Special Concurrence

In Central West Virginia Energy Co., Inc. v. Mountain State Carbon, LLC, Case No. 10-1486, 2011 U.S. App. LEXIS 7557 (4^th Cir. Apr. 13, 2011), the Fourth Circuit Court of Appeals clarified how to determine a corporation’s “principal place of business” for purposes of diversity jurisdiction.

 

 

Plaintiff, a coal corporation, brought suit in federal court against Defendants, a limited liability company and its member companies, alleging wrongful refusal to accept coal deliveries in breach of an agreement.  Defendants filed a motion to dismiss the complaint due to a lack of complete diversity of the parties.  Defendants argued that one of the member parties, Severstal Wheeling, had its “principal place of business in West Virginia, the Plaintiff’s home state; thus, Defendants argued, complete diversity did not exist.  Siding with Defendants, the District Court concluded that Severstal Wheeling’s “principal place of business” was indeed West Virginia because that is where its day-to-day operations were all handled and dismissed the complaint.

 

 

The Fourth Circuit Court of Appeals reversed.  Looking at precedent, the Fourth Circuit noted that, in the past, it has employed two different tests to determine a corporation’s “principal place of business”  Under the “nerve center” test, the home office of the corporation from which officers coordinate the corporation’s activities is the “principal place of business.”  Athena Auto, Inc. v. DiGregorio, 166 F.3d 288, 290 (4^th Cir. 1999).  Under the “place of operations” test, the “principal place of business” is where the bulk of the corporation’s activities occurs.  Id.  Prior to this decision, the Fourth Circuit had declined to adopt one test at the exclusion of the other.  Id.

           

The Supreme Court of the United States, however, recently held that that, for purposes of diversity jurisdiction, a corporation’s principal place of business is always determined by the “nerve center” test.  Hertz Corp. v. Friend, 130 S. Ct. 1181, 1186 (2010).  Here, the Fourth Circuit concluded that the District Court misapplied the “nerve center” test when it dismissed the claim for lack of diversity jurisdiction.

 

 

In its decision, the Fourth Circuit observed that seven of Severstal Wheeling’s eight corporate officers maintained their offices in Michigan rather than West Virginia.  Moreover, Severstal Wheeling conceded that its officers in Michigan were responsible for a great amount of oversight and decision-making.  Although Severstal Wheeling’s day-to-day operations, such as “purchasing, sales, transportation, engineering, human resources, and accounting/financial functions,” all occurred in West Virginia, the Court found these activities irrelevant to the “nerve center” test. 

 

 

Applying Hertz, the Court concluded that Michigan, rather than West Virginia, was Severstal Wheeling’s “principal place of business” because Michigan was where the corporation’s high level officers directed, controlled, and coordinated the corporation’s activities.

In a case of first impression in the Fourth Circuit, the Court held that an employer may be liable for sexual harassment committed by non-employees where the employer either knew or should have known of the harassment and failed to take appropriate action to halt it.  EEOC v. Cromer Food Servs., Inc., 2001 U.S. App. LEXIS 4279, at * 13 (4^th Cir. Mar. 3, 2011). 

 

 

The defendant, Cromer Food Services (“CFS”), sold snacks and beverages in vending machines that it placed on its clients’ premises.  CFS employed Homer Ray Howard (“Howard”) as a route driver who serviced the machines at Greenville Hospital, CFS’s biggest client.  Id., at * 2.  Starting in December of 2006, two hospital employees began harassing Howard daily, making inappropriate sexual comments and propositioning Howard.  Id., at * 3.  Howard made multiple complaints to CFS supervisors, but CFS did nothing to remedy the harassment.  Id., at * 4-5.  Howard also complained to the supervisor of the harassing hospital employees, but, after a two-day reprieve, the harassment continued.  Id., at * 6.

 

 

In March of 2007, Howard filed a complaint with the Equal Employment Opportunity Commission (“EEOC”).  Id. at * 7.  Upon receiving the EEOC complaint, CFS offered Howard a different route schedule.  Id.  Howard, however, declined the offer, claiming that his hourly pay would be less on his new shift and that the new shift conflicted with his childcare responsibilities.  CFS terminated Howard shortly after his rejection of the offer.  Id., at * 8.

 

 

On appeal, CFS argued that Howard failed to follow company policy by not reporting the harassment directly to the company president.  Id. at * 13-14.  CFS also argued that it took prompt remedial action after receiving the EEOC complaint by offering Howard a different route schedule.  Id. at * 18-19.  The Fourth Circuit Court of Appeals rejected both arguments.

 

 

Noting that the Fourth Circuit has not previously considered whether an employer may be held liable for the activities of non-employees in a claim for sexual harassment, the Court looked to other circuits for guidance.  Id. at * 11-13.  The Fourth Circuit concluded that CFS would be liable if it knew or should have known of the harassment and failed to take appropriate remedial action to stop it.  In this case, Howard complained to several CFS supervisors as well as directly to the hospital; this was sufficient to put CFS on notice of the sexual harassment. Id.   In addition, the Court questioned CFS’s policy that all complaints of harassment must be brought directly to the president, noting that an employee in a 100-member company may be too intimidated to report harassment directly to the president.  Id. at * 16-17.  Accordingly, the Court concluded that an employer cannot insulate itself from liability by adopting a “see no evil-hear no evil” policy.  Id.

 

Additionally, the Court concluded that CFS’s offer of a different route schedule was not a sufficient response to the harassment because it resulted in Howard being worse off.  Id. at * 18.  Arguably, the new route schedule would place Howard in a more difficult position because he would receive less hourly compensation and would be unable to drive his young child to doctor’s appointments.  Id.  The Court noted that CFS could have asked the management at the hospital to discipline the harassing employees or could have requested that one of its other employees switch routes with Howard.  Id. at * 19.  Instead, CFS chose to take an ineffective corrective action that was “too little-too late.”

On March 1, 2011, the Supreme Court of the United States issued its decision in Staub v. Proctor Hospital (No. 09-400).  The Court held an employer is liable for the biased intentions of a supervisor who influences, but does not take, the ultimate adverse action against an employee.  The Court confined its analysis to the Uniformed Services Employment and Reemployment Rights Act (“USERRA”) but noted that USERRA contains “motivating factor” language similar to that of Title VII and other federal workplace discrimination laws.

 

 

The Court based its decision on traditional tort and agency principles.  The final decision-maker’s unbiased decision does not prevent the supervisor’s previous unlawful action from being the proximate cause of the harm, because “it is common for injuries to have multiple proximate causes.”  Staub’s supervisors, Janice Mulally and Michael Korenchuk, intended to cause Staub’s dismissal and their actions formed the proximate cause of Staub’s ultimate termination by Linda Buck, an unbiased decision-maker.     

 

 

The Court declined to establish an affirmative defense for the employer when its final decision-maker had conducted an independent investigation.  In doing so, the Court refused to apply the Seventh Circuit’s definition of the “cat’s paw” as having a “singular influence” on the decision-maker.  Thus, so long as the decision-maker relied on the biased supervisor’s action, with or without considering other factors, the employer will be held liable.  To avoid liability in the face of an adverse action, the employer’s investigation must disclose reasons for the action that are independent of the biased supervisor’s motives. 

 

 

The Court’s opinion specifically refused to address whether the same principles would apply to make an employer liable when a co-worker influences the ultimate decision-maker, as opposed to a supervisor exerting a similar influence.   

 

 

Justice Scalia delivered the opinion of the Court, in which Chief Justice Roberts and Justices Kennedy, Ginsburg, Breyer, and Sotomayor joined.  Justice Alito filed an opinion concurring in judgment, in which Justice Thomas joined.  Justice Kagan took no part in the consideration or decision of the case.  

Having its first opportunity to address, somewhat indirectly, the gravamen of the United States Supreme Court’s holding in Padilla v. Kentucky, 130 S. Ct. 1473 (Mar. 31, 2010), the Virginia Supreme Court in Commonwealth v. Morris, Record No. 092163 and Commonwealth v. Chan, Record No. 092346 (Jan. 13, 2011) (collectively referred to as the “Morris/Chan” case) significantly limited the remedies available to a defendant who seeks to rely on Padilla for post-conviction relief in courts in the Commonwealth.

In Padilla, the United States Supreme Court held that where defense counsel fails to inform or incorrectly informs her non-citizen client of the immigration consequences of pleading guilty to a crime in state court, counsel has fallen below an objectively reasonable standard of professional performance, in violation of the Sixth Amendment as interpreted by Strickland v. Washington, 466 U.S. 688, 694 (1984).  Padilla, 130 S. Ct. at 1484. (“It is quintessentially the duty of counsel to provide her client with available advice about an issue like deportation and the failure to do so ‘clearly satisfies the first prong of the Strickland analysis.’”).  In light of Padilla, the appellees in Morris/Chan sought relief from the trial court where they pled guilty, claiming that their trial counsel purportedly gave them erroneous advice regarding the immigration consequences of pleading guilty. 

Morris and Chan pled guilty to and were convicted of crimes against the Commonwealth in 1997 and 2005, respectively.  After their convictions, Morris and Chan applied for United States citizenship, only to learn that their previous state court convictions not only prevented them from becoming citizens, but subjected them to removal from the United States, pursuant to the Immigration and Nationality Act (“INA”).  8 U.S.C. § 1227, et seq.  Specifically, Morris’ plea to petit larceny and sentence of 12 months’ imprisonment, with 11 months suspended constituted a “crime involving moral turpitude . . . for which a sentence of one year or longer may be imposed,” and, thus, subjected him to removal proceedings under the INA.  8 U.S.C. § 1227(a)(2)(A).  Similarly, Chan’s plea to misdemeanor assault and battery for which he received a 12 month sentence with all 12 months suspended, made him an “aggravated felon” for immigration purposes and subjected him to mandatory detention and deportation.  Id.; 8 U.S.C. § 1101(a)(43).  Claiming ineffective assistance of counsel under Padilla, the appellees sought a writ of error coram vobis, pursuant to Va. Code Section 8.01-677, and a writ of audita qurela, requesting that the trial court modify their original criminal sentence in a manner that would preclude removal.  In Morris’ case, the trial court determined that the writs sought by Morris were appropriate to review and modify his criminal sentence and, thus, modified Morris’ 12 month sentence by one day.   Likewise, in Chan’s case, the trial court amended Chan’s original sentence to 360 days by a nunc pro tunc order.

             However, the Virginia Supreme Court disagreed and reversed the Circuit Courts’ rulings in both Morris’ and Chan’s cases.  The Court reasoned that unless a statute clearly provided otherwise, a trial court is not able to modify a final order more than 21 days after the order has been entered.  Pursuant to Virginia Supreme Court Rule 1:1: “[a]ll final judgments, orders, and decrees, irrespective of terms of court, shall remain under the control of the trial court and subject to be modified, vacated, or suspended for twenty-one days after the date of entry, and no longer.”  Accordingly, though recognizing that a writ of habeas corpus, a writ of error coram vobis, and a writ of audita querela provide exceptions to Rule 1:1, the Court held that “these cases do not fall within the contemplated circumstances required by Code § 8.01-677 for error coram vobis, and audita querela is not available for use to modify criminal sentences in Virginia.”  Morris/Chan at 7. 

With respect to the writ of audita querela, the Court held that such a writ was only applicable to provide relief to civil judgment debtors and that, therefore, “[w]hat is certain is that the writ of audita querela has never been applicable to modify a criminal sentence in Virginia.”  Morris/Chan at 16.    Notably, the Court refused to follow the lead of other states, namely Florida and Kentucky, which have applied the writ to modify criminal sentences, holding, instead, that the writ as recognized in Virginia is the same as it was recognized under English common law: a writ “available for use by [civil] judgment debtors to release them from judgment where the judgment ‘ought not to have issued . . .’” Morris/Chan at 16.  

With respect to the writ of error coram vobis, the Court stated that the essential question “is whether there was an ‘error of fact not apparent on the record, not attributable to the applicant’s negligence, and which if known by the court would have prevented rendition of the judgment.’”  Morris/Chan at 10 (quoting Dobie v. Commonwealth, 198 Va. 762, 769 (1957)) (emphasis in original).  The Court rejected, therefore, Chan’s contention that because her counsel never made the trial court aware of Chan’s non-citizen status, the trial court was deprived of a fact which would have prevented it from proceeding to judgment.  The Court, instead, concluded that “[w]hile the trial court may have been inclined to impose a lesser sentence had it known of Chan’s non-citizen status, it still had the authority to render judgment against Chan.”  Morris/Chan at 10. 

Likewise, the Court went on to reject Morris’ seemingly stronger, Padilla-centered argument that ineffective assistance of counsel that results in a defendant pleading guilty to a crime for which he is either unaware or misinformed about the immigration consequences of pleading guilty is an error of fact for which a writ of coram vobis should issue.  The Court concluded that “[w]hile ineffective assistance of counsel may render a judgment voidable upon the necessary showing, it does not render the trial court incapable of rendering judgment, as do errors of fact in cases ‘where judgment is rendered against a party after his death, or who is an infant.’”  Morris/Chan at 12 (quoting Dobie, 198 Va. at 770)(emphasis in original).  Without additional analysis or reasoning, the Court concluded that Morris and Chan’s reliance on Padilla was misplaced because “[w]hile Morris and Chan may have suffered ineffective assistance of counsel according to Padilla, and may have been successful had they timely filed petitions for writs of habeas corpus pursuant to Code § 8.01-654, neither did so.”  Morris/Chan at 13.  Seemingly, the Court would confine Padilla’s applicability to the habeas corpus context, a conclusion that does not seem to necessarily follow the holding of Padilla.

            Said differently, the Court’s holding seems to promote the remarkable conclusion that a trial court, either knowing that a defendant has received ineffective assistance of counsel or, more simply, knowing that a defendant is unaware of one of the consequences of pleading guilty, a consequence that the U.S. Supreme Court has held to be most severe and crucial, see Padilla, 130 S. Ct. 1487 (“The severity of deportation – ‘the equivalent of banishment or exile,’ – only underscores how critical it is for counsel to inform her noncitizen client that he faces a risk of deportation.” (quoting Delgadillo v. Carmichael, 332 U.S. 388, 390-391 (1947))), could still proceed to render a judgment against such a defendant.  Thus, where, as in this case, the trial court is unaware of those facts, there is no error of fact that would have prevented the trial court from proceeding to judgment.  Id. (“Accordingly, a claim of ineffective assistance of counsel does not constitute an error of fact for which coram vobis will lie under Code § 8.01-677, because such a claim would not have prevented rendition of the judgment.”). 

  

The United States Supreme Court decision in Thompson v. North American Stainless, LP (No. 09-291, Jan. 24, 2011) significantly increased the likelihood of “retaliation-by-association” claims brought by employees who have close relationships with coworkers who engage in protected activity. In Thompson, the Court held that an employee who was fired three weeks after his fiancé (who also worked for the company) made a complaint of discrimination had standing to bring a claim of retaliation, even though the employee himself had not engaged in any protected activity.

In reaching its decision, the Court considered its precedent in Burlington Northern Santa Fe Railway Co. v. White, 548 U.S. 53 (2006), in which it held that “the antiretaliation provision, unlike the substantive provision [of Title VII], is not limited to discriminatory actions that affect the terms and conditions of employment.” Under Burlington, Title VII’s antiretaliation provision prohibits any employer action that “well might have dissuaded a reasonable worker from making or supporting a charge of discrimination.” In considering the third-party retaliation claim brought by Mr. Thompson, the Court found it “obvious that a reasonable worker might be dissuaded from engaging in protected activity if she knew that her fiancé would be fired.”

In addressing the employer’s concern that an employer could be at risk of a retaliation claim any time it fires any employee who happens to have a connection to a different employee who filed a charge with the EEOC, the Court declined to adopt a categorical rule that third-party reprisals do not violate Title VII. Instead, it noted that “Title VII’s antiretaliation provision is worded broadly” and that “a preference for clear rules cannot justify departure from the statutory text.” The Court recognized that the firing of a close family member will almost always meet the standard set forth in Burlington. On the other hand, “inflicting a milder reprisal on a mere acquaintance will almost never do so.” Beyond that, the Supreme Court was reluctant to generalize about what types of associations fall within the “zone of interest” protected by Title VII’s antiretaliation provision, although it emphasized that the “standard for judging harm must be objective, so as to avoi[d] the uncertainties and unfair discrepancies that can plague a judicial effort to determine a plaintiff’s unusual subjective feelings.”

Essentially, the Court has expanded the definition of “person aggrieved” within the meaning of Title VII to include not only the employee who engages in protected activity, but also third parties within the “zone of interest.” The Court found that Mr. Thompson fell within the “zone of interest” sought to be protected by Title VII because he was “not an accidental victim of the retaliation – collateral damage, so to speak, of [the employer] harming [his fiancée]. Hurting him was the unlawful act by which the employer punished her.” Accordingly, he “is a person aggrieved with standing to sue.”

The Thompson decision adds to the Supreme Court’s current trend of favoring plaintiffs in retaliation cases under Title VII, and will likely lead to more retaliation claims (the most frequent charge filed with the EEOC during the past year). The Court’s failure to define clearly what relationships are sufficient to trigger a third-party retaliation claim under the “zone of interests” test may encourage an increase in charges from employees who claim they should be protected from adverse actions due to their association with coworkers who engage in protected activity. Of course, these employees will still have to prove that any adverse action is causally connected to the protected activity of their coworkers.

Employers should continue to document and clearly articulate legitimate business reasons for any adverse employment actions. In addition, businesses need to train managers that retaliation has a broader scope beyond impermissible reprisals against employees who engage in protected activity, and that it now includes retaliation against those employees who are closely associated with an employee who has filed an internal complaint or otherwise engaged in protected activity. Employers should ensure that the language in their antiretaliation policies is broad enough to prevent retaliation against third parties. Where applicable, employers should also consider implementing policies that prohibit family members from working together and romantic relationships in the workplace and ensure that current policies addressing these prohibitions are enforced.

In Legend Night Club v. Miller, a panel majority found unconstitutional a Maryland statute that sought to “limit[] the range of permissible conduct, attire, and entertainment at establishments licensed to serve alcoholic beverages.”  In Miller, the plaintiffs brought a facial challenge to the statute, claiming it was overly broad in violation of the First Amendment.  In addition, the plaintiffs challenged on equal protection grounds a grandfather provision they alleged was adopted for the purpose of exempting from the reach of the statute a club owned by a prominent former state senator.  Because the majority struck down the statute on overbreadth grounds, it did not consider plaintiff’s equal protection claim.

 

 

As a doctrinal matter, unlike an as-applied challenge, a First Amendment facial challenge under the overbreadth doctrine involves allegations that a statute, while legitimately applying to the conduct or speech of the plaintiff, applies also to a broader range of protected activity in which others are engaged or may in the future become engaged.  Thus, under the doctrine, the Miller plaintiffs were free to assert claims on behalf of others who wish to engage in constitutionally protected activities that the statute arguably proscribed.

 

 

Because the effect of finding a statute overly broad nullifies a legislative act, the Supreme Court has counseled courts to apply the doctrine “sparingly and only as a last resort,” lest the courts impermissibly act outside the bounds of their constitutional authority.  As such, in cases involving conduct and not merely speech, a statute’s overbreadth must be not only real, but substantial; meaning the statute must reach a substantial range of protected conduct as judged in relation to the statute’s legitimate sweep. 

 

 

According to the majority in Miller, the statute in question reached a substantial number of protected activities because the statute could be applied not only to adult entertainment provided at clubs serving alcoholic beverages, but also to ballet performances, Shakespearean plays, and other productions with clear artistic merit.

 

 

In addition to their unsuccessful claim that the statute could be construed constitutionally, the defendants attempted to save the statute by assuring the court that the law would be enforced only against adult entertainment establishments.  The majority overruled this argument, concluding it would be unwise to leave unprotected persons and entities performing works having legitimate artistic value because the Government promised to enforce the law only against establishments featuring adult entertainment. 

 

 

Senior Judge Hamilton concurred in part and dissented in part, finding that the offending portions of the statute could be excised without infringing on the legislative function.  He also argued that the grandfather clause should be stricken as a violation of equal protection.

In Commonwealth v. Morris, the Supreme Court of Virginia ruled unanimously that a common law writ of coram nobis could not be used to reopen convictions imposed on immigrants who were ordered deported as a result of their convictions. Judge Dean Worcester of the Circuit Court for Loudon County, however, found the Supreme Court’s decision "unpersuasive" and announced he would not follow it.

In Rea v. Federal Investors (10-1440), the Third Circuit held that no private cause of action exists against a private employer that refused to hire an applicant because the applicant previously filed for bankruptcy.  The appellant applied to an investment firm and, after an interview, the firm was seemingly poised to hire him.  The investment firm, however, denied him employment because it discovered he filed bankruptcy seven years earlier.  The appellant filed suit, claiming the firm violated federal law by discriminating against him on account of his prior bankruptcy.  The district court dismissed his suit and the Third Circuit affirmed.

 

 

The Third Circuit’s decision was premised on its construction of two subsections found in § 525 of the Bankruptcy Code.  According to § 525(a) of the Code, a “governmental unit” may not “deny employment to, terminate the employment of,” or otherwise discriminate against a person who is or was a debtor in a bankruptcy case.  On the other hand, § 525(b) provides that “[n]o private employer may terminate the employment of, or discriminate with respect to” the employment of a current or former debtor.  Missing from the text of § 525(b) is the phrase “deny employment to” that applies to government employers under § 525(a).  Relying on the reasoning of Leary v. Warnaco, 251 B.R. 656 (S.D.N.Y. 2000), the appellant argued the omission of the phrase in § 525(b) was due to a “scrivener [who] was more verbose in writing § 525(a).”  And, moreover, according to the appellant, it would be incongruous with Congress’s objective to provide a debtor a “fresh start” if a private employer could deny employment because an applicant had sought bankruptcy protection.

 

 

Applying the canon of construction that states “[w]here 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 of exclusion,” (quoting Russello v. United States, 464 U.S. 16, 23 (1983), the Third Circuit rejected these arguments.  The court accordingly refused to explain the omission by calling it “scrivener’s error” and would not apply a purposive approach that would effectively modify the text of the statute.     

In the Savoy Opera The Gondoliers, the Grand Inquisitor is aghast to discover the existence of a republican monarchy where commoners and peasants have been elevated to the ranks of the nobility.  He argues that there is a need for distinction, because, “When everyone is somebody, then no one’s anybody.”  This bit of literary excursus begins the Eleventh Circuit’s opinion in Zisser v. The Florida Bar (10-11974), where the Court rejected an attorney’s constitutional challenge to the Florida Bar’s decision to deny her certification as a family law specialist and upheld its confidential peer review procedure to assess the fitness of applicants. 

 

 

Carolyn Zisser had been certified as a marital and family law specialist by the Florida Bar in 1985, but in 2000, after receiving unsatisfactory peer reviews, her application for recertification was denied.  While the Florida Bar refused to reveal the identities of the persons who provided negative assessments of Zisser’s performance as an attorney, it revealed the assessments uniformly depicted Zisser as having a “tendency to over litigate [her] cases . . . and to overcharge on [her] fees, resulting in excessive costs creating a financial hardship for clients and a disservice to opposing counsel, the judiciary, and the legal system.”  Zisser challenged the Bar’s decision administratively on grounds that denying her recertification on the basis of anonymous peer review amounted to a violation of due process under the Constitution because it denied her a meaningful opportunity to confront and impeach witnesses and challenge the accuracy of the peer review findings. 

 

After exhausting her administrative remedies, Zisser filed a challenge of the Bar’s decision to the Florida Supreme Court; again, contending that the confidential peer review process amounted to a denial of due process.  In a one sentence order, the Florida Supreme Court denied her petition for review. 

 

 

Zisser renewed her challenges in the U.S. District Court for the Middle District of Florida.  There, she asserted as-applied and facial challenges to the Bar’s certification procedures, specifically the confidential peer review portion of the process.  The district court rejected her claims, finding that because the Florida Supreme Court had denied her petition that asserted her as-applied constitutional challenges, the Rooker-Feldman doctrine dispossessed it of subject matter jurisdiction.  The district court further held that Zisser’s facial attacks on the certification procedures could not succeed because she failed to establish the first element of a procedural due process challenge:  the existence of a constitutionally protected property or liberty interest. Zisser appealed.

 

 

Before a panel of the Eleventh Circuit, Zisser argued the Rooker-Feldman doctrine did not apply because the Florida Supreme Court said only that it declined to review her petition and, as such, it did not consider the merits of her as-applied challenge.  The panel cast aside this argument, noting that in District of Columbia v. Feldman the D.C. Court of Appeals had likewise denied the appellant’s petition for review in a one sentence order.  And while the order in Feldman stated the court had considered the petition and denied it, as opposed to the Florida court saying it was denying review of the petition, the panel found that to be a distinction without a difference because while the form the denial took in Feldman was different, the nature and effect of the denial was the same.  Because there was no indication that the Florida Supreme Court’s denial was unconnected to the merits of the case, Rooker-Feldman deprived the federal courts of jurisdiction.

 

 

Zisser next argued that the Bar’s rules allowing an applicant to be denied certification based on undisclosed peer comments violated due process because an applicant was not given notice of the identities of her detractors and could not challenge their negative assessments.  The Court rebuffed this argument as well.  As a general proposition, to establish a procedural due process violation a party must prove (1) a deprivation of a constitutionally protected liberty or property interest, (2) by a state actor, and (3) constitutionally inadequate process.  According to the Court, Zisser’s claim failed because an attorney has no cognizable property or liberty interest in certification or recertification in a field of legal specialty. Distinguishing Shahawy v. Harrison, 875 F.2d 1529 (11th Cir. 1989), where it had previously held that a physician had a constitutionally protected property interest in his medical staff privileges at a hospital, the Court said that “unlike hospital staff privileges, which provide physicians with the ability to employ their skills at a hospital, board certification provides no such benefit and is irrelevant to an attorney’s ability to practice or appear before any court.” 

 

 

The Court also rejected Zisser’s contention that a constitutionally protected liberty interest was at stake because an attorney denied certification suffers damage to her professional reputation.  To establish such a claim, a party must show (1) a stigmatizing allegation, (2) dissemination or publication of that allegation, and (3) loss of some tangible interest due to publication of the stigmatizing allegation.  According to the Court, lack of certification in a field of specialty is not stigmatizing.  The purpose of Florida’s certification program is merely to distinguish “the most exceptional attorneys practicing in their chosen field.  A denial of certification, at most, denotes that the candidate, in the eyes of the Florida Bar, does not fall within this select group, nothing more.  Surely not all can claim the vestiges of the elite.” 

 

Moreover, with respect to the second part of the test, the Florida Bar does not publish or otherwise disseminate the fact that an attorney’s application for certification or recertification was denied.  Noting the irony presented by Zisser’s reputational damages claim, the Court said:  “The fact that Zisser’s application was denied apparently became public only because she appealed that denial and filed this lawsuit.”     

 

 

While this case considered the issue of whether an attorney has a property or liberty interest in being certified in a legal specialty, it has broader implications.  By extension, the Court’s reasoning would apply to any state or state sponsored organization that bestows distinctions, privileges, and other honorarium.  A party would likely have no constitutional property or liberty claim in a vestige of honor or distinction if being deprived of that honor would not prevent the individual from working in their chosen profession or cause them to suffer reputational harm.  

The Supreme Court of Virginia recently decided a pair of unanimous decisions clarifying the “right result for the wrong reason” doctrine. Virginia courts have long recognized that an appellate court may affirm the judgment of a trial court even where the trial court reached the right result for the wrong reason. Eason v. Eason, 204 Va. 347 (1963). Just last year, however, the Supreme Court of Virginia limited the application of the “right result for the wrong reason” doctrine to “cases in which the party seeking affirmance” argued the “right ground” to the trial court. Whitehead v. Commonwealth, 278 Va. 105, 114 (2009). In the two unanimous decisions, the Supreme Court of Virginia has clarified the doctrine and concluded that failure to make the alternate argument before the trial court is not the proper focus of the “right result for the wrong reason” doctrine. Rather, the focus should be on whether the facts in the record support the alternate ground for affirmance, regardless of whether the alternate ground was argued at trial. In those two cases, the Supreme Court of Virginia held that the record supported an alternate ground for affirmance, regardless of whether that ground was argued at trial, when it reflects that all evidence necessary to establish that ground was before the trial court.

In Perry v. Commonwealth, 2010 Va. LEXIS 271 (Nov. 4, 2010), the Supreme Court of Virginia considered whether the appellate court erred when it affirmed the trial court’s denial of the defendant’s motion to suppress certain evidence. In Perry, after arresting the driver of a vehicle for possession of PCP, a police officer frisked the defendant, the passenger in the vehicle, and arrested him on finding a vial of illegal drugs in his pocket. At trial, the defendant argued, to no avail, that the officer did not have reasonable articulable suspicion to believe that the defendant was armed and dangerous and that, even if the pat-down search was lawful, the officer exceeded the scope of the frisk. The appellate court ruled that the trial court erred in concluding that the officer had reasonable articulable suspicion necessary to justify the frisk. Instead, the appellate court held that the officer had probable cause to believe that the defendant possessed illegal drugs—“either by having joint or constructive possession of the drugs originally in [the driver’s] hand or by having actual possession of other drugs that the officer had not yet seen.” Perry v. Commonwealth, 55 Va. App. 122, 128 (2009). The appellate court acknowledged that the Commonwealth never argued that the officer had probable cause to arrest the defendant and conduct the search but affirmed the conviction based on the “right result for the wrong reason” doctrine.

On appeal, the defendant argued that the appellate court improperly applied the doctrine because the Commonwealth did not present the probable cause argument at trial. Nevertheless, the Supreme Court of Virginia upheld the appellate court’s decision because the facts necessary to resolve the issue of whether the officer had probable cause to arrest for possession were established in the record before the trial court. The record showed that the officer smelled drugs in the vehicle, verified that the driver of the vehicle possessed PCP, and identified the defendant’s behavior as consistent with that of an individual under the influence of PCP. Thus, the record showed that the officer had probable cause to believe that the defendant possessed PCP and conduct the subsequent search incident to arrest.

In Banks v. Commonwealth, 2010 Va. LEXIS 274 (Nov. 4, 2010), the Supreme Court of Virginia applied the doctrine to conclude that the appellate court erred in affirming the defendant’s conviction for possession of a firearm on alternate grounds. In that case, the defendant was arrested while wearing a long-sleeved shirt and mesh shorts. One of the arresting officers retrieved the defendant’s jacket because the defendant was inappropriately dressed for the cold weather and found a gun in the jacket pocket. The trial judge ruled that the defendant’s state of undress created exigent circumstances that justified the seizure of the jacket. The appellate court, however, upheld the seizure because the defendant had consented to seizure, an alternate ground that was not argued at trial.

Reversing the appellate court’s ruling, the Supreme Court of Virginia noted that the “right result for the wrong reason” doctrine only applies where the record before the trial court provides all evidence necessary to support the alternate ground for affirmance. The Supreme Court of Virginia added that, where the evidence is conflicting, however, “the record must show how [the trial court] resolved the dispute—for example, it must demonstrate how contradicting testimony was weighed or credited.” In Banks, the facts surrounding the seizure and whether the defendant consented to it were in dispute, and the circuit court neither resolved the dispute nor indicated how it weighed or credited the contradicting testimony as to whether the defendant asked for his jacket. Accordingly, the Supreme Court of Virginia held that the record did not afford sufficient evidence for the appellate court to apply the “right result for the wrong reason” doctrine.

On November 2, 2010, the Supreme Court of the United Stated heard oral argument in Staub v. Proctor Hospital (No. 09-400), a case that raises the issue of whether an employer may be held liable for the unlawful intent of officials who caused or influenced the ultimate employment decision but did not make it.

 

 

Vincent Staub filed suit under the Uniformed Services Employment and Reemployment Rights Act (“USERRA”) after he was terminated from his job as an X-ray technician.  USERRA makes it unlawful for employers to take adverse actions against military veterans because of an animus towards their status as active or retired military personnel.

 

Staub alleged that two of his supervisors, Janice Mulally and Michael Korenchuk, were openly hostile towards him because of his military service.  It was the hospital’s Vice President for Human Relations, Linda Buck, however, who made the ultimate decision to fire Staub.  She based her decision on a complaint from Korenchuk and Staub’s employment record, which contained official write-ups.

 

 

A jury found that Staub’s military status had been a “motivating factor” in his termination and awarded him damages in the amount of $57,740.  The hospital appealed to the Seventh Circuit Court of Appeals, which overturned the lower court’s decision in favor of Staub based on the cat’s paw or “singular influence” theory.

 

 

The phrase “cat’s paw” comes from a French fable, “The Monkey and the Cat,” made famous by the 17th Century poet Jean de la Fontaine.  In the fable, a cunning monkey persuades a naïve cat to snatch chestnuts from a fire.  The cat burns her paw while the monkey eats the chestnuts.  From this story, the term “cat’s paw” has come to mean a “tool” or “one used by another to accomplish his purposes.”

 

 

In the employment context, the cat’s paw theory provides for employer liability in cases where the ultimate decision-maker did not have an unlawful intent in taking adverse action, but was strongly influenced by another with unlawful motivations.  In other words, the biased employee or official uses the formal decision-maker as a dupe or cat’s paw to accomplish a discriminatory employment action.

 

 

The Seventh Circuit held that only the final decision-maker’s bias could make an employer liable, unless the final decision-maker was under the “singular influence” of another unlawfully-motivated employee or official.  Buck did not base her decision solely on the supervisors’ animus; she investigated other sources of information.

 

 

The Supreme Court granted certiorari to decide whether the motivations and biases of employees who influence an adverse employment action, but who do not make the final decision, may be considered when determining the employer’s liability.

 

 

On November 2, 2010, Staub’s attorney, Eric Schnapper, argued that the cat’s paw theory is too restrictive and that traditional agency theory should instead control the Court’s decision.  Under Schnapper’s reasoning, anyone acting with animus to influence an adverse action, including coworkers, could impose strict liability on the employer, even if the ultimate decision-maker was not biased and conducted an independent investigation.  In contrast, the hospital’s attorney, Roy Davis, argued that only the ultimate decision-maker could make the employer liable, unless the decision-maker was overwhelmingly influenced by someone else (i.e., the decision-maker was used as a cat’s paw).

 

 

The case specifically involves bias against those with military service obligations, but its outcome is likely to affect other federal workplace anti-discrimination laws such as Title VII of the Civil Rights Act (prohibiting discrimination on the basis of race, national origin, sex, genetic information or religion), the Family Medical Leave Act, the Age Discrimination in Employment Act, and the Americans with Disabilities Act.

 

 

Counsel for Staub stated that the Court “could write an opinion that only addressed … USERRA” and leave the other questions unanswered.  The language in USERRA, however, closely parallels that of Title VII.  Thus, even if the Court chooses to take the route suggested, federal workplace bias laws will no doubt be affected.

 

 

The case was heard by an eight-member Court.  Justice Kagan, in her former role as Solicitor General, filed a brief in the case pursuant to the Court’s invitation.

 

The Seventh Circuits’ opinion can be found at 560 F.3d 647 (7th Cir. 2009).

Designed to distinguish causes of action arising under duties imposed by contract from those arising under duties imposed by law, the “economic loss doctrine” remains a malleable legal issue which Virginia courts continue to refine.  The Virginia Supreme Court’s latest opportunity for such refinement came by way of its holding in Abi-Najm v. Concord Condominium, LLC, 280 Va. 350 (Sept. 16, 2010), in which the court reiterated the purposes of the economic loss rule and applied it to causes of action purportedly arising under the Virginia Consumer Protection Act (“VCPA”) and fraud in the inducement.

 

In Concord Condominium, several purchasers of residential condominiums in Arlington County filed causes of action for breach of contract, violation of VCPA, and fraud in the inducement in connection with purchase agreements that they entered into with the defendant in 2005 and 2006.  In the purchase agreements, Concord promised that each purchaser’s condominium would be furnished with “Bruce Oak hardwood, 3/4” flooring; but, the agreements also stated that Concord could “substitute substantially equivalent materials and finishes for those specified” in the purchase agreement.  Id. at 354-55.  The purchasers claimed, however, that Concord used “prefabricated engineered hardwood, 3/8” [which was] not substantially equivalent to Bruce Oak hardwood, 3/4.   Accordingly, the purchasers claimed that “Concord’s intentionally false and misleading information concerning the flooring constituted misrepresentations of a material fact, and fraudulent acts in violation of the VCPA;” and, that “Concord knowingly misrepresented the quality of the flooring it would deliver . . . and absent those representations [the purchasers] would not have entered into the [purchase agreements].”  Id. at 355-56.  The purchasers sought compensatory damages in the amount of $50,000 in relation to their contract and tort claims; and, sought $350,000 in punitive damages, prejudgment interest, and costs, including attorney’s fees, in connection with their tort claims.  The trial court sustained demurrers to the purchasers’ tort claims due to the economic loss rule, stating that the economic loss doctrine precluded those causes of action.  The Supreme Court of Virginia reversed.

 

In its analysis, the Court stated that “the question whether the economic loss doctrine applies requires a court first to determine ‘whether a cause of action sounds in contract or tort,’ ultimately by ascertaining ‘the source of the duty violated.’”  Id. at 361.  With respect to the VCPA, the Court stated that in making it unlawful for a supplier in connection with a consumer transaction to misrepresent the standard, quality, grade, style, or model of goods or services, the statute was designed to promote ethical dealings between suppliers and the consuming public.  Therefore, “[t]his duty not to misrepresent . . . is a statutory duty that exists independent of the [purchase agreements and] the duty is ‘not one existing between the parties solely by virtue of the contract.’”  Id. at 361-62.  Because the purchasers had alleged Concord breached a duty independent of the purchase agreements, the trial court erred in sustaining Concord’s demurrer.

 

With respect to the fraud claim, the Court recognized that where a promise is made with the present intention not to perform, the promisor makes a misrepresentation of a present, material fact, which can support a claim for fraud.  Id. at 363.  The Court further noted the important distinction between misrepresentations made pre-contract and misrepresentations made post-contract, finding the latter generally did not support a tort claim because the agreement was the source of the duty breached. See, e.g., Dunn Construction Inc. v. Cloney, 278 Va. 260, 268 (2009) (holding that a misrepresentation made in order to obtain payment due under a contract did not give rise to a separate tort claim); Augusta Mutual Ins. Co. v. Mason, 274 Va. 199, 206 (2007) (holding that the duties about which the defendant made fraudulent representations arose from the contract already entered).  Unlike the latter class of cases, the Court concluded the facts in Concord demonstrated that “[t]he fraud alleged by the Purchasers was perpetrated by Concord before a contract between the two parties came into existence, therefore it cannot logically follow that the duty Concord allegedly breached was one that finds its source in the [purchase agreements].”  Id.  

 

 

In FindWhere Holding, Inc. v. Systems Environment Optimization, LLC., (“SEO”), (No. 09-2155), the Fourth Circuit held that the forum selection clause found in the parties’ contract limited jurisdiction to the state courts of Virginia. 

 

The case arose when FindWhere (a company that sells global positioning systems and provides follow-up tracking services) filed suit against SEO, and its parent company, Homeland Security Networks, Inc., for breach of contract.  FindWhere filed suit in the Circuit Court for Loudon County and SEO, subsequently, removed the action to the Eastern District of Virginia based on diversity of citizenship.  FindWhere moved to remand the case based on the contract’s forum selection clause, which provided, inter alia, that “[j]urisdiction and venue of any dispute or legal action brought by either party . . . shall lie exclusively in, or be transferred to, the Courts of the State of Virginia, USA.”

 

The parties’ arguments concentrated on the meaning of the phrase “or be transferred to, the courts of the State of Virginia.”  SEO contended that the presence of the phrase indicated that a federal court would have concurrent jurisdiction because a state court cannot “transfer” a case from one state to another, whereas federal courts may transfer cases under 28 U.S.C. § 1404(a).  FindWhere countered that the term “transfer” should be read in accordance with its ordinary meaning, which is to go to or to be taken from one place to another; and, thus, the term “remand” would fall within the span of its definition—as a remand order would cause the case to go from one forum to another, i.e., from federal court to state court.  The trial court found FindWhere’s argument convincing and remanded the case back to state court.

 

The Fourth Circuit affirmed the district court and, in doing so, adopted the “widely accepted rule that forum selection clauses that use the term ‘in [a state] express the parties’ intent as a matter of geography, permitting jurisdiction in both the state and federal courts of the named state, whereas forum selection clauses that use the term ‘of [a state]’ connote sovereignty, limiting jurisdiction over the parties’ dispute to the state courts of the named state.” Id. at 5; accord Doe 1 v. AOL, LLC, 552 F.3d 1077, 1082 (9th Cir. 2009). Because the forum selection clause stated that jurisdiction and venue would lie exclusively in the courts ‘of’ the State of Virginia, the contract language referred to sovereignty rather than geography.

 

Note:  The Fourth Circuit also took note that the general prohibition of appellate review for remand orders contained in 28 U.S.C. § 1447(d) did not extend to remand orders based on the interpretation and application of a forum selection clause.  Section 1447(d)’s proscription extends only to remand orders based on a lack of subject matter jurisdiction or a timely raised defect in removal procedure.  See also Global Satellite Comm’c v. Starmill, 378 F.3d 1269, 1271 (11th Cir. 2004). 

In JTH Tax, Inc. v. Frashier (No. 09-2262), the Fourth Circuit considered whether a plaintiff’s recalculation of damages in its summary judgment motion divested the district court of jurisdiction.  Frashier involved a dispute between JTH Tax (“Liberty”), and one of its franchisees, Frashier.  Frashier had signed a franchise agreement with Liberty, which contained several post-termination provisions, including a covenant not to compete and a requirement that he return all customer lists and equipment to Liberty.  Their relationship soured in 2008, and, after an attempt to work out an agreement by which Liberty would purchase a right of first refusal for the purchase of Frashier’s franchise territory, Liberty terminated its franchise agreement with Frashier.

 

Frashier, however, allegedly breached his post-termination duties by using the former office to support a competing tax preparation enterprise and failing to return Liberty’s equipment and customer lists.  Because of the breach, Liberty filed suit in the Eastern District of Virginia seeking $80,000 in damages and a permanent injunction forcing Frashier to comply with the post-termination covenants.

 

Liberty never amended its complaint, but, in its subsequent summary judgment motion, Liberty refined its damages calculation to $60,456.25 in money damages, while continuing to assert a claim for permanent injunctive relief.  The district court sua sponte dismissed Liberty’s complaint for failure to meet the $75,000 threshold for diversity jurisdiction.  The Fourth Circuit reversed.

 

In its opinion, the Fourth Circuit restated the rule that courts generally refer to a plaintiff’s complaint when determining whether the amount in controversy requirement has been met.  If the complaint in good faith alleges a sufficient amount, “events occurring subsequent” to the filing of the complaint “which reduce the amount recoverable below the statutory limit do not oust jurisdiction.”  St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 288 (1938).

 

Applying this standard, the court found that Liberty’s downward adjusted damages figure did not “constitute a subsequent reduction of the amount claimed to oust the district court’s jurisdiction.”  Put another way, diversity jurisdiction did not turn on the amount stated in Liberty’s summary judgment motion, but on the good faith allegation in its complaint of an adequate jurisdictional amount.  Without a showing that Liberty’s original $80,000 claim was made in bad faith, the district court retained jurisdiction.

 

In addition, the court found that even if the amount Liberty claimed in damages fell below the $75,000 amount in controversy requirement, diversity jurisdiction could still be established.  This is so because, like requests for money damages, requests for injunctive relief must be valued in determining whether the plaintiff has alleged a sufficient amount in controversy.  See Hunt v. Wash. State Apple Adver. Comm’n, 432 U.S. 333, 347 (1977) (“In actions seeking declaratory or injunctive relief, it is well established that the amount in controversy is measured by the value of the object of the litigation.”).

 

To ascertain the value of an injunction, the Fourth Circuit looks to the larger of two figures:  the injunction’s worth to the plaintiff or its cost to the defendant.  The court found that, whether valued by the benefit conferred to Liberty or the detriment imposed upon Frashier, the value of the injunctive relief would have made up the shortfall caused by Liberty’s subsequent downward adjustment of its damages claim.

 

The court gave great deference to the amount in controversy alleged by the plaintiff in its complaint and emphasized that the benchmark for satisfying the amount in controversy requirement is a good faith allegation that the claim is worth more than $75,000.  To convince a court to dismiss for failure to satisfy that requirement, a defendant must prove that it is apparent “to a legal certainty” that the plaintiff cannot recover the amount claimed.  This standard is exceedingly difficult to satisfy.

 

This same “legal certainty” standard applies to a defendant’s attempt to claim an injunction request falls below the amount in controversy threshold.  To be sure, a plaintiff need only offer calculations that are facially plausible to establish that the amount in controversy requirement has been met.

Recently, a panel of the United States Court of Appeals for the Fourth Circuit held that Congress has not abrogated the states’ sovereign immunity as to the self-care provision of the Family Medical Leave Act (“FMLA”).  Coleman v. Md. Ct. of App., 2010 U.S. App. LEXIS 23291 (Nov. 10, 2010).  The plaintiff, a former employee of the Maryland Court of Appeals, brought a complaint under Title VII and the FMLA alleging that he was fired because of his race and for requesting sick leave due to his own illness.  The district court dismissed the plaintiff’s Title VII race-discrimination claim on the grounds that the plaintiff did not plead sufficient facts to sustain the claim and dismissed the FMLA claim on the grounds that it was barred by Eleventh Amendment immunity.

 

After affirming dismissal of the plaintiff’s Title VII claim, the panel analyzed whether Congress, in enacting the FMLA, abrogated the states’ Eleventh Amendment immunity with respect to the FMLA’s self-care provision.  The FMLA authorizes qualified employees to take up to twelve weeks of unpaid leave annually for certain reasons, including to care for a spouse, child, or parent with a serious health condition or when an employee’s own serious health condition makes him unable to perform his job.  29 U.S.C. § 2616(a).  The FMLA creates a private right of action for equitable relief or monetary damages against any employer that denies its employee FMLA rights.  Id. §§2615(a), 2617(a).   The issue in Coleman was whether Congress validly abrogated the states’ Eleventh Amendment immunity with regard to the FMLA’s self-care provision, allowing the plaintiff to bring his claim against a state entity—the Maryland Court of Appeals.

 

The Eleventh Amendment bars suit in federal court against an un-consenting state and any governmental units deemed to be arms of the state unless Congress has expressly, and validly, abrogated that immunity.  Alden v. Maine, 527 U.S. 706, 755-57 (1999).  The inquiry, accordingly, has two parts:  (1) In passing the Act, did Congress evince an unambiguous intention to abrogate state sovereign immunity; and (2) Was the Act in question passed pursuant to a constitutional provision granting Congress the power to abrogate?  See, e. g., Fitzpatrick v. Bitzer, 427 U.S. 445, 452-456 (1976).  

 

Applying the test, the court noted that the FMLA’s self-care provision clearly expresses an unequivocal intent to abrogate.  See Nevada Dep’t of Human Resources v. Hibbs, 538 U.S. 721, 726 (2003) (“The clarity of Congress’ intent [to abrogate the states’ immunity to FMLA suits] is not fairly debatable”).

 

With regard to the second prong of the test, the court noted that Congress can validly abrogate the states’ immunity from private suit under the Fourteenth Amendment.  Board of Trustees v. Garrett, 531 U.S. 356, 364 (2001).  To do so, however, “there must be a congruence and proportionality between the injury to be prevented or remedied and the means adopted to that end.”  City of Boerne v. Flores, 521 U.S. 507, 520 (1997).  Accordingly, the self-care provision would be constitutional only if there was some Fourteenth Amendment injury that Congress sought to remedy with its enactment and only if the self-care provision was a proportional remedy to that injury.

 

In Hibbs, the Supreme Court held that the FMLA provision relating to caring for a family member with a serious health condition constituted a valid abrogation of the states’ sovereign immunity.  Id. at 735.  In reaching that conclusion, the Court determined that Congress enacted the FMLA in response to “the States’ record of unconstitutional participation in, and fostering of, gender-based discrimination in the administration of leave benefits.”  Id.  In addition, allowing leave to care for a sick family member “narrowly targeted at the faultline between work and family—precisely where sex-based overgeneralization has been and remains strongest.”  Id. at 738. 

 

Hibbs, however, did not address whether Congress validly abrogated states’ immunity with regard to the self-care provision.  In concluding that it did not, the Fourth Circuit panel reasoned that preventing gender discrimination was not a significant motivation for Congress in including the self-care provision.  Rather, Congress included that provision in order to alleviate the economic effect on employees and their families of job loss due to sickness and to protect employees from being discriminated against because of their serious health condition.  See Brockman v. Wyoming Dep’t of Family Servs., 342 F.3d 1159, 1164 (10th Cir. 2003); S. Rep. No. 103-3, at 11-12 (1993), reprinted in 1993 U.S.C.C.A.N. 3, 13-14; H.R. Rep. No. 101-28(I) (1990).  Accordingly, the court concluded that the self-care provision cannot pass the congruence-and-proportionality test.  In addition, the court rejected the plaintiff’s argument that the court should evaluate the FMLA’s immunity abrogation as a whole rather than considering the self-care provision individually.

 

With this decision, the Fourth Circuit joins the Fifth, Sixth, and Seventh Circuits in holding that Congress did not validly abrogate the states’ immunity with regard to the self-care provision of the FMLA.

In a 2-1 decision, the Virginia Court of Appeals recently overturned a conviction for a violation of Va. Code § 18.2-152.7.  That statute provides as follows:

 

Any person who uses obscene, vulgar, profane, lewd, lascivious, or indecent language, or makes any suggestion or proposal of an obscene nature, or threatens any illegal or immoral act with the intent to coerce, intimidate, or harass any person, over any telephone or citizens band radio, in this Commonwealth, is guilty of a Class 1 misdemeanor.

 

The defendant in Barson v. Commonwealth, Dennis B. Barson, Jr., was convicted under the statute for sending e-mails to his ex-wife, her friends, and family members that portrayed his ex-wife as, shall we say, an unchaste person.  (Read the case for yourself for the lurid content of the e-mails).  At trial, Barson admitted sending the e-mails and explained that he sent them to prompt his ex-wife to respond to his allegations of adultery as well as to embarrass her. 

 

Interestingly, Barson did not argue on appeal that the statute was unconstitutionally vague or overly broad.  He instead argued that the evidence was insufficient to prove that the e-mails at issue were “obscene” because they demonstrated only anger and did not thematically appeal to a prurient interest in sex.

 

The test for obscenity utilized by the court derives from the test established by the United States Supreme Court in Miller v. California, 413 U.S. 15 (1973).  Accordingly, material is obscene under the statute when it “has as its dominant theme or purpose an appeal to the prurient interest in sex, that is, a shameful or morbid interest in nudity, sexual conduct, sexual excitement, excretory functions or products thereof or sadomasochistic abuse, (2) substantially exceeds the customary limits of candor in description or representation of such matters, and (3) taken as a whole, does not have serious literary, artistic, political or scientific value.” 

 

After applying the test, the court found as a matter of law the following:

 

Barson’s e-mails to Ms. Barson unquestionably contained vulgar, offensive, and sexually explicit language. However, his use of these words “considered as a whole,” and in the context of the marital discord and the angry, offensive tone and purpose of the e-mails, did not establish or support a factual or legal determination that Barson intended or had “as its dominant theme or purpose an appeal to the prurient interest in sex.” The e-mails were not in any way intended to arouse or appeal to sexual desire, either Barson’s own or any other individual’s to whom he sent the e-mails. Rather, the evidence showed that Barson wrote the e-mails solely to convey his anger and disgust and that he forwarded them to his family and friends to embarrass Ms. Barson.  Under these circumstances, we hold, using the definition of obscene set forth in Code § 18.2-372 and the requisite standard of review, that the evidence was insufficient to permit a reasonable trier of fact to conclude the e-mails were obscene.

 

The dissent, however, disagreed with the majority’s focus on the intent of the communicating party, stating:

 

I believe a reasonable fact finder could conclude, as it did here, that the eighty-seven e-mails Barson sent to his wife between May 1, 2009, and May 14, 2009, contained language of such a graphic and explicit sexual nature as to manifest a “shameful or morbid” interest in his wife’s sexual conduct, or in other words, a prurient interest in sex that “substantially exceeds the customary limits of candor in description or representation of such matters.”

 

The principal disagreement between the majority opinion and the dissent concerned whether the motivation of the speaker was dispositive.  According to the majority’s approach, Barson could not be convicted under the statute because his purpose in using the vulgar language was to convey a message to his ex-wife—that he was angry about her behavior.  While, according to contemporary community standards, he chose his words poorly, he could not be convicted for using improper language to convey a lawful message.  The dissent, on the other hand, reasoned that while purpose is a factor, it is not dispositive and, in this case, Barson’s choice of words alone should be sufficient to support a conviction.

On October 13, 2010, the United States Supreme Court heard oral argument in Kasten v. Saint-Gobain Performance Plastics Corp. (case no. 09-834).  The case presents the issue of whether the Fair Labor Standards Act (“FLSA”) protects workers who make oral complaints about wage and hour violations from retaliation.  Petitioner Kevin Kasten was employed by Saint-Gobain Performance Plastics Corp. until December 2006 when he was terminated for failing to follow the company’s policy for punching in on a time clock.   

 

Kasten filed suit alleging he was discharged after making multiple verbal complaints to his supervisors about the illegal location of the company’s time clocks.  According to his brief, the clocks’ location prevented the employees from being compensated for “time spent donning and doffing their protective gear.”

 

The U.S. District Court for the Western District of Wisconsin granted the employer’s motion for summary judgment.  The Court held that informal complaints were not protected based on the “plain language” of the FLSA, which prohibits an employer from retaliating against an employee if the employee “has filed any complaint….” 29 USC 215(a)(3).  The Seventh Circuit agreed, holding that the FLSA language required employees to submit a written complaint to “an employer, court, or administrative body.”   

 

Carter Phillips, counsel for Saint-Gobain, argued to the Supreme Court that the FLSA only protects workers from retaliation if they institute formal government proceedings.  Kasten’s counsel, James Kaster, argued any complaint, whether stated orally or in writing, that puts the employer on notice of the nature of the employee’s complaint should suffice.  Kaster contended that requiring complaints to be submitted to the federal government would foreclose internal communications.

 

Because Justice Kagan recused herself from the case, only eight Justices will consider the issue.  Of course, under Supreme Court rules, if the Justices split 4-4, the Seventh Circuit’s decision stands.   

 

To view the Seventh Circuit's decision, click the link above.

 

 

A recent case from the Second Circuit provides useful guidance regarding the scope of ERISA fiduciary duties. In Bell v. Pfizer, Inc., 2010 U. S. App. LEXIS 18111 (2d Cir. Aug. 30, 2010), the court resolved a dispute between a former employee and the Pfizer, Inc. Stock and Incentive Plan (“Pfizer Plan”) concerning the employee’s eligibility to exercise certain stock options after leaving employment with Pfizer.

To read more, follow the above link.

The North Carolina Court of Appeals recently overturned a DWI conviction in State v. Yencer, 696 S.E.2d 875 (N.C. Ct. App. 2010), on Establishment Clause grounds because the police officer who arrested the Defendant was a Davidson College campus police officer.  According to the court, Davidson is a “religious institution” and the delegation and subsequent exercise of state police power by an officer employed by such an institution violates the strictures of the Establishment Clause of the U.S. Constitution.  The decision relied on prior North Carolina cases, State v. Pendleton, 451 S.E.2d 274 (1994) and State v. Jordan, 574 S.E.2d 166 (N.C. Ct. App.  2002), which held that the state could not delegate discretionary government authority, including the authority to make arrests or investigate crimes, to the campus police departments of Campbell and Pfeiffer Universities because they were “religious institutions.”  Pendleton, 451 S.E.2d at 278. 

            The court in Yencer, as in Pendleton and Jordan, relied on the test created by the United States Supreme Court in Lemon v. Kurtzman, 403 U.S. 602 (1970).  Under Lemon, courts look to whether the state statute or governmental action (1) has a secular purpose, (2) has a primary effect of advancing or inhibiting religion, or (3) creates an excessive entanglement between government and religion.  403 U.S. at 612–13.   In finding that the delegation of police power to Davidson campus police created an excessive entanglement between government and religion, the Yencer court noted that the Presbyterian Church founded Davidson College, and that Davidson and the Church maintained a close relationship.  This relationship was memorialized in a Statement of Purpose declaring that the College was committed to the vital relationship between Christian Faith and “The Reformed Tradition.”  Moreover, the court found evidence of excessive entanglement in the fact that Davidson requires its students to take at least one religiously based course and requires its president and a percentage of the College’s trustees to be loyal and active members of the Presbyterian Church.

            This case is of special interest to colleges and universities with religious affiliations as it calls into question the constitutionality of investigative actions conducted by campus police at such institutions and raises issues regarding the propriety of otherwise religiously neutral relationships between government and religious entities.

Recently, in Tamraz v. Lincoln Electric Co., the Sixth Circuit overturned a district court verdict awarding $20 million to a plaintiff who claimed that his manganese exposure in the workplace led to his Parkinson’s disease.  Judge Sutton wrote the opinion for the majority while Judge Martin dissented.  The majority opinion helps define the often-elusive line between admissible opinion and inadmissible speculation under Rule 702 of the Federal Rules of Evidence.

 

While both the majority and dissent agreed that the connection between toxin exposure and Parkinson’s disease is the subject of great debate in the scientific community, they parted ways on the proper interpretation of Rule 702 vis-à-vis Daubert v. Merrell Dow Pharmaceuticals.  Plaintiff’s expert’s line of reasoning that manganese exposure had caused the plaintiff’s illness was as follows:  (1) Plaintiff was exposed to manganese fumes while welding; (2) he then developed the symptoms of Parkinson’s, but not manganism, a disease with some similarities to Parkinson’s; (3) scientists have identified some genetic factors linked to forms of otherwise “idiopathic” Parkinson’s disease (In the words of the television doctor Gregory House: “‘Idiopathic,’ from the latin meaning we’re idiots because we can’t figure out what’s causing it.”); (4) some scientific literature has put forth the hypothesis that that toxins combined with genetics may cause Parksinon’s disease; (5) manganese is a toxin and possible candidate for triggering Parkinson’s; (6) plaintiff may have the genes for Parkinson’s disease and (7) manganese may have triggered plaintiff’s Parkinson’s. 

 

Evaluating the expert’s hypothesis under the auspices of Rule 702, the majority said:  “That is a plausible hypothesis.  It may even be right.  But it is no more than a hypothesis, and it thus is not ‘knowledge,’ nor is it ‘based upon sufficient facts or data” or the ‘product of reliable principles and methods . . . applied . . . reliably to the facts of the case.’”

 

The dissent, relying strictly on the more permissive language of Daubert and its progeny, argued that the plaintiff’s expert may rely on his “general experience and knowledge, and theoretical medical writing that explored the connection between manganese exposure and Parkinson’s Disease.”  The dissent was unconcerned that the expert’s etiology was extrapolated principally from the diagnosis and was loosely based on scientific writings hypothesizing that toxins can trigger Parkinson’s in persons genetically predisposed to the disease.

 

A critical difference between the opinions is that the majority opinion relied on the plain language of Rule 702 and the dissent did not. The dissent, though able to find supporting language from various precedents and law review articles, never grapples with the clear text of Rule 702. Indeed, the dissenting opinion doesn’t cite, quote, or discuss the language of Rule 702 at all. 

 

This case is a reminder that the rather stark and plain language of Rule 702, as enacted in 2000, should be the starting point for any analysis concerning expert testimony and not the more ambiguous and permissive Daubert, General Elec. Co. v. Joiner , or Kumho Tire Co. v. Carmichael opinions, decided in 1993, 1997, and 1999 respectively.  Any interpretation of these cases that conflicts with the subsequently enacted statute, Rule 702, is legally incorrect.

 

In a decision that will surely cause headaches for drug companies nationwide, the Second Circuit Court of Appeals recently held that pharmaceutical sales representatives are not exempt from the Fair Labor Standard Act’s (“FLSA”) overtime pay requirements.  In re Novartis Wage and Hour Litig., 2010 U.S. App. LEXIS 13708 (2d Cir. July 6, 2010).  This case is particularly noteworthy because the Department of Labor filed an amicus brief arguing that pharmaceutical sales representatives are entitled to overtime compensation.  The Second Circuit of Appeals gave the Department of Labor’s interpretation of the relevant FLSA regulations “controlling deference” and concluded that the pharmaceutical sales representatives were neither administrative employee nor “outside salespersons.  Alarmingly, the Second Circuit’s decision creates confusion for major drug companies and their attorneys because it is inconsistent with the decisions of several district courts as well as the Third Circuit Court of Appeals.  See e.g., Smith v. Johnson & Johnson, 593 F.3d 280 (3d Cir. 2010) (pharmaceutical sales representatives are exempt administrative employees); Christopher v. SmithKlein Beecham Corp., 2009 U.S. Dist. LEXIS 108992 (D. Ariz. Nov. 20, 2009)(pharmaceutical sales representatives are exempt “outside salespersons).  With numerous FLSA cases involving pharmaceutical sales representatives flooding the courts, drug companies will have to keep a close on eye on whether courts throughout the country will follow the Second Circuit’s reasoning.

 

For a fuller discussion, please follow the following link:

 

http://www.williamsmullen.com/are-pharmaceutical-sales-representatives-exempt-from-the-flsa-overtime-pay-requirements-07-19-2010/

Before 1990, federal courts asserted jurisdiction over related claims and parties through two doctrines developed by the federal common law: ancillary and pendant jurisdiction.  Pendent jurisdiction allowed federal courts to assert jurisdiction over state law claims having a sufficient nexus to the federal claim.  Ancillary jurisdiction, on the other hand, allowed courts in diversity cases to assert jurisdiction over non-diverse parties joined after the filing of the original suit.  Ancillary jurisdiction was often used in cases where courts appointed receivers to maintain property of a party before the court.  The receiver could file suit against a third-party to recover property or assets that had once belonged to an original party.  In 1990, Congress enacted 28 U.S.C. § 1367, which purported to merge pendent and ancillary jurisdiction under the rubric of “supplemental jurisdiction.”  In Evans v. Holibaugh (No. 09-1429), the Fourth Circuit found that § 1367 did not codify the whole of the common law ancillary jurisdiction.

 

The case arose after Andris Pukke and the FTC entered into a stipulation of judgment to settle claims of fraud brought against Pukke.  The receiver sought to enforce a Note executed by Jeffrey Holibaugh in favor of one of Pukke’s companies by filing a recovery action in federal court.  Holibaugh argued that the federal court lacked subject matter jurisdiction.  The Fourth Circuit rejected this argument, concluding that because the federal district court had jurisdiction over the original FTC action, it possessed ancillary jurisdiction over an action brought by a receiver in furtherance of its appointment.  The court further explained that while § 1367 “governs ancillary jurisdiction over claims asserted in a case over which the district court has federal subject matter jurisdiction, it does not affect common law ancillary jurisdiction over related proceedings that are technically separate from the initial case that invoked federal subject matter jurisdiction, which remains governed by case law.”

 

Judge Gregory dissented and argued that the majority relied on a line of authority that did not survive the enactment of § 1367 or more recent Supreme Court precedent.  He relied heavily on Finley v. United States, 490 U.S. 545 (1989), where the Court said that, absent congressional legislation, a court with “jurisdiction over claims involving particular parties does not [have] jurisdiction over additional claims by or against different parties.”  Thus, according to the dissent, in light of Finley and § 1367, a receiver may not invoke federal subject matter jurisdiction “to bring new claims against a new defendant if that claim lacks any connection to the underlying suit that the district court is competent to hear.”

 

Michael Newdow is no stranger to litigation.  Usually representing himself, the atheist activist has challenged everything from the recitation of the Pledge of Allegiance in public schools, to the motto “In God We Trust” that is inscribed on our country’s coins and currency.  His claims have usually failed.  And that was the result in Newdow’s most recent legal battle—seeking to prevent President Obama from uttering the phrase “So help me God” at the conclusion of his taking the oath of office.  In fact, Newdow lost similar challenges with respect to President Bush’s inaugural ceremonies in 2001 and 2005.

 

When Barack Obama was elected President on November 4, 2008, he and his staff began the arduous task of planning and preparing for his inauguration.  Then President-elect Obama asked Chief Justice John Roberts, Jr. to administer the presidential oath of office at the ceremony, and to tack on—as so many previous Presidents have done—the phrase “So help me God” at the end of the 35-word oath.

 

When Newdow learned of these events, he filed suit seeking to bar the Chief Justice from including the religious reference not only in the 2009 inauguration, but also in those to be administered in 2013 and 2017.  Newdow said that any reference to the Supreme Being by the leader of the Free World amounted to a violation of the Constitution’s separation of church and state.  Newdow faced a tough legal battle from the outset: all of the 50 States in the Union filed amicus briefs opposing his requested relief.  Not surprisingly, the district court found little trouble in dismissing Newdow’s lawsuit, and the D.C. Circuit affirmed.

 

By the time the matter reached the D.C. Circuit, President Obama had long since taken the oath of office.  The court thus concluded that any challenge to the oath of office during the 2009 inauguration was moot, noting that federal courts may only resolve live “cases” and “controversies.”  Since the 2009 inauguration had taken place, there was nothing left for the court to decide.

 

The court of appeals also concluded that Newdow lacked standing to challenge the oaths for the 2013 and 2017 inaugurations.  The court said that, even assuming Newdow suffered an injury in fact, because “God” was referenced in the inaugural ceremony (thus offending his atheist sensibilities), he could not show that the injury could be redressed by a decision in his favor.  That is because an injunction against the Chief Justice or certain clergymen would not prevent Newdow’s claimed injury.  The Chief Justice, the appeals court said, “has no legal authority or duty to decide what may be added to the presidential oath”—it is the President who makes such decisions.  As such, the Chief Justice, and certain chosen clergy, are “powerless to direct, say no to, or otherwise stop the future President if he wishes to have his ceremony contain the offending elements.”

 

The court added that it could not redress Newdow’s claimed injury by imposing injunctive or declaratory relief against the President himself or any future President-elect.  The courts do not have jurisdiction to enjoin a president, nor has any court issued a ruling declaring that a president has acted unlawfully.  Moreover, the President cannot be denied the prerogative of making a religious reference because doing so would abrogate his own First Amendment rights.  The appeals court reasoned:

 

For sure, if it were otherwise, George Washington could not have begun the tradition by appending ‘So help me God’ to his own oath; Lincoln could not have offered a war-weary nation ‘malice toward none’ and ‘charity for all with firmness in the right as God gives us to see the right’; Kennedy could not have told us ‘that here on earth God’s work’ must be our own; nor could President Reagan have evoked ‘the shining city . . . built on rocks stronger than oceans windswept, God-blessed, and teeming with people of all kinds living in harmony and peace’ in his farewell address.

 

In a concurring opinion, Judge Kavanaugh somewhat conclusorily found that Newdow had standing and so reached the merits of Newdow’s Establishment Clause claims.  Concluding that use of the words “so help me God” in the presidential oath was not proselytizing or otherwise exploitative, he rejected Newdow’s claims.

 

Kavanaugh began his First Amendment analysis noting that he did not doubt Newdow’s claim of harm, yet he could not:

 

Dismiss the desire of others in America to publicly ask for God’s blessing on certain government activities and to publicly seek God's guidance for certain government officials. Plaintiffs suggest that no one should be upset if government ceremonies were entirely cleansed of religious expression; they argue that such a regime would reflect true government "neutrality" toward religion. Others respond, however, that stripping government ceremonies of any references to God or religious expression would reflect unwarranted hostility to religion and would, in effect, "establish" atheism. Cf. Salazar v. Buono, No. 08-472, slip op. at 14-15 (U.S. Apr. 28, 2010) (opinion of Kennedy, J.) ("The goal of avoiding governmental endorsement does not require eradication of all religious symbols in the public realm. . . . The Constitution does not oblige government to avoid any public acknowledgment of religion's role in society."); Lee v. Weisman, 505 U.S. 577, 598 (1992) ("A relentless and all-pervasive attempt to exclude religion from every aspect of public life could itself become inconsistent with the Constitution.").

 

He also concluded that Newdow’s argument that the words “so help me God” violated the Establishment Clause was foreclosed by Marsh v. Chambers, 463 U.S. 783 (1983), because “[l]ike the legislative prayer in Marsh, the words ‘so help me God’ in the Presidential oath are not proselytizing or otherwise exploitative. Moreover, like the practice of legislative prayer, use of ‘so help me God’ in oaths for government officials is deeply rooted in the Nation’s history and tradition.”

In Walton v. Mid-Atlantic Spine Specialists, P.C., ___ Va. ___ (2010) decided June 10, 2010, the Supreme Court of Virginia adopted a multi-factor analysis to determine whether a party’s inadvertent disclosure of a privileged document results in waiver of the privilege.  The Court determined that waiver may occur if the disclosing party failed to take reasonable measures to ensure and maintain the document’s confidentiality, or to take prompt and reasonable steps to rectify the error.

 

Under this approach, the Court established five factors to be included in a court’s consideration of waiver: (1) the reasonableness of the precautions to prevent inadvertent disclosures; (2) the time taken to rectify the error; (3) the scope of the discovery; (4) the extent of the disclosure; and (5) whether the party claiming privilege has used its unavailability for misleading or otherwise improper or overreaching purposes in the litigation, making it unfair to allow the party to invoke confidentiality under the circumstances.

 

The Court further explained that none of these factors is dispositive and that the trial court must also consider any other factors that have a material bearing.      

 

In Walton, a medical malpractice case, the defendant doctor inadvertently produced to plaintiff in discovery a letter he wrote to his attorney regarding his potential negligence in reviewing x-rays of plaintiff’s injured wrist.  The letter was first produced in response to a subpoena duces tecum issued in a worker’s compensation case to defendant’s medical group.  Subsequently, the letter was produced to plaintiff’s counsel in the malpractice case.  The defendants asserted they did not learn that plaintiff was in possession of the letter until three years later when plaintiff notified them of her intention to use the letter at trial.

 

Following a series of hearings on a motion for a protective order and a motion in limine, the trial court ruled that the letter was privileged and that the privilege had not been waived and restricted questioning by plaintiff’s counsel about defendant doctor’s recollection of his review of the x-rays.  The jury returned a defense verdict.

 

On appeal, having established the standards for determining whether a waiver has occurred, the Supreme Court applied the standard to the record on appeal and determined that the defendant doctor had waived the attorney-client privilege.

 

   

Chief Justice Leroy Hassell has announced that he will not seek a third term as the Chief Justice of the Supreme Court of Virginia. At the expiration of his term in January 2011, the justices of the court will select a new chief. Justice Hassell will continue as an associate justice on the court. Until 2002, the chief justice was selected based upon tenure and would serve as chief as long as the justice wished. In 2002, the court decided to elect the chief justice from among all of the justices to serve for a term of four years. Justice Hassell will have completed two terms when he steps down in January at the end of his current term.

Ruling on a question certified by a federal district court, the Supreme Court of Washington found that its state constitution did not prohibit public libraries from filtering internet websites even when adult patrons requested that the libraries turn off the internet filters. 

 

The plaintiffs in Bradburn v. North Central Regional Library District included several library patrons and a gun rights advocacy group that operated a website, womenandguns.com  They argued that the regional library policy of filtering websites, particularly when an adult had requested that the library disable the filters, violated the Washington constitution.  More specifically, they argued that the internet policy was so overbroad as to rise to the level of a prior restraint.

 

Article I, section 5 of the Washington State Constitution provides that “[e]very person may freely speak, write and publish on all subjects, being responsible for the abuse of that right.”  The Washington Supreme Court had previously found article I, section 5 more protective of speech than the First Amendment to the United States Constitution in many cases, including cases involving time, place, and manner restrictions in public fora, and cases involving prior restraints.  But article I, section 5 affords, no greater protection to obscenity, speech in nonpublic forums, commercial speech, and false or defamatory statements.

 

Relying on the U.S. Supreme Court’s decision in United States v. American Library Ass’n, 539 U.S. 194 (2004) (“ALA”) the court found that the restriction did not serve as a prior restraint.  In ALA, the Supreme Court, in interpreting the Children’s Internet Protection Act, termed it a mistake to extend “prior restraint to the context of public libraries’ collection decisions.  A library’s decision to use filtering software is a collection decision, not a restraint on private speech.”  Furthermore, the Washington court noted that libraries have broad discretion when selecting material for their book and periodicals collections, similarly,

 

Even if one were to assume a public library with unlimited funds and space, that library would be under no obligation to make all constitutionally protected printed materials available. For example, regardless of its resources a library need not place pornographic materials on its shelves, although such materials are constitutionally protected. It need not place children’s comic books on its shelves, although these, too, are constitutionally protected. As another example, if a private collector offered a library a collection of books at an attractive set price for the entire collection and the library purchased the collection, it would not have to include all of the books in its own collection and would not have to make them all available to its patrons.

 

The court also concluded that the filtering policy did not constitute an unconstitutional content based restriction.  Again relying on ALA, the court found that internet access is neither a traditional nor designated public forum.  The court did note, however, that the Third and Sixth Circuits have held that a library is a limited public forum “insofar as the library must permit the public to exercise the right to receive information and ideas consistent with the nature of the library as a place for reading, writing, and quiet contemplation.”  Yet, this right, according to the court, would “still exist only with respect to the materials that are actually in a library’s collection.  A patron would not have a right to receive information in a public library if that information was not part of the library’s collection.  And a patron does not have the constitutional right to force a public library to acquire a particular book or type of book.  Analogously, this right would not exist with respect to Internet sites that have been added to a library’s collection.” 

 

A concurring justice said that the majority “overcomplicates the analysis.”  He found that the text of the Washington Constitution applies only to the right to “speak, write, and publish,” and does not afford a right to “access” information.  Because the restriction was rationally related to the state interest of “[p]rotecting patrons from obscene material and increasing the library’s capacity to provide literary, scientific, historic, and other materials,” it satisfied constitutional muster.

 

Three justices dissented recalling that much of the free speech jurisprudence has involved cases where government entities have used the “laudable goal” of protecting children as a pretext to chill speech that they considered undesirable.  The dissent also disputed the majority’s claim that ALA supported its decision:

 

I respectfully disagree with the majority that [ALA] supports upholding the policy’s constitutionality under either the federal or state constitution. Even accepting for the moment that these libraries are not a limited public forum, eight justices found the ability of a patron to disable the filter constitutionally critical. Writing for a four justice plurality upholding CIPA, Justice Rehnquist noted constitutional concerns about the software blocking “are dispelled by the ease with which patrons may have the filtering software disabled. When a patron encounters a blocked site, he need only ask a librarian to unblock it or (at least in the case of adults) disable the filter.” Justice Kennedy was even more pointed, beginning his concurrence by saying, “If, on the request of an adult user, a librarian will unblock filtered material or disable the Internet software filter without significant delay, there is little to this case.” Justice Breyer also agreed that because a library patron could ask to have the filter disabled, the limitation on First Amendment activity was too slight to be of concern.  Justice Stevens alone thought the ability of an adult patron to have the filter removed was constitutionally irrelevant and even with that escape hatch, the CIPA was flatly unconstitutional. “A law that prohibits reading without official consent, like a law that prohibits speaking without consent, constitutes a dramatic departure from our national heritage and constitutional tradition.’”

In a 2004 documentary entitled Slasher, a film crew follows uber-used car salesman Michael Bennett as he travels to a “Slasher Sale” at a car dealership in Memphis, Tennessee.  The film shows Bennett, a wiry, nervous man, setting up a 72-hour inventory clearing extravaganza, complete with pretty showgirls, outlandishly dressed stereotyped characters, a DJ, an $88 car, and a chainsaw that salesmen use to “Slash” the price.  These events are highly lucrative and were started 20 years ago by Daniel Ryan and his company Caliber Marketing, now Caliber Automotive Liquidators. In Caliber Automotive Liquidators, Inc. v. Premier Chrysler, the “Slasher Sale” theme became the subject of a trademark suit.

 

In 1999, Caliber registered “Slash-It! Sales Event” as a service mark with the federal government.  The registration provides that the service mark is used for “advertising agency services, namely, promoting the services of automobile dealerships through the distribution of printed and audio promotional materials and by rendering sales promotion advice.”  The “Slash-It! Sales Event” mark, in trademark parlance, is “incontestable.”  Caliber also owns a federal registration for the service mark “Slasher Sale.”

 

Because the Slasher theme was so successful, Sam Kazran in 2006 began running infomercials called “Slasher Shows” for his Premier dealerships.  In addition to the Slasher title, the infomercial featured a Slasher Countdown, a Slasher host, off-camera voices screaming “slash it,” and on camera uses of the term “slash it.”  The show also featured a cavalcade of characters molded from clichéd stereotypes, going by names such as Eazy-E, the Disco kid, Zulu, Dr. Z, the White Face Mime, and the risqué Slasher Girls. 

 

Believing Caliber was involved in the Slasher Show infomercial, an owner of a Georgia car dealership became upset as he had purchased an exclusive license for use of the slasher sales in Georgia.  Ryan called Kazran to workout a licensing agreement, but Kazran showed no interest in dealing with Ryan.  Kazran told Ryan that he “commanded an army of lawyers” and, essentially, invited litigation.

 

Caliber sued Kazran and Premier claiming trademark infringement.  The district court noted correctly that a successful cause of action for trademark infringement requires the evidence to establish that the infringer 1) used the mark in commerce, without consent; and 2) that the use was likely to cause confusion.  With respect to the element of confusion the district court looked to: (1) type of mark; (2) similarity of mark; (3) similarity of the products the marks represent; (4) similarity of the parties’ retail outlets and customers; (5) similarity of advertising media; (6) defendant’s intent; and (7) actual confusion.  The court concluded that the similarity of the marks and “slight” actual confusion weighed in favor of likelihood of confusion; similarity in advertising did not tip the balance either way; and the strength of mark, similarity of events, similarity of sales method, and defendants’ intent all weighed against likelihood of confusion. Tallying the score, the district court found that no reasonable jury could find likelihood of confusion, and granted summary judgment to Premier on the trademark infringement claim.  The Court of Appeals reversed.

 

Noting that evidence of actual confusion is the most weighty factor, the court first looked to see if there was evidence that the relevant audience was actually confused.  Since car dealerships were the relevant audience and there was evidence of actual confusion, that factor weighed in Caliber’s favor. 

 

The Eleventh Circuit, however, declined to adopt the Ninth Circuit’s bright-line rule that summary judgment is precluded where the plaintiff proffers a single instance of actual confusion, saying “[t]his court’s caselaw forecloses such a binary rule. Rather, there is no absolute scale as to how many instances of actual confusion establish the existence of that factor.  The court must evaluate the evidence of actual confusion in the light of the totality of the circumstances involved. Similarly we have held that merely one

instance of actual confusion did not militate in favor of finding likelihood of

confusion.” 

 

The court next looked to the type of mark to assess its strength. 

 

There are four recognized types of mark, ranging from weakest to strongest: generic, descriptive, suggestive and arbitrary. The stronger the mark, the greater the scope of protection accorded it.  An arbitrary or fanciful mark bears no logical relationship to the product or service it is used to represent [e.g., Kodak]. A suggestive mark refers to some characteristic of the goods, but requires a leap of the imagination to get from the mark to the product [e.g., Penguin Refrigerators]. A descriptive mark identifies a characteristic or quality of the service or product [e.g.,

Vision Center].

 

The court found that Caliber’s marks were descriptive, which, along the spectrum between generic to arbitrary, falls on the weaker end.  Still, a descriptive mark may become stronger if deemed “incontestable.”  The court explained

 

Descriptive terms may not be registered as trademarks under the Lanham Act, unless the holder shows that the mark has acquired secondary meaning. Proof of secondary meaning in a trademark requires a showing that the mark has become distinctive of the trademark holder’s product. Five years after registering a mark, the holder may file the affidavit . . . and have its mark declared ‘incontestable.’ Once a mark has become incontestable, its validity is presumed . . . . Once a mark has achieved incontestable status, its validity cannot be challenged on the grounds that it is merely descriptive, even if the challenger can show that the mark was improperly registered initially.” Dieter v. B & H Indus. of Sw. Fla., 880 F.2d 322, 328 (11th Cir. 1989).

 

Because Slash-It! Sales Event had attained federal incontestable status, the court found the mark to be strong and deserving of protection. 

 

The court cursorily examined the other factors and ultimately determined that “Caliber has presented sufficient evidence of the strength of its marks and of actual confusion amongst the relevant consumer class to avoid summary judgment.”

 

While the court’s decision did not plough much new ground, it is an excellent case for those interested in intellectual property issues to read because it clearly distills essential trade mark principles in an interesting factual context. 

The conflict between an employee’s privacy interests in e-mail and an employer’s interest in monitoring employee usage of company equipment raises difficult questions.  Even more issues arise when an employee uses a company computer to communicate with her attorney about a suit she plans to file against her employer.  The New Jersey Supreme Court wrestled with these issues in Stengart v. Loving Care Agency, Inc.

 

Stengart had used her company owned laptop to communicate with her attorney over the internet through a private, web-based, password protected, e-mail account.  While the e-mail was sent over the internet, the computer automatically saved a copy of the e-mail to its hard drive.  After Stengart filed suit, Loving Care recovered these e-mails and sought to use them as evidence in the suit.  It argued that because of the company’s written e-mail policy (1) Stengart had no expectation of privacy in the e-mail; and (2) she had waived the attorney-client privilege with respect to the e-mails because she had sent them using a company computer.  The trial court agreed with Loving Care, but the New Jersey Appellate Division reversed, finding that Stengart had an expectation of privacy in her e-mail; that she had not waived the attorney-client privilege; and that Loving Care’s counsel had violated ethics rules by reading and using the privileged documents.

 

The New Jersey Supreme Court agreed and found that Stengart had a reasonable expectation of privacy in the e-mail messages.  The court stated that its decision principally rested on two premises:  (1) the employer’s written e-mail policy was ambiguous and did not provide Stengart sufficient notice that the company would read her private e-mail; and (2) her privacy interest was amplified by the public policy concerns underlying the attorney-client privilege.  As for the company policy, the court found it ambiguous because it said nothing about monitoring messages sent and received through personal e-mail accounts.  The court later in its decision commented, however, that a policy banning personal e-mail use would be unworkable.   Additionally, because the e-mail messages were attorney-client communications, Stengart enjoyed a more robust privacy interest.  Furthermore, because she had communicated with her attorney through her web-based account, she had taken reasonable steps to keep discussions with her attorney confidential and had not waived the attorney-client privilege.

 

Some key facts in the case provide guidance on how the case may be applied.  The e-mails were sent over a web-based, password protected, private e-mail account, and so an employee would have a reasonable expectation that her communications would remain private.  The Court implied that an employee’s privacy interest might diminish where the employee has used a company e-mail account.  The court also indicated that the location of the company’s computer might be a relevant factor.  Therefore, theoretically, the interest would further diminish if messages were composed while the employee was using the computer in the workplace and if sent through the employer’s servers.  These same considerations bear on whether the employee has waived the attorney-client privilege.

With the advent of CM/ECF and electronic filing, attorneys today rely almost exclusively on their computers to file pleadings and monitor deadlines.  What happens if you experience problems with your e-mail and you miss a deadline?  “You’re out of luck,” says the Fourth Circuit in Robinson v. Wix Filtration Corp.; a 2-1 opinion written by Judge Duncan, with Judge King dissenting.

 

After Robinson’s employment action was removed to federal court, a magistrate judge issued a pretrial and case management plan that set August 8, 2008, as the deadline to file dispositive motions.  And, on August 8, Wix filed a motion for summary judgment.  Robinson never filed a response and on December 3, 2008, after reviewing the record and Wix’s argument, the district court entered summary judgment in favor of Wix.  Robinson filed a motion under Rule 59(e) and Rule 60 on December 12, 2008, claiming that his counsel had not received electronic notice because his counsel’s e-mail system had malfunctioned after being attacked by a malware virus.  The district court denied the motion, and the Fourth Circuit affirmed.

 

According to the majority opinion:

 

“We can hardly say that the district court abused its discretion in declining to vacate its judgment to prevent ‘manifest injustice’ given that Appellant’s failure to receive notice of the motion resulted from his counsel’s conscious choice not to take any action with respect to his computer troubles.”

 

In addition, the court noted that the error arose, in part, because of counsel’s strategic choice not to call opposing counsel after the deadline for filing dispositive motions had passed because he did not want to alert them to the deadline.  The court was also unpersuaded by Robinson’s argument that his suit should not be dismissed because of his counsel’s error.  According to the court, “a party voluntarily chooses his attorney as his representative in the action, and, thus, he cannot later avoid the consequences of the acts or omissions of this freely selected agent.” 

 

It was on this point, principally, that Judge King disagreed with the majority.  In his view, Robinson should have an opportunity to litigate his case on the merits, irrespective of his counsel’s failure to abide by the court’s scheduling order.

 

Judge Davis wrote a short concurring opinion to address Judge King’s dissent.  According to Judge Davis, “the agency theory of legal representation is long established” and, thus, Robinson could not escape the consequence of his attorney’s struthian (yet, some would say vulpine) litigation strategy.  Judge Davis also noted that in some places lawyers actually “talk to each other frequently, even lawyers on opposing sides of disputes.  They discuss, for example, in advance, proposed or expected motions and other litigation events; they stay in contact with each other during the pendency of the case.”  Had those professional courtesies been extended, Judge Davis said, “what happened in this case would be highly unlikely to happen.”

 

The decision makes clear that attorneys cannot rely solely on electronic notice, but must make an effort to monitor the case docket, especially if they are experiencing computer problems, as a court is unlikely to entertain a “my e-mail was not working” defense.  It is also advisable to inform the court and opposing counsel about problems sending or receiving e-mail.

 

What is more, in all three opinions, either explicitly or implicitly, the court relates a sense of regret and frustration with respect to the lack of communication between counsel. Instead of playing a game of “Gotcha!” with the deadlines, had counsel been in touch about filings, Robinson would have had an opportunity to respond.  Nevertheless, the court made clear that even in the absence of a response, a “district court must review the motion . . . and determine from what it has before it whether the moving party is entitled to summary judgment as a matter of law.”

 

Note:  Judge Davis’s concurrence at note 2 quotes to two intellectual giants, in perhaps a “Posnerian” attempt to provide the bar with a bit of culture and refinement.  I am certain Brian Garner is aghast.  The quotes are as follows:

 

“A little learning is a dangerous thing; drink deep, or taste not the Pierian spring: there shallow draughts intoxicate the brain, and drinking largely sobers us again.”  Alexander Pope (English Poet).

 

“The saying that a little knowledge is a dangerous thing is, to my mind, a dangerous adage.  If knowledge is real and genuine, I do not believe that it is other than a very valuable possession, however infinitesimal its quantity may be.  Indeed, if a little knowledge is dangerous, where is the man who has so much as to be out of danger.”  Thomas Henry Huxley (Biologist).

The Supreme Court in United States v. Stevens struck down as substantially overbroad a federal law making it a crime to depict animal cruelty in commercial speech.  The statute at issue banned commercial depictions of “animal cruelty,” namely a depiction “in which a living animal is intentionally maimed, mutilated, tortured, wounded, or killed,” if the killing or other action violates the law where the “the creation, sale, or possession takes place.”  The statute provided an exception for a depiction “that has serious religious, political, scientific, educational, journalistic, historical, or artistic value.”  In an 8-1 decision authored by Chief Justice Roberts, the Supreme Court found the statute violated the First Amendment.

 

The Government’s main argument was that the statute complied necessarily with the First Amendment because depictions of animal cruelty, as a class, are categorically unprotected by the First Amendment.  Finding that depictions of animal cruelty do not fall within the categories of speech historically protected by the First Amendment, the Court rejected this argument.  In so doing, it clarified the Court’s dicta in cases such as New York v. Ferber that had suggested whether a given category of speech enjoyed First Amendment protection depended on a balancing of the value of the speech against its societal costs.

 

Furthermore, relying on the arguments offered by several hunting publication groups and the NRA as amici, the Court detailed how the statute could logically reach the sale of hunting magazines and videos in a state where the type or manner of hunting was legal if the depictions were filmed in a state where that type or manner of hunting violated state regulations. 

 

In a final effort to save the statute, the Government contended that “[t]he Executive Branch construes [the statute] to reach only extreme cruelty and it neither has brought nor will bring a prosecution for anything less.”  The Court did not find any comfort in the Government’s invocation of prosecutorial discretion, saying “the First Amendment protects against the Government; it does not leave us at the mercy of noblesse oblige.  We would not uphold an unconstitutional statute merely because the Government promised to use it responsibly.” 

 

Justice Alito dissented, arguing that the majority had unnecessarily struck down a valuable statute enacted to prevent horrific acts of animal cruelty.  Rather than strike the statute in its entirety, Alito would have vacated the Court of Appeals’ decision and remanded it for the court to consider if the videos at issue were constitutionally protected.  Put differently, Alito did not endorse the majority’s application of the “overbreadth doctrine” in this case.

Welcome to Special Concurrence!  I have designed this blog to serve as a resource for attorneys, clients, and anyone else interested in the law.  Here, I and other members of the Williams Mullen Appellate Group will examine recent appellate decisions and consider their practical and theoretical implications.  While the blog’s scope is national, it will focus primarily on cases decided by the Fourth Circuit, Supreme Court of Virginia, and North Carolina appellate courts.  With occasional commentary, and features on appellate practice, we hope to provide a useful resource and an interesting exposition of the law.

 

Joseph R. Pope

In Newdow v. Rio Linda Union School District, the Ninth Circuit in a 2-1 decision rejected atheist, Michael Newdow’s latest claim that teacher-led recitations of the Pledge of Allegiance constitutes an establishment of religion prohibited under the First Amendment of the Constitution. 

 

Everyday, willing students in the Rio Linda Union School District in California, led by their teacher, recite the Pledge.  One of the plaintiffs, Jane Roe, an atheist, whose child attended an elementary school in the district claimed that the words “under God” served to endorse religious belief and coerce and indoctrinate her child that God exists.  Roe’s daughter had never said the pledge; instead, she remained silent during the recital.

 

Reversing the district court, the majority asked: “Does Roe have the right to prevent teachers from leading other students from reciting the Pledge of Allegiance—something we all agree is a patriotic exercise—because the mention of God in the Pledge offends her as an atheist?”  The Court answered: No. 

 

According to the majority:

 

The Pledge reflects many beliefs held by the Founding Fathers of this country—the same men who authored the Establishment Clause—including the belief that it is the people who should and do hold the power, not the government.  They believed that the people derive their most important rights, not from government, but from God:

 

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.

 

The majority inferred from reading the Declaration of Independence and the Constitution that the founding fathers did not view the two ideas—that individuals were endowed by God with certain inalienable rights and that we do not want our government to establish a religion—as being in conflict.

 

The majority went on to recount that the current Pledge was adopted by Congress in 1954 and was recodified by Congress in 2002. (After a panel of the 9th Circuit held that the Pledge was unconstitutional, see Newdow v. United States Congress, 292 F.3d 597 (9th Cir. 2002), Congress “recodified” the Pledge as a means of reiterating its view that the Pledge was Constitutional.  The 9th Circuit’s decision was reversed on standing grounds by the Supreme Court.  See Elk Grove Unified Sch. Dist. v. Newdow, 542 U.S. 1 (2004)).

 

Upon reviewing the history of the Pledge and after applying all three Establishment Clause tests—Lemon, Endorsement, and Coercion—the majority said:

 

We hold that the Pledge of Allegiance does not violate the Establishment Clause because Congress' ostensible and predominant purpose was to inspire patriotism and that the context of the Pledge—its wording as a whole, the preamble to the statute, and this nation’s history—demonstrate that it is a predominantly patriotic exercise. For these reasons, the phrase "one Nation under God" does not turn this patriotic exercise into a religious activity

 

Accordingly, we hold that California’s statute requiring school districts to begin the school day with an "appropriate patriotic exercise" does not violate the Establishment Clause even though it permits teachers to lead students in recitation of the Pledge.

 

In a sharply worded 133-page dissent (complete with table of contents), Judge Reinhardt said, in part:

 

[N]o judge familiar with the history of the Pledge could in good conscience believe, as today’s majority purports to do, that the words "under God" were inserted into the Pledge for any purpose other than an explicitly and predominantly religious one . . . . Nor could any judge . . . seriously deny that carrying out such an indoctrination in a public school classroom unconstitutionally forces many young children either to profess a religious belief antithetical to their personal views or to declare themselves through their silence or nonparticipation to be protesting nonbelievers, thereby subjecting themselves to hostility and ridicule.

 

It is equally clear that no judge . . . could legitimately rely on a 2002 "reaffirmation" to justify the incorporation of the words "under God" into the Pledge . . . as if the finite act in 1954 of transforming a purely secular patriotic pledge into a vehicle to promote religion, and to indoctrinate public schoolchildren with a belief in God, had never occurred . . . .  In doing so [in 1954], we abandoned our historic principle that secular matters were for the state and matters of faith were for the church. The majority does so again today, sadly, by twisting, distorting, and misrepresenting the law, as well as the issues that are before us.

 

Today’s majority opinion will undoubtedly be celebrated, at least publicly, by almost all political figures, and by many citizens as well, without regard for the constitutional principles it violates and without regard for the judicial precedents it defies and distorts . . . .  [T]o the joy or relief . . . of the two members of the majority, this court’s willingness to abandon its constitutional responsibilities will be praised as patriotic and may even burnish the court's reputation among those who believe that it adheres too strictly to the dictates of the Constitution or that it values excessively the mandate of the Bill of Rights.

 

If a majority of the populace comes to believe in a patriotism that requires the abdication of judicial responsibility, if it comes to accept that we can only honor our nation by ignoring its basic values, if it comes to embrace a practice of bringing together the many by forfeiting the rights of the few, then we clearly will have imposed an untenable burden not only on our nation in general but on the judiciary in particular . . . .  I do not doubt that many Americans feel bound together by their faith in God, but whatever beliefs may be shared by a majority of our citizens, it is respect for the rights of minorities and for the Constitution itself that must bind us all.

 

The Supreme Court has agreed to consider Snyder v. Phillips (09-751), a case involving a stridently anti-gay Kansas preacher and members of his congregation who picket military funerals.  The Appellant, Albert Snyder, brought numerous tort claims against Phelps in district court and attained a $5 million judgment.  The Fourth Circuit vacated the judgment on First Amendment grounds and now the Supreme Court will consider whether to reinstate the district court’s judgment.  

 

Fred Phelps is the founder and leader of Westboro Baptist Church, which is located in Topeka, Kansas.  The church has approximately sixty members, fifty of whom are his children, grandchildren, or in-laws.  The church describes itself as a fundamentalist Christian church that practices a fire and brimstone orthodoxy.  It contends that God kills soldiers in Iraq and Afghanistan as punishment for America's tolerance of homosexuality and for the presence of gays in the U.S. military.  To advance its message, the church stages protests at the funerals of U.S. soldiers killed in action. The church also operates a number of websites, including one called "godhatesfags.com," on which it disseminates its rabidly anti-homosexual views.

 

Albert Snyder's son, Lance Corporal Matthew Snyder, was a U.S. Marine who was killed on March 3, 2006 during active service in Iraq. His body was returned to the United States, and his family held a funeral for him on March 10, 2006 in Westminster, Maryland.

 

Fred Phelps and members of his congregation picketed Matthew's funeral, holding signs expressing anti-gay, anti-American, and anti-Catholic slogans, including “God Hates the USA,” America is doomed,” “Pope in hell,” “Fag Troops,” “Thank God for IEDs,” “God hates you,” and “You’re going to hell.”

 

After returning to Kansas, Phelps and his church published an “epic” on its website.  In “The Burden of Marine Lance Cpl. Matthew A. Snyder” Phelps and his followers claimed that Albert and his wife “raised [Matthew] for the devil.” That God, through an IED, “RIPPED [Matthew’s] body apart and taught Matthew to defy his Creator, to divorce, and to commit adultery,” “taught him how to support the largest pedophile machine in the history of the entire world, the Roman Catholic monstrosity,” and “taught Matthew to be an idolator.”

 

Albert sued Phelps under Maryland state law, and won a $10.9 million jury verdict based on claims of intrusion upon seclusion, intentional infliction of emotional distress, and civil conspiracy.  The verdict included $2.9 million for compensatory damages and $8 million in punitive damages.  The district court entered judgment on the verdict,  but remitted the jury’s punitive damages award to $2.1 million.

 

The Fourth Circuit reversed.  Two judges on the panel held that Phelps’s speech, although distasteful, was hyperbolic and metaphorical and not directed at any specific person.  The court also found that the speech involved matters of public concern, such as gays serving in the military, the sex-abuse scandal in the Catholic Church, and the moral and political conduct of the United States and its citizens. 

 

A concurring judge found that although the appellant did not raise a sufficiency of the evidence challenge to the state law torts, the court should nevertheless consider the issue.  After considering the evidence in the record, the concurring judge found the evidence insufficient to sustain the verdict.

 

In his petition for writ of certiorari, Albert argued that the Supreme Court’s protection of speech about public issues does not extend “to private individuals versus private individuals.”  If it does apply, the petition said, “the victimized private individual is left without recourse.”  The petition also noted that the 4th Circuit’s decision creates an incentive for private individuals to use hyperbolic language to gain constitutional protection “even if that language is targeted at another private individual at a private, religious funeral.”

 

The Supreme Court will hear the case in its next term.

The Supreme Court in DeShaney v. Winebago County Dep’t of Soc. Servs., 489 U.S. 189, 197 (1989), considered the issue of whether a state’s social services department could be held liable under the constitution when a child was beaten severely by his father and the department had knowledge of a long history of physical abuse---as a result of the beating, Joshua DeShaney was left profoundly mentally retarded. The Supreme Court answered in the negative, finding that because the child was in the custody of his father, rather than the state, and the state played no part in creating the abusive environment, although knowing the environment existed, there was no state action; thus, no constitutional violation. This ruling led to Justice Blackmun’s famous “Poor Joshua!” dissent. But DeShaney did not answer the question of whether and under what circumstances a child who has been involuntarily removed from her home by state social workers and knowingly placed in a dangerous foster care environment may state a constitutional claim. The Fourth Circuit considered this issue in Doe v. South Carolina Department of Social Services, ___ F.3d ___, No. 08-2161 (4th Cir. 2010).

To say the least, the facts before the court were tragic. Jane Doe, age 4, and her brother, Kameron, age 8, were sexually abused by both their natural born parents and taken into protective custody by the South Carolina Department of Social Services (“SCDSS”). Kameron was subsequently evaluated by a psychologist who found “he posed a threat to himself and to Jane” and needed psychiatric hospitalization. The evaluation went on to say that Kameron “had a history of depression, suicidal and homicidal thoughts, and had become increasingly aggressive and hostile toward Jane.” The therapist also documented “a history of sexual experimentation by Kameron and Jane with each other, possible sexual abuse, and possible intergenerational incest.”

Debby Thompson was assigned to Jane and Cameron’s case and she knew of the psychologist’s report. Even though she knew that Kameron posed a threat to Jane, Thompson sought to keep the two together to continue the family bond. The two were placed eventually with the Johnson family for prospective adoption, but Kameron was removed from the home because he displayed sexually aggressive behavior. Jane remained with the family. Later, it came to light that Kameron had sexually abused Jane for years, even while they were in foster care. Jane also alleged that she reported the abuse to Thompson who responded that Jane should not tell anyone of the abuse “or they would never adopt her.”

As a result of the continued abuse, Jane’s behavior became intolerable. According to the Johnsons, Jane “cannot be left alone or trusted, they are unable to obtain any help supervising her, and they cannot leave her alone with other children for fear that she will act out sexually. Among other things, she is physically and sexually aggressive, violent towards the Johnsons and their biological children, and abusive to animals.”

The Johnsons subsequently filed suit on theirs and Jane's behalf, asserting claims under 28 U.S.C. § 1983 and the South Carolina Tort Claims Act. As to the § 1983 claim, the Johnsons argued that Thompson violated Jane’s substantive due process rights under the Fourteenth Amendment by placing her in foster care settings with Kameron while knowing Kameron was sexually abusive toward her. Additionally, the Johnson’s alleged that Thompson violated their substantive due process rights by failing to disclose fully Jane and Kameron’s sexual history prior to Jane’s adoption. Thompson argued that, as a state actor, she could not be held liable under the qualified immunity doctrine.

Saucier v. Katz, 533 U.S. 194 (2001), provided that the qualified immunity question was a two-part test: the first part of the inquiry considers whether the plaintiff alleged facts demonstrating the deprivation of a constitutional right, and the second asks whether the right was clearly established at the time of the alleged wrongdoing. In Pearson v. Callahan, 129 S. Ct. 808, 816 (2009), the Supreme Court modified this two-part order of battle and allowed lower courts to exercise discretion to determine which issue to consider first. The court considered first whether a constitutional right was violated. The court reasoned based on dicta from DeShaney and the decisions of other circuit courts that Jane had a substantive due process right to be free of abuse once she was taken into custody by the SCDSS and that SCDSS had breached its duty by being deliberately indifferent to the child’s safety and security. The court limited its ruling by explaining that a violation would only arise where state officials were deliberately indifferent to known dangers.

Proceeding to the second part of the test, the court found that none of its earlier decisions, or decisions of the Supreme Court, had clearly established a “positive” substantive due process right. Thus, the court ultimately denied Jane relief on her constitutional claim.

Judge Wilkinson, while concurring in the judgment, made a vigorous consequentialist argument that the majority’s finding that the Constitution “imposes upon states a ‘duty to protect’ children from harm by non-state actors” would ultimately harm abused children. Because the majority had expanded substantive due process rights in this context and opened the door to future § 1983 actions, in his view, states will be deterred from taking legal custody of abused children and potential foster parents will be discouraged from becoming foster parents out of fear of litigation.

In Flanigan’s Enterprises, Inc. v. Fulton County, Georgia, ___ F.3d ___, 08-17035, the Eleventh Circuit upheld an ordinance proscribing the sale of alcohol at clubs featuring exotic dancing. The case exemplifies the tension between expressive rights and the power of government to restrict expressive speech it deems immoral or tasteless. 

De gustibus non est disputandem; but irrespective of one’s taste or distaste for exotic dance, the Supreme Court has found, albeit via pluralities in the nude dancing cases, City of Erie v. Pap’s A.M. and Barnes v. Glen Theatre, Inc., that exotic dance is expressive conduct. And, by extension, onerous restrictions of its performance implicate broader threats to artistic freedom. [For a compendious history of exotic dance see Judge Posner’s concurrence in Miller v. Civil City of South Bend (“Public performances of erotic dances debuted in Western culture in the satyr plays of the ancient Greeks, were suppressed by Christianity, and, with Christianity’s grip loosening, reappeared in the late nineteenth and early twentieth centuries.”] To be sure, this does not mean that localities no longer retain a sphere of discretion to regulate the activity. Thus, where “the governmental purpose in enacting the regulation is unrelated to the suppression of expression” it is subject to intermediate scrutiny. In Flanigan’s, the court held that a county ordinance banning the sale of alcohol in strip clubs met this standard.

At issue in Flanigan’s was an ordinance “prohibiting the sale, possession, and consumption of alcohol in adult entertainment establishments.” Several bar owners who operated clubs serving and selling alcohol that also featured live nude dancing brought suit challenging this regulation. In fact, this was the second case brought by these bar owners. The first case resulted in the Eleventh Circuit striking down a substantially similar regulation. See Flanigan’s Enters., Inc. v. Fulton County, 242 F.3d 976 (11th Cir. 2001) (Flanigan’s I). Why the change of heart?

According to the court, in Flanigan’s I the County had ignored empirical evidence based on local conditions showing no relationship between the clubs, crime, or reduced property values. Instead, the County relied on studies from other cities that concluded, “strip clubs were indeed a blight on the surrounding communities.” According to the court, the County could not simply ignore the local studies in favor of studies from substantially different communities to demonstrate a substantial government interest.

By contrast, in Flanigan II, the court noted that the County had commissioned two additional local studies in the wake of Flanigan I to determine the secondary effects of alcohol and live nude dancing. According to these studies, the areas where the clubs engaging in this conduct were located were replete with dilapidated buildings, hourly hotels catering to prostitutes, and “general unsafe conditions.” The County also considered reports from around the country showing the negative secondary-effects of sexually oriented businesses. This factual basis, according to the court, demonstrated that the County had a substantial interest in curbing these deleterious effects; and because the ordinance only targeted adult establishments where alcohol was served, it was unrelated to the suppression of free expression.

This case provides municipalities guidance in how to regulate adult businesses and prevent the secondary effects often associated with them. The key, it would seem, is to marshal sufficient evidence to show more than a speculative fear of crime and property devaluation. This empirical foundation will serve to demonstrate that the regulation is at its core a “social and economic regulation aimed at improving communities and promoting health, safety, and welfare.” This factual basis may also be necessary because in the wake of Lawrence v. Texas courts will likely exact a greater level of scrutiny on regulations founded wholly on governmental concern for public decency and morality. See Lawrence v. Texas, 539 U.S. 558 (2003) (Scalia, J., dissenting). In fact, in Reliable Consultants, Inc. v. Earle, 517 F.3d 746–47 (5th Cir. 2008), the Fifth Circuit found public morality an insufficient state interest to sustain laws regarding sexual privacy, which the Supreme Court—unlike exotic dance—has not endowed with fundamental constitutional status.

Well, according to a California intermediate appellate court: it depends. The case, Hung Tan Phan v. Lang Van Pham, ___ Cal. App. 4th ___, G-041666 (Feb. 25, 2010), posed the question: “What happens when you receive a defamatory e-mail over the internet and simply hit the forward icon on your computer, sending it to someone else?” The answer, according to the court, depends on whether the forwarding party made a “material contribution” to the defamatory e-mail.

The case arose after the president of a group of veterans from the Navy and Merchant Marine of the Republic of Vietnam sent an e-mail accusing the plaintiff of being disciplined for abusive behavior by the Navy of the Republic of Vietnam. The defendant received the e-mail and forwarded it on to at least one other member of the group. But he included an introductory paragraph:

Dear Kmap
Everything will come out to the daylight, I invite you and our classmates to read the following comments of Senior Duc (Duc Xuan Nguyen) President of the Federal of Associations of the Republic of Vietnam Navy and Merchant Marine. (sic.)

The court found that this preliminary statement did not make a “material contribution” to the defamatory statement, saying: “His original language, quoted in full . . . merely said, in essence: Look at this and ‘Everything will come out to the daylight (sic.).’ All he said was: The truth will come out in the end. What will be will be. Whatever.” As such, the court dismissed the defamation claim.

Simply put, the “material contribution” test requires that the person forwarding the e-mail contribute her own defamatory material.

While this case comes from California, it could nevertheless have profound effects on anyone e-mailing someone located in California.