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TCL > September 2003 Issue > Tenth Circuit Summaries

September 2003       Vol. 32, No. 9       Page  145
From the Courts
U.S. Court of Appeals for the Tenth Circuit

Tenth Circuit Summaries

Summaries of selected opinions appear on a space-available basis. The summaries are prepared for the Colorado Bar Association by Jenine Jensen and Catherine Campbell, licensed Colorado attorneys. The summaries of the U.S. Court of Appeals for the Tenth Circuit are provided as a service by the Colorado Bar Association and are not the official language of the Court. The Colorado Bar Association cannot guarantee the accuracy or completeness of the summaries.
Full copies of the Tenth Circuit decisions are available on the CBA website at http: // (United States Courts link to the Tenth Circuit). Call The Colorado Lawyer Editorial Offices with questions: (303) 860-1118.


Ineffective Assistance of Counsel—Showing of Prejudice—Extent of Increase to Defendant’s Sentence—Significantly Greater Sentence

U. S. v. Horey, No. 02-6119, 6/23/03, W.D.Okla., Judge McKay.

Defendant appeals the district court’s order denying his motion to vacate his sentence, filed under 28 U.S.C. § 2255. The issue on appeal is whether his trial counsel was constitutionally ineffective, under Strickland v. Washington, 466 U.S. 668 (1984), for failing to object to an undisputedly inapplicable career offender enhancement that increased defendant’s total offense level and his criminal history category. These increases changed the guideline minimum sentences from 292 months to 360 months. These increases were based on defendant’s prior conviction for possession of cocaine. It is undisputed that this conviction did not meet the definition of a qualifying felony under U.S.S.G. § 4B1.1. Defendant’s appellate counsel did not raise this error on direct appeal. Defendant then filed this motion to vacate his sentence. The district court held that counsel’s failure to object was constitutionally deficient, but concluded that defendant failed to satisfy the prejudice requirement of Strickland, because defendant was sentenced within the guideline range that would have applied without the career offender enhancement.

The Tenth Circuit Court of Appeals reverses. Under U.S. v. Kissick, 69 F.3d 1048 (10th Cir. 1995), the defendant was required to establish that his attorney’s deficient performance resulted in a significantly greater sentence than would have been the case absent the attorney’s mistakes. That law has been abrogated by Glover v. U.S., 531 U.S. 198 (2001) (the amount by which a defendant’s sentence is increased by counsel’s action cannot serve as a bar to a showing of prejudice). Because of this change in the law, defendant has established prejudice. The judgment is reversed and the case is remanded for resentencing.

Standing—Borrowing Car From Someone Other Than Registered Owner—Lender in Lawful Possession of Car

U.S. v. Hocker, No. 02-4148, 6/26/03, D.Utah, Judge Lucero.

Defendant appeals the district court’s denial of his motion to suppress evidence that was obtained incident to the search of a car. Defendant was driving the car, but he had borrowed it from someone other than the registered owner. Defendant entered a conditional guilty plea to a drug count. The issue is whether he has standing to maintain his claim. He argued in the district court that the police lacked probable cause to conduct the search, and that any subsequent consent was tainted by the illegal search. The district court held that defendant lacked standing to challenge the search.

The Tenth Circuit Court reverses. Defendant submitted evidence, in addition to the familial relationship between the lender and the registered owner, that would lead a reasonable person to conclude that the lender was in lawful possession. Defendant stated that he presumed that the person from whom he borrowed the car owned it. The lender had been using the car as her own for a week during defendant’s visit, and kept it at her home. Defendant knew the registered owner personally. These facts lead to the conclusion that a reasonable person would assume that the lender was in lawful possession of the car. The case is reversed and remanded.

School Fight Policy—Race Discrimination—Racially Hostile Educational Environment—Private Right of Action—Intentional Conduct

Bryant v. Independent Sch. Dist. No. I-38, No. 02-6212, 7/2/03, W.D.Okla., Judge McKay.

Plaintiffs, African American students at the defendant school, were suspended for the remainder of the school year because they participated in a fight at school. They sued the school district under Title VI, 42 U.S.C. §§ 2000d et seq., claiming that (1) the school district intentionally discriminated against them on the basis of race when it suspended them for fighting, but did not suspend white students involved in the fight; (2) the school district used a neutral policy that had a disparate impact on African American students; and (3) the school district created and contributed to a racially hostile educational environment. The district court granted summary judgment in favor of the school district.

The Tenth Circuit Court rejects plaintiffs’ argument that the school district had racially discriminated against them by suspending them but not the white students involved in the fight. The school’s fight policy required suspension of students who were involved in two fights. The fight in question was the second for plaintiffs and the first for the white students. In addition, the school district demonstrated that the school consistently suspended all students involved in two fights, regardless of race. Therefore, plaintiffs’ suspension did not create an issue of fact and summary judgment was appropriate. The Tenth Circuit Court also rejects plaintiffs’ disparate-impact claim because they had not shown that their suspensions were a pretext for discrimination.

The Tenth Circuit Court addresses whether there exists a private right of action under Title VI for a racially hostile educational environment, and holds that there is, but only for intentional discrimination. Here, the school administrators affirmatively chose to take no action, even though students and parents complained about racial slurs, graffiti on school furniture, racially offensive notes placed in students’ lockers and notebooks, and white students being allowed to adorn their clothing and vehicles with the confederate flag, swastikas, KKK symbols, and hangman nooses. The Tenth Circuit Court holds that choice implicates intent. Therefore, school administrators can be held liable when they shirk their duty to provide a nondiscriminatory educational environment by doing nothing in the face of complaints of shameful conduct that could be characterized as racist and prejudicial. Accordingly, summary judgment was not warranted on this claim. The district court’s judgment is affirmed in part and reversed in part, and the case is remanded.

Tax—Bankruptcy—Partnership Losses—Partnership-level Proceeding

Katz v. Commissioner of Internal Revenue, Nos. 01-9009, 01-9010 & 01-9011, 7/7/03, Tax Court, Judge Hartz.

Taxpayer suffered losses in a number of partnerships in 1990. He filed for bankruptcy in 1990 and filed an income tax return for 1990, which resulted in his 1990 income taxes being treated as a post-petition debt not subject to the bankruptcy proceedings. In his 1990 tax return, taxpayer reported losses from his partnerships in excess of $19 million before bankruptcy. He claimed the losses on his returns for 1990 through 1994. The Commissioner of Internal Revenue ("Commissioner") challenged this characterization of the losses, contending that the 1990 partnership losses passed to the bankruptcy estate, so could not be claimed on the taxpayer’s personal income tax returns. The Tax Court ruled in favor of the Commissioner.

On appeal, the Tenth Circuit Court holds that the Tax Court lacked authority to reallocate the partnership losses because the Commissioner failed to conduct a partnership-level proceeding. The Commissioner argued that the losses were nonpartnership items. The defining date for determining whether an item should be treated as a nonpartnership item is the latest taxable year of the partner. Because taxpayer’s 1990 tax return was treated as a post-petition debt, the last year the Commissioner could have filed a claim was 1989. Accordingly, the 1990 partnership losses were not converted into nonpartnership items. Therefore, a partnership-level proceeding was required because such a proceeding is the exclusive means for adjusting a partnership item. The decision of the Tax Court is reversed and remanded.

Securities Broker-Dealer—Breach of Fiduciary Duty—Fraud—Discipline

Geman v. Securities and Exchange Commission, No. 01-9512, 7/7/03, SEC, Judge Holloway.

Plaintiff was a registered broker-dealer, investment adviser, and CEO of a firm that provided brokerage, advisory, and custodial services to customers for a fee, but did not make decisions on which securities customers should buy or sell. The firm represented to its customers that it was undertaking fiduciary responsibilities to them. After a period of heavy losses, plaintiff directed the firm’s traders to identify transactions in which the firm could profit by becoming a principal. The firm would execute a customer’s sell order, but instead of acting only as an intermediary, it would buy the stock and then "cover" by selling the stock at a higher price and keeping any profit for the firm. The "cover" transactions were completed on the same day that the customer directed the transaction. At the time this change was made, customers were informed that the firm might act as principal to take advantage of technological improvements and new regulatory interpretations, which was not true, and the customers were not told that the firm intended to make profits by acting as principal. The Securities and Exchange Commission ("SEC") sanctioned plaintiff for his role in this arrangement. He appealed.

The Tenth Circuit Court holds that the firm held itself out as a fiduciary and breached its duty to its customers to inform them of the true nature of the transactions in which the firm acted as principal. In addition, by acting for its own benefit in getting a higher price for a stock on the same trading day, the firm deprived its customers of the opportunity to obtain for themselves the higher prices. Plaintiff also violated SEC anti-fraud rules by failing fully to inform the customers. The Tenth Circuit Court affirms the SEC’s holding that plaintiff was liable for his firm’s illegal acts because he directed the firm’s actions and because he was reckless. Finally, the Tenth Circuit Court declines to lift or reduce the sanctions imposed on plaintiff. The SEC’s decision was affirmed.

Aggravated Incest as Crime of Violence—Use, Attempted Use, or Threatened Use of Physical Force Against Another—Conduct that Presents a Serious Potential Risk of Physical Injury to Another—Categorical Approach

U.S. v. Vigil, No. 02-1367, 7/8/03, D.Colo., Judge Tacha.

Defendant appeals his sentence. The district court decided that his prior state conviction for aggravated incest was a prior conviction for a "crime of violence" under U.S.S.G. § 4B1.2. This prior conviction was used to increase defendant’s base offense level from 14 to 20 under § 2K2.1(a)(4)(A). The district court concluded that the victim, defendant’s daughter, would have been about age 18 at the time of the offense. The court determined that aggravated incest as defined by the Colorado statute is, categorically, a crime of violence.

The Tenth Circuit Court affirms. The issue is whether, without reference to the underlying facts of the case, the offense defined in CRS § 18-6-302 has as an element the use, attempted use, or threatened use of physical force against another, or otherwise involves conduct that presents a serious potential risk of physical injury to another. The Court agrees with the district court that the requisite threat of force is implied whenever a parent inflicts sexual penetration on his child. The Court also holds that aggravated incest involves conduct that presents a serious potential risk of physical injury to another. The sentence is affirmed.

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