Tuesday, August 23, 2011



   Tax law - challenges to jurisdiction of the court based on defects in notice & procedure.

The correct deficiency notice was sent.

The determination of a partnership's viability falls within the definition of a partnership item.



   Securities litigation - question is whether it was kosher to have sold stock while privately unloading it.

Specific duty to disclose in agreement trumps general duty to disclose.  Waiver of this was partial and countermanded by the specific terms of the agreement.

Deft argument that waiver TKO's required scienter doesn't fly.  Sufficiently pleaded.

No holding on whether heightened pleading applies to loss causation.  Allegation that concealment caused the loss since revelation trashed the stock sufficeth unto the task.



   ERISA SOL did not tick prior to flat denial of benefits.

Given  both the ambiguity of the situation and claimant's actions and understanding of the situation, ERISA SOL didn't start to run any earlier than the explicit denial of benefits. 

Contractual limitation doesn't apply to this type of claim.

Eighth Circuit -- United States v. Thomas Wohlman

United States v. Thomas Wohlman

   "Enticement of minor" sentence upheld substantively and procedurally.

Sentencing court did not view guidelines as mandatory.

No error in consideration of uncharged or unacquitted conduct in finding that deft is a sex offender.

Harmless error in judge remarking that mitigation was not proved to a clear and convincing standard, as it wasn't proved to a lesser standard.

No error in consideration of uncharged pr0n possession when described in PSR.

No error in imposition of within-guidelines fine.

Not substantively unreasonable sentence.

Ineffective assistance best considered on collateral attack.

Concurrence: It's legit, but it 's a bit rough.

Seventh Circuit -- USA v. Wosvaldo Villegas

USA v. Wosvaldo Villegas

   Meeting with conspirators, bringing tools for the job, and planning to meet again is sufficient for a substantial step under the Hobbs Act. 

Sufficient evidence that deft took a substantial step under Hobbs Act where he met with co-conspirators, brought license plates to be used, and planned another meeting.  Recorded phone conversations suffice to establish threats of violence.

No error in not giving missing witness instruction where witness was available to deft, despite tension with defense team.  Additionally, deft was permitted to refer to the no-call many times in closing.

No error in introduction of evidence on priors as deft opened door.

No error in sentencing bump for brandishing weapon, as it was foreseeable and foreseen.  The fact that the CI did it is not relevant.

Seventh Circuit -- USA v. Howard Baker

USA v. Howard Baker

Crim - priors fairly admitted, no sentencing error, sufficient evidence.

No error in admission of description of prior bad acts, as while prejudicial, not unfairly prejudicial.

No procedural or substantive error in within-guidelines sentence - judge did not unfairly consider priors.

Sufficient evidence of possession despite lack of any testimony that deft carried bags & no prints implicating deft.

Seventh Circuit -- Roselva Chaidez v. USA

Roselva Chaidez v. USA

   Padilla's holding that not advising a client that plea deal will lead to deportation is a new rule, not an old rule applied to new facts, and therefore not retroactive to cases on collateral review.

Circuit split with Third flagged.

Review is on a writ of coram nobis as deft is not in custody.

Dissent - In context of Strickland, not a new rule; Language in Padilla signals that the Court anticipated retroactive application.

Seventh Circuit -- Tomas B. Torres-Rend v. Eric Holder

Tomas B. Torres-Rend v. Eric Holder 

Immigration - petitioner not eligible for fraud waiver given plain language of statute; stop-time rule applies to all considerations of withholding of deportation.

Petitioner here needed the waiver given that his legitimating marriage was bigamous.

Even if lawful re-entry could un-stop the time, petitioner's entry was unlawful.

Seventh Circuit -- Michael Purcell v. USA

Michael Purcell v. USA

   Wrongful death suit by family of serviceman who committed suicide barred by Feres exception in FTCA for injuries related to service.  

 Holding limited to facts of case - serviceman living on base reports suicidal impulse, counselors sent, but they allow decedent to visit restroom observed by a friend, decedent then kills self with gun hidden in waistband.  Counselors faced subsequent military court proceeding.

Decedent was centerline Feres, according to court, as issues developed after enlistment, and events happened on base and subject to military regs.

Sixth Circuit -- USA v. Karl Demmler

USA v. Karl Demmler 

Crim - conviction and sentencing upheld.

No error in denial of entrapment defense, as record indicates deft was predisposed.

Defining "corruptly" as "improper conduct" is invited error, as deft proposed the instruction - no manifest injustice.

When a sentencing enhancement is predicated on deft's scienter, review is of a factual finding - clear error. Here, no error in court holding that deft knew, given scope.

Accessory after the fact need not know to a certainty that principal committed the crime, merely the scope of the crime that was involved.

Sixth Circuit -- Richard Chesbrough v. VPA, P.C.

Richard Chesbrough v. VPA, P.C.

   Dismissal of qui tam suit under False Claims Act for insufficient particularity in pleading fraud under 9(b).

No implicit warrant that studies and reports submitted for reimbursement aren't substandard - no regs specifically ban it.

If realtor can establish that any of the reports were completely non diagnostic - totally worthless - qui tam claim would lie, but here, plaintiffs have not established that any were actually submitted.  Lax 9(a) should not apply to this situation.

No obligaiton under federal law for corporation to adhere to state rules.

Although 37(a)2(9) does not require presentment, it does require a showing that deft somehow ultimately prompted a presentment.

Third Circuit -- USA v. Prince Isaac

USA v. Prince Isaac

   Although deft was restrained to defense table, no error in his not being able to move around in courtroom during pro se representation.

No error in pro se deft not being permitted to leave defense table to attend sidebar, where standby counsel attended and colloquy established that deft had no objection.

No error in charge incorrectly listing predicates for CCE conviction where balance of charge clarifies the confusion.

Plain error on gov't not filing notice that enhanced maximums were in play due to predicates.  No holding on whether this is jurisdictional or not.

Misc. sentencing appeals discounted.

Third Circuit -- In Re: Mushroom Direct

In Re: Mushroom Direct

   Prejudgment collateral order denying farmers an antitrust exception is not reviewable, as nothing bars it from being reviewed after final judgment.  

  As the statutory shield is a less than complete grant of immunity, defts are still subject to suit for anti-competitive activities.  The traditional jurisdiction over collateral orders granting immunity does not apply.

Third Circuit -- USA v. Ruth Arnao

USA v. Ruth Arnao
USA v. Vincent Fumo

   Political corruption case - conviction upheld, sentencing remanded.

[Very complex opinons - this is just a quick parse that omits much. - TMB]

No error in introduction of evidence that deft violated state ethics statute, as theory of defense (on federal corruption charges) was that he had done nothing wrong.

No error in denial of retrial after juror posted to Twitter and Facebook during trial.

No abuse of discretion in finding that juror's discovery of deft's excluded priors wasn't substantially prejudicial.

Where court does not calculate guidelines ranges at time of sentence (?), challenge to departures is preserved for review - no need to prove plain error.

Error in exclusion of gov't estimate of losses, as they merely needed to be established by a preponderance, and deft didn't discredit.

Where loss calculation hinges on complex question of whether employee actually did work, and the court declines to rule given the compleity of the question, plain error.

Deduction of fair market value of building illicitly furnished and used as an office was abuse of discretion, as the property wasn't returned prior to charges being brought.

Where deft commissioned painting, no error in accepting appraised value, even though it was apparently unwanted and all prints are now in storage.

Error in refusal to apply charitable association sentencing bump.

Error in refusal to apply sophisticated means sentencing bump.

Error in court announcing departure in terms of months as opposed to in the terms of the sentencing guidelines.

Error in court not distinguishing departures from variances.

No error in order for prejudgment interest, as statute seeks to remedy victim's losses, and line of cases establishing it as a criminal penalty (and therefore barring PJ interest) is inapposite.

Codeft's sentence remanded on similar grounds.

Concur/dissent - absent objection preserving the exception, review of sentence can only be plain error.  Transcript clearly reveals the grounds for departures; re-calculating ranges after departure is an unnecessary step; whole-record review indicates that this was done anyway.  More on the Facebook/Twitter thing.

Third Circuit -- USA v. Jamaal Mike

USA v. Jamaal Mike

If you buy a gun in the Virgin Islands, sprint to register it.

No error in denial of use immunity where the claim would be a simple assertion of exoneration, subject to credibility analysis.

No error in finding that weapon was capable of discharge (element of statute) where gov't did not establish the fact through firing tests.

No error in denial of affirmative defense that deft intended to register the weapon (he was arrested on receipt, and statute permits acquisition where 'immediately' reported) as circumstances of transaction establish deft's lack of intent to register.

Concur/dissent: close statutory parsing of def'n of firearm, use immunity shoudl have been granted - the standard is similar to Brady, 'immedaite' registration element of statute is problematic.

Third Circuit -- Caroline Behrend v. Comcast Corp

Caroline Behrend v. Comcast Corp

   Antiturust class certification survives challenge to commonality. (Harms and remedy.)

 Even in a per se claim, relevant geographic market might have to be established.

Individual households are too granular to be considered relevant markets, as statute mandates market of economic significance.

No clear error in court finding that comcast's aggregation of service providers created anticompetitive harms citywide, and that the city is therefore the relevant geographic market.

No clear error to court finding barriers to competition based on expert opinion as opposed to any on-the-ground competitive activity which suffered harm.

Hypothetical but-for economic model of market can serve to establish that the claims are reasonably susceptible of common proof.

Concur/dissent -- No compelling reason why class boundary should be coterminous with relevant geographic market, expert but/for model will be TKO'd under Daubert, so no commonality to remedy.

Second Circuit -- United States v. Nadirashvili (Solomonyan)

United States v. Nadirashvili (Solomonyan)

Sufficient evidence for firearms conspiracy where folks seemed to be in the know about things - remand for sentencing as wrong standard of proof was applied for conspiracy sentencing bump.

Sufficient evidence for firearms sale charge where prior to acting as intermediary, deft clearly indicates that something big is going down, and later seems to be in the know.

Where statute refers to firearms dealer, sufficient evidence for conviction where deft knew putative dealer had guns on hand.  

Conspiracy-to-broker statute is not unconstitutionally vague with respect to a deft who was clearly brokerin' stuff.

Remand for resentencing, as conspiracy sentencing bumps not contemplated in the base level offense schedule need to be proved with reasonable certainty, not preponderance of the evidence.

Second Circuit -- Fait v. Regions Financing Trust, et al.

Fait v. Regions Financing Trust, et al.

Securities action alleging misstatements - pleading is inadequate for not alleging both actual falsity and knowing misstatement.

 Under Virginia Bankshares, statements of opinion are only actionable if actually false as to the material referred to and not the true opinions of the speaker - here, no plausible allegation in pleading that execs did not actually hold the opinion about the goodwill value of an acquisition.  

As pleading does not allege that there is an objective criterion for determining the adequacy of loan reserves, pleading must suggest both falsity and dissembling.
Compiled by D.E. Frydrychowski, who is, not incidentally, not giving you legal advice.

Category tags above are sporadically maintained Do not rely. Do not rely. Do not rely.

Author's SSRN page here.