Law in Plain English: Yates v. United States

This is one in a series of posts designed to describe court decisions in plain English. For more detail and background on the legal issues, see the link to the case below. For similar posts, click here.

SCOTUSblog: Yates v. United States

Argument: Nov 5 2014 (Aud.) 

Background: While fishing in the Gulf of Mexico, the Miss Katie was boarded by a fisheries officer, who measured several red grouper fish and found them to be less than 20 inches (the minimum size limit for red grouper at the time). The officer placed the undersized fish in the Miss Katie's fish box, issued the captain (Yates) a citation, and instructed Yates not to disturb the fish because they would be seized upon return to port. Nonetheless, Yates had his crew throw the undersized fish overboard and replaced them with other undersized (but closer to 20") fish. Yates was charged and convicted of 1) the destruction of property to prevent seizure; and 2) the destruction of a "tangible object with the intent to impede, obstruct, or influence" the government's investigation into harvesting undersized grouper. This second charge was based upon the "anti-shredding" provision of Sarbanes-Oxley, passed in the wake of the Enron scandal. The Eleventh Circuit affirmed his conviction.

Issue: The question before the Court is whether Mr. Yates was deprived of fair notice that destruction of fish would fall within the purview of 18 U.S.C. § 1519, which makes it a crime for anyone who “knowingly alters, destroys, mutilates, conceals, covers up, falsifies, or makes a false entry in any record, document, or tangible object” with the intent to impede or obstruct an investigation, where the term “tangible object” is ambiguous and undefined in the statute, and unlike the nouns accompanying “tangible object” in section 1519, possesses no record-keeping, documentary, or informational content or purpose.

Holding: The Supreme Court ruled that a “tangible object” within §1519’s compass is one used to record or preserve information. Because the grouper caught by Yates were not “tangible objects” under this meaning, his conviction would be reversed.

Law in Plain English: T-Mobile South, LLC v. City of Roswell

This is one in a series of posts designed to describe court decisions in plain English. For more detail and background on the legal issues, see the link to the case below. For similar posts, click here.

SCOTUSblog: T-Mobile South, LLC v. City of Roswell

Argument: Nov 10 2014 (Aud.)

Why did the Supreme Court take this case? In this case, the Eleventh Circuit held that the availability of the minutes and a transcript from a hearing were sufficient to meet the "in writing" requirement. On the other hand, the First,
Sixth, and Ninth Circuits have held that a written denial must be separate from the written record and must contain a sufficient explanation of the reasons for the permit denial to allow a reviewing court to evaluate the evidence in the record supporting those reasons. So-called "circuit splits" are perhaps the most common way cases make it to the Supreme Court.

Monopine-style cell tower

Background: The Federal Communications Act (FCA) requires that the denial of a permit for a cell tower be made "in writing and supported by substantial evidence contained in a written record." 47 U.S.C. § 332(c)(7)(B)(iii). When the City of Roswell, Georgia, denied a permit to T-Mobile, the letter simply indicated that the permit was denied and referred T-Mobile to the minutes from the hearing at which the Mayor and City Council denied the permit. The district ruled ruled for T-Mobile, finding that the city had violated the FCA by failing to provide a written document delineating the specific reasons for the local government's decision. Relying on their intervening decision in T-Mobile South LLC v. City of Milton, the Eleventh Circuit reversed, finding that the availability of the minutes and a transcript from the hearing were sufficient to meet the "in writing" requirement.

Issue: The question before the Court is whether a document from a state or local government stating that an application has been denied, but providing no reasons whatsoever for the denial, can satisfy the Communications Act’s “in writing” requirement.

Holding: In a 6-3 decision, the Supreme Court ruled that Section 332(c)(7)(B)(iii) requires localities to provide reasons when they deny applications to build cell phone towers. This conclusion follows from the Act’s provisions, which both preserve and specifically limit traditional state and local government authority. It would be considerably difficult for a reviewing court to determine whether a locality’s denial was supported by substantial evidence contained in a written record or whether a locality had unreasonably discriminated among providers of functionally equivalent services or regulated siting on the basis of the environmental effects of radio frequency emissions if localities were not obligated to state their reasons for denial.

Law in Plain English: Alabama Department of Revenue v. CSX Transportation, Inc.

This is one in a series of posts designed to describe court decisions in plain English. For more detail and background on the legal issues, see the link to the case below. For similar posts, click here.

SCOTUSblog: Alabama Department of Revenue v. CSX Transportation, Inc.

Argument: Dec 9 2014 (Aud.)

Background: CSX pays Alabama's 4% sales tax whenever it purchases diesel fuel in the state. CSX's main competitors in the state-interstate motor and water carriers do not. Motor carriers pay an excise tax of 19c per gallon. Water carriers pay no tax at all on diesel fuel purchases. CSX filed suit, alleging that by paying the 4% sales tax, the state discriminated against CSX in violation of the Railroad Revitalization and Regulation Reform Act of 1976 (4-R Act). The Act provides that a state may not "[i]mpose another tax that discriminates against a rail carrier providing transportation subject to the jurisdiction of the Board under this part." The district court dismissed the complaint, reasoning that because the state's motor carriers paid a roughly equivalent amount in taxes pursuant to the state's fuel excise tax, the motor carriers' exemption from the sales tax was not discriminatory. The district court also found that CSX had offered no evidence regarding the purported discriminatory effect of the tax as it related to water carriers. The Eleventh Circuit reversed, finding that because rail carriers paid the state's sales tax and motor and water carriers did not, the tax was discriminatory-regardless of whether other taxes leveled the playing field.

Issue: The questions before the Court are (1) whether a state “discriminates against a rail carrier” in violation of 49 U.S.C. § 11501(b)(4) when the state generally requires commercial and industrial businesses, including rail carriers, to pay a sales-and-use tax but grants exemptions from the tax to the railroads’ competitors; and (2) whether, in resolving a claim of unlawful tax discrimination under 49 U.S.C. § 11501(b)(4), a court should consider other aspects of the state's tax scheme rather than focusing solely on the challenged tax provision.

Holding: TBD

Law in Plain English: Lane v. Franks

This is one in a series of posts designed to describe court decisions in plain English. For more detail and background on the legal issues, see the link to the case below. For similar posts, click here.

SCOTUSblog: Lane v. Franks

Argument: Apr 28 2014 (Aud.)

Background: In September 2006, Edward Lane accepted a probationary position as Director of Central Alabama Community College (CACC)'s Community Intensive Training for Youth Program ("CITY"), a program for at-risk youth. Soon after assuming his duties, Lane audited CITY's finances and discovered that then-state representative Suzanne Schmitz was listed on CITY's payroll but was not reporting for work and had not otherwise performed tangible work for the program. Soon thereafter, Lane terminated Schmitz's employment with CITY after Schmitz refused to report to work. Soon after Schmitz's job termination, the FBI began investigating Schmitz and contacted Lane for information. Lane testified before a federal grand jury and — pursuant to a subpoena — testified at Schmitz's August 2008 federal criminal trial for mail fraud and fraud involving a program receiving federal funds. In late 2008 — due to substantial budget cuts — Lane's employment was terminated by Steve Franks, CACC's President. Lane filed a civil action against Franks — in both his official and individual capacity — alleging that Franks terminated Lane in retaliation for testifying against Schmitz, in violation of the First Amendment. The district court granted Franks's motion for summary judgment. Although the district court couched its decision in terms of qualified immunity, it determined that Lane's speech was made pursuant to his official duties as CITY's Director, not as a citizen on a matter of public concern. The Eleventh Circuit affirmed, finding that the record failed to establish that Lane testified as a citizen on a matter of public concern: as a matter of law, he could not state a claim for retaliation under the First Amendment.

Issue: The questions before the Court are (1) whether the government is categorically free under the First Amendment to retaliate against a public employee for truthful sworn testimony that was compelled by subpoena and was not a part of the employee’s ordinary job responsibilities; and (2) whether qualified immunity precludes a claim for damages in such an action.

Holding: In a unanimous decision, the Supreme Court ruled that Lane's sworn testimony outside the scope of his ordinary job duties is entitled to First Amendment protection. His testimony was speech as a citizen on a matter of public concern. However, the Court also found that Franks possessed qualified immunity for the termination of Franks because the existence of First Amendment protection was not “beyond debate.” 

Law in Plain English: United States v. Clarke

This is one in a series of posts designed to describe court decisions in plain English. For more detail and background on the legal issues, see the link to the case below. For similar posts, click here.

SCOTUSblog: United States v. Clarke

Argument: Apr 23 2014 (Aud.)

Background: The Internal Revenue Service (IRS) issued five administrative summonses, pursuant to 26 U.S.C. § 7602, during an investigation into the tax liabilities of Dynamo Holdings Limited Partnership (Dynamo) and Michael Clarke, in his capacity as Dynamo's CFO. To obtain enforcement of a summons, the IRS must make a four-part prima facie showing that (1) "the investigation will be conducted pursuant to a legitimate purpose," (2) "the inquiry may be relevant to the purpose," (3) "the information sought is not already within the Commissioner's possession," and (4) "the administrative steps required by the Code have been followed." Once the IRS makes its prima facie showing, the burden shifts to the party opposing the summons to either (1) disprove one of the four elements of the IRS's prima facie case, or (2) "convince the court that enforcement of the summons would constitute an abuse of the court's process."  A party opposing a summons is entitled to an adversary hearing before enforcement is ordered, and that, at the hearing, the opponent may challenge the summons on any appropriate ground. Under Fifth Circuit precedent, an allegation of improper purpose is sufficient to trigger a limited adversary hearing where the taxpayer may question IRS officials concerning the Service's reasons for issuing the summons. Nonetheless, the district court ordered enforcement of the summons. Clarke appealed, and the Fifth Circuit vacated the order and remanded the case to the district court, ruling that Clarke was entitled to a hearing to explore his allegation of an improper purpose.

Issue: The question before the Court is whether an unsupported allegation that the Internal Revenue Service (IRS) issued a summons for an improper purpose entitles an opponent of the summons to an evidentiary hearing to question IRS officials about their reasons for issuing the summons.

Holding: In a unanimous decision, the Supreme Court ruled that a taxpayer has a right to conduct an examination of IRS officials regarding their reasons for issuing a summons when he points to specific facts or circumstances plausibly raising an inference of bad faith. It is not enough to simply allege that the agents had an improper purpose, without providing any credible evidence to support that allegation.

Law in Plain English: Kaley v. United States

This is one in a series of posts designed to describe court decisions in plain English. For more detail and background on the legal issues, see the link to the case below. For similar posts, click here.

SCOTUSblog: Kaley v. United States

Argument: Oct 16 2013 (Aud.)

Background: The Kaleys were indicted for conspiracy to transport prescription medical devices (PMDs) from hospitals and then selling them on the black market (among other charges). The indictment also sought criminal forfeiture of all property traceable to the charged offenses. The government asked the District Court for an ex parte protective order restraining the Kaleys from transferring or otherwise disposing of the property listed in the forfeiture count. Included in this property was a $500,000 certificate of deposit purchased with a home equity line of credit on their home which they intended to use to fund their criminal defense. The Kaleys contended that the order prevented them from retaining counsel of their choice in violation of their Sixth Amendment right to the representation of counsel. Further, they asked the court to vacate the protective order and and expressly requested a pretrial, post-restraint evidentiary hearing, both of which were denied. The Eleventh Circuit affirmed.

Issue: The question before the Court was whether, when a post-indictment, ex parte restraining order freezes assets needed by a criminal defendant to retain counsel of choice, the Fifth and Sixth Amendments require a pre-trial, adversarial hearing at which the defendant may challenge the evidentiary support and legal theory of the underlying charges.

Holding: In a 6-3 decision, the Supreme Court ruled that when challenging the legality of a §853(e)(1) pre-trial asset seizure, a criminal defendant who has been indicted is not constitutionally entitled to contest a grand jury’s determination of probable cause to believe the defendant committed the crimes charged. As a result, the Kaleys do not have a right to a pretrial, post-restraint evidentiary hearing.

Law in Plain English: Unite Here Local 355 v. Mulhall

This is one in a series of posts designed to describe court decisions in plain English. For more detail and background on the legal issues, see the link to the case below. For similar posts, click here.

SCOTUSblog: Unite Here Local 355 v. Mulhall

Argument: Nov 13 2013 (Aud.)

Photo from Unite Here Local 355.

Background: Mardi Gras Gaming, and Unite Here Local 355, a labor union, entered into agreement in 2004. In the Agreement, Mardi Gras promised to (1) provide union representatives access to non-public work premises to organize employees during non-work hours; (2) provide the union a list of employees, their job classifications, departments, and addresses; and (3) remain neutral to the unionization of employees. In return, Unite promised to lend financial support to a ballot initiative regarding casino gaming. Ultimately, Unite spent more than $100,000 campaigning for the ballot initiative. Additionally, if recognized as the exclusive bargaining agent for Mardi Gras's employees, Unite promised to refrain from picketing, boycotting, striking, or undertaking other economic activity against Mardi Gras. Mulhall, a Mardi Gras employee opposed to being unionized, alleged that the agreement violated § 302 of the Labor Management Relations Act (LMRA), which makes it unlawful for an employer to give or for a union to receive any "thing of value." The District Court dismissed the complaint claim because it found that the assistance promised in the Agreement cannot constitute a "thing of value," but the Eleventh Circuit reversed.

Issue: The question before the Court is whether an employer and union may violate S§ 302 of the LMRA by entering into an agreement under which the employer exercises its freedom of speech by promising to remain neutral to union organizing, its property rights by granting union representatives limited access to the employer’s property and employees, and its freedom of contract by obtaining the union’s promise to forego its rights to picket, boycott, or otherwise put pressure on the employer’s business.

Holding:The Supreme Court dismissed the writ of ceriorari as improvidently granted. A "DIG" is essentially the Court saying that it should not have accepted the case and the issue remains undecided. Justice Breyer wrote a dissent in which he explained that the Court believed the case may have been moot and that the plaintiff Muhall may lack standing.

Law in Plain English: FTC v. Actavis

This is one in a series of posts designed to describe court decisions in plain English. For more detail and background on the legal issues, see the link to the case below. For similar posts, click here.

Federal Trade Commission v. Actavis

In order to give the patent-holders of brand-name drugs a longer time to exclusively market their drugs, these manufacturers sometimes make payments to generic drug companies to delay entering the market. This is referred to as "pay for delay" or a "reverse-payment agreement." The Federal Trade Commission filed a complaint in District Court alleging that the reverse payment agreements are unfair restraints on trade that violate federal antitrust laws. The District Court sided with the drug companies. The Eleventh Circuit agreed, ruling that reverse-payment agreements are immune from antitrust attack absent sham litigation or fraud in obtaining the patent. The question before the Court is whether reverse-payment agreements are per se lawful unless the underlying patent litigation was a sham or the patent was obtained by fraud (as the Eleventh Circuit held), or instead are presumptively anticompetitive and unlawful. In a 5-3 decision (Justice Alito recused), the Supreme Court ruled, although reverse payment settlement agreements are not presumptively unlawful, neither are the drug companies immune from antitrust attack. As a result, the FTC has an opportunity to prove its case. The practical impact of this decision is that courts reviewing such agreements should proceed by applying the “rule of reason" (an antitrust doctrine; the "test of legality is whether the restraint imposed is such as merely regulates, and perhaps thereby promotes, competition, or whether it is such as may suppress or even destroy competition.").

Law in Plain English: United States v. Davila

This is one in a series of posts designed to describe court decisions in plain English. For more detail and background on the legal issues, see the link to the case below. For similar posts, click here.

United States v. Davila

A judge told Davila that he should accept responsibility for his crimes (filing over 130 fraudulent tax returns) and that pleading guilty might be the best advice an attorney could provide him. However, the Federal Rules of Criminal Procedure (specifically, rule 11(c)) state that judges must not participate in plea agreements between an attorney for the government and the defendant's attorney. Davila pled guilty and was sentenced. The Eleventh Circuit reversed, finding that any participation by the judge requires automatic reversal. The question before the Court was whether the court of appeals erred in holding that any degree of judicial participation in plea negotiations, in violation of the Federal Rule of Criminal Procedure, automatically requires vacatur of a defendant’s guilty plea, irrespective of whether the error prejudiced the defendant. In a 9-0 decision, the Supreme Court ruled that under rule 11(h), vacatur of the plea is not in order if the record shows no prejudice to Davila’s decision to plead guilty. As a result, the Eleventh Circuit's automatic reversal rule is overturned. The practical impact of this decision is that when such a rule violation occurs, courts will have to examine the record to show that the violation actually resulted in prejudice.

Law in Plain English: Bullock v. BankChampaign, N.A.

This is one in a series of posts designed to describe court decisions in plain English. For more detail and background on the legal issues, see the link to the case below. For similar posts, click here.

Bullock v. BankChampaign, N.A.

Randy Bullock's father established a trust (based on his insurance policy) for the benefit of his children and made Randy the trustee. Bullock then borrowed money from the insurance company against the policy's value on three occasions (once at his father's request, and consistent with the trust's borrowing policy). His brothers then sued him, alleging a breach of fiduciary duty. The court found for the brothers and ordered Bullock to pay the trust the benefits he received from the breach of fiduciary duty by means of a constructive trust (to be administered by BankChampaign). He then filed for bankruptcy after being unable to obtain the funds to make the payment. BankChampaign opposed the bankruptcy discharge on the grounds that the debts fell under the "defalcation" exception and thus not dischargeable. The Bankruptcy Court agreed and ruled for Bank BankChampaign. The District Court and the 11th Circuit Court of Appeals affirmed. The question before the Court was whether “defalcation” applies in the absence of any specific finding of ill intent or evidence of an ultimate loss of trust principal. In a unanimous decision, the Supreme Court ruled “defalcation” in the Bankruptcy Code includes a culpable state of mind requirement involving knowledge of, or gross recklessness in respect to, the improper nature of the fiduciary behavior. As a result, Bullock's debt is dischargeable under bankruptcy law. The practical impact of this decision is that a finding of defalcation will require knowledge or gross reckless as it relates to the trustee's fiduciary duty.

Law in Plain English: Chafin v. Chafin

This is one in a series of posts designed to describe court decisions in plain English. For more detail and background on the legal issues, see the link to the case below. For similar posts, click here.

Chafin v. Chafin

Mr. Chafin, an American military member, married Ms. Chafin, a British citizen, in Germany. They had one child. After several moves and deployments, they filed for divorce. Ms. Chafin was deported to Scotland and filed a petition under the International Child Abduction Remedies Act (ICARA), which is a federal law that implements the Hague Convention on the Civil Aspects of International Child Abduction. The District Court agreed that the child belonged in Scotland and returned the child there. Mr. Chafin appealed to get the child returned to the United States, but the Court of Appeals ruled that once the child was taken to Scotland, courts within the United States were powerless to act. The question in this case was whether Mr. Chafin's appeal was moot after the child was returned to Scotland. The Supreme Court ruled that the return of the child to Scotland under the Hague Convention did not moot Mr. Chafin's case. As a result, the case will return to a lower court where Mr. Chafin can fight for custody of his child.

Law in Plain English: FTC v. Phoebe Putney Health System, Inc.

This is one in a series of posts designed to describe court decisions in plain English. For more detail and background on the legal issues, see the link to the case below. For similar posts, click here.

FTC v. Phoebe Putney Health System, Inc.

A Georgia-authorized hospital authority (Phoebe Putney Health System, PPHS) managed one hospital and then purchased the only other hospital in the same county. The Federal Trade Commission (FTC) filed an anti-trust complaint alleging that having one hospital authority owning both hospitals in the county would reduce competition. PPHS claimed that as a state-authorized entity, they were entitled to state-action immunity from the anti-trust liability. The question before the Court was whether PPHS was entitled to such immunity. The Supreme Court ruled that PPHS was not entitled to anti-trust immunity because Georgia did not make it affirmatively clear that its hospital authorities could take actions that would reduce competition. The practical impact of this decision is that states that wish to give state-action immunity to their subdivisions need to do so through a clearly articulated policy.

SCOTUS in Plain English: Lozman v. City of Riviera Beach, Florida

This is one in a series of posts designed to describe Supreme Court decisions in plain English. For more detail and background on the legal issues, see the link to the case at SCOTUblog below. For similar posts, click here.

Lozman v. City of Riviera Beach, Florida

Lozman owned a floating home that was parked at the Riviera Beach marina. After a dispute, the city tried to evict him. When that failed, they sought a lien to recover the payment of Lozman's debt under federal admiralty jurisdiction, claiming that the floating home was a "vessel" under such law. The Supreme Court ruled that although the home floated, it exhibited no other characteristics of a vessel (it had no propulsion, no method of storing electricity, etc.) and thus was not one. The pratical impact of this decision is that the government will not be permitted to use the more lenient lien rules under federal admiralty jurisdiction when dealing with floating homes (or, indeed, other floating structures like casinos).

Note: The floating home was sold at auction to the city, who had it destroyed. So there was some debate about whether the case was moot. However, since the city posted a $25,000 bond (in case Lozman prevailed), he could still recover and the case was decided on the merits.