (1)(a)(2)) while one of the contesting parents (Earl) continued to live in the state first issuing a custody decree, but recognized that the trial court was "free to properly consider the mother's motion asking it to exercise its discretion, under the `most convenient forum' provisions of the U.C.C. J.A. and P.K.P.A., to transfer the proceeding to Iowa." 366 N.W.2d at 482. My opinion mildly suggested in a footnote that "declining to exercise its jurisdiction ... may be more appropriate in considering change of custody motions, than on motions to expand or modify visitation rights where most of the facts concerning only the parent with visitation are focused in North Dakota." 366 N.W.2d at 482.
Justice VandeWalle's opinion, joined by Justice Gierke, joined in remanding for consideration of the "significant connection" jurisdictional test, but dealt clearly and directly with visitation: "The trial court ... should ... retain jurisdiction to modify the provisions for visitation, as opposed to custody, when Earl continues to reside in North Dakota and the visitation will take place in North Dakota." 366 N.W.2d at 477. Justice VandeWalle stressed that "the courts of the State in which the divorce decree was granted, in which the noncustodial parent continues to reside and in which the children will be visiting, are in the best position to determine whether or not that visitation is in the best interests of the children and whether or not it should be modified." 366 N.W.2d at 477-478. (I now concur in that well-expressed view. The course of this case upon remand prompts regret that I did not fully endorse that view in Dennis I.)
Upon remand, faced with this array of views, the trial court held another hearing on "jurisdiction". The trial court concluded that it had "jurisdiction over the parties and the subject matter hereto," and went on to conclude "that the Court has the right to decline to exercise this jurisdiction;" "that Iowa is the children's home state;" "that Iowa is the State that has significant contacts with the children;" "that substantial evidence concerning the children's present or future care, protection, training and personal relationships is most readily available in the State of Iowa;" and "that North Dakota is an inconvenient forum and the State of Iowa is the appropriate forum to have jurisdiction of this case."
On this appeal, Earl argues that the trial court committed several errors: "The lower court erred in holding that it did not have jurisdiction; erred in the application of it's standards of significant connections and in not setting the standards to be applied by it's ruling on significant connections referred to in NDCC 14-14-03(1)(b); erred in it's ruling on most convenient forum; erred in the application of the standards of closer connections to the jurisdiction of the court; and erred in failing to recognize the continuing jurisdiction of the court."
Given the different views of this Court about initial jurisdiction, it is not surprising that the trial court considered jurisdiction further. Since a majority of this court did not recognize "continuing jurisdiction," it is also not surprising that the trial court apparently relied upon the "significant connectionsubstantial evidence" test to find jurisdiction. While I adhere to my opinion in Dennis I, that there is continuing jurisdiction that accompanies the continued residence of one of the custodial contestants in *238 the state which was the first to adjudicate custody, I have no difficulty in accepting any analysis that yields jurisdiction, even if I deplore the lack of judicial economy in taking the "long way around." Therefore, I concur with Justice VandeWalle that the trial court concluded that it did have jurisdiction. Appellant's argument that the trial court failed to do so is plainly mistaken. Rather, it is clear that the trial court exercised discretionary power to decline jurisdiction under the inconvenient forum provisions of the U.C.C.J.A., which is also recognized in the P.K.P.A. (See footnotes 15, 16 and 17, 366 N.W.2d at 481).
I concur with Justice VandeWalle that a trial court's decision to decline jurisdiction on the grounds of inconvenient forum is discretionary. But, I do not agree that it is "entirely within the trial court's discretion," as he states it. Judicial discretion is not judicial license. Judicial discretion can only be exercised for sound reasons, not spurious ones. And, the reasons for exercise of discretion should be sufficiently expressed, if not readily apparent, to enable meaningful appellate review.
The trial court's findings do not recognize that visitation in North Dakota is the subject of the motion. They do not treat the location of the evidence which is often most important in considering visitation: the suitability of the noncustodial parent and his home for visitation. The trial court did not recognize the import of Section 14-05-22(2), N.D.C.C.:
"After making an award of custody, the court shall, upon request of the noncustodial parent, grant such rights of visitation as will enable the child and the noncustodial parent to maintain a parent-child relationship that will be beneficial to the child, unless the court finds, after a hearing, that visitation is likely to endanger the child's physical or emotional health."
Although the findings do look to some of the factors which may be considered under the statute, I am greatly troubled by the lack of depth in the findings. At least, findings should recognize those factors most relevant to the particular case for which they are made.
In accepting the findings, it appears to me that Justice VandeWalle is subordinating his own clearly expressed views to accord the greatest possible appellate deference to a discretionary disposition by an able and experienced trial judge. Since I did not join in Justice VandeWalle's clear expression in Dennis I, that the courts of this state are in the best position to determine whether or not additional visitation is in the best interest of the children, I share responsibility for not providing sufficient guidance to the trial court on remand. So, I cannot fairly second guess this exercise of discretion, either.
Therefore, I reluctantly concur in affirming the trial court's discretionary declination of jurisdiction in this case. It is high time some court got to the merits of this visitation matter. Iowa courts are equally capable of expanding visitation to implement our statutory mandate "to maintain a parent-child relationship that will be beneficial to the child." Iowa's statutory presumption may even be stronger:
"Consideration shall be given to the child's need for close contact with both parents and recognition of joint parental responsibility for the welfare of a minor child." 39 Iowa Code Annotated, Section 598.21(4).
LEVINE, J., concurs.
NOTES
[1] Earl also contends that the district court erred "in holding that it did not have jurisdiction." The court, however, explicitly held that it did have jurisdiction, and it is clear that the court ultimately based its decision upon Section 14-14-07, N.D.C.C., the inconvenient-forum provision.
[2] In Dennis v. Dennis, 366 N.W.2d 474, 477 (N.D.1985), some of the members of this court expressed the view that a determination of jurisdiction for purposes of modifying visitation is different from a determination of jurisdiction for a change of general custody. On remand, the trial court disagreed with that analysis. Nevertheless, when an inconvenient-forum issue is raised the various factors which can be considered by the trial court may vary in relevance depending upon whether change of custody or modification of visitation rights is at issue. However, our reading of the opinion of the trial court, delivered from the bench, as well as the formal order of the trial court, leaves no doubt that the trial court concluded that Iowa is the more convenient forum regardless of whether change of custody or modification of visitation rights is at issue.
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UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 97-7343
JOHN EDWARD SCRUGGS, JR.,
Petitioner - Appellant,
versus
GEORGE DEEDS, Warden; ATTORNEY GENERAL OF
VIRGINIA,
Respondents - Appellees.
Appeal from the United States District Court for the Western Dis-
trict of Virginia, at Roanoke. James C. Turk, District Judge.
(CA-97-26-R)
Submitted: February 27, 1998 Decided: March 20, 1998
Before NIEMEYER and WILLIAMS, Circuit Judges, and PHILLIPS, Senior
Circuit Judge.
Dismissed by unpublished per curiam opinion.
John Edward Scruggs, Jr., Appellant Pro Se. Eugene Paul Murphy,
OFFICE OF THE ATTORNEY GENERAL OF VIRGINIA, Richmond, Virginia, for
Appellee.
Unpublished opinions are not binding precedent in this circuit.
See Local Rule 36(c).
PER CURIAM:
Appellant seeks to appeal the district court's order denying
relief on his petition filed under 28 U.S.C.A. § 2254 (West 1994 &
Supp. 1997). We have reviewed the record and the district court's
opinion accepting the recommendation of the magistrate judge and
find no reversible error. To the extent that Scruggs alleges cause
for the procedural default of his malicious prosecution claim, we
find that his attorney was not ineffective, and thus that federal
review of this claim is barred. See Harris v. Reed, 489 U.S. 255,
262 (1989). Accordingly, we deny a certificate of appealability and
dismiss the appeal substantially on the reasoning of the district
court. Scruggs v. Deeds, No. CA-97-26-R (W.D. Va. Sept. 15, 1997).
We dispense with oral argument because the facts and legal conten-
tions are adequately presented in the materials before the court
and argument would not aid the decisional process.
DISMISSED
2
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In the
United States Court of Appeals
For the Seventh Circuit
____________
No. 06-2254
OLGER G. PERALTA-CABRERA,
Petitioner,
v.
ALBERTO R. GONZALES, Attorney General
of the United States,
Respondent.
____________
Petition for Review of an Order of the
Board of Immigration Appeals.
____________
ARGUED JUNE 6, 2007—DECIDED SEPTEMBER 7, 2007
____________
Before RIPPLE, EVANS, and WILLIAMS, Circuit Judges.
EVANS, Circuit Judge. This is the second time that
we are called to address Olger Peralta-Cabrera’s case, in
which he petitions for review of the Board of Immigration
Appeals’s (BIA) decision upholding the immigration
judge’s (IJ) denial of his motion to reopen. The material
facts are not disputed, and although we briefly discussed
them in a 2006 order, we recount them here for the sake
of clarity.
In November 1994, an IJ in Chicago ordered Peralta-
2 No. 06-2254
Cabrera deported1 in absentia to his home country of
Ecuador. Eight years later Peralta-Cabrera moved to
reopen his deportation hearing, claiming that he failed to
appear at the 1994 hearing because he never received a
notice of the hearing’s time or place. See 8 U.S.C.
§ 1252b(c)(3)(B) (1988). He asked the IJ to rescind his
in absentia deportation order and also moved to change
venue to the immigration court in Bloomington, Minne-
sota, where he and his family then resided. In a memoran-
dum and affidavit supporting his motion, Peralta-Cabrera
expounded upon his claim that he did not receive notice
of his 1994 deportation hearing.
Peralta-Cabrera began by explaining that he and a
traveling companion named Eloy Espinoza entered the
United States (at San Ysidro, California) in July 1994
“without inspection,” a euphemistic way of saying they
entered illegally. A few days later the duo ended up at
O’Hare International Airport in Chicago, Illinois, where
agents of the now-defunct Immigration and Naturalization
Service (INS) arrested the men for their illegal entry. See
8 U.S.C. § 1251(a)(1)(B) (1988). Upon their arrest,
Espinoza telephoned his brother-in-law who lived in
Chicago—Florentine Arias, a central player in this
story—and asked him to come to O’Hare and help him
1
When the Immigration and Naturalization Act (INA) was
amended in 1997 by the Illegal Immigration Reform and Immi-
grant Responsibility Act of 1996 (IIRIRA), one of the many
changes made was the substitution of the term “deportation”
with “removal.” See Fernandez-Vargas v. Gonzales, 126 S. Ct.
2422, 2426 n.1 (2006) (citing Gerald L. Neuman, Habeas Corpus,
Executive Detention, and the Removal of Aliens, 98 Colum. L.
Rev. 961, 966 (1998)). As we discuss later, Peralta-Cabrera’s
case is governed by the pre-IIRIRA version of the INA; thus, we
will utilize the term “deportation” and its appropriate deriva-
tives. See id.; Ursachi v. INS, 296 F.3d 592, 594 (7th Cir. 2002).
No. 06-2254 3
and Peralta-Cabrera seek their release. While he was
detained awaiting Arias’s arrival, Peralta-Cabrera spoke
with an immigration agent regarding where he would live
while his deportation proceedings were pending. He
informed the agent that he had never before been to
Chicago, had no place in the city to live, and knew no
one in the city. Therefore, Peralta-Cabrera stated, he
would go with Espinoza to stay with Arias while the
proceedings played out.
Meanwhile, Peralta-Cabrera continued, Arias arrived
at O’Hare and spoke with immigration agents regarding
Peralta-Cabrera’s and Espinoza’s release. The agents
sought from Arias information regarding how the im-
migration authorities could reach the two men to provide
them with information regarding their upcoming deporta-
tion hearings; Arias responded that both men would stay
at his apartment in Chicago’s Wrigleyville neighbor-
hood—841 West Cornelia Street, Chicago, Illinois, 60657.
The agents with whom Arias spoke used that address
when completing a variety of administrative forms regard-
ing Peralta-Cabrera’s arrest and release; among these
forms was the agency’s Order to Show Cause, the docu-
ment upon which immigration authorities would rely to
obtain Peralta-Cabrera’s contact information so they
could, in turn, mail to him notice of the time and place of
his deportation hearing.
After the paper work was completed, Peralta-Cabrera
further recounted, an immigration agent reviewed the
forms with him and asked if his contact information—that
is, the Cornelia Street address provided by Arias—was
correct; Peralta-Cabrera responded that it was. The agent
then informed Peralta-Cabrera that in a few weeks
immigration authorities would mail to Arias’s address a
hearing notice that contained information regarding
the time and place of his upcoming deportation hearing.
4 No. 06-2254
Peralta-Cabrera was then released. He proceeded to take
up residence in Arias’s apartment on Cornelia Street, as
he said he would. However, he never received the hear-
ing notice, or, for that matter, any other document regard-
ing his deportation hearing.
Having received no word from immigration authorities,
Peralta-Cabrera stated that in late 1994 he packed up his
possessions and traded Wrigleyville for the Minneapolis-
St. Paul area in Minnesota. Time passed, and in 2002
Peralta-Cabrera’s employer submitted a petition for an
immigrant visa on his behalf. After the visa was granted,
Peralta-Cabrera applied to adjust his status to a perma-
nent resident. However, the INS denied Peralta-Cabrera’s
application, saying he was ineligible to adjust his status.
The INS cited unspecified information submitted with his
employer’s visa petition and equally unspecified “related
files.” Curious as to what would prevent him from adjust-
ing his status, Peralta-Cabrera obtained a copy of his
immigration file, which contained many documents that,
until that moment, he did not know existed. Specifically,
the file contained a photocopy of a hearing notice dated
August 10, 1994, stating that a deportation hearing be-
fore an IJ was scheduled for November 23, 1994. At-
tached to the notice were two documents. The first docu-
ment was a copy of a receipt for certified mail, showing
that the notice was mailed the same day that it was
issued and that it was addressed to the following
recipient: “Peralta-Cabrera, Olger Gonzalo, 841 West
Cornelia, Chicago, IL 60657.” Also attached to the notice
was a copy of an envelope bearing a stamp that
read: “RETURN TO SENDER—ATTEMPTED NOT
KNOWN,” and handwritten notes reading “UNK” (presum-
ably short for “unknown”) and “8/12/94.” The file also
contained the IJ’s decision of November 23, 1994, in which
he ordered Peralta-Cabrera deported in absentia; at-
tached to the decision was another photocopy of a receipt
No. 06-2254 5
for certified mail, showing that the decision was mailed
on the same day it was issued to the same address as
the hearing notice, and another photocopy of an envelope,
bearing both a postmark of November 23, 1994, and
another “ATTEMPTED NOT KNOWN” stamp.
Confused as to why the hearing notice was not de-
livered to him in Chicago when it was sent to the address
he provided to the immigration agents, Peralta-Cabrera
stated that he contacted Arthur Roxas, an attorney
with the U.S. Postal Service, to see if he could shed some
light on the matter. After Peralta-Cabrera described the
documents in his immigration file, Roxas informed him
that, under Postal Service regulations, mail addressed to
a person who does not reside at an address, but is merely
visiting the address, will not be delivered unless the mail
is addressed “in care of ” the individual whom he is visit-
ing. Roxas also provided Peralta-Cabrera with the Postal
Service internal regulations setting forth the policy. Armed
with this information, Peralta-Cabrera moved to reopen
his deportation proceedings on the basis that he never
received notice.
Although the IJ accepted Peralta-Cabrera’s version of
the facts, he nevertheless denied the motion to reopen,
reasoning that it was solely Peralta-Cabrera’s responsibil-
ity to specify that his mail needed to be addressed to him
“in care of ” Arias, and thus “he can be ‘charged’ with
receiving notice which was sent to the only address he
provided.” Peralta-Cabrera appealed to the BIA, which
upheld the denial of the motion to reopen. Like the IJ, the
BIA had no issue with the facts as presented by Peralta-
Cabrera but echoed the IJ’s determination that Peralta-
Cabrera was properly charged with receiving the notice.
Peralta-Cabrera then petitioned us to review the BIA’s
decision. While his petition was pending, however, Peralta-
Cabrera was deported back to Ecuador. We nevertheless
6 No. 06-2254
addressed the case, but instead of assessing the merits
of Peralta-Cabrera’s arguments we accepted the govern-
ment’s suggestion to remand the case to the BIA so it
could examine whether Peralta-Cabrera could be charged
with receiving notice of his deportation hearing under our
then-recently announced decision in Sabir v. Gonzales, 421
F.3d 456 (7th Cir. 2005). We accordingly ordered the
BIA to examine whether, under Sabir, Peralta-Cabrera
thwarted the Postal Service’s attempts to deliver the notice
and, if not, whether the motion to reopen should be
granted on the basis that he did not receive notice. See
Peralta-Cabrera v. Gonzales, 161 F. App’x 594, 595 (2006)
(unpublished opinion).
On remand, the BIA again upheld the IJ’s denial of
Peralta-Cabrera’s motion to reopen. The BIA first noted
that it lacked jurisdiction to address Peralta-Cabrera’s
case because his deportation constituted a withdrawal of
his motion to reopen. See In re G-N-C-, 22 I. & N. Dec. 281
(B.I.A. 1998). However, this determination did not keep
the BIA from concluding that Peralta-Cabrera thwarted
service of his hearing notice by not informing the INS
agents at the time of his arrest that his mail needed to be
addressed to him “in care of ” Arias; as the BIA stated, “[i]t
was not the INS’ responsibility to guess that the addition
of those words might be necessary.” The BIA accordingly
dismissed Peralta-Cabrera’s appeal.
Which brings us to today, with Peralta-Cabrera again
petitioning us to review the BIA’s decision upholding the
IJ’s denial of his motion to reopen. Before we reach the
merits of Peralta-Cabrera’s arguments, however, the
BIA’s terse disavowal of jurisdiction requires us to ad-
dress a vital (and thorny) issue: whether Peralta-
Cabrera’s case remains justiciable in light of the fact that
he no longer is in the United States. This examination
first requires us to determine whether the Immigration
No. 06-2254 7
and Naturalization Act (INA) provides a basis for us to
exercise subject matter jurisdiction. Under the provisions
of the INA applicable to Peralta-Cabrera’s case, we
conclude that it does.
As we recounted earlier, the IJ entered its order of
deportation in November 1994. This, in turn, means that
his petition for review is governed by the INA as it existed
before it was amended in April 1997 by the Illegal Immi-
gration Reform and Immigrant Responsibility Act of 1996
(IIRIRA). See Pub. L. No. 104-208, § 309(a), (c)(1), 110
Stat. 3009-546, 3009-625 (1997) (stating that IIRIRA
generally does not apply to aliens “in exclusion or deporta-
tion proceedings” before effective date); Fernandez-Vargas
v. Gonzales, 126 S. Ct. 2422, 2432 (2006); Nwaokolo v. INS,
314 F.3d 303, 305-06 (7th Cir. 2002) (per curiam). The pre-
IIRIRA provisions of the INA deprived the federal courts
of appeals of jurisdiction to address any petition for review
when the petitioner had “departed from the United
States.” See 8 U.S.C. § 1105a(c) (1988); Sofinet v. INS, 188
F.3d 703, 708 (7th Cir. 1999); see also In re G- N- C-, 22
I. & N. Dec. at 288 (applying pre-IIRIRA version of INA to
determine lack of jurisdiction to address motion to reopen
1991 deportation proceedings). At first blush, then, it
appears that we lack jurisdiction to address Peralta-
Cabrera’s petition for review because of his deportation.
Not so; in fact, this is where things get interesting. Federal
appellate courts have interpreted the term “departure” to
mean only “legally executed departures”; thus, jurisdiction
over a petition for review is not removed if the petitioner’s
departure was due to unlawful government action. See
Joehar v. INS, 957 F.2d 887, 889-90 (D.C. Cir. 1992);
Zepeda-Melendez v. INS, 741 F.2d 285, 287 (9th Cir. 1984);
Juarez v. INS, 732 F.2d 58, 59-60 (6th Cir. 1984); see also
Marrero v. INS, 990 F.2d 772, 777 (3d Cir. 1993) (stating
court has jurisdiction when petitioner also presents
colorable due process claim). Our jurisdiction thus rests on
8 No. 06-2254
whether Peralta-Cabrera’s deportation was “legally exe-
cuted,” and, as we will see, it was not.
With exceptions not pertinent here, under the pre-
IIRIRA version of the INA an alien who served a petition
for review on the Attorney General and relevant immigra-
tion authorities automatically was granted a stay of
deportation pending the resolution of the petition. See 8
U.S.C. § 1105a(a)(3) (1988 & Supp. V 1993); Sofinet, 188
F.3d at 705 (noting that IIRIRA replaced provision grant-
ing automatic stay with provision requiring petitioner
affirmatively requesting stay). The record shows that
on November 19, 2004—ten days before he was deported—
Peralta-Cabrera served upon both the Attorney General
and correct immigration authorities his first petition
for review of the BIA’s decision upholding the IJ’s denial of
his motion to reopen. (This petition, as we have noted, led
us to remand the case to the BIA with instructions to
consider the case in light of Sabir.) The deportation order
entered against Peralta-Cabrera thus should have been
stayed pending the outcome of his petition for review, see
8 U.S.C. § 1105a(a)(3) (1988 & Supp. V 1993); Sofinet, 188
F.3d at 705, and yet, disturbingly, he was deported.
Because the government ran afoul of the applicable pre-
IIRIRA provisions of the INA by prematurely deporting
him, cf. Bejar v. Ashcroft, 324 F.3d 127, 132 (3d Cir. 2003),
we cannot say that Peralta-Cabrera’s departure was
“legally executed.” Thus, under the INA we have jurisdic-
tion over his petition for review, his deportation notwith-
standing. See Marrero, 990 F.2d at 777; Joehar, 957 F.2d
at 889; Zepeda-Melendez, 741 F.2d at 287.
Our discussion, unfortunately, does not end there;
although the INA gives us jurisdiction over Peralta-
Cabrera’s case, we nevertheless may not address his
petition for review if his deportation renders his case moot.
See Spencer v. Kemna, 523 U.S. 1, 7-8 (1998); A.M. v.
Butler, 360 F.3d 787, 790 (7th Cir. 2004) (“[A] federal court
No. 06-2254 9
at any stage of the proceedings must, on its own, dismiss
a case as moot when it cannot give the petitioner any
effective relief.”). A case is moot when the parties fail to
“continue to have a ‘personal stake in the outcome’ ” of the
legal action in question, see Spencer, 523 U.S. at 7 (quoting
Lewis v. Cont’l Bank Corp., 494 U.S. 472, 477-78 (1990)),
meaning here that for his case to remain justiciable,
Peralta-Cabrera “must have suffered, or be threatened
with, an actual injury traceable to the [government] and
likely to be redressed by a favorable judicial decision,” see
Lewis, 494 U.S. at 477; A.M., 360 F.3d at 790. Because
Peralta-Cabrera is no longer subject to deportation (after
having already been deported) and is not detained by
the INS, his deportation thus must yield some collateral
consequences to present a live and cognizable issue. See
Tapia Garcia v. INS, 237 F.3d 1216, 1217 (10th Cir. 2001);
see also A.M., 360 F.3d at 790.
Under the INA’s current admissibility provisions, see
Fernandez-Vargas, 126 S. Ct. at 2432 n.11, collateral
consequences exist. Specifically, Peralta-Cabrera may not
seek readmission to the United State for five years from
the date he was deported. See 8 U.S.C. § 1182(a)(6)(B)
(2004); cf. 8 U.S.C. § 1182(a)(6)(B) (1988) (barring de-
ported aliens from seeking readmission for five years
unless they first obtain Attorney General’s permission);
Labojewski v. Gonzales, 407 F.3d 814, 822 n.5 (7th Cir.
2003); Tapia Garcia, 237 F.3d at 218. Peralta-Cabrera
likewise is hindered from adjusting his immigration
status, as he originally sought to do, until the five years
have expired or he obtains the Attorney General’s permis-
sion to apply early, which, we think, is extremely unlikely.
See Lopez-Flores v. Dep’t of Homeland Sec., 387 F.3d 773,
777 & n.4 (7th Cir. 2004) (citing 8 C.F.R. § 212.2(a)). These
consequences of Peralta-Cabrera’s deportation are con-
crete disadvantages imposed on him as a matter of law,
see Max-George v. Reno, 205 F.3d 194, 196 (5th Cir. 2000);
10 No. 06-2254
Gao v. Jenifer, 185 F.3d 548, 557 (6th Cir. 1999), and
which a favorable decision from us can begin to redress.
For instance, we can grant Peralta-Cabrera’s petition for
review and remand the case with instructions to reopen his
deportation hearings, which, in turn, would allow him the
opportunity to challenge his deportation, and potentially
the chance to seek readmission or adjustment of status.
Thus, despite his deportation, Peralta-Cabrera’s petition
for review presents a live case and controversy for us to
address. See Tapia Garcia, 237 F.3d at 218; see also A.M.,
360 F.3d at 790.
The justiciablility of Peralta-Cabrera’s appeal now
established, we move, finally, to the merits of his claim.
Peralta-Cabrera argues that the BIA incorrectly upheld
the IJ’s denial of his motion to reopen by erroneously
determining that he thwarted delivery of his hearing
notice solely by not stating that the notice needed to be
addressed to him “in care of ” Arias. Where, as here, the
BIA undertook an independent review of the record, we
review the BIA’s decision directly. See Korniejew v.
Ashcroft, 371 F.3d 377, 382 n.7 (7th Cir. 2004). We nor-
mally review a decision upholding the denial of a motion to
reopen for abuse of discretion, see Ursachi v. INS, 296
F.3d 592, 594 (7th Cir. 2002), but because the issue of
whether an alien received notice of his deportation hearing
implicates notions of due process, our examination is
de novo, Nazarova v. INS, 171 F.3d 478, 482 (7th Cir.
1999).
An alien seeking to challenge a deportation order entered
in absentia has but one option: to move to reopen the
hearing that resulted in the order. See 8 U.S.C.
§ 1252b(c)(3) (1988); In re Gonzalez-Lopez, 20 I. & N. Dec.
644, 645-46 (B.I.A. 1993). As pertinent here, the alien can
bring the motion at any time if he shows that he did not
appear at the deportation hearing because he failed to
receive proper notice of the hearing. See 8 U.S.C.
No. 06-2254 11
§ 1252b(c)(3)(B) (1988). That is not to say that an alien
can “make himself unreachable, and then later ask to
have his case reopened because he did not receive notice,”
Sabir, 421 F.3d at 459. He cannot. Rather, where the
evidence establishes that the alien “thwarted delivery” of
the notice, he can be charged with having received it. See
id.; Wijeratne v. INS, 961 F.2d 1344, 1347-48 (7th Cir.
1992); cf. 8 U.S.C. § 1252b(c)(2) (1988) (eliminating
notice requirement where alien fails to provide contact
information).
In addressing whether Peralta-Cabrera received notice
of his deportation hearing, the parties devote substan-
tial portions of their briefs discussing whether the notice
itself satisfied statutory and constitutional requirements.
However, these arguments are misplaced. The issue of
whether notice was proper pertains to only whether the
IJ’s in absentia deportation order was correct; an issue,
as we repeatedly have explained, that is separate from
whether the IJ should have rescinded the order upon a
motion to reopen because the alien received no notice of
the hearing. See 8 U.S.C. § 1252b(c)(3)(B) (1988); Joshi v.
Ashcroft, 389 F.3d 732, 736 (7th Cir. 2004) (stating that
with motions to reopen based on lack of notice “the issue
is not notice but receipt, because the statute allows an
alien ordered removed in an absentia proceeding to
reopen the proceeding if he did not receive notice even
if the notice that was sent, whether or not it was received,
satisfied statutory and constitutional requirements”); see
also Sabir, 421 F.3d at 458-59; Pervaiz v. Gonzales, 405
F.3d 488, 492 (7th Cir. 2005); Gurung v. Ashcroft, 371
F.3d 718, 722 (10th Cir. 2004) (“Considerations on a
motion to reopen differ from those relevant to the holding
of an in absentia hearing. A motion to reopen focuses on
whether the alien actually received notice, rather than on
whether the INS sent sufficient notice to the proper
address.”). Thus, our review is confined to whether
12 No. 06-2254
Peralta-Cabrera received notice of his hearing and, if not,
whether he can be charged with receiving the notice
because he “made himself unreachable.”
With that said, it is undisputed that Peralta-Cabrera
did not receive the hearing notice; after all, the record
contains the envelope of the notice stamped “ATTEMPTED
NOT KNOWN.” The question is whether Peralta-Cabrera
can be charged with receiving the notice because he “made
himself unreachable.” We start with what the parties
agree Peralta-Cabrera did and did not do in “making
himself unreachable.” Both sides agree that he informed
immigration agents that he would reside with Arias at
the Cornelia Street address and that the address was
correct and not falsified in an attempt to evade contact
with immigration authorities. The parties further agree
that Peralta-Cabrera never refused service of the notice;
again, there can be no contention on this point because
the record contains the notice that was never delivered,
and there is no evidence suggesting that immigration
authorities attempted to serve the notice in person.
Perhaps most importantly, however, the parties agree
that when immigration authorities attempted to serve
Peralta-Cabrera with notice via certified letter, he was
residing exactly where he stated he would be: around
the corner from Wrigley Field at 841 West Cornelia,
Chicago, Illinois, 60657.
So far, so good. But given that at all times pertinent
immigration authorities knew, or should have known,
where Peralta-Cabrera was residing, how exactly does
the government contend he “made himself unreachable”?
The government echoes the BIA’s stance that Peralta-
Cabrera thwarted delivery simply by failing to inform the
immigration agents that all mail must be addressed to him
“in care of ” Florentine Arias. According to the government,
because the INA required Peralta-Cabrera to provide an
address where his hearing notice could be sent, the
No. 06-2254 13
responsibility fell on him to “inform the INS of the addi-
tional language” essential for delivery. As the government
states, Peralta-Cabrera “was in the best position to provide
the complete address,” and because he did not, he “made
himself unreachable.”
We have no quarrel with the government’s assertion that
an alien has a duty to provide immigration authorities
with an address where he can be contacted. See 8 U.S.C.
§ 1252b(a)(1)(F) (1988); In re Grijalva, 21 I. & N. Dec. 27,
33 (B.I.A. 1995) (“It is incumbent upon the [alien] to
provide an address where he can receive mail in a regular
and timely manner.”). We fail to understand, though, how
that duty translates into the additional burden of ensur-
ing that the government will properly address a hearing
notice mailed to the alien. The government contends that
this is so because the alien is “in the best position” to
direct the government how to address the hearing notice.
But this assertion runs counter to the INA’s mandate
that it is the government’s duty to ensure that hearing
notices are successfully “given” to the alien, see 8 U.S.C.
§ 1252b(a)(2)(A) (1988), as well as the notion that, in most
instances, it is the government’s responsibility to ensure
that notice by mail is successfully delivered, see, e.g., Jones
v. Flowers, 126 S. Ct. 1708, 1716-21 (2006) (holding notice
of impending tax sale of property was not reasonably
calculated to reach property owner when notice sent via
certified letter by state was returned unclaimed and state
did not take additional reasonable steps to ensure notice
was provided); Terezov v. Gonzales, 480 F.3d 558, 555-56
(7th Cir. 2007) (“It is an abuse of discretion to refuse to
rescind an in absentia order of removal and reopen the
proceedings when the record shows that the [Department
of Homeland Security] sent the alien’s Notice to Appear to
an incorrect or old address.”); Singh v. Gonzales, 412 F.3d
1117, 1121-22 (9th Cir. 2005) (concluding that denial of
14 No. 06-2254
motion to reopen was an abuse of discretion where evi-
dence showed that immigration authorities sent a hear-
ing notice to an old address).
We think the government, not the alien, is “in the best
position” to know how to properly address a hearing notice.
We cannot see why an alien, having just arrived in the
United States, is “in the best position” to instruct im-
migration agents how to address correspondence to him
when he tells them where he is staying and who he is
staying with. We find it difficult to believe that if an alien
provided an incomplete mailing address under any other
circumstances—say, an address devoid of a street name,
zip code, or even the name of a city—an immigration agent
could sit idly by and accept the information on the assump-
tion that it was correct. To say that an alien is “in the
best position” to know how to address mail expects too
much of the alien and suggests that the government is
incapable of properly utilizing the postal system. And
because the government is, instead, the party “in the
best position” to know how to properly address correspon-
dence to an alien, once an alien satisfies his duty under the
INA and provides an address where he can be contacted,
it is the government’s responsibility to ensure that mail is
properly addressed so that it can be delivered to the
location the alien provided. Cf. Jones, 126 S. Ct. at 1716-
21; Terezov, 480 F.3d at 555-56; Singh, 412 F.3d
at 1121-22.
Here, Peralta-Cabrera informed the government that
he would be staying with Arias while his deportation
proceedings were pending and provided the address of
Arias’s apartment. The responsibility accordingly fell on
the government to ensure that the hearing notice would be
delivered to the address Peralta-Cabrera provided, cf.
Jones, 126 S. Ct. at 1716-21; Terezov, 480 F.3d at 555-56;
Singh, 412 F.3d at 1121-22, and the government, we
No. 06-2254 15
think, under these facts, had the responsibility to address
the notice to Peralta-Cabrera “in care of ” Arias.
As an aside, it is difficult to take seriously the govern-
ment’s contention that Peralta-Cabrera “thwarted” service
of his hearing notice when it could have, at any time,
served the notice on him in person but failed to do so. The
INA explicitly allows hearing notices to be served person-
ally on the alien or, where appropriate, the alien’s repre-
sentative. See 8 U.S.C. § 1252b(a)(2)(A) (1988). And
although it is “not our responsibility to prescribe the
form of service that the [government] should adopt,” see
Jones, 126 S. Ct. at 1721 (quoting Greene v. Lindsey, 456
U.S. 444, 455 n.9 (1982)), perhaps in this case personal
service would have been appropriate (and easier to accom-
plish than service by mail) since immigration authorities
knew that Peralta-Cabrera was residing at Arias’s apart-
ment. Or, perhaps better yet, the government could have
provided Peralta-Cabrera with notice of his hearing
when immigration agents detained him at O’Hare; initial
court dates are routinely set at the time that people are
arrested, and we fail to understand why that docketing
procedure cannot translate to the immigration context.
But that aside, because the government opted instead to
serve Peralta-Cabrera with his hearing notice via certified
mail, it had the responsibility to ensure that the notice
would be delivered to the address he provided.
Peralta-Cabrera’s petition for review is GRANTED. The
case is REMANDED to the BIA with instructions to grant
Peralta-Cabrera’s motions to reopen and to vacate his in
absentia deportation order. We express no opinion regard-
ing his motion to transfer venue.
16 No. 06-2254
A true Copy:
Teste:
________________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit
USCA-02-C-0072—9-7-07
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145 F.3d 1343
NOTICE: Ninth Circuit Rule 36-3 provides that dispositions other than opinions or orders designated for publication are not precedential and should not be cited except when relevant under the doctrines of law of the case, res judicata, or collateral estoppel.UNITED STATES OF AMERICA, Plaintiff - Appellee,v.Manfred Otto SIMON, Defendant - Appellant.United States of America, Plaintiff - Appellee,v.Frederick Manfred Simon, Defendant - Appellant.
Nos. 97-30248, 97-30250.
United States Court of Appeals, Ninth Circuit.
Submitted June 8, 1998**.Decided June 12, 1998.
Appeal from the United States District Court for the District of Montana, Charles C. Lovell, District Judge, Presiding.
Before REINHARDT, THOMPSON, and LEAVY, Circuit Judges.
1
MEMORANDUM*
2
In these companion appeals, Manfred Otto Simon and his son, Frederick Manfred Simon, appeal their sentences imposed following their guilty pleas to conspiracy to commit mail fraud and wire fraud in violation of 18 U.S.C. § 371. We have jurisdiction pursuant to 28 U.S.C. § 1291. We review for abuse of discretion, United States v. Bollinger, 940 F.2d 478, 480 (9th Cir.1991).
3
Manfred Simon (97-30248) contends that the district court erred by prohibiting him from engaging in the railroad parts business as a condition of his probation because the restriction is more than the minimum condition necessary to protect the public and amounts to punishment. Frederick Simon (97-30250) makes the same claim with respect to his term of supervised release.
4
The district court may impose an occupational restriction if the court determines that a "reasonably direct relationship" exits between a defendant's business and his offense of conviction and the restriction is "reasonably necessary to protect the public" because there is reason to believe that the defendant would continue similar unlawful conduct. See U.S.S.G. § 5F1.5(a). Further, section 5F1.5 directs the district court to impose the restriction for "the minimum time and to the minimum extent necessary to protect the public." See U.S.S.G. § 5F1.5(b).
5
Here, the record reveals that the district court keyed the duration of each appellant's occupational restriction to the duration of his term of court-ordered supervision rather than determining what constituted the "minimum time" and "the minimum extent necessary to protect the public." Consequently, the district court abused its discretion in its application of section 5F1.5. See U.S.S.G. § 5F1.5, comment. (back'd.). We vacate the judgment of the district court and remand to the district court for the limited purpose of determining, as to each appellant, the minimum time and minimum extent necessary for imposition of the occupational restriction as a separate consideration from the length of supervision.
6
VACATED AND REMANDED.
7
JUDGE LEAVY WOULD AFFIRM THE JUDGMENT OF THE DISTRICT COURT.
**
The panel unanimously finds this case suitable for decision without oral argument. See Fed.R.App.P. 34(a); 9th Cir.R. 34-4
*
This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as provided by 9th Cir.R. 36-3
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163 Wis.2d 993 (1991)
473 N.W.2d 152
STATE of Wisconsin, Plaintiff-Respondent,
v.
Gregory L. GESCH, Defendant-Appellant.[]
No. 90-1328-CR.
Court of Appeals of Wisconsin.
Submitted on briefs January 8, 1991.
Decided June 20, 1991.
*994 For the defendant-appellant the cause was submitted on the briefs of Richard D. Martin, assistant public defender, of Milwaukee.
For the plaintiff-respondent the cause was submitted on the briefs of Donald J. Hanaway, attorney general, with David J. Becker, assistant attorney general.
Before Eich, C.J., Gartzke, P.J., and Sundby, J.
GARTZKE, P.J.
Gregory Gesch appeals from a judgment of conviction on one count of criminal trespass to a medical facility, sec. 943.145, Stats. The issue is whether the judgment should be reversed because the trial court denied the defendant's motion to excuse from the jury a brother of the state's police witness. We affirm the judgment.
*995 Gesch was arrested because of an incident at an abortion clinic. Madison Police Officer David Wineke was one of two officers dispatched to the clinic. The prosecution listed him as a potential witness at trial. When the jury was being selected, prospective juror Daniel Wineke stated that Officer Wineke was his brother. In response to defense counsel's questioning, juror Wineke stated that he and his brother live in Madison. They see each other about every other month and are on good terms. He stated that he would not feel uncomfortable if, during jury deliberations, another juror questioned his brother's credibility.
The court asked juror Wineke several questions to determine whether he could be impartial. Wineke answered that he could.[1] Gesch moved to strike Wineke for cause. The court refused. The court stated:
[D]emeanor of the juror ... is one of the factors upon which the Court exercises its discretion. I think it is fair to say that Mr. Wineke was very strong not *996 only in the substance but also in his demeanor in terms of asserting his independence. There were a couple of times he smiled when asked if he would have any difficulty seeing his brother criticized. I guess I inferred from that that he's quick to criticize his brother or certainly comfortable in the context of having his brother criticized .... I feel fairly confident, actually very confident that Mr. Wineke was quite forthright in his expression of his independence
....
Gesch used his peremptory challenges on other prospective jurors. Before the evidentiary portion of the trial, he again moved to disqualify juror Wineke for cause. Denying the motion, the court said:
Certainly I was suspicious and inclined to excuse him if he in fact didn't persuade me quite convincingly that he was of a very strong independent mind about treating his brother in a fashion virtually identical to a witness he didn't know. For many family situations, that would be a difficult proposition. It was clear to me that it was not a difficult proposition for that particular juror.
Officer Wineke testified at trial about the events at the clinic leading to Gesch's arrest. The state produced the testimony of several witnesses, but Officer Wineke was the only police witness to testify. The jury found Gesch guilty, and this appeal resulted.[2]
Gesch argues that Wineke's service on the jury denied him his right to due process and an impartial jury. He quotes from Nyberg v. State, 75 Wis. 2d 400, 404-05, 249 N.W.2d 524, 526 (1977) (citation omitted):
*997 A trial court must honor challenges for cause whenever it may reasonably suspect that circumstances outside the evidence may create bias or appearance of bias. These guidelines are equally if not more important in a criminal trial where the accused may eventually be deprived of his or her liberty.
Nyberg is not dispositive. Following the passage Gesch quotes, the Nyberg court noted that the trial court had conducted a thorough voir dire, dismissed some jurors for cause and declined to dismiss others. The Nyberg court concluded that the trial court used the correct standard for dismissing panel members and had not abused its discretion. 75 Wis. 2d at 405, 249 N.W.2d at 526. Implicit in the court's analysis is that whether a trial court "may reasonably suspect" bias or the appearance of bias must be determined with respect to the particular juror whom a party wants excused. Nyberg does not compel the creation of broad, general rules.
[1]
Gesch does not argue that juror Wineke was partial or that the trial court's assessment of his ability to be impartial was erroneous. He points only to the fact that the juror is the brother of the police witness. That is not enough.[3] Gesch proposes a per se rule barring jury service *998 by relatives of witnesses. A per se rule would remove the matter from the trial court's discretion and convert it to an exclusion required by law. Gesch cites cases from other states,[4] but the Wisconsin Supreme Court has been "reluctant to exclude groups of persons from serving as petit jurors as a matter of law." State v. Louis, 156 Wis. 2d 470, 479, 457 N.W.2d 484, 488 (1990), cert. denied, 111 S. Ct. 1078 (1991). The Louis court refused to hold that, as a matter of law, jurors must be excused who are officers in the same police department as other officers who will testify.[5]
[2]
Gesch argues that sec. 805.08(1), Stats., compels Wineke's being excused from the jury. The statute provides in relevant part:
The court shall examine on oath each person who is called as a juror to discover whether the juror is related by blood or marriage to any party or to any *999 attorney appearing in the case .... If a juror is not indifferent in the case, the juror shall be excused.
Gesch argues that Officer Wineke should be considered a "party" and therefore his brother should have been excused from the jury. Gesch notes that the state was represented by only two persons in the courtroom, the prosecutor and Officer Wineke, that the criminal complaint was founded on Wineke's report, and that he was the state's only witness. Gesch concludes that Officer Wineke was the "functional equivalent" of a party. We disagree.
[3]
Section 805.08(1), Stats., mandates excusing the relative of a party to avoid the juror's having to cast a vote which is deemed unquestionably to affect the fortune or future of a relative. Juror Wineke's vote would not unquestionably affect his brother's fortune or future.
Gesch argues that we have expanded "party" in sec. 805.08(1), Stats., to include persons who are so "closely allied" with a party that their interests are inseparable. He relies on State v. Noren, 125 Wis. 2d 204, 371 N.W.2d 381 (Ct. App. 1985). In Noren, the defendant, convicted of second-degree murder, appealed on grounds that the trial court should have excused a juror whose second cousin was married to the victim's sister. We said that marriage does not cause the blood relatives of one spouse to become related to the blood relatives of the other spouse. Id. at 211, 371 N.W.2d at 385. Gesch argues that we implicitly held that the victim in a criminal prosecution is a party for purposes of sec. 805.08(1). We did not. Because we held that the blood relatives of one spouse are not related to the blood relatives of the other spouse, we had no reason to decide whether a juror related to the victim must be excused.
*1000 We conclude that the judgment of conviction must be affirmed.
By the Court.Judgment affirmed.
SUNDBY, J. (dissenting).
There are relationships between prospective jurors and those who must ensure a criminal defendant a fair trial so close that it is contrary to human nature to expect that the juror can serve impartially. Such a relationship is present in this case. The juror Gesch challenged for cause is the brother of the arresting officer who was the state's only police witness.
I am sure that juror Wineke honestly believed that he could serve without partiality. The trial court conducted an extensive voir dire of the juror to determine whether he was actually biased. But actual bias is not the only test. "A trial court must honor challenges for cause whenever it may reasonably suspect that circumstances outside the evidence may create bias or appearance of bias." Nyberg v. State, 75 Wis. 2d 400, 404, 249 N.W.2d 524, 526 (1977) (emphasis added). Perhaps the circumstance is better described as implied bias, a term adopted by other courts. See United States v. Haynes, 398 F.2d 980, 984 (2d Cir. 1968), cert. denied, 393 U.S. 1120 (1969).
In determining whether a prospective juror should be excluded on this ground [implied bias] his statements upon voir dire are totally irrelevant; a person `may declare that he feels no prejudice in the case; and yet the law cautiously incapacitates him from serving on the jury because it suspects prejudice, because in general persons in a similar situation would feel prejudice.'
*1001 Id. at 984 (quoting United States v. Burr, 25 F. Cas. 49, 50 (C.C. Va. 1807) (No. 14692g)).
Here, the trial court suspected prejudice because of the close relationship between the prospective juror and the state's witness. The court said: "Certainly I was suspicious ...." The juror's responses to the court's questions satisfied the court that the juror was not actually biased. The juror's responses were, however, totally irrelevant. No matter how honest the juror's responses, the law cautiously incapacitated him from serving on the jury because in general, persons in a similar situation would feel prejudice. As Lord Coke put it: "[T]he law presumeth that one kinsman doth favour another before a stranger." 1 Coke's Commentary Upon Littleton (Butler & Hargrave's Notes) Note 157.a on Book 2, ch. 12 sec. 234 (1853).
Voir dire occurs at the beginning of criminal trials. The jurors are usually unfamiliar with criminal trials and may honestly believe that they can serve impartially. The conduct of the trial may educate the juror with too close a relationship to a witness, that he or she cannot make credibility determinations as impartially as he or she may have expected. By then, however, it is too late, as a practical matter, for the juror to withdraw. Hence the law's caution.
Further, the presence of a close relative of an important witness in the jury room may deter other jurors from making impartial credibility determinations, even if the juror/relative in fact remains impartial. A criminal defendant may not be made to bear this risk.
I do not, however, suggest a "class" or per se rule when a prospective juror is challenged because of a blood relationship with a witness. There may be no issue of credibility with respect to the witness. Where, however, as here, the witness's credibility is critical to the state's *1002 case, a challenge to a prospective juror who has a close blood relationship to the witness must be honored to avoid the appearance of bias. "In any sound judicial system it is essential not only that justice be done but also that it appear to be done." State v. Jackson, 203 A.2d 1, 11 A.L.R.3d 841, 852 (N.J. 1964), cert. denied, Ravenell v. New Jersey, 379 U.S. 982 (1965).
I conclude that the trial court applied an incorrect standard to Gesch's motion to excuse juror Wineke. The court sought only to determine the juror's actual bias and did not consider the juror's appearance of bias. I therefore dissent.
NOTES
[] Petition to review granted.
[1] The colloquy was as follows:
Q. Would you find it difficulty on sitting on [sic] a case where your brother is a potential witness?
A. No.
Q. You don't think you would? You think you would be able to fairly and impartially judge his testimony even though he is your brother? I don't want to presume anything about your relationship here.
A. I don't believe it would be significant.
Q. Okay. In other words, you feel that if I were to instruct you to not give any additional weight to his testimony and treat him as you would any witness that you didn't know as well as you know your brother, do you think you could do that?
A. Easily. Yes.
Q. Easily? Okay, that's fine.
[2] It would not have resulted had the trial court exercised its undoubted discretion to excuse juror Wineke.
[3] The dissent's quotation from Lord Coke misses the mark. When discussing a "principall challenge" to a juror, Lord Coke said:
And again a principall challenge is of two sorts, either by judgment of law without any act of his, or by judgment of law upon his owne act.
And it is said that a principall challenge is, when there is expresse favour or expresse malice.
1. Without any act of his, as if the juror be of blood or kindred to either partie, consaguineus, which is compounded ex con & sanguine, quasi eodem sanquine natus, as it were issued from the same blood; and this is a principal challenge, for that the law presumeth that one kinsman doth favour another before a stranger; and how far remote soever he is of kindred, yet the challenge is good.
1 Coke's Commentary Upon Littleton (Butler & Hargrave's Notes) Note 157.a on Book 2, ch. 12 sec. 234 (1853) (footnotes omitted).
As the full quotation shows, Lord Coke refers to disqualification of a juror related to a party, not to a juror related to a witness.
[4] He cites: Ex Parte Tucker, 454 So. 2d 552 (Ala. 1984); State v. Kuster, 353 N.W.2d 428 (Iowa 1984); Calvert v. Commonwealth, 708 S.W.2d 121 (Ky. Ct. App. 1986); Hayes v. Commonwealth, 458 S.W.2d 3 (Ky. 1970); Thompson v. State, 519 P.2d 538 (Okla. Crim. App. 1974); State v. Beckett, 310 S.E.2d 883 (W. Va. 1983); and State v. Kilpatrick, 210 S.E.2d 480 (W. Va. 1974).
[5] We are not free to adopt the approach taken by the dissent. As an error-correcting court, we are bound by Louis.
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144 Conn. 126 (1956)
CHARLES SMITH
v.
CITY OF NEW HAVEN ET AL.
Supreme Court of Connecticut.
Argued October 5, 1956.
Decided December 11, 1956.
INGLIS, C. J., BALDWIN, O'SULLIVAN, WYNNE and DALY, JS.
*127 T. Holmes Bracken, for the appellant (defendant Esposito).
James O. Shea, for the appellee (plaintiff).
BALDWIN, J.
The plaintiff brought this action against the city of New Haven and Eustacio Esposito. In the first count of his complaint he sought recovery against the city for a claimed defect in a public highway. The court directed a verdict in favor *128 of the city, judgment was rendered upon this verdict, the plaintiff took no appeal, and further consideration of this feature of the case is not required.
In a second count addressed to the defendant Esposito, the plaintiff sought to recover upon two theoriesthat Esposito was negligent and that he had created and maintained a nuisance, thereby causing the plaintiff's injuries. The jury returned a verdict in favor of the plaintiff against this defendant, judgment was rendered upon it, and he has appealed. He assigns error in the charge, in the granting of permission to amend the complaint, in rulings on evidence, and in the refusal of the court to set aside the verdict as excessive.
The plaintiff claimed to have proved the following facts: He lived on the second floor of a two-family house located at 34 Morse Place in New Haven and owned by Esposito, hereinafter called the defendant. Late in the evening of February 11, 1953, the plaintiff returned to his home from a social engagement in New Haven, alighted from a taxicab, and went to his mailbox to pick up the mail. The mailbox was located near the paved portion of the roadway and some distance away from a flight of steps ascending a bank and leading to the walk to the front entrance to the house. When the plaintiff was returning from the mailbox to the steps, he fell over a water gate and broke his ankle. This water gate was located within the limits of the public highway, but outside of the paved portion, in front of the house where the plaintiff lived. Had there been an improved sidewalk there, the water gate would have been within its limits. The water gate was four and one-half inches in diameter and protruded, on one side, one and one-half inches above the ground, and on the other, three and one-half *129 inches. It had been installed when the house was built in 1950 by the defendant and was maintained by him. When it was inspected in 1950 by the city plumbing inspector, it protruded as it did when the plaintiff was injured. The public had the right to use the area where the water gate was placed in traveling up and down Morse Place, although this portion of the highway was incorporated within the lawn in front of the house where the plaintiff lived. When the plaintiff rented the premises from the defendant in February, 1952, he did not agree to perform services for the defendant upon the premises. He and another tenant, however, occasionally cut the grass in front of the house. The water gate was at all times under the control of the defendant. The steps and walk leading to the house were used by the occupants of both floors of the dwelling.
The defendant made the following claims of proof: The installation of the water gate so that it protruded an inch or more above the ground and its maintenance in that condition were proper to allow it to be quickly found should an emergency arise, to keep the grass from covering it and the dirt from seeping in, and to better protect it from injury. The defendant did not have control of the water gate because the tenants were to take care of the premises outside of the house. The water gate stood up above the ground when the plaintiff began his tenancy and he knew of its location and condition.
The parties conceded that the water gate was located within the limits of the public highway and that the defendant's premises extended to the center line of the highway subject to the public easement for travel.
We shall consider first the errors claimed in the charge. A charge must be correct in law, adapted to *130 the issues and sufficient for the guidance of the jury. Boland v. Vanderbilt, 140 Conn. 520, 522, 102 A.2d 362. When a party submits requests to charge on a specific issue or issues, it is the duty of the court to comply in substance, at least, with the requests if they are applicable. Tyburszec v. Heatter,141 Conn. 183, 187, 104 A.2d 548. In applying these tests, the charge must be considered in its entirety. Danehy v. Metz, 140 Conn. 376, 379, 100 A.2d 843. We shall examine the defendant's claims of error in the charge in the light of these cardinal principles.
The defendant requested a charge to the effect that an abutting property owner has a right to maintain in that portion of the highway owned by him such appurtenances to his premises as do not unreasonably interfere with the use of the highway by the traveling public. He also requested charges dealing with the factors to be considered by the jury in determining whether the water gate did in fact interfere with public travel and whether the plaintiff was using the area where the water gate was placed as a pedestrian traveler in the highway. The court charged the jury that the relationship between the plaintiff and the defendant was that of tenant and landlord. This charge removed from the jury's consideration any question of the duty owed by the defendant as a property owner to the plaintiff as a traveler on the highway. It was favorable to the defendant because it removed from the case one of the grounds of liability claimed by the plaintiff, and the defendant has no justifiable complaint on this feature of the case. The defendant also sought in several specific requests charges dealing with the issue whether the defendant had retained control of the portion of the premises where the water gate was located or whether he had relinquished control to *131 the plaintiff as a tenant. These requests were not given literally by the court but were adequately covered in substance. Giambartolomei v. Rocky DeCarlo & Sons, Inc., 143 Conn. 468, 472, 123 A.2d 760; Maltbie, Conn. App. Proc., § 66. The court told the jury that it was the duty of the landlord to use reasonable care to keep in a reasonably safe condition that part of the building and grounds which were retained solely in his control, including passageways or approaches reserved for the common use of his tenants. It also charged that the matter of control presented an issue of fact, the burden of proof being upon the plaintiff to prove control in the defendant, and that the jury were to consider who "took care of this area, the purpose and designed use of the water box and whether it was in the path of a passageway or approach to the house in which the plaintiff lived as a tenant of the defendant." The charge on the issue of control was adequate to the facts of the case.
The defendant also complains of the court's refusal to give the specific charges requested by him on the issue of contributory negligence. We call attention to the failure of the defendant to include in his claims of proof any claim that the plaintiff was guilty of contributory negligence. This aside, the court did state that the same principles relating to negligence applied in considering the defendant's claim that the plaintiff himself was guilty of contributory negligence, except that the defendant had the burden of proving it. The court then went on to discuss the principles pertaining to negligence. It told the jury that the plaintiff had lived on the property for a year or more prior to the date of the injury and that the evidence disclosed that the condition of the water gate had existed for some time *132 prior to the plaintiff's accident and at the time when the plaintiff became a tenant. "This," said the court "is a circumstance of some moment." The court then went on to state that the plaintiff was bound to exercise a degree of care commensurate with a known condition. The defendant has no valid complaint upon this feature of the charge.
The defendant has assigned error also with respect to nine lengthy paragraphs of the charge as given. However, at the close of the charge he failed to take exception to any of the statements which these paragraphs contain other than those pertaining to the matters which we have hereinbefore discussed. Under the rules we cannot consider errors in the charge unless exceptions have been duly taken to them. Practice Book § 153; Hofacher v. Fox, 142 Conn. 179, 185, 112 A.2d 217.
The defendant claims error because the court, after the trial had begun, permitted the plaintiff to amend his complaint with respect to his injuries and resulting damage. The amendment was offered after the time when it could have been filed as a matter of right under General Statutes § 7852. The ruling called for the exercise of the court's legal discretion. Stanley v. M. H. Rhodes, Inc., 140 Conn. 689, 692, 103 A.2d 143; Cook v. Lawlor, 139 Conn. 68, 71, 90 A.2d 164. Our courts have followed a liberal policy relative to permitting amendments to pleadings after the expiration of the time during which, under § 7852, amendments may be filed as a matter of right. Practice Book §§ 93, 94, 95. The essential tests are whether the ruling of the court will work an injustice to either the plaintiff or the defendant and whether the granting of the motion will unduly delay a trial. Cook v. Lawlor, supra, 72. The finding does not disclose that the defendant *133 moved for either a postponement of the trial or a delay to permit a medical examination to be made by a qualified medical expert called in behalf of the defendant. We cannot say that the court abused its discretion by the ruling.
The rulings on evidence which the defendant alleges were erroneous pertain to the admission of testimony under the amendment or to the admission of expert testimony concerning the proper manner of installing a water gate. These claims lack merit and require no discussion.
The final claim to be considered is the court's refusal to set aside a verdict for $3000 because it was excessive. The applicable test is "whether the total amount of the verdict falls within the necessarily flexible limits of fair and reasonable compensation or is so large as to offend the sense of justice and compel a conclusion that the jury were influenced by partiality, prejudice or mistake." Gorczyca v. New York, N.H. & H.R. Co., 141 Conn. 701, 703, 109 A.2d 589. We review the court's ruling on the motion to set aside the verdict in the light of this rule and accord the court's action the necessarily favorable consideration arising from the fact that it supports that of the jury. Fairbanks v. State, 143 Conn. 653, 661, 124 A.2d 893. In the instant case, the court not only supported the action of the jury but went further, in justifying its refusal to set aside the verdict, by stating in its memorandum of decision that "[h]ad the court been the trier of fact, and found liability, the damages awarded would have run higher." The court's ruling on the motion cannot be disturbed.
There is no error.
In this opinion the other judges concurred.
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340 U.S. 887
71 S.Ct. 133
95 L.Ed. 644
DENNIS et al.v.UNITED STATES.
No. 336.
Decided Nov. 27, 1950.
Messrs.Harry Sacher and Abraham J. Isserman, for petitioners.
Solicitor General Perlman, for the United States.
The motion of petitioners for a postponement of oral argument is denied. The motion of petitioners for a member of the English Bar to participate in oral argument pro hac vice is granted. The motion of petitioners to grant an aggregate of two hours for oral argument, divided among three attorneys, is granted.
Mr. Justice CLARK took no part in the consideration or decision of these motions.
An individual statement was filed by Mr. Justice FRANKFURTER.
1
Individual Statement of Mr. Justice FRANKFURTER.
2
The petition for certiorari in this case was granted on October 23, 340 U.S. 863, 71 S.Ct. 91. For obvious reasons, criminal cases should be heard with every expedition. In view of the nature and range of the issues here involved, the case was set for argument on December 4, 1950. On November 17, the petitioners moved the Court to postpone the argument until January 22, 1951, in order to make possible participation in the argument by an English barrister.
3
Adequate presentation by qualified counsel of issues relevant to a litigation is indispensable to the adjudicatory process of this Court. To that end, litigants have the unquestioned right to make their choice from the members of the bar of this Court, or even to be represented by nonmembers of this bar who are given special leave under appropriate circumstances to appear pro hac vice. If a party is unable to secure representation, this Court, on cause shown, appoints qualified counsel. Intrinsic professional competence alone matters. The name or fame of counsel plays no part whatever in the attention paid to argument, and is wholly irrelevant to the outcome of a case.
4
If this were a case in which the Court were duly advised that the petitioners were without adequate legal representation and were unable to secure competent counsel, the Court would of course appoint counsel qualified to press upon the Court the arguments on behalf of the petitioners. There is not the remotest suggestion that the counsel who have thus far appeared in the Court of Appeals and here are not in every way fully equipped to present the cause of the petitioners. There is no suggestion that these lawyers will not in every was meet their duties to their clients as well as to the Court. Indeed it is clear that they are especially qualified for this professional task. These five lawyers argued these questions at length before the Court of Appeals and submitted full briefs to that court. They are the same five lawyers who successfully presented the motion for admission to bail to Circuit Justice Jackson, and on whose petition and brief this Court granted a review of the decision of the Court of Appeals. They are the same five lawyers who on November 20 filed a brief on behalf of the petitioners constituting a volume of 280 pages, which, even on a cursory examination, is disclosed as an able piece of advocacy.
5
Solicitous regard for every interest of the petitioners is part of the due administration of justice. In these circumstances their interests will be fully safeguarded if the case proceeds to argument as originally set, on December 4. If, on that day, counsel for petitioners deem it desirable to associate with themselves any other counsel, whether a member of the bar of this Court or, pro hac vice, a member of the bar of England or Australia, they are of course free to do so. See Rule 2 of the Rules of this Court, as amended, 28 U.S.C.A.
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UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 19-6726
UNITED STATES OF AMERICA,
Plaintiff - Appellee,
v.
BILLY DEONANDRE HODGE,
Defendant - Appellant.
Appeal from the United States District Court for the District of South Carolina, at Florence.
Terry L. Wooten, Senior District Judge. (4:08-cr-01082-TLW-1; 4:16-cv-02618-TLW)
Submitted: September 25, 2019 Decided: October 3, 2019
Before MOTZ, AGEE, and FLOYD, Circuit Judges.
Dismissed by unpublished per curiam opinion.
Billy Deonandre Hodge, Appellant Pro Se.
Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:
Billy Deonandre Hodge seeks to appeal the district court’s order denying relief on
his 28 U.S.C. § 2255 (2012) motion. The order is not appealable unless a circuit justice or
judge issues a certificate of appealability. 28 U.S.C. § 2253(c)(1)(B) (2012). A certificate
of appealability will not issue absent “a substantial showing of the denial of a constitutional
right.” 28 U.S.C. § 2253(c)(2) (2012). When the district court denies relief on the merits,
a prisoner satisfies this standard by demonstrating that reasonable jurists would find that
the district court’s assessment of the constitutional claims is debatable or wrong. Slack v.
McDaniel, 529 U.S. 473, 484 (2000); see Miller-El v. Cockrell, 537 U.S. 322, 336-38
(2003). When the district court denies relief on procedural grounds, the prisoner must
demonstrate both that the dispositive procedural ruling is debatable, and that the motion
states a debatable claim of the denial of a constitutional right. Slack, 529 U.S. at 484-85.
We have independently reviewed the record and conclude that Hodge has not made
the requisite showing. * Accordingly, we deny Hodge’s motion to appoint counsel, deny a
certificate of appealability and dismiss the appeal. We dispense with oral argument
*
After the district court entered its judgment, the Supreme Court decided United
States v. Davis, 139 S. Ct. 2319 (2019). In Davis, the Supreme Court held that the residual
clause of the definition of crime of violence in § 924(c)(3)(B) is unconstitutionally vague.
Davis, 139 S. Ct. at 2336; accord United States v. Simms, 914 F.3d 229, 232 (4th Cir. 2019)
(en banc), petition for cert. docketed, 87 U.S.L.W. 3427 (U.S. Apr. 24, 2019) (No. 18-
1338). However, we recently held that Hobbs Act robbery qualifies as a crime of violence
under the force clause in § 924(c)(3)(A), which remains intact after Davis. See United
States v. Mathis, 932 F.3d 242, 266 (4th Cir. 2019).
2
because the facts and legal contentions are adequately presented in the materials before this
court and argument would not aid the decisional process.
DISMISSED
3
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766 N.W.2d 241 (2009)
2009 WI App 41
THALACKER
v.
THALACKER.
No. 2007AP2567.
Court of Appeals of Wisconsin.
February 10, 2009.
Unpublished Opinion. Affirmed.
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IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
__________________________
No. 00-31154
(Summary Calendar)
__________________________
MARION DIXON, ET AL,
Plaintiffs,
MICHELLE JAMES ORSO;
LEROY PERRY;
KEVIN DUTHU,
Plaintiffs-Appellants,
versus
FORD MOTOR CREDIT COMPANY;
CHRYSLER FINANCIAL CORPORATION;
NISSAN MOTOR ACCEPTANCE CORPORATION;
LOUISIANA DEALER SERVICES INSURANCE, INC.;
FIRST ASSURANCE LIFE OF AMERICA;
AMERICAN NATIONAL INSURANCE COMPANY,
Defendants-Appellees.
-----------------------------------------------------------------
KEVIN WELLS, JR.; Etc; ET AL,
Plaintiffs,
versus
LOUISIANA DEALER SERVICES INC.;
FIRST ASSURANCE LIFE OF AMERICA;
CRESCENT CITY NISSAN EAST,
Defendants-Appellees.
___________________________________________________
Appeal from the United States District Court
for the Eastern District of Louisiana
(Nos. 98-CV-2456-J; 99-CV-1819-J)
___________________________________________________
April 2, 2001
Before HIGGINBOTHAM, WIENER, and BARKSDALE, Circuit Judges.
PER CURIAM:*
Plaintiffs-Appellants (collectively “Dixon”), who purchased
credit life insurance from Defendants-Appellees lenders and credit
insurers (collectively “Ford”) in connection with automobile
financing, appeal the district court’s grant of summary judgment to
Ford on their federal RICO claims and dismissal without prejudice
of their pendent state-law claims. We affirm.
I.
FACTS AND PROCEEDINGS
In this consolidated action, Dixon brings claims against Ford
under the Racketeer Influenced and Corrupt Organizations Act
(“RICO”)1 and the Louisiana Motor Vehicle Sales Finance Act
(“LMVSFA”),2 seeking, inter alia, treble damages, costs, and
attorneys’ fees under the civil liability provisions of RICO.3 The
gravamen of Dixon’s complaint is that Ford allegedly engaged in a
*
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.
1
18 U.S.C. § 1961 et seq.
2
La. Rev. Stat. 6:951 et seq.
3
See 18 U.S.C. § 1964(c).
2
mail-fraud scheme involving the sale and financing of credit life
insurance,4 in connection with vehicle financing contracts, without
disclosing to the purchasers that (1) the credit life insurance
premium includes an additional amount of coverage for unearned
interest on the contracts, which interest is never owed, resulting
in the insurance of a non-existent risk; and (2) approximately 60
to 70 percent of the credit life insurance premium is “pocketed” by
the vehicle dealer. Ford denies all liability.
To say that this case has had “a long and tortured history,”
as the district court put it, would be an understatement; were we
to narrate this procedural odyssey in its entirety, our account
would include four transfers to three district court judges, two
dismissals from the district court accompanied by two forays into
state courts, two changes in the named plaintiffs, and four amended
complaints. Only two recent episodes in this circuitous history,
however, are directly relevant to the issues that we must decide on
appeal today.
First, in May 2000, the district court denied both Ford’s
motions to dismiss the fourth amended complaint for failure to
state a claim and its motion for summary judgment; the district
court summarily concluded that after “considering all the
applicable law and standards, the Court does not believe this case
4
Credit life insurance is insurance on the life of the
debtor for the security of the creditor in connection with a loan
or other credit transaction.
3
should be dismissed for failure to state a claim or for any other
reason, nor does it believe that summary judgment is appropriate
under all the facts and circumstances.” Although the district
court’s order reiterates the parties’ claims and defenses, it does
not explain the reasoning behind the ruling.
Second, shortly after the district court made that ruling,
this case was transferred to another district court judge. In July
2000, the transferee judge, sua sponte, ordered the parties to
brief the questions “whether federal subject matter jurisdiction is
present in this case, and more specifically, whether plaintiff has
a viable RICO claim.” The transferee judge’s directive was
motivated by a concession made by Dixon’s counsel during oral
argument on another motion that “the sole basis for federal
jurisdiction in this matter is [the] alleged claim under RICO[.]”
After the parties filed their briefs, the district court
issued a ruling that dismissed Dixon’s RICO claims with prejudice
and dismissed pendent state-law claims without prejudice. In a
thorough, well-reasoned opinion, the district court concluded that
under Summit Properties, Inc. v. Hoechst, which we decided one
month after the earlier ruling by the previous judge on the motions
to dismiss, a plaintiff must plead detrimental reliance on the
predicate mail fraud to state a viable RICO claim.5 After
observing that Dixon had failed to plead such reliance, the
5
See 214 F.3d 556, 562 (5th Cir. 2000).
4
district court then went outside the pleadings to find that “[i]n
fact, the representative plaintiffs have testified in depositions
that they did not rely on any representations or omissions of the
defendants in deciding to purchase credit life insurance,” and
dismissed Dixon’s RICO claims with prejudice. The district court
also exercised its discretion to decline supplemental jurisdiction
over Dixon’s state-law claims, and dismissed them without
prejudice.
Dixon now appeals to us, contending, inter alia, that the
district court (1) erred in dismissing the RICO claims with
prejudice after considering evidence outside the pleadings but
without providing the required notice or opportunity to respond to
that evidence, (2) erred in declining to apply the law-of-the-case
doctrine to the previous judge’s earlier ruling on the viability of
the RICO claims, and (3) abused its discretion in declining to
exercise supplemental jurisdiction over the pendent state-law
claims. We shall address these issues seriatim.
II.
ANALYSIS
A. Standard of Review
We review a grant of summary judgment de novo, applying the
same standard as the district court.6 A grant of summary judgment
6
Morris v. Covan World Wide Moving, Inc., 144 F.3d 377, 380
(5th Cir. 1998). Although the district court styled its decision
as a dismissal for lack of subject matter jurisdiction, a reading
of the district court’s order discloses that the court properly
5
is proper only if there is no genuine issue as to any material
fact. The movant may demonstrate such a lack by pointing out the
absence of evidence to support an essential element of the
nonmovant’s claim, as “a complete failure of proof concerning an
essential element of the nonmoving party's case necessarily renders
all other facts immaterial."7 In deciding whether summary judgment
is proper, we must view the facts and the inferences to be drawn
from them in the light most favorable to the nonmovant.8 We review
a district court’s decision to decline to exercise supplemental
jurisdiction over pendent state-law claims for abuse of
exercised its federal-question jurisdiction and determined that
Dixon had failed to establish a claim under the federal statute
alleged in the complaint. We have long recognized that “[w]here
the existence of a cause of action is inextricably bound up with
the question of this court’s subject matter jurisdiction, we
treat the dismissal as one on the merits under Rule 12(b)(6) or
as a grant of summary judgment under Rule 56.” See Carpenters
Local Union No. 1846 v. Pratt-Farnsworth, Inc., 690 F.2d 489,
499-500 n.4 (5th Cir. 1982) (citation omitted). As the district
court considered material outside the pleadings in dismissing
Dixon’s federal claim with prejudice, we treat the dismissal as a
summary judgment and review it accordingly. See Federal Rule of
Civil Procedure 12(b) ("If . . . matters outside the pleading are
presented to and not excluded by the court, the motion shall be
treated as one for summary judgment and disposed of as provided
in Rule 56[.]"); see also Baker v. Putnal, 75 F.3d 190, 197 (5th
Cir. 1996) ("where a district court grants a motion styled as a
motion to dismiss but bases its ruling on facts developed outside
the pleadings, we review the order as an order granting summary
judgment”).
7
Celotex Corp. v. Catrett, 477 U.S. 317, 323-25 (1986).
8
Olabisiomotosho v. City of Houston, 185 F.3d 521, 525 (5th
Cir. 1999).
6
discretion.9
B. Summary Judgment on RICO Claims
Dixon argues that the district court erred by granting summary
judgment sua sponte to Ford on the RICO claims without providing
Dixon notice and a reasonable opportunity to respond to the
evidence presented by Ford as required under Rules 12(b) and 56.
Ford counters that even if Dixon did not receive adequate notice,
the grant of summary judgment should nevertheless be upheld under
the harmless error standard because a review of all Dixon’s
additional evidence discloses that there is no genuine issue of
material fact.10 We agree.
Under Summit, a plaintiff must demonstrate reliance on the
predicate mail fraud to establish the proximate causation required
under the RICO statute.11 Here, the district court concluded that
Dixon not only did not but also could not allege reliance, as “the
representative plaintiffs have testified in depositions that they
9
Batiste v. Island Records, Inc., 179 F.3d 217, 227 (5th
Cir. 1999).
10
See Nowlin v. Resolution Trust Corp., 33 F.3d 498, 504
(5th Cir. 1994).
11
See 214 F.3d at 561-62. Dixon unsuccessfully attempts to
evade the clear holding of Summit by distinguishing that case on
its facts: Summit, according to Dixon, involved
misrepresentations made to persons other than the plaintiffs, on
which the plaintiffs did not rely; here, Dixon claims,
“defendants directly participated in the transactions by which
[the plaintiffs] were damaged.” But Summit itself makes clear
that “any fraud during the sale of those products proximately
injured only those initial purchasers who relied on the alleged
misrepresentations[.]” Id. at 560.
7
did not rely on any representations or omissions of the defendants
in deciding to purchase credit life insurance.” Even though it is
generally true that leave should be liberally granted to amend
pleadings for failure to state a cause of action, under the instant
circumstances, when it appears beyond doubt that the plaintiffs can
prove no set of facts to support their RICO claims, the grant of
summary judgment to the defendants is proper. This is true even if
we assume that the plaintiffs did not receive sufficient summary-
judgment notice.12 Accordingly, the district court did not err in
granting summary judgment to Ford on Dixon’s RICO claims.
C. Law of the Case
Dixon also contends that the law-of-the-case doctrine bars the
district court from holding that the plaintiffs’ RICO claims are
fatally defective. More specifically, Dixon argues that the
district court’s prior ruling on Ford’s motions for dismissal and
summary judgment prior to the transfer of the case was “entitled to
substantial deference” and should not have been disturbed.
Ford responds, correctly, that under the law-of-the-case
doctrine, a successor judge has the same discretion to reconsider
12
See Leatherman v. Tarrant County Narcotics Intelligence &
Coordination Unit, 28 F.3d 1388, 1398 (5th Cir. 1994) (“When
there is no notice to the nonmovant, summary judgment will be
considered harmless if the nonmovant has no additional evidence
or if all of the nonmovant's additional evidence is reviewed by
the appellate court and none of the evidence presents a genuine
issue of material fact.”) (internal punctuation and citations
omitted).
8
an order as would the first judge, although the successor judge
should not overrule his predecessor’s order or judgment merely
because the successor judge would have decided matters
differently.13 But the doctrine does not apply when the prior
decision was erroneous, is no longer sound, or would create
injustice.14 In the instant case, our decision in Summit, which
clarified that RICO plaintiffs must establish reliance on the
predicate mail fraud, was not available for consideration by the
predecessor judge in ruling on Ford’s motions. Under these
circumstances, the law-of-the-case doctrine erected no barrier to
the successor judge’s consideration of the plaintiffs’ ability to
state a viable RICO claim in light of Summit’s supervening clear
holding that RICO plaintiffs must allege and prove reliance on the
predicate acts of alleged mail fraud.
D. Dismissal of Pendent State-Law Claims
In view of our decision that the district court providently
granted summary judgment to Ford on Dixon’s federal claims, we need
not linger long over Dixon’s contention that the district court
abused its discretion in declining to exercise supplemental
jurisdiction over Dixon’s pendent state-law claims. Under 28
U.S.C. § 1367(c)(3), the district court “may decline to exercise
supplemental jurisdiction over a claim . . . if . . . the district
13
See United States v. O’Keefe, 128 F.3d 885, 891 (5th Cir.
1997).
14
See id.
9
court has dismissed all claims over which it has original
jurisdiction.” In general, the dismissal of state-law claims is
favored when, as here, (1) the federal claims to which they are
pendent are dismissed and (2) the factors of judicial economy,
convenience, and fairness to litigants are not present.15
In declining to exercise supplemental jurisdiction in the
instant case, the district court emphasized that (1) pretrial
preparation “has largely been limited to addressing the
jurisdiction issue,” (2) the issue of class certification has yet
to be addressed, and (3) no trial dates or other deadlines have
been established. In addition, the relevant provisions of the
Louisiana statute at issue here have yet to be interpreted by a
Louisiana court.16 Under these circumstances, the district court
prudently concluded that “in the absence of any valid federal
claims and any justification stemming from judicial economy
concerns of issues of convenience or fairness to litigants, which
might be present if this litigation were more advanced,” it should
not “needlessly make decisions concerning state law.”17
15
See Guzzino v. Felterman, 191 F.3d 588, 594 (5th Cir.
1999) (citation omitted).
16
See 28 U.S.C. § 1367(c) (listing among the factors which a
court must consider in deciding whether to exercise supplemental
jurisdiction whether “the state claim raises a novel or complex
issue of State law”).
17
See also Guzzino, 191 F.3d at 594 (“Needless decisions of
state law should be avoided both as a matter of comity and to
promote justice between the parties, by procuring for them a
surer-footed reading of applicable law.”) (citation omitted).
10
Accordingly, the district court did not abuse its discretion in
declining to exercise supplemental jurisdiction over Dixon’s
pendent state-law claims.
III.
CONCLUSION
For the reasons explained above, the district court’s grant of
summary judgment to Ford on Dixon’s RICO claims and its dismissal
without prejudice of Dixon’s pendent state-law claims are
AFFIRMED.
11
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84 F.3d 522
70 Fair Empl.Prac.Cas. (BNA) 1377, 44 Fed. R.Evid. Serv. 354Elizabeth SHERLOCK, Plaintiff-Appellant,v.MONTEFIORE MEDICAL CENTER, Defendant-Appellee.
No. 1355, Docket 95-9128.
United States Court of Appeals,Second Circuit.
Argued April 12, 1996.Decided May 10, 1996.
Elizabeth Sherlock, Long Island City, New York, pro se.
John D. Canoni, New York City (Marcie L. Schlanger, Nixon Hargrave, Devans & Doyle, New York City, on the brief), for Defendant-Appellee.
Before: KEARSE and ALTIMARI, Circuit Judges, and MORAN, District Judge.*
KEARSE, Circuit Judge.
1
Plaintiff pro se Elizabeth Sherlock appeals from a final judgment of the United States District Court for the Southern District of New York, Harold Baer, Jr., Judge, dismissing her complaint alleging that defendant Montefiore Medical Center ("Montefiore") terminated her employment in violation of, inter alia, 42 U.S.C. §§ 1981, 1983, and 1985(3) (1994); Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq. (1994) ("Title VII"); and the Age Discrimination in Employment Act, 29 U.S.C. § 621 et seq. (1994 & Supp.1995) ("ADEA"). The district court dismissed Sherlock's claims under §§ 1981, 1983, and 1985(3) for failure to state a claim upon which relief can be granted; it dismissed her Title VII and ADEA claims on the ground that they were barred by the statute of limitations by reason of her failure to file suit within 90 days of receiving a right-to-sue letter from the Equal Employment Opportunity Commission ("EEOC"). Sherlock challenges these rulings on appeal. For the reasons below, we conclude that the court applied an inappropriate presumption in order to find Sherlock's Title VII and ADEA claims time-barred, and we therefore affirm in part and vacate and remand in part.
I. BACKGROUND
2
Montefiore is a not-for-profit medical institution engaged to provide medical services at New York City's Rikers Island Correctional Facility. In July 1989, Montefiore hired Sherlock, then age 45, to work as an HIV counselor at that facility. In October 1992, Montefiore terminated Sherlock's employment. Sherlock filed charges with the EEOC, alleging that Montefiore had discriminated against her on the basis of her age and gender. The EEOC dismissed those charges and issued a right-to-sue letter; the letter, dated February 15, 1995, stated that Sherlock could continue pursuit of her Title VII and ADEA claims by filing a private lawsuit but that "[s]uch a lawsuit must be commenced within 90 days of receipt of this" letter.
3
Sherlock commenced the present action on May 25, 1995, i.e., 99 days after the date of the EEOC right-to-sue letter. She asserted claims under Title VII, the ADEA, §§ 1981, 1983, 1985(3), and state law. Montefiore moved to dismiss the complaint on the grounds, inter alia, that it failed to state a claim on which relief could be granted and that the claims under Title VII and the ADEA were time-barred because the complaint was filed more than 90 days after receipt of the right-to-sue letter.
4
In an Opinion and Order, 1995 WL 542458, dated September 11, 1995 ("District Court Opinion"), the district court granted the motion to dismiss, finding that the complaint failed to state a claim (a) under 42 U.S.C. § 1981 because it did not allege that Sherlock was a member of a racial minority, (b) under § 1983 because it did not allege state action, and (c) under § 1985(3) because, inter alia, it did not allege the violation of a right that could serve as the basis for a § 1985(3) claim. The court dismissed the claims asserted under Title VII and the ADEA on the ground that they were untimely, stating, in pertinent part, as follows:
5
Sherlock filed this claim ninety-six days after receiving her right-to-sue letter, thus exceeding the ninety-day statute of limitations by six days. The EEOC mailed notice to Sherlock on February 15, 1995. A presumption exists that an EEOC notice is received three days after its mailing. Baldwin County Welcome Center, 466 U.S. at 148 n. 1 [104 S.Ct. at 1724 n. 1]. Accordingly, Sherlock is presumed to have received her right-to-sue letter on February 18, 1995. Because Sherlock commenced this action on May 25, 1995--ninety-six days later--her Title VII and ADEA causes of action must be dismissed as untimely.
6
District Court Opinion at 4. Having dismissed all of Sherlock's federal claims, the court also declined to exercise supplemental jurisdiction over her state-law claims. Judgment was entered dismissing the action, and this appeal followed.
II. DISCUSSION
7
On appeal, Sherlock contends principally that the court erred in finding her Title VII and ADEA claims time-barred. We conclude that, on the basis of the present record, the court erred in so ruling as a matter of law.
8
A. The Timeliness of the Title VII and ADEA Claims
9
In order to be timely, a claim under Title VII or the ADEA must be filed within 90 days of the claimant's receipt of a right-to-sue letter. 42 U.S.C. § 2000e-5(f)(1); see also Baldwin County Welcome Center v. Brown, 466 U.S. 147, 149-50, 104 S.Ct. 1723, 1724-25, 80 L.Ed.2d 196 (1984) (per curiam); Cornwell v. Robinson, 23 F.3d 694, 706 (2d Cir.1994). Normally it is assumed that a mailed document is received three days after its mailing. See, e.g., Baldwin County Welcome Center v. Brown, 466 U.S. at 148 n. 1, 104 S.Ct. at 1724 n. 1 (citing Fed.R.Civ.P. 6(e) ("Whenever a party has the right or is required to do some act or take some proceedings within a prescribed period after the service of a notice or other paper upon the party and the notice or paper is served upon the party by mail, 3 days shall be added to the prescribed period.")). And normally it may be assumed, in the absence of challenge, that a notice provided by a government agency has been mailed on the date shown on the notice. See Baldwin County Welcome Center v. Brown, 466 U.S. at 148 & n. 1, 104 S.Ct. at 1724 & n. 1.
10
Although such presumptions are convenient and reasonable in the absence of evidence to the contrary, the Baldwin case, on which the district court in the present case relied, did not suggest that they are irrebuttable. While the Baldwin Court noted the presumed date of receipt, the issue in that case was not the date on which the right-to-sue letter had been received but rather whether the forwarding of that letter by the plaintiff to the district court constituted the commencement of the lawsuit. See, e.g., id. at 150 n. 4, 104 S.Ct. at 1725 n. 4. If a claimant presents sworn testimony or other admissible evidence from which it could reasonably be inferred either that the notice was mailed later than its typewritten date or that it took longer than three days to reach her by mail, the initial presumption is not dispositive. See, e.g., Smith v. Local Union 28 Sheet Metal Workers, 877 F.Supp. 165, 172 (S.D.N.Y.1995) (determining date of receipt on basis of testimonial evidence), aff'd mem., --- F.3d ----, 1996 WL 53650 (2d Cir. Feb. 8, 1996).
11
The record in the present case provides clear ground to question the dates on which the EEOC notice, which bore the typed date February 15, 1995, was (a) mailed by EEOC and (b) received by Sherlock. There is no evidence from EEOC itself as to the date on which EEOC mailed the letter to Sherlock, but the letter was addressed both to Sherlock and to Montefiore, and the copy received by Montefiore is part of the record. That copy bears two stamped dates, to wit, February 27 on the upper right, and February 28 on the lower right. At oral argument of this appeal, Montefiore's counsel informed us that these stamps indicate the timing of Montefiore's own receipt of the letter. Thus, the record indicates that Montefiore itself did not receive the letter until at least February 27. A notation showing an unexpectedly late date of arrival, affixed by a party that has an interest in claiming its earlier arrival, is admissible against that party as an admission. Fed.R.Evid. 801(d)(2). The fact that Montefiore, as one of two addressees, received the letter at least 12 days after its typewritten date plainly raises a question of fact as to whether Sherlock, the other addressee, received it within three days of its typewritten date.
12
We hasten to note that we would not regard the presence of a self-serving date-of-receipt notation on the claimant's copy of a right-to-sue letter (there was no date-of-receipt notation on Sherlock's copy) as evidence rebutting the presumption that the letter was received three days after its typewritten date, unless the claimant also presented an affidavit or other admissible evidence of receipt on the noted date. We also note that, leaving aside the Montefiore copy of the letter, the evidence that Sherlock proffered to the district court in the present case was not sufficient to rebut the presumption. Sherlock submitted her own affidavit stating, in pertinent part, (a) that she had no recollection of when she received the letter, and (b) that her husband believed that she had received the letter on February 27 or 28. There was no affidavit by Sherlock's husband, and her representation as to his statement is hearsay. Neither that proffer of inadmissible evidence nor her own lack of recollection sufficed to rebut the presumption that the letter had been received by February 18.
13
Nonetheless, as discussed above, the evidence that Montefiore did not receive the letter until at least February 27 creates an issue of fact as to whether Sherlock received it at or about the same time, and hence whether her complaint, filed 87 days thereafter, was timely. Accordingly, we vacate the dismissal of Sherlock's claims under Title VII and the ADEA.B. The Other Federal Claims
14
Sherlock's other federal claims were properly dismissed. Her complaint failed to state a claim under 42 U.S.C. § 1981 because, as the district court noted, it did not allege that she was a member of a racial or ethnic minority. See, e.g., Saint Francis College v. Al-Khazraji, 481 U.S. 604, 613, 107 S.Ct. 2022, 2028, 95 L.Ed.2d 582 (1987); Mian v. Donaldson, Lufkin & Jenrette Securities Corp., 7 F.3d 1085, 1087 (2d Cir.1993) (per curiam).
15
Sherlock's claim under § 1983 was properly dismissed because, insofar as Montefiore's employment practices are concerned, the complaint fails to allege state action. The fact that a municipality is responsible for providing medical attention to persons held in its custody may make an independent contractor rendering such services a state actor within the meaning of § 1983 with respect to the services so provided, see, e.g., West v. Atkins, 487 U.S. 42, 54, 108 S.Ct. 2250, 2258, 101 L.Ed.2d 40 (1988); but that fact does not make the contractor a state actor with respect to its employment decisions, see, e.g., Rendell-Baker v. Kohn, 457 U.S. 830, 840-43, 102 S.Ct. 2764, 2770-72, 73 L.Ed.2d 418 (1982); Wolotsky v. Huhn, 960 F.2d 1331, 1335-36 (6th Cir.1992).
16
The complaint failed to state a claim under § 1985(3) because, inter alia, that section creates no substantive rights but merely "provides a remedy for violation of the rights it designates," Great American Federal Savings & Loan Association v. Novotny, 442 U.S. 366, 372, 99 S.Ct. 2345, 2349, 60 L.Ed.2d 957 (1979), and the Supreme Court has held that in light of the enforcement and conciliation mechanism created by Congress for claims under Title VII, see 442 U.S. at 372-78, 99 S.Ct. at 2349-52, the "deprivation of a right created by Title VII cannot be the basis for a cause of action under § 1985(3)," id. at 378, 99 S.Ct. at 2352. The similar mechanism for enforcement and conciliation of claims under the ADEA, e.g., compare 42 U.S.C. § 2000e-5(b) with 29 U.S.C. § 626(b), persuades us that a violation of the ADEA likewise cannot be the basis for a claim under § 1985(3). Cf. Zombro v. Baltimore City Police Department, 868 F.2d 1364, 1366-68 (4th Cir.1989) (claim under § 1983 may not be predicated on violation of ADEA), cert. denied, 493 U.S. 850, 110 S.Ct. 147, 107 L.Ed.2d 106 (1989).
C. The State-Law Claims
17
The district court also dismissed Sherlock's state-law claims, declining to exercise supplemental jurisdiction over them because it had dismissed all of her federal claims. In light of the reinstatement of Sherlock's Title VII and ADEA claims, we also vacate the dismissal of the state-law claims.
CONCLUSION
18
The judgment of the district court is affirmed insofar as it dismissed the claims asserted under 42 U.S.C. §§ 1981, 1983, and 1985(3). The judgment is vacated insofar as it dismissed the claims asserted under Title VII, the ADEA, and state law, and the matter is remanded for further proceedings not inconsistent with this opinion.
19
The parties shall bear their own costs with respect to this appeal.
*
Honorable James B. Moran, of the United States District Court for the Northern District of Illinois, sitting by designation
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390 F.Supp.2d 1067 (2005)
UNITED STATES of America,
v.
Matthew B. SHIVERS, Defendant.
No. 4:05CR5-RH/WCS.
United States District Court, N.D. Florida, Tallahassee Division.
April 19, 2005.
Bruce E. Lowe, U.S. Attorney, Tallahassee, FL, for Plaintiff.
William Rourk Clark, Jr., Federal Public Defender Office, Tallahassee, FL, for Defendant.
ORDER DENYING MOTION TO DISMISS
HINKLE, Chief Judge.
The grand jury indicted defendant Matthew B. Shivers under 18 U.S.C. §§ 922(g)(1). That statute makes it unlawful for a convicted felon:
to ship or transport in interstate or foreign commerce, or to possess in or affecting commerce, any firearm or ammunition; or to receive any firearm or ammunition which has been shipped or transported in interstate or foreign commerce.
18 U.S.C. § 922(g)(1).
Mr. Shivers has moved to dismiss the indictment, asserting that the statute exceeds the scope of Congress's authority under the commerce clause. In support of this claim he cites United States v. Lopez, 514 U.S. 549, 115 S.Ct. 1624, 131 L.Ed.2d 626 (1995), which struck down 18 U.S.C. § 922(q). That statute prohibited possession *1068 of a firearm within specified proximity to a school, without regard to whether the firearm had moved in interstate commerce. Mr. Shivers notes that § 922(g) prohibits possession of a firearm "in or affecting commerce" without an express limitation to "interstate or foreign commerce," and he notes that in this respect the "possession" clause is unlike the "ship or transport" clause of § 922(g) and equivalent provisions in other subsections of § 922, which are explicitly limited to "interstate or foreign" commerce. Finally, Mr. Shivers cites United States v. Denalli, 73 F.3d 328 (11th Cir.1996), modified in part, 90 F.3d 444 (11th Cir.1996), which reversed a conviction for arson of a private home on the ground that the government failed to show that the crime had a substantial impact on interstate or foreign commerce.
Leaving aside any question of whether all or some of Mr. Shivers' claims are not properly raised by motion to dismiss, I deny the motion on the merits, as required by the law of the circuit.
The Eleventh Circuit has squarely rejected the assertion that Lopez invalidates § 922(g). See United States v. McAllister, 77 F.3d 387, 389-90 (11th Cir.1996) (holding § 922(g)(1) constitutional on its face and as applied). As construed there, § 922(g) applies only to firearms that have moved in interstate or foreign commerce. The school zone statute at issue in Lopez, § 922(q), included no such limitation. Thus § 922(g) is constitutional, even though § 922(q) was not. As the Eleventh Circuit said:
§ 922(g) makes it unlawful for a felon to "possess in or affecting commerce, any firearm or ammunition." 18 U.S.C. § 922(g) (emphasis added). This jurisdictional element defeats McAllister's facial challenge to the constitutionality of § 922(g)(1).
McAllister, 77 F.3d at 390; see also id. at 390 n. 4 (citing Lopez and contrasting § 922(g)(1) with predecessor statute 18 U.S.C. § 1202(a)). Thus, under the law of the circuit, the reference in § 922(g) to "commerce" means "interstate or foreign commerce," and this is sufficient to render the statute constitutional.
More recent Eleventh Circuit decisions confirm this result. See, e.g., United States v. Scott, 263 F.3d 1270, 1273-74 (11th Cir.2001) (holding that "the requirement that the felon `possess in or affecting commerce, any firearm or ammunition,' immunizes § 922(g)(1) from Scott's facial constitutional attack" and "reaffirm[ing] McAllister's holding that as long as the weapon in question has a `minimal nexus' to interstate commerce, § 922(g)(1) is constitutional"); United States v. Dupree, 258 F.3d 1258 (11th Cir.2001) (holding that "in or affecting commerce" language satisfies jurisdictional element required by the commerce clause, and reaffirming that only "minimal nexus to interstate commerce" is required) (citing McAllister, 77 F.3d at 390); United States v. Chisholm, 105 F.3d 1357, 1357-58 (11th Cir.1997) (holding that even if McAllister and Denalli are in tension, McAllister is binding precedent that controls the interpretation of § 922(g)(1)).
In short, the law of the circuit is that the limitation of § 922(g) to firearms that have moved in interstate commerce renders the statute constitutional, and that the government need show no further nexus to interstate commerce.
There is, to be sure, some tension between this approach which requires only a technical connection with interstate commerce and establishes little real restraint on congressional authority and the more substantive approach reflected in cases such as Denalli and United States v. Morrison, 529 U.S. 598, 120 S.Ct. 1740, 146 L.Ed.2d 658 (2000) (invalidating Violence Against Women Act). If the slate were clean, much could be said for the view that *1069 the commerce clause should be applied based on the substance of an event at issue and the real effect of that event or the overall effect of events of that type on interstate commerce. On this view, it would not matter so much that a firearm might have crossed a state line in 1909, which may be all the government can or need prove in the case at bar. But such an emphasis on the substance of transactions of the type at issue might not help Mr. Shivers; the overall effect of felons possessing firearms on the life and health of the nation might well be deemed a substantial effect on interstate commerce. In order to prevail, then, Mr. Shivers would have to steer a narrow if not non-existent path between an exceedingly technical approach (under which movement of a firearm in interstate commerce is sufficient to bring a case within federal jurisdiction), on the one hand, and a realistic and substantive approach (under which the overall effect on interstate commerce of felons possessing firearms might be deemed sufficient to bring such cases within federal jurisdiction), on the other hand. Whether such a path could be steered is, at the district court level, a moot point, because the law of the circuit has settled the matter in favor of the technical approach, at least with respect to § 922(g).
For these reasons,
IT IS ORDERED:
Defendant's motion to dismiss (document 14) is DENIED.
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IN THE SUPREME COURT OF PENNSYLVANIA
MIDDLE DISTRICT
COMMONWEALTH OF PENNSYLVANIA, : No. 689 MAL 2015
:
Respondent :
: Petition for Allowance of Appeal from
: the Order of the Superior Court
v. :
:
:
PERNELL CHARLES RIDDICK, :
:
Petitioner :
ORDER
PER CURIAM
AND NOW, this 29th day of December, 2015, the Petition for Allowance of
Appeal is DENIED.
Mr. Justice Eakin did not participate in the decision of this matter.
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949 P.2d 171 (1997)
86 Hawai`i 331
STATE of Hawai`i, Plaintiff-Appellee,
v.
Wendy SHAMP, Defendant-Appellant.
No. 17808.
Intermediate Court of Appeals of Hawai`i.
November 18, 1997.
*172 Richard N. Wurdeman, Deputy Public Defender, on the brief, for defendant-appellant.
Mark R. Simonds, Deputy Prosecuting Attorney, County of Maui, on the brief, Wailuku, for plaintiff-appellee.
Before BURNS, C.J., and WATANABE and KIRIMITSU, JJ.
KIRIMITSU, Judge.
Defendant-Appellant Wendy Shamp (Defendant) was convicted of, among other charges,[1] Operating a Vehicle Without No-Fault Insurance, Hawai`i. Revised Statutes (HRS) § 431:10C-104 (1993) (or chapter 431).[2] Defendant appeals from the District Court of the Second Circuit's February 1, 1994 judgment and denial of her motion for a judgment of acquittal as to the HRS § 431:10C-104 offense. For the reasons set forth below, we reverse the district court's conviction of Defendant as to the HRS § 431:10C-104 offense on the grounds that the court committed plain error because the State of Hawai`i (the State) did not prove all of the elements necessary for conviction. We affirm the court's convictions of Defendant in regards to her violations of HRS § 286-25 (1993) and HRS § 249-11 (1993). As guidance to the prosecutor's office and the district court, we also conclude that the district court erred by not following the procedures set forth in HRS § 805-13(b) (1993).[3]
I. BACKGROUND
This case involves a no-fault insurance violation that is relatively common. The underlying *173 facts are undisputed. On September 21, 1993, Maui police officer William Hankins (Officer Hankins) stopped Defendant's car at Kepaniwai Park for having a delinquent auto tax and expired safety tags. When Officer Hankins asked Defendant for proof of nofault insurance or other form of bonds, surety or self-insurance, as required by statute, Defendant failed to produce such evidence. Defendant was the driver of the car, though not its registered owner.
At trial, Defendant also produced no evidence of insurance. The court listened to Officer Hankins' testimony and the arguments of the State and Defendant, but at no time required the vehicle's registered owner (the owner) to appear in court. At the conclusion of the State's case, Defendant field a motion for judgment of acquittal in regards to the insurance violation, contending that, pursuant to HRS § 805-13(b), the court's judgment against Defendant was procedurally flawed. HRS § 805-13(b) provides that "[i]n all cases of citation for alleged violations of chapter 294 or section 286-116 the court shall required the appearance of the driver cited and the registered owner of the motor vehicle." (Emphasis added.) Defendant argued that the trial court's failure to "require the appearance of the ... registered owner of the motor vehicle" was grounds for dismissing the insurance charge against Defendant. Id.
The district court denied the motion. Defendant rested her case without introducing any evidence and the court decided:
That on September the 20th, 1993, (inaudible) a publicwithin Honokowai [Honokōwai][4] Park, considered a public roadway, [Defendant] was seated behind a wheel of a two door Datsun. Defendant was in the driver's seat.
Probable cause for the stop, traffic stop, was that the bumper and the license plate of the vehicle operated by defendant indicated that the safety sticker and tax had expired and that the tax was delinquent and the safety sticker had expired.
Upon the stop the police officer is required by law to ask [Defendant] to produce the no-fault insurance card which she was unable to do. Nor did she produce evidence of self-insurance. No explanation as to why there was no insurance.
The vehicle was privately owned and was (inaudible). Exhibit 1 in evidence indicates ownership of the vehicle and that the vehicle was not exempt from no-fault insurance and the safety sticker had expired and the (inaudible) also expired.
Therefore the Court finds that on said date the vehicle operated by [Defendant] was being operated on a public highway when that vehicle was not then insured by a policy of no-fault insurance as required by Chapter 431.
Further finds that the tax was delinquent and there was no valid safety sticker on said vehicle.
The Court finds [Defendant] guilty of all charges....
(Emphases added.) The court fined Defendant $500 and revoked her license for three months, pending the disposition of this appeal. Defendant filed a timely notice of appeal on May 11, 1994.
II. STANDARD OF REVIEW
"[A]lthough points of error not raised on appeal in accordance with Hawai`i Rules of Appellate Procedure (HRAP) Rule 28(b)(4) will ordinarily be disregarded, this court, at its option, may notice a plain error not presented." State v. Schroeder, 76 Hawai`i 517, 532, 880 P.2d 192, 207 (1994). In the interest of justice, the court may take notice of plain errors not presented by either party on appeal. See HRAP Rule 28(b)(4)(D); see also Hawai`i Rules of Penal Procedure (HRPP) Rule 52(b) ("[p]lain errors or defects affecting substantial rights may be noticed although they were not brought to the attention of the court.").
*174 Plain error may occur where "substantial evidence" does not support every material element of the crime. State v. Batson, 73 Haw. 236, 248-49, 831 P.2d 924, 931, reconsideration denied, 73 Haw. 625, 834 P.2d 1315 (1992). Substantial evidence "is credible evidence which is of sufficient quality and probative value to enable a [person] of reasonable caution to support a conclusion." Id. Whether substantial evidence supports the conviction "is to be determined by an appellate court upon review of the evidence adduced in the light most favorable to the prosecution." State v. Naeole, 62 Haw. 563, 565, 617 P.2d 820, 823 (1980) (citing Byrnes v. United States, 327 F.2d 825 (9th Cir. 1964)).
In the instant case, the inquiry is whether the district court's conviction of Defendant was supported by "substantial evidence." We hold that it was not.
III. DISCUSSION
The sole point of error Defendant raises on appeal is that the district court's failure to require the registered owner of the vehicle to appear in court was, pursuant to HRS § 805-13(b), reversible error. We need not address this issue because we hold that the State failed to prove one of the three necessary elements for an HRS § 431:10C-104 violation, and, therefore, the district court committed plain error in convicting Defendant. For the reasons stated below, we reverse the district court's conviction.
However, in order to guide the district court, the prosecutor's office, and enforcement officers, we further hold that the court erroneously failed to follow the procedures set forth in HRS § 805-13. We discuss this error because it is important that, in future cases, the district court, the prosecutor's office, and enforcement officers follow the mandates set forth in HRS § 805-13.
A. The District Court's Conviction of Defendant Constituted Plain Error.
Defendant presents no objections to the district court's finding that she was guilty of violating HRS § 431:10C-104; rather, she argues that her motion for judgment of acquittal should have been granted due to a procedural error. We review her conviction as a threshold inquiry into the soundness of the district court's denial of Defendant's motion for judgment of acquittal.
Normally, this court will not review questions not presented to it on appeal, though it can take notice of "plain errors[.]" State v. Nguyen, 81 Hawai`i 279, 292-93, 916 P.2d 689, 702-03 (1996); HRAP Rule 28(b)(4)(D). Though the "court's power to deal with plain error is one to be exercised with caution," Nguyen, 81 Hawai`i at 292, 916 P.2d at 702, an appellate court may, on its own motion, "`notice errors to which no exception has been taken, if the errors are obvious, or if they otherwise seriously affect the fairness, integrity or public reputation of judicial proceedings.'" Id. at 293, 916 P.2d at 703 (quoting United States v. Atkinson, 297 U.S. 157, 160, 56 S.Ct. 391, 392, 80 L.Ed. 555 (1936)).
In a criminal case, the State has the burden of proving all elements of the offense beyond a reasonable doubt. HRS § 701-114(1) (1993).[5] In the instant case, two issues are presented in regards to whether the State met its burden of proving, beyond a reasonable doubt, all the elements of an HRS § 431:10C-104 offense: (1) Is the state of mind of a defendant an element of an HRS § 431:10C-104 violation; and (2) if so, did the prosecution prove it beyond a reasonable doubt. Although the law was previously unclear regarding the first issue, we now hold that the state of mind of a defendant is *175 an element of an HRS § 431:10C-104 offense. Moreover, there is a statutory "reasonable belief" presumption underlying this element; the court must presume that the borrower of a motor vehicle reasonably believed that the vehicle was insured. Thus, in order to convict a defendant, the State must prove that the state of mind of a person who borrowed an uninsured motor vehicle was "knowing" or, in certain circumstances, "reckless." Construing the facts in the light most favorable to the prosecution, we conclude that the district court committed plain error because the State failed to prove this state-of-mind element.
1. State of mind is an element of an HRS § 431:10C-104 offense.
Previously, in order to convict a defendant of failing to possess no-fault insurance, the State had the burden of proving: "(1) the motor vehicle was being operated on a public highway[;] (2) the vehicle was not insured under a no-fault policy[;] and (3) the operator was either the owner or, if not the owner, had knowledge of or acted recklessly by not `ascertaining that there was a valid, current no-fault card in the vehicle.'" State v. Arakaki, 7 Haw.App. 48, 51, 744 P.2d 783, 785 (1987)[6] (quoting State v. Lesher, 66 Haw. 534, 537, 669 P.2d 146, 148 (1983)), overruled on other grounds, State v. Dow, 72 Haw. 56, 806 P.2d 402 (1991). The first two elements of the offense are not at issue in the instant case; they are statutorily required elements that the district court properly found Defendant guilty of violating. See HRS § 431:10C-104(a).
Rather, in the instant case, the third "state-of-mind" element is the problematic one. At no time did the State inquire into or prove that Defendant, as the driver of the motor vehicle but not its registered owner, had the requisite state of mind (i.e., knowing or recklessly not knowing that the vehicle was uninsured). On appeal, the State concedes the necessity of proving the three elements, but apparently assumes that the State's burden to prove the third element arises only if a defendant presents a "good faith" defense.[7] However, the State relies on *176 old law[8] because this is no longer the condition of Hawai`i's insurance code or state law.
In order to understand this third element and clarify our holding, we will briefly discuss the evolution of the state-of-mind requirement.[9] In State v. Lesher, 66 Haw. at 536-37, 669 P.2d at 147-48, the Hawai`i Supreme Court held that pursuant to HRS § 702-204 (1993),[10] an insurance violation required, at least, the driver of a borrowed vehicle to possess a knowing or reckless state of mind. The court further held that where a driver who was not the owner of the vehicle committed a no-fault insurance violation, the court should, in effect, presume that the driver acted recklessly "[b]y operating the vehicle in question without ascertaining that there was a valid, current no-fault card in the vehicle...." Id. at 537, 669 P.2d at 148. In particular, the court held that "[a]ll citizens are charged with knowledge of the law. It is therefore incumbent upon the borrower of a vehicle to ascertain whether or not there is a current no-fault insurance card in the vehicle." Id. Thus, the State's burden of proof was easily satisfied when Defendant presented a good faith "lack of knowledge" defense to the charge because, under Lesher, the presumption was that the defendant had knowledge of the uninsured status of the vehicle he or she was driving.
The decision in Lesher was affirmed and clarified in two subsequent cases, State v. Arakaki and State v. Palpallatoc, 71 Haw. 178, 787 P.2d 214 (1990), overruled by State v. Bolosan, 78 Hawai`i 86, 90, 890 P.2d 673, 677 (1995). However, the state legislature took issue with Palpallatoc's holding, Sen. Stand. Comm. Rep. No. 2616, in 1990 Senate Journal, at 1091, which placed an affirmative duty upon the borrower of a motor vehicle to inquire into the vehicle's insurance status. Palpallatoc, 71 Haw. at 182, 787 P.2d at 216. Thus, in 1990 the legislature revised HRS § 431:10C-117 (1993), the penalty portion of the insurance code.[11] Under this revision, a *177 driver of a borrowed vehicle is presumed to hold a "reasonable belief" that the vehicle he or she is driving is insured.[12] The 1990 revision created the reverse presumption from that created in Lesher and Palpallatoc: rather than presuming recklessness, the legislature clarified that when a person borrows a car from another, the act of borrowing the *178 car creates a presumption that the person held a reasonable belief that the car was insured. Bolosan, 78 Hawai`i at 90-91, 890 P.2d at 677-78;[13]State v. Kahaunaele, 10 Haw.App. 519, 531, 879 P.2d 566, 571 (1994).
As a Senate Standing Committee report stated,
[W]e find it is reasonable for a driver who borrows a car to assume that the borrowed vehicle is insured. The reasonableness of this assumption derives from the mandatory provisions of our automobile insurance law. The assumption is, however, rebuttable by proof of knowledge of the uninsured status of the vehicle.
Sen. Stand. Comm. Rep. No. 2164, in 1990 Senate Journal, at 929 (emphasis added). This presumption of reasonable belief thus created a duty for the State to rebut the presumption with "proof of knowledge" that the driver actually knew of the "uninsured status of the vehicle." Bolosan, 78 Hawai`i at 90-91, 890 P.2d at 677-78. Further, because of this amendment, "the borrower of a motor vehicle has a statutory right to reasonably believe that the borrowed motor vehicle is insured." Kahaunaele, 10 Haw.App. at 531, 879 P.2d at 571 (emphasis added); see also Sen. Stand. Comm. Rep. No. 2616, in 1990 Senate Journal, at 1091 ("a person has a right to reasonably believe that a borrowed vehicle is insured, as all vehicles are required to carry coverage by law").
Thus, while it may not be apparent from a facial reading of HRS § 431:10C-104 or case precedent, the third element has survived the 1990 statutory amendment and subsequent creation of a new state-of-mind presumption. The elements and defenses have not changed, though the presumption, and concomitant burden on the State, have.
The State, therefore, has the burden of proving: (1) actual knowledge of no insurance; or (2) a "reckless" lack of knowledge when facts are in evidence showing that the defendant should have "`affirmatively ascertain[ed]'" that the vehicle was insured. Bolosan, 78 Hawai`i at 91, 890 P.2d at 678 (quoting Conf. Comm. Rep. No. 113, in 1990 Senate Journal, at 813-14). This may occur, for example, where the borrower of a motor vehicle has reason to know that the vehicle is uninsured. In that case, the borrower of the vehicle would act with a "reckless" state of mind if he or she did not inquire into the vehicle's insurance status before he or she borrowed the motor vehicle.
However, so long as the borrower of the vehicle holds a "reasonable belief" that the vehicle is insured, he or she has no further duty to inquire into the status of the vehicle's insurance. In order to rebut the presumption of reasonable belief of insurance, this "reckless" state of mind, like the actual knowledge requirement, must be proved by the State.
The general rule is, therefore, that the State must prove beyond a reasonable doubt that the borrower of a motor vehicle knew that the vehicle was uninsured before he or she may be convicted of violating HRS § 431:10C-104, and be subjected to the penalty provisions of HRS § 431:10C-117.
In summary, the three elements that the State must prove beyond a reasonable doubt, in order to convict a driver who is not the owner of the vehicle, are, pursuant to HRS § 431:10C-104(a): (1) the vehicle was being driven on a "public street, road or highway of this State"; (2) the vehicle was not insured by no-fault insurance or some form of bond, surety or self-insurance; and (3) pursuant to HRS § 702-204, relevant case law and legislative history, the driver acted with the requisite state of mind. So long as the driver of the vehicle is not the vehicle's registered owner, he or she must have actually known that the vehicle was not insured by no-fault insurance, or, under certain *179 circumstances, be shown to have acted recklessly in not so knowing.
2. The district court committed plain error by convicting Defendant without substantial evidence of her state of mind.
In the instant case, the district court committed plain error by convicting Defendant of Operating a Vehicle Without No-Fault Insurance because the State did not, at any place in the record, inquire into and prove beyond a reasonable doubt the third state-of-mind element of the offense. Because "the borrower of a motor vehicle has a statutory right to reasonably believe that the borrowed motor vehicle is insured," Kahaunaele, 10 Haw.App. at 531, 879 P.2d at 571 (emphasis added), the court's error denied Defendant a statutory right. The denial of a statutory right can be considered a "substantial right" in this jurisdiction. State v. Timas, 82 Hawai`i 499, 509, 923 P.2d 916, 926, cert. denied, 81 Hawai`i 400, 917 P.2d 727 (1996). Further, the error seriously affects the "fairness, integrity or public reputation" of the district court's proceedings. The district court thus committed plain error, pursuant to HRPP Rule 52(b). We therefore reverse the district court's conviction of Defendant.
B. The District Court Erred by Not Following the Procedural Mandates Set Forth in HRS § 805-13.
Having concluded that Defendant was erroneously convicted, we now turn to the sole point of error raised by Defendant. We address this error, even though it is now a moot question, in order to guide the prosecutor's office, enforcement officers, and the district court in handling future cases.
Defendant argues that the district court's failure to require the owner of the vehicle to appear in court is, pursuant to HRS § 805-13(b), reversible error. A threshold inquiry is whether HRS § 805-13 is applicable to a violation of HRS § 431:10C-104. We agree with Defendant that HRS § 805-13 does apply to chapter 431:10C violations and that the district court erred in not requiring the vehicle's owner to appear in court; also, Officer Hankins erred by not properly citing the vehicle's registered owner. We therefore strongly encourage the prosecutor's office, enforcement officers, and the district court to strictly comply with HRS § 805-13.
1. HRS § 805-13 is a valid procedural statute to apply to a § 431:10C-104 violation.
As a preliminary matter, Defendant argues that HRS § 805-13 is a valid procedural statute because it has not been explicitly or implicitly repealed. Though Defendant presents the issue as one of repeal, the issue argued, in part, before the district court and the issue at hand is whether the procedural requirements of HRS § 805-13 are applicable to a chapter 431:10C violation. We conclude that they are.
At district court, the State argued that HRS § 805-13 does not apply because the statute expressly applies to violations of only "chapter 294 or section 286-116."[14] HRS § 805-13(b). The State points out that chapter 294 was repealed, 1987 Haw. Sess. L. Act *180 341 (vol.2), § 1 at 1, and Defendant was charged with violating § 431:10C-104. Therefore, the State argued that HRS § 805-13 was an improper procedural statute to apply in this case. For the reasons set forth below, we disagree.
First, although chapter 294 was repealed on July 1, 1988, it was recodified in chapter 431, the Hawai`i Insurance Code, effective the same date. Id. In addition to chapter 294, the following HRS chapters, all relating to the subject of insurance, were repealed by Act 347: Chapters 431, 431A, 431D, 431F, 431H, 431J, 432, 433, 434, and 435. Id., § 1 at 1. According to HRS § 431:1-100.5 (1993), as adopted by Act 347, the purpose of the new chapter 431 was "to recodify, without substantive change, the insurance law in effect immediately prior to [the effective date of this chapter]." (Emphasis added.)
The House and Senate Conference Committee Reports on House Bill No. 410, which was enacted into law as Act 347, further explain the purpose of Act 347, as follows:
The purpose of this bill is to update and revise Hawai`i's [Hawai`i's] insurance laws. In 1985, the Legislature provided funds to the Insurance Commissioner for a comprehensive review of the State's insurance laws. The Legislature was concerned with the problems of insurance, such as its high cost, lack of availability, and affordability for certain risks. Furthermore, several insurance companies, national and domestic, had failed in the recent past.
The report, "A Revised and Consolidated Insurance Laws [sic] of the State of Hawaii [Hawai`i]" was submitted to the 1987 Session and provided the basis for the bill.
H.B. No. 410 was introduced as a complete revision of the insurance laws of the State. Existing chapters 296, and 431 and 435 were compressed into new Chapters 431 and 432. The existing chapters were grouped into twenty distinct articles, and further subdivided into parts.
H.B. No. 410 differs from the report in a number of areas. This was due to the Insurance Commissioner's decision to remove provisions where changes of significance were proposed. Those changes were either placed in two companion bills, H.B. No. 1526 and S.B. No. 1525, and H.B. No. 1524 and S.B. No. 361, or removed entirely from consideration. It was intended that these companion measures would receive appropriate public hearings during which ample opportunity could be provided for discussion and debate.
On the other hand, H.B. No. 410 was designed to invite relatively little debate, its length and noncontroversial nature was intended to result in few changes.
...
Hse. Conf. Comm. Rep. No. 53, in 1987 House Journal, at 1022-23; Sen. Conf. Comm. Rep. No. 58, in 1987 Senate Journal, at 839-40 (emphasis added).
Based on the foregoing, it is clear that Act 347 was intended by the legislature to be purely non-substantive in nature, and to merely sweep all of the existing chapters on insurance into one, unified chapter on insurance.
Second, HRS § 805-13(b) was enacted as part of a comprehensive statutory scheme to strengthen the enforcement power of the compulsory insurance requirements of Hawai`i's no-fault law in protecting the public from uninsured motorists. HRS § 805-13(b) was originally enacted in 1978, when the state legislature passed and the Governor approved Act 91. Section 1 of Act 91 provided:
Legislature policy and purpose. The legislature finds that the Hawaii [Hawai`i] no-fault law cannot function in the interest of the protection of our society if compliance with the law is permitted to be the option [sic] of some drivers and owners of motor vehicles.
The legislature determines, that in order to protect the public as intended under Hawaii [Hawai`i] no-fault law, law enforcement officers and the courts of the State must be placed in a statutory position effectively to enforce the observance of the law.
1978 Haw. Sess. L. Act 91, § 3 at 116. The legislative committee reports on House Bill No. 2895, which was ultimately enacted as Act 91, confirm that the bill "provides the *181 necessary teeth to the no-fault law enforcement provisions, and will reduce the uninsured motorist population." Sen. Stand. Comm. Rep. No. 671, in 1978 Senate Journal, at 1060; Hse.Stand. Comm. Rep. No. 544, in 1978 House Journal, at 1634.
In keeping with the legislature's stated intention that the uninsured motorist population be reduced, HRS § 805-13(b) provides that a driver cited for not having the required no-fault insurance policy "shall be deemed to be the [vehicle] owner's agent for purposes of service and by naming the [vehicle's] owner jointly with the driver in the citation." As noted above, there is a statutory presumption that the driver of an uninsured vehicle holds a reasonable belief that the vehicle was insured. It would obviously be difficult to establish that a driver held an unreasonable belief that a vehicle was insured without the presence of the vehicle's owner. Moreover, the legislature's intent in enacting HRS § 805-13 was to enhance the enforcement of the no-fault law enforcement provisions and thereby reduce the uninsured motorist population. In order to accomplish this goal, the legislature believed that it was necessary to cite the key person responsible for the lack of no-fault insurance coverage for the vehicle: the vehicle's owner.
In construing HRS § 805-13, the legislature's intent controls. State v. Ganal, 81 Hawai`i 358, 371, 917 P.2d 370, 383 (1996). The legislature intended for § 805-13 "to place law enforcement officers and the courts of the State in an effective statutory position to enforce the compulsory insurance requirements of the Hawaii [Hawai`i] No-Fault Law in order to protect the public as intended under the law." Sen. Stand. Comm. Rep. No. 671, in 1978 Senate Journal, at 1059. Hawai`i's "No-Fault Law" is currently chapter 431, which is a non-substantive recodification of chapter 294, the former no-fault law which HRS chapter 431 replaced. See Hse. Stand. Comm. Rep. No. 173, in 1987 House Journal, at 1163.
It is a cardinal rule of statutory construction that courts are bound to give effect to all parts of a statute, and that no clause, sentence, or word shall be construed as superfluous, void, or insignificant if a construction can be legitimately found which will give force to and preserve all words of the statute.
State v. Ortiz, 74 Haw. 343, 351-52, 845 P.2d 547, 551-52, reconsideration denied, 74 Haw. 650, 849 P.2d 81 (1993) (emphasis added) (citing State v. Wallace, 71 Haw. 591, 594, 801 P.2d 27, 29 (1990)). In light of the legislature's intent to update and replace chapter 294 with chapter 431, and in keeping with § 805-13's original intent, we must conclude that HRS § 805-13 continues to apply to the relevant chapter regarding Hawai`i's insurance code, which is now chapter 431.
We therefore conclude that when a defendant is charged with a chapter 431:10C violation, in particular a violation of HRS § 431:10C-104, § 805-13 is the proper procedural statute for the district court, enforcement officers, and the prosecutor's office to follow.
2. The district court erred by not strictly applying HRS § 805-13.
Because HRS § 805-13 applies to chapter 431:10C violations, the district court and the prosecutor's office must follow the procedures set forth therein. The district court thus erred by not strictly construing and applying the procedures stated in § 805-13.
Criminal procedure statutes must be strictly construed. State v. Ganal, 81 Hawai`i at 373, 917 P.2d at 385; State v. Gaylord, 78 Hawai`i 127, 137, 890 P.2d 1167, 1177 (1995). Section 805-13(b) states that "[i]n all cases of citation for alleged violations of chapter 294 or section 286-116 the court shall require the appearance of the driver cited and the registered owner of the motor vehicle." (Emphases added.) Reading the face of the statute, § 805-13 requires the court to request the owner's presence as well as the driver's.
This interpretation is supported by the legislative scheme for no-fault insurance violations. See State v. Toyomura, 80 Hawai`i 8, 18-19, 904 P.2d 893, 904-05 (1995) ("`we must read statutory language in the context of the entire statute and construe it in a manner consistent with its purpose'"). HRS § 431:10C-117 provides that both the *182 driver and the registered owner, if they were properly convicted of violating HRS § 431:10C-104, must be penalized. HRS § 431:10C-117(a)(3). As the section on penalties for HRS § 431:10C-104 violations states,
if any person operates a motor vehicle without a valid no-fault policy in effect insuring the driver or registered owner, or both, either the driver's license of the driver and of the registered owner shall be suspended for three months or they shall be required to maintain proof of financial responsibility pursuant to section 287-21(2), (3), or (4) and keep a nonrefundable no-fault insurance policy in force for six months....
HRS § 431:10C-117(a)(3) (1993) (emphases added); see also Sen. Conf. Comm. Rep. No. 188, in 1988 Senate Journal, at 658 ("in addition to a fine, the owner and the driver of an illegally operated uninsured motor vehicle shall have their driver's licenses suspended...." (emphases added)); HRS § 286-116(c) (1993) (both the owner and the driver shall be cited for not carrying no-fault insurance). HRS § 431:10C-117, as codified in 1993,[15] clearly illustrates the legislature's intent to penalize both the driver and the owner of the vehicle, and § 805-13 provides the proper procedure to carry out this intent. However, though the district court fined Defendant and revoked her license for three months, at no time did the court require the registered owner's presence or even allude to the mandatory provision for also penalizing the owner. This constituted a prima facie procedural error.
3. The enforcement officer erred by not properly citing the vehicle's registered owner.
Furthermore, the prosecutor concedes that Officer Hankins did not properly cite the vehicle's registered owner. As guidance to Hawai`i's enforcement officers, we hold that HRS § 805-13(b) requires that enforcement officers cite the registered owner as well as the driver of the motor vehicle. As HRS § 805-13(b) explicitly provides, "the registered owner shall be cited by service of the citation on the driver who shall be deemed to be the owner's agent for purposes of service and by naming the owner jointly with the driver in the citation." (emphasis added); see also HRS § 286-116(c) (providing similar procedural guidelines).
On appeal, the State argues that though HRS § 805-13 requires a citation to be issued to both the driver and the owner, this provision should not be enforced because it is impracticable for enforcement officers to properly cite the registered owner of the vehicle if he or she is not in the vehicle at the time of the citation. This argument has merit because it may, sometimes, be difficult for an officer to properly give notice of the citation to the owner, particularly when the legislature has not set forth clear guidelines regarding the citation procedure.[16] However, the above provision of § 805-13(b) is clearly mandatory. Until the legislature sees fit to clarify or change the citations process, enforcement officers are legally bound to comply with HRS § 805-13(b) and, thus, must include the owner's name on any citation *183 issued to a driver who is not the owner of the vehicle.
IV. CONCLUSION
We hold that the district court committed plain error when it convicted Defendant of violating HRS § 431:10C-104 because the State failed to prove one of the three necessary elements of the offense. The State must prove each of the elements because, otherwise, a serious miscarriage of justice may occur: the wrong defendant may be convicted (the proper defendant being the vehicle's registered owner). We therefore reverse the district court's conviction of Defendant in regards to the HRS § 431:10C-104 violation. We further conclude that the district court erred when it failed to require the owner of the vehicle to appear in court, pursuant to HRS § 805-13. Section 805-13 properly applies to chapter 431:10C violations, in particular HRS § 431:10C-104.
Our holding is congruent with the legislature's intent to deter owners from operating motor vehicles on public roadways without insurance and to deter drivers who knowingly borrow and operate on public roadways an uninsured motor vehicle. The state-of-mind requirement protects innocent borrowers of motor vehicles, holding responsible only drivers who knew or should have known that the vehicle was uninsured, and owners who failed to properly insure their motor vehicles. Enforcing the requirement that the registered owner appear in court will also help the district court and the State to determine who the true violator of the statute is: the vehicle's registered owner or, additionally, the vehicle's driver. We therefore strongly encourage prosecutors, the district courts, and enforcement officers to follow the procedures set forth in HRS § 805-13(b).
NOTES
[1] Defendant-Appellant Wendy Shamp (Defendant) was also convicted of operating a vehicle without a certificate of inspection, in violation of Hawai`i Revised Statutes (HRS) § 286-25 (1993), and fraudulent use of plates, tags or emblems and other misdemeanors, in violation of HRS § 249-11 (1993). However, these convictions are not the bases for this appeal.
[2] HRS § 431:10C-104 (1993) provides:
Conditions of operation and registration of motor vehicles. (a) Except as provided in section 431:10C-105, no person shall operate or use a motor vehicle upon any public street, road or highway of this State at any time unless such motor vehicle is insured at all times under a no-fault policy.
(b) Every owner of a motor vehicle used or operated at any time upon any public street, road or highway of this State shall obtain a nofault policy upon such vehicle which provides the coverage required by this article and shall maintain the no-fault policy at all times for the entire motor vehicle registration period.
(c) Any person who violates the provisions of this section shall be subject to the provisions of section 431:10C-117(a).
(d) The provisions of this article shall not apply to any vehicle owned by or registered in the name of any agency of the federal government.
[3] HRS § 805-13 (1993) is a criminal procedure statute, of which subsection (b) is at issue in the instant case. In pertinent part, § 805-13 provides:
Motor vehicle insurance violation. (a) In all cases of citation for alleged violations of chapter 294 or section 286-116, the court shall hear and dispose of such actions expeditiously. Such actions may be severed from any other proceedings to facilitate immediate disposition. Continuance of proceedings on motor vehicle insurance violations may be allowed in the discretion of the court, only after the court has received evidence that the required insurance on the motor vehicle involved was in fact in force on the date of the citation, or that the motor vehicle has been, or is ordered by the court to be, impounded.
(b) In all cases of citation for alleged violations of chapter 294 or section 286-116 the court shall require the appearance of the driver cited and the registered owner of the motor vehicle. If the registered owner is not the driver, the registered owner shall be cited by service of the citation on the driver who shall be deemed to be the owner's agent for purposes of service and by naming the owner jointly with the driver in the citation....
HRS § 805-13(a),(b) (1993) (emphasis added).
[4] While the judge, in the transcript recorded on December 27, 1993, states that the citation occurred at "Honokowai [Honokōwai] Park," Officer William Hankins and Defendant's recitation of the facts allege it occurred at "Kepaniwai Park." In any case, this factual discrepancy is not material. We will assume that the citation occurred at Kepaniwai Park in the County of Maui.
[5] HRS § 701-114 (1993) provides:
Proof beyond a reasonable doubt. (1) Except as otherwise provided in section 701-115 [(regarding defenses) ], no person may be convicted of an offense unless the following are proved beyond a reasonable doubt:
(a) Each element of the offense;
(b) The state of mind required to establish each element of the offense;
(c) Facts establishing jurisdiction;
(d) Facts establishing venue; and
(e) Facts establishing that the offense was committed within the time period specified in section 701-108.
(2) In the absence of the proof required by subsection (1), the innocence of the defendant is presumed.
(Emphasis added.)
[6] In State v. Arakaki, 7 Haw.App. 48, 744 P.2d 783 (1987), the offense with which the defendant was charged was a no-fault insurance violation, pursuant to HRS § 294-8(a) (1985). Chapter 294 was repealed in 1987 and replaced by chapter 431, articles 10C and 10G. HRS § 294-8 is very similar to the current HRS § 431:10C-104. See supra n. 2. HRS § 294-8 provided:
Conditions of Operation. (a)(1) No person shall operate or use a motor vehicle upon any public street, road, or highway of this State at any time unless such motor vehicle is insured at all times under a no-fault policy. Every owner of a motor vehicle used or operated at any time upon any public street, road, or highway of this State shall obtain a no-fault policy upon such vehicle which provides the coverage required by this chapter and shall maintain the no-fault policy at all times for the entire motor vehicle registration period.
(2) The requirements of this subsection may be satisfied by any owner of a motor vehicle if:
(A) Such owner provides a surety bond, proof of qualifications as a self-insurer, or other securities affording security substantially equivalent to that afforded under a nofault policy, providing coverage at all times for the entire motor vehicle registration period, as determined and approved by the commissioner under regulations, and
(B) The commissioner is satisfied that in case of injury or death or property damage, any claimant would have the same rights against such owner as the claimant would have had if a no-fault policy had been applicable to such vehicle.
(b) Any person who violates the provisions of subsection (a) shall be subject to the provisions of subsection 294-39(a) [regarding penalties].
(c) The provisions of this chapter shall not apply to any vehicle owned by or registered in the name of any agency of the federal government.
[7] Undoubtedly, previous legislation and case law have not clearly outlined whether the third "state-of-mind" element is a defense or a prima facie element of an HRS § 431:10C-104 conviction. However, the legislature and the judiciary have subsequently clarified the presumption that a person has a right to reasonably believe that a vehicle he or she has borrowed is insured. See Sen. Stand. Comm. Rept. No. 2164, in 1990 Senate Journal, at 929; State v. Bolosan, 78 Hawai`i 86, 90-92, 890 P.2d 673, 677-79 (1995); State v. Kahaunaele, 10 Haw.App. 519, 531, 879 P.2d 566, 571 (1994). As a matter of policy, this interpretation also upholds the legislature's intent to protect "innocent" borrowers of vehicles and penalizes the true culpritsthe owners of the vehicleswhich effectuates the legislature's intent to ensure that all motor vehicles are properly insured.
[8] The State of Hawai`i (the State) may have been mistaken regarding the law in this area, as evidenced by its reliance on somewhat outdated law in regards to the third element of an HRS § 431:10C-104 violation (the state-of-mind element). In particular, State v. Palpallatoc, 71 Haw. 178, 787 P.2d 214 (1990), has been overruled by the Hawai`i Supreme Court as well as by the state legislature, as discussed in the above text.
[9] We have already discussed, in detail, the history of the third element of a no-fault insurance violation in Kahaunaele. We therefore will not repeat ourselves here, but do find a brief recitation of background materials necessary.
[10] HRS § 702-204 (1993) provides:
State of Mind Required. Except as provided in section 702-212, a person is not guilty of an offense unless the person acted intentionally, knowingly, recklessly, or negligently, as the law specifies, with respect to each element of the offense. When the state of mind required to establish an element of an offense is not specified by the law, that element is established if, with respect thereto, a person acts intentionally, knowingly, or recklessly.
(Emphasis added); but see HRS § 702-212(1) and Commentary (1993) (providing that an offense for which conviction can only result in a fine or other "civil" penalty does not fall under § 702-204, unless a legislative purpose to impose culpability "plainly appears"). Because the legislature has declared an intent to provide a state-of-mind requirement, we interpret HRS § 702-204 to apply to violations of chapter 431, article 10C. As the court in State v. Lesher reasoned, "[w]e do not assertain, from the statute, any legislative purpose to impose absolute penal liability on such innocent [drivers]." State v. Lesher, 66 Haw. 534, 537, 669 P.2d 146, 148 (1983). More recently, the court in State v. Bolosan, 78 Hawai`i at 90, 890 P.2d at 676, stated that
[Senate Standing Committee Report No. 2164, in 1990 Senate Journal, at 929] clearly indicates that the legislature had originally intended that it would be considered "reasonable for a driver who borrows a car to assume that the borrowed vehicle is insured" and that such an assumption would only be "rebuttable by proof of [the driver's] knowledge of the uninsured status of the vehicle."
(Emphasis added.) From these interpretations, coupled with HRS §§ 702-204 and 701-114, supra n. 5, we conclude that "knowing or reckless" is the proper state-of-mind requirement for an HRS § 431:10C-104 violation.
[11] HRS § 431:10C-117(a) (1993) codified the 1990 legislative revisions and provides, in pertinent part:
Penalties.
(a) (1) Any person subject to this article in the capacity of the operator, owner, or registrant of a motor vehicle in this State, or registered in this State, who violates any applicable provision of this article, shall be subject to citation for the violation by any county police department in a form and manner approved by the violations bureau of the district court of the first circuit.
....
(3) In addition to the fine in [paragraph (2)], if any person operates a motor vehicle without a valid no-fault policy in effect insuring the driver or registered owner, or both, either the driver's license of the driver and of the registered owner shall be suspended for three months or they shall be required to maintain proof of financial responsibility... and keep a nonrefundable no-fault insurance policy in force for six months; provided that if the violation is a subsequent offense of driving without a valid nofault policy, the driver's licenses of the driver and the registered owner shall be suspended for one year; and provided further that any person cited under this section shall have an opportunity to present a good faith defense, including but not limited to lack of knowledge or proof of insurance. The general penalty provision of this section shall not apply to:
....
(C) Any operator of a borrowed motor vehicle if the operator holds a reasonable belief that the subject vehicle is insured.
HRS § 431:10C-117(a)(1), (3)(C) (emphases added). We note that HRS § 431:10C-117 (1993) was amended in 1996. 1996 Sess. L. Act 20, at 30-33. While § 431:10C-117(a)(3) was largely unchanged by the 1996 amendment in regards to the good faith defense, the legislature did change the penalty provisions, providing that "the driver's license of the driver or the registered owner shall be suspended for one year and the driver or the registered owner shall be required to maintain proof of financial responsibility pursuant to section 287-20." HRS § 431:10C-117(a)(3) (Supp.1996) (emphases added). However, this amendment did not occur until three years after the facts of the immediate case. Thus, we apply HRS § 431:10C-117 as codified in 1993.
[12] We distinguish the "reasonable belief" determination set forth in HRS § 431:10C-117(a)(3)(C), which was added by the legislature in 1990, from the "reasonable belief" presumption discussed above. Over the years, this distinction has been blurred by the legislature and the courts. The reasonable belief determination, which is the guiding presumption used to interpret the statutory good faith defense, see HRS § 431:10C-117(a)(3)(C) at supra n. 11, has merged with the state-of-mind presumption, though both are separate determinations. For example, both State v. Arakaki and State v. Palpallatoc addressed the state-of-mind determination for the statutory good faith defense, not the presumption for the state-of-mind element. In so doing, both cases incorporated the reasoning of State v. Lesher, which, while discussing the good faith defense, also discussed state of mind as a prima facie element of a no-fault insurance offense. See Lesher, 66 Haw. at 535-37, 669 P.2d at 147-48. The reasoning that the courts in Arakaki and Palpallatoc used to justify the state-of-mind determination for the good faith defense was thus that which evolved from Lesher's discussion of state of mind as an element. See Arakaki, 7 Haw.App. at 51, 54-55, 744 P.2d at 785, 787; Palpallatoc, 71 Haw. at 180, 182, 787 P.2d at 215-16. The dialogue regarding the necessary state-of-mind element for a no-fault insurance violation has thus been carried on in those cases discussing the proper determination for the good faith defense; however, both presumptions are applied separately. Our holding today is directed toward the underlying presumption for the state-of-mind element, not for the good faith defense.
Our opinion is thus consistent with State v. Bolosan. As the court stated in Bolosan, 78 Hawai`i at 91 n. 9, 890 P.2d at 678 n. 9, the legislature intended for HRS § 431:10C-117(a)(3)(C), regarding "reasonable belief," to be "a standard for determining how the good faith defense of lack of knowledge applies in the case of borrowed vehicles." We therefore note that the reasonable belief determination created in § 431:10C-117(a)(3)(C) applies to a defense and does not create a prima facie element of the case; the state-of-mind element existed prior to the 1990 amendment that created HRS § 431:10C-117(a)(3)(C). However, in clarifying its legislative intent (i.e., superseding by statute Palpallatoc), the legislature also clarified what the underlying presumption for the state of mind of the borrower of a motor vehicle is supposed to be: a reasonable belief of insurance. The reasonable belief determination created by the 1990 legislature thus (1) created the "reasonable belief" determination set forth in § 431:10C-117(a)(3)(C), which applies to the good faith defense, and (2) clarified that the underlying state of mind for a no-fault insurance violation, in the case of a borrowed vehicle, should be a "reasonable belief" that the vehicle is insured. The theoretical effect of this amendment is thus to create both a reasonable belief determination, which applies to the good faith defense, and a reasonable belief presumption, which applies to the state-of-mind element. The practical effect, as evidenced by our holding today, is to move the prosecutor's burden of proof in regards to the defendant's state of mind from disproving a defendant's good faith defense to proving the defendant's state of mind, as the legislature, apparently, originally intended.
[13] In Bolosan, the defendant was arrested in 1989, requiring the court to apply HRS § 431:10C-117 as it existed before the legislature amended it in 1990 (creating the "reasonable belief" presumption). Bolosan, 78 Hawai`i at 90, 890 P.2d at 677. In the instant case, we apply HRS § 431:10C-117 as codified in 1993. However, Bolosan's holding and reasoning are still applicable because the court interpreted § 431:10C-117 in light of the legislature's 1990 amendments, "to determine the original legislative intent." Id. at 90, 890 P.2d at 677. Bolosan is, therefore, relevant to our discussion, because its interpretation and reasoning are based on current, post-1988 legislative amendments.
[14] HRS § 286-116 provides, in pertinent part:
(b) At any time a law enforcement officer finds a motor vehicle in operation by a driver not in possession of the no-fault or liability insurance identification card required under section 431:10C-107 and section 431:10G-106, the officer shall issue a citation with the earliest possible date for court appearance in every instance.
(c) In all instances in which a citation shall be issued under subsection (b), whenever the driver cited is not found to be the registered owner of the motor vehicle under operation, the citation shall also be issued to the driver as the owner's agent and to the registered owner of the motor vehicle. Whenever the registered owner of any motor vehicle permits any person to operate the registered owner's motor vehicle, the registered owner appoints, designates, and constitutes the driver the registered owner's agent for all purposes under this section and section 431:10C-107, section 431:10G-106, and section 805-13.
(d) The operation of any motor vehicle required to be licensed on a highway by a driver, whether or not licensed, who knows, or has reason to believe, that the motor vehicle is not insured in compliance with article 10C and article 10G of chapter 431, shall constitute a violation of this chapter.
HRS § 286-116(b), (c), (d) (1993) (emphases added).
[15] See supra n. 11, discussing amendments made in 1996 to HRS § 431:10C-117 (1993). These amendments eliminated the need for both the driver and the owner of the motor vehicle to suffer certain penalties, if the insurance violation was a first offense within a five-year period. HRS § 431:10C-117(a)(3) (Supp.1996). The legislature's intent in so amending the statute was, apparently, not to thwart the mandates of HRS § 805-13, but "to eliminate the proof of financial responsibility requirement for people convicted of driving without a valid no-fault policy for the first time within a five-year period." Hse. Stand. Comm. Rep. No. 791, in 1996 House Journal, at 1338.
[16] While HRS § 805-13 appears to be unique, a couple of jurisdictions have addressed the problem of citing the owner of a motor vehicle when the owner is not the operator of the vehicle. For example, in Minnesota, state statute provides (1) the manner in which the owner may be cited (by mail), (2) the address to which it should be mailed, and (3) that notice by mail is presumed received five days after mailing. Minn.Stat. Ann. § 169.791(4) (Supp.1997, vol.12A); see also Mo. Ann. Stat. § 303.041 (Vernon 1994) (providing similar guidance). We note that Hawai`i's insurance code procedures, in particular HRS §§ 805-13(b) and 286-116(c), could include such details. However, until the legislature decides to make such amendments, enforcement officers must follow HRS § 805-13(b)'s mandates.
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In the
United States Court of Appeals
For the Seventh Circuit
No. 00-3381
United States of America,
Plaintiff-Appellee,
v.
Leon Thomas,
Defendant-Appellant.
Appeal from the United States District Court
for the Northern District of Indiana, Hammond Division.
No. 2:99-CR-191--James T. Moody, Judge.
Argued April 12, 2001--Decided February 19, 2002
Before Easterbrook, Ripple, and Williams,
Circuit Judges.
Williams, Circuit Judge. Leon Thomas was
convicted by a jury of unlawful
possession of a firearm as a convicted
felon and for bartering a stolen firearm.
Although each conviction carried a
maximum sentence of ten years, Thomas was
exposed to a sentence of no less than
fifteen years on the possession
conviction because of three prior felony
convictions. The district court sentenced
Thomas to life imprisonment, in part by
cross-referencing the first degree murder
guideline. Because we find that the
district court’s application of the
homicide cross reference was not based on
sufficient findings, we vacate and remand
for resentencing.
I. BACKGROUND
A. Facts
On the morning of November 21, 1999,
Thomas, a convicted felon, and Gerald
Blunt went to the home of Michael
Hutcherson. Thomas gave Hutcherson a
semi-automatic pistol in exchange for
thirty dollars’ worth of rock cocaine.
Later that day, police officers stopped
Thomas and Blunt while Thomas was driving
a Dodge automobile and he was arrested.
Before trial, the government notified
Thomas that if he was convicted of the
unlawful possession of a firearm as a
convicted felon, it would seek to enhance
his sentence for that offense to a term
of imprisonment not less than fifteen
years pursuant to 18 U.S.C. sec.
924(e)(1), based on Thomas’s prior
robbery convictions in Indiana and
Georgia. Thomas stipulated at trial that
he knew that the pistol had been stolen.
The jury convicted him of unlawful
possession of a firearm as a convicted
felon in violation of 18 U.S.C. sec.sec.
922(g)(1), 924(a)(2), receiving a firearm
while under indictment in violation of 18
U.S.C. sec.sec. 922(n), 924(a)(1), and
bartering a stolen firearm under 18
U.S.C. sec.sec. 922(j), 924(a)(2). The
conviction for receiving a firearm while
under indictment was subsequently
vacated.
B. Sentencing Hearing
At sentencing, the government tried to
connect Thomas to the murder of the
firearm’s owner, Armondo Leal. It
presented evidence that the night before
Thomas pawned Leal’s pistol, Leal was
shot to death in the Dodge car that
Thomas was found driving. The gun used in
the murder was never recovered. A bullet
hole was found in the lower-front
passenger door of the car and Leal’s
blood was found on the driver’s seat of
the car. Leal’s blood was also on the
pavement of Thomas’s driveway and on
Thomas’s shirt. The government surmises
that the bloodstains were found in those
locations because Leal was taken out of
the car and laid temporarily in Thomas’s
driveway and Thomas got into the car
after Leal was shot but before the blood
dried.
The government also presented evidence
through the testimony of Detective Titus
that an unidentified neighbor of Thomas’s
told Detective Jackson that on the night
of the murder, he saw Leal driving the
Dodge car in the vicinity of Thomas’s
home. The neighbor stated that he heard
gun shots and shortly thereafter saw
Thomas driving away in the same car.
Detective Titus further testified that on
the night of Thomas’s arrest, Thomas’s
uncle was murdered and Thomas’s house was
set on fire. These crimes were done, in
his opinion, in retaliation for Leal’s
murder.
Based on this evidence, the district
court concluded, "Whether [Thomas] pulled
the trigger or not, the Court finds that
it’s pretty clear that he was involved in
the killing of Armondo Leal, and the
theft of Mr. Leal’s gun." The court then
adopted the recommendations of the
Presentence Investigation Report ("PSR"),
and cross-referenced Thomas’s conviction
for possession of a firearm while a felon
with the homicide guideline for first
degree murder, sec. 2A1.1. The court also
considered Thomas’s prior convictions and
determined that Thomas was an armed
career criminal under 18 U.S.C. sec.
924(e)(1). The court then sentenced
Thomas to life imprisonment for his
conviction for unlawful possession of a
firearm as a convicted felon, and to a
concurrent ten-year sentence for
bartering a stolen firearm./1
II. ANALYSIS
On appeal, Thomas challenges the
district court’s: 1) admission of hearsay
testimony of an unidentified witness; 2)
cross-referencing of his conviction for
unlawful possession of a firearm as a
convicted felon with the homicide
guideline for first degree murder; 3)
enhancement of his sentence for prior
convictions when he was not indicted or
convicted by the jury under the Armed
Career Criminal Statute, in violation of
Apprendi v. New Jersey, 530 U.S. 466
(2000); and 4) use of the homicide cross-
reference to increase his sentence above
the statutory maximum for the offenses of
conviction without being charged and
proved beyond a reasonable doubt at
trial, also in violation of Apprendi.
Because we prefer to dispose of cases on
factual grounds rather than on
constitutional ones, see United States v.
Westmoreland, 240 F.3d 618, 629 (7th Cir.
2001), we proceed to Thomas’s factual
challenges first.
A. Hearsay Objection
Thomas’s first argument challenges the
admission of hearsay testimony, which was
used to establish Thomas’s involvement in
Leal’s murder. Hearsay is permitted at
sentencing as long as it is reliable and
the defendant is afforded an opportunity
to rebut the evidence. United States v.
Corbin, 998 F.2d 1377, 1385 (7th Cir.
1993); United States v. Beal, 960 F.2d
629, 634 (7th Cir. 1992) (applying same
standard to hearsay within hearsay
testimony). Reliability may be
established by corroborating evidence.
United States v. Morrison, 207 F.3d 962,
968 (7th Cir. 2000).
Detective Titus testified that an
unidentified neighbor told Detective
Jackson that on the night of Leal’s
murder, the neighbor saw Leal driving a
Dodge car in the vicinity of Thomas’s
home, heard gunshots, and saw Thomas
driving away in the same vehicle. We are
satisfied that both layers of hearsay
(between the detectives, and between
Detective Jackson and the neighbor) are
reliable because the neighbor’s
statements were supported by evidence
linking Thomas to the crime scene.
Significantly, Thomas was found driving
the Dodge car the following day, Leal was
killed by multiple gunshot wounds, and
Leal’s blood was found in the car, on
Thomas’s shirt, and in Thomas’s driveway.
In light of this corroborative evidence
and the fact that Thomas does not argue
that he was denied an opportunity to
rebut the testimony, we cannot say that
the district court abused its discretion
in allowing Detective Titus to so
testify.
B. Homicide Cross Reference Issue
Thomas’s next challenge is to the
district court’s application of the
homicide cross reference for first degree
murder to his conviction for the unlawful
possession of a firearm as a convicted
felon. He argues that there was no
evidence that Leal’s death resulted from
his possession of the pistol for which he
was convicted, and even if there was such
evidence, the court should not have
chosen first degree murder over an
offense with a lesser culpability.
Because we find that the district court
failed to make sufficient findings to
support the application of the homicide
cross reference, we vacate Thomas’s
sentence and remand for further
proceedings.
1. Standard of review
Normally we review a district court’s
application of the murder cross reference
for clear error, and its interpretation
of the Sentencing Guidelines de novo.
Westmoreland, 240 F.3d at 635. The
government argues, however, that our
review should be for plain error because
although Thomas objected below to the
court’s finding that he was involved in
the murder, he never claimed that the
death did not result from the possession
of the pistol charged in his indictment
or that first degree murder was improper.
We will reverse under the plain error
standard only if the defendant
demonstrates that 1) there was error, 2)
the error was plain, 3) the error
affected the defendant’s substantial
rights, and 4) the error seriously
affects the fairness, integrity, or
public reputation of judicial
proceedings. Westmoreland, 240 F.3d at
633.
During the sentencing hearing, Thomas’s
counsel argued that:
All you can have him guilty of is sitting
in the car where there was bloodstained
seats. That’s all he has and the fact
that the blood was in his driveway--sure
Mr. Leal could have been killed after
this, but there is nothing that indicates
he did the killing. . . . As far as the
murder, I don’t believe there is enough
to tie it into this case, judge, and I
think double jeopardy--or the notion of
jeopardy should protect him in this case.
For that reason I would ask that homicide
be denied.
We agree with the government that this
objection was insufficient to have
alerted the district court and the
government to the specific grounds of
Thomas’s arguments that he now raises on
appeal. See United States v. Hardamon,
188 F.3d 843, 848 (7th Cir. 1999); United
States v. McClellan, 165 F.3d 535, 551
(7th Cir. 1999). Therefore, we will
review Thomas’s challenge for plain
error. With the parameters of our review
established, we proceed to the merits of
Thomas’s argument.
2. Homicide Cross Reference Guideline
Section 2K2.1(c) of the Sentencing
Guidelines states that "[i]f the
defendant used or possessed any firearm
or ammunition in connection with the
commission or attempted commission of
another offense, [and] death resulted,"
the court must cross-reference the "most
analogous offense guideline from" the
Homicide Guidelines. Applying sec.
2K2.1(c), a sentencing court should
proceed in two steps. First, it "must
ascertain whether death resulted from the
defendant’s conduct. If so, [it] must
identify the analogous Homicide Guideline
that most closely resembles the
defendant’s conduct." United States v.
Walls, 80 F.3d 238, 241 (7th Cir. 1996).
a. If "death resulted"
To determine "if death resulted," the
sentencing court must ascertain whether
the defendant’s conduct was "intentional
or reckless" and whether death was "a
foreseeable risk" of that conduct. Id.
Generally, this means that the
defendant’s possession of a weapon during
the commission of another offense "put
into motion a chain of events that ended
in a tragedy." Id. at 242. For example,
in Walls, the evidence introduced at
sentencing demonstrated that the
defendant gathered a group of armed men,
proceeded to a rival’s house where a
gunfight ensued, and fired a shot into a
crowd in which an innocent bystander was
killed. Id. at 240. The district court
cross-referenced Walls’s conviction for
possession of a firearm while a felon
with the homicide guidelines, reasoning
that Walls "put in motion this series of
events that resulted in the taking of a
human life." Id. We affirmed concluding
that irrespective of whether Walls fired
the fatal shot, his conduct resulted in
the bystander’s death. Id. at 242. Accord
United States v. Smith, 5 F.3d 259 (7th
Cir. 1993) (approved application of
homicide cross reference to a defendant
who fired recklessly into a group of New
Year’s Eve partygoers killing one of
them); United States v. White, 979 F.2d
539 (7th Cir. 1992) (affirming
application of the general "death
results" guideline, U.S.S.G. sec. 5K2.1,
to a defendant who transported a minor
across state lines for the purpose of
prostitution who was killed, presumably
by a customer).
The problem here is that the district
court did not make any findings that
Thomas’s conduct put into motion a series
of events that led to Leal’s death. All
the court found was that Thomas was
"involved" in Leal’s murder and "the
theft of Mr. Leal’s gun." We are unable
to determine if the theft and possession
resulted in Leal’s death or if Leal’s
death precipitated the theft and
possession. And, the evidence that Thomas
was found in possession of Leal’s pistol
the day after the murder, and Detective
Titus’s testimony that the blood on
Thomas’s t-shirt was due to Thomas
getting into the car after Leal had been
shot, could support the conclusion that
Thomas’s involvement occurred after
Leal’s death. Most significantly, because
Leal was not shot with his own gun, we do
not know if Thomas even possessed a
firearm before or at the time of the
murder. This is important because, unlike
the defendant in Smith, the pistol that
Thomas was found in possession of was not
the weapon used to kill Leal. See Smith,
5 F.3d at 260 (defendant used firearm to
shoot and kill partygoer). As far as we
can tell, the pistol that Thomas
possessed was also not used to shoot at
Leal. Cf. Walls, 80 F.3d at 240
(defendant fired shot blindly toward
enemy’s house and an innocent bystander
was killed).
Because there are insufficient findings
as to the sequence of events and whether
Thomas possessed any firearm before or at
the time of Leal’s death, the district
court’s application of the cross
reference was in error. This error, which
was plain, affected Thomas’s substantial
rights and the outcome and integrity of
the district court proceedings because
without it, Thomas could have received a
sentence less than life imprisonment.
And, without sufficient findings, we
cannot be confident that a miscarriage of
justice did not occur. Because the
district court did not make sufficient
findings to conclude that Leal’s death
resulted from Thomas’s possession of a
firearm during the commission of another
offense, Thomas’s life sentence for the
unlawful possession of a firearm as a
convicted felon is vacated.
b. "Most analogous homicide
guideline"
Even if we were to uphold the court’s
conclusion that Leal’s death resulted
from Thomas’s possession of a firearm in
connection with another offense, the
court’s application of the cross
reference would still be improper because
the court’s selection of first degree
murder as opposed to an offense with a
lesser culpability was also plain error.
After a sentencing court determines that
death resulted from the defendant’s
possession of a firearm, it must choose
the most appropriate homicide guideline:
first or second degree murder, or
voluntary or involuntary manslaughter.
Walls, 80 F.3d at 242. Under the federal
statute, from which we borrow the
definition of first degree murder is the
unlawful killing of a human being with
malice aforethought, done with
premeditation or committed in the
perpetration of certain enumerated
felonies. 18 U.S.C. sec. 1111(a). Here,
again, the district court made
insufficient findings. We recognize that
Leal’s murder did not occur "[w]ithin the
special maritime and territorial
jurisdiction of the United States." 18
U.S.C. sec. 1111. Nevertheless, courts
use the definition set forth in sec. 1111
for simplicity’s sake. See Walls, 80 F.3d
at 242; Smith, 5 F.3d at 262. The parties
here have assumed that federal law, in
particular 18 U.S.C. sec. 1111, supplies
the appropriate substantive definition of
homicide. We accept their shared
assumption for the purpose of this case,
without foreclosing the possibility of
turning to other definitions should that
question be raised in future litigation.
i. Premeditation
The district court did not make any
findings as to Thomas’s state of mind, or
his degree of planning or preparation.
The court relied on the unchallenged
factual findings and conclusions of the
PSR, which does not lay out the elements
of first degree murder or discuss how the
facts relate to those elements. We do not
know if there was an argument between
Leal and Thomas, how much time lapsed
between the time the neighbor saw Leal
drive up and the time the neighbor heard
the gunshots, the nature of the
relationship between Leal and Thomas
before the incident, or if Thomas just
drove away in the car after Leal was
murdered by someone else. Because the
district court made no findings to
support premeditation, the district
court’s selection of first degree murder
as the most appropriate homicide
guideline must be remanded for further
proceedings.
ii. Felony Murder
The government argues that despite the
lack of findings supporting
premeditation, the district court’s
selection of first degree murder can be
sustained under the felony murder
doctrine. Under that doctrine, every
murder "committed in the perpetration of,
or attempt to perpetrate, any arson,
escape, murder, kidnaping, treason,
espionage, sabotage, aggravated sexual
abuse or sexual abuse, burglary or
robbery . . . is murder in the first
degree." 18 U.S.C. sec. 1111(a). Thomas
responds that because his offenses of
conviction--unlawful possession of a
firearm as a convicted felon and
bartering a stolen firearm--are not among
those offenses listed as predicate
felonies, the felony murder doctrine
cannot apply. He relies on a Tenth
Circuit case which holds that in order
for the felony murder to apply, the
defendant’s offense of conviction must
serve as a predicate felony under 18
U.S.C. sec. 1111(a). United States v.
Fortier, 180 F.3d 1217, 1226 (10th Cir.
1999).
In Fortier, the defendant was convicted
of conspiring to transport stolen
firearms, transporting stolen firearms,
making a materially false statement to
the FBI, and misprision of a felony. Id.
at 1219. The district court found that
the defendant’s sale of the stolen
firearms to Timothy McVeigh and the
deaths that resulted from McVeigh’s
bombing of the federal building in
Oklahoma brought the defendant within the
homicide cross reference for first degree
murder. The Tenth Circuit vacated the
defendant’s sentence reasoning that the
use of the felony murder doctrine at
sentencing should be restricted to
situations in which the defendant’s
offense of conviction is one of the
enumerated felonies in 18 U.S.C. sec.
1111(a), and the defendant’s offenses of
conviction did not "even [come] close to
the predicate felonies described in
section 1111(a)." Id. at 1226.
Although we have not had occasion to
decide this issue, we have reached a
conclusion consistent with Fortier. In
United States v. Prevatte, 16 F.3d 767
(7th Cir. 1994), aff’d in part, rev’d in
part, dismissed in part, 66 F.3d 840 (7th
Cir. 1995), we affirmed the district
court’s conclusion that a defendant
convicted of maliciously destroying
property by means of explosives could be
sentenced under the first degree murder
guideline for the deaths that resulted
from the explosion. We looked to the
defendant’s offense of conviction and
reasoned that it was sufficiently similar
to arson, one of the offenses enumerated
in the felony murder statute. Because the
defendant’s offense of conviction was
sufficiently similar to one of the
predicate felonies, it supported the
selection of first degree felony murder
as the most analogous offense guideline.
Id. at 780; see also United States v.
Martin, 63 F.3d 1422, 1434-35 (7th Cir.
1995) (remanding to district court to
determine if the defendant, convicted of
arson, should also be sentenced under the
first degree murder guideline for conduct
that led to the death of two
firefighters).
We do not need to determine in this case
whether, as Fortier stated, a formal
charge on the predicate offense is
essential, or whether it is proper to use
real-offense principles, as United States
v. Greene, 834 F.2d 1067, 1071-72 (D.C.
Cir. 1987), holds./2 Cf. United States
v. Taylor, 272 F.3d 980 (7th Cir. 2001)
(treating enhancement under sec. 2K2.1(a)
as an example of a real-offense component
in the Guidelines). The subject is not
presented by the case in its current
posture, because the district court did
not address the question whether Thomas
committed robbery or any other act that
could be the basis of a felony murder
finding. All the court found was that
Thomas was involved in the theft of
Leal’s gun, and theft is not one of the
predicate offenses listed in 18 U.S.C.
sec.1111(a). Just as a court needs facts
to support a finding of premeditation for
"regular" first degree murder, it needs
facts to support a felony for first
degree felony murder. Additionally, there
is nothing in the record to suggest that
the district court recognized that it had
the option under Application Note 1 to
sec. 2A1.1 to depart downward from life
imprisonment. See Prevatte, 16 F.3d at
784-85 (holding that when felony murder
provides the basis for the sentence
enhancement, a district court’s failure
to make findings as to the defendant’s
mental state to determine if a departure
down from life imprisonment required a
remand). Therefore, the district court’s
selection of first degree murder under a
felony murder theory cannot stand.
iii. Plain Error Test
The incremental error in the court’s
selection of first degree murder over
second degree murder or manslaughter,
although not the worse we have seen, is
enough to satisfy the plain error
standard. With Thomas’s criminal history
category of VI, a second degree murder
finding would have resulted in a
sentencing range of 235-293 months as
opposed to life imprisonment.
Manslaughter would have resulted in
significantly lower sentencing ranges
(from 24 to 137 months), but because of
Thomas’s prior convictions, those ranges
were unavailable. See discussion infra
Part IIC. The district court was not
limited to the sentencing range for
second degree murder, however, because it
could have selected a sentence somewhere
between second degree murder and
voluntary manslaughter in fashioning the
appropriate sentence. See, e.g., Walls,
80 F.3d at 242 (affirming sentence
halfway between second degree murder and
voluntary manslaughter).
Here, at sentencing, the government was
allowed to come in the back door, where
there is a lower burden of proof and
lower procedural safeguards, to
essentially convict Thomas for Leal’s
murder, when it could not get a murder
conviction at trial due to the lack of
evidence of premeditation and the absence
of a predicate felony. And even under the
lower standards, the district court
failed to make sufficient findings
regarding Thomas’s state of mind or
commission of a predicate felony.
Finally, even if Leal’s "death resulted"
from Thomas’s conduct, Thomas’s sentence
must still be vacated and remanded
because the court committed plain error
in sentencing Thomas to life imprisonment
without making sufficient findings.
C. Prior Felony Convictions
Thomas also challenges the court’s use
of his prior convictions to enhance his
sentence for the unlawful possession of a
firearm as a convicted felon to a minimum
of fifteen years under 18 U.S.C. sec.
924(e)(1). In addition to a due process
challenge that we will address in the
next section, Thomas argues that the
court erred in finding that he committed
three violent felonies on different
occasions. We review questions of law
regarding sec. 924(e) de novo. United
States v. White, 997 F.2d 1213, 1215 (7th
Cir. 1993). Because Thomas committed at
least three violent felonies on occasions
different from one another, we find that
the prerequisites of sec. 924(e) were
satisfied.
Title 18 U.S.C. sec. 924(e)(1), also
known as the Armed Career Criminal Act,
provides that:
In the case of a person who violates
section 922(g) of this title and has
three previous convictions . . . for a
violent felony . . . committed on
occasions different from one another,
such person shall be . . . imprisoned not
less than fifteen years . . . .
A violent felony is defined as "any crime
punishable by imprisonment for a term
exceeding one year, . . . that . . . has
as an element the use, attempted use, or
threatened use of physical force against
the person of another . . . ." 18 U.S.C.
sec. 924(e)(2)(B). Thomas concedes that
he has one conviction for a violent
felony in Indiana, but argues that his
Georgia conviction for three counts of
robbery by intimidation should not be
included because there were insufficient
facts for the district court to find that
the Georgia conviction involved violent
felonies committed on different
occasions.
The Georgia Code states that robbery by
intimidation is a lesser included offense
of armed robbery. Ga. Code Ann. sec. 16-8-
41 (2000). A conviction for robbery by
intimidation "’requires proof that the
theft was attended with such
circumstances of terror--such threatening
by word or gesture, as in common
experience, are likely to create an
apprehension of danger, and induce a
[person] to part with his property for
the safety of his person.’" Smith v.
State, 543 S.E.2d 434, 435 (Ga. Ct. App.
2000) (quoting Johnson v. State, 392
S.E.2d 280, 282 (Ga. Ct. App. 1990)).
Based on this definition and the fact
that Thomas does not challenge the PSR’s
finding that he used a handgun to commit
the robberies, we are satisfied that the
Georgia conviction for three counts of
robbery by intimidation meets the Armed
Career Criminal Act’s definition of
violent felony.
Thomas also argues that the robberies
that constituted the Georgia conviction
were not "committed on occasions
different from one another." See 18
U.S.C. sec. 924(e)(1). We set forth the
parameters of what satisfies this
requirement in United States v. Hudspeth,
42 F.3d 1015 (7th Cir. 1994) (en banc).
In Hudspeth, a majority of this court
held that when a defendant has committed
multiple crimes within a short period of
time, the relevant inquiry is whether the
crimes were simultaneous or sequential.
Id. at 1021. We concluded that crimes
committed sequentially, against different
victims, at different times and different
locations satisfied the requirement that
they must be "committed on occasions
different from one another." Id. Under
this standard, at least two of the three
Georgia robberies that Thomas committed
were on different occasions because they
occurred on different dates and involved
different victims./3 When added to the
Indiana conviction that Thomas does not
challenge, the district court properly
found that Thomas committed at least
three violent felonies on occasions
different from one another, thereby
making him an armed career criminal.
D. Due Process Violation
Finally, Thomas argues that the use of
his prior convictions and the application
of the homicide cross reference to
increase his sentence for the possession
conviction above the statutory maximum
for that offense violates the due process
clause because the facts underlying the
prior convictions and the homicide cross
reference were not submitted to the jury
and proved beyond a reasonable doubt. See
Apprendi v. New Jersey, 530 U.S. 466
(2000). We reject Thomas’s challenge to
the use of the prior convictions to
increase his sentence for the reasons
stated in United States v. Skidmore, 254
F.3d 635, 642 (7th Cir. 2001); United
States v. Jones, 245 F.3d 645, 649 (7th
Cir. 2001); and United States v. Brough,
243 F.3d 1078, 1081 (7th Cir. 2001). And,
as we discussed earlier, because Thomas
was correctly found to be an armed career
criminal, the maximum sentence he faced
was life imprisonment. Therefore, there
was no due process violation in
sentencing him to a term of life
imprisonment because the sentence was
within the statutory cap. Westmoreland,
240 F.3d at 636.
III. CONCLUSION
In sum, we uphold the district court’s
decisions to admit hearsay testimony and
enhance Thomas’s sentence to reflect his
status as an armed career criminal.
However, we conclude that the court’s
application of the homicide cross
reference for first degree murder was
based on insufficient findings. We
therefore VACATE Thomas’s sentence
forunlawful possession of a firearm as a
convicted felon and REMAND for proceedings
consistent with this opinion.
FOOTNOTES
/1 Thomas does not challenge on appeal his sentence
for bartering a stolen firearm.
/2 We recognize that Greene was not a Sentencing
Guidelines case, however, its analysis is helpful
here.
/3 It is unclear from the record whether the third
robbery, which was committed on the same day as
one of the others, was also committed on a
different occasion because we do not know the
time of day that the robbery occurred nor do we
have any facts (other than the identity of the
victim and the amount of money taken) surrounding
the robbery.
| {
"pile_set_name": "FreeLaw"
} |
184 F.2d 165
86 U.S.P.Q. 499
AMERICAN POTATO DRYERS, Inc., et al.v.PETERS.
No. 6051.
United States Court of Appeals Fourth Circuit.
Argued June 13, 1950.Decided Sept. 13, 1950.
Gordon W. Daisley, Washington, D.C., and Oscar Leach, Raleigh, N.C. (Smith, Leach & Anderson, Raleigh, N.C., on the brief), for appellants and cross-appellees.
Charles F. Meroni, Chicago, Ill. (Hill, Sherman, Meroni, Gross & Simpson, Chicago, Ill., Clem B. Holding and Bailey & Holding, all of Raleigh, N.C. on the brief), for appellee and cross-appellant.
Before PARKER, Chief Judge, and SOPER and DOBIE, Circuit Judges.
PARKER, Chief Judge.
1
These are cross appeals in a patent case. The plaintiff in the court below was Frederick C. Peters, holder of Arthur patents No. 2,228,192 and 2,326,115, relating respectively to a process for drying potatoes for shipment and a machine for carrying out the process. Plaintiff asked damages for infringement of the patents and for breach of confidence and breach of contract by defendants with respect to the subject matter which they embrace. Defendants are Broadus Wilson and American Potato Dryers, Inc., a corporation which he controls. In addition to denying liability to plaintiff, defendants alleged that plaintiff had been guilty of violating the anti-trust acts in connection with his ownership of the patents and asked damages on that account. The judge below made extensive findings of fact in which he held that the patents sued on were invalid, that, even if valid, they had not been infringed, that defendants were not estopped to deny their validity, and that there was no basis for recovery by plaintiff on account of breach of confidence or breach of contract or by defendants on account of the alleged violations of the anti-trust acts. From judgment entered on these findings both sides have appealed; but plaintiff raises no question as to the correctness of the holding as to the invalidity of the machine patent.
2
While many matters have been discussed in the briefs and arguments of counsel, the case before us, when properly analyzed, is narrowed to three questions: (1) whether, the process patent sued on is valid; (2) whether because of dealings had between the parties, defendants are estopped to question the validity of the patent or plaintiff is entitled, irrespective of its validity, to recover damages of defendants because of breach of confidence or brach of contract; and (3) whether defendants are entitled to recover damages of plaintiff on account of violations of the anti-trust laws. We think that all of these questions should be answered in the negative.
3
1. The Validity of the Patent.
4
The patent in suit, No. 2,228,192, issued to A. F. Arthur and assigned to plaintiff, was applied for March 29, 1940, and granted January 7, 1941. It relates to the washing of dirt from potatoes and drying them by the use of a current of hot air. To wash potatoes before they are shipped to market adds to their value, but the moisture which clings to them after they are washed is conducive to soft rot or decay. It is important, therefore, that, if the potatoes are washed, they be dried afterwards; and the process of the patent is to dry them by passing them through a tunnel in which they come in contact with hot air flowing in the opposite direction. It is contended that this process results not only in drying the potatoes but also in producing a biological change which further protects them from decay. Claims one and five, which may be taken as typical, are as follows:
5
'1. The process of treating potatoes for shipment and to aid in preventing soft rot during shipment which comprises moistening whole potatoes so that the skin of each potato is covered with a film of moisture adapted to serve during subsequent steps of the process as a heat insulator to prevent cooking of the body of the potato, then conveying the moistened potatoes through a confined area, subjecting the potatoes as they travel through said area to a heated blast of air for a period of time approximating four minutes and of a temperature of substantially 100 to 145 degrees F. and of a velocity of substantially 1200 feet per minute to evaporate the moisture from the skins of the potatoes by skin drying the potatoes and whereby substantially one-half pound of moisture is removed from each bushel of potatoes, and utilizing the evaporation of said moisture to preclude the heating and cooking of the body of the potato.'
6
'5. In a process of treating raw potatoes to aid in preventing deterioration while preserving the natural appearance of the potatoes, the steps of disposing the potatoes in a predefined area and subjecting each potato uniformly over its entire surface to a large volume of heated relatively high velocity air of a temperature approximately 100 degrees F. for a short period of time sufficient to remove rapidly moisture from the outer and periderm layers of cells of the potato, and just prior to discharge of the potato from said area causing the dried outer cells of the potato to be subjected to a higher temperature short of that which would cook the starchy body of the potato but which will cause a biological change in the formation of the outer and periderm layers of cells of the potato to render the same resistant to the ingress of deteriorating bacteria.'
7
The patent is correctly analyzed in the findings of the learned judge below as follows: 'The only acts or physical operations actually performed on the potatoes in carrying out the process disclosed in patent No. 192 are as follows: (1) moistening or washing whole potatoes so that the skin of each potato is covered with a film of moisture, (2) conveying the moistened potatoes through an enclosed drying chamber, (3) subjecting the potatoes as they travel through the chamber to a blast of heated air moving in the opposite direction to that of the potatoes, the air having (a) a temperature of approximately 145 degrees F. upon entry into the chamber and an exit temperature of about 100 degrees F., and (b) a linear velocity of approximately 1200 feet per minute, and (4) keeping the potatoes in the chamber for a period of approximately four minutes. The specification of patent No. 192 also describes, and the claims include, certain other alleged features of the process, such as: (A) evaporating the moisture from the skins of the potatoes by skin-drying the potatoes and thereby removing substantially one-half pound of moisture from each bushel of potatoes, (B) utilizing the evaporation of said moisture to preclude the heating and cooking of the starchy body of the potatoes, and (C) causing the heat of the heated air to act on the outer layers of cells of the potatoes as they are drying to cause a biological change or a change of cell construction or formation therein such as to render the potatoes resistant to the ingress of soft rot bacteria. The weight of the evidence is contrary to the teaching of patent No. 192 that the drying procedure specifically described therein is effective to cause such a biological or other change in the outer layers of cells of the potatoes as they are dried.'
8
We would not be justified, on the evidence before us, in reversing the finding of the lower court with respect to the biological change produced in the potatoes by the process of the patent; but we regard this as immaterial, in any event, since the biological change produced in the potatoes, if any there be, is the result of the process and not a part thereof and is therefore not patentable. LeRoy v. Tatham, 14 How. 156, 174-175, 14L.Ed. 367. The process of the patent, then, is nothing more than using hot air to dry potatoes being carried on a conveyor in a tunnel, and we agree with the court below that no patentable novelty was involved in such a process. The evidence shows beyond question the use of heated air for drying potatoes, which had been washed in preparation for marketing, as early as 1930 by the Idaho Packing Co. at Pocatello, Idaho. While the specific details of the process at Pocatello are not shown in evidence, the evidence does show that a process which is substantially the process of the patent was in use by John F. Stambaugh at McGuffey, Ohio, in 1934 and by the Gould's Growers, Inc. of Goulds, Florida, in 1937. Goulds, Florida, is the town in which it is claimed that the process of the patent was developed; and the evidence shows that more than a year before the patentee claims to have reduced his ideas to practice, the process for which his patent was issued was being publicly used in the town in which he was operating. With respect to the Stambaugh and Goulds uses of the process, the trial court found the facts as follows:
9
'11. The testimony and exhibits concerning the Stambaugh dryer establish that at least as early as 1936 Stambaugh publicly practiced a process of treating potatoes, for shipment which included the steps (1) washing the potatoes, (2) conveying them through an enclosed tunnel for a distance of 110 feet, (3) blowing air of relatively high temperature through the tunnel countercurrent to the movement of the potatoes by means of a fan having an output velocity of 1800 feet per minute, and (4) subjecting the potatoes to the heated air for a period of approximately 4 1/2 minutes, and that, under normal weather conditions, the potatoes thus treated were satisfactorily dried, had no visible moisture on them, and were well enough dried to enable their packing in paper bags. In view of the non-critical character of the specific values of air temperature and velocity and time of treatment of the potatoes set forth in the claims of patent No. 192, and since the alleged production of a biological or other change in the outer layers of cells of the potatoes, if it occurs under the conditions specified in the claims, would inherently occur in any equivalent procedure, the method of operation of the Stambaugh dryer embodied every material procedural step of the process claimed in patent No. 192.
10
'12. 'early in 1937 Goulds Growers, Inc., of Goulds, Florida, began to publicly use in their commercial packing operations two potato processing production lines each of which included a washing mechanism and a heated air dryer, the method of operation of which was the same in all material respects as the process defined by the claims of patent No. 192. The Goulds Growers packing-house was located only one-quarter of a mile away from plaintiff's packing-house where Arthur was employed, and Arthur was admittedly very familiar with the construction and method of operation of the Goulds Growers installation from the time when it was being built. * * *
11
'15. The Goulds Growers Potato washing and drying machines as they were publicly used during the potato packing seasons of 1937 and 1938 performed the following operations in preparing potatoes for shipment: (1) washed the potatoes, (2) conveyed them through enclosed tunnels for a distance of approximately 100 feet, and for double that distance during time of unfavorable weather conditions, (3) produced a high velocity, turbulent flow of heated air through the tunnels countercurrent to the movement of the potatoes there through, the air having an inlet temperature of from 120 to 150 degrees F. and being blown through the tunnels by fans having an output velocity of approximately 880 feet per minute, and (4) subjected the potatoes to the heated air for a period of time ranging from 3 1/2 to 5 1/2 minutes, or double that period when both machines were connected in series. The potatoes discharged from the Goulds Growers dryers were dried sufficiently to practically eliminate losses from bacterial soft rot, which is the avowed purpose of the process of patent No. 192.'
12
In the light of these findings, which are amply supported by the testimony, the process patent is clearly invalid. As we have seen, the pointing out in the patent that the process of drying by hot air resulted in a biological change in the potatoes did not constitute patentable invention. And it is equally clear that it was not invention to point out the range of temperature and the velocity of the air current at which the best results were to be obtained. There was nothing critical in any particular temperature or velocity; and the determination of which had best be used involved nothing that the skill of the engineer could not easily supply. The fact that Arthur may have made improvements in a process already being used successfully did not entitle him to a patent where there was nothing in the improvements involving real invention as distinguished from the skill of the calling. See Atlantic Works v. Brady, 107 U.S. 192, 200, 2 S.Ct. 225, 27 L.Ed. 438; Thompson v. American Tobacco Co., 4 Cir., 174 F.2d 773, 777; Wine Ry. Appliance Co. v. B. & O.R. Co., 4 Cir., 78 F.2d 312, 319, and cases were cited.
13
It is difficult to see, at this time in the history of the arts and sciences, how it could possibly be thought that there was patentability in the use of hot air in drying vegetables; and the process of blowing the air through a tunnel in a direction opposite to that in which the vegetables are being carried would seem to be a process which would readily suggest itself to anyone faced with the problem. That machines employing such a process had long been known, is shown by numerous patents referred to by the lower court in holding the machine patent invalid. See findings 34, 35 and 36. A patent may not, of course, be granted for a process when the process has been disclosed by prior patents covering machines to practice the process. MacDougald Const. Co. v. Finley, 5 Cir., 38 F.2d 809, certiorari denied 282 U.S. 862, 51 S.Ct. 36, 75 L.Ed. 763; Girdler Corp. v. Abbotts Dairies, D.C., 24 F.Supp. 551, affirmed 3 Cir., 106 F.2d 998.
14
Since the patent is manifestly void on account of the prior uses established by the evidence, it is not necessary that we consider the Wayland patent also relied upon by the lower court, nor is it necessary that we pass upon the questions of infringement which have been strenuously argued.
15
2. The Dealings Between the Parties.
16
Plaintiff contends that, even though the patent sued on be invalid, defendants are estopped to assert its invalidity because of dealings had between the parties. They contend also that these dealings establish a confidential relationship which defendants have abused, entitling plaintiff to recover damages on that account, and that plaintiff is entitled to recover damages also because defendants have breached the provisions of a contract entered into between the parties at the conclusion of their dealings. The facts establish with respect to these matters are as follows:
17
Plaintiff, a grower and shipper of potatoes, employed Arthur, the grantee of the patents in suit, as a packing house foreman and assigned him the duty of working out some satisfactory process of cleaning potatoes for shipment. Arthur, after experimenting with a cooling or refrigerating process for handling the washed potatoes, decided that a more satisfactory process would be to dry them by the use of hot air and proceeded to have a machine built for that purpose. A part of the equipment for this machine was furnished by one of the defendant Wilson's corporations; and one Hincz, representing the corporation, helped to install it and became thoroughly familiar with the machine and its operation. He told the defendant Wilson about the machine and brought him to plaintiff's packing house where Wilson saw it in operation and discussed with plaintiff the possibility of obtaining a patent on it. This was early in the year 1939. Defendant made no effort then to obtain a patent either for himself or for plaintiff but began planning to manufacture potato drying machines which would use the hot air process. In early 1940 plaintiff and defendant entered into three contracts the salient provisions of which were that a corporation should be organized, owned in equal parts by plaintiff and defendant, to manufacture and lease potato drying machines; that one of defendant's corporations should be given the exclusive contract of manufacturing the machines; and that the patents which were to be applied for should be the property of a corporation owned by plaintiff but that the corporation to be formed should be granted a license to use them for a nominal consideration. Arthur had already made application for the patent in suit, and the corporation provided for in the contracts was duly organized and commenced business. A controversy arose within a few months, however, and defendant sold out to plaintiff his interest in the corporation. The three prior contracts were then cancelled and a new contract was thereafter made, dated August 31, 1940, settling all matters in difference between the parties. That contract contained, among others, the following provisions:
18
'4. That for and in consideration of payments made in the past to said parties of the first part (Wilson and one of his corporations) said parties of the first part, together and separately, agree not to utilize or to take advantage in any way of disclosures to them by the said parties of the second and third parts of the latter's processes and apparatuses for processing agricultural products, which is the basis of a patent application now pending in the Patent Office and owned by said parties of the second part.
19
'5. That the parties of the first part, except as provided for in the present agreement, hereby agree not to use any of the confidential disclosures to them regarding said process of treating agricultural products by said parties of the second part, and not to manufacture, sell, or lease any equipment for processing agricultural products in accordance with the process disclosed to them in confidence by said parties of the second and third parts.'
20
Following the execution of this contract, defendant began making and leasing potato drying machines which plaintiff contends practice the process of the Arthur Patent but which defendants contend operate upon entirely different principles.
21
We see no ground upon which the defendants can be held to be estopped to assert the invalidity of the patent. They were never licensees under it; they neither bought nor sold any interest in it; and they entered into no contract recognizing its validity in any way. Not even the corporation formed by plaintiff and defendant to manufacture and lease potato drying machines held any license under the patent but had at the most a mere executory contract that it should have a license under any patent that might be obtained, and the final contract between the parties put an end even to this. Under such circumstances, it is perfectly clear that defendants are not estopped to dispute the validity of the patent by reason of having sold out to plaintiff their interest in the corporation which was to have potato drying machines manufactured and lease them.
22
And we think it equally clear that no factual basis has been established for recovering damages on account of breach of confidence under the principles laid down in Hoeltke v. C. M. Kemp Mfg. Co., 4 Cir., 80 F2d 912 or Saco-Lowell Shops v. Reynolds, 4 Cir., 141 F.2d 587. We agree with the following finding of the court below with respect to this matter: '49. None of the information which the defendant Wilson obtained concerning the things upon which plaintiff relies as secrets was given to Wilson in confidence by either the plaintiff or Arthur. The defendant Wilson had been fully informed by Hincz concerning the construction and operating procedure of the plaintiff's installation before Wilson ever visited plaintiff's packinghouse. The information which Hincz thus conveyed to Wilson was obtained by Hincz by fair means, in the ordinary and open course of business, and without any injunction of secrecy; he had free access to the plaintiff's dryers at all times and rightfully considered that all of the information connected therewith, particularly the technical data which he himself worked out in designing the air conditioning equipment, could be freely given by him to Wilson or anyone else. The weight of the evidence does not support plaintiff's contention that his brief conversation with the defendant Wilson on the subject of patents during Wilson's first visit to plaintiff's packinghouse in February 1939 gave rise to a confidential relationship between the two men, nor does it establish that Wilson obtained on that visit any information with respect to the installation in the packinghouse which he did not already have. The evidence likewise fails to establish plaintiff's contention that the defendant Wilson received secret or confidential information from Arthur with respect to the potato processing installations made by General Produce Dryers, Inc., using the dryers which had been designed and built under Wilson's supervision at the General Air Conditioning Company plant at Raleigh.'
23
For the same reason, no basis is established for recovery on the theory that the above quoted provisions of the final contract between the parties have been breached. While plaintiff complains that defendants' machines embody his process, he does not specifically point out the disclosures or processes which he contends that defendants have appropriated. As we have seen, the process and machine of plaintiff embodied processes and devices which were old and well known in the art and which had been employed in practically the same way by Goulds only a few hundred yards from plaintiff's installation. The provisions of the contract which we have quoted cannot reasonably be interpreted as an agreement by defendants not to use machines or processes in use by persons other than plaintiff; for it would be absurd to designate as a confidential disclosure that which is publicly known. It is not sufficient, therefore, for plaintiff to introduce general testimony to the effect that Arthur had the idea of drying potatoes by the use of hot air and that defendants were given the benefit of his ideas while helping to build his machine. Plaintiff must show that he disclosed to defendants matters which were peculiar to the process and machine which he was developing, and not common property, and that defendants used these in building their machine, and not merely devices and processes which were open to the public. This he has not done. As was well said in the findings of the court below: '62. Paragraph 5 of the August 31, 1940 agreement is specifically limited by its terms to the use of 'confidential' disclosures. Although paragraph 4 does not include the word 'confidential' as a modifier of 'disclosures', the word 'disclosures' itself implies that the things referred to were secret, concealed or unknown prior to the time of their revelation. The evidence does not establish that any confidential disclosures were made to the defendant Wilson by plaintiff or on his behalf.'
24
The evidence, in fact, negatives the making of any confidential disclosures. The deposition of the witness Arthur relating to the matter tells of the visit of Wilson to plaintiff's packing plant and his meeting with Peters, and proceeds as follows: 'They talked a little bit there, and Mr. Wilson seemed especially pleased with the installation; in fact, I would almost describe his expression as beaming. He said, 'Mr. Peters, you really have got a wonderful thing here, and I believe it can be patented.' They talked a few minutes longer, and Mr. Peters was pleased with that statement, and informed Mr. Wilson that he was extremely busy selling potatoes, and that he would like to have me show him further details of the machine. I talked with Mr. Wilson and Mr. Hincz, explaining the operations, but Mr. Wilson was pretty well acquainted with them. He seemed to know all about the entire installation. We did not spend a great deal of time there, since he seemed to know, without my explaining it, how it operated and particularly how the drying operation was handled. I brought him in here to Mr. Peters' office then, and left them with Mr. Peters. I didn't see them when they left, because I had to go back into the packinghouse and continue operations.
25
'Q. 293. How did you happen to explain the operations to Mr. Wilson and Mr. Hincz? A. Because Mr. Wilson told Mr. Peters he could get him a patent, or thought he could get him a patent, and Mr. Peters asked me to show him everything about it, to give him access to it and give him the information.
26
'Q. 294. Did you do that? A. I gave him what I could in the time we had, but he seemed to know as much about it as I did. I didn't think it was necessary to give him any great deal of information.'
27
This testimony clearly indicates that no confidential disclosures had been made prior to that time and that none was made then because, in the language of Arthur, Wilson 'seemed to know all about the entire installation'.
28
It is strenuously argued that confidential disclosures to defendants are conclusively established by the fact that the above quoted provisions were inserted in the contract. Wilson contends, however, that Peters, who had the contract prepared, had these provisions incorporated without prior agreement; that there were in fact no confidential disclosures to which they could have had reference; and that he signed the contract without insisting upon their deletion because Peters was away on a cruise and could not be reached and only by executing the contract could he get money which Peters owed him and which ne needed. Be that as it may, it is clear that the provisions of the contract do not of themselves make out a case for damages for breach of contract. It is necessary that plaintiff supplement them by specific proof of what confidential disclosures he made to defendants and what damage he has sustained by reason of defendants' use thereof. No such damage from breach of the contract has been established.
29
3. Violation of Anti-Trust Law.
30
Defendants' counterclaim for damages under the anti-trust acts is based (1) on contracts between plaintiff and the Food Machinery Corporation to the effect that that company, which was contracting to manufacture machines for plaintiff under his patent, would not manufacture, lease or sell any potato-drying machinery competitive with that of the patent, and (2) on threats by plaintiff to bring infringement suits against the licensees of the defendants' machines. No extended discussion of these matters is necessary. Defendants have shown no damage resulting to them from the contracts between plaintiff and the Food Machinery Corporation; and for this reason, even if the contracts were violative of the anti-trust acts, which we do not decide, see United States v. Bausch & Lomb Optical Co., D.C., 45 F.Supp. 387, 399, Id., 32l U.S. 707, 719, 64 S.Ct. 805, 88 L.Ed. 1024, they would furnish defendants no basis for recovery. So far as the threats of suit for patent infringement are concerned, the evidence supports the finding of the lower court that these were made in good faith in protection of what plaintiff thought were rights secured by the patent and not pursuant to an unlawful attempt to extend the monopoly thereby granted. See U.S.G&P.E. Corp. v. Hanson-VanWinkle, etc., Co., 4 Cir., 104 F.2d 856, 862.
31
For the reasons stated, the judgment appealed from will be affirmed.
32
Affirmed.
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505 F.2d 727
Kalscheurv.Rounick
74-1598, 74-1639
UNITED STATES COURT OF APPEALS Second Circuit
10/9/74
1
S.D.N.Y.
AFFIRMED
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413 U.S. 266 (1973)
ALMEIDA-SANCHEZ
v.
UNITED STATES.
No. 71-6278.
Supreme Court of the United States.
Argued March 19 and 28, 1973.
Decided June 21, 1973.
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT
*267 James A. Chanoux, and John J. Cleary by appointment of the Court, 411 U. S. 903, argued the cause for petitioner. Mr. Chanoux was on the brief.
Deputy Solicitor General Lacovara argued the cause for the United States. With him on the brief were Solicitor General Griswold, Assistant Attorney General Petersen, Mark L. Evans, Beatrice Rosenberg, and Roger A. Pauley.[*]
MR. JUSTICE STEWART delivered the opinion of the Court.
The petitioner in this case, a Mexican citizen holding a valid United States work permit, was convicted of having knowingly received, concealed, and facilitated the transportation of a large quantity of illegally imported marihuana in violation of 21 U. S. C. § 176a (1964 ed.). His sole contention on appeal was that the search of his automobile that uncovered the marihuana was unconstitutional under the Fourth Amendment and that, under the rule of Weeks v. United States, 232 U. S. 383, the marihuana should not have been admitted as evidence against him.
The basic facts in the case are neither complicated nor disputed. The petitioner was stopped by the United States Border Patrol on State Highway 78 in California, and his car was thoroughly searched. The road is essentially an east-west highway that runs for part of its course through an undeveloped region. At about the point where the petitioner was stopped the road meanders north as well as eastbut nowhere does the road reach the Mexican border, and at all points it lies north of U. S. 80, a major east-west highway entirely within the *268 United States that connects the Southwest with the west coast. The petitioner was some 25 air miles north of the border when he was stopped. It is undenied that the Border Patrol had no search warrant, and that there was no probable cause of any kind for the stop or the subsequent searchnot even the "reasonable suspicion" found sufficient for a street detention and weapons search in Terry v. Ohio, 392 U. S. 1, and Adams v. Williams, 407 U. S. 143.
The Border Patrol conducts three types of surveillance along inland roadways, all in the asserted interest of detecting the illegal importation of aliens. Permanent checkpoints are maintained at certain nodal intersections; temporary checkpoints are established from time to time at various places; and finally, there are roving patrols such as the one that stopped and searched the petitioner's car. In all of these operations, it is argued, the agents are acting within the Constitution when they stop and search automobiles without a warrant, without probable cause to believe the cars contain aliens, and even without probable cause to believe the cars have made a border crossing. The only asserted justification for this extravagant license to search is § 287 (a) (3) of the Immigration and Nationality Act, 66 Stat. 233, 8 U. S. C. § 1357 (a) (3), which simply provides for warrantless searches of automobiles and other conveyances "within a reasonable distance from any external boundary of the United States," as authorized by regulations to be promulgated by the Attorney General. The Attorney General's regulation, 8 CFR § 287.1, defines "reasonable distance" as "within 100 air miles from any external boundary of the United States."
The Court of Appeals for the Ninth Circuit recognized that the search of petitioner's automobile was not a "border search," but upheld its validity on the basis of *269 the above-mentioned portion of the Immigration and Nationality Act and the accompanying regulation. 452 F. 2d 459, 461. We granted certiorari, 406 U. S. 944, to consider the constitutionality of the search.
I
No claim is made, nor could one be, that the search of the petitioner's car was constitutional under any previous decision of this Court involving the search of an automobile. It is settled, of course, that a stop and search of a moving automobile can be made without a warrant. That narrow exception to the warrant requirement was first established in Carroll v. United States, 267 U. S. 132. The Court in Carroll approved a portion of the Volstead Act providing for warrantless searches of automobiles when there was probable cause to believe they contained illegal alcoholic beverages. The Court recognized that a moving automobile on the open road presents a situation "where it is not practicable to secure a warrant because the vehicle can be quickly moved out of the locality or jurisdiction in which the warrant must be sought." Id., at 153. Carroll has been followed in a line of subsequent cases,[1] but the Carroll doctrine does not declare a field day for the police in searching automobiles. Automobile or no automobile, there must be probable cause for the search.[2] As MR. JUSTICE WHITE wrote for the Court in Chambers v. Maroney, 399 *270 U. S. 42, 51: "In enforcing the Fourth Amendment's prohibition against unreasonable searches and seizures, the Court has insisted upon probable cause as a minimum requirement for a reasonable search permitted by the Constitution."
In seeking a rationale for the validity of the search in this case, the Government thus understandably sidesteps the automobile search cases. Instead, the Government relies heavily on cases dealing with administrative inspections. But these cases fail to support the constitutionality of this search.
In Camara v. Municipal Court, 387 U. S. 523, the Court held that administrative inspections to enforce community health and welfare regulations could be made on less than probable cause to believe that particular dwellings were the sites of particular violations. Id., at 534-536, 538. Yet the Court insisted that the inspector obtain either consent or a warrant supported by particular physical and demographic characteristics of the areas to be searched. Ibid. See also See v. City of Seattle, 387 U. S. 541. The search in the present case was conducted in the unfettered discretion of the members of the Border Patrol, who did not have a warrant,[3] probable cause, or consent. The search thus embodied precisely the evil the Court saw in Camara when it insisted that the "discretion of the official in the field" be circumscribed by obtaining a warrant prior to the inspection. Camara, supra, at 532-533.
Two other administrative inspection cases relied upon by the Government are equally inapposite. Colonnade Catering Corp. v. United States, 397 U. S. 72, and United States v. Biswell, 406 U. S. 311, both approved *271 warrantless inspections of commercial enterprises engaged in businesses closely regulated and licensed by the Government. In Colonnade, the Court stressed the long history of federal regulation and taxation of the manufacture and sale of liquor, 397 U. S., at 76-77. In Biswell, the Court noted the pervasive system of regulation and reporting imposed on licensed gun dealers, 406 U. S., at 312 n. 1, 315-316.
A central difference between those cases and this one is that businessmen engaged in such federally licensed and regulated enterprises accept the burdens as well as the benefits of their trade, whereas the petitioner here was not engaged in any regulated or licensed business. The businessman in a regulated industry in effect consents to the restrictions placed upon him. As the Court stated in Biswell:
"It is also plain that inspections for compliance with the Gun Control Act pose only limited threats to the dealer's justifiable expectations of privacy. When a dealer chooses to engage in this pervasively regulated business and to accept a federal license, he does so with the knowledge that his business records, firearms, and ammunition will be subject to effective inspection. Each licensee is annually furnished with a revised compilation of ordinances that describe his obligations and define the inspector's authority. . . . The dealer is not left to wonder about the purposes of the inspector or the limits of his task." Id., at 316.
Moreover, in Colonnade and Biswell, the searching officers knew with certainty that the premises searched were in fact utilized for the sale of liquor or guns. In the present case, by contrast, there was no such assurance that the individual searched was within the proper scope of official scrutinythat is, there was no reason *272 whatever to believe that he or his automobile had even crossed the border, much less that he was guilty of the commission of an offense.
II
Since neither this Court's automobile search decisions nor its administrative inspection decisions provide any support for the constitutionality of the stop and search in the present case, we are left simply with the statute that purports to authorize automobiles to be stopped and searched, without a warrant and "within a reasonable distance from any external boundary of the United States." It is clear, of course, that no Act of Congress can authorize a violation of the Constitution. But under familiar principles of constitutional adjudication, our duty is to construe the statute, if possible, in a manner consistent with the Fourth Amendment. Ashwander v. Tennessee Valley Authority, 297 U. S. 288, 348 (Brandeis, J., concurring).
It is undoubtedly within the power of the Federal Government to exclude aliens from the country. Chae Chan Ping v. United States, 130 U. S. 581, 603-604. It is also without doubt that this power can be effectuated by routine inspections and searches of individuals or conveyances seeking to cross our borders. As the Court stated in Carroll v. United States: "Travellers may be so stopped in crossing an international boundary because of national self protection reasonably requiring one entering the country to identify himself as entitled to come in, and his belongings as effects which may be lawfully brought in." 267 U. S., at 154. See also Boyd v. United States, 116 U. S. 616.
Whatever the permissible scope of intrusiveness of a routine border search might be, searches of this kind may in certain circumstances take place not only at the border itself, but at its functional equivalents as well. For *273 example, searches at an established station near the border, at a point marking the confluence of two or more roads that extend from the border, might be functional equivalents of border searches. For another example, a search of the passengers and cargo of an airplane arriving at a St. Louis airport after a nonstop flight from Mexico City would clearly be the functional equivalent of a border search.[4]
But the search of the petitioner's automobile by a roving patrol, on a California road that lies at all points at least 20 miles north of the Mexican border,[5] was of a wholly different sort. In the absence of probable cause or consent, that search violated the petitioner's Fourth Amendment right to be free of "unreasonable searches and seizures."
It is not enough to argue, as does the Government, that the problem of deterring unlawful entry by aliens across long expanses of national boundaries is a serious one. The needs of law enforcement stand in constant tension with the Constitution's protections of the individual against certain exercises of official power. It is precisely the predictability of these pressures that counsels a resolute loyalty to constitutional safeguards. It *274 is well to recall the words of Mr. Justice Jackson, soon after his return from the Nuremberg Trials:
"These [Fourth Amendment rights], I protest, are not mere second-class rights but belong in the catalog of indispensable freedoms. Among deprivations of rights, none is so effective in cowing a population, crushing the spirit of the individual and putting terror in every heart. Uncontrolled search and seizure is one of the first and most effective weapons in the arsenal of every arbitrary government." Brinegar v. United States, 338 U. S. 160, 180 (Jackson, J., dissenting).
The Court that decided Carroll v. United States, supra, sat during a period in our history when the Nation was confronted with a law enforcement problem of no small magnitudethe enforcement of the Prohibition laws. But that Court resisted the pressure of official expedience against the guarantee of the Fourth Amendment. Mr. Chief Justice Taft's opinion for the Court distinguished between searches at the border and in the interior, and clearly controls the case at bar:
"It would be intolerable and unreasonable if a prohibition agent were authorized to stop every automobile on the chance of finding liquor and thus subject all persons lawfully using the highways to the inconvenience and indignity of such a search. Travellers may be so stopped in crossing an international boundary because of national self protection reasonably requiring one entering the country to identify himself as entitled to come in, and his belongings as effects which may be lawfully brought in. But those lawfully within the country, entitled to use the public highways, have a right to free passage without interruption or search unless there is *275 known to a competent official authorized to search, probable cause for believing that their vehicles are carrying contraband or illegal merchandise." 267 U. S., at 153-154.
Accordingly, the judgment of the Court of Appeals is
Reversed.
MR. JUSTICE POWELL, concurring.
While I join the opinion of the Court, which sufficiently establishes that none of our Fourth Amendment decisions supports the search conducted in this case, I add this concurring opinion to elaborate on my views as to the meaning of the Fourth Amendment in this context. We are confronted here with the all-too-familiar necessity of reconciling a legitimate need of government with constitutionally protected rights. There can be no question as to the seriousness and legitimacy of the law enforcement problem with respect to enforcing along thousands of miles of open border valid immigration and related laws. Nor can there be any question as to the necessity, in our free society, of safeguarding persons against searches and seizures proscribed by the Fourth Amendment. I believe that a resolution of the issue raised by this case is possible with due recognition of both of these interests, and in a manner compatible with the prior decisions of this Court.[1]
I
The search here involved was carried out as part of a roving search of automobiles in an area generally proximate to the Mexican border. It was not a border search, *276 nor can it fairly be said to have been a search conducted at the "functional equivalent" of the border. Nor does this case involve the constitutional propriety of searches at permanent or temporary checkpoints removed from the border or its functional equivalent. Nor, finally, was the search based on cause in the ordinary sense of specific knowledge concerning an automobile or its passengers.[2] The question posed, rather, is whether and under what circumstances the Border Patrol may lawfully conduct roving searches of automobiles in areas not far removed from the border for the purpose of apprehending aliens illegally entering or in the country.
The Government has made a convincing showing that large numbers of aliens cross our borders illegally at places other than established crossing points, that they are often assisted by smugglers, that even those who cross on foot are met and transported to their destinations by automobiles, and that roving checks of automobiles are the only feasible means of apprehending them. It would, of course, be wholly impracticable to maintain a constant patrol along thousands of miles of border. Moreover, because many of these aliens cross the border on foot, or at places other than established checkpoints, it is simply not possible in most cases for the Government to obtain specific knowledge that a person riding or stowed in an automobile is an alien illegally in the country. *277 Thus the magnitude of the problem is clear. An answer, reconciling the obvious needs of law enforcement with relevant constitutional rights, is far less clear.
II
The Government's argument to sustain the search here is simply that it was reasonable under the circumstances. But it is by now axiomatic that the Fourth Amendment's proscription of "unreasonable searches and seizures" is to be read in conjunction with its command that "no Warrants shall issue, but upon probable cause." Under our cases, both the concept of probable cause and the requirement of a warrant bear on the reasonableness of a search, though in certain limited circumstances neither is required.
Before deciding whether a warrant is required, I will first address the threshold question of whether some functional equivalent of probable cause may exist for the type of search conducted in this case. The problem of ascertaining the meaning of the probable-cause requirement in the context of roving searches of the sort conducted here is measurably assisted by the Court's opinion in Camara v. Municipal Court, 387 U. S. 523 (1967), on which the Government relies heavily. The Court was there concerned with the nature of the probable-cause requirement in the context of searches to identify housing code violations and was persuaded that the only workable method of enforcement was periodic inspection of all structures:
"It is here that the probable cause debate is focused, for the agency's decision to conduct an area inspection is unavoidably based on its appraisal of conditions in the area as a whole, not on its knowledge of conditions in each particular building." Id., at 536.
*278 In concluding that such general knowledge met the probable-cause requirement under those circumstances, the Court took note of a "long history of judicial and public acceptance," of the absence of other methods for vindicating the public interest in preventing or abating dangerous conditions, and of the limited invasion of privacy occasioned by administrative inspections which are "neither personal in nature nor aimed at the discovery of evidence of crime." Id., at 537.
Roving automobile searches in border regions for aliens, likewise, have been consistently approved by the judiciary. While the question is one of first impression in this Court, such searches uniformly have been sustained by the courts of appeals whose jurisdictions include those areas of the border between Mexico and the United States where the problem has been most severe. See, e. g., United States v. Miranda, 426 F. 2d 283 (CA9 1970); Roa-Rodriquez v. United States, 410 F. 2d 1206 (CA10 1969). Moreover, as noted above, no alternative solution is reasonably possible.
The Government further argues that such searches resemble those conducted in Camara in that they are undertaken primarily for administrative rather than prosecutorial purposes, that their function is simply to locate those who are illegally here and to deport them. Brief for the United States 28 n. 25. This argument is supported by the assertion that only 3% of aliens apprehended in this country are prosecuted. While the low rate of prosecution offers no great solace to the innocent whose automobiles are searched or to the few who are prosecuted, it does serve to differentiate this class of searches from random area searches which are no more than "fishing expeditions" for evidence to support prosecutions. The possibility of prosecution does not distinguish such searches from those involved in Camara. Despite the Court's assertion in that case that the searches *279 were not "aimed at the discovery of evidence of crime," 387 U. S., at 537, violators of the housing code there were subject to criminal penalties. Id., at 527 n. 2.
Of perhaps greater weight is the fact that these searches, according to the Government, are conducted in areas where the concentration of illegally present aliens is high, both in absolute terms and in proportion to the number of persons legally present. While these searches are not border searches in the conventional sense, they are incidental to the protection of the border and draw a large measure of justification from the Government's extraordinary responsibilities and powers with respect to the border. Finally, and significantly, these are searches of automobiles rather than searches of persons or buildings. The search of an automobile is far less intrusive on the rights protected by the Fourth Amendment than the search of one's person or of a building. This Court "has long distinguished between an automobile and a home or office." Chambers v. Maroney, 399 U. S. 42, 48 (1970). As the Government has demonstrated, and as those in the affected areas surely know, it is the automobile which in most cases makes effective the attempts to smuggle aliens into this country.
The conjunction of these factorsconsistent judicial approval, absence of a reasonable alternative for the solution of a serious problem, and only a modest intrusion on those whose automobiles are searchedpersuades me that under appropriate limiting circumstances there may exist a constitutionally adequate equivalent of probable cause to conduct roving vehicular searches in border areas.
III
The conclusion that there may be probable cause to conduct roving searches does not end the inquiry, for "except in certain carefully defined classes of cases, a search of private property without proper consent is *280 `unreasonable' unless it has been authorized by a valid search warrant." Camara v. Municipal Court, supra, at 528-529. I expressed the view last Term that the warrant clause reflects an important policy determination: "The Fourth Amendment does not contemplate the executive officers of Government as neutral and disinterested magistrates. Their duty and responsibility is to enforce the laws, to investigate, and to prosecute. . . . But those charged with this investigative and prosecutorial duty should not be the sole judges of when to utilize constitutionally sensitive means in pursuing their tasks." United States v. United States District Court, 407 U. S. 297, 317 (1972). See also Coolidge v. New Hampshire, 403 U. S. 443, 481 (1971); Chimel v. California, 395 U. S. 752, 763-764 (1969).
To justify warrantless searches in circumstances like those presented in this case, the Government relies upon several of this Court's decisions recognizing exceptions to the warrant requirement. A brief review of the nature of each of these major exceptions illuminates the relevant considerations in the present case. In Terry v. Ohio, 392 U. S. 1 (1968), the Court held that a policeman may conduct a limited "pat down" search for weapons when he has reasonable grounds for believing that criminal conduct has taken or is taking place and that the person he searches is armed and dangerous. "The sole justification [for such a] search . . . is the protection of the police officer and others nearby . . . ." Id., at 29. Nothing in Terry supports an exception to the warrant requirement here.
Colonnade Catering Corp. v. United States, 397 U. S. 72 (1970), and United States v. Biswell, 406 U. S. 311 (1972), on which the Government also relies, both concerned the standards which govern inspections of the business premises of those with federal licenses to engage in the sale of liquor, Colonnade, or the sale of guns, *281 Biswell. In those cases, Congress was held to have power to authorize warrantless searches. As the Court stated in Biswell:
"When a dealer chooses to engage in this pervasively regulated business and to accept a federal license, he does so with the knowledge that his business records, firearms, and ammunition will be subject to effective inspection." 406 U. S., at 316.
Colonnade and Biswell cannot fairly be read to cover cases of the present type. One who merely travels in regions near the borders of the country can hardly be thought to have submitted to inspections in exchange for a special perquisite.
More closely in point on their facts are the cases involving automobile searches. E. g., Carroll v. United States, 267 U. S. 132 (1925); Chambers v. Maroney, supra; Coolidge v. New Hampshire, supra. But while those cases allow automobiles to be searched without a warrant in certain circumstances, the principal rationale for this exception to the warrant clause is that under those circumstances "it is not practicable to secure a warrant because the vehicle can be quickly moved out of the locality or jurisdiction in which the warrant must be sought." Carroll v. United States, supra, at 153. The Court today correctly points out that a warrantless search under the Carroll line of cases must be supported by probable cause in the sense of specific knowledge about a particular automobile. While, as indicated above, my view is that on appropriate facts the Government can satisfy the probable cause requirement for a roving search in a border area without possessing information about particular automobiles, it does not follow that the warrant requirement is inapposite. The very fact that the Government's supporting information relates to criminal activity in certain areas rather than *282 to evidence about a particular automobile renders irrelevant the justification for warrantless searches relied upon in Carroll and its progeny. Quite simply, the roving searches are justified by experience with obviously nonmobile sections of a particular road or area embracing several roads.
None of the foregoing exceptions to the warrant requirement, then, applies to roving automobile searches in border areas. Moreover, the propriety of the warrant procedure here is affirmatively established by Camara. See also See v. City of Seattle, 387 U. S. 541 (1967). For the reasons outlined above, the Court there ruled that probable cause could be shown for an area search, but nonetheless required that a warrant be obtained for unconsented searches. The Court indicated its general approach to exceptions to the warrant requirement:
"In assessing whether the public interest demands creation of a general exception to the Fourth Amendment's warrant requirement, the question is not whether the public interest justifies the type of search in question, but whether the authority to search should be evidenced by a warrant, which in turn depends in part upon whether the burden of obtaining a warrant is likely to frustrate the governmental purpose behind the search." Camara v. Municipal Court, supra, at 533.
See also United States v. United States District Court, supra, at 315.
The Government argues that Camara and See are distinguishable from the present case for the purposes of the warrant requirement. It is true that while a building inspector who is refused admission to a building may easily obtain a warrant to search that building, a member of the Border Patrol has no such opportunity when *283 he is refused permission to inspect an automobile. It is also true that the judicial function envisioned in Camara did not extend to reconsideration of "the basic agency decision to canvass an area," Camara v. Municipal Court, supra, at 532, while the judicial function here would necessarily include passing on just such a basic decision.
But it does not follow from these distinctions that "no warrant system can be constructed that would be feasible and meaningful." Brief for the United States 36. Nothing in the papers before us demonstrates that it would not be feasible for the Border Patrol to obtain advance judicial approval of the decision to conduct roving searches on a particular road or roads for a reasonable period of time.[3] According to the Government, the incidence of illegal transportation of aliens on certain roads is predictable, and the roving searches are apparently planned in advance or carried out according to a predetermined schedule. The use of an area warrant procedure would surely not "frustrate the governmental purpose behind the search." Camara v. Municipal Court, supra, at 533. It would of course entail some inconvenience, but inconvenience alone has never been thought to be an adequate reason for abrogating the warrant requirement. E. g., United States v. United States District Court, supra, at 321.
Although standards for probable cause in the context of this case are relatively unstructured (cf. id., at 322), there are a number of relevant factors which would merit consideration: they include (i) the frequency with which aliens illegally in the country are known or reasonably believed to be transported within a particular area; *284 (ii) the proximity of the area in question to the border; (iii) the extensiveness and geographic characteristics of the area, including the roads therein and the extent of their use,[4] and (iv) the probable degree of interference with the rights of innocent persons, taking into account the scope of the proposed search, its duration, and the concentration of illegal alien traffic in relation to the general traffic of the road or area.
In short, the determination of whether a warrant should be issued for an area search involves a balancing of the legitimate interests of law enforcement with protected Fourth Amendment rights. This presents the type of delicate question of constitutional judgment which ought to be resolved by the Judiciary rather than the Executive. In the words of Camara,
"This is precisely the discretion to invade private property which we have consistently circumscribed by a requirement that a disinterested party warrant the need to search." 387 U. S., at 532-533.
Nor does the novelty of the problem posed by roving searches in border areas undermine the importance of a prior judicial determination. When faced with a similarly unconventional problem last Term in United States District Court, supra, we recognized that the focus of the search there involved was "less precise than that directed against more conventional types of crime," and that "[d]ifferent standards may be compatible with the Fourth Amendment if they are reasonable both in relation *285 to the legitimate need of Government . . . and the protected rights of our citizens." 407 U. S., at 322-323. Yet we refused to abandon the Fourth Amendment commitment to the use of search warrants whenever this is feasible with due regard to the interests affected.
For the reasons stated above, I think a rational search warrant procedure is feasible in cases of this kind. As no warrant was obtained here, I agree that the judgment must be reversed. I express no opinion as to whether there was probable cause to issue a warrant on the facts of this particular case.
MR. JUSTICE WHITE, with whom THE CHIEF JUSTICE, MR. JUSTICE BLACKMUN, and MR. JUSTICE REHNQUIST join, dissenting.
Trial and conviction in this case were in the United States District Court for the Southern District of California under an indictment charging that petitioner, contrary to 21 U. S. C. § 176a (1964 ed.), had knowingly received, concealed, and facilitated the transportation of approximately 161 pounds of illegally imported marihuana. He was sentenced to five years' imprisonment. He appealed on the sole ground that the District Court had erroneously denied his motion to suppress marihuana allegedly seized from his automobile in violation of the Fourth Amendment.
The motion to suppress was heard on stipulated evidence in the District Court.[1] United States Border Patrol Officers Shaw and Carrasco stopped petitioner's car shortly after midnight as it was traveling from Calexico, on the California-Mexico border, toward Blythe, California. *286 The stop was made on Highway 78 near Glamis, California, 50 miles by road from Calexico. The highway was "about the only north-south road in California coming from the Mexican border that does not have an established checkpoint."[2] Because of that, "it is commonly used to evade check points by both marijuana and alien smugglers." On occasions "but not at all times," officers of the Border Patrol "maintain a roving check of vehicles and persons on that particular highway." Pursuant to this practice "they stopped this vehicle for the specific purpose of checking for aliens." Petitioner's identification revealed that he was a resident of Mexicali, Mexico, but that he held a work permit for the United States. Petitioner had come from Mexicali, had picked up the car in Calexico and was on his way to Blythe to deliver it. He intended to return to Mexicali by bus.[3] The officers had been advised by an official bulletin that aliens illegally entering the United States sometimes concealed themselves by sitting upright behind the back seat rest of a car, with their legs folded under the back seat from which the springs had been removed. While looking under the rear seat of petitioner's car for aliens, the officers discovered packages believed by them to contain marihuana. Petitioner was placed under arrest and advised of his rights. His car was then searched for additional marihuana, which was found in substantial amounts.
On this evidence, the motion to suppress was denied, *287 and petitioner was convicted. A divided Court of Appeals affirmed, 452 F. 2d 459 (CA9 1971), relying on its prior cases and on § 287 (a) (3) of the Immigration and Nationality Act, 8 U. S. C. § 1357 (a) (3), which provides that officers of the Immigration and Naturalization Service shall have the power, without warrant, to search any vehicle for aliens within a reasonable distance from any external boundary of the United States.[4] I dissent from the reversal of this judgment.
I
The Fourth Amendment protects the people "in their persons, houses, papers, and effects, against unreasonable searches and seizures" and also provides that "no Warrants shall issue, but upon probable cause . . . ." The ordinary rule is that to be reasonable under the Amendment a search must be authorized by warrant issued by a magistrate upon a showing of probable cause. The *288 Amendment's overriding prohibition is nevertheless against "unreasonable" searches and seizures; and the legality of searching, without warrant and without probable cause, individuals and conveyances seeking to enter the country has been recognized by Congress and the courts since the very beginning. Boyd v. United States, 116 U. S. 616 (1886), said as much; and in Carroll v. United States, 267 U. S. 132, 154 (1925), the Court repeated that neither warrant nor probable cause was required to authorize a stop and search at the external boundaries of the United States: "Travelers may be so stopped in crossing an international boundary because of national self protection reasonably requiring one entering the country to identify himself as entitled to come in, and his belongings as effects which may be lawfully brought in." This much is undisputed in this case. Persons and their effects may be searched at the border for dutiable articles or contraband. Conveyances may be searched for the same purposes, as well as to determine whether they carry aliens not entitled to enter the country. Neither, apparently, is it disputed that warrantless searches for aliens without probable cause may be made at fixed checkpoints away from the border.
The problem in this case centers on the roving patrol operating away from, but near, the border. These patrols may search for aliens without a warrant if there is probable cause to believe that the vehicle searched is carrying aliens illegally into the country. But without probable cause, the majority holds the search unreasonable, although at least one Justice, MR. JUSTICE POWELL, would uphold searches by roving patrols if authorized by an area warrant issued on less than probable cause in the traditional sense. I agree with MR. JUSTICE POWELL that such a warrant so issued would satisfy the Fourth Amendment, and I would expect that such warrants would be readily issued. But I disagree with him *289 and the majority that either a warrant or probable cause is required in the circumstances of this case. As the Court has reaffirmed today in Cady v. Dombrowski, post, p. 433, the governing standard under the Fourth Amendment is reasonableness, and in my view, that standard is sufficiently flexible to authorize the search involved in this case.
In Terry v. Ohio, 392 U. S. 1 (1968), the Court proceeding under the "general proscription against unreasonable searches and seizures," id., at 20 (footnote omitted), weighed the governmental interest claimed to justify the official intrusion against the constitutionally protected interest of the private citizen. Id., at 20-21. The "`need to search'" was balanced "`against the invasion which the search . . . entails,'" quoting from Camara v. Municipal Court, 387 U. S. 523, 534-535, 536-537 (1967). Terry, supra, at 21. In any event, as put by Mr. Chief Justice Warren, the "question is whether in all the circumstances of this on-the-street encounter, his right to personal security was violated by an unreasonable search and seizure." Id., at 9 (emphasis added).
Warrantless but probable-cause searches of the person and immediate surroundings have been deemed reasonable when incident to arrest, see Chimel v. California, 395 U. S. 752 (1969); and in Terry, the stop of a suspected individual and a pat-down for weapons without a warrant were thought reasonable on less than traditional probable cause. In Camara v. Municipal Court, supra, an inspection of every structure in an entire area to enforce the building codes was deemed reasonable under the Fourth Amendment without probable cause, or suspicion that any particular house or structure was in violation of law, although a warrant, issuable without probable cause, or reasonable suspicion of a violation, was required with respect to nonconsenting property owners. Also, in Colonnade Catering Corp. v. United *290 States, 397 U. S. 72 (1970), MR. JUSTICE DOUGLAS, writing for the Court and recognizing that the Fourth Amendment bars only unreasonable searches and seizures, ruled that the historic power of the Government to control the liquor traffic authorized warrantless inspections of licensed premises without probable cause, or reasonable suspicion, not to check on liquor quality or conditions under which it was sold, but solely to enforce the collection of, the federal excise tax.[5]United States v. Biswell, 406 U. S. 311 (1972), involved the Gun Control Act of 1968 and its authorization to federal officers to inspect firearms dealers. The public need to enforce an important regulatory program was held to justify random inspections of licensed establishments without warrant and probable cause.
The Court has been particularly sensitive to the Amendment's broad standard of "reasonableness" where, as in Biswell and Colonnade, authorizing statutes permitted the challenged searches. We noted in Colonnade that "Congress has broad power to design such powers of inspection under the liquor laws as it deems necessary *291 to meet the evils at hand," 397 U. S., at 76; and in Biswell we relied heavily upon the congressional judgment that the authorized inspection procedures played an important part in the regulatory system. 406 U. S., at 315-317. In the case before us, 8 U. S. C. § 1357 (a) (3), authorizes Border Patrol officers, without warrant, to search any vehicle for aliens "within a reasonable distance from any external boundary of the United States" and within the distance of 25 miles from such external boundary to have access to private lands, but not dwellings "for the purpose of patrolling the border to prevent the illegal entry of aliens into the United States . . . ." At the very least, this statute represents the considered judgment of Congress that proper enforcement of the immigration laws requires random searches of vehicles without warrant or probable cause within a reasonable distance of the international borders of the country.
It is true that "[u]ntil 1875 alien migration to the United States was unrestricted." Kleindienst v. Mandel, 408 U. S. 753, 761 (1972). But the power of the National Government to exclude aliens from the country is undoubted and sweeping. "That the government of the United States, through the action of the legislative department, can exclude aliens from its territory is a proposition which we do not think open to controversy. Jurisdiction over its own territory to that extent is an incident of every independent nation. It is a part of its independence. If it could not exclude aliens, it would be to that extent subject to the control of another power." Chae Chan Ping v. United States, 130 U. S. 581, 603-604 (1889). "The power of Congress to exclude aliens altogether from the United States, or to prescribe the terms and conditions upon which they may come to this country, and to have its declared policy in that regard enforced exclusively . . . is settled by our previous adjudications." *292 Lem Moon Sing v. United States, 158 U. S. 538, 547 (1895). See also Fong Yue Ting v. United States, 149 U. S. 698, 711 (1893); Yamataya v. Fisher, 189 U. S. 86, 97-99 (1903); United States ex rel. Turner v. Williams, 194 U. S. 279, 289-290 (1904); Oceanic Steam Navigation Co. v. Stranahan, 214 U. S. 320, 335-336 (1909); United States ex rel. Volpe v. Smith, 289 U. S. 422, 425 (1933).
Since 1875, Congress has given "almost continuous attention . . . to the problems of immigration and of excludability of certain defined classes of aliens. The pattern generally has been one of increasing control. . . ." Kleindienst v. Mandel, supra, at 761-762. It was only as the illegal entry of aliens multiplied that Congress addressed itself to enforcement mechanisms. In 1917, immigration authorities were authorized to board and search all conveyances by which aliens were being brought into the United States. Act of Feb. 5, 1917, § 16, 39 Stat. 886. This basic authority, substantially unchanged, is incorporated in 8 U. S. C. § 1225 (a).
In 1946, it was represented to Congress that "[i]n the enforcement of the immigration laws it is at times desirable to stop and search vehicles within a reasonable distance from the boundaries of the United States and the legal right to do so should be conferred by law." H. R. Rep. No. 186, 79th Cong., 1st Sess., 2 (1945). The House Committee on Immigration and Naturalization was "of the opinion that the legislation is highly desirable," ibid., and its counterpart in the Senate, S. Rep. No. 632, 79th Cong., 1st Sess., 2 (1945), stated that "[t] here is no question but that this is a step in the right direction." The result was express statutory authority, Act of Aug. 7, 1946, 60 Stat. 865, to conduct searches of vehicles for aliens within a reasonable distance from the border without warrant or possible cause. Moreover, in the Immigration and Nationality Act of 1952, 66 Stat. *293 163, Congress permitted the entry onto private lands, excluding dwellings, within a distance of 25 miles from any external boundaries of the country "for the purpose of patrolling the border to prevent the illegal entry of aliens into the United States . . . ." § 287 (a) (3), 66 Stat. 233.
The judgment of Congress obviously was that there are circumstances in which it is reasonably necessary, in the enforcement of the immigration laws, to search vehicles and other private property for aliens, without warrant or probable cause, and at locations other than at the border. To disagree with this legislative judgment is to invalidate 8 U. S. C. § 1357 (a) (3) in the face of the contrary opinion of Congress that its legislation comported with the standard of reasonableness of the Fourth Amendment. This I am quite unwilling to do.
The external boundaries of the United States are extensive. The Canadian border is almost 4,000 miles in length; the Mexican, almost 2,000. Surveillance is maintained over the established channels and routes of communication. But not only is inspection at regular points of entry not infallible, but it is also physically impossible to maintain continuous patrol over vast stretches of our borders. The fact is that illegal crossings at other than the legal ports of entry are numerous and recurring. If there is to be any hope of intercepting illegal entrants and of maintaining any kind of credible deterrent, it is essential that permanent or temporary checkpoints be maintained away from the borders, and roving patrols be conducted to discover and intercept illegal entrants as they filter to the established roads and highways and attempt to move away from the border area. It is for this purpose that the Border Patrol maintained the roving patrol involved in this case and conducted random, spot checks of automobiles and other vehicular traffic.
*294 The United States in this case reports that in fiscal year 1972, Border Patrol traffic checking operations located over 39,000 deportable aliens, of whom approximately 30,000 had entered the United States by illegally crossing the border at a place other than a port of entry. This was said to represent nearly 10% of the number of such aliens located by the Border Patrol by all means throughout the United States.[6]
Section 1357 (a) (3) authorizes only searches for aliens and only searches of conveyances and other property. No searches of the person or for contraband are authorized by the section. The authority extended by the statute is limited to that reasonably necessary for the officer to assure himself that the vehicle or other conveyance is not carrying an alien who is illegally within this country; and more extensive searches of automobiles without probable cause are not permitted by the section. Roa-Rodriquez v. United States, 410 F. 2d 1206 (CA10 1969); see Fumagalli v. United States, 429 F. 2d 1011, 1013 (CA9 1970). Guided by the principles of Camara, Colonnade, and Biswell, I cannot but uphold the judgment of Congress that for purposes of enforcing the immigration laws it is reasonable to treat the exterior boundaries of the country as a zone, not a line, and that there are recurring circumstances in which the search of vehicular traffic without warrant and without probable cause may be reasonable under the Fourth Amendment although not carried out at the border itself.
*295 This has also been the considered judgment of the three Courts of Appeals whose daily concern is the enforcement of the immigration laws along the Mexican-American border, and who, although as sensitive to constitutional commands as we are, perhaps have a better vantage point than we here on the Potomac to judge the practicalities of border-area law enforcement and the reasonableness of official searches of vehicles to enforce the immigration statutes.
The Court of Appeals for the Ninth Circuit, like other circuits, recognizes that at the border itself, persons may be stopped, identified, and searched without warrant or probable cause and their effects and conveyances likewise subjected to inspection. There seems to be no dissent on this proposition. Away from the border, persons and automobiles may be searched for narcotics or other contraband only on probable cause; but under § 1357 (a) (3), automobiles may be stopped without warrant or probable cause and a limited search for aliens carried out in those portions of the conveyance capable of concealing any illegal immigrant. This has been the consistent view of that court.
In Fumagalli v. United States, supra, Fumagalli was stopped at a checkpoint in Imperial, California, 49 miles north of the international boundary. In the course of looking in the trunk for an illegal entrant, the odor of marihuana was detected and marihuana discovered. Fumagalli contended that the trunk of the automobile could not be examined to locate an illegal entrant absent probable cause to believe that the vehicle carried such a person. The court, composed of Judges Merrill, Hufstedler, and Byrne, rejected the position, stating that "[w]hat all of these cases make clear is that probable cause is not required for an immigration search within approved limits [footnote omitted] but is generally required to sustain the legality of a search for contraband *296 in a person's automobile conducted away from the international borders. . . . Appellant has confused the two rules in his attempt to graft the probable cause standards of the narcotics cases . . . onto the rules justifying immigration inspections . . . ." 429 F. 2d, at 1013. Among prior cases reaffirmed was Fernandez v. United States, 321 F. 2d 283 (1963), where an automobile was stopped 18 miles north of Oceanside, California, on Highway 101 at a point 60 to 70 miles north of the Mexican border. An inspection for illegally entering aliens was conducted, narcotics were discovered and seized, and the stop and seizure were sustained under the statute. The Immigration Service, it was noted, had been running traffic checks in this area for 31 years, many illegal entrants had been discovered there, and there were at least a dozen other such checkpoints operating along the border between the United States and Mexico.[7]
The Courts of Appeal for the Fifth and Tenth Circuits share the problem of enforcing the immigration laws along the Mexican-American border. Both courts agree with the Ninth Circuit that § 1357 (a) (3) is not void and that there are recurring circumstances where, as the statute permits, a stop of an automobile without warrant or probable cause and a search of it for aliens are constitutionally permissible.
In United States v. De Leon, 462 F. 2d 170 (CA5 1972), De Leon was stopped without warrant or probable cause, *297 while driving on the highway leading north of Laredo, Texas, approximately 10 miles from the Mexican border. The purpose of the stop was to inspect for illegally entering aliens. De Leon opened the trunk as he was requested to do. A false bottom in the trunk and what was thought to be an odor of marihuana were immediately noticed and some heroin was seized. Judge Wisdom, writing for himself and Judges Godbold and Roney, concluded that:
"Stopping the automobile ten miles from the Mexican border to search for illegal aliens was reasonable. See United States v. McDaniel, [463 F. 2d 129 (CA5 1972)]; United States v. Warner, 5 Cir. 1971, 441 F. 2d 821; Marsh v. United States, 5 Cir. 1965, 344 F. 2d 317, 8 U. S. C. §§ 1225, 1357; 19 U. S. C. §§ 482, 1581, 8 C. F. R. § 287.1 [1973]; 19 C. F. R. §§ 23.1 (d), 23.11 [1972]. Once the vehicle was reasonably stopped pursuant to an authorized border check the agents were empowered to search the vehicle, including the trunk, for aliens." Id., at 171.
Similarly, United States v. McDaniel, 463 F. 2d 129 (CA5 1972), upheld a stop and an ensuing search for aliens that uncovered another crime. Judge Goldberg, with Judges Wisdom and Clark, was careful to point out, however, that the authority granted under the statute must still be exercised in a manner consistent with the standards of reasonableness of the Fourth Amendment. "Once the national frontier has been crossed, the search in question must be reasonable upon all of its facts, only one of which is the proximity of the search to an international border." Id., at 133. This view appears to have been the law in the Fifth Circuit for many years.[8]
*298 The Court of Appeals for the Tenth Circuit has expressed similar views. In Roa-Rodriquez, supra, the automobile was stopped in New Mexico some distance from the Mexican border, the purpose being to search for aliens. Relying on the statute, the court, speaking through Judge Breitenstein, concluded that "[i]n the circumstances the initial stop and search for aliens were proper." Id., at 1208. However, when it was determined by the officers that there were no occupants of the car illegally in the country, whether in the trunk or elsewhere, the court held that the officers had no business examining the contents of a jacket found in the trunk. The evidence in this case was excluded. The clear rule of the circuit, however, is that conveyances may be stopped and examined for aliens without warrant or probable cause when in all the circumstances it is reasonable to do so.[9]
Congress itself has authorized vehicle searches at a reasonable distance from international frontiers in order to aid in the enforcement of the immigration laws. Congress has long considered such inspections constitutionally permissible under the Fourth Amendment. So, also, those courts and judges best positioned to make intelligent and sensible assessments of the requirements of reasonableness in the context of controlling illegal entries into this country have consistently and almost without dissent come to the same conclusion that is embodied in the judgment that is reversed today.[10]
*299 II
I also think that § 1357 (a) (3) was validly applied in this case and that the search for aliens and the discovery of marihuana were not illegal under the Fourth Amendment. It was stipulated that the highway involved here was one of the few roads in California moving away from the Mexican border that did not have an established check station and that it is commonly used by alien smugglers to evade regular checkpoints. The automobile, when stopped sometime after midnight, was 50 miles along the road from the border town of Calexico, proceeding toward Blythe, California; but as a matter of fact it appears that the point at which the car was stopped was approximately only 20 miles due north of the Mexican border. Given the large number of illegal entries across the Mexican border at other than established ports of entry, as well as the likelihood that many illegally entering aliens cross on foot and meet prearranged transportation in this country, I think that under all the circumstances the stop of petitioner's car was reasonable, as was the search for aliens under the rear seat of the car pursuant to an official bulletin suggesting search procedures based on experience. Given a valid search of the car for aliens, it is in no way contended that the discovery and seizure of the marihuana were contrary to law.[11]
I would affirm the judgment of the Court of Appeals.
NOTES
[*] Luke McKissack filed a brief as amicus curiae urging reversal. Arthur Wells, Jr., filed a brief for Gilbert Foerster as amicus curiae.
[1] E. g., Chambers v. Maroney, 399 U. S. 42; Dyke v. Taylor Implement Mfg. Co., 391 U. S. 216; Brinegar v. United States, 338 U. S. 160; Husty v. United States, 282 U. S. 694.
[2] Moreover, "[n]either Carroll, supra, nor other cases in this Court require or suggest that in every conceivable circumstance the search of an auto even with probable cause may be made without the extra protection for privacy that a warrant affords." Chambers v. Maroney, supra, at 50. See also Coolidge v. New Hampshire, 403 U. S. 443, 458-464.
[3] The Justices who join this opinion are divided upon the question of the constitutionality of area search warrants such as described in MR. JUSTICE POWELL'S concurring opinion.
[4] With respect to aircraft, 8 CFR § 281.1 defines "reasonable distance" as "any distance fixed pursuant to paragraph (b) of this section." Paragraph (b) authorizes the Commissioner of Immigration and Naturalization to approve searches at a greater distance than 100 air miles from a border "because of unusual circumstances."
[5] The Government represents that the highway on which this search occurred is a common route for illegally entered aliens to travel, and that roving patrols apprehended 195 aliens on that road in one year. But it is, of course, quite possible that every one of those aliens was apprehended as a result of a valid search made upon probable cause. On the other hand, there is no telling how many perfectly innocent drivers have been stopped on this road without any probable cause, and been subjected to a search in the trunks, under the hoods, and behind the rear seats of their automobiles.
[1] I am in accord with the Court's conclusion that nothing in § 287 (a) (3) of the Immigration and Nationality Act, 8 U. S. C. § 1357 (a) (3), or in 8 CFR § 287.1 serves to authorize an otherwise unconstitutional search.
[2] The Solicitor General's brief in this Court states explicitly that "We . . . do not take the position that the checking operations are justified because the officers have probable cause or even `reasonable suspicion' to believe, with respect to each vehicle checked, that it contains an illegal alien. Apart from the reasonableness of establishment of the checking operation in this case, there is nothing in the record to indicate that the Border Patrol officers had any special or particular reason to stop petitioner and examine his car." Brief for the United States 9-10.
[3] There is no reason why a judicial officer could not approve where appropriate a series of roving searches over the course of several days or weeks. Experience with an initial search or series of searches would be highly relevant in considering applications for renewal of a warrant.
[4] Depending upon the circumstances, there may be probable cause for the search to be authorized only for a designated portion of a particular road or such cause may exist for a designated area which may contain one or more roads or tracks. Particularly along much of the Mexican border, there are vast areas of uninhabited desert and arid land which are traversed by few, if any, main roads or highways, but which nevertheless may afford opportunitiesby virtue of their isolated characterfor the smuggling of aliens.
[1] The facts, except for when petitioner was stopped, are taken from the oral stipulation in open court. See App. 11-14. The time petitioner was stopped is given by the Complaint as 12:15 a. m., App. 4, while petitioner testified at trial that he was "stopped about 1:00." 3 Tr. of Rec. 62.
[2] West of Glamis the prevailing direction of the highway is east-west. At the point of the stop west of Glamis, the highway is only approximately 20 miles north of the border, running parallel to it. East of Glamis, the highway proceeds sharply northeast to Blythe, a distance of over 50 miles.
[3] It appears, see App. 12, 13, that the officers were informed of these facts before initiating any search for aliens, and hence before finding any contraband.
[4] Title 8 U. S. C. § 1357 (a) provides in pertinent part:
"Any officer or employee of the [Immigration and Naturalization] Service authorized under regulations prescribed by the Attorney General shall have power without warrant
. . . . .
"(3) within a reasonable distance from any external boundary of the United States, to board and search for aliens any vessel within the territorial waters of the United States and any railway car, aircraft, conveyance, or vehicle, and within a distance of twenty-five miles from any such external boundary to have access to private lands, but not dwellings, for the purpose of patrolling the border to prevent the illegal entry of aliens into the United States . . . ."
The Court of Appeals also relied on 8 CFR § 287.1, which in relevant part provides:
"(a) (2) Reasonable distance. The term `reasonable distance,' as used in section 287 (a) (3) of the Act, means within 100 air miles from any external boundary of the United States or any shorter distance which may be fixed by the district director, or, so far as the power to board and search aircraft is concerned, any distance fixed pursuant to paragraph (b) of this section."
[5] In Colonnade Catering Corp. v. United States, 397 U. S. 72 (1970), the conviction was set aside because it was thought that Congress, with all the authority it had to prescribe standards of reasonableness under the Fourth Amendment, had not intended federal inspectors to use force in carrying out warrantless, nonprobable-cause inspections. In dissent, THE CHIEF JUSTICE, joined by Justices Black and STEWART, would have sustained the search, saying: "I assume we could all agree that the search in question must be held valid, and the contraband discovered subject to seizure and forfeiture, unless (a) it is `unreasonable' under the Constitution or (b) it is prohibited by a statute imposing restraints apart from those in the Constitution. The majority sees no constitutional violation; I agree." Id., at 78.
In a separate dissent Mr. Justice Black, joined by THE CHIEF JUSTICE and MR. JUSTICE STEWART, also emphasized that the ultimate test of legality under the Fourth Amendment was whether the search and seizure were reasonable. Id., at 79-81.
[6] In fiscal year 1972, 398,000 aliens who had entered the United States without inspection were located by Immigration and Naturalization officers; and of the 39,243 deportable aliens located through traffic checking operations, about one-third, 11,586, had been assisted by smugglers. In fiscal year 1972, 2,880 such smugglers were discovered through traffic checking operations. Ninety-nine percent of all aliens illegally entering the United States by land crossed our border with Mexico.
[7] In the Court of Appeals for the Ninth Circuit, 8 U. S. C. § 1357 (a) (3) has also been sustained in, e. g., Mienke v. United States, 452 F. 2d 1076 (1971); United States v. Marin, 444 F. 2d 86 (1971); Duprez v. United States, 435 F. 2d 1276 (1970); United States v. Sanchez-Mata, 429 F. 2d 1391 (1970); United States v. Avey, 428 F. 2d 1159 (1970); United States v. Miranda, 426 F. 2d 283 (1970); and United States v. Elder, 425 F. 2d 1002 (1970). See also Valenzuela-Garcia v. United States, 425 F. 2d 1170 (1970), and Barba-Reyes v. United States, 387 F. 2d 91 (1967).
[8] E. g., Kelly v. United States, 197 F. 2d 162 (1952). See also United States v. Bird, 456 F. 2d 1023, 1024 (1972); Ramirez v. United States, 263 F. 2d 385, 387 (1959); and Haerr v. United States, 240 F. 2d 533, 535 (1957).
[9] E. g., United States v. Anderson. 468 F. 2d 1280 (1972); and United States v. McCormick, 468 F. 2d 68 (1972).
[10] Without having undertaken an exhaustive survey, in the 20 court of appeals cases I have noted, including the one before us, 35 different judges of the three Courts of Appeals found inspection of vehicles for illegal aliens without warrant or probable cause to be constitutional. Only one judge has expressed a different view.
[11] The United States does not contend, see Tr. of Oral Arg. 29, and I do not suggest that any search of a vehicle for aliens within 100 miles of the border pursuant to 8 CFR § 287.1 would pass constitutional muster. The possible invalidity of the regulation and of 8 U. S. C. § 1357 (a) (3) in other circumstances is not at issue here.
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Consol. Court No. 13-00288 Page 2
Gum from the People’s Republic of China, 78 Fed. Reg. 33,351 (Dep’t Commerce June 4, 2013)
(final determ.) (“Final Determination”) and accompanying Issues & Decision Mem. (“I&D
Mem.”), amended by Xanthan Gum from the People’s Republic of China, 78 Fed. Reg. 43,143
(Dep’t Commerce July 19, 2013) (am. final determ.). The four prior opinions of this court
thoroughly set forth the facts underlying this appeal. CP Kelco US, Inc. v. United States, Slip
Op. 15-27, 2015 WL 1544714 (CIT Mar. 31, 2015) (“CP Kelco I”); CP Kelco US, Inc. v. United
States, Slip Op. 16-36, 2016 WL 1403657 (CIT Apr. 8, 2016) (“CP Kelco II”); CP Kelco US,
Inc. v. United States, 41 CIT __, 211 F. Supp. 3d 1338 (2017) (“CP Kelco III”); CP Kelco US,
Inc. v. United States, Slip Op. 18-36, 2018 WL 1703143 (CIT Apr. 5, 2018) (“CP Kelco IV”).
The court presumes familiarity with those opinions. For the reasons discussed below, the court
sustains Commerce’s Remand Results.
BACKGROUND
In its Final Determination, Commerce concluded that the Thai Ajinomoto financial
statements constituted a better source for calculating surrogate financial ratios than the Thai
Fermentation financial statements. I&D Mem. at cmt. 2. Commerce first disregarded the Thai
Fermentation statements on the basis that the record did not contain a full English translation,
without making a finding that the untranslated portions were crucial to Commerce’s calculations.
Id. Commerce then selected the only remaining statements, those of Thai Ajinomoto, despite the
fact that the Thai Ajinomoto statements “show evidence of the receipt of countervailable
subsidies.” Id. Defendant-Intervenors Neimenggu Fufeng Biotechnologies, Co., Ltd. and
Shandong Fufeng Fermentation Co., Ltd. (collectively, “Fufeng”) challenged this determination,
arguing that Commerce failed to properly justify its disregard of the Thai Fermentation
statements. Def.-Intervenor Rule 56.2 Mot. for J. on the Agency R. 13–22, ECF No. 28 (Mar. 7,
Consol. Court No. 13-00288 Page 3
2014). The court agreed, remanding for Commerce to provide a more robust explanation for its
choice of financial statements. CP Kelco I, 2015 WL 1544714, at *7.
Commerce then submitted its Final Results of Redetermination Pursuant to Ct. Remand,
ECF No. 83 (July 28, 2015) (“First Remand Results”). Commerce again chose the Thai
Ajinomoto statements over the Thai Fermentation statements, justifying its selection by
explaining the issues presented by the incompleteness of financial statements generally. Id. at
10–12. However, the court again remanded the issue, finding that Commerce still gave short
shrift to the issues presented by the countervailable subsidies reflected in the Thai Ajinomoto
statements. CP Kelco II, 2016 WL 1403657, at *5.
Commerce, as it did in its Final Determination and in its First Remand Results, again
found that the Thai Ajinomoto statements were the better surrogate financial ratio source. Final
Results of Redetermination Pursuant to Ct. Order 8, ECF No. 109 (Aug. 22, 2016) (“Second
Remand Results”). Commerce based its determination on what it described as a new practice of
“rejecting from use financial statements that are incomplete . . . unless there are no other
financial statements left on the record.” Id. at 7. The court again remanded, explaining that “the
practice Commerce advance[d] [was] not reasonable and that it result[ed] in an unsupported
determination.” CP Kelco III, 41 CIT at __, 211 F. Supp. 3d at 1340. The court gave Commerce
the option of doing a faithful comparison of the two statements or of making a “fact-sensitive
finding” that the untranslated information in the Thai Fermentation statements was “vital,” such
that Commerce could not discern the reliability of those statements. Id., 41 CIT at __, 211 F.
Supp. 3d at 1345.
Commerce opted for the second alternative, explaining that “Thai Fermentation’s
financial statements are missing complete translations for two paragraphs of the property plant
Consol. Court No. 13-00288 Page 4
and equipment (i.e., fixed asset) footnote” which are central to calculating depreciation expense.
Final Results of Third Redetermination Pursuant to Ct. Order 7, ECF No. 157 (Sept. 18, 2017)
(“Third Remand Results”). Commerce further explained that:
[I]n the instant proceeding, depreciation expense comprises . . . a majority of the
overhead costs for Thai Fermentation. [And] by virtue of comprising all or most
of a company’s overhead costs, depreciation expense is an integral component of
the denominator of the selling, general and administrative (SG&A) expense and
profit ratios. Thus, depreciation can significantly impact the surrogate financial
ratios . . . .
Id. at 8 (footnotes omitted). Commerce further provided that “the narrative portions of a
company’s footnotes can provide vital information regarding asset impairments, changes in
useful lives of fixed assets, revaluations of fixed assets and the capitalization of production costs,
among other things that are not shown on the numeric fixed asset schedule.” Id. at 10.
The court remanded once more, stating that, “[u]nlike the prior proceedings cited by
Commerce, here the Department has not identified a particular depreciation methodology, class
of fixed assets, or statement by the auditor in the Thai Fermentation statements that is
questionable or unreliable.” CP Kelco IV, 2018 WL 1703143, at *3. The court found that
“Commerce’s general discussion about depreciation does not comply with the court’s instruction
to make ‘a fact-sensitive finding that the Thai Fermentation statements are missing “vital”
information.’” Id. (citing CP Kelco III, 41 CIT at __, 211 F. Supp. 3d at 1345). Therefore, the
court ordered that Commerce may “either translate the two paragraphs or leave them as is” but
must, in any event, “use the Thai Fermentation statements to calculate surrogate financial ratios.”
Id. at 4.
Consol. Court No. 13-00288 Page 5
JURISDICTION AND STANDARD OF REVIEW
The court has jurisdiction pursuant to 28 U.S.C. § 1581(c). The court must sustain
Commerce’s remand redetermination if it is supported by substantial record evidence, is
otherwise in accordance with law, and is consistent with the court’s remand order. See Ad Hoc
Shrimp Trade Action Comm. v. United States, 38 CIT __, __, 992 F. Supp. 2d 1285, 1290 (2014);
see also 19 U.S.C. § 1516a(b)(1)(B)(i).
DISCUSSION
In its latest remand results, “Commerce has relied upon the Thai Fermentation financial
statements to recalculate Fufeng’s weighted-average dumping margins for these final remand
results.” Final Results of Fourth Redetermination Pursuant to Ct. Order 9, ECF No. 169 (July 5,
2018) (“Remand Results”). As Commerce explains, “the weighted-average dumping margin for
Fufeng changes from 8.69 percent to 0.00 percent.” Id. at 12. For reasons discussed at length in
the court’s four opinions in this action, the court finds that the Remand Results are supported by
substantial evidence and, in all respects, are in accordance with the law. The Remand Results
also comply with the terms of CP Kelco IV.1
1
CP Kelco now urges the court to “remand the case to Commerce with instructions clarifying that
Commerce has the discretion to calculate Fufeng’s weighted-average dumping margin using the
simple average methodology so long as Commerce includes financial ratios derived from the Thai
Fermentation financial statements in its calculation.” CP Kelco’s Comments on Final Results of
Fourth Remand Redetermination 2, ECF No. 173 (Aug. 6, 2018). This suggestion arises out of its
view “that a simple average of both the Thai Ajinomoto and Thai Fermentation financial
statements would yield a more accurate rate.” Id. at 4–5. However, this court’s standard of review
demands that it consider only the soundness of the decision before it. Because the court finds that
Commerce’s determination here is supported by substantial evidence and in accordance with law,
it does not reach either whether CP Kelco’s preferred methodology is more reasonable or if that
argument was waived, as per Fufeng’s suggestion, Fufeng’s Comments on Commerce’s Fourth
Remand 5–6, ECF No. 172 (Aug. 6, 2018).
Consol. Court No. 13-00288 Page 6
CONCLUSION
For the foregoing reasons, Commerce’s Remand Results are SUSTAINED. Judgment
will enter accordingly.
/s/ Richard W. Goldberg
Richard W. Goldberg
Senior Judge
Dated: 4FQUFNCFS
New York, New York
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11 B.R. 697 (1981)
In re COMPLETE DRYWALL CONTRACTING, INC., Bankrupt.
Leonard P. GOLDBERGER, Successor Trustee in Bankruptcy, Plaintiff,
v.
Albert C. BROSS, Jr. and Regina A. Bross, his wife, Defendants.
Bankruptcy No. 77-1927EG.
United States Bankruptcy Court, E.D. Pennsylvania.
June 18, 1981.
*698 Melvin Lashner, Adelman & Lavine, Philadelphia, Pa., for plaintiff/trustee, Leonard P. Goldberger.
John M. McAllister, McAllister & Reif, Philadelphia, Pa., for defendant, Albert C. Bross, Jr. and Regina A. Bross, his wife.
Leonard P. Goldberger, Philadelphia, Pa., trustee.
OPINION
EMIL F. GOLDHABER, Bankruptcy Judge:
The issue before us is whether certain payments made by an insolvent corporation prior to the filing of its petition in bankruptcy are fraudulent and therefore recoverable by the trustee under § 67(d) or § 70(e) of the Bankruptcy Act ("the Act"). For the reasons stated below, we find that the payments which were made to repay the personal loans or obligations incurred by the defendant, president of the bankrupt corporation were fraudulent and, hence, recoverable under § 70(e). On the other hand, we conclude that those payments made on account of expenses incurred by the bankrupt corporation in the ordinary course of business were valid and not recoverable.
*699 The facts of the instant case are as follows:[1] On November 25, 1977, Complete Drywall Contracting, Inc. ("the bankrupt corporation") filed a petition in bankruptcy under the Act.[2] Prior thereto Albert C. Bross, Jr. ("Bross") was the president, sole shareholder and controlling person of the bankrupt corporation. On November 14, 1979, the trustee filed the instant complaint to recover payments made by Bross out of corporate funds during 1976 and 1977[3] asserting that those payments were fraudulent and therefore recoverable from Bross under § 67(d) and/or § 70(e) of the Act.
Section 70(e)(1) provides:
e. (1) A transfer made or suffered or obligation incurred by a debtor adjudged a bankrupt under this Act which, under any Federal or State law applicable thereto, is fraudulent as against or voidable for any other reason by any creditor of the debtor, having a claim provable under this Act, shall be null and void as against the trustee of such debtor.
Applicable Pennsylvania state law provides:
Every conveyance made and every obligation incurred by a person who is or will be thereby rendered insolvent, is fraudulent as to creditors, without regard to his actual intent, if the conveyance is made or the obligation is incurred without a fair consideration.
Pa.Stat.Ann. tit. 39, § 354 (Purdon).
In the case at bench, Bross has admitted that the bankrupt corporation was insolvent during the time when the above payments were made. Therefore, the question presented is whether the payments made by the bankrupt corporation were made for a fair consideration.
Under both Pennsylvania state law[4] and federal law, a managing officer and controlling shareholder of a bankrupt corporation stands in a fiduciary relationship to the bankrupt, stockholders and creditors of the corporation. See, e.g., Burroughs v. Fields, 546 F.2d 215 (7th Cir. 1976); Inland Security Company, Inc. v. Estate of Kirshner, 382 F.Supp. 338 (W.D.Mo.1974); Bellis v. Thal, 373 F.Supp. 120 (E.D.Pa.1974); Duberstein v. Werner, 256 F.Supp. 515 (E.D.N.Y.1966). As established by the United States Supreme Court in Pepper v. Litton, 308 U.S. 295, 60 S.Ct. 238, 84 L.Ed. 281 (1939), the fundamental rule with respect to that fiduciary relationship is:
A director is a fiduciary . . . So is a dominant or controlling stockholder or group of stockholders . . . Their dealings with the corporation are subjected to rigorous scrutiny and where any of their contracts or engagements with the corporation is challenged the burden is on the director or stockholder not only to prove the good faith of the transaction but also to show its inherent fairness from the viewpoint of the corporation and those *700 interested therein. [Citations omitted.] The essence of the test is whether or not under all the circumstances the transaction carries the earmarks of an arm's length bargain. If it does not, equity will set it aside. While normally that fiduciary obligation is enforceable directly by the corporation, or through a stockholder's derivative action, it is, in the event of bankruptcy of the corporation, enforceable by the trustee. For that standard of fiduciary obligation is designed for the protection of the entire community of interests in the corporation creditors as well as stockholders.
Id. at 306-07, 60 S.Ct. at 245.
In the instant case, accordingly, the burden is on Bross to show that the transactions involved were made in good faith and are fair from the viewpoint of the bankrupt corporation. We conclude that, with respect to the payments made by the bankrupt corporation to repay personal loans incurred by Bross and his wife,[5] Bross has failed to sustain his burden of establishing the fairness of those transactions. At the trial Bross asserted that the bankrupt corporation received fair consideration for those payments. But no evidence was offered to support that bald assertion and, absent such proof, we must conclude that those payments were not for fair consideration and are, therefore, void under Pennsylvania law and § 70(e) of the Bankruptcy Act.
With respect to the other payments, however, we conclude that Bross has established that the bankrupt corporation did receive fair consideration for them. Of those other payments, many were for the maintenance of Bross's residence (i.e., payments for the utilities[6] and for the mortgage[7]). Because Bross's residence also served as the place of business of the bankrupt corporation, we conclude that those payments are valid business expenses of the bankrupt corporation and not voidable under § 70(e) of the Act.
We conclude that the remaining payments in question (rent for Bross's summer home and Bross's country club dues)[8] were also in exchange for fair consideration received by the bankrupt corporation and are not avoidable. The testimony offered by Bross and by Bross's accountant was that Bross was compensated by the bankrupt corporation for services rendered by him for the corporation in two ways. Bross received a weekly salary of $500, $300 of which he received in cash and $200 of which was placed in an account known as a "loan and exchange" account. It was out of that account that the above payments for rent and country club dues were paid. As further evidence that the money in that account was received by Bross as part of his salary, both Bross and his accountant testified that Bross paid income taxes on the entire $500/week received by him. Furthermore, it does not appear that Bross' salary was excessive given the services performed by him for the bankrupt corporation. Consequently, we conclude that the payments made by the bankrupt corporation to the "loan and exchange" account were for fair consideration and not voidable under Pennsylvania law and § 70(e) of the Act.
However, the evidence presented at the trial showed that there was a deficit in the "loan and exchange" account of $2,489 as of the date of the filing of the bankruptcy petition. Since Bross apparently drew more out of that account than even he asserts he was entitled to, we conclude that the trustee is entitled to recover that $2,489 as being a payment which was not given in exchange for fair consideration and thus is *701 voidable under Pennsylvania law and § 70(e) of the Act.
With respect to the arguments of the trustee and the bankrupt corporation based on § 67(d)(2) of the Act, we conclude that an analysis under that section will not result in the avoidance of any more of the above payments. The part of § 67(d)(2) on which the trustee relies states:
(2) Every transfer made and every obligation incurred by a debtor within one year prior to the filing of a petition initiating a proceeding under this Act by or against him is fraudulent (a) as to creditors existing at the time of such transfer or obligation, if made or incurred without fair consideration by a debtor who is or will be thereby rendered insolvent, without regard to his actual intent.
Since the test under that section is the same as the test under § 70(e) of the Act and that applied under Pennsylvania law[9] except that § 67(d)(2) contains a one year limitation, we conclude that § 67(d)(2) will not add anything to our analysis of the trustee's rights under § 70(e).
NOTES
[1] This opinion constitutes the findings of fact and conclusions of law required by Rule 752 of the Rules of Bankruptcy Procedure.
[2] While the Bankruptcy Act has been superseded by the Bankruptcy Code as of October 1, 1979, the provisions of the Act still govern petitions filed before that date. The Bankruptcy Reform Act of 1978, Pub.L. No. 95-598, § 403, 92 Stat. 2683 (1978).
[3] The payments in question include payments to Industrial Valley Bank in the amount of $3,135.67 on account of a personal loan incurred by Bross; to Fidelity Bank in the amount of $5,780.12 on account of a personal loan incurred by Bross; to Frankford Trust Co. in the amount of $1,016.28 on account of a personal loan incurred by Bross; to Frankford Trust Co. in the amount of $3,442.82 on account of the mortgage obligation on Bross's residence; to Philadelphia Electric Company in the amount of $1,059.75 on account of electricity supplied to Bross's home; to Southhampton Water Authority in the amount of $258.24 on account of water supplied to Bross's home; to the Torresdale Country Club in the amount of $476.30 for Bross's membership dues; and to Bross in the amount of $2,800.00 for rent for his summer home.
[4] Pennsylvania law provides:
Officers and directors shall be deemed to stand in a fiduciary relation to the corporation, and shall discharge the duties of their respective positions in good faith and with that diligence, care and skill which ordinarily prudent men would exercise under similar circumstances.
Pa.Stat.Ann. tit. 15, § 1408 (Purdon Com.Supp. 1978-79).
[5] Those payments were the payment to Fidelity Bank of $5,780.12, the payment to Industrial Valley Bank of $3,135.67 and the payment to Frankford Trust of $1,016.28 for a total of $12,421.07.
[6] Those payments total $1,317.99 ($1,059.75 for electricity and $258.24 for water).
[7] Those payments total $3,442.82.
[8] Those payments were for $476.30 for country club dues and $2,800 for rent for the summer home.
[9] Pa.Stat.Ann. tit. 15, § 1408 (Purdon Com. Supp. 1978-79).
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Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
08/02/2019 01:06 AM CDT
- 167 -
Nebraska Supreme Court A dvance Sheets
303 Nebraska R eports
STATE v. BARNES
Cite as 303 Neb. 167
State of Nebraska, appellee, v.
R ichard C. Barnes, appellant.
___ N.W.2d ___
Filed May 17, 2019. No. S-18-875.
1. Judgments: Appeal and Error. When dispositive issues on appeal
present questions of law, an appellate court has an obligation to reach
an independent conclusion irrespective of the decision made by the
court below.
2. Criminal Law: Judgments: Sentences: Appeal and Error. In a
criminal case, the judgment from which the appellant may appeal is
the sentence.
3. Judgments: Collateral Attack. When a judgment is attacked in a
way other than by proceeding in the original action to have it vacated,
reversed, or modified, or by a proceeding in equity to prevent its
enforcement, the attack is a collateral attack.
4. ____: ____. Absent an explicit statutory or common-law authority per-
mitting collateral attack upon a criminal judgment under other circum-
stances, only a void judgment may be collaterally attacked.
5. Sentences. A sentence outside of the period authorized for a valid crime
is erroneous only; it is not a void sentence.
6. ____. Failing to give credit for time served, while erroneous, does not
render the sentence void.
7. Criminal Law: Final Orders: Sentences: Collateral Attack. Neb.
Rev. Stat. § 83-1,106(1) (Reissue 2014) does not set forth a right to col-
laterally attack the final judgment in a criminal case on the ground that
credit for time served was not given as mandated by the statute.
Appeal from the District Court for Pierce County: James G.
Kube, Judge. Affirmed.
Richard C. Barnes, pro se.
- 168 -
Nebraska Supreme Court A dvance Sheets
303 Nebraska R eports
STATE v. BARNES
Cite as 303 Neb. 167
Douglas J. Peterson, Attorney General, and Austin N. Relph
for appellee.
Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke,
Papik, and Freudenberg, JJ.
Freudenberg, J.
NATURE OF CASE
The defendant, who was sentenced in 1994, sought in 2018
to have his sentence amended to reflect credit for time served
by filing a “Motion/Request for Jail Credit.” The district court
denied the motion, and the defendant appeals. We affirm.
BACKGROUND
In 1994, pursuant to a voluntary guilty plea, Richard C.
Barnes was convicted on one count of first degree murder
and one count of use of a weapon to commit a felony. He
was sentenced to life imprisonment on the murder conviction
and from 62⁄3 years’ to 20 years’ imprisonment on the use of a
weapon conviction. The court did not give Barnes credit for
time served.
Barnes did not file a direct appeal. In 2004, Barnes filed
an amended motion seeking postconviction relief. He argued
that defense counsel was ineffective by failing to file a direct
appeal after Barnes requested that he do so. Barnes also argued
that he had been denied due process and equal protection of
the law, because the sentencing court failed to give him credit
for time served against his sentence on the use of a weapon
conviction. After an evidentiary hearing, Barnes’ motion for
postconviction relief was denied.
In State v. Barnes,1 we affirmed the order denying post-
conviction relief. We held that the court did not clearly err
in finding that Barnes did not ask his trial counsel to file a
direct appeal. We thus affirmed the district court’s conclusion
that defense counsel’s performance in failing to file a direct
1
State v. Barnes, 272 Neb. 749, 724 N.W.2d 807 (2006).
- 169 -
Nebraska Supreme Court A dvance Sheets
303 Nebraska R eports
STATE v. BARNES
Cite as 303 Neb. 167
appeal was not deficient. Regarding Barnes’ challenges to
the sentencing order that failed to give Barnes credit for time
served, we held that those challenges were procedurally barred
because they could have been raised on direct appeal.
In 2018, Barnes, proceeding pro se, filed a “Motion/Request
for Jail Credit Pursuant to N.R.S. sec: 83-1,106(1). State v.
Esquinel, 244 Neb. 308 (1993).” The district court denied the
motion, reasoning that it had no authority to amend the 1994
sentencing order. Barnes appeals.
ASSIGNMENT OF ERROR
Barnes assigns that the “lower District Court erred in failing
at the conclusion of the sentencing hearing by the failure of
the district court to calculate the amount of credit to be given
for time served.”
STANDARD OF REVIEW
[1] When dispositive issues on appeal present questions
of law, an appellate court has an obligation to reach an inde-
pendent conclusion irrespective of the decision made by the
court below.2
ANALYSIS
Barnes argues that we should recognize the trial court plainly
erred in failing to grant him credit for time served and that we
should, as in the case of State v. Groff,3 remand the cause to
the district court for a determination of credit for time served.
State v. Groff, however, involved the direct appeal from the
defendant’s convictions and sentences. This case involves a
collateral attack.
[2-4] In a criminal case, the judgment from which the appel-
lant may appeal is the sentence.4 The sentence includes credit
for time served under Neb. Rev. Stat. § 83-1,106(1) (Reissue
2
State v. Jerke, 302 Neb. 372, 923 N.W.2d 78 (2019).
3
State v. Groff, 247 Neb. 586, 529 N.W.2d 50 (1995).
4
State v. Ratumaimuri, 299 Neb. 887, 911 N.W.2d 270 (2018).
- 170 -
Nebraska Supreme Court A dvance Sheets
303 Nebraska R eports
STATE v. BARNES
Cite as 303 Neb. 167
2014).5 When a judgment is attacked in a way other than by
proceeding in the original action to have it vacated, reversed,
or modified, or by a proceeding in equity to prevent its enforce-
ment, the attack is a collateral attack.6 Absent an explicit statu-
tory or common-law procedure permitting otherwise, only a
void judgment may be collaterally attacked.7
[5,6] A sentence outside of the period authorized for a valid
crime is erroneous only; it is not a void sentence.8 Thus, failing
to give credit for time served, while erroneous, does not render
the sentence void.9
[7] Barnes fails to present statutory or common-law author-
ity for his 2018 motion collaterally attacking the erroneous,
but not void, sentence rendered in 1994. Barnes purported
to bring his motion under the authority of § 83-1,106(1) and
State v. Esquivel.10 Section 83-1,106(1) provides that “[c]redit
against the maximum term and any minimum term shall be
given to an offender for time spent in custody as a result of
the criminal charge for which a prison sentence is imposed or
as a result of the conduct on which such a charge is based.”
Section 83-1,106(1) does not set forth a right to collaterally
attack the final judgment in a criminal case on the ground
that credit for time served was not given as mandated by the
statute. While we held in State v. Esquivel that a judge is
5
See, State v. Barnes, supra note 1; State v. Groff, supra note 3.
6
State v. Ratumaimuri, supra note 4.
7
See Sanders v. Frakes, 295 Neb. 374, 888 N.W.2d 514 (2016). See, also,
State v. Jerke, supra note 2; State v. Robertson, 294 Neb. 29, 881 N.W.2d
864 (2016); State v. Erpelding, 292 Neb. 351, 874 N.W.2d 265 (2015);
State v. Gonzalez, 285 Neb. 940, 830 N.W.2d 504 (2013); State v. Smith,
269 Neb. 773, 696 N.W.2d 871 (2005).
8
See Meyer v. Frakes, 294 Neb. 668, 884 N.W.2d 131 (2016). See, also,
e.g., Hickman v. Fenton, 120 Neb. 66, 231 N.W. 510 (1930); In re Fanton,
55 Neb. 703, 76 N.W. 447 (1898).
9
See State v. Barnes, supra note 1.
10
State v. Esquivel, 244 Neb. 308, 505 N.W.2d 736 (1993).
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STATE v. BARNES
Cite as 303 Neb. 167
required to separately determine, state, and grant the amount
of credit on the defendant’s sentence to which the defendant
is entitled under § 83-1,106(1), that case, like State v. Groff,
was decided on direct appeal and does not provide authority
for collaterally attacking a sentence that fails to grant credit
for time served.
There is no authority for Barnes’ collateral attack on the
1994 judgment through a motion for jail credit. Thus, the dis-
trict court did not err in denying Barnes’ motion.
CONCLUSION
For the foregoing reasons, we affirm the order of the dis-
trict court.
A ffirmed.
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} |
Filed 3/28/19
CERTIFIED FOR PUBLICATION
COURT OF APPEAL, FOURTH APPELLATE DISTRICT
DIVISION ONE
STATE OF CALIFORNIA
JPMORGAN CHASE BANK, N.A., D073378
Plaintiff and Appellant,
v. (Super. Ct.
No. 37-2013-00044721-CU-OR-NC)
DAVID WARD, as Successor Trustee, etc.,
Defendant and Respondent.
APPEAL from a judgment of the Superior Court of San Diego County,
Timothy M. Casserly, Judge. Reversed.
Dillon Miller & Ahuja, Scott Alan Miller and Jessica Rasmussen for Plaintiff and
Appellant.
Procopio, Cory, Hargreaves & Savitch, Kendra J. Hall and William A. Smelko for
Defendant and Respondent.
Walter Dean Ward took out a secured loan in 2007. 1 He did not indicate whether
he signed the deed of trust conveying his property to the lender in his individual capacity
or in his capacity as sole trustee of the trust in which his property was held. That deed of
trust (DOT) was never recorded. Years later, the lender's successor (JPMorgan Chase
Bank, N.A. (Chase)) asked for a replacement to foreclose. Walter refused, prompting
Chase to sue. The trial court sustained two general demurrers to Chase's complaint,
entered a judgment of dismissal, and awarded contractual attorney fees and costs to
Walter's son, David Ward, the successor trustee of the trust that held the property.
We believe the central issue on appeal is whether Chase may reframe its action by
amendment to omit a fatal allegation in its original complaint. Because we conclude it
can, notwithstanding the sham pleading doctrine, the court should have granted leave to
amend. Accordingly, we reverse the judgment and the postjudgment order and direct the
court to enter a new order sustaining the general demurrers with leave to amend.
FACTUAL AND PROCEDURAL BACKGROUND
In 1999 Walter and Marijane Ward acquired real property in Valley Center (the
property). They created the Walter Dean Ward and Marijane Frances Ward Trust Dated
January 5, 1996 (the Trust) in 2002 and conveyed the property to it by grant deed. When
Marijane passed away in December 2002, Walter became the sole successor trustee and
lifetime beneficiary of the Trust.
1 We refer to members of the Ward family by their first names for clarity, intending
no disrespect.
2
In December 2007 Walter took out a loan for $402,876. As security he pledged
the property to lender Washington Mutual Bank. The notary public certified that Walter
executed the security instrument in his "authorized capacity." Walter signed the DOT in
his name and represented in the note that he "ha[d] the right to grant and convey the
Property."
The original DOT was never recorded and was later lost, damaged, or destroyed.
The copy sent to Washington Mutual could not be recorded because it lacked Walter's
original signature. Chase ultimately acquired the promissory note and DOT as
Washington Mutual's successor-in-interest.
As a precursor to foreclosure, Chase asked Walter to re-execute and notarize a
replacement deed of trust for purposes of recordation. Walter refused. On April 18,
2013, Chase sued Walter in both his individual capacity and his capacity as trustee of the
Trust. Central to this appeal is the allegation at paragraph 18 of the verified complaint:
"By an inadvertent error and misinformation, despite title being
vested in Borrower in his capacity as the trustee of Borrower's Trust,
Borrower executed Plaintiff's Deed of Trust in his individual
capacity, and the true intent of the parties failed, in that, at the time
of executing Plaintiff's Deed of Trust, Borrower did not hold title to
the Property in his individual capacity." (Hereafter paragraph 18.)
The complaint asserted three causes of action. First, Chase sought an order
quieting title to the property to ensure that it had the senior lien. It next sought
reformation of the DOT in two respects. Believing Walter would challenge the level of
detail in the DOT's property description, Chase sought to correct it to include "certain
metes and bounds information" to match the full legal description of the property in the
3
1999 grant deed. Chase also sought to correct the DOT to reflect the "true intent of the
parties" that the property would secure the loan. Finally, Chase sought declaratory relief
as to the enforceability of the DOT, including a declaration that:
• As a revocable inter vivos trust, the Trust was merely a probate-
avoiding device. Walter did not dispose of the property when he
conveyed it to the Trust in the 2002 grant deed.
• Because Walter was the settlor and lifetime beneficiary of the Trust
with power to direct Trust conveyances, he had the equivalent of full
ownership.
• When he executed the DOT, Walter had full power to convey the
property as security for the note, and the fact that it was held in the
Trust did not prevent enforceability of the DOT to reach Trust
property as security for the 2007 note.
• The DOT is valid and enforceable against any successor trustee of
Walter's.
• The DOT was intended to secure the loan as a first lien against the
property.
• The DOT in fact secures the loan as a first lien against the property.
In connection with these three causes of action, Chase sought contractual attorney fees
and costs.
Walter passed away in September 2016, and his son David became successor
trustee of the Trust. David filed two general demurrers to Chase's complaint, arguing all
causes of action were barred by the statute of frauds and the applicable statute of
limitations. 2 He claimed Chase's allegations confirmed that the Trust never executed any
2 The record does not indicate what transpired in the litigation after the complaint
was filed in April 2013 and before David filed the general demurrers in July 2017.
4
written instrument conveying the property. He also asserted any action for relief from
fraud or mistake would be time-barred. Because these allegations were fatal to Chase's
action, David argued that leave to amend should be denied.
Represented by new counsel, Chase opposed the demurrers. It claimed the
gravamen of its action was to enforce the DOT as written, not to correct a mistake in its
execution. Relying on the same cases it cites on appeal, Chase explained that it was "of
no legal consequence" that Walter did not expressly sign the DOT in his capacity as
trustee of the Trust. If paragraph 18 suggested he did so in his "individual capacity," the
DOT did not support that allegation.
The trial court sustained both general demurrers. It observed that the parties had
"vastly different positions" as to the gravamen of Chase's action. But as the court read
the complaint, Chase contended the DOT did not reflect the parties' true intent because it
did not indicate that Walter was executing it in his capacity as trustee of the Trust. The
court believed Chase was seeking to reform the DOT to reflect the parties' true intent as a
precursor to foreclosure. Read in this manner, the lack of a writing was conceded, and
an unrecorded and incorrect DOT could not satisfy the statute of frauds (Civ. Code,
§ 1624, subd. (a)). Further, the court concluded the action was barred under the three-
year limitations period for relief from mistake (Code Civ. Proc., § 338, subd. (d)) 3 or the
catch-all four-year limitations period for other actions (§ 343), implicitly determining that
3 Further statutory references are to the Code of Civil Procedure unless otherwise
indicated.
5
the action accrued when the DOT was signed in December 2007. It denied leave to
amend.
After a judgment of dismissal was entered in his favor, David requested
contractual attorney fees and costs. The court granted his motion, awarding $82,325 in
fees and $3,967 in costs.
DISCUSSION
Chase appeals the judgment, arguing the demurrers were erroneously sustained
without leave to amend. To the extent we accept this position, it challenges the
postjudgment award of fees and costs.
The issues on appeal mirror those raised below. The parties diverge as to the
gravamen of Chase's action, offering competing interpretations of paragraph 18 of the
verified complaint. Chase minimizes the paragraph, claiming it seeks to enforce the DOT
as written despite "inartfully" pleading mistake in its execution. Framed in this manner,
Chase maintains the statute of frauds and statute of limitations present no bar. To the
extent the complaint was confusing or unclear, it argues that leave to amend was
improperly denied. In response, David emphasizes paragraph 18 to claim that the heart
of Chase's action is to correct a mistake in the execution of the DOT. Invoking the sham
pleading doctrine, David argues that Chase cannot simply omit that allegation in an
amended pleading.
As we explain, reframed in the manner urged on appeal, Chase could assert a
viable cause of action. Because a party may show that amendment is possible for the first
time on appeal, we conclude the denial of leave to amend was an abuse of discretion. In
6
doing so, we reject the contention that the proposed amendment would violate the sham
pleading doctrine. Our result further compels reversal of the postjudgment award of
attorney fees and costs.
1. Standard of Review
A general demurrer tests the legal sufficiency of a complaint. On de novo review
of an order sustaining of a demurrer, "we are guided by long-settled rules. 'We treat the
demurrer as admitting all material facts properly pleaded, but not contentions, deductions
or conclusions of fact or law.' " (Blank v. Kirwan (1985) 39 Cal.3d 311, 318 (Blank);
Evans v. City of Berkeley (2006) 38 Cal.4th 1, 6.)
A different standard applies to the denial of leave to amend. If the complaint,
liberally construed, can state a cause of action under any theory or if there is a reasonable
possibility amendment could cure the defect, a trial court abuses its discretion by denying
leave to amend. (Blank, supra, 39 Cal.3d at p. 318; Schifando v. City of Los Angeles
(2003) 31 Cal.4th 1074, 1081; Kong v. City of Hawaiian Gardens Redevelopment Agency
(2002) 108 Cal.App.4th 1028, 1037.) We address this issue even if the plaintiff failed to
seek amendment before the trial court. (City of Stockton v. Superior Court (2007) 42
Cal.4th 730, 746 (City of Stockton); § 472c, subd. (a).) Unless a complaint is "incapable
of amendment," leave to amend should be "liberally allowed as a matter of fairness"
where a plaintiff has received no opportunity to amend after a demurrer. (City of
Stockton, at p. 747.)
7
2. Chase Articulates a Viable Legal Theory on Appeal
Chase claims the gravamen of its action was for declaratory relief to restore a lost
deed pursuant to Civil Code, section 3415, subdivision (a). That statute provides: "An
action may be maintained by any person interested in any private document or instrument
in writing, which has been lost or destroyed, to prove or establish the document or
instrument or to compel the issuance, execution, and acknowledgment of a duplicate of
the document or instrument." Largely unchanged since its enactment in 1906, the statute
reflects the longstanding remedy in equity for restoring lost instruments. (Brown v.
Anderson-Cottonwood Irrigation Dist. (1920) 183 Cal. 186, 187 (Brown); Atkins Corp. v.
Tourny (1936) 6 Cal.2d 206, 216 ["an equity court possesses full power physically to
restore the [lost] document"].)
Chase contends there is no statute of frauds problem with such a claim since it
seeks to restore and enforce the DOT as written. We agree. A trust is simply a fiduciary
relationship with respect to property. Legal title to property owned by a trust is held by
the trustee, since the trust itself is simply a collection of assets and liabilities. (Portico
Management Group, LLC v. Harrison (2011) 202 Cal.App.4th 464, 473.) A revocable
inter vivos trust, like the Trust at issue here, is "a probate avoidance device" that "does
not prevent creditors of the settlors—who are often also the trustees and sole
beneficiaries during their lifetimes—from reaching trust property." (Galdjie v. Darwish
(2003) 113 Cal.App.4th 1331, 1349 (Galdjie).)
It follows that a signature by the sole trustee and beneficiary of an inter vivos
revocable trust is sufficient to convey good title to trust property. (Galdjie, supra, 113
8
Cal.App.4th at pp. 1349−1350.) "[W]here a trustee signs a contract of sale or deed
without reference to his or her representative capacity, the contract or deed is enforceable
against the trust." (Id. at p. 1349; see Carne v. Worthington (2016) 246 Cal.App.4th 548,
551 [because decedent as sole trustee of 1985 revocable inter vivos trust had power
during his lifetime to convey good title to real property held by the trust, his signature
sufficed to convey title from that trust to a 2009 trust]; Christy v. Fisher (1881) 58 Cal.
256, 258 [land conveyed to "James Smith, as administrator of Robert Smith, deceased,"
vested title in Smith, and Smith's later conveyance transferred legal title even though it
was not explicitly made in his capacity as administrator].) Accordingly, even though
Walter did not indicate his signing capacity, the DOT conveyed good title to the
property. 4
David responds that the result should be different where "a party specifically
pleads that a conveyance did not occur in a representative capacity." But as we later
explain, Chase may amend its pleading to omit that allegation. 5 We disagree that estate
planning would be thrown "into wholesale disarray" if Walter's signature on the DOT
4 This conclusion comports with our facts. Walter represented that he had the right
to grant and convey the property, and the notary public certified having satisfactory
evidence that Walter executed the instrument in his "authorized capacity."
5 Malerbi & Associates v. Seivert (1961) 191 Cal.App.2d 760, cited by David, is not
on point. A purported contract for the sale of real property was invalid because it
completely omitted the name of a purchaser. The seller tried to enforce a document that
read, "Received from ____ the purchaser, the sum of ____ Dollars, . . . as a deposit on
account of the purchase price of ($122,500.00)." (Id. at p. 761.) There is no dispute here
that the DOT was signed by Walter; the question is whether it matters that he did not
indicate he was signing "as trustee."
9
were sufficient to convey good title. California law sufficiently protects the interests of
trustees and third parties. (See Moeller v. Superior Court (1997) 16 Cal.4th 1124,
1133−1134; Prob. Code, §§ 16002, subd. (a), 16400, 18100.) Walter's status as the sole
trustee and lifetime beneficiary further minimizes any prejudice.
Although the analysis is more complex on this issue, we also conclude an action to
enforce the DOT as written would not be untimely on its face. As we explain, a four-
year statute of limitations applies to Chase's reformulated action and accrues from the
date Walter refused to execute a replacement deed. Based on the allegations pleaded,
such an action would not be untimely on the face of the complaint.
Chase claims it "desires a judicial declaration establishing the existence of the
[DOT] so that it may enforce its rights thereunder and non-judicially foreclose its lien."
An action seeking declaratory relief has the same limitations period as the underlying
legal or equitable claim. (Bank of New York Mellon v. Citibank, N.A. (2017)
8 Cal.App.5th 935, 943.) Here, the underlying claim is grounded on Civil Code section
3415, subdivision (a).
"An action upon any contract, obligation, or liability founded upon an instrument
in writing" carries a four-year statute of limitations. (§ 337, subd. (a).) But a claim is
founded upon a writing only when it "relies upon the language within a written
instrument or contract." (Smeaton v. Fidelity National Title (1999) 72 Cal.App.4th 1000,
1004.) The "sole object" of Chase's action would be to restore a lost instrument. (Shores
v. Withers (1913) 166 Cal. 403, 405.) Finding no other applicable limitations period, we
believe the catch-all four-year period for "[a]n action for relief not hereinbefore
10
provided" applies. (§ 343; see Piller v. Southern Pac. R. Co. (1877) 52 Cal. 42, 44 [§ 343
can apply to any suit in equity]; Moss v. Moss (1942) 20 Cal.2d 640, 645 [applying § 343
to an action to cancel an instrument as contrary to public policy].) 6
David did not suggest a different limitations period in his respondent's brief.
Instead, he focused on why, with mistake as the gravamen of the action, the demurrer was
properly sustained on statute of limitations grounds. David argued Chase was aware of
the alleged mistake in December 2007, when Walter signed the DOT in his individual
capacity, but did not sue until April 2013, well past the three-year period for actions
founded on mistake (§ 338, subd. (d)). That said, plainly we cannot apply the three-year
period for actions grounded on mistake, since Chase now disavows mistake in the DOT's
execution. (Compare Federal Deposit Ins. Corp. v. Dintino (2008) 167 Cal.App.4th 333,
347 [applying § 338, subd. (d)].) The only statute of limitations argument David raised
6 Chase invokes the 10-year period from the date of maturity under section 882.020,
subdivision (a)(1) of the Civil Code. That statute requires the maturity date to be
"ascertainable from the recorded evidence of indebtedness." Thus, a recorded document
must state the note's maturity date. (Miller v. Provost (1994) 26 Cal.App.4th 1703, 1707;
Nicolopulos v. Superior Court (2003) 106 Cal.App.4th 304, 310–311.)
11
as to Chase's recharacterized action was that Walter's passing in 2016 triggered the
probate statute of limitations. 7
For the first time during oral argument, David's counsel asserted a new statute of
limitations defense. He claimed an action based on Civil Code section 3415, subdivision
(a) would be barred under the three-year period generally applicable to actions "upon a
liability created by statute." (Code Civ. Proc. § 338, subd. (a).) But Civil Code section
3415 is not a liability statute; it provides for a means of obtaining judicial relief.
Moreover, "[t]he restoration of lost instruments is an old and well-established function of
courts of equity." (Brown, supra, 183 Cal. at p. 187; see Conlin v. Ryan (1873) 47 Cal.
71, 73 [equitable action to restore a lost deed].) Thus, Civil Code section 3415 did not
really create anything, but rather recognized and validated a power courts traditionally
exercised.
Although we have not found authority determining the limitations period for
actions based on Civil Code section 3415, as we have noted we believe the four-year
period in Code of Civil Procedure section 343 would apply to Chase's action as
articulated on appeal. But regardless of which period applies, David does not
7 Relying on sections 366.1, 366.2, subdivision (a), and 366.3, subdivision (a),
David contends the probate limitations period prevents Chase from reformulating its
claim against Walter's estate. This argument fails because an action against Walter is not
"lost by reason of [his] death." (§ 377.20, subd. (a); see § 377.41; see Union Savings
Bank v. Barrett (1901) 132 Cal. 453, 454−455 [suit to foreclose a mortgage survives
against the decedent's estate].) Chase's amended complaint would seek recovery "on the
same general set of facts" and therefore relate back to the original for statute of
limitations purposes. (Austin v. Massachusetts Bonding & Ins. Co. (1961) 56 Cal.2d 596,
600.)
12
demonstrate that Chase's action would be barred by accrual. "Critical to applying a
statute of limitations is determining the point when the limitations period begins to run."
(Pooshs v. Philip Morris USA, Inc. (2011) 51 Cal.4th 788, 797.) The complaint alleges
that before Chase filed suit, the original DOT was lost, damaged, or destroyed, and
Walter refused to execute and notarize a replacement. It does not provide dates as to
when these events occurred. Based on this silence Chase argues that a demurrer would
not lie on statute of limitations grounds.
"Generally speaking, a cause of action accrues at 'the time when the cause of
action is complete with all its elements.' " (Fox v. Ethicon Endo-Surgery, Inc. (2005) 35
Cal.4th 797, 806 (Fox); see § 312.) Traditionally, "the statute of limitations runs from
'the occurrence of the last element essential to the cause of action.' " (Aryeh v. Cannon
Business Solutions, Inc. (2013) 55 Cal.4th 1185, 1191.) During oral argument, David's
counsel took the view that Chase's action accrued when the deed was lost, conceding it
was unclear from the record when that happened. We can conceive of certain actions
where such an accrual date might make sense—e.g., when a plaintiff loses the instrument
and seeks reissuance. (See Brown, supra, 183 Cal. at p. 188 [plaintiff's equitable claim
for a duplicate rested entirely on her loss of the original].) As we explain, however, that
accrual theory is untenable here.
The complaint gives no indication Chase lost the original DOT; all it ever claimed
to have was a copy that could not be recorded. Chase seeks "a judicial declaration
establishing the existence of the [DOT]." In this context, the requirements for declaratory
relief inform the accrual date. " 'The fundamental basis of declaratory relief is the
13
existence of an actual, present controversy over a proper subject.' " (City of Cotati v.
Cashman (2002) 29 Cal.4th 69, 79; see § 1060.) "In the context of a demurrer, the courts
evaluate whether the factual allegations of a complaint for declaratory relief reveal an
actual, ripe controversy exists between the parties." (Linda Vista Village San Diego
Homeowners Assn., Inc. v. Tecolote Investors, LLC (2015) 234 Cal.App.4th 166, 181.)
Critically, Brown makes clear that when a plaintiff seeks to restore a lost instrument, "the
defendant would not be in the wrong" until it had refused the plaintiff's demand for
reissuance. (Brown, supra, 183 Cal. at p. 188, italics added.)
Drawing on Brown and section 1060's "actual controversy" requirement, Chase is
correct that the limitations period for its reformulated declaratory relief action would
accrue from the date Walter refused to execute the replacement DOT following Chase's
demand. As it notes, the complaint is silent as to when that occurred. 8
Where a complaint does not reveal on its face that it is barred by the statute of
limitations, a plaintiff has no obligation to plead around the defense. (Union Carbide
Corp. v. Superior Court (1984) 36 Cal.3d 15, 25 (Union Carbide); Spray, Gould &
Bowers v. Associated Internat. Ins. Co. (1999) 71 Cal.App.4th 1260, 1266, fn. 4; see
generally, Norgart v. Upjohn Co. (1999) 21 Cal.4th 383, 396 [statute of limitations is an
8 During oral argument, Chase's counsel ventured that Walter likely refused to
execute a replacement shortly before Chase filed suit in April 2013. Additional clarity on
the exact date may, of course, be revealed through the discovery process or at trial.
14
affirmative defense].) Accordingly, if Chase brought the action articulated on appeal,
that action would not be untimely based on the facts alleged in the complaint. 9
In summary, recast as an action to enforce the DOT as written, Chase's suit would
not be barred by the statute of frauds or statute of limitations on our record.
3. The Demurrer Was Properly Sustained to the Complaint as Pleaded
To withstand a demurrer, it is not enough that Chase could assert a viable theory.
"A demurrer tests the legal sufficiency of factual allegations in the complaint."
(Rakestraw v. California Physicians' Service (2000) 81 Cal.App.4th 39, 42, italics
added.) The allegation that Walter mistakenly executed the trust deed in his individual
capacity is arguably a well-pleaded fact, assumed true on demurrer. 10
9 An important exception to the general rule defining accrual is the discovery rule,
which "postpones accrual of a cause of action until the plaintiff discovers, or has reason
to discover, the cause of action." (Fox, supra, 35 Cal.4th at p. 807.) This rule may be
judicially implied " 'in situations where the plaintiff is unable to see or appreciate a
breach has occurred.' " (E-Fab, Inc. v. Accountants, Inc. Services (2007) 153
Cal.App.4th 1308, 1318.) If the discovery rule applies, accrual begins only when a
plaintiff has reason at least to suspect a factual basis for the elements of its action. (Fox,
at p. 807.) A plaintiff seeking to rely on the discovery rule to excuse an action time-
barred on its face "must specifically plead facts to show (1) the time and manner of
discovery and (2) the inability to have made earlier discovery despite reasonable
diligence.' " (Id. at p. 808.) Because on our record Chase's proposed action would not be
untimely on its face, we need not resort to the discovery rule to assess its viability. (See
Union Carbide, supra, 36 Cal.3d at p. 25.) To the extent Chase intends to rely on the
discovery rule to excuse causes of action that are patently untimely in an amended
pleading, it would of course need to satisfy the applicable pleading requirements.
10 Courts have held that an allegation as to a contracting party's intent "is a
conclusion of fact, which need not be accepted for purposes of demurrer." (Poseidon
Development, Inc. v. Woodland Lane Estates, LLC (2007) 152 Cal.App.4th 1106, 1114;
see Morris v. Redwood Empire Bancorp (2005) 128 Cal.App.4th 1305, 1314.) But these
cases involve plaintiffs who invoke conclusory allegations on appeal. We have not found
15
We agree with the trial court that paragraph 18 is central to Chase's complaint.
Chase sought an order quieting title to reflect that it had the senior lien. Believing Walter
would challenge the sufficiency of the legal description, it sought to correct it to reflect
the true intent of the parties—i.e., that the property would secure the loan. Although it
sought declaratory relief that the DOT in fact secured the loan as a first lien, even that
cause of action highlighted the need to "correct the public records before third persons
without knowledge of the errors and mistakes in the public records rely thereon to their
detriment." The complaint's focus is correcting the mistake alleged in paragraph 18.
Chase's contention that the gravamen of its complaint is for restoration of a lost deed
under Civil Code section 3415, subdivision (a) is unpersuasive; the complaint neither
references that statute nor any request to restore a lost deed. Accordingly, the demurrers
were properly sustained on statute of limitations grounds. 11, The question becomes
whether Chase could cure the defect by amendment.
cases taking this approach where a plaintiff disavows allegations to reformulate its legal
theory. Nor can we disregard the allegation as contradicting an exhibit to the complaint.
(Moran v. Prime Healthcare Mgmt., Inc. (2016) 3 Cal.App.5th 1131, 1145−1146; Sarale
v. Pacific Gas & Electric Co. (2010) 189 Cal.App.4th 225, 245.) The fact that Walter
signed his name without specifying the capacity does not negate the allegation that he
mistakenly signed in his individual capacity.
11 See Salazar v. Thomas (2015) 236 Cal.App.4th 467, 476 [three years for quiet title
based on mistake]; Welsher v. Glickman (1969) 272 Cal.App.2d 134, 140 [three years for
reformation based on mistake].
16
4. Chase Should Be Granted Leave to Amend Notwithstanding the Sham Pleading
Doctrine
Generally, if a verified complaint contains allegations fatal to a cause of action, a
plaintiff cannot cure the defect by simply omitting those allegations in an amended
pleading without explanation. (Hendy v. Losse (1991) 54 Cal.3d 723, 742 (Hendy).) This
principle is known as the sham pleading doctrine. But amendment in this manner is
allowed where a plaintiff clearly shows that the earlier pleading is the result of mistake or
inadvertence. (Id. at p. 743; Meyer v. State Bd. of Equalization (1954) 42 Cal.2d 376,
386; American Advertising & Sales Co. v. Mid-Western Transport (1984) 152
Cal.App.3d 875, 879.) A plaintiff may show mistake or inadvertence, or demonstrate a
factual basis for the revised allegation, for the first time on appeal. (See Hendy, at
p. 743.)
Critically, the sham pleading doctrine "cannot be mechanically applied." (Avalon
Painting Co. v. Alert Lumber Co. (1965) 234 Cal.App.2d 178, 185 (Avalon).) It "is not
intended to prevent honest complainants from correcting erroneous allegations or prevent
the correction of ambiguous facts." (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 751.)
Instead "the rule must be taken together with its purpose, which is to prevent [an]
amended pleading which is only a sham, when it is apparent that no cause of action can
be stated truthfully." (Callahan v. City and County of San Francisco (1967) 249
Cal.App.2d 696, 699 (Callahan); see McGee v. McNally (1981) 119 Cal.App.3d 891, 897
(McGee) [where omission did not "impugn[] the credibility of appellants' cause of
action," amendment should have been allowed].)
17
Contrary to David's contention, the sham pleading doctrine does not preclude
Chase from omitting allegations of mistake in its complaint and reframing its action in
the manner urged on appeal. In Callahan, supra, 249 Cal.App.2d 696, 698, a plaintiff
sued the City of San Francisco for negligently maintaining its roads after the car she was
a passenger in careened into a lake, paralyzing her. In a prior complaint against only the
driver of her car, she alleged that he engaged in willful misconduct. That allegation was
dropped in the operative complaint. (Id. at pp. 698−699.) Relying on the earlier
allegation, the court sustained the demurrer. (Id. at p. 698.) Reversing, the appellate
court explained that the sham pleading doctrine did not apply. The allegation of willful
misconduct in the earlier complaint was "but an allegation of a conclusion" on a question
that was "essentially a question of fact." (Id. at pp. 699–700.) "It would be unfair to give
the city the benefit, at the pleading stage, of assuming that these generic allegations
against another may be taken as proved." (Id. at p. 700.)
The sham pleading doctrine likewise did not apply in Avalon, supra, 234
Cal.App.2d 178. In its original cross-complaint, painting subcontractor Avalon alleged
an agency relationship between the paint manufacturer and retailer. This allegation was
fatal to its breach of warranty cross-claim against the retailer; a known agent of a
disclosed principal could not be liable for warranty breach. (Id. at p. 182.) Nevertheless,
an amended pleading could omit that allegation and simply allege a manufacturer-retailer
relationship without triggering the sham pleading doctrine. (Id. at pp. 184−185.) As the
court explained, omitting reference to the agency relationship was not the sort of
omission that "carries with it the onus of untruthfulness." (Id. at p. 184.)
18
Similarly, in Jackson v. Pacific Gas & Electric Co. (1949) 95 Cal.App.2d 204, an
allegation of an employment relationship precluded a personal injury plaintiff's lawsuit
against the defendant. But he could omit that inadvertent allegation and clarify the
parties' relationship in an amended pleading. (Id. at p. 207.) As the court cautioned, "to
bind litigants to inadvertent untrue statements of facts and forbid them the inherent right
to correct the false by substituting the true facts" would be to condone "miscarriages of
justice." (Id. at p. 212.)
Another helpful example is McGee, supra, 119 Cal.App.3d 891. The plaintiff in
McGee sued his employer for intentional infliction of emotional distress, claiming a
campaign of workplace harassment. (Id. at p. 893.) His original complaint made an
oblique reference to suffering physical harm, but its thrust was emotional injury. The
trial court sustained the employer's demurrer without leave to amend, concluding
worker's compensation provided the exclusive remedy. (Ibid.) Reversing, the appellate
court reasoned that the plaintiff should have been granted leave to amend. Allegations of
physical injury were "mere 'makeweight,' " and no actual disability claim was made. (Id.
at p. 895.) The court could conceive reasons why the plaintiff mentioned physical injury,
and excluding those tangential allegations in an amended pleading would not impugn the
trustworthiness of his action. (Id. at p. 897.)
Smyth v. Berman (2019) 31 Cal.App.5th 183 offers a useful counterexample.
There, the sham pleading doctrine prevented plaintiffs from making a factually
inconsistent allegation in their second and third amended complaints where there was no
plausible explanation for the change. (Id. at p. 196.) In earlier complaints the plaintiffs
19
alleged they had not extended their lease; in later complaints they alleged they had. Their
claim that recently located documents supported the change was not plausible; plaintiffs
claimed to be present when the oral lease extension was made, and documentary evidence
was unnecessary to allege an extension. (Ibid.)
We conclude the sham pleading doctrine does not prevent Chase from omitting its
allegations of mistake in a reformulated action. The complaint was drafted by prior
counsel, and Chase immediately distanced itself from such allegations in responding to
the demurrer. This is not a situation where the proposed amendment impugns the
trustworthiness of the pleading; new counsel and further legal research presumably
revealed the fallacy of the assumption that Walter's signature had to specify that he
signed as trustee in the name of the Trust. Indeed, paragraph 18 is best read as a
characterization of Walter's signature on the underlying DOT, not as the assertion of a
foundational fact that should bind Chase in all subsequent pleadings. (Callahan, supra,
249 Cal.App.2d at pp. 699–700; see, e.g., Lim v. The.TV Corp. Internat. (2002) 99
Cal.App.4th 684, 691 ["[t]he rule is aimed at averments of fact the pleading party
attempts to avoid in a later pleading"].) On our record, Chase is entitled to amend its
complaint to omit these defective allegations. Leave to amend should have been granted.
(City of Stockton, supra, 42 Cal.4th at p. 746.) 12
12 We do not fault the trial court for denying leave to amend. Chase did not seek
leave or cite any case law dealing with the sham pleading doctrine. Even so, a plaintiff
may claim for the first time on appeal that amendment is possible, and on our record the
sham pleading doctrine does not prevent Chase from omitting its prior allegation of
mistake in paragraph 18. (See Hendy, supra, 54 Cal.3d at p. 743.)
20
Our analysis does not depend on allegations in Chase's separate action for
equitable subrogation and an equitable lien. David requests judicial notice of the
complaint in that action to argue that Chase cannot allege new facts if given leave to
amend. In our view, no new facts are needed: Chase could omit the allegations of
mistake and reformulate this action as one for declaratory relief based on Civil Code
section 3415, subdivision (a). Because the related pleading is not relevant to our
analysis, David's request for judicial notice is denied. (Mangini v. R.J. Reynolds
Tobacco Co. (1994) 7 Cal.4th 1057, 1063 ["only relevant material may be noticed"].)
Because we reverse the underlying judgment that was the basis of the award, we
also reverse the postjudgment order awarding attorney fees and costs to David. (See
Lafferty v. Wells Fargo Bank (2013) 213 Cal.App.4th 545, 572.)
21
DISPOSITION
The judgment and postjudgment order are reversed, and the court is directed to
enter a new order granting Chase leave to amend its complaint. Chase is entitled to
recover its costs on appeal.
DATO, J.
WE CONCUR:
McCONNELL, P. J.
BENKE, J.
22
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835 F.2d 879
Unpublished DispositionNOTICE: Sixth Circuit Rule 24(c) states that citation of unpublished dispositions is disfavored except for establishing res judicata, estoppel, or the law of the case and requires service of copies of cited unpublished dispositions of the Sixth Circuit.Kenneth Paul STARZYK, Plaintiff-Appellant,v.Glenda McKINNEY and Six County Consortium for Employment andJob Training, Defendants-Appellees.
No. 87-1238.
United States Court of Appeals, Sixth Circuit.
Dec. 15, 1987.
1
Before DAVID A. NELSON and BOGGS, Circuit Judges, and CHARLES M. ALLEN, District Judge.*
ORDER
2
This case has been referred to a panel of the court pursuant to Rule 9(a), Rules of the Sixth Circuit. Upon examination of the briefs and record, this panel unanimously agrees that oral argument is not necessary. Fed.R.App.P. 34(a).
3
On October 18, 1985, the plaintiff filed a civil rights action alleging that he had been discriminated against by the defendants and that his fourth and first amendment rights had been violated by certain application requirements imposed by them on applicants for job training. Specifically, plaintiff claimed that in violation of his religious convictions the defendants required that he produce a voter's registration card to establish his citizenship. He further alleged that his fourth amendment rights were violated by the defendants' requirement that the number of persons living in his household be verified by a nonmember of his family.
4
Liberally construed, the plaintiff's complaint gives fair notice that a 42 U.S.C. Sec. 1983 action has been brought against the defendants for alleged violations of the plaintiff's first and fourth amendment rights arising from the defendants' application requirements. Therefore, it cannot be said that the plaintiff has not made a short and plain statement of his claim sufficient to satisfy Fed.R.Civ.P. 8(a).
5
However, dismissal of the plaintiff's action must be affirmed given the frivolity provisions of 28 U.S.C. Sec. 1915(d). Under that statute, an action may be dismissed as being frivolous if it appears beyond doubt that the plaintiff can prove no set of facts which would entitle him to relief. Malone v. Colyer, 710 F.2d 258, 261 (6th Cir.1983). Given the nature of the plaintiff's claims, no set of facts could be proven which could entitle the plaintiff to relief in the present case. The eligibility requirements of the defendant, as shown by the exhibit attached to the plaintiff's complaint, do not exclusively require a voter's registration card to establish citizenship. Citizenship may also be established by a birth certificate which the plaintiff had already supplied the defendant. Accordingly, no first amendment violation can be proved because the plaintiff was not required to obtain a voter registration card in order to apply for job training with the defendants. Likewise, no violation of the plaintiff's privacy can be shown, as the defendant's application requirements are at best simply a nonintrusive means of verifying that which the plaintiff has already made known to the public, the residence of himself and his mother at their family home. See McNally v. Pulitzer Publishing Company, 532 F.2d 69 (8th Cir.), cert. denied, 429 U.S. 855 (1976).
6
Accordingly, the judgment of the district court entered on February 17, 1987, is hereby affirmed pursuant to Rule 9(b)(5), Rules of the Sixth Circuit. Furthermore, the plaintiff's motion to disqualify Judge Miles is hereby denied.
*
The Honorable Charles M. Allen, Senior U.S. District Judge for the Western District of Kentucky, sitting by designation
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895 N.E.2d 696 (2005)
357 Ill. App.3d 1089
IN RE R.M.
No. 1-05-0273.
Appellate Court of Illinois, First District.
June 23, 2005.
Affirmed.
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48 N.W.2d 230 (1951)
SAVERY, County Atty.,
v.
EDDY et al.
No. 47811.
Supreme Court of Iowa.
June 5, 1951.
Rudolph & Rudolph and Dalton & Dalton, of Atlantic, for appellants.
Don Savery, County Atty., John E. Budd, Present County Atty., Atlantic, for appellee.
MULRONEY, Justice.
Our original opinion in this case, reported in 45 N.W.2d 872, ordered all of the Eddy children returned to their parents. We granted rehearing as to those children who had been adopted by other parties pending the appeal in the original case. See order reported 47 N.W.2d 230. Pursuant to that order, affidavit proof has been filed which establishes that Beverly, Charles, Marilyn, Robert and Esther were all adopted after the order of September 15, 1948 which placed the "permanent" custody of the children in the American Home Finding Association. The proof shows that a certified copy of said order of September 15, 1948 was sent to the American Home Finding Association on September 16, 1948 and said association received no notice or knowledge of an appeal from said order.
All of said children were placed in homes of persons who had previously applied to the association as prospective adoptive parents shortly after the order of September 15, 1948. They remained in these homes for more than one year before adoption proceedings were instituted in the counties where the prospective adoptive parents resided and during this period the children and the homes they were in were regularly visited and investigated by the association's social workers. Within a month or two after the required year's residence of the children with their prospective adoptive parents, the latter started adoption proceedings under the provisions *231 of Chapter 600, Code 1950, I.C.A. In each instance the proceedings resulted in a decree of adoption, changing the children's names, and granting rights and imposing duties between adoptive parents and the children, the same as exist between natural parents and children, including rights of inheritance. Beverly and Charles, who are now about 8 and 5 years old respectively, were adopted into one home. Marilyn and Robert, who are now about 10 and 9 years old respectively, were adopted into one home. Esther, who is now about 6 years old, was adopted into one home.
The proof now before us is to the effect that since the adoption of the children the association, through its officers, has made an investigation relative to the welfare of the children in their respective adoptive homes. The officer's affidavit states: "None of the children remember their natural parents * * * The children are happy and well placed. The parents are happy with the children and are rearing them as their natural children and the general welfare of each child is beyond question in the adoptive homes. None of the adoptive parents desire to relinquish the children. The adoptive parents love the children as their own."
Now that we are confronted with this record of adoptions we must determine whether the adoptions were affected in any way by the appeal taken by the parents from the order of September, 1948. There is no question but that order was a valid and binding order until the reversal in this court. The effect of the order was to deprive the natural parents of custody and grant permanent custody to the American Home Finding Association. Section 232.22, Code 1950, I.C.A., specifically provides that when the trial court makes such an order of custody the institution becomes the proper party in place of the parents, for adoption proceedings. Section 232.23, Code 1950, I.C.A., provides that the trial court could have placed restrictions deemed "advisable for the welfare of the child" in its order committing the children to the institution and "the jurisdiction of the court over said proceedings and said child shall continue until the child is legally adopted."
Though the appeal in a case involving child custody is triable de novo in this court it has never been held that the perfection of an appeal from a custody order operates to vacate the judgment of the lower court. Scheffers v. Scheffers, Iowa, 44 N.W.2d 676. This court, under the rule announced in the Scheffers case, could, upon proper application, have made appropriate orders for the welfare of the children, and to preserve the status quo pending the appeal. Perhaps the trial court, under the continuing grant of jurisdiction, Sec. 232.23, Code 1950, I.C.A., "until the child is legally adopted" could have made appropriate orders even after the notice of appeal, that would have prevented adoption. The order appealed from was a self-executing order which required no process to carry out its mandate. The association had had custody of these children for two years and eight months prior to the order of September, 1948. When the latter order was made, the association under the clear provisions of the statutes was authorized and empowered to place the children out for adoption, unless restricted by this court or possibly a subsequent order of the trial court. The record shows no application, to stay the adoptive authority implicit in the trial court's order, was ever made in this court or in the trial court. We must hold that the association's exercise of this authority resulted in legal adoptions long before the parties got around to filing the record on appeal in this court.
Perhaps at the start it was thought an order to prevent adoption would not be necessary since an adoption cannot ordinarily be accomplished in less than a year and it should not take a year to perfect and submit an appeal in such a case as this. But as time went on and appellants sought, and obtained from the trial court, ten extensions of time of thirty, sixty, or ninety days each for filing the record it should have been perfectly apparent that some action should be taken by appellants to restrict the full sweep of the order if the *232 status quo was to be preserved. The record here shows all of the adoptions were completed in October and November of 1949 while the printed record on the appeal was not filed in this court until October of 1950. We place no blame for the delay for we do not know all of the facts. We know there were arguments between counsel as to settling the record, but it does seem the case was one that called for co-operation by all parties to the end that there be a speedy and final adjudication of custodial rights. The custody of children of such tender years should be settled as quickly as possible for little children, like tender plants, have roots; they are roots of affection that are nurtured in the sunshine of a good home. The longer they grow in mutual love and affection with those who fill the place of parents, the greater the shock of transplanting. The legislature has wisely encouraged early adoptions when permanent orders of custody in favor of institutions are made. All will agree that an institution does not furnish the most desirable atmosphere in which to rear young children. They need a home and the legislature has said an unrestricted order of custody to an institution is a delegation of authority to that institution to consent to the adoption, to the end that the children receive a home. The adoption statutes provide such delegated consent will result in legal adoptions. We cannot under this record, and under the plain provisions of the statutes hold otherwise.
It is our conclusion that the adoptions of these children were legal adoptions under the provisions of the statute. Regardless of what we did in our former opinion reversing the order of September, 1948, that order was valid and binding until the reversal. More than a year before that reversal these children had been adopted after strict compliance with the adoption statutes. Those who voluntarily and generously take children for adoption have a right to assurance that the relationship they so kindly assume will be permanent. Our conclusion therefore is that as to these children, who were adopted pending the appeal, the adoptions are valid. This means that the trial court's order of custody of September, 1948, as to the children named herein, will remain unchanged. This amounts to an affirmance in part and changes our ruling on the entire appeal to an affirmance in part and a reversal in part.
Affirmed in part and reversed in part. All Justices concur.
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190 F.Supp. 671 (1960)
BANKERS TRUST COMPANY and Leonard M. Wallstein as Executors of the Will of Charles Newman, deceased, Plaintiffs,
v.
UNITED STATES of America, Defendant.
United States District Court S. D. New York.
December 29, 1960.
Wallstein, Menschel & Wallstein, New York City, for plaintiffs; Leonard M. Wallstein, Benjamin Menschel and Leonard M. Wallstein, Jr., New York City, of counsel.
S. Hazard Gillespie, Jr., U. S. Atty. for Southern Dist. of New York, New York City, for defendant; Lola S. Lea, Asst. U. S. Atty., New York City, of counsel.
PALMIERI, District Judge.
In this action brought by the executors of the estate of Charles Newman, a refund of a portion of the estate tax heretofore paid is sought upon the ground that the Commissioner erroneously disallowed a claimed deduction for the present value of a trust remainder to charity. Both sides have moved for summary judgment.
The Undisputed Historic Facts
Charles Newman died on October 26, 1950. During his lifetime he established a trust providing that, upon his death, the income thereof was to be paid to Anne Marie Hughes and, upon her death, the principal thereof was to be distributed "to and among the issue of said Anne Marie Hughes, her surviving." In default of such issue the principal was to be paid to a charitable foundation, bequests to which, in accordance with the Commissioner's ruling, are exempt from federal taxation.
Anne Marie Hughes had been Charles Newman's devoted private secretary for the thirty years preceding his death. At the date of his death she was 47 years of age, had been married for 17 years and was childless.[1] Upon *672 the taking of her deposition, Mrs. Hughes stated that on October 26, 1950 neither she nor her husband was aware of any physical impediment which might have prevented her from bearing children.[2]
Because the trust was revocable, the full principal, aggregating $83,114.36,[3] was included in Charles Newman's gross estate. The full principal was also included in the net estate subject to taxation since the Commissioner disallowed the deduction for the remainder to charity originally itemized in the estate tax return. Asserting that the charitable remainder was a deductible item and that its present value on the date of Charles Newman's death was $37,384.38, the portion of the estate tax allocable to which was $15,107.21, plaintiffs duly filed a claim for refund. Following the Commissioner's rejection of the administrative claim, plaintiffs instituted this action.[4]
The Question Presented
Plaintiffs base their right to the claimed deduction upon section 812(d) of the Internal Revenue Code of 1939 and the regulations thereunder. Section 812(d) permits as a deduction from the value of the gross estate the amount of all transfers to charitable uses.[5] As specified in section 81.44(d) of Treasury Regulations 105, "if a trust is created for both a charitable and a private purpose," a deduction may be taken only insofar as the interest in favor of the *673 charitable purpose "is presently ascertainable."[6] Where, as here, the transfer to charity is conditional in form, the Regulations, in section 81.46(a), go on to provide that "no deduction is allowable unless the possibility that the charity will not take is so remote as to be negligible."[7] Thus, the question presented is whether, at the date of Charles Newman's death, the remainder to charity, conditioned upon the survival of issue of Anne Marie Hughes, then age 47, married 17 years and childless, had a "presently ascertainable" value and was sufficiently certain to be enjoyed by the charity.
The affirmative answer of the plaintiffs is supported by affidavits of medical and actuarial experts tending to show the remote "statistical probability" of a first birth to a white American married female, living with her husband, at age 47.[8] The Government's conclusion that the remainder interest was too remote at the time of Charles Newman's death to qualify for the deduction rests on two propositions: first, the presumption that Mrs. Hughes was physically capable of bearing children was not rebutted by medical evidence;[9] second, the charity's chance of enjoying the remainder could not be determined with a sufficient degree of reliability since actuarial estimates as to the occurrence of the contingency, birth of issue to the life tenant, failed to account for a peculiarly individual *674 factorthe exercise of volition on the part of Mrs. Hughes.
Neither party has argued that the question is one of valuation. Cf. Commissioner of Internal Revenue v. Maresi, 2 Cir., 1946, 156 F.2d 929. In this respect, I agree with the position shared by the parties that in Commissioner of Internal Revenue v. Sternberger's Estate, 1954, 348 U.S. 187, 75 S.Ct. 229, 99 L.Ed. 246, 55 Colum.L.Rev. 924 (1955), the Supreme Court excluded as a possible approach fragmentation of the claimed deduction to reflect the chance that the charity might not enjoy the remainder interest. Stating that it found "no statutory authority for the deduction from a gross estate of any percentage of a conditional bequest to charity where there is no assurance that charity will receive the bequest or some determinable part of it," 348 U.S. at page 199, 75 S.Ct. at page 235, the Court indicated that an "all or nothing" approach must be taken.[10] I am, therefore, faced with the necessity of placing this case on one side of the line or the other.
The Relevant Factors
In the absence of evidence to the contrary and in view of the testimony given by Mrs. Hughes upon the taking of her deposition,[11] I must assume that on October 26, 1950, the contingency which could defeat the charitable remainder was a physical possibility. See United States v. Provident Trust Co., 1934, 291 U.S. 272, 54 S.Ct. 389, 78 L.Ed. 793. However, plaintiffs' failure to rebut the existence of the bare physical possibility of issue is not necessarily fatal to their claim. For, under the applicable Regulations,[12] the test is whether the possibility, assuming that it did exist, was "so remote as to be negligible." See City Bank Farmers' Trust Co. v. United States, 2 Cir., 1935, 74 F.2d 692; Rev. Rule 59-143, 1959-1 Cum.Bull. 247; cf. note 15, infra, and text thereat.
Both the Commissioner in Rev.Rule 59-143 and the Court of Appeals for this Circuit in City Bank Farmers' Trust Co. v. United States, supra, relied upon data reported in Bureau of Census publications rather than direct medical evidence in determining whether the contingency of a first birth was "so remote as to be negligible." Cf. Commissioner of Internal Revenue v. Sternberger's Estate, supra, 348 U.S. at page 196, note 8, 75 S.Ct. at page 234. The Second Circuit had before it a bequest conditioned upon the failure of issue of a female life tenant who was 59 and had never had a child up to the date of the testator's death. The Revenue Ruling dealt with a bequest in default of issue of decedent's daughters whose ages were 55 and 59 years, respectively, at the time of decedent's death. Significantly, the Department of Commerce statistics showed no recorded births to women of 55 years and over.[13]
It is illuminating to contrast with these cases the situation presented in In re Cardeza's Estate, 3 Cir., 1958, 261 F.2d 423. There, a reversion was contingent upon the failure of issue of decedent's 64 year old son. Under the applicable code section,[14] the property was *675 to be included in the decedent's gross estate if the value of the reversion exceeded 5 per cent of the value of the property. Accordingly, the Government attempted to use birth statistics for fathers aged 55 and over to establish that the reversionary interest retained by the decedent was "at least" 7.976 per cent of the value of the property. No medical evidence was offered as to the 64 year old son's capacity to procreate. Because of the volitional element and the monetary benefit attendant upon the birth of issue, the Third Circuit rejected the statistical analysis as an insufficient basis upon which to rest a conclusion that the reversion exceeded 5 per cent. Ruling in favor of the taxpayer's contention that the volitional element rendered the Government's actuarial computations an unreliable guide, the Court stated:
"[T]he government [has not] attempted to adjust its figures to indicate what the procreative figures would be for 64-year-old men with the decided inducement to have progeny that was present in the instant case." 261 F.2d at page 426.
"In a case such as this we are convinced that any actuarial conclusion would be nothing but a guess." 261 F.2d at page 427.
The Court of Appeals for the First Circuit has indicated that it would take a similar position on the question of "issue" and the possible exercise of volition by the life tenant. See United States v. Dean, 1955, 224 F.2d 26, 28. Both courts appeared to extract from the Supreme Court's discussion of the Regulations in Commissioner of Internal Revenue v. Sternberger's Estate, supra, the principle of general application that deduction is appropriate where the charity "is sure to take" but not when "the condition is such that the charity may not take at all." See Griswold, Cases and Materials on Federal Taxation 856-57 (4th ed. 1955).
In Sternberger, it was conceded that the claimed deduction could not be taken under section 81.46(a) since the possibility of the birth of issue to the 27 year old life tenant was not a remote contingency. However, it was urged that a portion of the remainder could be deducted under section 81.44(d) and that actuarial computations could be used to determine the present value of the chance that the charity would take. In rejecting this contention the Supreme Court held that unless the requirements of both sections of the Regulations are satisfied, no deduction may be taken for a conditional bequest to charity. See 55 Colum.L.Rev. 924, 925 (1955). With respect to section 81.46(a), the Court stated:
"The predecessor of § 81.46 confined charitable deductions to outright, unconditional bequests to charity. It expressly excluded deductions for * * * bequests that might never reach charity. Subsequent amendments have clarified and not changed that principle. Section 81.46(a) today yields to no condition unless the possibility that charity will not take is `negligible' or `highly improbable.'" 348 U.S. at page 194, 75 S.Ct. at page 233. (Emphasis added.)
I am also mindful of the approach taken by the Supreme Court in the related area of bequests of remainder interests to charity where the granting instrument authorizes invasion of corpus for the comfort, maintenance and support of the life beneficiary. In this class of cases no deduction is permitted unless "the probability of invasion is remote or the extent of the invasion is calculable in accordance with some ascertainable standard." Rev.Rul. 54-285, 1954-2 Cum.Bull. 302. Where the granting instruments did not limit corpus disbursements in accordance with a ready standard, the Court has denied deductions as failing to meet the requirement of section 81.44(d), despite fact patterns which made it extremely unlikely that any corpus invasion would occur. For example, in ruling against the claimed deduction in Henslee v. Union Planters National Bank & Trust Co., 1949, 335 U.S. 595, 69 S.Ct. 290, 292, 93 L.Ed. 259, where the life beneficiary was 85 at the time of the testator's death and died *676 three years later without having requested any corpus invasion in her behalf, the Court observed:
"We do not overlook the unlikelihood that a woman of [the life tenant's] age and circumstances would abandon her customary frugality and squander the decedent's wealth. But, though there may have been little chance of that extravagance which would waste a part or consume the whole of the charitable interest, that chance remained. What common experience might regard as remote in the generality of cases may nonetheless be beyond the realm of precise prediction in the single instance."
See also Merchants National Bank v. Commissioner, 1943, 320 U.S. 256, 64 S.Ct. 108, 88 L.Ed. 35.
In sum, the expressions of the Supreme Court indicate that the current Regulations do not enlarge to any appreciable extent the situations in which, under the more restrictive language of the earlier Regulations, conditional bequests to charity were permitted.[15]Compare Note, 28 Va.L.Rev. 387, 391 (1942) with 55 Colum.L.Rev. 924 (1955). With this background in mind, I turn to the question whether plaintiffs have satisfactorily established their contention that the chance that the remainder would not go to charity was so remote as to be insignificant.
At ages 47-54 first births have been recorded in the Bureau of Census statistics. Plaintiffs' affidavits state that in 1949 such births numbered 65; in 1950, 49 and in 1951, 50.[16] The extent to which the factor of individual volition is responsible for this small number of recorded births has not been the subject of statistical measurement.[17] However, it is reasonable to conclude from the available statistics and the information contained in the affidavit of Dr. Alan F. Guttmacher[18] that at age 47, the chance that a woman will bear issue for the first time, thereby defeating a remainder interest which would otherwise go to charity, is limited. Nonetheless, it is impossible to calculate with certainty the extent of that limited chance. Where, as here, there has been no evidence of poor health or incapacity due to surgery or natural causes,[19] the existing precedent indicates that, in the case of a 47 year old woman, statistical data is insufficient to meet the requirement of section 81.46 (a). In other words, under the circumstances presented here, I believe that the judicial interpretations of the Regulations support the administrative practice and compel me to give recognition to the distorting effect upon the statistical data of the volitional element and the possible *677 inducement to have progeny. Accordingly, while I do not reject the statistics offered by plaintiffs as without evidentiary value, I do hold that, in the case of a woman of 47 years, statistical data, without more, is an insufficient basis upon which to support a conclusion that the chance that the charitable remainder would be defeated "was so remote as to be negligible."[20]
In view of my holding with respect to the possibility of bodily issue, it is unnecessary to discuss at length the Government's alternative argument that the possibility of adopted "issue" rules out the claimed deduction. I have examined the relevant New York cases and find that although the law in this area has not been static, the trend discerned by the Government in favor of treating adopted children as issue has not gone far enough to reach the situation presented here, i. e., one in which no child had been adopted at the date of decedent's death. See N.Y.Domestic Relations Law, McKinney's Consol.Laws, c. 14, § 115; Matter of Upjohn's Will, 1952, 304 N.Y. 366, 107 N.E.2d 492; Matter of Day's Trust, 1st Dept. 1960, 10 A.D.2d 220, 198 N.Y.S.2d 760.
The Government's motion for summary judgment is granted; plaintiffs' cross-motion for summary judgment is denied.
So ordered.
NOTES
[1] Mrs. Hughes has remained childless. Her husband died in 1958 and she has not remarried. However, for purposes of this decision, I cannot look beyond the situation which existed at the death of Charles Newman. See Henslee v. Union Planters National Bank & Trust Co., 1949, 335 U.S. 595, 69 S.Ct. 290, 293, 93 L.Ed. 259, where the Court stated:
"The charitable deduction is a matter of congressional grace, and it is for Congress to determine the advisibility of permitting amendment of estate tax returns at such time as the probable vesting of the charitable interest has reduced itself to unalterable fact."
[2] The following excerpts from the deposition of Mrs. Anne Marie Hughes, taken on August 9, 1960, are relevant:
Questions posed by the Government:
"Q. Prior to October 26, 1950, did you, if you know, experience menopause? A. No.
"Q. Do you know of any physical reason which would have prevented you or your husband from having children? A. No.
"Q. Did you refrain from having children prior to October 26, 1950 as a matter of choice? A. No.
"Q. It was not as a matter of choice? A. No.
"Q. Do you recall having a telephone conversation with a Mr. Ward of this office in June, 1959? A. Yes.
"Q. Do you recall telling Mr. Ward that the reason that you had not had children was because you were very devoted to Mr. Newman, your employer and did not want to leave him. A. Not in so many wordsyes, that was the substance of my statement.
"Q. And was that the situation? A. Yes and no."
Questions posed by plaintiffs' counsel:
"Q. * * * Is it that you don't know whether you went through menopause, or you know that you did not? A. I probably don't know.
"Q. Does that situation prevail at the present time? A. Yes, it does.
"Q. Then you don't know what the situation was then or up to date? A. Yes, that's right."
[3] The corpus established inter vivos was valued at $37,116.48. A bequest of $46,000 was added thereto in accordance with the provisions of a codicil to Charles Newman's will.
[4] The deficiency assessed by the Collector was paid by plaintiffs in May, 1952, less than four and a half months after the return was filed. In January, 1955 a claim for refund was duly filed. Notice of disallowance was mailed to plaintiffs on July 14, 1955 and on July 8, 1957 this action was commenced.
[5] Internal Revenue Code of 1939:
"§ 812. Net estate
"For the purpose of the tax the value of the net estate shall be determined, in the case of a citizen or resident of the United States by deducting from the value of the gross estate * * *
"(d) Transfers for public, charitable, and religious uses.
"The amount of all bequests, legacies, devises, or transfers * * * to or for the use of any corporation organized and operated exclusively for religious, charitable, scientific, literary, or educational purposes, * * *"
26 U.S.C.A. § 812(d).
[6] U.S.Treas. Reg. 105, § 81.44 (1944) provides:
"Transfers for public, charitable, religious, etc., uses. * * * (d) If a trust is created for both a charitable and a private purpose, deduction may be taken of the value of the beneficial interest in favor of the former only insofar as such interest is presently ascertainable, and hence severable from the interest in favor of the private use.
[7] U.S.Treas. Reg. 105, § 81.46 (1942) provides:
"Conditional bequests. (a) If as of the date of decedent's death the transfer to charity is dependent upon the performance of some act or the happening of a precedent event in order that it might become effective, no deduction is allowable unless the possibility that charity will not take is so remote as to be negligible. If an estate or interest has passed to or is vested in charity at the time of decedent's death and such right or interest would be defeated by the performance of some event which appeared to have been highly improbable at the time of decedent's death, the deduction is allowable."
[8] The following statistical analysis appears in the affidavits prepared by professional actuaries and submitted by plaintiffs:
"1. Number of white females
aged 47, married with
husband present, 1950 608,250
2. Proportion of married
females aged 45-49, husband
present, with no
children ever born, 1950 .197
3. Estimated number of
white females aged 47,
married with husband
present, with no children
ever born, i.e., (1) ×
(2) 119,825
4. First births, white women,
aged 47 and over
1949 65
1950 49
1951 50
Average 55
5. Probability that a white
woman aged 47 married
with husband present,
will ever bear a child, i.e.,
(4) ÷ (3) .00046"
The foregoing statistics were obtained from the following sources:
Line 1Bureau of Census, "1950 Census," Special Report P-E, No. 2D, table 5.
Line 2Bureau of Census, "Current Population Reports," Series P-20, No. 84, p. 8, table 2.
Line 4National Office of Vital Statistics, "Vital Statistics of the United States," 1949, Vol. II, p. 165; 1950 Vol. II, p. 274; 1951, Vol. I, p. 268.
[9] See United States v. Provident Trust Co., 1934, 291 U.S. 272, 54 S.Ct. 389, 78 L.Ed. 793 (presumption is rebutted by evidence that woman's procreative organs were removed by surgical operation); City Bank Farmers' Trust Co. v. United States, 2 Cir., 1935, 74 F.2d 692 (age 59); Ninth Bank & Trust Co. v. United States, D.C.E.D.Pa.1936, 15 F.Supp. 951 (ages 57, 63, 67); Rev.Rul. 59-143, 1959-1 Cum.Bull. 247 (ages 55 and 59) (presumption is rebutted where woman is beyond the age of any reasonable likelihood of childbirth).
[10] The Court of Appeals for the First Circuit, commenting upon the holding in Sternberger, stated, "The [Supreme] Court construed § 81.46 * * * as taking not a proportional but an all or nothing approach to the problem of deductions on account of contingent bequests to charity." United States v. Dean, 1955, 224 F.2d 26, 28-29.
[11] See note 2, supra.
[12] See note 7, supra.
[13] In City Bank Farmers' Trust Co. v. United States, supra, Judge Augustus Hand observed:
"[T]he medical books contain a trifling number of cases * * * where women 59 years of age and over have borne children. But, since verification of offspring to women of 55 years and over began to be attempted by the United States Department of Commerce, there have been from the years 1923 to 1932, inclusive, no recorded births to such women." 74 F.2d at page 693.
[14] Internal Revenue Code of 1939, § 811 (c), as amended by the Technical Change Act of 1949, 26 U.S.C.A. § 811(c).
[15] It may be that a situation such as that presented in Hoagland v. Kavanaugh, D.C.E.D.Mich.1941, 36 F.Supp. 875 would bear reexamination in light of the "clarifying amendment." In Hoagland, no deduction was allowed where the life tenant was 45, unmarried, childless, had a critical case of pulmonary tuberculosis and died two months after the testator's death.
[16] See note 8, supra.
[17] The figures used by plaintiffs' actuaries, see note 8 supra, give no indication of the number of women in the specified class who have physical capacity but have voluntarily refrained from bearing children.
[18] This affidavit, submitted by plaintiffs, states, in pertinent part:
"3. During the years 1953 to 1959, inclusive, while I was Director of the Department of Obstetrics and Gynecology at Mt. Sinai Hospital, my department has records of 31,288 consecutive births occurring at the hospital. Such records indicate that among all these there were only three women, 45 years of age, who conceived and gave birth to a viable infant (by viable I mean an infant sufficiently large to have a mathematical chance of survival). Such records disclose no women over 45 years of age who conceived for the first time and gave birth to a viable infant."
[19] See note 2, supra.
[20] In City Bank Farmers' Trust Co. v. United States, 2 Cir., 1935, 74 F.2d 692, 694, Judge Augustus Hand stated that "the certainty that a woman who has reached 50 years will not bear children is far greater than that which attends most other human affairs and to which rules of law must be made and applied." He expressed the opinion that "if the Commissioner had adopted a regulation whereby a bequest to charity conditioned upon failure of issue to a woman of 50 years of age and upwards would be deductible in determining the net estate subject to taxation, [the court] should deem it entirely reasonable." However, Judge Hand made it clear that the essential rationale of the City Bank Farmers' Trust Co. case is limited to cases where the bequest is conditioned upon the failure of issue to a woman beyond the age of 54. See note 13, supra. He specifically refrained from addressing the question whether, in the absence of a pronouncement by the Commissioner, it would be appropriate for a court to set the line further back. See Moser, Charitable Gifts to Foundations, 13 N.Y.U. Inst.Fed.Tax. 223, 226 (1955).
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537 U.S. 952
ROBINSONv.GEORGIA.
No. 02-5637.
Supreme Court of United States.
October 15, 2002.
1
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT.
2
C. A. 11th Cir. Certiorari denied.
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382 P.2d 903 (1963)
James F. BALDRIDGE, Appellant,
v.
STATE of Alaska, Appellee.
Jack L. WILLIAMS, Appellant,
v.
STATE of Alaska, Appellee.
Nos. 283, 284.
Supreme Court of Alaska.
June 26, 1963.
Quincy Benton, Homer, for appellants.
James C. Merbs, Dist. Atty., and Robert N. Opland, Asst. Dist. Atty., Anchorage, for appellee.
Before NESBETT, C.J., and DIMOND and AREND, JJ.
*904 DIMOND, Justice.
Two moose were killed by the defendants (appellants), Baldridge and Williams. They slit the throats and opened the stomachs of the animals, but did not gut them. The reason the defendants gave for not butchering the meat was that they had to fly out of the area in a hurry in Baldridge's airplane because ground fog was setting in and they didn't want to stay out all night without sleeping bags. They were unable to fly back the next day because of a damaged ski on Baldridge's plane. They attempted to arrange other air transportation to the scene of the kill. Failing in this, they attempted to employ a nearby caterpillar operator to drag the moose out. Being otherwise employed at the time, the cat operator did not reach the scene of the kill for several days. The meat was spoiled by then. Defendants were convicted of violating a regulation prohibiting the wasting of game. They have appealed, claiming that the evidence was insufficient to sustain their convictions.
The complaint charged defendants with violating the following regulation of the State Board of Fish and Game:
"304.02 Wanton waste.
"It shall be unlawful for any person wantonly to waste or unnecessarily destroy any game taken in the State of Alaska; provided, however, that this shall not apply to game which the Department declares by regulation to be of a destructive, noxious or nuisance character. The flesh of all small game and all big game except bears must be salvaged for human consumption; provided, however, that either the hide or the flesh of bears must be salvaged for human use."[1]
The state does not contend there was proof that defendants had wasted game "wantonly", as that term is ordinarily understood.[2] The state's argument is that the second sentence of section 304.02 imposes a mandatory duty on a hunter to salvage game meat for human consumption, and that if he negligently fails to fulfill this duty he is guilty of a violation of the regulation, regardless of whether his actions were wanton in nature. In substance, the state's position is that a negligent failure to salvage game meat for human consumption is an offense separate and apart from a wanton waste of game.
The state's position is untenable. A 1959 statute prohibits the wanton waste of game in the same language as the first sentence of the regulation.[3] Presumably the legislature used the term "wanton" in its common meaning, since there is nothing in the statutory language indicating a contrary intent.[4] The legislative policy, then, is clear: it is a criminal offense to waste game meat in a manner that amounts to a reckless disregard of consequence[5]; it is not a criminal offense to waste game meat by a negligent failure to salvage it for human consumption.[6]
*905 To adopt the argument urged by the state would mean that the Board of Fish and Game has made criminal by regulation that which the legislature did not see fit to make criminal by statute. This the board would not have the authority to do, since its regulation to be valid must be in harmony and not in conflict with the policy established by the legislature.[7] In order to give the regulation the presumption of validity to which it is entitled[8], the requirement in the second sentence must be construed as being governed by the prohibition against wanton waste in the first sentence. Thus, a failure to salvage game meat for human consumption is a violation of the regulation and a criminal offense only when the element of wantonness is present.
The evidence was insufficient to sustain the convictions because there was no proof that defendants had acted wantonly in failing to preserve and salvage the moose they had shot. The judgments are reversed, and the cases are remanded with directions to vacate the judgments of conviction and enter judgments of acquittal as to each of the defendants.
NOTES
[1] 5 Alaska Adm.Code § 304.02 (1962).
[2] An act is done "wantonly" when it is done with a reckless disregard of consequences. Alaska Packers' Ass'n. v. United States, 244 F. 710, 711, 4 Alaska Fed. 585, 588 (9th Cir., 1917) (wanton waste of fish); State v. Vinzant, 200 La. 301, 7 So.2d 917, 922 (1942).
[3] S.L.A. 1959, ch. 94, Art. I, § 27 [AS 16.05.830] provides:
"Wanton Waste. It shall be unlawful for any person wantonly to waste or unnecessarily destroy any fish or game taken or caught in the waters or on the land of the State of Alaska; provided, however, that this shall not apply to fish or game which the Department declares by regulation to be of a destructive, noxious or nuisance character."
[4] 2 Sutherland, Statutory Construction § 4919, at 429-437 (3d ed. 1943).
[5] Note 2, supra.
[6] Further evidence of legislative intent is contained in AS 16.30.010 which reads:
"A person who kills a wild food animal and and [sic] fails to make a reasonable effort to utilize it for food, or who kills a wild food animal with intent to wantonly destroy it, is guilty of a misdemeanor, and upon conviction is punishable by a fine of not more than $500 or by imprisonment for not more than six months, or by both."
We have not been specifically guided by this statute in deciding this case for the reason that the defendants were not charged with failure to make a "reasonable effort" to utilize the game for food, nor with killing it "with intent to wantonly destroy it." They were charged with "wanton waste of game" under a regulation promulgated by the State Board of Fish and Game.
[7] State v. Miles, 5 Wash.2d 322, 105 P.2d 51, 53 (1940).
[8] Hynes v. Grimes Packing Co., 337 U.S. 86, 101, 69 S.Ct. 968, 93 L.Ed. 1231, 1245, 12 Alaska 348, 366 (1949).
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COURT OF APPEALS
EIGHTH DISTRICT OF TEXAS
EL PASO, TEXAS
§
MOSTAFA ARAM AZADPOUR, No. 08-11-00308-CR
§
Appellant, Appeal from
§
v. County Criminal Court No. 8
§
THE STATE OF TEXAS, of Tarrant County, Texas
§
Appellee. (TC # 1148393)
§
OPINION
Mostafa Aram Azadpour, pro se, appeals his conviction of resisting arrest.1 A jury found
Appellant guilty and the court assessed punishment at one year in jail, probated, and a fine of
$4,000, half of which is probated. We affirm.
FACTUAL SUMMARY
Emily Murphy is employed by the City of Euless as a court clerk. On February 11, 2009,
Murphy was told that Appellant would be coming to the office to retrieve something and she was
shown the envelope intended for him. Appellant arrived at around 11 a.m. and Murphy gave him
the envelope. Appellant opened it and then shoved it back under the glass. Appellant appeared
to be angry. He told Murphy it was unacceptable and he asked to see the court manager, Ms.
1
Appellant represented himself at trial but retained an attorney for appeal. After Appellant’s brief and reply brief
had been filed, but prior to the submission date, the court was notified that counsel had died. The court gave
Appellant an opportunity to retain new counsel but he declined to do so.
Alexander. Murphy told him that Alexander was in a meeting and Appellant left. After a few
minutes, Appellant came back into the clerk’s office and waited in line while Murphy helped
another customer with a ticket. Murphy was explaining deferred adjudication to the man and
told him that he could not get another traffic ticket in Tarrant County for ninety days. Appellant
suddenly yelled, “Euless, only Euless.” She repeated to the customer that it was ninety days in
Tarrant County and Appellant again interrupted her by yelling “Euless, only Euless.” Murphy
found it difficult to help the customer at the counter because Appellant, who appeared agitated
and upset, continued to interrupt her by speaking in a loud voice. Officer Pamela Byers came
over and asked Appellant to not interfere with Murphy and her customer.
Pamela Joy Byers is a police officer with the City of Euless and she is assigned to the
Euless municipal courts as a warrant officer and bailiff. When Appellant arrived at the
municipal court, the clerks notified Byers because Appellant had a history of being verbally
abusive. Byers went out into the lobby and stood where she could be seen by Appellant as she
had on prior occasions. Appellant was in line and other individuals were standing in line behind
him. In order to not intimidate the individuals standing in line, Byers played Solitaire on her
PalmPilot while standing in the lobby in the event she needed to intervene. Appellant began
yelling at Byers and told her that what she was doing was subject to open records. Byers showed
him the screen and explained that she was only playing Solitaire. The other individuals in line
behind Appellant began laughing when they saw the screen but Appellant continued to yell about
her using the PalmPilot to record what he was doing. Appellant became so agitated that the other
individuals in the line began backing away. In an effort to calm Appellant, Byers told him he
should make any requests he wanted.
-2-
One of the clerks, Emily Murphy, was speaking to a man about his citation and
explaining the rules of “deferred” to him when Appellant began yelling at the clerk and
disagreeing with her instructions given to the man. Byers instructed Appellant to stop interfering
with the clerk and to mind his own business. She then told him to go over to the open clerk’s
window but Appellant began demanding copies of the video taken by the cameras in the lobby.
Byers continued to tell Appellant to step over to the clerk’s window to take care of his business.
Appellant went to the window but he continued to yell at Byers and at a second police officer,
Donald Lee Scott, who had arrived to assist Byers. Byers finally told Appellant to calm down
and take care of his business or leave, but he continued to argue. Consequently, both Byers and
Scott repeatedly instructed Appellant to leave the building or he would be arrested for trespass.
Appellant refused to leave. Officer Scott attempted to take Appellant’s arm to escort him from
the building but Appellant jerked his arm away. Scott then grabbed Appellant by the arm and
both officers escorted him out of the lobby and into the vestibule. At that point, Appellant began
calling Scott an obscene name and repeatedly stating, “This is bullshit.” Byers instructed Scott
to retrieve her ticket book to write Appellant a citation for disorderly conduct. Byers attempted
to calm Appellant but he backed out of the building while continuing to repeat “This is bullshit.”
When Appellant began heading toward his car, Byers stopped him because he was so enraged
and she was concerned for her safety and the safety of other people in the parking lot. Byers told
Appellant he was under arrest but he continued moving towards his car, a convertible, while
yelling profanities. Byers became concerned that Appellant might have a weapon in the vehicle
and she again told him he was under arrest. She got behind Appellant and instructed him to put
his hands behind his back but he refused to comply. Byers reached for Appellant’s left arm to
control him but he pulled away from her. Appellant pulled out his cell phone, called 911, and
-3-
stated he was being attacked in the parking lot. Byers could not handcuff Appellant because he
kept pulling his arms away from her and he pushed her arm each time she attempted to grab him.
Byers radioed for assistance in the parking lot and then placed Appellant in a bear hug to prevent
him from getting in the car. Sergeant David Chaney saw Byers struggling with Appellant and he
stopped to assist her. Chaney put Appellant in a wrist lock and Byers was able to handcuff him.
Byers then took Appellant back into the building.
The State charged Appellant with resisting arrest and criminal trespass. The cases were
tried together before a jury and Appellant represented himself. Appellant testified that he was at
the municipal court on February 11, 2009 to retrieve a record of a trial for an appeal from a
municipal court. He denied creating any disturbances and said that he was standing quietly and
patiently when Byers and Scott “jump[ed] on [him].” He also denied committing criminal
trespass because he had a right of access and he was there to conduct legitimate business.
Appellant expressly denied refusing to leave. He did admit resisting the officers’ efforts to seize
his cell phone and his notebook and said that he resisted so that he could throw those items into
his convertible. Appellant freely and voluntarily gave his hand to the officer after he put those
items in the car. The jury rejected Appellant’s defense and found him guilty of both offenses.
LEGAL SUFFICIENCY
In his first issue, Appellant challenges the legal sufficiency of the evidence supporting his
conviction of resisting arrest. He argues that he lacked the requisite culpable mental state to
commit the offense. Additionally, he maintains that the State failed to prove beyond a
reasonable doubt that he used physical force against the officers.
-4-
Standard of Review and Elements of the Offense
The legal sufficiency standard articulated in Jackson v. Virginia, 443 U.S. 307, 319, 99
S.Ct. 2781, 61 L.Ed.2d 560 (1979), is the only standard a reviewing court applies in determining
whether the evidence is sufficient to support a conviction. Brooks v. State, 323 S.W.3d 893, 894-
95 (Tex.Crim.App. 2010). Under the Jackson standard, a reviewing court must consider all
evidence in the light most favorable to the verdict and in doing so determine whether a rational
justification exists for the trier of fact's finding of guilt beyond a reasonable doubt. 2 Brooks, 323
S.W.3d at 894-95, citing Jackson, 443 U.S. at 319, 99 S.Ct. at 2789. The trier of fact is the sole
judge as to the weight and credibility of witness testimony, and therefore, on appeal we must
give deference to those determinations. See Brooks, 323 S.W.3d at 894-95. If the record
contains conflicting inferences, we must presume the trier of fact resolved such facts in favor of
the verdict and defer to that resolution. Id. On appeal, we serve only to ensure the trier of fact
reached a rational verdict. Id. We may not reevaluate the weight and credibility of the evidence
produced at trial and in so doing, substitute our judgment for that of the fact finder. King v.
State, 29 S.W.3d 556, 562 (Tex.Crim.App. 2000). Circumstantial evidence is as probative as
direct evidence in establishing the guilt of an actor, and circumstantial evidence alone can be
sufficient to establish guilt. Clayton v. State, 235 S.W.3d 772, 778 (Tex.Crim.App. 2007).
A person commits the offense of resisting arrest if he intentionally prevents or obstructs a
person he knows is a peace officer or a person acting in a peace officer’s presence and at his
direction from effecting an arrest, search, or transportation of the actor or another by using force
2
The Jackson standard of review requires the appellate court to review all of the evidence admitted at
trial. The trial court admitted into evidence two DVDs, State’s Exhibits 1 and 2. State’s Exhibit 1 is a recording
from a camera in the lobby of the municipal court building. State’s Exhibit 2 is a record from a camera in the
parking lot. Appellant has filed a motion to have State’s Exhibits 1 and 2 forwarded to this court for our review.
We entered an order requiring the official court reporter and/or the trial court clerk to prepare and file a
supplemental record containing those two exhibits. The supplemental record has been filed and the court has
reviewed the exhibits.
-5-
against the peace officer or another. TEX.PENAL CODE ANN. § 38.03(a)(West 2011). A person
acts intentionally, or with intent, with respect to the nature of his conduct, or to a result of his
conduct when it is his conscious objective or desire to engage in the conduct or cause the result.
TEX.PENAL CODE ANN. § 6.03(a)(West 2011). Whether the defendant possessed the requisite
intent to commit an offense is most often proven through the circumstantial evidence
surrounding the crime. Sholars v. State, 312 S.W.3d 694, 703 (Tex.App.--Houston [1st Dist.]
2009, pet. ref’d). Intent may be inferred from the acts, words, and the conduct of the appellant.
Guevara v. State, 152 S.W.3d 45, 50 (Tex.Crim.App. 2004).
Intent
The offense of resisting arrest requires the State to prove not only that the defendant
intentionally prevented or obstructed his arrest but also that the defendant acted with the
knowledge that the person attempting to arrest him is a peace officer or a person acting in a
peace officer’s presence and at his direction. In this case, Appellant does not challenge the
sufficiency of the evidence proving that he knew Byers was a police officer. The only issue is
whether Appellant acted intentionally to prevent or obstruct the peace officer from arresting him.
Appellant argues that he acted as he did because he was attempting to avoid seizure of his
personal belongings, namely his cell phone and notebook, by placing them in the car. He also
claims that he permitted the officers to place a handcuff on one wrist and he believed that was
sufficient to “consent” to the arrest. Appellant bases his arguments on his own testimony. The
jury heard other evidence regarding Appellant’s words and conduct. There is considerable
evidence that Appellant argued with the officers and municipal court personnel from the
beginning of their encounter inside of the building. Appellant initially would not obey the
officers’ commands to conduct himself appropriately inside of the building and he subsequently
-6-
refused repeated commands to leave the building. After Byers told Appellant she was going to
give him a citation for disorderly conduct, Appellant began walking away and he would not obey
Byers’ commands to stop walking towards his car. Byers told Appellant he was under arrest and
instructed him to place his hands behind his back, but he repeatedly pulled his arms away from
her and pushed her arm away so that she could not place the handcuffs on him. Appellant’s
assertion that he permitted the officers to handcuff one wrist is directly contradicted by Officer
Chaney’s testimony that he had to place a wrist lock on one of Appellant’s wrists in order to get
the arm behind the back so a handcuff could be placed on that wrist. It was only after forcing
Appellant to place that arm behind his back that they were able to get the other arm behind his
back and handcuff him. The jury was not required to believe Appellant’s testimony regarding
his intent and it was free to resolve the conflicts in the testimony as it did. The evidence is
legally sufficient to support a finding that he acted intentionally to prevent or obstruct Byers
from arresting him.
Use of Force
Appellant next argues that the evidence is legally insufficient to prove beyond a
reasonable doubt that he used force against Officer Byers. The information alleged that
Appellant intentionally prevented or obstructed Officer Byers from effecting Appellant’s arrest
by pushing Officer Byers.
Appellant cites cases holding that noncompliance or refusal to be arrested does not
constitute resisting arrest by force under Section 38.03. See Sheehan v. State, 201 S.W.3d 820,
823 (Tex.App.--Waco 2006, no pet.)(passive non-cooperation with an arrest is not by itself
an act of the use of force against a peace officer); Martin v. State, No. Nos. 03-08-00400-CR,
03-08-00401-CR, 2009 WL 1980951, at *4 (Tex.App.--Austin July 10, 2009, no pet.)(same).
-7-
Appellant also relies on Leos v. State, 880 S.W.2d 180 (Tex.App.--Corpus Christi 1984, no pet.)
and Raymond v. State, 640 S.W.2d 678, 679 (Tex.App.--El Paso 1982, pet. ref’d). In Leos, the
Corpus Christi Court of Appeals held that trying to flee from a police officer is insufficient use
of force under Section 38.03. Leos, 880 S.W.2d at 184. This court held in Raymond that the
mere act of pulling away from an officer’s grasp does not constitute resisting arrest because the
force was directed away from the officer, not toward him. Raymond, 640 S.W.2d at 679. As
observed by the State in its brief, this court has since disavowed the language in Raymond
requiring that the force be directed “toward” the officer in order to constitute resisting arrest.
Hopper v. State, 86 S.W.3d 676, 679 (Tex.App.--El Paso 2002, no pet.).
The Second Court of Appeals has addressed sufficiency of the evidence in a case
factually similar to this one. In Clement v. State, 248 S.W.3d 791 (Tex.App.--Fort Worth 2008,
no pet.), the evidence showed that the defendant resisted the officer’s attempts to arrest her by
pulling away from him and moving in the opposite direction of the officer’s instructions. Id., at
797. After the officer handcuffed the defendant, she managed to free one hand and became more
resistant when he handcuffed her the second time. Id. The defendant continued to struggle,
resist, and pull away from the officer as she was being put into a patrol car. The court found the
evidence sufficient because a reasonable juror could have found beyond a reasonable doubt that
the defendant intentionally resisted the officer’s initial attempts to arrest her. Id. at 799.3
We agree that passive non-compliance is insufficient to prove that the defendant used
force against an officer, but Appellant did more than merely walk away or otherwise passively
resist arrest. The officer specifically testified that Appellant pushed her arm while she was
attempting to place the handcuffs on him and he continued to pull away from and struggle
3
The Supreme Court transferred this case from the Second Court of Appeals to this Court pursuant to a docket
equalization order. The Rules of Appellate Procedure require us to decide this case in accordance with precedent of
the Second Court of Appeals. See TEX.R.APP.P. 41.3.
-8-
against her while she attempted to arrest him. This evidence is sufficient to permit a rational trier
of fact to find beyond a reasonable doubt that Appellant used force against Officer Byers to
prevent or obstruct his arrest. See Humphreys v. State, 565 S.W.2d 59, 60 (Tex.Crim.App.
1978)(striking at an officer’s arm, pushing the officer, and struggling with the officer is sufficient
use of force under Section 38.03); Clement, 248 S.W.3d at 799; Pumphrey v. State, 245 S.W.3d
85, 91-92 (Tex.App.--Texarkana 2008, pet. ref’d)(evidence sufficient to support conviction of
resisting arrest where defendant immediately started pulling away and jerking when the officer
informed her she was under arrest for disorderly conduct and defendant jerked, squirmed,
twisted, turned, and struggled against the officer’s efforts to arrest her). Issue One is overruled.
WITHDRAWAL OF WAIVER OF COUNSEL
In Issue Two, Appellant argues that the trial court failed to properly admonish him when
he indicated a desire during trial to withdraw his waiver of the right to counsel. He also
complains that the court denied him the effective assistance of standby counsel.
The facts related to these issues are somewhat complex because more than one judge
presided over the cases and Appellant vacillated on whether he wished to have standby counsel.
The misdemeanor information was filed on March 2, 2009. Appellant initially waived his right
to counsel but he later retained counsel, Danny Burns, who made an appearance in the case on
October 19, 2009. On October 12, 2010, Appellant filed a motion to substitute counsel in which
he requested that the court permit him to represent himself. He alternatively requested that
Burns remain as standby counsel. At the hearing on the motion, the trial judge4 stated on the
record that she had previously given Appellant the required warnings about the dangers of self-
representation. The court admonished Appellant that it was in his best interest to be represented
4
Appellant’s cases were originally filed in the County Criminal Court Number Four of Tarrant County and the
Honorable Deborah Nekhom conducted the hearing.
-9-
by counsel and if he represented himself, he would be held to the same standards as an attorney
and he would be expected to be aware of the rules of evidence and procedure. The trial court
granted the motion. The court ordered that Burns would remain at all hearings and the trial as
standby counsel for Appellant. Appellant’s cases were subsequently transferred to County
Criminal Court Number Eight of Tarrant County. The Honorable Daryl R. Coffey, Judge of
County Criminal Court Number Eight, conducted a hearing on pretrial motions on April 27, 2011
and addressed Appellant’s qualifications to represent himself. Appellant testified that he had just
turned 50 years of age and he was unemployed at the time but he did contract engineering work.
Appellant has a bachelor’s degree and a master’s degree and he had done some research for a
Ph.D. in electrical engineering and computer science. Appellant had the ability to read and
comprehend the law. The trial judge stated on the record that he had read the numerous motions
Appellant had filed and concluded that the motions were of good form and literate. Appellant
told the court that he had represented himself in the Euless Municipal Court and in federal court
in a California discrimination case which went to the United States Supreme Court. The court
advised Appellant that by representing himself he would be required to follow the law, the rules
of evidence, and the rules of the court. Appellant stated that he understood and he volunteered
that he knew he could not claim ineffective assistance of counsel. Appellant also told the court
that Burns had represented him for about a year and a half in the case but he began representing
himself due to what he believed was ineffective assistance of counsel by Burns. The court
concluded Appellant was competent to represent himself and advised Appellant that he was
going to let him represent himself in this case. Later during this same hearing, Appellant had the
following exchange with the trial court:
[Appellant]: I have two administrative issues I would like to bring up, Your
Honor.
- 10 -
[The Court]: Okay.
[Appellant]: One is that when we had the substitution of counsel, Mr. Danny
Burns, the Order of Substitution is written such that his presence is required at all
hearings and I assume trial, and --
[The Court]: I’m not going -- I’m going to rescind that.
[Appellant]: Great. That’s why I was trying to get clarification --
[The Court]: You’re -- you’re stuck with yourself.
[Appellant]: That is the way I want it.
A few weeks before trial, Appellant had a subpoena duces tecum issued for Burns to
appear at trial. On the day of trial, Appellant filed a motion requesting the presence of Burns
during trial as his standby attorney. The record does not reflect that Appellant ever presented the
motion to the trial court or obtained a ruling.
Prior to voir dire, the trial judge addressed Appellant’s right to counsel. Appellant
persisted in his desire to waive counsel and he signed a written waiver. At the beginning of trial,
the State invoked the Rule which had the effect of excluding Burns from the courtroom.
At the conclusion of the State’s case-in-chief and just before a lunch break, the trial court
asked Appellant whether he wished to present any evidence. Appellant told the trial court that he
wished to consult with standby counsel, Mr. Burns, before making that decision. The court
reminded Appellant that the prior order making Burns standby counsel had been rescinded and
Appellant was representing himself. The court gave Appellant the opportunity to consult with
Burns or anyone he wished during the lunch break. After the break, Burns came into the
courtroom in the event he was needed as standby counsel. The court informed Burns that he
could assist Appellant if he wished but he would not be allowed to sit at counsel table. Since
Appellant had issued a subpoena for Burns, the court asked Appellant whether he was going to
- 11 -
call him as a witness. When Appellant indicated that he would not release Burns from the
subpoena, the court swore Burns as a witness and instructed him to sit outside in the hallway.
The court informed Appellant that Burns could not assist him and also be a witness in the case.
Later, during the defense’s case-in-chief, Appellant asked whether Burns was still present
and the trial court informed him that he was, but Appellant had subpoenaed him as a witness and
the Rule had been invoked. The court gave Appellant the choice of calling him as a witness or
releasing him from the subpoena. Appellant explained that he wanted to release him as a witness
so he could ask him a question. The court released Burns from the subpoena and told Appellant
that he could speak with him during the break, but Burns would not be permitted to sit at counsel
table with him.
Applicable Law
A criminal defendant has a right to the assistance of counsel in state court, guaranteed by
the Sixth and Fourteenth Amendments to the United States Constitution. Hatten v. State, 71
S.W.3d 332, 333 (Tex.Crim.App. 2002), citing Gideon v. Wainwright, 372 U.S. 335, 83 S.Ct.
792, 9 L.Ed.2d 799 (1963). The United States Supreme Court recognized in Faretta v.
California that a criminal defendant also has the right to waive counsel and represent himself.
Faretta v. California, 422 U.S. 806, 818-20, 95 S.Ct. 2525, 2532-33, 45 L.Ed.2d 562 (1975);
Hatten, 71 S.W.3d at 333. To be constitutionally effective, such a decision must be made
competently, voluntarily, knowingly, and intelligently. Godinez v. Moran, 509 U.S. 389, 400,
113 S.Ct. 2680, 2687, 125 L.Ed.2d 321 (1993); Faretta, 422 U.S. at 835-36, 95 S.Ct. at 2541.
The decision is made knowingly and intelligently if made with a full understanding of the right
to counsel, which is being abandoned, as well as the dangers and disadvantages of self-
representation. Faretta, 422 U.S. at 835-36, 95 S.Ct. at 2541; Williams v. State, 252 S.W.3d 353,
- 12 -
356 (Tex.Crim.App. 2008).
The Court of Criminal Appeals has held on several occasions that there is no
constitutional right to hybrid representation. See e.g., Dunn v. State, 819 S.W.2d 510, 525-26
(Tex.Crim.App. 1991); Scarbrough v. State, 777 S.W.2d 83, 92 (Tex.Crim.App. 1989); Landers
v. State, 550 S.W.2d 272, 280 (Tex.Crim.App. 1977). In Scarbrough, the Court of Criminal
Appeals held that the admonishments regarding the dangers and disadvantages of self-
representation should include making the accused aware that there is no right to standby counsel.
Scarbrough, 777 S.W.2d at 93. If the defendant asserts a desire for self-representation, but also
indicates he would prefer what actually amounts to hybrid representation, the trial court should
decide at the earliest practicable moment whether to allow it, and if not, should inform the
defendant he must choose instead between two mutually exclusive rights--the right to self-
representation or to representation by counsel--and inform him that there is no “middle ground.”
Id. If hybrid representation is not to be a permissible option, the defendant must be made aware
of that circumstance, and given the opportunity, thus informed, to reassert his right to self-
representation. Id. If he continues to insist on conducting his own defense, but only with the
selective aid of counsel, it may be said his assertion of the right to self-representation is
“conditional,” and thus, equivocal. Id.
Analysis
The issue of hybrid representation and standby counsel came up several times in the trial
court. First, at the November 18, 2010 hearing on Appellant’s motion to substitute himself for
retained counsel, Appellant asked if Burns could act as standby counsel. Judge Nekhom made it
clear that Appellant did not have a right to hybrid representation and told him bluntly, “When
you’re pro se, you’re pro se.” The court continued to emphasize that Appellant would be
- 13 -
responsible for representing himself, but told him that if Mr. Burns was willing to advise
Appellant, she would permit it. The court ordered that Burns would remain at all hearings and
the trial as standby counsel for Appellant. Judge Nekhom’s admonishments regarding hybrid
representation complied with Scarbrough.
Approximately five months later, Judge Coffey conducted a pretrial hearing and
addressed Appellant’s qualifications to represent himself. After the court determined that
Appellant was competent to represent himself, Appellant brought up the prior order making
Burns the standby counsel. Judge Coffey told Appellant he would not permit standby counsel
and he was going to rescind the order. Appellant did not object to that ruling and in fact
indicated his agreement. Thus, the record does not reflect that Appellant made a conditional
assertion of his right to self-representation.
Appellant did not bring up the subject of standby counsel again until the day of trial,
June 14, 2011, when he filed a “notice” requesting the presence of standby counsel, but he did
not present his request to the court or obtain a ruling on it. At the conclusion of the State’s case-
in-chief and again during the defense’s case-in-chief, Appellant broached the subject of standby
counsel. The court reminded Appellant that he had rescinded the order making Burns standby
counsel. A short time later, Appellant asked the court whether Burns was present because he
wanted to ask him a question. The court permitted Appellant to consult with Burns. Appellant
did not indicate that he wished to withdraw his waiver of the right to counsel and the record does
not support a finding that Appellant’s assertion of his right to represent himself was conditional
or equivocal. Appellant’s first argument is without merit.
- 14 -
Denial of Effective Assistance of Standby Counsel
Appellant also argues that he was denied the effective assistance of standby counsel.
Given that there is no constitutional right to hybrid representation, courts have held that there is
no corresponding constitutional right to the effective assistance of standby counsel. See, e.g.,
United States v. Oliver, 630 F.3d 397, 413-14 (5th Cir. 2011); United States v. Morrison, 153
F.3d 34, 55 (2nd Cir. 1998); United States v. Windsor, 981 F.2d 943, 947 (7th Cir. 1992). Even
assuming for the sake of argument that there is such a right, the record does not support
Appellant’s claim that he was deprived of the effective assistance of standby counsel. Appellant
agreed with Judge Coffey’s decision to rescind the order appointing standby counsel. It was only
later during trial that Appellant requested the assistance of standby counsel. Appellant had,
however, subpoenaed Burns for trial. When Appellant refused to release Burns from the
subpoena, the trial court swore Burns as a witness and instructed him to remain outside of the
courtroom. TEX.R.EVID. 614. After Appellant released Burns from the subpoena, the court
permitted Appellant to consult with Burns. Thus, the record reflects that Appellant created the
situation which caused Burns to be excluded from the courtroom for a time during the trial.
Appellant has failed to show that the trial court denied him the effective assistance of standby
counsel. For all of these reasons, we overrule Issue Two.
CONSOLIDATION OF THE CASES
In Issue Three, Appellant contends that the trial court erred by consolidating the resisting
arrest and criminal trespass cases for trial. The State responds that Appellant’s motion to sever
filed on the day of trial was untimely, and alternatively, any error is harmless.
Section 3.02 of the Penal Code provides that a defendant may be prosecuted in a single
criminal action for all offenses arising out of the same criminal episode. TEX.PENAL CODE ANN.
- 15 -
§ 3.02(a). If the State properly joins two offenses pursuant to Section 3.02, the defendant has a
right to sever the cases into different trials if he timely invokes that right. TEX.PENAL CODE
ANN. § 3.04(a). When a defendant timely requests a severance under Section 3.04(a), his right to
a severance is absolute and the severance is mandatory. King v. State, 189 S.W.3d 347, 353
(Tex.App.--Fort Worth 2006, no pet.). A motion to sever must be raised before trial. See
Thornton v. State, 986 S.W.2d 615, 617 (Tex.Crim.App. 1999). Appellant did not file a written
motion to sever until the day of trial. He did file a written notice on April 1, 2011 objecting to
consolidation of the two cases and he informed the trial court during a pretrial hearing that he
opposed consolidation. We find that Appellant timely and specifically objected to consolidation
of the cases. See Ford v. State, 782 S.W.2d 911, 912 (Tex.App.--Houston [14th Dist.] 1989, no
pet.)(stating that the defendant’s complaint is sufficient if it apprises the trial court that he does
not desire to have the offenses joined in a common trial). The trial court erred by consolidating
the cases over Appellant’s objection.
Severance error is not structural error and is subject to a harm analysis under
TEX.R.APP.P. 44.2(b). Llamas v. State, 12 S.W.3d 469, 470-71 (Tex.Crim.App. 2000). Under
Rule 44.2(b), any error that does not affect a substantial right must be disregarded. A substantial
right is affected when the error had a substantial and injurious effect or influence on the jury's
verdict. King v. State, 953 S .W.2d 266, 271 (Tex.Crim.App. 1997). Substantial rights are not
affected if, after examining the record as a whole, we have fair assurance that the error did not
influence the jury, or had but a slight effect. Motilla v. State, 78 S.W.3d 352, 355
(Tex.Crim.App. 2002).
In the case of the erroneous denial of a motion for severance, the error is harmless if the
offenses are intertwined in one inseparable transaction, because evidence of one offense would
- 16 -
have been admissible as same transaction contextual evidence in the separate prosecution of the
other offense. King, 189 S.W.3d at 353; Tovar v. State, 165 S.W.3d 785, 795 (Tex.App.--San
Antonio 2005, no pet.); Dominguez v. State, 62 S.W.3d 203, 208 (Tex.App.--El Paso 2000, pet.
ref’d). Same transaction contextual evidence is evidence of another crime or act that is so
intertwined with the charged offense that full proof of either crime could not be had without
eliciting testimony of the other. Delgado v. State, 235 S.W.3d 244, 253 (Tex.Crim.App. 2007).
The facts related to the criminal trespass offense are so intertwined with the facts related to the
resisting arrest offense that the evidence related to each offense would have been admissible in a
separate trial of each charge. See King, 189 S.W.3d at 354. Consequently, the error is
consolidating the cases for trial over Appellant’s objection is harmless. Issue Three is overruled.
The judgment of the trial court is affirmed.
Appellant is hereby notified that he has a right to file a petition for discretionary review
with the Court of Criminal Appeals. See TEX.R.APP.P. 68.1. The petition is due to be filed
within thirty days after the day of our judgment in this case or the day the last timely motion for
rehearing is overruled by this Court. See TEX.R.APP.P. 68.2.
May 29, 2013
ANN CRAWFORD McCLURE, Chief Justice
Before McClure, C.J., Rivera, and Antcliff, JJ.
Antcliff, J., not participating
(Do Not Publish)
- 17 -
| {
"pile_set_name": "FreeLaw"
} |
Filed 6/30/15 P. v. Cassidy CA4/1
NOT TO BE PUBLISHED IN 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.
COURT OF APPEAL, FOURTH APPELLATE DISTRICT
DIVISION ONE
STATE OF CALIFORNIA
THE PEOPLE, D065931
Plaintiff and Respondent,
v. (Super. Ct. No. SCD252989)
ROBERT LEE CASSIDY,
Defendant and Appellant.
APPEAL from a judgment of the Superior Court of San Diego County,
Melinda J. Lasater, Judge. Affirmed.
Patrick J. Hennessey, Jr., under appointment by the Court of Appeal, for
Defendant and Appellant.
Kamala D. Harris, Attorney General, Julie L. Garland, Assistant Attorney
General, William M. Wood and Paige B. Hazard, Deputy Attorneys General, for Plaintiff
and Respondent.
A jury found Robert Lee Cassidy guilty of receiving stolen property, possessing
burglary tools and possessing the personal identifying information of ten or more people
with the intent to defraud within the meaning of Penal Code section 530.5, subdivision
(c)(3). (Undesignated statutory references are to the Penal Code.) Cassidy appeals his
identity theft conviction, contending the evidence did not support a finding he possessed
the information with the intent to defraud. He also asserts the trial court erred by
(1) responding to a jury question, (2) by not instructing the jury on the lesser offense of
misdemeanor possession of identifying information under section 530.5, subdivision
(c)(1), and (3) instructing the jury on the theory of aiding and abetting. We reject his
contentions and affirm the judgment.
FACTUAL AND PROCEDURAL BACKGROUND
On an afternoon in December 2013, San Diego Police Department Officer
Michael Weaver investigated a report of an unconscious man inside a Mercedes. Officer
Weaver observed a Mercedes parked with the door open. Cassidy sat in the driver's seat,
unconscious with one foot extended outside onto the ground. When Cassidy woke up, he
told Officer Weaver that he was unemployed and living in his car.
Officer Weaver conducted a search of the car. In the center console of the car, he
discovered a handicap placard and determined that Cassidy did not own the placard.
Further investigation revealed the handicap placard had been stolen from a locked car
along with the vehicle registration and other documents. Inside the trunk were, among
other things, some briefcases and a "professional slim jim kit," which is used to enter
cars without use of a key. Officer Weaver also found a two-gallon jug that smelled of
gasoline, materials to siphon gasoline from cars and items to remove the rubber casings
on automobile windows. Officer Weaver believed these items could be used to enter
2
locked vehicles. Finally, Officer Weaver discovered a license plate registered to a
Mercedes other than Cassidy's.
Officer Weaver conducted an initial search of the three briefcases found in the car.
The briefcases contained paperwork and numerous checks written out to Cassidy for
large amounts of money. The checks prompted Officer Weaver to call Detective David
Spitzer of the identity theft unit to the scene. Detective Spitzer arrived and later
inventoried the contents of the three briefcases found in Cassidy's trunk.
A brown briefcase contained notes explaining how to decipher the origination of
any social security number, three types of "check stock" used to create checks and state-
issued documents for two businesses in Cassidy's name. Detective Spitzer also found
checks from an Oregon company called Enchanted Gardens Landscape Service, a New
Jersey company called Sea Box Incorporated and a company called Parts Express (the
three businesses). All of the checks were made out to a person named Scott McEachern.
Investigation revealed the checks were counterfeit. While the account numbers
listed for the three businesses were valid, none of the three businesses had ever written a
check to Scott McEachern. Nor had the businesses given Cassidy permission to be in
possession of their checks or account information. Detective Spitzer explained that
thieves commonly make checks payable to others to avoid detection. A fraud
investigator for Wells Fargo Bank testified that the bank had paid a fraud claim on the
account of one of the three businesses.
Inside a black briefcase, Detective Spitzer found, among other things, a Visa card
and insurance cards in the name of Manny Manatad. Inside an address book that Cassidy
3
admitted he owned, was Manatad's credit card. Manatad testified at trial that the cards
found in the briefcase were his. Manatad did not know Cassidy and had never given him
permission to be in possession of his personal information.
Inside a silver briefcase, Detective Spitzer found loose documents and many
different manila folders. One folder contained pages of false names, addresses, social
security numbers, driver's license numbers, dates of birth and credit card numbers created
using a "fixer identity generator." Such lists are used to create identities to defraud
others. Other folders contained personal identifying information for 12 different
individuals. Detective Spitzer later testified as an expert at trial. Cassidy testified in his
defense. Cassidy stated he never intended to commit fraud.
DISCUSSION
I. Sufficiency of the Evidence
Cassidy challenges his conviction on count one for acquiring or retaining
possession of the identifying information of ten or more people with the intent to
defraud. (§ 530.5, subd. (c)(3), hereinafter section 530.5(c)(3).) Cassidy concedes the
evidence established he possessed the requisite identifying pieces of information as to ten
separate individuals, but argues the evidence did not show he possessed or retained that
information with the intent to commit identity theft. We disagree.
In reviewing a challenge to the sufficiency of evidence, we "consider the evidence
in a light most favorable to the judgment and presume the existence of every fact the trier
could reasonably deduce from the evidence in support of the judgment. The test is
whether substantial evidence supports the decision, not whether the evidence proves guilt
4
beyond a reasonable doubt." (People v. Mincey (1992) 2 Cal.4th 408, 432, fn. omitted.)
"The standard of review is the same in cases in which the People rely mainly on
circumstantial evidence." (People v. Stanley (1995) 10 Cal.4th 764, 792.) "Resolution of
conflicts and inconsistencies in the testimony is the exclusive province of the trier of fact.
[Citation.] Moreover, unless the testimony is physically impossible or inherently
improbable, testimony of a single witness is sufficient to support a conviction." (People
v. Young (2005) 34 Cal.4th 1149, 1181.) Because intent can seldom be proven by direct
evidence, it typically is inferred from the circumstances. (People v. Abilez (2007) 41
Cal.4th 472, 506-507 [robbery]; People v. Holt (1997) 15 Cal.4th 619, 668 [burglary];
People v. Wilkins (1972) 27 Cal.App.3d 763, 773 [intent to defraud].)
Here, the prosecution presented sufficient evidence from which a reasonable jury
could infer that Cassidy acquired or retained possession of the information with the
necessary intent to defraud. After being evicted from his home, Cassidy moved his
belongings to two storage locations. When he purchased the Mercedes, he moved some
of his belongings into the car. Cassidy explained that the silver briefcase belonged to his
estranged wife, Chantal Kiley, whom he had not seen in over a year. Cassidy admitted
that he reviewed the contents of the silver briefcase and knew it contained various papers
in other people's names. The silver briefcase also contained documents pertaining to
Cassidy and his Mercedes. Cassidy had seen Kiley with the personal identifying
information of other people in the past and admitted that Kiley had previously committed
fraud.
5
Detective Spitzer reviewed the contents of the silver briefcase, noting it contained
personal identifying information for 12 individuals or businesses. Detective Spitzer
explained how personal identifying information can be used to create false documents
such as checks and credit cards. Although much of the information found was a few
years old and the age of the information can impact its usability for identity theft
purposes, Detective Spitzer stated it is "very common" for identity thieves to save
information. Stolen information which is five to ten years old can be used to defraud
individuals because some information about individuals never changes. Additionally, it
is common for identity thieves to buy and sell information. Detective Spitzer opined that
Cassidy was "stockpiling information" for later use when he had the necessary
equipment. That there was no evidence showing Cassidy had attempted to use any of the
identifying information for unlawful purposes is irrelevant as this is not an element of the
crime.
II. Response to Jury Question
A. Background Facts
The trial court instructed the jury on count one with the pattern jury instruction
describing the elements of section 530.5(c)(3). (CALCRIM No. 2041.) The instruction
required the People to prove: (1) the defendant acquired or kept the personal identifying
information of ten or more other persons; and (2) did so with the intent to defraud
another person. The instruction defined intent as follows: "A person intends to defraud if
he or she intends to deceive another person in order to cause a loss of money, or goods,
6
or services, or something else of value, or to cause damage to a legal, financial, or
property right."
During deliberations, the jury inquired whether the "intent need[ed] to exist for 10
or more or just 1?" The court informed the parties that it intended to respond by
rewording CALCRIM No. 2041. After discussing the matter, defense counsel requested
the jury be instructed that the intent must exist for ten or more and must be an intent to
defraud one or more persons. The court commented that the proposed response added an
element to the crime. Ultimately, the court provided the jury a response which mimicked
the statutory language: "Every person who, with the intent to defraud, acquires or retains
possession of the personal identifying information of 10 or more other persons is
guilty. . . ." Later that day, the jury returned a guilty verdict on count one.
B. Analysis
Trial courts have a duty to help a jury understand the legal principles it is asked to
apply (People v. Beardslee (1991) 53 Cal.3d 68, 97) and to attempt to clear up any
instructional confusion expressed by the jury. (§ 1138; People v. Gonzalez (1990) 51
Cal.3d 1179, 1212.) A court's decision as to what additional explanations are required to
satisfy the jury's request for information is a discretionary one that will only be reversed
for manifest abuse (People v. Gonzalez, at p. 1213) and a violation of section 1138
warrants reversal only if prejudice appears (People v. Beardslee, at p. 97).
Cassidy contends the trial court must instruct the jury on the general principles of
law relevant to the issues raised by the evidence and the instruction provided by the court
in response to the jury's question incorrectly stated the law. Relying on People v.
7
Valenzuela (2012) 205 Cal.App.4th 800 (Valenzuela), Cassidy contends the intent to
defraud had to accompany the possession of ten or more items and must apply to each
and every one of them.
The parties' dispute over the propriety of the trial court's response to the jury
question ultimately involves an issue of statutory interpretation, which is a question of
law subject to de novo review on appeal. (Bialo v. Western Mutual Ins. Co. (2002) 95
Cal.App.4th 68, 76-77.) In interpreting a statute, our goal is to ascertain and carry out
the Legislature's intent. (Code Civ. Proc., § 1859.) As we shall explain, we disagree
with Cassidy's interpretation of the statute.
Section 530.5, subdivision (c)(1) (hereinafter section 530.5(c)(1)) makes it a
misdemeanor to acquire or retain possession of the personal identifying information "of
another person" with the intent to defraud. Section 530.5(c)(3) criminalizes the
acquisition or retention of the personal identifying information "of 10 or more other
persons" with the intent to defraud. Subdivision 530.5(c)(3) provides the offense may be
punishable as either a felony or a misdemeanor.
In Valenzuela, the defendant was convicted of three misdemeanor counts of
identity theft under section 530.5(c)(1). (Valenzuela, supra, 205 Cal.App.4th at p. 801.)
He challenged the convictions arguing his possession of the identifying information of
three people at one time constitutes a single offense rather than three separate offenses.
(Ibid.) Defendant asserted the fact section 530.5(c)(3) made the theft of identifying
information for ten or more persons punishable as a misdemeanor or a felony constituted
evidence of the Legislature's intent to make the possession of identifying information of
8
fewer than ten people a single offense under section 530.5(c)(1). (Valenzuela, at p. 808.)
The Valenzuela court rejected this argument, stating section 530.5(c)(3) evidenced the
Legislature's intent to provide law enforcement and the courts with another tool "to help
stem the tide of identity theft" by allowing a state prison sentence rather than county jail.
(Valenzuela, at p. 808.) After examining the legislative history for section 530.5, the
Valenzuela court noted that the acquisition or retention of personal identifying
information of another is not a possession crime, but is a unique theft crime; thus, the
acquisition or retention of personal identifying information of multiple victims
constitutes multiple identity theft offenses under section 530.5(c)(1). (Valenzuela, at p.
808.)
Cassidy argues the Valenzuela decision supports his argument that a violation of
section 530.5(c)(3) required a finding that the intent to defraud had to exist as to each of
the ten or more persons to whom he possessed the personal identifying information. This
argument is directly contrary to the legislative history of section 530.5 as set forth in
Valenzuela. The legislative history makes clear the Legislature's purpose of broadening
the crime of identity theft, a crime that can take place in many forms and "creates ripples
of harm to the victim that flow from the initial misappropriation." (Valenzuela, supra,
205 Cal.App.4th at p. 808.)
The intent of the identify thief is to use the stolen personal information of different
individuals with the overall intent to deceive as many persons as possible to get money or
goods. The act being punished is the acquisition or retention of the personal information.
An identity thief, such as Cassidy, that has acquired or retained the personal information
9
of ten or more people is better prepared to defraud, and more deeply involved in, a
general scheme to defraud. Such a person is more dangerous and thus deserving of more
punishment than the person found with the identifying information of one other person.
Accordingly, the trial court correctly refused to directly answer the jury's question with
any numerical value to quantify the specific intent requirement. Based on our conclusion
that Cassidy's proposed response to the jury's question incorrectly stated the law, we
conclude the trial court did not abuse its discretion under section 1138 when in answered
the jury's question by restating the elements of the crime.
III. Lesser Included Offense
When the evidence raises a question as to whether all of the elements of the
charged offense are present and there is evidence that would justify a conviction of a
lesser offense, the trial court has a sua sponte duty to instruct on the lesser included
offense. (People v. Cooper (1991) 53 Cal.3d 771, 827.) Substantial evidence is not
equivalent to any evidence, no matter how weak, but requires evidence from which a
reasonable jury could conclude the lesser included offense, but not the greater offense,
was committed. (People v. Breverman (1998) 19 Cal.4th 142, 162.) The failure to
instruct sua sponte on a lesser included offense in a noncapital case is not subject to
reversal unless an examination of the entire record establishes a reasonable probability
the error affected the outcome. (Id. at p. 165.)
Cassidy asserts the trial court prejudicially erred in failing to sua sponte instruct
the jury on the lesser included offense of acquiring or retaining possession of the
personal identifying information of another person with the intent to defraud, a
10
misdemeanor within the meaning of section 530.5(c)(1). The Attorney General
concedes, and we agree, based on the elements test, section 530.5(c)(1) is a lesser
included offense of section 530.5(c)(3). Substantial evidence, however, did not support a
conclusion that Cassidy committed the lesser included offense, but not the greater
offense.
During closing argument, defense counsel virtually conceded the prosecution had
proven Cassidy possessed the personal indentifying information of ten or more people
and focused his argument on the intent element of section 530.5(c)(3). On appeal,
Cassidy conceded the evidence established he possessed the requisite identifying pieces
of information as to ten separate individuals as required under section 530.5(c)(3). Thus,
if the jury found the prosecution proved the second element, that Cassidy acquired or
retained the personal indentifying information with the intent to defraud, it could only
find Cassidy guilty of the greater offense and not the lesser. As discussed above, Cassidy
misinterpreted the intent required for guilt under section 530.5(c)(3) and the evidence
amply supported that Cassidy possessed the requisite intent. (Ante, Parts I & II.)
Accordingly, substantial evidence did not support instructing on section 530.5(c)(1).
IV. Aiding and Abetting Instruction
The prosecution requested the jury be instructed on aiding and abetting, noting
that if the jury believed Cassidy's testimony that Kiley was involved in identity theft, it
could conclude that Cassidy aided and abetted her crime by saving personal identifying
information for her. Over defense objection, the trial court instructed the jury that
Cassidy could be guilty of his crimes directly or on aiding and abetting principles.
11
Cassidy asserts the trial court erred in instructing on aiding and abetting because
there was no evidence establishing Kiley committed any crime of identity theft under
section 530.5(c)(3), let alone any evidence her crime involved the identifying
information of ten or more people. We disagree.
A person aids and abets the commission of a crime when the person, acting
(1) with knowledge of the perpetrator's unlawful purpose, and (2) with intent or purpose
of committing, encouraging, or facilitating the commission of the offense, (3) by act or
advice aids, promotes, encourages or instigates the commission of the crime. (People v.
Croy (1985) 41 Cal.3d 1, 11-12; People v. Beeman (1984) 35 Cal.3d 547, 561; see also
CALCRIM No. 401.) Direct evidence of the defendant's mental state is rarely available
and may be shown with circumstantial evidence. (People v. Beeman, at pp. 558-559.)
"[A]iding and abetting liability cannot attach unless the substantive elements of a
predicate offense are met. This requirement may be satisfied by proof of an attempt [to
commit the offense]." (People v. Perez (2005) 35 Cal.4th 1219, 1227.)
Here, the substantive elements of the predicate offense were satisfied. Cassidy
testified that the personal identifying information in the silver briefcase belonged to
Kiley, he had seen Kiley with the personal identifying information of other people in the
past and admitted Kiley had previously committed fraud. Based on Cassidy's testimony
that he retained other information for eventual return, the jury could have reasonably
inferred Cassidy similarly retained the personal identifying information in the silver
briefcase for eventual return to Kiley for the purpose of furthering her commission of
identity theft crimes. Actual use of the personal information is not an element of the
12
crime. Accordingly, the jury could have reasonably concluded that the information
belonged to Kiley, and Cassidy retained the information to aid and abet Kiley.
Even assuming the trial court erred when it instructed the jury on aiding and
abetting, the assumed error was harmless. If a jury is presented with multiple theories
supporting conviction on a single charge and on review, one theory is found unsupported
by sufficient evidence, reversal is not required if sufficient evidence supports the alternate
theory and there is no affirmative basis for concluding the jury relied on the factually
unsupported theory because it is presumed jurors would not rely on a factually deficient
theory. (People v. Guiton (1993) 4 Cal.4th 1116, 1128-1129.)
Here, the court instructed the jury with CALCRIM No. 200, which states, "You
must decide what the facts are. It is up to all of you, and you alone, to decide what
happened, based only on the evidence that has been presented to you in this trial." This
instruction further informed the jury that "[s]ome of these instructions may not apply,
depending on your findings about the facts of the case. Do not assume just because I give a
particular instruction that I am suggesting anything about the facts. After you have decided
what the facts are, follow the instructions that do apply to the facts as you find them."
Thus, the jury was aware it could find that there was no evidence to support the aiding and
abetting instruction, and that in such a situation, this instruction would not apply. During
closing argument, the prosecutor did not argue Cassidy's potential guilt on count one on an
aiding and abetting theory. There is nothing in the record to affirmatively show that
13
the jury in fact relied on the aiding and abetting instruction to reach its verdict on count
one. Moreover, the evidence amply supported Cassidy's guilt on count one. (Ante, Part
I.) Thus, assuming the aiding and abetting instruction was unsupported by the evidence,
any error was harmless.
DISPOSITION
The judgment is affirmed.
MCINTYRE, J.
WE CONCUR:
MCCONNELL, P. J.
BENKE, J.
14
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837 F.2d 482
U.S.v.Kangarloo (Hassan)
NO. 87-5075
United States Court of Appeals,Ninth Circuit.
JAN 14, 1988
1
Appeal From: C.D.Cal.
2
AFFIRMED.
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Filed 1/15/15 by Clerk of Supreme Court
IN THE SUPREME COURT
STATE OF NORTH DAKOTA
2015 ND 13___
Darlene Mertz, Plaintiff and Appellee
v.
Mervyn Mertz, Defendant and Appellant
No. 20140072
Appeal from the District Court of Burleigh County, South Central Judicial District, the Honorable Sonna M. Anderson, Judge.
REVERSED AND REMANDED.
Opinion of the Court by Crothers, Justice.
Kent M. Morrow, 411 North 4th Street, P.O. Box 2155, Bismarck, ND 58502-
2155, for plaintiff and appellee.
Brenda A. Neubauer, 115 North 4th Street, Suite 3, Bismarck, ND 58501, for defendant and appellant.
Mertz v. Mertz
No. 20140072
Crothers, Justice.
[¶1] Mervyn Mertz appeals from a district court divorce judgment distributing marital assets and debts and ordering him to pay spousal support. He argues the district court erroneously awarded permanent spousal support and the district court’s division of assets and debts is clearly erroneous. We reverse and remand for reconsideration of spousal support and property distribution.
I
[¶2] Mervyn Mertz and Darlene Mertz were married in 1996. They were married 17 years but had a relationship for over 30 years. When the couple started dating, Darlene Mertz had two young children, whom Mervyn Mertz helped raise. In 1980, the parties had a son together. All the children are now above the age of majority. Darlene Mertz was 57 years old at the time of trial and works as a public school instructional aid. Mervyn Mertz was 60 years old at the time of trial and was an ironworker, but now is disabled. Both parties have several health problems.
[¶3] The district court granted a divorce and awarded Darlene Mertz spousal support of $900 per month until she dies or remarries and divided the marital property. Darlene Mertz was awarded retirement funds, a vehicle and personal property, with a combined value of $76,045. She was responsible for $1,700 in marital debt, resulting in a property award with a net value of $74,345. The district court awarded Mervyn Mertz the marital home, retirement funds, vehicles and personal property, with a combined value of $272,700. He was responsible for $47,465 in marital debt, resulting in a property award with a net value of $225,235. The court ordered Mervyn Mertz to pay $75,000 to Darlene Mertz to equalize the disparity in the value of property awards.
II
[¶4] A district court’s “decision on spousal support is treated as a finding of fact and is subject to the clearly erroneous standard [under] N.D.R.Civ.P. 52(a).”
Fox v. Fox
, 1999 ND 68, ¶ 22, 592 N.W.2d 541. A district court’s “division of marital property is . . . reversible on appeal only if clearly erroneous.”
Brandner v. Brandner
, 2005 ND 111, ¶ 8, 698 N.W.2d 259. “A finding of fact is clearly erroneous if it is induced by an erroneous view of the law, if there is no evidence to support it, or if, although there is some evidence to support it, on the entire evidence we are left with a definite and firm conviction a mistake has been made.”
Id.
III
[¶5] Mervyn Mertz argues Darlene Mertz failed to request spousal support in her initial complaint; instead, the complaint stated, “[N]either party shall make alimony or spousal support payments.” In Darlene Mertz’s application for interim order, she requested spousal support. Mervyn Mertz argues he objected to the district court’s consideration of spousal support at the interim hearing and reminded the court Darlene Mertz failed to amend her pleading. Mervyn Mertz argues the district court erred in awarding Darlene Mertz spousal support because Darlene Mertz failed to properly plead or amend her complaint.
[¶6] “An issue which is not properly raised in the pleadings but is tried by the express or implied consent of the parties will be treated in all respects as having been raised in the pleadings.”
Schumacher v. Schumacher
, 1999 ND 149, ¶ 25, 598 N.W.2d 131. “Under Rule 15(b), N.D.R.Civ.P., a pleading may be amended impliedly, by the introduction of evidence which varies the theory of the case and which is not objected to by the opposing party.”
Schumacher
, at ¶ 25. “Implied consent is established where the parties recognized that the issue entered the case at trial and acquiesced in the introduction of evidence on that issue.”
Napoleon Livestock Auction, Inc. v. Rohrich
, 406 N.W.2d 346, 357 (N.D. 1987). “[W]hether the issue was tried by express or implied consent is a matter within the sound discretion of the trial court and will not be reversed on appeal unless an abuse of discretion is shown.”
Id.
Rule 15 “does not permit amendment to include collateral issues which may find only incidental support in the record.”
Rohrich
, at 357.
[¶7] Spousal support was requested and granted in proceedings on the interim order. Mervyn Mertz had notice of it. At trial he cross-examined Darlene Mertz regarding her need for spousal support and did not object to questions on direct examination regarding the issue. Therefore, spousal support was tried by the implied consent of the parties.
IV
[¶8] Mervyn Mertz argues the district court’s award of spousal support is clearly erroneous. He argues the district court erroneously found Darlene Mertz to be economically disadvantaged, and nothing more. Mervyn Mertz argues he is unable to pay the debts awarded to him, his living expenses, the $75,000 cash payment, spousal support arrears and his $900 monthly spousal support obligation. The district court must consider the “supporting spouse’s needs and ability to pay as well as the receiving spouse’s income and needs.”
Gustafson v. Gustafson
, 2008 ND 233, ¶ 6, 758 N.W.2d 895.
[¶9] The district court “may require one party to pay spousal support to the other party for any period of time.” N.D.C.C. § 14-05-24.1. “[O]ur Court has recognized permanent spousal support as an appropriate remedy to ensure the parties equitably share the overall reduction in their separate standards of living.”
Sommer v. Sommer
, 2001 ND 191, ¶ 14, 636 N.W.2d 423. “A district court may award permanent spousal support ‘when the economically disadvantaged spouse cannot be equitably rehabilitated to make up for the opportunities and development she lost during the course of the marriage.’”
Gustafson
, 2008 ND 233, ¶ 6, 758 N.W.2d 895 (quoting
Wagner v. Wagner
, 2007 ND 33, ¶ 8, 728 N.W.2d 318). “A disadvantaged spouse is one who has foregone opportunities or lost advantages as a consequence of the marriage and who has contributed during the marriage to the supporting spouse’s increased earning capacity.”
Sommer
, at ¶ 10 (citations and quotation marks omitted). This Court has “dispose[d] of the ‘disadvantaged spouse’ doctrine and reemphasize[d] the importance of a comprehensive analysis under the
Ruff-Fischer
guidelines.”
Sack v. Sack
, 2006 ND 57, ¶ 12, 711 N.W.2d 157;
Ruff v. Ruff
, 78 N.D. 775, 52 N.W.2d 107 (1952);
Fischer v. Fischer
, 139 N.W.2d 845 (N.D. 1966).
[¶10] “The district court must consider all the relevant factors under the
Ruff-Fischer
guidelines in determining spousal support.”
Gustafson
, 2008 ND 233, ¶ 6, 758 N.W.2d 895. Under the
Ruff-Fischer
guidelines, the court considers:
“[T]he respective ages of the parties, their earning ability, the duration of the marriage and conduct of the parties during the marriage, their station in life, the circumstances and necessities of each, their health and physical condition, their financial circumstances as shown by the property owned at the time, its value at the time, its income-producing capacity, if any, whether accumulated before or after the marriage, and such other matters as may be material.”
Weigel v. Weigel
, 2000 ND 16, ¶ 6, 604 N.W.2d 462. “The court is not required to make a finding on each factor, but it must explain its rationale for its determination.”
Becker v. Becker
, 2011 ND 107, ¶ 28, 799 N.W.2d 53 (citation and quotation marks omitted). The district court must consider the “supporting spouse’s needs and ability to pay as well as the receiving spouse’s income and needs.”
Gustafson
, at ¶ 6. “The district court must adequately explain the basis for its decision, but we will not reverse a district court’s decision when valid reasons are fairly discernable, either by deduction or by inference.”
Lorenz v. Lorenz
, 2007 ND 49, ¶ 9, 729 N.W.2d 692 (citations and quotations marks omitted).
[¶11] At trial, Darlene Mertz requested $500 spousal support per month. The district court found Darlene Mertz is a disadvantaged spouse, explaining, “Throughout the marriage, she has earned a fraction of what Mervyn earned. Mervyn contributed to the household expenses, but he spent his money as he wanted to spend it. The assets held in his name are significantly more valuable than the assets that Darlene has had.” The district court awarded Darlene Mertz $900 per month in permanent spousal support, which is outside the range of evidence presented and the needs of Darlene Mertz.
See
Lynnes v. Lynnes
, 2008 ND 71, ¶ 16, 747 N.W.2d 93 (“When the district court’s valuation is within the range of evidence provided by the parties, the district court’s valuation will not be set aside, unless this Court has a definite and firm conviction a mistake has been made.”);
Gustafson
, 2008 ND 233, ¶ 6, 758 N.W.2d 895 (explaining the district court must consider the “supporting spouse’s needs and ability to pay as well as the receiving spouse’s income and needs”).
[¶12] We “dispose[d] of the ‘disadvantaged spouse’ doctrine and reemphasize[d] the importance of a comprehensive analysis under the
Ruff-Fischer
guidelines.”
Sack
, 2006 ND 57, ¶ 12, 711 N.W.2d 157. The district court only found that Darlene Mertz is a disadvantaged spouse, without analysis under the
Ruff-Fischer
guidelines. The court also awarded spousal support in excess of the amount requested. The district court’s findings are inadequate and it misapplied the law.
[¶13] Moreover, a basis for the district court’s findings cannot fairly be discerned. The district court found Mervyn Mertz’s income is $3,849 per month and his monthly expenses, including paying the marital obligations, are $3,391. The district court found Darlene Mertz’s monthly income is $1,400 and her monthly expenses are $1,000. The district court also ordered Mervyn Mertz to make a $75,000 cash payment to Darlene Mertz, payable within sixty days of the judgment. Mervyn Mertz argues he does not have the ability to pay spousal support in the amount of $900 per month. The district court must consider the “supporting spouse’s needs and ability to pay as well as the receiving spouse’s income and needs.”
Gustafson
, 2008 ND 233, ¶ 6, 758 N.W.2d 895. Based upon the district court’s findings, Mervyn Mertz does not have the ability to pay $900 spousal support per month. The district court’s award of spousal support must be reversed and remanded for further proceedings.
V
[¶14] Mervyn Mertz argues the district court’s division of marital property and debts is clearly erroneous. He argues the district court failed to assign reasonable values to the property and debts of the parties, resulting in a grossly inequitable distribution in Darlene Mertz’s favor. Darlene Mertz argues the distribution was equitable. Section 14-05-24(1), N.D.C.C., requires the court to make “an equitable distribution of the property and debts of the parties.” “The ultimate objective is to make an equitable division of the property. There are no set rules for the distribution of the martial estate and what is equitable depends upon the circumstances of the particular case.”
Blowers v. Blowers
, 377 N.W.2d 127, 129 (N.D. 1985) (citations omitted). “It is well-settled in our case law a property division does not need to be equal to be equitable, but a substantial disparity must be explained.”
Young v. Young
, 1998 ND 83, ¶ 11, 578 N.W.2d 111.
[¶15] “All of the marital assets and debts must be included for the court to distribute the marital assets under the
Ruff-Fischer
guidelines.”
Brandner
, 2005 ND 111, ¶ 6, 698 N.W.2d 259. “We have never said that the trial court must make an express finding as to each of the factors enumerated by the guidelines. Instead, we have said that the guidelines are solely an aid to the equitable division of marital property.”
Fraase v. Fraase
, 315 N.W.2d 271, 274 (N.D. 1982). “The district court must adequately explain the basis for its decision, but we will not reverse a district court’s decision when valid reasons are fairly discernable, either by deduction or by inference.”
Lorenz
, 2007 ND 49, ¶ 9, 729 N.W.2d 692 (citations and quotations marks omitted).
A
[¶16] Mervyn Mertz argues he should have been awarded a greater distribution of the marital estate based on the property he brought into the marriage. He argues the district court erroneously awarded Darlene Mertz the increase in value of his home from the date of purchase through the date of trial instead of from the date of marriage, nearly ten years later, to the date of trial.
[¶17] “The fact that property subject to distribution was acquired by one of the parties prior to the marriage is a consideration weighing in favor of that party.”
Fraase
, 315 N.W.2d at 274. “Although we have recognized that the time of the acquisition of property and its source is significant, we have nevertheless held that property acquired prior to the marriage by one spouse should be considered as part of the marital estate in determining what an equitable division would be.”
Id.
“We have stated that all property, regardless of source, is to be considered marital property.”
Ulsaker v. White
, 2006 ND 133, ¶ 12, 717 N.W.2d 567. “We have consistently held that property acquired before marriage must be included in the marital estate.”
Neidviecky v. Neidviecky
, 2003 ND 29, ¶ 10, 657 N.W.2d 255. The district court’s distribution of the marital property was not clearly erroneous by not awarding Mervyn Mertz a greater distribution of the marital estate based on the property he brought into the marriage.
[¶18] Mervyn Mertz also argues the district court erred in determining the value of the home. The district court found:
“[T]he original loan of $46,900 was paid off during the marriage, on July 1, 2002.
“[A] copy of a 2009 appraisal valu[ed] the home at $150,000. The value of homes in Bismarck has increased since 2009. The Court finds the home has a present market value of $165,000.
“The value of the home has increased during the course of the marriage. The amount of increase becomes marital property to be divided. The home has increased in value since the date of the marriage by $117,000.”
“The district court’s valuation of property is a finding of fact, which is presumptively correct and will not be reversed on appeal unless it is clearly erroneous.”
Gustafson
, 2008 ND 233, ¶ 11, 758 N.W.2d 895.
[¶19] “Rule 8.3(a) of the North Dakota Rules of Court requires the parties to prepare a ‘preliminary property and debt listing,’ without indicating such listing would be binding, thus allowing the court to make its own findings of fact.”
Gustafson
, 2008 ND 233, ¶ 11, 758 N.W.2d 895. On the 8.3 Property and Debt Listing, Mervyn Mertz valued the home at $150,000 and Darlene Mertz valued the home at $300,000. At trial, Mervyn Mertz testified the home needed substantial repairs. “An owner of real property may testify as to the value of the land without any further qualification or special knowledge.”
Eberle v. Eberle
, 2010 ND 107, ¶ 17, 783 N.W.2d 254.
[¶20] The district court is in a superior position than this Court to determine property values because the district court can assess the credibility of the witnesses and evidence available.
Eberle
, 2010 ND 107, ¶ 17, 783 N.W.2d 254. “If the district court’s valuation is within the range of the evidence presented, its valuation of marital property is not clearly erroneous.”
Gustafson
, 2008 ND 233, ¶ 11, 758 N.W.2d 895;
see also
Datz v. Dosch
, 2013 ND 148, ¶ 22, 836 N.W.2d 598 (upholding the district court’s valuation of real estate property, which is within range of the evidence when the parties’ valuations of the property differ greatly). The district court’s valuation of $165,000 is within the range of the evidence presented. The district court’s valuation of the marital estate is not clearly erroneous.
[¶21] Mervyn Mertz argues the district court erred in its distribution of his Iron Worker’s Annuity. “Retirement benefits are marital property that must be included in the marital estate and are subject to equitable distribution.”
Lorenz
, 2007 ND 49, ¶ 19, 729 N.W.2d 692. During closing arguments, the district court specifically asked Mervyn Mertz’s attorney how to distribute the annuity. Mervyn Mertz’s counsel responded: “The date of the marriage, Your Honor, versus the years of employment. He testified he had been an iron worker for 30-some years. So it would be about 25 percent.” The district court awarded Darlene Mertz her retirement accounts “plus a share of Mervyn’s Farmer’s Financial Solutions/Ironworkers Annuity based upon the formula set forth in
Bullock v. Bullock
, 354 N.W.2d 904 (N.D. 1984). The Court finds that he paid into the Retirement fund for 34 years and the parties were married for 17 years, (34/17 x .50=25%).”
[¶22] Mervyn Mertz does not argue the award to Darlene Mertz was improper. Rather, he contends the district court erroneously considered the other fifty percent, acquired prior to marriage, as a marital asset. He argues this “overstates” his awarded marital assets by $46,200. Again, while the source of the property is a factor weighing in favor of a party, the property is still considered part of the marital estate.
See
Fraase
, 315 N.W.2d at 274 (“Although we have recognized that the time of the acquisition of property and its source is significant, we have nevertheless held that property acquired prior to the marriage by one spouse should be considered as part of the marital estate in determining what an equitable division would be.”). “We have consistently held that property acquired before marriage must be included in the marital estate.”
Neidviecky
, 2003 ND 29, ¶ 10, 657 N.W.2d 255. The district court did not err in its distribution of Mervyn Mertz’s Iron Worker’s Annuity or its classification of his pre-marriage Iron Worker’s Annuity as a marital asset.
[¶23] Mervyn Mertz argues the district court erred in its valuation of other property such as the camper and the John Deere tractor. He also argues the district court overvalued his coin collection. Mervyn Mertz, noting the disparity between his and Darlene Mertz’s evaluations, argues the district court assigned value without giving an explanation. However, this Court defers to the district court’s valuation of property if it is not clearly erroneous and is within the range of evidence presented.
Gustafson
, 2008 ND 233, ¶ 11, 758 N.W.2d 895. The district court valued the property at a price in the middle of Darlene Mertz’s and Mervyn Mertz’s estimates. “[W]e do not reweigh conflicts in the evidence, and we give due regard to the trial court’s opportunity to judge the credibility of the witnesses.”
Crandall v. Crandall
, 2011 ND 136, ¶ 19, 799 N.W.2d 388 (citations and quotation marks omitted). The district court’s valuation of other property is not clearly erroneous.
B
[¶24] Mervyn Mertz argues the district court failed to include all debts as of the date of trial. “Once all property and debts of the parties are included, a trial court may consider which of the parties has incurred particular debts, and the purposes for which those debts were incurred, in determining an equitable allocation of the responsibility for repayment.”
Neidviecky
, 2003 ND 29, ¶ 11, 657 N.W.2d 255.
[¶25] The district court found: “Darlene shall assume and pay her own medical bills. Mervyn shall assume and pay the loan on the camper, his truck, Darlene’s vehicle,·and any other debts listed.” The district court also found that Mervyn Mertz’s brother’s student loans are a personal obligation, not marital debt, that Mervyn Mertz no longer has an obligation on Darlene Mertz’s son’s business loan and that the money Mervyn Mertz borrowed from his various family members after the separation is not marital debt. Mervyn Mertz was awarded the camper and his truck. The district court considered which of the parties incurred the debt, the purposes for which the debt was incurred and allocated responsibility for the debt accordingly.
See
Neidviecky
, 2003 ND 29, ¶ 11, 657 N.W.2d 255. The district court’s distribution of debts is not clearly erroneous.
[¶26] However, Mervyn Mertz correctly explains:
“The trial court[] reduced the marital debts to $49,165.00 and marital assets to $348,745.00. Mervyn was awarded $47,465.00 of the debt, which according to the trial court’s Findings of Fact, Conclusions of Law, and Order for Judgment includes the 2012 Ford Pickup debt of $29,600; the 2008 Mercury Milan debt of $5,642; the 5th Wheel camper debt of $12,229; and the credit card debt of $1,300. The trial court’s numbers do not compute. Mervyn’s actual assigned debts equal $48,771, and based upon the values assigned on the 8.3 listing, $48,766.46.”
A $1,306 discrepancy exists. Standing alone, this is de minimis error.
Halvorson v. Halvorson
, 482 N.W.2d 869, 872 (N.D. 1992) (explaining a relatively insignificant error, standing alone, does not constitute sufficient grounds for reversal of a judgment). However, this case is being remanded on other grounds and the district court must fix this discrepancy upon remand.
VI
[¶27] “Property division and spousal support are interrelated and intertwined and often must be considered together.”
Kostelecky v. Kostelecky
, 2006 ND 120, ¶ 14, 714 N.W.2d 845 “Because of the interrelation of property division and spousal support, to the extent the district court’s award of spousal support is intertwined with its property division, the district court may reconsider the issue of spousal support after it has properly calculated the total marital estate and redetermined the property distribution.”
Lynnes
, 2008 ND 71, ¶ 27, 747 N.W.2d 93. We are reversing and remanding the spousal support award for further proceedings, and because spousal support is intertwined with the property distribution, the district court may reconsider its distribution of marital property and debt on remand.
[¶28] We reverse and remand the district court’s divorce judgment for reconsideration of the issues of spousal support and property distribution.
[¶29] Daniel J. Crothers
Lisa Fair McEvers
Carol Ronning Kapsner
Gerald W. VandeWalle, C.J.
I concur in the result.
Dale V. Sandstrom
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F I L E D
United States Court of Appeals
Tenth Circuit
UNITED STATES COURT OF APPEALS
December 6, 2006
TENTH CIRCUIT Elisabeth A. Shumaker
Clerk of Court
ATHELIA P. SMITH-JOHNSON,
Plaintiff - Appellant, No. 06-3278
(D. Kansas)
v. (D.C. No. 06-CV-4019-JAR)
MARY ANN FLUNDER, Chairman,
Wyandotte/Leavenworth Area Agency on
Aging,
Defendant - Appellee.
ORDER AND JUDGMENT *
Before HENRY, BRISCOE, and O’BRIEN, Circuit Judges.**
Plaintiff-Appellant Athelia P. Smith-Johnson, proceeding pro se, appeals the
district court’s dismissal of her civil rights and discrimination claims. We affirm.
On February 2, 2006, Ms. Smith-Johnson filed suit in the United States District
Court for the District of Kansas. On March 31, 2006, the district court entered a
*
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 (eff. Dec.
1, 2006) and 10th Cir. R. 32.1 (eff. Jan. 1, 2007).
**
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)(2); 10th Cir. R. 34.1(G). The case is
therefore ordered submitted without oral argument.
conditional order of dismissal. In a thorough five-page order, the district court explained
that Ms. Smith-Johnson’s process and service of process were insufficient under Federal
Rules of Civil Procedure 12(b)(4) and (5). Additionally, the district court noted that, even
though it was construing her complaint liberally to state civil rights and discrimination
claims, Ms. Smith-Johnson failed to sufficiently invoke federal jurisdiction under Federal
Rule of Civil Procedure 12(b)(1) because she did not make any factual allegations.
Accordingly, the district court gave Ms. Smith-Johnson until June 20, 2006 to correct
these deficiencies and amend her complaint. Because she did not comply with the order,
the district court dismissed the action on July 7, 2006.
Ms. Smith-Johnson has forfeited appellate review of the district court’s decision.
Although we construe pro se filings liberally, “[t]his court has repeatedly insisted that pro
se parties follow the same rules of procedure that govern other litigants.” Nielsen v.
Price, 17 F.3d 1276, 1277 (10th Cir. 1994) (internal quotation marks omitted). Federal
Rule of Appellate Procedure 28(a) requires an appellant’s brief to contain “a statement of
the issues presented for review,” “a statement of the case briefly indicating the nature of
the case, the course of proceedings, and the disposition below,” “a statement of facts
relevant to the issues submitted for review with appropriate references to the record,” “a
summary of the argument, which must contain a succinct, clear and accurate statement of
the arguments made in the body of the brief,” and “the argument, which must contain:
appellant’s contentions and the reasons for them, with citations to the authorities and parts
of the record on which appellant relies; and for each issue, a concise statement of the
-2-
applicable standard of review.” F ED. R. A PP. P. 28(a)(5)-(9). Thus, “[u]nder Rule 28,
which applies equally to pro se litigants, a brief must contain more than a generalized
assertion of error, with citations to supporting authority. [W]hen a pro se litigant fails to
comply with that rule, we cannot fill the void by crafting arguments and performing the
necessary legal research.” Garrett v. Selby Connor Maddux & Janer, 425 F.3d 836, 841
(10th Cir. 2005) (second alteration in original; internal quotation marks and citation
omitted).
Here, Ms. Smith Johnson’s entire brief is composed of the issues presented for
review (“civil rights” and “discrimination”) and one potential complete sentence (“proof
of statements have been sent in previous records in your possession”). Aplt’s Br. at 2-3.
Her brief does not contain a statement of facts, citations to the record, or a statement of
the applicable standard of review with respect to the issues presented. Furthermore, she
does not contest the district court’s analysis in its conditional order of dismissal, nor does
she present any reason for failing to amend her complaint. At best, then, Ms. Smith-
Johnson makes “generalized assertion[s] of error” that her civil rights were violated and
that she was the victim of discrimination. Garrett, 425 F.3d at 841. While we construe
pro se pleadings liberally, this sparse submission is so deficient that we decline to
exercise “any discretion we may have to delve for substance.” Id. at 840.
-3-
Accordingly, we AFFIRM the district court’s dismissal of Ms. Smith-Johnson’s
complaint.
Entered for the Court,
Robert H. Henry
Circuit Judge
-4-
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TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN
NO. 03-07-00005-CV
Philip Robert Terranella, Appellant
v.
Chaoyueh Kent, Appellee
FROM THE DISTRICT COURT OF TRAVIS COUNTY, 98TH JUDICIAL DISTRICT
NO. D-1-FM-06-002760, HONORABLE SUZANNE COVINGTON, JUDGE PRESIDING
M E M O R A N D U M O P I N I O N
Appellant Philip Robert Terranella and appellee Chaoyueh Kent have filed an agreed
motion to dismiss the appeal. The parties have agreed that costs are to be paid by the party incurring
same. We grant the motion and dismiss the appeal. Tex. R. App. P. 42.1.
W. Kenneth Law, Chief Justice
Before Chief Justice Law, Justices Puryear and Henson
Dismissed on Agreed Motion
Filed: May 3, 2007
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880 F.2d 419
Fruit Growers Express Co.v.Kulmer
NO. 88-7393
United States Court of Appeals,Eleventh Circuit.
JUN 21, 1989
1
Appeal From: N.D.Ala.
2
AFFIRMED.
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176 N.W.2d 279 (1970)
STATE of Minnesota, Respondent,
v.
Robert Francis KING, Appellant.
No. 41627.
Supreme Court of Minnesota.
March 26, 1970.
*280 C. Paul Jones, Public Defender, Minneapolis, John S. Gowan, Rochester, for appellant.
Douglas Head, Atty. Gen., St. Paul, D. P. Mattson, County Atty., Rochester, for respondent.
OPINION
KNUTSON, Chief Justice.
This is an appeal from a judgment entered pursuant to a finding of a jury that *281 defendant was guilty of murder in the first degree and from the order of the trial court denying his motion for judgment notwithstanding the verdict, or a new trial.
Essentially the questions presented for review are: (1) Whether defendant was suffering from such a mental disorder as to be incapable of premeditation, which is one of the essentials required for a finding of guilty of murder in the first degree; (2) whether the testimony of two accomplices whose identity was discovered by an interrogation ruled inadmissible by the trial court was admissible; (3) whether testimony of two individuals who were inmates in the county jail at the time defendant was incarcerated there as to admissions made to them by defendant was admissible; and (4) whether instructions given to the jury properly defined premeditation.
Assuming that the trial court properly admitted testimony of witnesses whose testimony defendant sought to exclude, which will be discussed later, the evidence is virtually conclusive that defendant shot and killed one Floyd Joseph Haley, a Rochester, Minnesota, policeman, under the folowing circumstances: During the early morning of August 6, 1967, defendant and two companions, Larry Koontz and Steven Britt, were attempting to break into a bowling alley in Rochester. Defendant acted as lookout. While Koontz was trying to force open a door in the bowling alley, defendant noticed a patrol car coming into the bowling alley parking lot. Koontz was armed with a .25-caliber pistol. Defendant told Koontz and Britt to run toward defendant's car, which was parked alongside the road. Koontz testified that defendant said to him that if the cop came over there defendant would kill him. Koontz and Britt ran to the car and hid in thick weeds 20 to 25 feet back from the road. Defendant hid in weeds close to his car. Officer Haley stopped his car some 8 to 10 feet from defendant's car, got out, and walked to the car with a flashlight in his hand. As Haley was returning to his car, defendant jumped up and said, "Reach." Defendant then yelled for Koontz and Britt to help him get the officer's gun. They removed Haley's gun from its holster. As Koontz and Britt were walking away, they heard three shots. Defendant had discharged the police revolver three times; two of the shots struck the body of Haley, killing him instantly. Koontz testified that before shooting Officer Haley defendant had said, "You know, you shouldn't have walked down there," and the officer had replied that he knew that now.
Defendant then moved the patrol car and Officer Haley's body off the road. The three boys drove to Silver Lake in Rochester, where Britt threw Haley's gun into the water and Koontz threw the officer's flashlight in.
On August 21 defendant was arrested for a burglary not connected with this offense. He was interrogated by police regarding this and other burglaries the greater part of a day and a half and at the end of this interrogation he confessed to killing Haley. He led the officers to the place where the boys had thrown the revolver into the lake and it was recovered. It was during this interrogation that the identities of Koontz and Britt were discovered by the officers. After a lengthy pretrial hearing the court suppressed defendant's confession and the tangible evidence discovered as a result of such interrogation. On appeal by the state we affirmed the trial court's suppression of this evidence. State v. King, 279 Minn. 225, 156 N.W.2d 742.
1. From the record of the pretrial hearing held pursuant to State ex rel. Rasmussen v. Tahash, 272 Minn. 539, 141 N.W.2d 3, it seems quite clear that defendant is suffering from a serious mental disorder. He was examined by Dr. Edward Litin, a psychiatrist from the Mayo Clinic at Rochester, Minnesota, and by other psychiatrists. Dr. Litin testified that defendant was suffering from schizophrenia. He explained *282 schizophrenia as follows: Schizophrenics' interpretation of reality is impaired and they have difficulty relating to other people. They are cold and aloof and when talking to a schizophrenic a person senses a lack of communication. Dr. Litin said schizophrenia is what is commonly known as split personality. One observes emotions in schizophrenics that one would not expect. He also diagnosed defendant as suffering from paranoia, which means that one is suspicious of his environment and fears others are against him. Other psychiatrists and psychologists testified as to defendant's mental condition. They said he had great anxiety and tended to act impulsively under stress. Defendant has had a troubled life from an early age, and his mental illness appears to be the result of his relationship with an extremely cruel father whom defendant apparently justifiably hates. Dr. Litin was of the opinion that defendant, even though mentally disturbed, could distinguish between right and wrong and knew what he was doing. The court submitted this issue to the jury under the following instruction:
"The law states that no person shall be tried, sentenced, or punished for any crime while in a state of idiocy, imbecility, lunacy, or insanity so as to be incapable of understanding the proceedings or making a defense.
"Now with respect to insanity, I instruct you as follows, that the statute further reads: `But the person shall not be excused from criminal liability except upon proof that at the time of committing the alleged criminal act he was laboring under such a defect of reason from one of these causes as not to know the nature of his act or that it was wrong.'
"Now, jurors, I instruct you to consider this issue of insanity under this definition in deciding whether or not the defendant Robert Francis King should be excused upon grounds of insanity for conduct which you otherwise would find to constitute a crime. You must not find him not guilty upon the grounds of insanity unless his insanity qualifies as insanity under that definition."
In addition, the court gave a lengthy instruction on the necessity of proving premeditation in order to find defendant guilty of murder in the first degree.
In addition to Dr. Litin's testimony that in spite of his mental condition defendant knew what he was doing, there is other evidence which sustains the jury's verdict. Defendant admitted to two witnesses, Robert Hennum and Marvin B. Herring, who were inmates in the county jail when defendant was incarcerated there, and to his brother, Ronald King, that he had killed a policeman. The evidence also discloses that defendant had committed a number of burglaries and that he and his accomplices were in the process of committing a burglary at the time Officer Haley discovered them. The evidence further establishes that defendant asked for and received a.25-caliber pistol from Koontz and stated that if Haley came over to his parked car defendant was going to shoot him, and that he did exactly that after asking Koontz and Britt to join him in removing Haley's.38-caliber revolver. There is no reasonable doubt that defendant shot three times, and that two of the shots hit Haley.
In the light of this evidence we are convinced that, while the jury could conceivably have found that defendant was suffering under such a mental disorder that he could not have formed a premeditated design to effect death, they could also find that the evidence did establish premeditation. We have held in a number of cases that premeditation need not exist for any specific period of time. State v. Gowdy, 262 Minn. 70, 113 N.W.2d 578; State ex rel. Fruhrman v. Tahash, 275 Minn. 242, 146 N.W.2d 174; State v. Ware, 267 Minn. 191, 126 N.W.2d 429; State v. Hare, 278 *283 Minn. 405, 154 N.W.2d 820, certiorari denied, 391 U.S. 925, 88 S.Ct. 1823, 20 L.Ed. 2d 663.
2. We come then to the question of whether the testimony of Koontz and Britt, as well as that of defendant's brother, was admissible. We hold that it was. Defendant relies on Wong Sun v. United States, 371 U.S. 471, 83 S.Ct. 407, 9 L.Ed. 2d 441, where it was held that the physical and verbal evidence which police obtained as a result of an illegal arrest must be excluded. However, cases such as Wong Sun do not control in a situation such as we have here where no evidence was elicited or introduced as the result of illegal interrogation. The only thing that was discovered was the identity of Koontz and Britt and defendant's brother.
The precise question before us has been dealt with at considerable length by the Court of Appeals for the District of Columbia. In Smith v. United States and Bowden v. United States, 117 U.S.App.D. C. 1, 324 F.2d 879, the facts are practically identical to those now before us. Judge Warren Burger (now Chief Justice of the United States Supreme Court), writing for a majority of the court, said:
"These are appeals from murder and robbery convictions in which there is urged upon us the novel point that the testimony of an eyewitness to the crime must be suppressed because the police learned from appellants, during a period of illegal detention, of the existence and identity of such an eyewitness. In short it is argued that because the confessions made during the `unnecessary delay' are inadmissible, the testimony of an eyewitness to the crime must also be suppressed because the existence of the eyewitness was revealed to police by appellants during the same period of time.
* * * * * *
"Courts have gone a long way in suppressing evidence but no case as yet has held that a jury should be denied the testimony of an eyewitness to a crime because of the circumstances in which his existence and identity was learned. * * *
* * * * * *
"Here no confessions or utterances of the appellants were used against them; tangible evidence obtained from appellants, such as the victim's watch, was suppressed along with the confessions. But a witness is not an inanimate object which like contraband narcotics, a pistol or stolen goods, `speak for themselves.' The proffer of a living witness is not to be mechanically equated with the proffer of inanimate evidentiary objects illegally seized. The fact that the name of a potential witness is disclosed to police is of no evidentiary significance, per se, since the living witness is an individual human personality whose attributes of will, perception, memory and volition interact to determine what testimony he will give. The uniqueness of this human process distinguishes the evidentiary character of a witness from the relative immutability of inanimate evidence."
In support of its decision the court discussed at length Payne v. United States, 111 U.S.App.D.C. 94, 294 F.2d 723, certiorari denied, 368 U.S. 883, 82 S.Ct. 131, 7 L.Ed.2d 83.
Although the facts are somewhat distinguishable in McLindon v. United States, 117 U.S.App.D.C. 283, 329 F.2d 238, and Smith v. United States, 120 U.S.App.D.C. 160, 344 F.2d 545, they might be construed to hold contrary to the Smith-Bowden opinion. But Brown v. United States, 126 U.S.App.D.C. 134, 375 F.2d 310, certiorari denied, 388 U.S. 915, 87 S.Ct. 2133, 18 L. Ed.2d 1359, clearly reaffirmed the Smith-Bowden decision, assuming an opposite holding had been adopted in the two prior *284 cases. In a special concurring opinion, Judge Burger said (126 U.S.App.D.C. 142, 375 F.2d 318):
"I concur fully in Judge Fahy's opinion, but it seems to me note should be taken of what I consider a misreading of my opinion in Smith and Bowden v. United States, 117 U.S.App.D.C. 1, 324 F.2d 879 (1963). The dissent seems to view each fact and factor recited in that opinion as critical and decisive to the holding.
"Of course, that is not so. For example, it was never intended in Smith-Bowden to suggest that the time factor for the interaction of `will, perception, memory and volition' was significant. This interaction in one case may occur in 10 seconds or 10 minutes; in another it may be 10 months, depending on myriad factors not relevant to the decision to testify. The critical aspect of Smith-Bowden is that live witnesses are not `suppressed', as inanimate objects may be. When an eyewitness is willing to give testimony, under oath and subject to all the rigors of cross-examination and penalties of perjury, he must be heard. How he came to be in court is a matter which goes only to the weight, not the admissibility, of his testimony."
We are persuaded that the holdings of Smith-Bowden and Brown state the most sensible rule. Here no evidentiary matter was used that came to light as the result of illegal interrogation. The only thing that was of any help was the discovery of the identity of Koontz and Britt and the fact that defendant's brother had information regarding the commission of the offense. We think the evidence of these witnesses was properly admitted.
3. Defendant further contends that the court erred in refusing to suppress statements given by him to Herring and Hennum when they were in the county jail together. Here defendant relies on Massiah v. United States, 377 U.S. 201, 84 S. Ct. 1199, 12 L.Ed.2d 246. The facts in Massiah and those now before us are not at all similar. In Massiah, admissions made by defendant in the absence of counsel were heard by a government agent through use of a transmitter he had hidden in an accomplice's automobile without defendant's knowledge. In the case now before us the statements made by defendant to the fellow-inmates of the county jail were voluntarily given. We know of no rule that would exclude such evidence. The same is true of admissions voluntarily made by defendant to his brother.
4. After the jury had retired to deliberate, they returned for further instructions as to the definition of premeditation. The court then instructed the jury as follows:
"Now the premeditation is an essential element of the one crime, first-degree murder, and it must be proved in order to find a person guilty of first-degree murderit is one of the elements that must be provedand that premeditation is as follows: `Premeditation means to consider, plan, or prepare for, or determine to commit the act referred to prior to its commission.' I will reread that. `Premeditation means to consider, plan, or prepare for, or determine to commit the act referred to prior to its commission.'"
Defendant claims this charge was more limited than the instruction first given. It is true that the definition given by the court during the jury's deliberations is not identical to the instruction given prior to the submission of the case to the jury. However, it did encompass a proper definition of premeditation and we can see no merit to this argument.
Under all the circumstances we are convinced that the decision must stand.
Affirmed.
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254 F.3d 130 (D.C. Cir. 2001)
NextWave Personal Communications Inc. and NextWave Power Partners Inc., Petitionersv.Federal Communications Commission and United States of America, RespondentsBellSouth Corporation, et al., Intervenors
No. 00-1402 and with 00-1403
United States Court of Appeals FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued March 15, 2001Decided June 22, 2001
On Petition for Review and Notice of Appeal of Orders of the Federal Communications Commission
Theodore B. Olson argued the cause for petitioners/appellants. With him on the briefs were Thomas G. Hungar, Donald B. Verrilli, Jr., Ian Heath Gershengorn and Lara M. Flint. Miguel A. Estrada entered an appearance.
William H. Crispin, Emanuel Grillo, David Friedman and Kenneth N. Klee were on the brief for amici curiae Senator Robert G. Torricelli, et al. in support of petitioners/appellants.
Daniel M. Armstrong, Associate General Counsel, Federal Communications Commission, argued the cause for respondents/appellee. With him on the brief were Christopher J. Wright, General Counsel, Joel Marcus and Stanley R. Scheiner, Counsel, Jacob M. Lewis and H. Thomas Byron III, Attorneys, U.S. Department of Justice. Stewart A. Block, Counsel, Federal Communications Commission, entered an appearance.
Richard G. Taranto argued the cause for intervenors Cellular Telecommunications Industry Association, et al. With him on the brief were Michael F. Altschul, L. Andrew Tollin, Robert G. Kirk, Craig E. Gilmore, Douglas I. Brandon, Howard J. Symons, Sara F. Leibman, Louis Gurman, Christa M. Parker, John T. Scott III, Mark L. Evans, Lawrence J. Movshin, Michael Deuel Sullivan and H. Richard Juhnke. Matthew R. Sutherland entered an appearance.
Before: Sentelle, Tatel and Garland, Circuit Judges.
Opinion for the Court filed by Circuit Judge Tatel.
Tatel, Circuit Judge:
1
This case concerns the extent to which the Bankruptcy Code limits a federal agency--here, the Federal Communications Commission--acting to implement the provisions of its own statute. Seeking to comply with its statutory duty to ensure small business participation in auctions of broadband PCS licenses, the Commission allowed winning bidders to pay for their licenses in installments. As part of this scheme, the Commission took and perfected security interests in the licenses, and provided for license cancellation should a bidder fail to make timely payments. When appellants, winning bidders on several licenses, declared bankruptcy and ceased making payments, the Commission canceled their licenses. Applying the fundamental principle that federal agencies must obey all federal laws, not just those they administer, we conclude that the Commission violated the provision of the Bankruptcy Code that prohibits governmental entities from revoking debtors' licenses solely for failure to pay debts dischargeable in bankruptcy. The Commission, having chosen to create standard debt obligations as part of its licensing scheme, is bound by the usual rules governing the treatment of such obligations in bankruptcy.
2
* In 1993, Congress amended the Communications Act of 1934 to authorize the Federal Communications Commission to award spectrum licenses "through a system of competitive bidding." 47 U.S.C. 309(j)(1). In "identifying classes of licenses and permits to be issued by competitive bidding," and in "designing the methodologies" for such bidding, Congress directed the Commission to promote several objectives, including "the development and rapid deployment of new technologies, products and services," the "recovery for the public of a portion of the value of the public spectrum resource made available for commercial use," and the "efficient and intensive use of the electromagnetic spectrum." Id. 309(j)(3). Congress also directed the Commission to "promot[e] economic opportunity and competition and ensur[e] that new and innovative technologies are readily accessible to the American people by ... disseminating licenses among a wide variety of applicants, including small businesses [and] rural telephone companies." Id. 309(j)(3)(B). To further this last goal, Congress directed the Commission to "consider alternative payment schedules and methods of calculation, including lump sums or guaranteed installment payments ... or other schedules or methods." Id. 309(j)(4)(A).
3
Acting pursuant to this statute, the Commission adopted rules to auction licenses for "broadband PCS"--"personal communications services in the 2 GHz band." In re Implementation of Section 309(j) of the Communications Act, 9 FCC Rcd 5532 p 1 (1994). The Commission expected broadband PCS to "provide new mobile communications capabilities" through "a new generation of communications devices" including "small, lightweight, multi-function portable phones, portable facsimile and other imaging devices, new types of multi-channel cordless phones, and advanced paging devices with two-way data capabilities." Id. p 3. The Commission "determined that the use of competitive bidding to award broadband PCS licenses, as compared with other licensing methods, would speed the development and deployment of new services to the public and would encourage efficient use of the spectrum," as required by statute, since "auctions would generally award licenses quickly to those parties who value them most highly and who are therefore most likely to introduce service rapidly to the public." Id. p 5. The Commission expected the PCS license auction to "constitute the largest auction of public assets in American history," recovering "billions of dollars for the United States Treasury," and thus fulfilling another statutory mandate. Id. p 1.
4
As directed by Congress, the Commission adopted a variety of measures to promote small business ownership of PCS licenses, including setting aside two blocks of licenses, the "C" and "F" Blocks, for bidding by entities with annual gross revenues and total assets below specified amounts. Id. p 12. Especially relevant to this case, the Commission allowed "most successful bidders within the [C and F Blocks] to pay for their licenses in installments." Id. p 16. Observing that "the primary impediment to participation [in license auctions] by designated [small business] entities is lack of access to capital," id. p 10, the Commission concluded that "installment payments are an effective means to address the inability of small businesses to obtain financing and will enable these entities to compete more effectively for the auctioned spectrum." Id. p 135. "By allowing payment in installments," the Commission stated, "the government is in effect extending credit to licensees, thus reducing the amount of private financing needed prior to and after the auction." Id. p 136. The Commission also announced that "[t]imely payment of all installments will be a condition of the license[ ] grant and failure to make such timely payment will be grounds for revocation of the license." Id. p 138.
5
In 1995, a group of former telecommunications executives founded NextWave Personal Communications Inc. and NextWave Power Partners Inc. (collectively "NextWave"), appellants in this case, for the purpose of bidding on PCS licenses and operating a personal communications service. NextWave's founders hoped the company would become a "carrier's carrier," selling wireless services and airtime wholesale. Appellants' Opening Br. at 5. At C Block auctions in May and July, 1996, NextWave bid $4.74 billion in total, winning sixty-three licenses. The company made a $474 million down payment. Several months later, the Commission granted NextWave its licenses, took a security interest in each, and filed UCC financing statements to perfect its claims. The security agreements gave the Commission "a first lien on and continuing security interest in all of the Debtor's rights and interest in [each] License." Security Agreement between NextWave and FCC p 1 (January 3, 1997). The licenses included the following language: "This authorization is conditioned upon the full and timely payment of all monies due pursuant to ... the terms of the Commission's installment plan as set forth in the Note and Security Agreement executed by the licensee. Failure to comply with this condition will result in the automatic cancellation of this authorization." FCC, Radio Station Authorization for Broadband PCS 2 (issued to NextWave January 3, 1997).
6
After the Commission awarded the C Block licenses, several successful bidders, including NextWave, experienced difficulty obtaining financing, having agreed to pay on average almost three times what winning bidders in the prior A and B Block auctions had paid, and several times what winning bidders in subsequent D, E, and F block auctions paid. In response, the Commission suspended installment payment obligations for C Block licensees, and then issued two Restructuring Orders, offering a variety of revised financing options that allowed C Block licensees to surrender some or all of their licenses for full or partial forgiveness of their outstanding debt. See In re Amendment of the Comm'n's Rules Regarding Installment Payment Fin. for Pers. Communications Servs. Licensees, Second Report and Order and Further Notice of Proposed Rule Making, 12 FCC Rcd 16436 p p 6, 32-69 (1997); In re Amendment of the Comm'n's Rules Regarding Installment Payment Fin. for Pers. Communications Servs. Licensees, Order on Recons. of the Second Report and Order, 13 FCC Rcd 8345 p p 11-15 (1998); see also In re Amendment of the Comm'n's Rules Regarding Installment Payment Fin. for Pers. Communications Servs. Licensees, Second Order on Recons. of the Second Report and Order, 14 FCC Rcd 6571 (1999). None of the restructuring options allowed licensees to keep any of their licenses for less than the full bid price. See In re Amendment of the Comm'n's Rules, Order on Recons., 13 FCC Rcd 8345 p 8. According to the Commission, these options balanced the goals of introducing new spectrum services rapidly and promoting small business participation in PCS auctions against the need to maintain auction integrity and treat unsuccessful bidders fairly. See In re Amendment of the Comm'n's Rules, 12 FCC Rcd 16436 p p 1-5; see also U.S. Airwaves, Inc. v. FCC, 232 F.3d 227 (D.C. Cir. 2000) (upholding restructuring scheme). The Commission gave licensees until June 8, 1998 to elect a restructuring option, and until July 31, 1998 to resume installment payments. Public Notice, Wireless Telecommunications Bureau Announces June 8, 1998 Election Date, 13 FCC Rcd 7413 (1998). It set October 29, 1998 as the last date it would accept late installment payments. Id.
7
On June 8, 1998, after failing to obtain stays of the election deadline from the Commission and this court, NextWave filed for Chapter 11 bankruptcy protection in New York. See NextWave Pers. Communications, Inc. v. FCC (In re NextWave Pers. Communications, Inc.), 235 B.R. 263, 267 (Bankr. S.D.N.Y. 1998) ("NextWave I"). Because the Bankruptcy Code is central to this case, we pause to summarize certain relevant provisions. Section 362, the "automatic stay" provision, provides that petitions filed under Chapter 11 "operate[ ] as a stay, applicable to all entities" of a variety of acts to collect on or enforce debts. 11 U.S.C. 362(a). Subsection 362(a)(3) stays "any act to obtain possession of property of [an] estate ... or to exercise control over property of the estate," id. 362(a)(3), but subsection 362(b)(4) provides an exception to 362(a)(3) for "governmental unit[s]" acting to "enforce" their "regulatory power." Id. 362(b)(4). Subsections 362(a)(4) and (5) stay "any act to create, perfect, or enforce any lien against property of the estate" or of the debtor. Id. 362(a)(4), (5). The regulatory power exception does not apply to these subsections. See id. 362(b)(4). In general, an automatic stay lasts only until a bankruptcy case is closed or dismissed, or until the bankruptcy court grants or denies a discharge. See id. 362(c)(2). Other provisions of the Code, however, offer more permanent relief. Section 525 prohibits "governmental unit[s]" from "revok[ing]" a bankrupt's or debtor's license "solely because such bankrupt or debtor ... has not paid a debt that is dischargeable ... under this title." Id. 525(a). Finally, under section 1123, 11 U.S.C. 1123, bankrupts (subject to court approval) have the power to "cure" their defaults--that is, to "tak[e] care of the triggering event and return[ ] to pre-default conditions." Di Pierro v. Taddeo (In re Taddeo), 685 F.2d 24, 26-27 (2d Cir. 1982).
8
After declaring bankruptcy, and in line with the "normal deferment of the payment of preorganization claims until their disposition can be made part of a plan of reorganization," In re Penn Cent. Transp. Co., 467 F.2d 100, 102 n.1 (3d Cir. 1972), NextWave made no further payments on its licenses. Nor did it seek permission to make installment payments under the "necessity of payment" doctrine, which some courts have invoked to authorize payment of prepetition claims "if such payment [is] essential to the continued operation of the debtor." In re Just For Feet, Inc., 242 B.R. 821, 825 (Bankr. D. Del. 1999). NextWave sought no such authorization, it explains, because "the Code's automatic stay provision generally prevents even government creditors from enforcing payment obligations or seizing assets of the estate," and thus it had "no reason to believe it would be required to make the October 1998 installment payment while in bankruptcy." Appellants' Opening Br. at 10 & n.8.
9
Instead, NextWave alleged in the bankruptcy court that its $4.74 billion license fee obligation was avoidable under section 544 of the Bankruptcy Code as a "fraudulent conveyance" since the company had not received reasonably equivalent value in exchange for incurring the obligation: by the time the Commission actually conveyed the licenses to NextWave, the company claimed, their value had declined to less than $1 billion. NextWave I, 235 B.R. at 269; see also NextWave Pers. Communications, Inc. v. FCC (In re NextWave Pers. Communications), 235 B.R. 277, 290 (Bankr. S.D.N.Y. 1999) ("NextWave III"). Ruling on this claim, the bankruptcy court began by addressing its jurisdiction. It acknowledged that under 47 U.S.C. 402, it lacked jurisdiction to "enjoin[ ], review[ ], assess[ ] damages for or otherwise adjudicat[e] the consequences of the conduct of [a] Federal agency acting within the scope of its Congressional mandate." NextWave I, 235 B.R. at 268. It nevertheless asserted jurisdiction over the case because, in its view, NextWave's claim against the Commission did not involve "any regulatory conduct on the part of the FCC," but rather concerned solely the debtorcreditor relationship between the FCC and NextWave. Id. at 269; see also NextWave Pers. Communications, Inc. v. FCC (In re NextWave Pers. Communications), 235 B.R. 305, 314 (Bankr. S.D.N.Y. 1999) ("NextWave IV"). Nothing in the Communications Act, the court said, suggests that a bankruptcy court lacks jurisdiction to implement the provisions of the Code "which affect [the Commission] as a creditor." NextWave I, 235 B.R. at 269-70. Turning to the merits, the court found that NextWave's winning bid exceeded the fair market value of its licenses at the time they were conveyed, NextWave III, 235 B.R. at 304, and avoided $3.72 billion of NextWave's $4.74 billion license fee obligation, ruling in effect that the company could keep its licenses for the reduced price of $1.02 billion. See NextWave IV, 235 B.R. 305, aff'd NextWave Pers. Communications, Inc. v. FCC (In re NextWave Pers. Communications, Inc.), 241 B.R. 311, 321 (S.D.N.Y. 1999); see also In re NextWave Pers. Communications, Inc., 235 B.R. 314, 316 (Bankr. S.D.N.Y. 1999) ("NextWave V").
10
The Second Circuit reversed, making four key points. First, it emphasized that the Commission's action, contrary to the bankruptcy court's finding, was regulatory: the Commission explicitly "made 'full and timely payment of the winning bid' a regulatory condition for obtaining and retaining a spectrum license," and this condition had a purpose "related directly to the FCC's implementation of the spectrum auctions." FCC v. NextWave Pers. Communications, Inc. (In re NextWave Personal Communications), 200 F.3d 43, 52 (2d Cir. 1999) (quoting 47 C.F.R. 24.708). The Second Circuit explained the Commission's regulatory purpose as follows:
11
[The FCC] decided that it would be 'critically important to the success of our system of competitive bidding ... [to] provide strong incentives for potential bidders to make certain of their qualifications and financial capabilities before the auction so as to avoid delays in the deployment of new services to the public that would result from litigation, disqualification and re-auction.' ... [Since] 'designated entities' such as NextWave ... were allowed to pay in installments[,] [i]t was important for the functioning of the auction ... that the FCC's default rules and penalties be enforceable, because the FCC relied upon them as a substitute for conducting the 'detailed credit checks' and other forms of due diligence that otherwise would be necessary to ensure ... that the licenses would be awarded to the appropriate entities.
12
Id. at 52-53 (quoting In re Implementation of Section 309(j) of the Communications Act--Competitive Bidding, Second Report and Order, 9 FCC Rcd 2348 p p 197, 194, 198 (1994)).
13
Second, the court held that the bankruptcy court had interfered with this regulatory purpose by avoiding a substantial portion of NextWave's bid price, thus allowing the company to keep the licenses for a reduced price. Id. at 55. This, the Second Circuit held, the bankruptcy court had no jurisdiction to do: "Because jurisdiction over claims brought against the FCC in its regulatory capacity lies exclusively in the federal courts of appeals, see ... 47 U.S.C. 402, the bankruptcy and district courts lacked jurisdiction to decide the question of whether NextWave had satisfied the regulatory conditions placed by the FCC upon its retention of the Licenses." In re NextWave, 200 F.3d at 54.
14
Third, the Second Circuit found that besides interfering with the Commission's licensing function through a collateral proceeding, the bankruptcy court had in effect attempted to exercise that function itself--again exceeding its jurisdiction:
15
By holding that for a price of $1.023 billion NextWave would retain licenses for which it had bid $4.74 billion, the bankruptcy ... court[ ] impaired the FCC's method for selecting licensees by effectively awarding the Licenses to an entity that the FCC determined was not entitled to them. In so doing [it] exercised the FCC's radiolicensing function.... [E]ven if the bankruptcy ... court[ ] [was] right in concluding that granting the Licenses at a small fraction of NextWave's original successful bid price best effectuated the [Federal Communication Act's] goals, [it was] utterly without the power to order that NextWave be allowed to retain them for that reason or on that basis.
16
Id. at 55 (internal citations omitted).
17
Finally, notwithstanding its conclusion that the bankruptcy court lacked jurisdiction to change the conditions under which NextWave could retain its licenses, the Second Circuit acknowledged that the bankruptcy court might well have jurisdiction over NextWave's underlying debts themselves: "To the extent that the financial transactions between [the FCC and NextWave] do not touch upon the FCC's regulatory authority, they are indeed like the obligations between ordinary debtors and creditors." Id. Pointing out that NextWave "remain[ed] a debtor in bankruptcy," and that "[i]f the Licenses [were] returned to the FCC, the bankruptcy court [might] resolve resulting financial claims that the FCC has against NextWave," id. at 56, the Second Circuit reviewed the merits of the bankruptcy court's avoidance decision and concluded that NextWave should not be allowed to avoid $3.72 billion of its debt under the Bankruptcy Code. Id. at 46, 62.
18
Immediately following the Second Circuit reversal, NextWave prepared a new plan of reorganization that provided for a single lump sum payment to satisfy its entire $4.3 billion outstanding obligation to the Commission, including interest and late fees. The Commission objected to the plan, alleging that NextWave's licenses had automatically canceled when the company missed its first payment deadline in October 1998. See In re Pub. Notice DA 00-49, Auction of C and F Block Broadband PCS Licenses, Order on Reconsideration, FCC 00-335 p 7 (Sept. 6, 2000). Simultaneously, the Commission issued a public notice announcing re-auction of NextWave's licenses. The notice stated that the licenses were "available for auction under the automatic cancellation provisions" of the Commission's regulations. Public Notice, Auction of C and F Block Broadband PCS Licenses, DA 0049, 15 FCC Rcd 693 (2000).
19
The dispute then returned to the bankruptcy court, which declared the Commission's cancellation of NextWave's licenses "null and void" as a violation of various provisions of the Bankruptcy Code, including the automatic stay provisions of section 362(a). In re NextWave Pers. Communications, Inc., 244 B.R. 253, 257-58, 267-68 (Bankr. S.D.N.Y. 2000) ("NextWave VI"). In reaching this conclusion, the bankruptcy court acknowledged that under the Second Circuit's ruling, it lacked jurisdiction to interfere with the Commission's regulatory acts. Id. at 260-61. It also acknowledged that it was bound by the Second Circuit's decision that "a regulatory purpose was implicit in the 'full payment requirement' in the FCC regulations." Id. at 270. As the bankruptcy court saw it, however, the "regulatory objective" behind the full payment requirement had been "fulfilled in the debtors' modified Plan . . . . to pay the entire $4.3 billion outstanding ... in a lump sum upon confirmation." Id. The cancellation of NextWave's licenses, in contrast, was a response to the company's failure to make a timely payment, and this requirement, the court reasoned, was "purely economic," having to do with "the time value of money." Id. "[T]he economic consequence of delay," it stated, "will be fully cured by payment in full of all applicable interest, penalties and late fees...." Id. Further explaining its view that the timely payment requirement lacked a regulatory purpose, the bankruptcy court discussed at length its reasons for believing that canceling licenses for failure to make a timely payment "conflict[ed] with the spirit and the letter of the agency's governing statute"--namely, section 309(j) of the Communications Act. Id. at 281; see also id. at 282-83, 271. Concluding that the Commission "has not and cannot articulate any regulatory interest entailed in the 'timely payment' requirement," id. at 270, the court ruled that the Second Circuit's prior decision did not preclude it from declaring the cancellation void. Id. at 283.
20
Again, the Second Circuit reversed. In re FCC, 217 F.3d 125 (2d Cir. 2000). Granting a mandamus petition filed by the Commission, the court held that "[t]here can be little doubt that if full payment is a regulatory condition, so too is timeliness." Id. at 136. In the court's view, "the regulatory purpose for requiring payment in full--the identification of the candidates having the best prospects for prompt and efficient exploitation of the spectrum--is quite obviously served in the same way by requiring payment on time." Id. at 135. The conclusion that the Commission's decision "was in fact regulatory," the court went on, was "reinforced" by the fact that the bankruptcy court, in deciding that the license cancellation lacked a regulatory purpose, had explained at length that the cancellation and re-auction were contrary to the purposes of section 309(j) of the Communications Act. Id. at 136. But according to the Second Circuit, these discussions, rather than explaining why the re-auction decision was not regulatory, explained why, under the Communications Act, it was arbitrary, and such a determination, the Second Circuit pointed out, was "outside the jurisdiction of the bankruptcy court." Id. "[A] regulatory condition is a regulatory condition even if it is arbitrary. It is for the FCC to state its conditions of licensure, and for a court with power to review the FCC's decisions to say if they are arbitrary or valid." Id. at 137.
21
As a consequence, the Second Circuit concluded that the bankruptcy court had both violated the appellate court's earlier mandate and exceeded the bankruptcy court's own jurisdiction. Id. "The bankruptcy court," the Second Circuit stated, "construes our mandate to mean no more than that the bankruptcy court may not abrogate the full-payment requirement on the basis of a fraudulent conveyance holding." Id. at 139. But this understanding "under-reads our previous opinion." Id. That opinion "clearly instruct[ed] the bankruptcy court to refrain from interfering with the licensing decisions of the FCC," id., and as the Second Circuit saw it, this is exactly what the bankruptcy court did in declaring the license cancellation null and void. In addition, because "[e]xclusive jurisdiction to review the FCC's regulatory action lies in the courts of appeals" under 47 U.S.C. 402, In re FCC, 217 F.3d at 139, the Second Circuit found that the bankruptcy court's license cancellation holding exceeded that court's jurisdiction. Id. at 141. The court also noted that "NextWave remains free to pursue its challenge to the FCC's regulatory acts" in another forum, pointing out that the company had already filed "protective notices of appeal" in this court. Id. at 140-41.
22
After losing in the Second Circuit, NextWave filed a petition with the Commission, requesting reconsideration of the license cancellation. Denying the petition, the Commission noted first that the public notice of reauction "was not an order or action of the Commission ... canceling NextWave's licenses." Order on Reconsideration, FCC 00-335 p 10. Rather, "[p]ursuant to [Commission] rules, the licenses canceled automatically" after NextWave failed to make its first installment payment. Id. The Commission thus concluded that NextWave's petition was "late" and its challenge to the reauction notice "procedurally defective." Id. "Nevertheless, because of the importance of the issues raised in NextWave's petition," id., the Commission went on to address the company's challenge to the automatic cancellation. The Commission rejected NextWave's arguments that the cancellation was arbitrary and capricious and barred by estoppel and waiver, id. p p 11-33, and found that the company's Bankruptcy Code arguments, having been "summarily rejected by the Second Circuit," were "precluded under the doctrine of res judicata." Id. p 26.
23
NextWave now challenges the Commission's decision on two basic grounds. First, it claims that the license cancellation is "patently unlawful," Appellants' Opening Br. at 16, under the provisions of the Bankruptcy Code described earlier: the anti-discrimination provision (section 525), the automatic stay provision (section 362), and the provision of the Code allowing debtors to "cure" their defaults (section 1123). Second, citing our decision in Trinity Broadcasting of Florida, Inc. v. FCC, 211 F.3d 618, 631 (D.C. Cir. 2000), where we held that an agency may not "sanction a company for its failure to comply with regulatory requirements" without first providing "fair notice" of those requirements, NextWave argues that even if the license cancellation is not barred by the Bankruptcy Code, it is invalid because the Commission failed to provide adequate notice that the timely payment regulations apply to Chapter 11 debtors. The Commission, supported by Intervenors (the Cellular Telecommunications Industry Association and several telecommunications companies) defends its decision.
II
24
We begin with three threshold issues. Does our jurisdiction in this case arise from 47 U.S.C. 402(a) or 402(b)? Was NextWave's challenge to its license cancellation timely? And are NextWave's Bankruptcy Code arguments barred by res judicata? We consider each question in turn.
Jurisdiction
25
NextWave has filed both a petition for review under section 402(a) and a notice of appeal under section 402(b) of the Communications Act. Section 402(a) provides that "[a]ny proceeding to enjoin, set aside, annul, or suspend any order of the Commission under this chapter (except those appealable under subsection (b) of this section) shall be brought" in a court of appeals. See 47 U.S.C. 402(a) (cross-referencing 28 U.S.C. 2342(1)). Section 402(b), in contrast, provides:
26
Appeals may be taken from decisions and orders of the Commission to the United States Court of Appeals for the District of Columbia ... [b]y the holder of any construction permit or station license which has been modified or revoked by the Commission.
27
Id. 402(b). Acknowledging that we have previously found these two provisions mutually exclusive, see Friedman v. FCC, 263 F.2d 493, 494 (D.C. Cir. 1959), NextWave asks us to "dismiss the filing that relies on the incorrect jurisdictional provision." Appellants' Opening Br. at 1.
28
In Mobile Communications Corp. of America v. FCC, we decided that the term "station license" in section 402(b) encompasses PCS licenses. See 77 F.3d 1399, 1403 (D.C. Cir. 1996); see also 47 U.S.C. 153(42) (defining "station license" as "that instrument of authorization required ... for the use or operation of apparatus for transmission of energy, or communications, or signals by radio"); id. 153(33) (defining "communication by radio" as "the transmission by radio of writing, signs, signals, pictures, and sounds of all kinds"). Given this, we think section 402(b)'s plain language, permitting appeal by "the holder of any ... station license which has been ... revoked by the Commission," covers this case. Cf. Cook, Inc. v. United States, 394 F.2d 84, 86 n.4 (7th Cir. 1968) (" 'The language of [subsection 402(b)], when considered in relation to that of subsection (a) ... would make clear that judicial review of all cases involving the exercise of the Commission's radio-licensing power is limited to [the United States Court of Appeals for the District of Columbia Circuit].' ") (quoting S. Rep. No. 82-44, at 11 (1951)); In re FCC, 217 F.3d at 140-41. Even if the Commission did not formally "revoke" NextWave's licenses, that is certainly the effect of the license cancellation: the licenses once assigned to NextWave are now being re-auctioned to other bidders. Cf. In re FCC, 217 F.3d at 140 n.10. We therefore dismiss the section 402(a) petition and proceed with the section 402(b) appeal.
Timeliness
29
Section 402(c) of the Communications Act requires appeals under section 402(b) to be filed "within thirty days from the date upon which public notice is given of the decision or order complained of." 47 U.S.C. 402(c). The "decision" NextWave seeks to challenge is the Commission's cancellation of its licenses, but the formal Commission action it actually appeals is the public notice of re-auction, which itself cancels no licenses, but rather announces in passing that the company's licenses canceled automatically at an earlier date. Order on Reconsideration, FCC 00-355 p 10.
30
The Commission acknowledges that "in some instances, it may be proper for a party to challenge the Commission's public notices that establish or deny rights." Id. Joined by Intervenors, however, it argues that NextWave's challenge to the license cancellation policy is untimely. Intervenors claim that NextWave should have challenged the policy when its licenses were issued, since the licenses themselves stated explicitly that they were conditioned on timely payment, and as we have held, "[a]cceptance of a license constitutes accession to all [license] conditions." P&R Temmer v. FCC, 743 F.2d 918, 928 (D.C. Cir. 1984). Alternatively, both Intervenors and the Commission suggest that NextWave should have challenged the automatic cancellation rule during the Restructuring Order proceedings because during those proceedings, the Commission considered objections to its original installment payment plan (including some objections based on the Bankruptcy Code), revised the plan, and ultimately reaffirmed the timely payment requirement. Intervenors' Br. at 3; see also, e.g., Order on Recons. of the Second Report and Order, 13 FCC Rcd 8345 p 24. Having failed to challenge the automatic cancellation rule at one of these earlier dates, they argue, NextWave cannot do so now because orders denying reconsideration do not re-open matters that should have been challenged previously. See ICC v. Bhd. of Locomotive Eng'rs, 482 U.S. 270, 279-80, 285-86 (1987).
31
As NextWave points out, however, we have held that "a party against whom a rule is applied may, at the time of application, pursue substantive objections to the rule ... even where the petitioner had notice and opportunity to bring a direct challenge within statutory time limits" but failed to do so. Indep. Cmty. Bankers of Am. v. Bd. of Governors of the Fed. Reserve Sys., 195 F.3d 28, 34 (D.C. Cir. 1999). Thus even if NextWave could have challenged the automatic cancellation policy at an earlier date--either when its licenses issued or during the Restructuring Order proceedings--the company remained free to do so "within thirty days from the date upon which public notice [was] given" that the policy had been applied to it. 47 U.S.C. 402(c).
32
According to NextWave, the thirty-day period was triggered by the public notice of re-auction because, prior to the re-auction notice, "the FCC had done nothing whatsoever to announce the cancellation of NextWave's licenses." Appellants' Reply Br. at 6. Because it filed a precautionary appeal with this court 30 days after the notice of re-auction, NextWave claims, its appeal was timely. Disagreeing, Intervenors argue that NextWave already had notice in October 1998 that its licenses would cancel automatically if and when it failed to make an installment payment. Thus, they argue, no further Commission statement was required to trigger the period for seeking judicial review.
33
Intervenors' argument assumes that notice of a future event's automatic effect (here, the explicit warning that the licenses would cancel for failure to make a timely payment) is by itself sufficient notice to mean that the occurrence of the future event (failing to make a timely payment) will trigger the period for seeking judicial review under section 402(c). To resolve the timeliness issue in this case, however, we need not decide whether that assumption is correct, for we think it was unclear prior to the notice of re-auction that the automatic cancellation policy would apply to licensees who had filed for bankruptcy. To begin with, the Bankruptcy Code gave NextWave reason to doubt that the automatic cancellation would actually occur when the company missed its first payment in October 1998: the automatic stay triggered by a Chapter 11 filing generally blocks most efforts by creditors to exercise control over or repossess property of a debtor. See 11 U.S.C. 362(a); cf. NextWave VI, 244 B.R. at 266-68 (finding that the automatic stay applied to NextWave's license fee obligations). Neither the Commission nor Intervenors point to any instance prior to the re-auction notice in which the Commission actually announced that NextWave's licenses had canceled despite the stay. Moreover, the Commission's own conduct suggests that it was at best unsure whether the automatic stay blocked cancellation of the company's licenses. After the bankruptcy court's fraudulent conveyance holding, and several months after NextWave missed the October payment deadline, the Commission moved the bankruptcy court to lift the stay "so that the ... automatic cancellation provisions may take effect." Mot. to Lift Automatic Stay at 2, NextWave V, 235 B.R. 314 (No. 98 B 21529). And in the bankruptcy court, Commission counsel suggested that the automatic stay blocked cancellation of NextWave's licenses, stating for example that although "[t]he regulations provide that upon failure to make the payments the license is automatically canceled[,] ... [t]hat hasn't [happened] in this case due to the automatic stay." See Hearing Tr. at 30, In re NextWave Pers. Communications, Inc., No. 98 B 21529 (Bankr. S.D.N.Y. Nov. 12, 1998); NextWave VI, 244 B.R. at 277 (noting that transcript erroneously attributes this quotation to the Court).
34
These circumstances suggest that the Commission believed NextWave's licenses had not canceled prior to the notice of re-auction. At the very least, they created doubt about the matter, and as we have held, "when an agency leaves room for genuine and reasonable doubt as to the applicability of its orders or regulations, the statutory period for filing a petition for review is tolled until that doubt is eliminated." Recreation Vehicle Indus. Ass'n v. EPA, 653 F.2d 562, 569 (D.C. Cir. 1981). Because the "genuine and reasonable doubt" about the status of NextWave's licenses continued until the Commission issued the notice of re-auction, we conclude that NextWave's petition is timely.
Res Judicata
35
This brings us to the final and most difficult threshold issue: whether NextWave's Bankruptcy Code arguments are barred by res judicata. "The doctrine of res judicata prevents repetitious litigation involving the same causes of action or the same issues." I.A.M. Nat'l Pension Fund v. Indus. Gear Mfg. Co., 723 F.2d 944, 946 (D.C. Cir. 1983). According to the Commission, because NextWave litigated and lost its Bankruptcy Code arguments in the Second Circuit mandamus proceedings, it may not relitigate them here. Asserting a right to make these arguments here, NextWave argues that the Second Circuit's decision was jurisdictional--a decision about "where NextWave's bankruptcy challenges should be decided, not how they should be resolved." Appellants' Opening Br. at 26 (emphasis added). As a result, the company argues, res judicata does not bar it from presenting its Bankruptcy Code arguments in this court.
36
The doctrine of res judicata "usually is parsed into claim preclusion and issue preclusion." I.A.M. Nat'l Pension Fund, 723 F.2d at 946. Because the Commission raises arguments based on both theories, and because the two theories differ in subtle but significant respects, we consider each separately. "Under the claim preclusion aspect of res judicata, a final judgment on the merits in a prior suit involving the same parties or their privies bars subsequent suits based on the same cause of action." Id. at 946-47. Claim preclusion prevents parties from relitigating issues they raised or could have raised in a prior action on the same claim. See Allen v. McCurry, 449 U.S. 90, 94 (1980). "[D]ismissals for lack of jurisdiction," however, "are not decisions on the merits and therefore have no [claim preclusive] effect on subsequent attempts to bring suit in a court of competent jurisdiction." Kasap v. Folger Nolan Fleming & Douglas, Inc., 166 F.3d 1243, 1248 (D.C. Cir. 1999); see also Fed R. Civ. P. 41(b) ("a dismissal under this subdivision and any dismissal not provided for in this rule, other than a dismissal for lack of jurisdiction ... operates as an adjudication upon the merits").
37
No one disputes that the Second Circuit thought the bankruptcy court lacked authority to declare the notice of reauction invalid. In re FCC, 217 F.3d at 141. The question dividing the parties is why the Second Circuit thought this. According to NextWave, the Second Circuit reversed the bankruptcy court because under section 402 of the Communications Act, "the FCC's licensing decisions are subject to the exclusive jurisdiction of the federal courts of appeals." Id. at 129. In other words, the company claims, the Second Circuit held that any arguments directly or collaterally challenging the Commission's regulatory actions--including arguments based on the Bankruptcy Code--must be brought in a court of appeals. Cf. In re NextWave, 200 F.3d at 55. The Commission has a different view of the Second Circuit's decision. It argues that the Second Circuit decided not that the bankruptcy court lacked jurisdiction to determine whether the license cancellation violated the Bankruptcy Code, but rather that "the [Bankruptcy Code] provisions on which NextWave relies do not reach regulatory actions such as those at issue here." Appellee's Br. at 15. In other words, the Commission claims that the Second Circuit reviewed the bankruptcy court's Bankruptcy Code conclusions on the merits and found that because the Commission's actions were regulatory, the automatic stay, right to cure, and antidiscrimination provisions of the Code did not reach those actions.
38
We agree with NextWave's interpretation of the Second Circuit's decision. As we read that decision, the court principally held that the Commission's license cancellation was a regulatory act reviewable only by a court of appeals under section 402 of the Communications Act, and thus that the bankruptcy court lacked jurisdiction to apply the Code to these acts. With one exception (which we shall explain later), we do not understand the Second Circuit to have decided as a substantive matter that nothing in the Bankruptcy Code prevents the Commission from canceling NextWave's licenses.
39
To begin with, and most obviously, the Second Circuit repeatedly stated that it was making a "jurisdictional" decision based on section 402. Here are just three examples: "We recognized that pursuant to ... 47 U.S.C. 402, review of the FCC's regulatory decisions and orders is entrusted solely to the federal courts of appeals and is therefore outside the jurisdiction of the bankruptcy and district courts," In re FCC, 217 F.3d at 131 (describing initial opinion); " '[b]ecause jurisdiction over claims brought against the FCC in its regulatory capacity lies exclusively in the federal courts of appeals, see ... 47 U.S.C. 402, the bankruptcy and district courts lacked jurisdiction to decide the question of whether NextWave had satisfied the regulatory conditions placed by the FCC upon its retention of the Licenses,' " id. at 137 (quoting initial opinion); "[e]xclusive jurisdiction to review the FCC's regulatory action lies in the courts of appeals," id. at 139 (citing cases discussing section 402). Reinforcing the jurisdictional nature of its opinion, the Second Circuit also disavowed any intent to rule on the merits of NextWave's challenges to the Commission's acts, stating explicitly that NextWave was "free to pursue its challenge to the FCC's regulatory acts" in an appropriate forum, id. at 140, and that the court was making "no comment on the prospects" of such an appeal. Id. at 129; see also id. at 138 n.8 ("we have no occasion to opine on whether the Public Notice is valid or whether the Licenses automatically canceled at some prior date"); id. at 139 ("Even if the bankruptcy court is right on the merits of its arguments against revocation--we have no occasion to express an opinion--it is without power to act on its determination.").
40
According to the Commission, these repeated references to the bankruptcy court's lack of jurisdiction mean only that the bankruptcy court lacked jurisdiction to decide whether the Commission had applied the auction requirements of section 309(j) of the Communications Act arbitrarily and capriciously, not that it lacked jurisdiction to review the Commission's actions for compliance with the Bankruptcy Code. Likewise, the Commission suggests, the Second Circuit's references to the prospects of NextWave's appeal refer only to an appeal based on section 309(j). In support of this interpretation, the Commission points to language in the Second Circuit's opinion suggesting that the bankruptcy court lacked jurisdiction to question the Commission's regulatory judgments under section 309(j). See, e.g., id. at 131-32 (" '[E]ven if the bankruptcy and district courts were right in concluding that granting the Licenses at a small fraction of NextWave's original successful bid price best effectuated the [Federal Communication Act's] goals, they were utterly without the power to order that NextWave be allowed to retain them for that reason or on that basis.' ") (quoting initial opinion); see also id. at 136-37.
41
The Second Circuit, however, had good reason to address section 309(j) directly: the bankruptcy court devoted several paragraphs to evaluating the Commission's conduct in light of that section. See NextWave VI, 244 B.R. at 271, 281-83. Moreover, it is perfectly consistent to hold that section 402 prohibits the bankruptcy court from reviewing Commission action both under section 309(j) and under the Bankruptcy Code. True, as the Commission points out, other circuits have recognized the jurisdiction of bankruptcy courts to determine whether provisions of the Code such as the automatic stay apply to agency actions. See, e.g., Commerce Oil Co. v. Word (In re Commerce Oil Co.), 847 F.2d 291 (6th Cir. 1988); Universal Life Church, Inc. v. United States (In re Universal Life Church, Inc.), 128 F.3d 1294 (9th Cir. 1997). But that is irrelevant to the question we face here: how did the Second Circuit view the bankruptcy court's jurisdiction? Regardless of how other circuits--or even we--might interpret section 402, we think the Second Circuit construed the provision to confer "exclusive jurisdiction" on courts of appeals to review even Bankruptcy Code challenges to the Commission's regulatory acts. Many of the court's references to section 402 are not clearly restricted to bankruptcy court power under section 309(j). See, e.g., In re FCC, 217 F.3d at 139 ("Exclusive jurisdiction to review the FCC's regulatory action lies in the courts of appeals."). And at least once in its opinion, the Second Circuit expressly stated that "[t]he bankruptcy court lacked jurisdiction to declare the Public Notice [of reauction] null and void on [the] groundthat the Public Notice violated the automatic stay, [or] that the right to cure obviates any default"--that is, on Bankruptcy Code grounds. Id. at 139 (emphasis added).
42
The Second Circuit's reasoning in granting mandamus further illustrates the jurisdictional nature of its opinion. The court overturned the bankruptcy court's decision on two "independently sufficient" grounds, each discussed in a separate section of the opinion. See id. at 141. One ground was that the bankruptcy court lacked "statutory jurisdiction" to nullify the Commission's license cancellation. Id. Entitled "Jurisdiction," this section of the opinion consists entirely of a discussion of sections 402(a) and (b) of the Communications Act--it never mentions the Bankruptcy Code. Id. at 139-41. If, as the Commission maintains, the Second Circuit thought the bankruptcy court lacked authority to invalidate the license cancellation principally because the Code does not reach the Commission's regulatory acts (and if, as the Commission also maintains, the Second Circuit's discussion of "jurisdiction" merely refers to the peripheral issue of the bankruptcy court's jurisdiction to review Commission actions under section 309(j) of the Communications Act) it is difficult to explain why the court failed to discuss the Bankruptcy Code in this section of its opinion, given that the reasons discussed here provide an "independently sufficient" basis for mandamus.
43
The Second Circuit's other reason for granting mandamus was that the bankruptcy court violated the appellate court's earlier mandate. But as the Second Circuit made clear, its initial opinion too was jurisdictional:
44
Our extraordinary mandamus power has two purposes: to achieve compliance with the terms and spirit of our mandates, and to constrain inferior courts to proper exercises of their jurisdiction. In this case, the two uses of mandamus overlap and reinforce one another. This Court's previous opinion reversed a decision of the bankruptcy court on the ground that that court lacked jurisdiction. The bankruptcy court again seeks to control the FCC's allocation of licenses, notwithstanding this Court's express holding that 'the bankruptcy and district courts lack[ ] jurisdiction to decide the question of whether NextWave had satisfied the regulatory conditions placed by the FCC upon its retention of the Licenses.' Thus a writ of mandamus protecting this Court's mandate also confines the inferior court to the lawful exercise of its jurisdiction.
45
Id. at 137 (quoting In re NextWave, 200 F.3d at 54).
46
To be sure, in the "mandate" section of its opinion, the Second Circuit appeared to decide on the merits that at least some parts of the automatic stay provision of the Bankruptcy Code, 11 U.S.C. 362, do not apply to the facts of this case. See In re FCC, 217 F.3d at 138 ("Undoubtedly, the [Commission] is a governmental unit that is seeking 'to enforce' its 'regulatory power' [under subsection 362(b)(4)]."); id at 138 n.8 ("[W]e hold that the FCC's regulatory decisions fall within [subsection] 362(b)(4)."). But leaving aside for the moment the effect of this discussion under the doctrine of issue preclusion, this portion of the Second Circuit's opinion does not change our view that the court's decision was primarily jurisdictional, for the court expressly couched its discussion of the automatic stay in jurisdictional terms: the court prefaced its discussion by noting that "[t]he bankruptcy court founds its jurisdiction [to interfere with the FCC's enforcement of its payment schedule] chiefly on the automatic stay provision of [section 362]...." Id. at 138 (emphasis added). We need not decide whether this jurisdictional interpretation of section 362 is correct--the Supreme Court has declined to express an opinion on the issue, see Bd. of Governors of the Fed. Reserve Sys. v. MCorp Fin., Inc., 502 U.S. 32, 41 n.11 (1991)--because the Commission's res judicata argument requires only that we determine what the Second Circuit meant, and here we think it clear that the court treated section 362 as though it provided a potential basis for bankruptcy court jurisdiction.
47
In addition to this direct evidence of the jurisdictional nature of the Second Circuit opinion, the Commission's alternate view of the opinion--that the court decided as a substantive matter that nothing in the Bankruptcy Code prevents the Commission from canceling NextWave's licenses--is implausible. Not only does this interpretation fail to account fully for the opinion's jurisdictional language, see supra at 21-22, but the Second Circuit never actually states that the Bankruptcy Code as such does not reach the Commission's regulatory acts: the entire opinion concerns the power and jurisdiction of the bankruptcy court. Perhaps most telling, the Second Circuit does not discuss any provision of the Bankruptcy Code besides section 362, despite the fact that the bankruptcy court discussed section 525 and made a ruling based on sections 1123 and 1124. As NextWave argues, "[t]he exclusively jurisdictional character of the Second Circuit's ruling provides a complete explanation for its ... silence respecting NextWave's principal bankruptcy arguments." Appellants' Reply Br. at 4.
48
Faced with the Second Circuit's silence about sections 525 and 1123, the Commission suggests that even though the court failed to mention these provisions, it necessarily decided that they do not bar the license cancellation because "mandamus relief is warranted only where the petitioner has demonstrated that its right to such relief is clear and indisputable," and "the Second Circuit would not have granted our request for extraordinary relief if it had thought that the bankruptcy court's decision was sustainable on the basis of [section] 525" or 1123. Appellee's Br. at 21 n.13 (internal quotation omitted); id. at 24 n.15. The assumption that the Second Circuit "necessarily" resolved these arguments, however, is valid only if the Commission's view of the case is correct--that is, if the Second Circuit meant to decide as a substantive matter that the Bankruptcy Code did not reach the Commission's actions. If instead the Second Circuit principally decided, as much of the opinion's language suggests, see supra at 20-22, that the bankruptcy court lacked jurisdiction to hear these arguments, that conclusion would also have provided a basis for mandamus, without requiring the court to consider or decide anything about sections 525 and 1123 at all.
49
The Commission offers a second, equally unpersuasive explanation for the Second Circuit's silence regarding sections 525 and 1123. The bankruptcy court's analysis of those provisions, the Commission says, "hinges on its characterization of the FCC as an ordinary creditor," Appellee's Br. at 24, and by rejecting decisively this characterization, the Second Circuit in effect decided that these parts of the Code do not apply. Apart from the fact that it seems odd that the Second Circuit would have decided that sections 525 and 1123 do not apply without ever mentioning them, this argument fails because, like the previous argument, it assumes the correctness of the Commission's reading of the Second Circuit's opinion. But the alternate reading of the opinion--that the bankruptcy court lacked jurisdiction to hear challenges to the Commission's regulatory actions based on the Bankruptcy Code or otherwise--also relies upon the notion that the Commission is not an ordinary creditor but a regulator in this situation. The fact that the Second Circuit decided that the Commission was not acting as an ordinary creditor when it canceled the licenses thus does not indicate that the court implicitly decided that sections 525 and 1123 are inapplicable to this case.
50
Having thus concluded that the Second Circuit's opinion was jurisdictional and that claim preclusion does not bar NextWave from re-litigating its Bankruptcy Code arguments in this court, we turn to the Commission's second major res judicata argument: that each of NextWave's Bankruptcy Code arguments is barred by issue preclusion. "Under the issue preclusion aspect of res judicata, a final judgment on the merits in a prior suit precludes subsequent relitigation of issues actually litigated and determined in the prior suit, regardless of whether the subsequent suit is based on the same cause of action." I.A.M. Nat'l Pension Fund, 723 F.2d at 947. Issue preclusion is most often invoked where "a subsequent action is brought on a different claim," id. at 947 n.3, and as a result claim preclusion does not apply. Issue preclusion, however, may also apply to subsequent actions brought on the same claim: if a judgment "does not preclude relitigation of all or part of the claim on which the action was brought"--if, for example, as here, the judgment was jurisdictional--it may still preclude relitigation of any issues "actually litigated and determined" in the first action. Id. For issue preclusion to apply, however, "the issue must have been actually and necessarily determined by a court of competent jurisdiction in the first trial." Connors v. Tanoma Mining Co., 953 F.2d 682, 684 (D.C. Cir. 1992) (internal quotation and emphasis omitted). If the "basis" of a prior decision is "unclear, and it is thus uncertain whether the issue was actually and necessarily decided in [the prior] litigation, then relitigation of the issue is not precluded." Id.
51
It may appear that the only issue potentially barred by issue preclusion from a case dismissed for lack of jurisdiction is the jurisdictional determination itself. Cf. Kasap, 166 F.3d at 1248. In this case, it may thus seem that the Second Circuit cannot have ruled on the merits of any of NextWave's Bankruptcy Code arguments, because the court only decided that the bankruptcy court lacked jurisdiction to hear them. And indeed, under our jurisdictional interpretation of the Second Circuit's decision, we do not think the court "actually and necessarily" decided whether sections 525 and 1123 bar the license cancellation. We thus conclude that issue preclusion does not bar relitigation of these issues.
52
Far less clear, however, is whether issue preclusion bars NextWave's section 362 argument. As we have seen, the Second Circuit explicitly discussed section 362's automatic stay, finding that the bankruptcy court could not rely on the provision as an independent basis for jurisdiction because the license cancellation was a regulatory act exempt under subsection 362(b)(4). See supra at 23-24. It is true, as we have said, that this was a jurisdictional discussion, but this does not preclude it from having issue preclusive effect: if a court makes a substantive determination in order to arrive at a jurisdictional holding, the substantive determination can have issue preclusive effect so long as it was "actually litigated and determined in the prior action." See I.A.M. Nat'l Pension Fund, 723 F.2d at 947 n.3. The Restatement gives the following example:
53
A brings an action against B for personal injuries arising out of an automobile accident. Jurisdiction is asserted over B, a nonresident, on the basis that the automobile involved in the accident was being operated in the state by or on his behalf. After trial of this issue, the action is dismissed for lack of jurisdiction. In a subsequent action by A against B for the same injuries, brought in the state of B's residence, the prior determination that the automobile was not being operated by or on behalf of B is conclusive.
54
Restatement (Second) of Judgments 27, illustration 3 (1980).
55
Here, the Second Circuit appears to have decided that section 362 does not confer jurisdiction on the bankruptcy court because subsection 362(b)(4)'s "regulatory power" exception applies as a substantive matter. We thus agree with the Commission that issue preclusion bars NextWave from relitigating the question of whether the license cancellation falls within subsection 362(b)(4). The Second Circuit spoke clearly and unequivocally about this issue, stating that "[u]ndoubtedly, the FCC is a governmental unit that is seeking 'to enforce' its 'regulatory power,' " In re FCC, 217 F.3d at 138, and that "we hold that the FCC's regulatory decisions fall within [subsection] 362(b)(4)." Id. at n.8. And under the Second Circuit's jurisdictional reading of section 362, this decision was necessary to the case: if subsection 362(b)(4) did not apply, section 362 could have provided a basis for the bankruptcy court to assert jurisdiction over the license cancellation. In considering NextWave's Bankruptcy Code arguments, see Section III infra, we will thus assume that the license cancellation falls within the regulatory power exception to the automatic stay.
56
We are less sure, however, that the Second Circuit "actually and necessarily" decided as part of its jurisdictional decision that all provisions of section 362 do not apply to the license cancellation. In particular, as the Second Circuit implicitly acknowledged, subsection 362(b)(4)'s "regulatory power" exception does not apply to subsections 362(a)(4) and (5), which stay actions to enforce liens. See In re FCC, 217 F.3d at 138. Although the bankruptcy court thought the cancellation of NextWave's licenses "unarguably violate[d]" these subsections, NextWave VI, 244 B.R. at 267, and explicitly quoted the language in the security agreements creating a "first lien on and continuing security interest in" the licenses, id. at 267 n.7, the Second Circuit, in a footnote, simply observed: "Subsections (4) and (5) are concerned with liens. The bankruptcy court does not explain why they are implicated here." In re FCC, 217 F.3d at 138 n.7. Thus, unlike in its subsection 362(b)(4) discussion, the Second Circuit never said it was "hold[ing]" that subsections 362(a)(4) and (5) do not apply to the cancellation of NextWave's licenses. Cf. id. at 138 n.8. Instead, the court merely observed that the bankruptcy court did not explain why they are implicated. It is thus unclear whether the Second Circuit decided that subsections 362(a)(4) and (5) do not block cancellation of NextWave's licenses, or whether it simply concluded that it had no need to reach the issue because the bankruptcy court failed adequately to address it. Since under our decision in Connors, if it is "uncertain whether [an] issue was actually and necessarily decided in [prior] litigation, then relitigation of the issue is not precluded," 953 F.2d at 684, we conclude that NextWave is not barred from arguing that subsections 362(a)(4) and (5) prohibit cancellation of its licenses.
57
Having resolved these threshold issues, we turn to the merits of NextWave's appeal.
III
58
NextWave argues that the Commission's cancellation of its licenses violated sections 525, 1123, and 362 of the Bankruptcy Code. Under the Administrative Procedure Act, we must "hold unlawful and set aside agency action ... found to be ... not in accordance with law [or] ... in excess of statutory jurisdiction, authority, or limitations." 5 U.S.C. 706(2). This provision requires us to invalidate agency action not only if it conflicts with an agency's own statute, but also if it conflicts with another federal law. See, e.g., Scheduled Airlines Traffic Offices, Inc. v. Dep't of Def., 87 F.3d 1356, 1361 (D.C. Cir. 1996) (applying 5 U.S.C. 706(2)(A) and declaring Department of Defense policy invalid under Miscellaneous Receipts statute); see also Cousins v. Sec'y of the U.S. Dep't of Transp., 880 F.2d 603, 608 (1st Cir. 1989) (stating that the quoted passages from section 706 are "general in their meaning" and "do not restrict the courts to consideration of the agency's own enabling statute").
We begin with section 525:
59
[A] governmental unit may not deny, revoke, suspend, or refuse to renew a license ... or other similar grant to, ... discriminate with respect to such a grant against, deny employment to, terminate the employment of, or discriminate with respect to employment against, a person that is ... a bankrupt or a debtor under the Bankruptcy Act ... solely because such bankrupt or debtor ... has not paid a debt that is dischargeable in the case under this title or that was discharged under the Bankruptcy Act.
60
11 U.S.C. 525(a). No one disputes that the Commission is a "governmental unit" that has "revoke[d]" a license for purposes of section 525, nor that NextWave is a "bankrupt or a debtor under the Bankruptcy Act." Pointing to the fact that the Commission has filed proofs of claim in bankruptcy court based on its security interests in PCS licenses, see, e.g., Proof of Claim, In re NextWave Pers. Communications, Inc., No. 98 B 21529 (Bankr. S.D.N.Y. Dec. 16, 1998) (filed on behalf of creditor The United States of America), NextWave argues that the installment payment obligations were dischargeable debts under the Bankruptcy Code. See 11 U.S.C. 1141(d) (stating that dischargeable debts under Chapter 11 generally include "any debts that arose before the date of ... confirmation" of the debtor's reorganization plan). And because failure to make installment payments was the "sole triggering mechanism" for automatic cancellation, NextWave continues, its licenses canceled "solely because" it failed to pay dischargeable debts. Appellants' Reply Br. at 8.
61
The Commission never denies that if NextWave had made its payments, the company could have retained its licenses. Nor does the Commission dispute that NextWave's license fee obligations were at least in part genuine, enforceable debts-indeed, the Commission's own regulations provide for their collection if left unpaid. See 47 C.F.R. 1.2110(g)(4)(iv) ("A licensee in the PCS C or F [B]locks shall be in default, its license shall automatically cancel, and it will be subject to debt collection procedures, if the payment due on the payment resumption date ... is more than ninety (90) days delinquent.") (emphasis added). Instead, the Commission offers a series of unpersuasive arguments intended to demonstrate why, notwithstanding section 525's apparent applicability, the provision does not bar cancellation of NextWave's licenses.
62
First, the Commission urges us to read section 525 in light of section 362. The latter section, the Commission suggests, "serves the important purpose of providing a debtor with some breathing room in the situations to which it applies. Accordingly, [section] 362 should be broader than 525, providing for breathing room even in some situations where cancellation ultimately would be permitted." Appellee's Br. at 21-22. Thus, the Commission argues, because (on its reading) the automatic stay does not apply to this case, section 525 should not apply either. Fleshing out this argument, Intervenors suggest that "[i]t would make little sense for Congress to exempt governmental 'regulatory' actions from the stay [under subsection 362(b)(4)] but then flatly forbid them in [section] 525. Basic structural coherence requires the conclusion that [section] 525 does not prevent a license cancellation already correctly found exempt from the stay as regulatory." Intervenors' Br. at 18.
63
This is an interesting argument, but it fails for several reasons. To begin with, it is inconsistent with section 525's plain language. Section 525 clearly and explicitly prohibits governmental units, for whatever reason, from canceling licenses for failure to pay a dischargeable debt: "a governmental unit may not ... revoke ... a license ... to ... a bankrupt ... solely because such bankrupt ... has not paid a debt that is dischargeable ... under this title." 11 U.S.C. 525(a). Nothing in section 525 or 362 states that section 525 is subject to subsection 362(b)(4)'s regulatory power exception, or that the exception should be read to limit section 525's clear reach. Thus, while interpretation of the Bankruptcy Code is a "holistic endeavor," and "[a] provision that may seem ambiguous in isolation" can often be "clarified by the remainder of the statutory scheme," United Sav. Ass'n of Tex. v. Timbers of Inwood Forest Assocs., Ltd., 484 U.S. 365, 371 (1988), here we see no such ambiguity. Various bankruptcy and district courts, accordingly, have held that section 525 can apply even if the automatic stay does not. See, e.g., William Tell II, Inc. v. Illinois Liquor Control Comm'n (In re William Tell II, Inc.), 38 B.R. 327, 330 (N.D. Ill. 1983) ("even if a state proceeding is not automatically stayed, a bankruptcy court has authority to enjoin certain conduct under 11 U.S.C. 525"); In re The Bible Speaks, 69 B.R. 368, 373 n.5 (Bankr. D. Mass. 1987) ("[Section] 525(a) is directed at governmental units and may apply even where the automatic stay has no effect.").
64
Moreover, contrary to Intervenors' argument, this interpretation of section 525 does not render the Code "structural[in]coheren[t]." Though this reading does mean that an action exempted under subsection 362(b)(4) might nonetheless be barred by section 525, it does not render subsection 362(b)(4) meaningless, because that subsection covers a different and wider variety of actions than section 525. For example, subsection 362(b)(4) exempts from the automatic stay (among other things) "any act" by a governmental unit to "obtain possession of property of the estate ... or to exercise control over property of the estate," so long as the act is taken to enforce the unit's "regulatory power." 11 U.S.C. 362(a)(3), (b)(4) (emphasis added). Section 525, in contrast, prohibits governmental units only from taking certain specific actions with respect to an extremely limited subset of a debtor's property--licenses and similar grants-or with respect to employment opportunities.
65
Even if the Commission were correct that section 525 should be read to permit all actions exempted from the automatic stay by subsection 362(b)(4), that argument would be inapplicable to this case because subsection 362(b)(4) does not apply to the stay of acts to "create, perfect, or enforce" liens against property of the estate or of the debtor imposed by subsections 362(a)(4) and (5). Here, NextWave executed security agreements giving the Commission a "first lien" on the company's interest in the licenses, and under subsections 362(a)(4) and (5), "a creditor holding a lien on property of the estate may not enforce the lien by seizure, foreclosure, or otherwise." 3 Collier on Bankruptcy p 362.03[6] (15th ed. rev. 2000). Stayed actions include "self-help remedies against collateral" such as "repossession." Id. p 362.03[6][b]. Before the bankruptcy court, Commission counsel acknowledged that canceling the licenses and seeking to collect on the debt was "tantamount ... to foreclosing on collateral." Hearing Tr. at 14, In re NextWave Pers. Communications, Inc., No. 98 B 21529 (Bankr. S.D.N.Y. May 26, 1999). Thus, contrary to the Commission's argument, and notwithstanding the applicability of the regulatory power exception, section 362's automatic stay does apply here. This is thus not a case in which section 525, if applicable, would bar an action exempt from the automatic stay.
66
The Commission next argues that section 525 is inapplicable because NextWave's license fee obligation was not a "dischargeable" debt. In support of this proposition, the Commission offers two arguments. First, it claims that the New York bankruptcy court could not have discharged NextWave's debt because the Second Circuit, whose decisions are binding on that court, held in its initial opinion that so long as NextWave retained its licenses, its payment obligation was subject to neither modification nor discharge in bankruptcy. As a result, the Commission concludes, the payment obligation was not a debt "dischargeable" in bankruptcy while the license was held.
67
We disagree. To begin with, it is unclear that the Second Circuit in fact thought the bankruptcy court lacked power to alter or discharge the payment obligation while NextWave held the licenses. Though parts of its initial opinion do suggest this, see In re NextWave, 200 F.3d at 56, other parts suggest that the court simply thought the bankruptcy court had no authority to require the Commission to allow NextWave to keep its licenses after modification of its payment obligation. See, e.g., id. at 54 ("It is beyond the jurisdiction of a court in a collateral proceeding to mandate that a licensee be allowed to keep its license despite its failure to meet the conditions to which the license is subject."). If the latter reading is correct, then insofar as NextWave's payment obligation was a debt (as opposed to a license condition), it was dischargeable by the bankruptcy court. Even if the Commission's reading of the Second Circuit's opinion is correct, the Commission's argument assumes that the phrase "debt that is dischargeable ... under this title" in section 525(a) refers to the bankruptcy court's power to modify or discharge a payment obligation. The provision's plain language, however, refers to a payment obligation that can be modified or discharged under the Bankruptcy Code; and as we read the Second Circuit's opinion, the court merely decided that insofar as timely payment was a condition for license retention, the bankruptcy court had no authority to modify it. It never decided that a court of competent jurisdiction (such as this one) could not modify or discharge it under section 525.
68
The Commission also argues that because "[a] licensee's full and timely payment of its winning bid installments is an essential condition of its license grant[,] [p]ayment ... is a regulatory requirement, not a dischargeable debt." Appellee's Br. at 22. At oral argument, Commission counsel conceded that the payment obligation also has the character of a dischargeable debt. As we indicated earlier, the Commission could seek to collect its license fee, and in so doing it would be subject (as the Second Circuit held) to the constraints imposed on creditors by the Bankruptcy Code. See In re NextWave, 200 F.3d at 56. But here, the Commission contends, it seeks only to revoke NextWave's licenses, not to collect on the debt, and insofar as timely payment is a condition of license retention, it is a regulatory requirement, not a dischargeable debt, and section 525 is inapplicable.
69
As Commission counsel also acknowledged, this claim amounts to a request for a regulatory purpose exception to section 525: the Commission in effect argues that because (for legitimate regulatory motives) it made timely payment a regulatory requirement, it should be permitted to cancel licenses for failure to meet that requirement despite section 525's plain language ("a governmental unit may not ... revoke ... a license ... to ... a bankrupt ... solely because such bankrupt ... has not paid a debt that is dischargeable ... under this title"). But basic principles of statutory interpretation preclude such a result. To begin with, section 525 contains several exceptions, but none for agencies fulfilling regulatory purposes. See 11 U.S.C. 525(a) ("Except as provided in the Perishable Agricultural Commodities Act ... the Packers and Stockyards Act ... and section 1 of ... 'An Act making appropriations for the Department of Agriculture for the fiscal year ending June 30, 1944, and for other purposes' ... a governmental unit may not deny, revoke, suspend ... a license...."). This in itself suggests that Congress did not intend to provide a regulatory purpose exception to section 525. See Tenn. Valley Auth. v. Hill, 437 U.S. 153, 188 (1978) (relying on fact that Endangered Species Act "creates a number of limited 'hardship exemptions' " but none for federal agencies to conclude "under the maxim expressio unius est exclusio alterius ... that these were the only 'hardship cases' Congress intended to exempt"). Moreover, other parts of the Bankruptcy Code contain explicit regulatory purpose exceptions. Section 362, as we have seen, exempts from certain provisions of the automatic stay any "governmental unit" exercising its "police or regulatory power." 11 U.S.C. 362(b)(4). Section 362 also contains a series of narrower exceptions for certain named agencies that have entered lending relationships, allowing them to engage in particular acts of foreclosure and other actions. See, e.g., 11 U.S.C. 362(b)(8) (exception permitting HUD Secretary to foreclose on certain mortgages insured under the National Housing Act). To us, these express exceptions demonstrate that section 525 contains neither an implied regulatory power exception for governmental units in general nor an implied agency-specific exception allowing the Commission to enforce an automatic cancellation policy pursuant to an installment payment scheme under section 309(j) of the Communications Act. See Russello v. United States, 464 U.S. 16, 23 (1983) ("Where Congress includes particular language in one section of a statute but omits it in another section of the same Act, it is generally presumed that Congress acts intentionally and purposely in the disparate inclusion or exclusion.") (internal quotation omitted).
70
Next, Intervenors argue that even if the license fee obligation itself is a dischargeable debt, the Commission did not cancel NextWave's licenses "solely because" of failure to pay that debt. "The 'solely because' language," they argue, "limits the bar on license revocation to circumstances where a government [agency] is simply advancing creditor interests in receiving the money due." Intervenors' Br. at 16-17. Since here, license cancellation was intended not to induce payment but instead to "protect[ ] the integrity of [the] auction[ ] and select[ ] the applicant most likely to use the Licenses efficiently for the benefit of the public," section 525 is not implicated, because "it is not the 'debt' character of the defaulted obligation that is the 'sole' basis for the cancellation." Id. (internal quotation omitted).
71
We are unconvinced. Intervenors argue that "solely because" should be read to mean "solely because of creditor interests in receiving the money due." But the statute says nothing about an agency's motives in canceling a license for failure to pay a dischargeable debt--it simply says governmental units may not cancel licenses "solely because" a debtor "has not paid" such a debt. See 11 U.S.C. 525(a) (emphasis added). It may be true, as the Second Circuit decided, that the Commission had a regulatory motive for examining NextWave's timely payment record and canceling its licenses on that basis, but as we pointed out earlier, neither the Commission nor Intervenors dispute that NextWave could have retained its licenses if it had made timely installment payments. NextWave's failure to make its payments was thus the "sole" trigger of the license cancellation, in the sense that the Commission looked to no other factor in determining whether NextWave should retain its licenses; and we think this is exactly the kind of conduct barred by section 525's plain text. Adopting Intervenors' intent-based reading of section 525 would allow governmental units to escape section 525's limitations simply by invoking a regulatory motive for their concern with timely payment, and as we have already explained, section 525 contains no implicit regulatory purpose exception.
72
To support their view that the phrase "solely because" permits license cancellation based on failure to pay a dischargeable debt so long as the cancellation is motivated by a non-pecuniary regulatory purpose, Intervenors point to legislative history stating that section 525 "does not prohibit consideration of ... factors[ ] such as future financial responsibility or ability ... if applied nondiscriminatorily," H.R. Rep. No. 95-595, at 367 (1977), and that "in those cases where the causes of the bankruptcy are intimately connected with the license grant ... an examination into the circumstances surrounding the bankruptcy will permit governmental units to pursue appropriate regulatory policies and take appropriate action without running afoul of bankruptcy policy." Id. at 165. But these passages do not lead us to conclude that section 525 is inapplicable here. To begin with, we may not "resort to legislative history to cloud a statutory text that is clear." Ratzlaf v. United States, 510 U.S. 135, 147-48 (1994). Moreover, while the quoted passages do suggest that agencies may make regulatory decisions (including perhaps canceling the licenses of bankrupt debtors) based on factors such as future financial responsibility or ability, they do not state that an agency may use timely payment of a dischargeable debt as the sole indicator of such responsibility, as the Commission has done here. Cf. H.R. Rep. No. 95-595, at 165 ("The purpose of [section 525] is to prevent an automatic reaction against an individual for availing himself of the protection of the bankruptcy laws.").
73
Duffey v. Dollison, 734 F.2d 265 (6th Cir. 1984), which Intervenors invoke, reinforces rather than undermines this interpretation of section 525. In Duffey, the court upheld as applied to a bankrupt debtor a state law suspending the driver's license of anyone who failed to make timely payment of a state tort judgment until that person provided proof of future financial responsibility. The statute at issue there specifically required extrinsic "evidence of financial responsibility," such as a certificate of insurance or a bond, in order to reinstate a license, and was specifically re-written not to require payment of discharged debts as a precondition for reinstatement: "the registrar shall vacate the order of suspension upon proof that such judgment is stayed, or satisfied in full ... and upon such person's filing ... evidence of financial responsibility...." Id. at 269 (quoting Ohio Rev. Code 4509.45 (Baldwin 1975)). The Commission's automatic cancellation policy, in contrast, refers to no analogous extrinsic evidence of fitness to hold a license, and allows license cancellation to rest solely on failure to pay a dischargeable debt.
74
Finally, noting that section 525 is entitled "Protection against discriminatory treatment," and that the House Report on the bankruptcy bill provides that section 525 "extends only to discrimination or other action based solely ... on the basis of nonpayment of a debt discharged in the bankruptcy case," H.R. Rep. No. 95-595, at 366-67, the Commission suggests that the provision is inapplicable here because "[a]ll licensees lost their licenses if they failed to meet the payment deadline." Appellee's Br. at 23.
75
The text of section 525, however, includes "discriminat[ion]" only as an item in a series of prohibited actions: "a governmental unit may not deny, revoke, suspend, or refuse to renew a license ... to, [or] condition such a grant to, discriminate with respect to such a grant against, [or] deny employment to, [or] terminate the employment of, or discriminate with respect to employment against[ ] a person that is ... a debtor under this title...." 11 U.S.C. 525(a) (emphasis added). Another prohibited action in the series is (as we have just seen) to "revoke" the license of a bankrupt "solely because such bankrupt" has "not paid a debt dischargeable" under the Bankruptcy Code--precisely what happened in this case. And the House Report itself explicitly states that section 525 "extends only to discrimination or other action based solely ... on the basis of nonpayment of a debt discharged in the bankruptcy case...." H.R. Rep. No. 95-595, at 366-67 (emphasis added); see also Walker v. Wilde (In re Walker), 927 F.2d 1138, 1142-43 (10th Cir. 1991) (invalidating under section 525 a license cancellation policy that applied to bankrupts and non-bankrupts alike).
76
We have no doubt that in developing its installment payment plan, the Commission made a good faith effort to implement Congress's command to encourage small businesses with limited access to capital to participate in PCS auctions. We are also mindful that, as the Commission suggests, allowing NextWave to retain its licenses may be "grossly unfair" to losing bidders and licensees who "complied with the administrative process and forfeited licenses or made timely payments despite their financial difficulties." Appellee's Br. at 9. Any unfairness, however, was inherent in the Commission's decision to employ a licensing scheme that left its regulatory actions open to attack under Chapter 11 of the Bankruptcy Code, the very purpose of which is "to permit successful rehabilitation of debtors." NLRB v. Bildisco & Bildisco, 465 U.S. 513, 527 (1984); see also H.R. Rep. No. 95-595, at 220 ("The purpose of a business reorganization case, unlike a liquidation case, is to restructure a business's finances so that it may continue to operate, provide its employees with jobs, pay its creditors, and produce a return for its stockholders."). The Code expressly contemplates that bankrupts will sometimes avoid the consequences of late or non-payment they might have faced had they not filed for bankruptcy. See, e.g., 11 U.S.C. 1123(a)(5)(G) (stating that a reorganization plan may, among other options, provide for "curing or waiving of any default"); United States v. Whiting Pools, Inc., 462 U.S. 198, 204 (1983) ("The creditor with a secured interest in property included in the estate must look to [the provisions of the Bankruptcy Code] for protection, rather than to the nonbankruptcy remedy of possession."). And the Code's restrictions have been applied even to the official actions of Government agencies. See, e.g., Whiting Pools, 462 U.S. at 209 (enforcing the Bankruptcy Code against the IRS to prevent seizure of property under a tax lien and concluding that "[n]othing in the Bankruptcy Code or its legislative history indicates that Congress intended a special exception for the tax collector"). Here, as we have explained, we think section 525 prevents the Commission, whatever its motive, from canceling the licenses of winning bidders who fail to make timely installment payments while in Chapter 11.
77
We do not think this conclusion frustrates the purposes of the Communications Act, because nothing in the Act required the Commission to choose the licensing scheme at issue here. Although section 309(j) suggests the possibility of using guaranteed installment payments of some kind, the statute also suggests alternative methods of facilitating small business participation. See 47 U.S.C. 309(j)(4)(A). Indeed, in 1998, the Commission decided that "until further notice, installment payments should not be offered in auctions as a means of financing small businesses and other designated entities seeking to secure spectrum licenses." See Competitive Bidding Proceeding, 63 Fed. Reg. 2315, 2318-19 (Jan. 15, 1998). Moreover, irrespective of the Commission's decision to use installment payments as part of its licensing scheme, nothing in the Act required it to enter a creditor relationship with winning bidders, take liens on licenses, or--most important for our decision here--make timely payment a license condition. For example, the Commission could have required winning bidders to obtain third party guarantees for their license fee obligations, or required full upfront payment from C Block licensees and helped them obtain loans from third parties. The Commission could also have made license grants conditional on periodic checks of financial health, a more extensive credit check, or some other evidence that winning bidders were capable of using their licenses in the public interest. Having chosen instead a scheme that put it in a creditor-debtor (and lienholder) relationship with its licensees and conditioned licenses on timely payment of their debts, and having as a consequence run afoul of section 525 of the Bankruptcy Code, the Commission may not escape that provision's clear command simply because it acted for a regulatory purpose.
IV
78
In view of our conclusion that the Commission violated section 525 of the Bankruptcy Code in canceling NextWave's licenses, we need not consider NextWave's remaining Bankruptcy Code arguments, nor its arguments that the cancellation violated principles of due process and fair notice. We therefore reverse and remand to the Commission for proceedings not inconsistent with this opinion.
79
So ordered.
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421 F.Supp.2d 1220 (2006)
UNITED STATES of America, Plaintiff,
v.
Myron H. HAFNER, Caroline L. Hafner, and Leland Erickson, Defendants.
No. 1:05-CV-114.
United States District Court, D. North Dakota, Southwestern Division.
March 14, 2006.
*1221 Kent Rockstad, U.S. Attorney's Office, Fargo, ND, for Plaintiff.
Myron H. Hafner, Beulah, ND, Pro se.
Caroline L. Hafner, Beulah, ND, Pro se.
Leland Erickson, Beulah, ND, Pro se.
ORDER DENYING DEFENDANT HAFNER'S MOTION TO DISMISS
HOVLAND, Chief Judge.
Before the Court is defendant Myron Hafner's Motion to Dismiss filed on January 3, 2006. The Government has filed a response opposing the motion. For the reasons set forth below, the motion is denied.
I. BACKGROUND
On November 1, 2005, the Government filed suit against Myron L. Hafner and Caroline L. Hafner alleging that the Hafners had defaulted on several loans made by the Farm Service Agency (FSA).[1] See Docket No. 1. On December 5, 2005, the Government filed a "Waiver of Service of Summons" form signed by Myron Hafner on December 1, 2005. The waiver states, in part:
I acknowledge receipt of your request that I waive service of a summons in the above-captioned case. I have also received a copy of the complain in the action, two copies of this instrument, and a means by which I can return the signed waiver to you without cost to me. I agree to save the cost of service of a summons and an additional copy of the compliant in this lawsuit by not requiring that I (or the entity on whose behalf I am acting) be served with judicial process in the manner provided by Rule 4.
(Docket No. 3).
II. LEGAL DISCUSSION
Defendant Myron Hafner's present motion seeks a dismissal of the action pursuant to Rule 12(b) of the Federal Rules of Civil Procedure. Specifically, Hafner alleges lack of jurisdiction, insufficiency of process, insufficiency of service of process, and failure to state a claim upon which relief can be granted. The Government contends that each allegation is without merit.
A. LACK OF SUBJECT MATTER JURISDICTION
Hafner initially seeks dismissal under Rule 12(b)(1) of the Federal Rules of Civil Procedure for lack of subject matter jurisdiction. According to the complaint, jurisdiction in this case is predicated upon 28 U.S.C. § 1345 which provides as follows:
Except as otherwise provided by Act of Congress, the district courts shall have original jurisdiction of all civil actions, *1222 suits or proceedings commenced by the United States, or by any agency or officer thereof expressly authorized to sue by Act of Congress.
"Generally, district courts have original jurisdiction over suits brought by the United States to foreclose mortgages on realty situated within the district." United States v. Torres, 142 F.3d 962, 966 (7th Cir.1998) (citing Garden Homes, Inc. v. United States, 200 F.2d 299, 300 (1st Cir. 1953)); see United States v. Mosbrucker, 340 F.3d 664, 666 (8th Cir.2003) (holding that district court had jurisdiction to order foreclosure and eviction). It is apparent that this Court has jurisdiction over all actions in which the United States appears as a plaintiff, which includes foreclosure actions, unless some act of Congress states differently.
Myron Hafner contends that the Agricultural Credit Act of 1987(ACA) created an exception to a district court's jurisdiction over foreclosure actions involving agricultural debtors. Hafner also contends that the Government has failed to complete all administrative and servicing actions prior to filing suit as required by the ACA. In further support of his position, Hafner cites to 7 U.S.C. § 1981d entitled "Notice of loan service programs" and 7 U.S.C. § 2000(g) entitled "Prerequisites to foreclosure or liquidation."
Having carefully reviewed the cited authority, the Court finds that neither the ACA, nor the accompanying statutes cited by Hafner, divest this Court of jurisdiction under 28 U.S.C. § 1345. Hafner has failed to establish that the ACA constitutes a statutory exception to the general jurisdiction statute found at 28 U.S.C. § 1345. Hafner's contentions that this Court lacks subject matter jurisdiction over this matter are wholly unsupported by the law. In fact, this Court has recently rejected this same argument in a related case. See United States v. Bauer, 1:05&-cv-061 (D.N.D.2005) (Order Denying Defendant's Motion for a More Definite Statement and Defendant's Motions to Dismiss); see also United States v. Anderson, 2:04-cv-121 (D.N.D.2005) (Order Denying Defendant's Motion For a More Definite Statement and Motion to Dismiss).[2] The Court finds no basis for granting a dismissal under 12(b)(1) for lack of subject matter jurisdiction.
B. INSUFFICIENCY OF PROCESS AND INSUFFICIENCY OF SERVICE OF PROCESS
Hafner also seek dismissal under Rule 12(b)(4) and (5) of the Federal Rules of Civil Procedure for insufficiency of process and insufficiency of service of process.[3]*1223 Although Hafner acknowledges he signed a "Waiver of Service of Summons," he contends that dismissal is warranted because he was not served with an actual summons. Hafner also contends that Rule 4(d) of the Federal Rules of Civil Procedure, which allows a defendant to waive service of summons, is unconstitutional.
Rule 4(d) of the Federal Rules of Civil Procedure provides, in part, as follows:
(2) An individual, corporation, or association that is subject to service under subdivision (e), (f), or (h) and that receives notice of an action in the manner provided in this paragraph has a duty to avoid unnecessary costs of serving the summons. To avoid costs, the plaintiff may notify such a defendant of the commencement of the action and request that the defendant waive service of a summons. The notice and request
(A) shall be in writing and shall be addressed directly to the defendant, if an individual, or else to an officer or managing or general agent (or other agent authorized by appointment or law to receive service of process) of a defendant subject to service under subdivision (h);
(B) shall be dispatched through first-class mail or other reliable means;
(C) shall be accompanied by a copy of the complaint and shall identify the court in which it has been filed;
(D) shall inform the defendant, by means of a text prescribed in an official form promulgated pursuant to Rule 84, of the consequences of compliance and of a failure to comply with the request;
(E) shall set forth the date on which the request is sent;
(F) shall allow the defendant a reasonable time to return the waiver, which shall be at least 30 days from the date on which the request is sent, or 60 days from that date if the defendant is addressed outside any judicial district of the United States; and
(G) shall provide the defendant with an extra copy of the notice and request, as well as a prepaid means of compliance in writing.
Fed.R.Civ.P. 4(d)(2).
The record reveals that the Government fully complied with each of the required elements. On November 11, 2005, the Government sent Hafner a "Waiver of Service of Summons" and a copy of the complaint. On December 1, 2005, Hafner executed the waiver, and it was subsequently filed on December 5, 2005. See Docket No. 3. In such a situation, the commentary to Rule 4" makes clear that a challenge under Rules 12(b)(4) and (5) is unwarranted.
Subdivision (b) of Rule 12 of the Federal Rules of Civil Procedure has seven numbered grounds of objection. Of the seven, two are waived when the request for waiver is honored by the defendant: the objections numbered 4, on insufficiency of process, and 5, on insufficiency of service of process. Since there is no summons in the picture at all when the waiver procedure is fulfilled, objection 4 has nothing to operate on, and dispensing with formal service is of course the very purpose of the waiver procedure, *1224 thus taking objection 5 out of the picture as well.
Commentary C4-16, 2005 Supplementary Pamphlet, Title 28 U.S.C.A., Fed.R.Civ.P.
The Court finds that Myron Hafner voluntarily waived his right to receive service of a summons. The waiver excused the Government from providing him with service of a summons and waived Hafner's ability to raise objections under Rules 12(b)(4) and (5) of the Federal Rules of Civil Procedure. For obvious reasons, the Court will decline Hafner's invitation to declare Rule 4(d) of the Federal Rules of Civil Procedure unconstitutional. The Court finds no basis for granting a dismissal under Rules 12(b)(4) and (5) for insufficiency of process and insufficiency of service of process.
C. FAILURE TO STATE A CLAIM
Finally, Hafner seeks dismissal under Rule 12(b)(6) of the Federal Rules of Civil Procedure for failure to state a claim upon which relief can be granted. Although not entirely clear from the pleadings, Hafner seems to contend that the complaint does not include sufficient detailed factual information.
The standard for a district court to employ in ruling on a motion to dismiss under Rule 12(b)(6) is clear and well-established. CrumpleyPatterson v. Trinity Lutheran Hosp., 388 F.3d 588, 590 (8th Cir.2004). "A district court must accept the allegations contained in the complaint as true, and all reasonable inferences from the complaint must be drawn in favor of the nonmoving party." Id. (citing Hishon v. King & Spalding, 467 U.S. 69, 73, 104 S.Ct. 2229, 81 L.Ed.2d 59 (1984); Halley v. Lohman, 90 F.3d 264, 266 (8th Cir.1996)). "[D]ismissal is inappropriate `unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.'" McCormack v. Citibank, N.A., 979 F.2d 643, 646 (8th Cir.1992) (quoting Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)). "A motion to dismiss should be granted `as a practical matter . . . only in the unusual case in which there is some insuperable bar to relief.'" Strand v. Diversified Collection Service, Inc., 380 F.3d 316, 317 (8th Cir.2004) (citing Frey v. Herculaneum 44 F.3d 667, 671 (8th Cir.1995) (quoting Bramlet v. Wilson, 495 F.2d 714, 716 (8th Cir.1974))). "Under the Federal Rules, it is not necessary to plead every fact with formalistic particularity." BJC Health System v. Columbia Cas. Co., 348 F.3d 685, 688 (8th Cir.2003). "A pleading which sets forth a claim for relief ... shall contain a short and plain statement of the claim showing that the pleader is entitled to relief. ..." Fed.R.Civ.P. 8(a).
The Government's complaint details the promissory note and real estate mortgages executed by Myron Hafner and Caroline Hafner. A copy of each is attached to the complaint. The complaint alleges that the Hafners defaulted under the terms of the promissory note and real estate mortgages and sets forth the specific amounts due and owing. The complaint explains that all administrative and servicing actions have been completed and the Hafners have been provided notices as required under federal law. In the prayer for relief, the Government seeks a judgment of foreclosure of its mortgages and an order for a judicial sale of the mortgaged property.
A plain reading of the complaint reveals that the Government has fully satisfied Rule 8(a) of the Federal Rules of Civil Procedure which requires only a short and plain statement of the claim showing that the pleader is entitled to relief. The Court finds no basis for granting a dismissal under Rules 12(b)(6) of the Federal Rules of Civil Procedure for failure to state a claim upon which relief can be granted.
*1225 III. CONCLUSION
For the reasons set forth above, the Court DENIES defendant Myron Hafner's Motion to Dismiss. (Docket No. 5). This Court clearly has subject matter jurisdiction over this foreclosure proceeding under 28 U.S.C. § 1345.
IT IS SO ORDERED.
NOTES
[1] The complaint also named Leland Erickson who leases the real estate being foreclosed upon.
[2] Hafner's motion to dismiss bears an eery resemblance to the Defendants' pleadings filed in United States v. Bauer. Hafner is appearing in this matter pro se, as were the Defendants in Bauer. The Court learned that the Bauers were being counseled by an unlicensed individual in the state of Montana holding himself out as an attorney, i.e., Von Bretz. The Bauers' pleadings were prepared and filed by that unlicensed individual, and the Bauers paid for the legal services. The Court would warn Hafner that North Dakota law prohibits the practice of law without a license. See N.D. Cent.Code 27-11-07. If Hafner wishes the assistance of legal counsel, the Court would strongly recommend hiring a competent attorney who is properly licensed to practice law and admitted to the federal bar of North Dakota.
[3] The distinction between Rule 12(b)(4) and 12(b)(5) is not always clear, nor always observed. The difference between the two rules has been explained as follows:
An objection under Rule 12(b)(4) concerns the form of the process rather than the manner or method of its service. Technically, therefore, a rule 12(b)(4) motion is proper only to challenge noncompliance with the provisions of Rule 4(b) or any applicable provision incorporated by Rule 4(b) that deals specifically with the content of the summons. A Rule 12(b)(5) motion is the proper vehicle for challenging the mode of delivery or lack of delivery of the summons and complaint. Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure § 1353, pp. 334-35 (3d Ed.2004). Due to difficulties that arise when trying to distinguish the two rules "[s]everal courts have ... treated a combination of the two motions as proper procedure. As stated by the Eighth Circuit, `[t]he distinction between the two insufficiencies is often blurred, and it is appropriate to present and analyze service under both rules.'" Adams v. Allied Signal General Aviation Avionics, 74 F.3d 882, 884 n. 2 (8th Cir.1996).
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THE THIRTEENTH COURT OF APPEALS
13-12-00535-CR
ANDRE SAMUEL
v.
THE STATE OF TEXAS
On Appeal from the
117th District Court of Nueces County, Texas
Trial Cause No. 04-CR-3356-B
JUDGMENT
THE THIRTEENTH COURT OF APPEALS, having considered this cause on
appeal, concludes that the judgment of the trial court should be AFFIRMED. The Court
orders the judgment of the trial court AFFIRMED.
We further order this decision certified below for observance.
December 5, 2013
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949 F.Supp. 626 (1996)
Mirko PETROVICH, Plaintiff,
v.
LPI SERVICE CORPORATION, d/b/a LaSalle Partners, Defendant.
No. 94 C 3071.
United States District Court, N.D. Illinois, Eastern Division.
December 4, 1996.
John P. De Rose, John P. De Rose & Associates, Burr Ridge, IL, for plaintiff.
Barry A. White, Mayer, Brown & Platt, Chicago, IL, Jeffrey S. Fowler, Laner, Muchin, Dombrow, Becker, Levin & Tominberg, Ltd., Chicago, IL, for defendant.
MEMORANDUM OPINION
GRADY, District Judge.
Before the court is a motion by defendant for partial summary judgment limiting plaintiff's employment discrimination remedies. For the reasons stated in this opinion, the motion is denied.
BACKGROUND
The background facts in the case were recounted fully in the court's memorandum opinion of June 3, 1996. See Petrovich v. LPI Service Corp., 1996 WL 296639, (N.D.Ill. June 3, 1996). In summary, plaintiff Mirko Petrovich is a citizen of the United States of Serbian national origin. In March 1990, Petrovich was hired by Trammell Crow, a large national real estate firm, to work at the Chancellory office complex in Itasca, Illinois. The Chancellory consists of six office buildings, and Petrovich was hired to be chief engineer of One Pierce Place, one of the largest of the buildings. Effective January 1, 1992, Trammell Crow ceased managing the Chancellory and LaSalle Partners was awarded the management contract. Stephen *627 Zsigray, a LaSalle vice president, was named general manager of the complex. LaSalle hired all of the engineers at the Chancellory and assumed their union contract. The engineers, including the chief engineers, were represented by Operating Engineers Local 399.
In May 1992, Zsigray announced that he was changing the Chancellory's engineering management structure to conform with the system used by LaSalle, which allowed for only one chief engineer per complex. The engineers and their union representative selected Art Wyruchowski to be chief engineer because he had the most seniority. Petrovich and Paul Krause became the assistant chief engineers, supervised by Wyruchowski. Petrovich continued to supervise the same building and with the same compensation. The defendant admits that Zsigray and Wyruchowski discussed the possibility of terminating Petrovich for performance in September 1992. Petrovich asserts that Wyruchowski informed him that Zsigray had told Wyruchowski to fire "the foreigner"; Zsigray denies that he made this reference. In late October 1992, LaSalle demoted Krause to engineer, leaving Petrovich as the only assistant chief engineer. All engineers would report to Petrovich, who would report to Wyruchowski. At some point after this change, but before the end of 1992, Wyruchowski prepared a positive written evaluation of Petrovich. Zsigray admitted at his deposition that when he saw this performance review, he expressed his displeasure to Wyruchowski that it was too favorable, and threw it away.
On January 8, 1993, Zsigray gave Wyruchowski the choice of either resigning or being fired. Wyruchowski resigned effective January 23, 1993, and states that he was forced to resign in part because he had been too easy on Petrovich. On January 15, 1993, Petrovich met with Zsigray and expressed his desire to become chief engineer, noting that he was the most senior engineer. Zsigray told Petrovich that he would not be considered because of his poor relations with his subordinates. On February 8, 1993, LPI hired John Learch, an American-born white male, to be chief engineer. On February 23, Petrovich presented Zsigray with a copy of a grievance letter he had written to the union protesting the hiring of Learch. According to Petrovich, Zsigray reacted to the letter by angrily stating that plaintiff would never become a chief and that "Serbian guys like [him] were killing everybody." Zsigray denies making any statements regarding Serbs or people being killed.
Petrovich filed an EEOC charge on February 25, 1993. On March 4, 1993, he received the formal notice of reprimand and suspension Zsigray and Learch prepared after jointly inspecting One Pierce Place on February 23. On April 14, 1993, the EEOC sent notice of Petrovich's charge to LaSalle. On September 13, 1993, Learch issued Petrovich another formal reprimand pursuant to the union contract. On October 6, 1993, Petrovich filed a second EEOC charge claiming discrimination and retaliation with respect to this reprimand. After receiving Zsigray's approval, Learch prepared a letter of termination to be given to Petrovich. On October 13, 1993, Petrovich was terminated at a meeting attended by Learch, Zsigray and the leasing manager of the Chancellory. Petrovich grieved this termination under the collective bargaining agreement between LaSalle and Local 399. By a letter dated June 3, 1994, Petrovich was "terminated" for the second time based on misrepresentations on his resume uncovered in LaSalle's investigation into Petrovich's grievance. In the second dismissal letter, Zsigray stated that LaSalle's investigation of Petrovich's resume uncovered that he only worked for the Four Seasons Hotel in Chicago from January 1989 to April 1989, rather than the September 1988 to October 1989 period reported on his resume. Zsigray noted that LaSalle's application for employment requires applicants to sign a statement that any misrepresentation of fact "will be sufficient reason not to hire me and may be cause for dismissal." Zsigray's letter informed Petrovich that he was dismissed for "resume fraud," effective immediately. Petrovich grieved this second dismissal, and an arbitration hearing was scheduled on the grievances, but the hearing was later dropped by the union.
*628 Defendant LaSalle now moves for partial summary judgment to limit Petrovich's remedies to backpay under the Supreme Court's decision in McKennon v. Nashville Banner Publishing Co., 513 U.S. 352, 115 S.Ct. 879, 130 L.Ed.2d 852 (1995).
DISCUSSION
Summary judgment "shall be rendered forthwith 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). In considering such a motion, the court must view all inferences in the light most favorable to the nonmoving party. Tolentino v. Friedman, 46 F.3d 645, 649 (7th Cir.), cert. denied, ___ U.S. ___, 115 S.Ct. 2613, 132 L.Ed.2d 856 (1995). "A dispute over material facts is genuine if `the evidence is such that a reasonable jury could return a verdict for the nonmoving party.'" Kennedy v. Children's Serv. Soc'y of Wis., 17 F.3d 980, 983 (7th Cir.1994) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986)). The court will enter summary judgment against a party who does not "come forward with evidence that would reasonably permit the finder of fact to find in" its favor on a material question. McGrath v. Gillis, 44 F.3d 567, 569 (7th Cir.1995).
Once the moving party has supported its motion for summary judgment, the "adverse party may not rest upon the mere allegations or denials of the adverse party's pleading, but the adverse party's response, by affidavits or as otherwise provided in [Rule 56], must set forth specific facts showing that there is a genuine issue for trial." Fed. R.Civ.P. 56(e). Any fact asserted in the movant's affidavit will be accepted by the court as true unless the adverse party submits its own affidavits or other admissible evidence contradicting the assertion. Curtis v. Bembenek, 48 F.3d 281, 287 (7th Cir.1995).
LIMITATIONS ON THE PLAINTIFF'S REMEDIES AFTER McKENNON
LaSalle contends that Petrovich's possible remedies for alleged employment discrimination are limited to backpay because of the Supreme Court's recent ruling in McKennon v. Nashville Banner Publishing Co., 513 U.S. 352, 115 S.Ct. 879, 130 L.Ed.2d 852 (1995). In McKennon, an age discrimination case, the Court held that after-acquired evidence of employee wrongdoing affects the remedies available to the plaintiff.[1]Id. at ___, 115 S.Ct. at 886. The plaintiff had removed and copied several confidential financial documents prior to her discharge in what the defendant employer said was a cost-cutting move. At her deposition, she revealed that she had copied and retained financial documents. The defendant employer sent her a letter terminating her a second time, and notifying her that she would have been discharged for that misconduct if it had known when it occurred. The Supreme Court held that in a case with after-acquired evidence of wrongdoing, "neither reinstatement nor front pay is an appropriate remedy." Id. The Court also held that the trial court should calculate backpay "from the date of the unlawful discharge to the date the new information was discovered." Id. To rely on the after-acquired evidence, the employer must establish that "the wrongdoing was of such severity that the employee in fact would have been terminated on those grounds alone if the employer had known of it at the time of the discharge." Id. at ___ - ___, 115 S.Ct. at 886-87.
LaSalle contends that Petrovich's possible remedies should be limited to backpay because of after-acquired evidence of resume fraud it uncovered in investigating Petrovich's grievance of his first dismissal. In the second dismissal letter sent to Petrovich, dated June 3, 1994, Zsigray stated that LaSalle's *629 investigation of Petrovich's resume uncovered that he only worked for the Four Seasons Hotel in Chicago from January 1989 to April 1989, rather than the September 1988 to October 1989 period reported on his resume. LaSalle's application for employment required applicants to sign a statement that any misrepresentation of fact "will be sufficient reason not to hire me and may be cause for dismissal." In its further investigation of Petrovich's resume after the second dismissal, LaSalle discovered that Petrovich had omitted all references to his employment by Acorn Tool, the Emergency Response People, and the Turnberry Isle Yacht and Country Club. Memorandum in Support of Defendant's Motion for Partial Summary Judgment at 5. Petrovich admitted in his answers to interrogatories that he had worked for those firms. Plaintiffs Answers to Interrogatories, ¶¶ 6, 8. In its motion, LaSalle argues that any remedy for Petrovich's employment discrimination claim must be limited to backpay from the date of his first termination to the date of this second termination, because of the after-acquired evidence of this wrongdoing with his resume.
In response, Petrovich contends that McKennon is inapplicable to this case because: (1) there is a genuine issue of material fact as to whether he actually prepared or submitted the allegedly false resume; and (2) there is a genuine issue of material fact as to whether the after-acquired evidence of resume inaccuracies would alone have been the cause of his dismissal if LaSalle had known about them at the time of his first discharge. While we find that there is no issue of material fact that Petrovich was responsible for his resume, we are not persuaded as a matter of law that the after-acquired evidence alone would have caused LaSalle to dismiss him.
At his deposition and in his response, Petrovich contends that his resume with LaSalle was not prepared by him, and not submitted to LaSalle by him, and thus he is not responsible for its content. Petrovich Deposition at 103-104. Petrovich's attempt to create an issue of material fact here is undercut by his own later deposition testimony, in which he admits that he was given a copy of this resume by someone at LaSalle about the time that it was submitted. Petrovich Deposition at 161. Petrovich also admits in his 12(n) statement that the dates of his employment provided in his interrogatories do not match the dates of his employment provided in the LaSalle resume. Plaintiff's Response to Defendants' Statement of Undisputed Facts Pursuant to Local Rule 12(n) at ¶¶ 1, 3. Because Petrovich's own testimony establishes that he had a copy of the resume from LaSalle months prior to his termination and did not seek to correct the inaccuracies, we find no genuine issue of material fact over whether Petrovich knew of the inaccuracies or is responsible for the resume.[2]
Secondly, Petrovich asserts that there is a genuine issue of material fact as to whether the after-acquired evidence of wrongdoing would, standing alone, have caused LaSalle to dismiss him had LaSalle known about it at the time of his first discharge. In response, LaSalle argues the fact that the resume discrepancies did result in the second dismissal in June 1994 shows that they would have had the same result in October 1993 had they been known then.
Petrovich contends that the second dismissal arose out of the pending litigation, not any LaSalle policy of dismissal for resume misrepresentations, and therefore does not meet the burden under McKennon. But McKennon does allow the employer to utilize after-acquired evidence of wrongdoing that would lead to discharge, "even if it is acquired during the course of discovery in a suit against the employer and even if the information might have gone undiscovered absent the suit." McKennon, 513 U.S. at ___, 115 S.Ct. at 886. The fact that LaSalle uncovered the evidence of Petrovich's resume misrepresentations during the pendency of this lawsuit would not prevent this evidence *630 from forming the grounds for discharge. But LaSalle does not offer sufficient evidence by affidavit from Zsigray or its other managers that the discovery of these resume misrepresentations alone would have caused them to discharge Petrovich. Such affidavit testimony of a LaSalle manager might be sufficient to shift the burden back to Petrovich to produce affirmative evidence to the contrary. See Wallace v. Dunn Construction Co., 62 F.3d 374, 380 (11th Cir.1995)(holding that employer affidavits that falsified application would have resulted in termination would meet employer's burden under McKennon for summary judgment). Requiring affidavits to prove the employer's reliance on after-acquired evidence is in line with Seventh Circuit case law before McKennon. See Washington v. Lake County, 969 F.2d 250 (7th Cir.1992), reversed on other grounds, McKennon v. Nashville Banner Publishing Co., 513 U.S. 352, 115 S.Ct. 879, 130 L.Ed.2d 852 (1995).
We disagree with LaSalle that its second "termination" of Petrovich is an "obviously superior substitute" for sworn testimony from LaSalle managers that they would have terminated Petrovich for resume fraud alone. That LaSalle did discharge Petrovich may be simply a tactical move consistent with its desire to limit damages in this case and not of itself a demonstration that this is what it would have done had it made the discovery without a lawsuit pending. We are willing to consider a further summary judgment motion upon presentation of affidavit testimony explaining why the misstatement of dates and omission of prior employers on Petrovich's LaSalle resume would have been considered serious enough to result in his dismissal.
CONCLUSION
For the reasons stated in this opinion, LaSalle's motion for partial summary judgment is denied. If it desires to do so, LaSalle may file a further motion supported by affidavit by December 27, 1996. The court will review any filing and determine whether a response from Petrovich is necessary.
NOTES
[1] While the Supreme Court's McKennon holding involved the Age Discrimination in Employment Act ("ADEA"), the Court indicated that the reasoning should likely apply to the other employment discrimination statutes as well. Subsequent decisions of the lower courts have extended McKennon's reasoning on after-acquired evidence to Title VII. See Wallace v. Dunn Construction Co., 62 F.3d 374, 378 (11th Cir.1995); Naszke v. Federal Express Corp., 1996 WL 450832, at * 8 (N.D.Ill. Aug. 6, 1996). The Seventh Circuit has not yet considered a case involving McKennon and after-acquired evidence.
[2] We also note that at a Rule 16 conference before us on October 24, 1994, plaintiff's counsel denied that "the resume was false in any material particulars." At that time, plaintiff's counsel did not contest whether Petrovich had in fact prepared the resume, and apparently has only now raised this issue in response to defendant's motion for partial summary judgment.
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759 F.2d 19
*Herringv.Elmer Line Ltd.
84-3171
United States Court of Appeals,Fifth Circuit.
3/18/85
1
E.D.La.
AFFIRMED
2
---------------
* Fed.R.App.P. 34(a); 5th Cir.R. 34.2.
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190 S.E.2d 392 (1972)
15 N.C. App. 592
Viola Mae STROUD
v.
NORTH CAROLINA MEMORIAL HOSPITAL.
No. 7215IC460.
Court of Appeals of North Carolina.
August 2, 1972.
*393 Atty. Gen. Robert Morgan, by Associate Atty. Gen. Richard B. Conely, for defendant petitioner.
Winston, Coleman & Bernholz, by Barry T. Winston, Chapel Hill, for plaintiff respondent.
MORRIS, Judge.
Upon appeal from an award of the Industrial Commission, our inquiry is limited to two questions of law: (1) Whether there was any competent evidence before the Commission to support its findings of fact; and (2) Whether the findings of fact of the Commission justify its legal conclusions and decision. Bailey v. North Carolina Dept. of Mental Health, 272 N.C. 680, 159 S.E.2d 28 (1968). The Industrial Commission's findings of fact are conclusive on appeal when supported by competent evidence. G.S. § 143-293. This is true even when there is evidence which would support findings to the contrary. Bailey v. North Carolina Dept. of Mental Health, supra.
We hold that the findings of the Commission that plaintiff was an invitee of defendant, that plaintiff was injured by a negligent act on the part of a State employee acting in the scope of her employment, and that plaintiff was not contributorily negligent are supported by competent evidence. See Crawford v. Wayne County Board of Education, 3 N.C.App. 343, 164 S.E.2d 748 (1968), aff'd 275 N.C. 354, 168 *394 S.E.2d 33 (1969). Similarly we hold that the findings of fact are sufficient to support the Full Commission's conclusion that plaintiff was entitled to recover.
The opinion and award of the Full Commission is
Affirmed.
BROCK and HEDRICK, JJ., concur.
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443 F.2d 382
UNITED STATES of America, Appellee,v.Gustavo ORELLANA, Appellant.
No. 973, Docket 35632.
United States Court of Appeals, Second Circuit.
Argued June 3, 1971.Decided June 3, 1971.
Phylis Skloot Bamberger, New York City (Robert Kasanof, The Legal Aid Society, New York City, of counsel), for appellant.
Daniel J. Dillon, Asst. U.S. Atty. (Edward R. Neaher, U.S. Atty., for Eastern District of New York, David G. Trager, Asst. U.S. Atty., of counsel), for appellee.
Before CLARK, Associate Justice,1 and SMITH and HAYS, Circuit judges.
PER CURIAM.
1
We affirmed in open court the conviction of appellant in the United States District Court for the Eastern District of New York, Leo F. Rayfiel, Judge.
1
Sitting by designation
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