Vol. 40, No. 7
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: www.cobar.org (click on "Opinions/Rules/Statutes").
No. 10-4079. United States v. Huff. 04/19/2011. D.Utah. Judge Tymkovich. Monetary Transactions in Criminally Derived Property—Depositing Checks Constituted Money Laundering.
A jury convicted defendant of one count of wire fraud and two counts of money laundering. In connection with his construction of a new home, he submitted a loan application containing false statements and supported by false and fraudulent documentation. The mortgage company to whom he applied then made a wire transfer to a title company, which issued two checks to defendant. Defendant then deposited the checks into his business bank account.
On appeal, defendant challenged his money laundering convictions, arguing the government did not prove he possessed the wire fraud proceeds before he allegedly engaged in money laundering. The issue under the money laundering statute was whether he "engaged in monetary transactions in criminally derived property" when he deposited the checks into his bank account. Defendant argued that he did not obtain the proceeds of the wire fraud until after he deposited the checks into his account, and that he could not launder proceeds he did not yet possess.
The Tenth Circuit disagreed. It concluded that defendant obtained the criminally derived proceeds when he received the checks. When he deposited them, he committed money laundering. The wire transfer that supported the wire fraud conviction (defendant’s fax of the loan application to the mortgage company) was separate from the monetary transactions supporting the money laundering charge (his deposit of the two checks). The money laundering charges therefore stemmed from later conduct, after the wire fraud was complete. Moreover, the checks constituted proceeds of criminal activity received by defendant, even before he deposited them into his account. The Circuit therefore affirmed his conviction.
No. 10-2226. United States v. Maestas. 04/25/2011. D.N.M. Judge Holmes. Fourth Amendment—No Reasonable Expectation of Privacy in Common—Enclosed Garbage Storage Area.
Defendant pleaded guilty to drug and firearm charges, reserving the right to appeal the district court’s denial of his motion to suppress evidence. While under police surveillance in connection with a controlled purchase of methamphetamine, defendant was observed entering a triplex residential unit where he had spent a considerable amount of time during the preceding three months. He entered the unit carrying a gun and a ziplock bag containing methamphetamine. While inside, he received a phone call informing him that police had the house surrounded. He took the ziplock bag and went out the back door. He was observed looking around, reaching to the small of his back where the gun was located, and walking toward the enclosed garbage storage area adjacent to the residence. He disappeared inside a fenced-in area where officers could not see him; when he reemerged, he was arrested. Officers searched the enclosed garbage storage area and located a handgun and a ziplock bag containing methamphetamine.
On appeal, defendant argued that he had a reasonable expectation of privacy in the enclosed garbage storage area as a guest in the home to which it was attached. The Tenth Circuit assumed that he was a social or overnight guest at the residence and had an expectation of privacy coterminous with that of its tenant.
The question, then, was whether the garbage storage area was included within the cartilage area of the home protected by the Fourth Amendment. The Circuit stated that even if it was within the cartilage, defendant did not have a reasonable expectation of privacy in that area. The garbage storage area was used by at least two other tenants in the triplex and was accessible to the landlord. The tenant of the unit in which defendant was a guest had no familial or other special relationship with the other two tenants that could create a privacy interest in this common area. The Circuit therefore upheld the district court’s denial of defendant’s motion to suppress the drugs and firearm found in the garbage storage area.
No. 10-5103. Krauser v. Astrue. 05/06/2011. N.D.Okla. Judge Anderson. Social Security Disability—New Evidence Presented to Appeals Council—Treating Physician’s Opinion—Sporadic Household Tasks.
Plaintiff filed for Social Security disability benefits. An administrative law judge (ALJ) denied his application, finding that he could perform occupations other than his past relevant work. Plaintiff submitted new evidence about his depression to the Appeals Council (Council), which the Council accepted and considered. The Council denied review. The district court did not consider the new evidence of depression because it did not relate to the period before the ALJ’s decision. The district court upheld the agency’s decision and plaintiff appealed.
The Tenth Circuit noted that new evidence submitted to the Council is considered part of the disability determination if it is (1) new, (2) material, and (3) related to the period on or before the date of the ALJ’s decision. The Council considered the evidence, but the district court held that it did not meet the third criterion and did not consider it, thus creating a conflict about whether the new evidence was part of the disability record. The Circuit stated that when the Council accepts the evidence, it is included in the record, and when the Council rejects the evidence, that decision is subject to de novo review. Here, however, even if the new evidence was considered, it would not change the outcome. The report was dated well after the ALJ’s decision and did not state that plaintiff’s depression existed before the ALJ’s decision. Nevertheless, the case was remanded for other error, so the ALJ should consider the new evidence.
The Circuit remanded because the ALJ failed to properly analyze the treating physician’s opinion that plaintiff had significant work-related limitations. When considering such an opinion, an ALJ must first determine whether the opinion is entitled to controlling weight—that is, if it is wellsupported by medically acceptable clinical or laboratory diagnostic techniques and is not inconsistent with other substantial evidence. Even if it the opinion is not entitled to controlling weight, it is entitled to deference and the ALJ must state how much deference he has given the opinion, if any, and state the reasons, tied to the evidence. The ALJ’s failure to discuss the deference he afforded the treating physician’s opinion required a remand.
The Circuit further noted that the record did not support the ALJ’s findings that plaintiff was able to do significant house and yard work. On remand, the ALJ should keep in mind that an ability to do sporadic household tasks does not mean a claimant can do substantial gainful activity. The district court’s judgment was reversed and remanded with instructions to remand to the agency for further proceedings.
No. 10-2151. McDonaldCuba v. Santa Fe Protective Services, Inc. 05/09/2011. D.N.M. Judge Anderson. Title VII—Employment Discrimination—Retaliation—Exhaustion of Administrative Remedies—Jurisdiction—Application for Unemployment Benefits Not Protected Activity.
Plaintiff sued her former employer under Title VII, alleging gender discrimination and retaliation. The employer filed various counterclaims, which it later voluntarily dismissed. The district court granted summary judgment in favor of the employer. Plaintiff appealed.
The Tenth Circuit held that it lacked subject matter jurisdiction over plaintiff’s claim that the employer retaliated against her by filing allegedly groundless counterclaims. Plaintiff was required to exhaust her administrative remedies by filing a separate charge with the Equal Employment Opportunity Commission (EEOC), alleging that the employer had retaliated against her by filing the counterclaim before adding such a retaliation claim to her lawsuit. Her failure to file a separate charge with the EEOC was fatal to jurisdiction.
Plaintiff also asserted that the employer retaliated against her because she filed for unemployment benefits. The Circuit held that merely filing for unemployment benefits, without more, is not protected activity under Title VII, so this claim failed as a matter of law.
Finally, the Circuit rejected plaintiff’s claims of discrimination and retaliation based on the employer’s decision to fire her. The district court’s judgment was affirmed in part and remanded in part to dismiss for lack of subject matter jurisdiction.
No. 11-1066. Countryman v. Farmers Insurance Exchange. 05/10/2011. D.Colo. Per Curiam. Notice of Removal to Federal Court—Minor Procedural Defect—Remand Not Required.
Defendants timely removed this case from state court to federal district court. On plaintiff’s motion, the federal district court remanded the action to state court because defendants’ joint notice of removal failed to attach a copy of the summons served on one of the defendants. The statute governing removal procedures contains a requirement that the notice include copies of all process, pleadings, and orders served on defendants. Shortly after expiration of the thirtyday removal period, defendants supplemented their original and timely joint notice of removal with a copy of the summons. Defendants appealed the remand order.
The Tenth Circuit held, as a matter of first impression, that defendants’ failure to attach a co-defendant’s summons to the joint notice of removal was a de minimis procedural defect that did not require a remand to the state court. The Circuit further held that the de minimis procedural defect was curable, either before or after the thirtyday removal period. Defendants corrected the omission, plaintiff was not prejudiced by the omission, and the district court’s ability to proceed with the case was not materially impaired. The district court’s order of remand was vacated and the case was remanded.
No. 10-5061. United States v. Harrison. 05/11/2011. N.D.Okla. Judge Seymour. Fourth Amendment—Consent to Search—Agents’ False Statements About Possibility of a Bomb Planted in Apartment Rendered Consent Involuntary.
Defendant was charged with being a felon in possession of a firearm and ammunition, which had been discovered by agents of the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) during a warrantless search of his apartment. The district court suppressed the firearm and ammunition, reasoning that deceitful tactics used by the ATF to gain defendant’s consent to search rendered his consent involuntary. The government appealed.
The evidence showed that the agents, who had defendant under surveillance for suspected drug trafficking but did not observe any evidence of drug trafficking, decided to conduct a "knock and talk" with defendant to attempt to gain his consent to search the apartment. The officers, dressed in plain clothes, knocked on the door and identified themselves as law enforcement agents. Defendant allowed them to enter the apartment. One of the agents told him, falsely, that they were there because their office had received an anonymous phone call stating there were drugs and bombs at the apartment and asked whether defendant would mind if they looked around the apartment. When defendant demurred, the agents assured him he could give permission to search even though it was his girlfriend’s apartment, that they were there to make sure there was no threat or danger to the community, and that they were not interested in arresting him for a "small bag of weed." Defendant then gave the agents permission to search the apartment, during which they found the gun and ammunition.
On appeal, the government argued that the search was lawful because the agents used a permissible form of deception to gain defendant’s consent. The Tenth Circuit disagreed. The district court found that the government falsely implied that they had information that defendant could be in danger from a bomb planted in the apartment. The officers’ conduct left defendant with two options: (1) either deny consent to search and take the risk that a bomb had been planted in the apartment, or (2) consent to the search. Consent under these circumstances was not free of impermissible coercion, and defendant’s consent was therefore involuntary. For this reason, the Circuit affirmed the suppression of the firearm and ammunition.
No. 10-4114. United States v. Vigil. 05/12/2011 D.Utah. Judge Ebel. Sentencing Guidelines—In the Business Enhancement—Professional Fences—Inappropriate Fine Absent Appropriate Findings—Contesting Ability to Pay.
Defendant pleaded guilty to access device fraud, aggravated identity theft, and possession of stolen mail after police pulled him over and found in his care a large quantity of counterfeit identifications and other materials indicative of identity theft. Defendant admitted to stealing checks from mailboxes and wallets from gym lockers, and to purchasing information stolen by others. At sentencing, the district court applied a two-level enhancement known as an "in the business" (ITB) enhancement, applicable where "the offense involved receiving stolen property, and the defendant was a person in the business of receiving and selling stolen property." The district court imposed restitution based on the offenses of conviction. It then imposed a $10,000 fine over defendant’s objection, notwithstanding a finding in the presentence report that defendant did not appear able to pay a fine because of his apparent lack of income or assets.
On appeal, defendant first argued that the ITB enhancement applies only to professional fences, and there was no evidence that he actually sold stolen property, so it should not apply to him. The Tenth Circuit agreed. For the ITB enhancement to apply, the defendant must be in the business of both receiving and selling stolen property. Here, the district court made no factual finding that defendant actually sold stolen property, and no such finding would have been appropriate given the state of the record. Therefore, the district court should not have applied the enhancement to him.
Defendant also challenged the imposition of the $10,000 fine. Where, as here, a defendant presents evidence of his or her inability to pay, the district court must make findings concerning ability to pay, and no such findings were made in this case. In fact, the district court did not provide any reasons for imposing the fine, and did not consider whether imposition of the fine might impair defendant’s ability to pay the restitution ordered. The Circuit therefore reversed the imposition of the fine, along with the ITB enhancement, and remanded for resentencing.
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