|The Colorado Lawyer|
Vol. 33, No. 8 [Page 187]
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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: //www.cobar.org/hotlinks.cfm (United States Courts link to the Tenth Circuit). Call The Colorado Lawyer Editorial Offices with questions: (303) 860-1118.
Rooker-Feldman Doctrine—Federal Jurisdiction—Dismissal Without Prejudice—Merits Actually Decided—Inextricably Intertwined
Merrill Lynch Business Financial Services, Inc. v. Nudell, No. 03-1163, 4/12/04, D.Colo., Chief Judge Tacha.
Plaintiff sued defendant in a Colorado state court to collect on a loan he guaranteed for his company. Unbeknownst to plaintiff, defendant’s company had filed for bankruptcy the day before the collection action was filed. The Colorado state court dismissed the collection suit without prejudice. After the bankruptcy case was closed, plaintiff sued defendant again, this time in federal district court. The defendant moved to dismiss the federal case, invoking the "Rooker-Feldman doctrine," and the district court granted the motion. [See Dist. of Columbia Court of Appeals v. Feldman, 460 U.S. 462, 283 (1983).]
The Rooker-Feldman doctrine establishes, as a matter of subject-matter jurisdiction, that only the U.S. Supreme Court has appellate authority to review a state-court decision. [See 28 U.S.C. § 1257(a).] The defendant argued that the state court’s dismissal of the first collection action without prejudice barred the federal court from taking subject-matter jurisdiction. The Tenth Circuit Court disagrees, holding that the doctrine did not apply here because the state court’s order did not actually decide the merits of plaintiff’s federal claims, and the federal claims were not inextricably intertwined with the state court’s judgment. Rejecting defendant’s suggestion that the state court could have ruled on the merits, the Tenth Circuit Court applies Colorado law, holding that a dismissal without prejudice means not on the merits. Accordingly, the Rooker-Feldman doctrine did not divest the federal court of jurisdiction. The district court’s judgment is reversed and remanded.
Meaning of Dismissal "With Prejudice"—Re-file Claims in Another Court
Styskal v. Weld County Board of County Comm’rs, No. 03-1179, 4/13/04, D.Colo., Judge Hartz.
Plaintiff sued both governmental entities and private individuals over difficulties surrounding property she purchased in Weld County, Colorado. Her federal claims against the governmental defendants were dismissed; she does not appeal that ruling. In dismissing her federal claims, however, the district court also dismissed her state-law claims against the individual defendants, finding that it lacked supplemental jurisdiction over those claims. The district court dismissed all claims with prejudice.
Plaintiff appealed, contending that she should be permitted to re-file her state-law claims against the individual defendants in a state court. The Tenth Circuit Court explains that the meaning of a dismissal "with prejudice" has changed over the years. Relying on a recent Supreme Court opinion, the Tenth Circuit Court holds that the primary meaning of "dismissal with prejudice" is that plaintiff is barred from again bringing the same claims in the same court. Whether those claims can be re-filed in a different court depends on whether the claims were dismissed on the merits or on procedural grounds. Because the district court’s judgment did not necessarily preclude plaintiff from refiling her state-law claims in a state court, the district court’s judgment is affirmed.
Civil or Criminal Contempt—Costs and Fees for Appeal
Lucre Management Group, LLC, v. Schempp Real Estate, LLC (In re Lucre Mgmt. Group, LLC), No. 03-1086, 4/20/04, D.Colo., Judge McKay.
Lucre Management Group, LLC ("Lucre") violated the bankruptcy court’s order limiting how certain funds could be used. Consequently, the bankruptcy court found that Lucre was in contempt, and ordered it to reimburse the funds to the bankruptcy trustee or pay $1,000 as a sanction. Lucre appealed to the district court, who characterized the contempt as "criminal" for the first time, and affirmed the order. Lucre then appealed that judgment, seeking reversal of the contempt and challenging the characterization of it as "criminal."
The Tenth Circuit Court upholds the contempt order, because it was clear that Lucre had notice of what the bankruptcy order required, and that it violated the order. The contempt order was not, however, "criminal" in nature; rather it was "civil." A civil contempt is remedial and for the benefit of the complainant. In contrast, a criminal contempt is punitive, to vindicate the authority of the court. Here, the contempt order required Lucre to reimburse the funds and, if it did, it could avoid the $1,000 sanction. Therefore, it was a civil contempt.
The Tenth Circuit Court addresses appellee Schempp Real Estate’s request for fees and costs incurred in the appeal to the district court, as well as to the appellate court. The request was granted as to the initial appeal, because the appeal was utterly without merit, but denied as to the instant appeal, because Lucre raised a substantial question about the proper characterization of the contempt. The district court’s judgment is affirmed in part and reversed in part.
Unlawful Reentry After Deportation for Conviction of an Aggravated Felony—Enhancement Under U.S.S.G. § 2L1.2 for Aggravated Felony—Sexual Assault on a Child as Crime of Violence—Disjunctive Reading of Commentary to Guideline
U.S. v. Munguia-Sanchez, No. 03-1206, 4/20/04, D.Colo., Judge Henry.
Defendant appeals the sentence imposed after his conviction of unlawfully reentering the United States after deportation for conviction of an aggravated felony. He argues on appeal that his prior Colorado state court conviction for sexual assault of a child did not constitute a crime of violence under U.S.S.G. § 2L1.2(b)(1)(A)(ii) (sentencing for convictions of unlawful reentry). The state charge arose from defendant’s contact with a 12-year-old girl. Defendant was 20 years old at the time, and he said that she was his girlfriend. The pre-sentence report recommended a sixteen-level enhancement of defendant’s offense level under this guideline, based on the conviction of sexual assault on a child, an aggravated felony. The district court concluded that this conviction was a crime of violence and imposed the enhancement.
The Tenth Circuit Court of Appeals affirms, holding that a conviction for sexual assault on a child constitutes a crime of violence regardless of the victim’s alleged consent. This is the first time the Court has construed the definition of a "crime of violence" under § 2L1.2. The definition of crime of violence in the commentary to the guideline must be read disjunctively, even though it contains the word "and." This view is supported by recent amendment to the commentary to § 2L1.2. The state court conviction for sexual assault of a minor is a forcible sex offense (including sexual abuse of a minor) under the definition of a crime of violence in the commentary. The district court did not err in applying the enhancement and did not commit plain error. The sentence is affirmed.
Sex Discrimination—Outrageous Conduct—Colorado Law—Sexual Harassment Must Be Based on Gender
Riske v. King Soopers, Nos. 02-1378 & 02-1439, 4/22/04, D.Colo., Judge McKay.
Plaintiff was employed by King Soopers. From 1997 to early 2000, she periodically received anonymous flowers and notes at her job, which caused her physical and emotional harm. The sender was eventually identified as her supervisor. Plaintiff sued King Soopers for sexual harassment under Title VII. She also sued the supervisor for extreme and outrageous conduct. After plaintiff presented her case to the jury, the district court granted judgment as a matter of law in favor of the supervisor; the jury found in plaintiff’s favor on the sexual harassment claim against King Soopers.
The Tenth Circuit Court holds that the outrageous conduct claim against the supervisor should have been resolved by the jury. Under Colorado law, the question of whether conduct is sufficiently outrageous is ordinarily a question for a jury. Here, the question was a close call. The Court finds significant the length of time involved and the managerial relationship between plaintiff and the supervisor. Even though the flowers were sent anonymously, plaintiff suspected that her supervisor was behind the conduct, which would restrict her ability to complain. The evidence also could support the requirements that the supervisor’s conduct was reckless or intentional and that the conduct caused severe emotional distress. Therefore, the district court’s dismissal of this claim is reversed. The claim against King Soopers for sexual harassment cannot stand, however, because the evidence was insufficient to establish that the harassing conduct was due to the plaintiff’s gender. The district court’s judgment is reversed and the case is remanded.
Incendiary Bomb—Dismissal of Indictment—Possession of Destructive Device—Homemade Intruder Alarm
U.S. v. La Cock, No. 02-2283, 4/27/04, D.N.M., Judge Ebel.
The government appeals the district court’s granting of defendant’s motion to dismiss the indictment against him for possession of a destructive device. The court dismissed the indictment on the basis that the device was a homemade intruder alarm that fell outside the statutory definition of destructive device. Defendant created a box that contained rocks, firecrackers, matches, and powder that would light the firecrackers when the box was opened. He testified that his home had been burglarized several times and that he created this box to scare off any intruders, as well as to alert his neighbors. After a hearing, the district court granted defendant’s motion to dismiss the indictment on the grounds that the device was not designed as a weapon and was not a bomb, because it would not explode.
The Tenth Circuit Court reverses. The district court erroneously determined that this device did not fall within the definition under 26 U.S.C. § 5845(f), which defines a destructive device to include any explosive or incendiary bomb or similar device. This device, which was designed to shoot a six-foot flame into the air and emit gas, heat, and energy is an "incendiary bomb" or "similar device" under the statute. The district court’s dismissal of the indictment is reversed and the case is remanded.
Motion for Judgment as a Matter of Law at Close of Evidence and After Verdict—Sufficiency of the Evidence—Discovery—Post-Trial Motion—Reasonable Time
Cummings v. General Motors Corp., Nos. 02-6340 & 03-6209, 4/28/04, W.D.Okla., Judge Kelly.
Plaintiffs were involved in an accident while driving a car manufactured by defendant. Plaintiffs sued, claiming that the serious injuries sustained by Mrs. Cummings were caused by the design of the car’s seat and seatbelt. Defendant maintained that Mrs. Cummings had misused the seat by riding with the seat reclined. A jury returned a verdict in favor of defendant. Eight months after the trial, plaintiffs filed a motion for relief from the judgment based on alleged discovery misconduct by defendants.
On appeal, the Tenth Circuit Court first addresses whether plaintiffs had preserved for appellate review the issue of sufficiency of the evidence. It holds that only the issue of misuse was preserved because only that issue was raised at the close of the evidence. Defendant’s liability generally was not raised then, so that issue was subject to plain-error review. Plaintiffs’ failure to move for a judgment as a matter of law after the verdict did not waive the issue properly preserved earlier—the misuse issue; but the only available remedy was a new trial, not a directed verdict in their favor. The Tenth Circuit Court found no plain error in defendant’s liability generally. On the preserved issue of misuse, the Court finds no error in denying a judgment as a matter of law, because there was evidence supporting both sides.
Turning to the discovery disputes, the Tenth Circuit Court holds that if a plaintiff wants to depose an employee of the defendant, he must obtain the employee’s presence by subpoena, rather than by notice to the employer. In rejecting plaintiff’s claim that defendant had withheld names of potential witnesses, the Court notes that, under the current version of Rule 26(a)(1)(A), a party is not required to disclose witnesses or documents it does not intend to use. Finally, the Tenth Circuit Court affirms the district court’s decision to deny the post-trial motion, which was filed eight months after trial, based on videotapes discovered about one month after trial. Even though plaintiffs filed the motion within one year, as required by Rule 60(b), they were also required to file it within a "reasonable time," which they did not do. In addition, the motion was properly denied on the merits. The district court’s judgment is affirmed.
Age Discrimination in Employment Act—Failure to Hire—Exhaustion of Administrative Remedies—Liberal Construction—Piggybacking Claims
Foster v. Ruhrpumpen, Inc., No. 03-5101, 4/30/04, N.D.Okla., Judge Henry.
The twenty-seven plaintiffs were employees of a pump manufacturing plant that was bought by defendant. Plaintiffs were not re-hired by defendant. They sued under the Age Discrimination in Employment Act for wrongful termination and failure to hire. The district court granted summary judgment to defendant.
The Tenth Circuit Court holds that plaintiffs’ claims for wrongful termination were properly denied because they had never been employed by defendant. The Court evaluates whether plaintiffs had exhausted their administrative remedies to preserve their failure-to-hire claims, and holds that they had. The charges filed with the Equal Employment Opportunity Commission ("EEOC") asserted that plaintiffs were "terminated" by defendant. Construing the charges liberally, the Tenth Circuit Court holds that plaintiffs gave sufficient notice to defendant and served the central purposes of the administrative exhaustion requirement. In addition, the four plaintiffs who had not filed charges with the EEOC could "piggyback" their claims on the charges that had been exhausted administratively, because they were similarly situated to the other plaintiffs and their claims arose out of the same circumstances. Moreover, the charges filed with the EEOC included language that gave notice to defendant that there could be additional plaintiffs. The district court’s judgment is reversed and the case is remanded.
Restitution—Financial Circumstances—Complexity Exception of the Mandatory Victims Restitution Act—Defendant’s Financial Circumstances—Repair of Fire—Damaged Forest Land
U.S. v. Barton, No. 03-1112, 5/4/04, D.Colo., Judge Briscoe.
The government appeals the district court’s refusal to order defendant to pay restitution. Defendant pled guilty to setting fire to inflammable materials on federal lands, and making a false statement. The pre-sentence report ("PSR") recommended that defendant be ordered to reimburse the U.S. Forest Service for $14.7 million expended in revegetating fire-damaged forest land, under the Mandatory Victims Restitution Act ("Act"). Defendant did not object. The district court refused to do so, citing the alleged complexity of deciding the loss, and the effect that a restitution order would have on defendant, given her limited financial resources.
The Tenth Circuit Court reverses. Unless the complexity exception or the "number of victims" exception applies, then the Act controls and applies to defendant. The amount of restitution recommended in the PSR was based on actual recoverable loss incurred by a party that was a victim of defendant’s crime, and defendant did not object. Thus, there was no basis for the district court to invoke the complexity exception. Defendant’s financial circumstances were irrelevant under the Act. In cases involving damage to property, a restitution order under the Act can include the costs of cleanup or repair of the damaged property. The government’s proposed loss calculation is consistent with that principle, since revegetation can be viewed an as an effort to "repair" the forest, and would not have occurred absent the fire. The judgment is reversed and the case is remanded with directions to impose restitution as requested by the government.
ERISA—Back Pay—Equitable or Legal Relief
Millsap v. McDonnell Douglas Corp., No. 03-5124, 5/21/04, N.D.Okla., Judge Baldock.
Plaintiffs were employees of defendant’s military aircraft plant who were laid off when the plant was closed. Plaintiffs alleged that defendant closed the plant to prevent them from receiving benefits under their pension and health care plans, in violation of ERISA. The district court certified the class action, bifurcated the issues of liability and damages, ruled that defendant had violated ERISA by closing the plant to avoid paying benefits, held that back pay was available to plaintiffs, and certified for interlocutory appeal the issue of whether the plaintiffs were entitled to back pay as damages.
The Tenth Circuit Court examined ERISA’s comprehensive civil enforcement provisions and determined that only equitable, not legal, relief was available. The back pay plaintiffs sought was compensatory and, therefore, legal relief. Accordingly, back pay was not available under ERISA. The Tenth Circuit Court reject plaintiffs’ attempt to characterize back pay as equitable relief, which they based on the following arguments: (1) back pay was intertwined with their (abandoned) reinstatement claim; (2) back pay is available under the similar provisions of the NLRA and Title VII; and (3) policy considerations should permit back pay. The district court’s ruling is reversed.
Deceased Plaintiff—Substitution of Party—Honest and Understandable Mistake—Relation-Back Doctrine
Esposito v. United States, No. 03-3183, 5/26/04, D.Kan., Judge Ebel.
Plaintiff died while in the custody of a federal prison. He was named as plaintiff in the ensuing wrongful death suit. After defendant moved to dismiss, decedent’s wife sought to be substituted as plaintiff. Plaintiff’s attorney explained that he had made an honest mistake in naming decedent as plaintiff. The district court accepted the attorney’s characterization of the mistake as "honest," but denied substitution, because the mistake was not "understandable."
The Tenth Circuit Court determines that the suit could not be maintained in decedent’s name and that his wife was a real party in interest. The court then evaluates whether the wife could be substituted as plaintiff, and concludes that she could. The Tenth Circuit Court does not require a showing that a mistake be "understandable," as well as "honest." Rather, the inquiry is into whether plaintiff engaged in deliberate tactical maneuvering and whether defendant was prejudiced. Here, the district court abused its discretion in requiring a showing that the mistake was "understandable." The judgment is reversed.
Bankruptcy Discharge—Transferee Income Tax Liability—Not Dischargeable
McKowen v. IRS, No. 01-1345, 6/1/04, D.Colo., Judge O’Brien.
Plaintiff was the sole owner of a corporation that was dismantled in 1987. The corporation’s assets were transferred to plaintiff. The IRS determined that the corporation owed taxes for 1987. In 1995, plaintiff filed for Chapter 7 bankruptcy protection, which included a claim that the corporate taxes for 1987 should be discharged. The bankruptcy court ruled that the debt was discharged, but the district court reversed.
The Tenth Circuit Court holds that a debt arising from transferee liability for unpaid income tax owed by the transferor corporation is not discharged by the transferee’s bankruptcy. Harmonizing the Bankruptcy Code and the Internal Revenue Code, the Tenth Circuit Court determines that plaintiff’s transferee liability was derived from a tax owed by the corporation "on or measured by income," and was thus exempt from discharge in bankruptcy. The district court’s judgment refusing to discharge the debt is affirmed.
Pro Se Criminal Defendant Seeking Reimbursement of Costs Under the Criminal Justice Act—Expenses Incurred by Court-Appointed Attorneys
U.S. v. McElhiney, No. 04-3032, 6/1/04, D.Kan., Judge Briscoe.
Defendant, appearing pro se, appeals the denial of his application for reimbursement of costs under the Criminal Justice Act ("CJA" or "Act"). After defendant’s third trial, defendant filed a CJA authorization and voucher form with the district court, seeking reimbursement under the Act for postage and copy expenses in connection with his third trial. The district court denied the request, holding that the plain language of the Act limited reimbursement to expenses reasonably incurred by attorneys, and did not encompass expenses incurred by criminal defendants who represent themselves at trial.
The Tenth Circuit Court affirms, holding that the plain language of the Act limits reimbursement of expenses incurred by court-appointed attorneys. It cannot be read to allow reimbursement to pro se criminal defendants. The fact that the court granted the same application at the conclusion of defendant’s second trial does not require a different result. The case law has changed, and an appellate court applying a de novo standard of review is not bound by the district court’s prior interpretation of the Act. The district court’s decision is affirmed.
Waiver of Right to Appeal—Illegal Sentence—Ex Post Facto Clause—Clarifying or Substantive Amendments—Double Counting
U.S. v. Groves, No. 02-3387, 6/3/04, D.Kan., Judge Ebel.
Defendant pled guilty to a count of trafficking in child pornography. The offense took place in 1994, but the district court calculated defendant’s sentence by relying on two aspects of the commentary that accompanied a 1996 amendment to U.S.S.G. § 2G2.2(b)(4). First, the court held that subsection (b)(4)’s five-level enhancement for engaging in a pattern of activity involving the sexual abuse or exploitation of a minor applied, regardless of whether the abuse or exploitation occurred before or during the course of the offense. Second, the court noted that under the 1996 amendment, prior convictions taken into account for purposes of setting the offense level as part of a pattern of abuse or exploitation under the guidelines could also be used to determine defendant’s criminal history. Defendant argues on appeal that the court’s application of the 1996 amendment violated the Ex Post Facto Clause.
The Tenth Circuit Court reverses defendant’s sentence. The Court holds that defendant can appeal despite his waiver of his right to appeal. That waiver reserved the right to appeal an illegal sentence. Because a sentence that violates the Ex Post Facto Clause is illegal, defendant can challenge his sentence on those grounds. Next, the court’s use of the 1996 guideline amendment to determine the scope of the pattern of abuse enhancement was consistent with the Ex Post Facto Clause, because that aspect of the amendment merely clarified preexisting law. The amendment, however, substantively changed preexisting law with respect to double counting for purposes of establishing both the offense level and the criminal history. The pre-amendment guidelines and commentary show that a pattern of activity involving the sexual abuse or exploitation of a minor was relevant conduct with regard to the offense at issue, so that conduct could not also have been used in the criminal history calculations. To do so constitutes double counting. Because the 1996 amendment modified this framework by expressly allowing this type of double counting, this aspect of the amendment is substantive, not merely clarifying. Its application to defendant’s 1994 offense was therefore improper, and violated the Ex Post Facto Clause. For that reason, defendant’s sentence is reversed and the case is remanded for resentencing.
Attempt to Preserve Issue by Codefendant’s Objection—Motion to Sever—Summary Witness Testimony and Charts—Sentencing—Possession of Firearm During Drug Crime—Manager or Supervisor in Conspiracy
U.S. v. Ray, No. 02-5231, 6/7/04, N.D.Okla., Judge Tacha.
Defendant appeals his convictions and sentence. He was convicted of drug offenses, including conspiracy to possess and distribute. He argues that the verdict forms were defective; that his motion to sever from his co-defendants should have been granted; that the court erred in allowing a government witness to present summary testimony and exhibits that summarized the testimony presented at trial; and that the district court erroneously enhanced his sentence, imposed under the sentencing guidelines.
The Tenth Circuit Court affirms. The Court holds that defendant failed to preserve the issue of the defective verdict forms. A co-defendant objected, but defendant’s counsel did not enter an objection or join co-defendant’s counsel’s objection. There is a split in the Circuit Courts, and the Tenth Circuit Court adopts the position that a party can rely on a co-defendant’s objection only if he joins in the objection. On the merits, defendant has not met the standard of plain error. Even if the court abused its discretion in denying defendant’s motion to sever, defendant cannot make the requisite strong showing of prejudice. Regarding the summary witness testimony, the Court notes that neither F.R.E. 702 nor F.R.E. 1006 permit the use of summary exhibits and testimony here. However, other Circuit Courts allow summary witnesses and charts in complex drug conspiracy cases under F.R.E. 611(a). The district court did not abuse its discretion in allowing the charts and the summary testimony. Because the case involved fifty witnesses over twenty-three days, the summary testimony and charts helped the jury in ascertaining the truth, and defense counsel had sufficient opportunity to challenge the veracity of the charts and testimony. As for sentencing, the Court affirms the enhancement under U.S.S.G. § 2D1.1(b)(1) for possessing a firearm during a drug crime, and the enhancement for acting as a manager or supervisor in the conspiracy, under § 3B1.1(b). The convictions and sentence are affirmed.
Motion to Extend Time to File Notice of Appeal—Excusable Neglect or Good Cause—In Forma Pauperis Motion
Bishop v. Corsentino, No. 02-1485, 6/9/04, D.Colo., Judge Anderson.
Plaintiff sought to appeal the district court’s summary judgment against her on her civil rights claims. Twenty-eight days after judgment, plaintiff’s attorney filed a motion to extend the thirty-day deadline for filing the notice of appeal. After the time for appeal had elapsed, plaintiff’s attorney filed a second motion to extend the time to appeal and also a motion to proceed in forma pauperis ("IFP"). The motion stated that plaintiff needed a ruling on her IFP motion before filing her notice of appeal. The district court denied both extension motions.
The Tenth Circuit Court notes that the time to file a notice of appeal may be extended upon a showing of excusable neglect or good cause, so long as the motion is filed within thirty days after the appeal time has expired. The grounds for plaintiff’s first motion—to permit trial counsel to obtain an opinion from outside counsel—stated neither excusable neglect nor good cause. The second motion, claiming plaintiff needed to obtain IFP status first, was also properly denied because she could have filed a timely notice of appeal without an accompanying filing fee. If the district court had denied her IFP motion, she could have applied to the appellate court for IFP status. Therefore, the district court did not abuse its discretion in denying her extension motions. The district court’s judgment is affirmed.
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