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TCL > January 2011 Issue > Summaries of Selected Opinions

January 2011       Vol. 40, No. 1       Page  153
From the Courts
U.S. Court of Appeals for the Tenth Circuit

Summaries of Selected Opinions

Summaries of selected Tenth Circuit Court of Appeals Opinions appear on a space-available basis. The summaries are prepared for the Colorado Bar Association (CBA) by Katherine Campbell and Frank Gibbard, licensed Colorado attorneys. They are provided as a service by the CBA and are not the official language of this Court. The CBA cannot guarantee the accuracy or completeness of the summaries. Full copies of the Tenth Circuit decisions are accessible from the CBA website: (click on "Opinions/Rules/Statutes").

No. 08-1095. DeFranco v. Storage Technology Corporation. 10/20/2010. D.Colo. Judge Ebel. Colorado Employment—At-Will—Breach of Contract—Promissory Estoppel—Special Consideration.

Plaintiff sued his former employer, Storage Technology Corporation (StorageTek), as well as Sun Microsystems (Sun), which acquired StorageTek in 2005. Plaintiff alleged that his employment was terminated despite promises of permanent employment. In 2004, he accepted a transfer to England. He asserted that StorageTek executives assured him permanent employment when he returned to the United States; however, plaintiff signed an agreement that included a provision stating that his employment was at-will, that StorageTek did not guarantee him a comparable position at the end of his overseas job, and that the written agreement superseded all other agreements, written or oral.

While plaintiff was in England, Sun acquired StorageTek. Plaintiff claimed that two Sun executives verbally guaranteed him a permanent job with Sun. Six months after his return from England, however, Sun terminated plaintiff’s employment. He sued StorageTek and Sun, alleging breach of contract and promissory estoppel, based on defendants’ assurances of permanent employment. Exercising diversity jurisdiction and applying Colorado law, the district court granted summary judgment in favor of defendants.

The Tenth Circuit evaluated the promises of permanent employment, finding that the first promises, made before Sun’s acquisition, were superseded by the written agreement stating that employment was at-will. This agreement bound both the domestic StorageTek entity and the international one, even though only the domestic entity signed the agreement. As for the alleged promises made by Sun executives, the Circuit noted that Colorado law presumes that employment is at-will, but can be modified by an explicit contract term that restricts the employer’s right to discharge. Alternatively, the employee may rebut the presumption of at-will employment under a promissory estoppel theory.

Colorado law provides that a contract for permanent employment is no more than an indefinite general hiring terminable at the will of either party, unless there is an express stipulation as to the length of employment or special consideration. The Circuit rejected plaintiff’s claim that he provided special consideration by foregoing the opportunity to look for other jobs or by finishing the work he had been hired to do. Accordingly, the breach of contract and promissory estoppel claims both failed. The district court’s judgment was affirmed.

No. 09-3229. United States v. Lewis. 10/29/2010. D.Kan. Judge Anderson. Crack and Powder Cocaine Sentencing Discrepancy—Failure to Depart or Vary Downward—Procedural and Substantive Reasonableness of Sentence.

Defendant pleaded guilty to several counts involving distribution of cocaine base (crack). The district court sentenced him to 168 months’ imprisonment. At the time he was sentenced, the Sentencing Guidelines (Guidelines) drug tables provided for a ratio of 100 to 1 for crack cocaine as opposed to powder cocaine.

At sentencing, defendant argued for a downward variance, making his offense level the same as if he had been convicted of offenses involving powder cocaine. The district court denied a variance, noting defendant’s lengthy criminal history, his status as a "significant distributor of crack" in his community, and his continued use of drugs during pretrial release. It also noted that the law did not provide for the one-to-one crack/cocaine ratio that defendant sought. It then sentenced defendant at the bottom of the Guidelines range.

On appeal, defendant argued that the district court committed both procedural and substantive error by failing to grant a downward variance as a matter of policy based on the disparity between crack and powder sentences. He contended that as a matter of procedure, the district court was required to consider whether there was an unwarranted disparity between crack and powder cocaine guidelines and, if so, to determine the correct ratio.

The Tenth Circuit determined that no such rigid procedural requirement existed. Mandating that the district court duplicate the efforts of the Sentencing Commission or Congress would be the antithesis of the district court’s duty of discretionary sentencing. The district court may depart or vary downward from the crack guidelines, but is not required to do so. Also, its failure to do so, by itself, is not substantively unreasonable. There simply is no mandate that a defendant convicted of a crack cocaine offense must be sentenced the same as a defendant convicted of a powder cocaine offense.

No. 10-4028. Standard Industries, Inc. v. Aquila, Inc. (In re C.W. Mining Co.). 11/08/2010. Bankruptcy Appellate Panel. Judge Kelly. Bankruptcy—Contempt—Automatic Stay—Notice and Opportunity to be Heard—Failure to Raise Issue Below—Bankruptcy Court’s Contempt Authority.

Standard Industries, Inc. (Standard), Aquila, Inc., and C.O.P. Coal Development Co. (COP) are creditors of the debtor C.W. Mining Company (CWM). CWM produced coal from a mine it leased from COP; COP claimed it was owed royalty payments. CWM contracted with Aquila to provide coal; Aquila alleged CWM failed to provide the coal. Standard was the broker for CWM’s coal and alleged that CWM owed it brokerage fees. After Aquila filed an involuntary bankruptcy petition against CWM, Standard and COP allegedly attempted to terminate their contracts with CWM and to collect money from it.

Consequently, Aquila filed a civil contempt motion against Standard and COP for violations of the automatic stay in bankruptcy. Aquila served the contempt motion by first-class mail on the attorneys for Standard and COP, setting a response deadline and a contempt hearing date. Standard and COP responded by filing a motion to increase the time to respond; the bankruptcy court entered a scheduling order, confirming the response and hearing dates. Standard and COP did not respond by the deadline. Without holding a hearing, the bankruptcy court held Standard and COP in civil contempt for violating the automatic stay, and voided all actions in violation of the stay. Standard and COP appealed to the Bankruptcy Appellate Panel (BAP), which affirmed the bankruptcy court.

The Tenth Circuit rejected Standard and COP’s argument that they were denied due process because the bankruptcy court did not hold a contempt hearing. Standard and COP were given reasonable notice and a meaningful opportunity to be heard. The Circuit declined to consider their challenge to the constitutionality of a local rule, because the issue had not been raised in any prior proceeding. Finally, the Circuit held that resolution of the contempt issue by motion was appropriate and Aquila was not required to seek relief in an adversary proceeding. Moreover, the bankruptcy court did not exceed its authority by voiding the actions taken by Standard and COP in violation of the automatic stay. This relief merely returned the parties to the status quo before Standard and COP violated the stay. The BAP’s decision was affirmed.

Nos. 08-1389 & 08-1415. Sampson v. Buescher. D.Colo. 11/09/2010. Judge Hartz. Colorado Ballot Initiative—Funding Disclosure Requirements—Unconstitutional as Applied—First Amendment—Right to Association—Attorney Fee Award.

Plaintiffs are residents of an unincorporated area who opposed annexation into the Town of Parker. They had raised less than $1,000 to support their cause when their opponents challenged their failure to register as an issue committee. Colorado law requires any group of two or more people that has accepted or made contributions or expenditures exceeding $200 to support or oppose a ballot issue to register and report the names and addresses of anyone who contributes $20 or more. Plaintiffs filed suit under 42 U.S.C. § 1983, asserting that the Colorado reporting requirements unconstitutionally burdened their First Amendment right to association. The district court upheld the constitutionality of the challenged law, but awarded attorney fees to plaintiffs. (The ballot issue was defeated.)

The Tenth Circuit held that the reporting requirements, as applied to plaintiffs, violated their constitutional right to freedom of association. The Circuit observed that reporting requirements for a candidate for public office serve to prevent quid pro quo corruption. In contrast, a ballot initiative does not implicate improper influence of an elected official. The Circuit concluded that the public’s interest in financial disclosure from campaign organizations is attenuated when the organization is concerned with only a single ballot issue and the money involved is minimal. Balancing the First Amendment interests, the Circuit held that the substantial burdens of complying with the law outweighed the minimal benefits of disclosure. Therefore, the Circuit held that it was unconstitutional to impose the reporting burden on plaintiffs. The district court’s judgment was reversed and the case was remanded. The award of attorney fees to plaintiffs was affirmed.

No. 09-2091. United States v. Pablo. 11/16/2010. D.N.M. Judge Ebel. Confrontation Clause—Use of Lab Reports Prepared by Non-Testifying Sources—Discouraging Witnesses From Testifying—Exclusion of Evidence Under F.R.E. 412.

A jury convicted defendant of rape, kidnapping, assault resulting in serious bodily injury, and carjacking. Defendant and his co-defendant allegedly attacked a good Samaritan with a shovel, and then stole his pickup truck. The victim was asleep in the back seat of the truck. When she awoke, defendants prevented her from exiting the truck. Both of them later raped her—the co-defendant first, followed by defendant.

On appeal, defendant argued that DNA testimony from a lab analyst violated his Confrontation Clause rights. The analyst testified concerning lab test reports prepared by two other analysts, who were not called to testify, linking defendant to the sexual assault. The Tenth Circuit, applying a plain error standard, concluded that this testimony did not violate the Confrontation Clause, because the out-of-court statements in the reports were not offered for the truth of the matter asserted. Instead, they merely provided support for the analyst’s expert testimony concerning the DNA evidence. Although it would be a violation of the Confrontation Clause for an expert to simply "parrot" reports from non-testifying sources, rather than using them as a basis for his or her own expert opinion, any evidence that such parroting occurred here was insufficient to meet the plain error standard.

Defendant next argued that the government and district court impermissibly interfered with his right to present a defense by discouraging two defense witnesses from testifying. The two witnesses purportedly were present during the events for which defendants were charged, including the sexual assaults, and may have driven the car in which defendants left the scene of the crime. The prosecutor raised his concern to the district court that the witnesses’ testimony could lead to their own self-incrimination. After the district court advised them of this fact and appointed counsel for them, the witnesses refused to testify. The Circuit found no active discouragement of defense testimony from the prosecutor and district court’s actions, and no improper interference with the defense.

Finally, defendant challenged the exclusion of evidence under Federal Rule of Evidence 412 that the victim was seen undressed with two other men on the night of the rape, and that she made sexual advances toward the co-defendant. Rule 412 generally excludes evidence of a victim’s sexual behavior or predisposition in sexual assault cases. Defendant argued that the evidence that the victim was seen partially undressed with other men fell within an exception to Rule 412, because it could prove that her vaginal injuries were not the result of the alleged sexual assault. An expert who examined the victim, however, stated that she had seen injuries like those suffered by the victim only in cases of sexual assault, never as the result of consensual sex. There was no evidence that the other men engaged in nonconsensual or violent sex with the victim that could have resulted in her injury. The evidence was not admissible to prove that the victim had been intoxicated as a back-door way of proving her disposition toward casual sex.

Defendant also tried to introduce evidence that the victim’s sexual activity with his co-defendant was consensual, by showing that she had made sexual advances beforehand to the co-defendant. He argued that he should be permitted to prove the victim consented to have sex with his co-defendant, because no reasonable jury would believe that the victim would consent to sex with him after being raped by his co-defendant. Acting under a plain error standard, the Circuit rejected this claim because defendant could not show that the jury would not have convicted him but for the challenged evidence. The evidence would not have explained the victim’s injuries; even if her sexual conduct with the co-defendant was consensual, the injuries she suffered would best be explained by defendant’s having raped her.

No. 09-3165. United States v. Hall. 11/16/2010. D.Kan. Judge Hartz. Due Process—Use of Prior Felony Convictions During Voir Dire—Cross-Examination and Closing Argument.

A jury convicted defendant of bank robbery, brandishing a firearm, and being a felon in possession of a firearm. He stipulated, for purposes of the felon-in-possession count, that he had two prior felony convictions. During voir dire, however, the district court read to the jury the entire indictment, which included an allegation that defendant had been convicted of two prior bank robberies. Defendant later took the stand and admitted to both prior robberies.

On appeal, defendant argued that the district court erred in denying his request for a mistrial after the jury heard about his two prior bank robbery convictions. The Tenth Circuit held that any error was harmless. During direct examination, the defense specifically asked defendant about both convictions. Defendant argued, however, that he would not have testified at all if his prior convictions had not been disclosed during voir dire. The Circuit rejected this argument, noting that defendant had filed a notice of alibi, indicating his intent to testify. He was the only witness who could have testified to the alibi. Without the alibi defense, he would have been convicted anyway, because the evidence against him was overwhelming.

Defendant also argued that the prosecutor elicited excessive and unnecessary details about the prior bank robberies. Reviewing for plain error, the Tenth Circuit did not find the inquiries, which disclosed similarities in the modus operandi between the previous robberies and the charged offense, to have been substantially prejudicial. In light of the lawfully admitted evidence of the prior robberies, the Circuit failed to see how the jury could be influenced by additional evidence that defendant had an accomplice, used a gun, or wore a mask during a prior robbery.

Finally, defendant argued that the district court erred in permitting numerous references to the prior robberies during closing argument. Applying plain error, the Circuit disagreed. The references were designed to rebut defendant’s contention that his prior offenses would have taught him not to do what he allegedly did in the present instance—drive his own car to a bank robbery. They also represented legitimate comment on the "prior felony" element of the offense of felon-in-possession; created doubt about defendant’s failure to promptly state his alibi defense; and cast doubt on the defense and on defendant’s credibility.

Nos. 09-6229, 09-6230 & 09-6231. United States v. Wampler; United States v. Shaver; and United States v. Colbert. 11/16/2010. W.D.Okla. Judge Gorsuch. Interlocutory Appeal—Assertion of Prior Plea Agreement—Application of Cohen Doctrine.

After the government charged them with various crimes, defendants asserted a "right not to be tried" under the terms of an alleged prior plea agreement. They sought to bring an interlocutory appeal to the Tenth Circuit to enforce the terms of the agreement. The plea agreement arose from an investigation that had targeted defendants and a corporation in which they were principals, examining their use of falsified construction invoices to inflate the costs of the corporation’s low-income housing projects. To induce the government to focus on the corporation, defendants had resigned from various corporate offices. The government arranged a proposed plea agreement that would have required the company to plead guilty to wire fraud and money laundering, but would have exempted the individuals from prosecution. The district court rejected the plea out of concern that it "let the company’s principals off the hook." The corporation then withdrew its plea and the government dismissed the matter without prejudice. The corporation at first sought to appeal the decision refusing the plea agreement, but then dropped its appeal. The government then indicted the individual defendants. The district court denied their motion to dismiss the indictment based on the prior plea agreement with the corporation, and they appealed.

Defendants argued that because they would lose their right not to be tried under the prior plea agreement, the Circuit should accept immediate jurisdiction under the "collateral order" theory of Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541 (1949). The Circuit disagreed. The only time an alleged right not to be tried will justify interlocutory appellate review in a criminal case is when a statutory or constitutional provision guarantees that such a trial will not occur. Such provisions include the Double Jeopardy Clause or the Speech and Debate Clause, each of which explicitly prohibits a trial.

The Circuit rejected defendants’ argument that the plea agreement gave them a right to avoid trial. Even assuming an executory agreement could grant defendants any rights, defendants’ remedy for a violation of those rights would be an appeal after a conviction rather than interlocutory review. Moreover, amendments to the Rules Enabling Act now require the Supreme Court to make any expansion to interlocutory appeal by rulemaking rather than by case-by-case expansion of the Cohen doctrine. Defendants’ arguments that the district court violated the separation-of-powers doctrine by essentially instructing the government to indict them, or that the government retaliated against them for joining the company’s appeal, did not justify immediate review. Finally, the prior proceedings against their company did not constitute double jeopardy for purposes of the action against the individual defendants. Accordingly, the Circuit dismissed their appeal.

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