Vol. 41, No. 9
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. 11-6041. Campbell v. City of Spencer. 06/22/2012. W.D.Okla. Judge Hartz. Rooker–Feldman Doctrine—Claims Barred if Based on State Court Judgment.
Defendant municipality seized horses from plaintiff’s property and obtained a state court order to forfeit the horses unless plaintiff posted a security bond to pay for their maintenance. Plaintiff sued the municipality, claiming it had violated: (1) the Fourth Amendment, by searching her property and seizing her horses; (2) the Fifth Amendment, by depriving her of her horses without due process or just compensation; and (3) the Eighth Amendment, by obtaining an excessive fine through an unreasonable forfeiture bond. The district court held that it lacked jurisdiction pursuant to the Rooker–Feldman doctrine, which bars the lower federal courts from engaging in appellate review of state court judgments. [Rooker v. Fid. Trust Co., 263 U.S. 413 (1923); D.C. Ct. App. v. Feldman, 460 U.S. 462 (1983).] Plaintiff appealed.
After reviewing the Rooker–Feldman doctrine, the Tenth Circuit distilled its essential point that claims complaining of injuries caused by state court judgments are barred; therefore, the state court wrongfully entered its judgment. Careful to distinguish the preclusion doctrine, the Circuit observed that plaintiff’s Fifth Amendment claim was a direct attack on the state court’s judgment, because an element of her claim was that the judgment was wrongful. Therefore, it was properly dismissed under Rooker–Feldman. Similarly, Rooker–Feldman barred the Eighth Amendment claim. Plaintiff’s claim that defendants sought and obtained an excessive fine resulting in the forfeiture of the horses was a claim that the state court judgment was wrong.
The Circuit held, however, that plaintiff’s Fourth Amendment claims were not barred. She could bring the same claims even if there had been no state court proceedings. She claimed that the officials improperly searched her property and seized her horses, and these allegedly unconstitutional acts preceded the state court judgment. Although this claim may be subject to the preclusion doctrine, it was not barred by Rooker–Feldman. The district court’s judgment was affirmed in part and reversed and remanded in part.
No. 10-6241. Morris v. Okla. Dep’t of Human Servs. 07/09/2012. W.D.Okla. Judge Lucero. Medicaid Eligibility—Qualifying Annuity—Transfer of Assets Between Spouses—Transfer Penalty.
The Medicare Catastrophic Coverage Act permits the spouse of an applicant for long-term care benefits to keep a certain amount of resources without affecting the applicant’s eligibility. Accordingly, the "community spouse" does not have to be destitute before the "institutionalized spouse" can receive Medicaid assistance for nursing home care. Certain annuities are not treated as an available resource for Medicaid eligibility, and there are rules governing transfers between spouses.
To meet the Medicaid eligibility requirements, plaintiffs purchased an annuity payable to the husband to "spend down" their assets so Medicaid would assist with the wife’s nursing home expenses. The Oklahoma Department of Human Services (agency) denied the wife’s application for Medicaid, ruling that the wife could not spend her share of the couple’s resources on an annuity payable to her husband or, alternatively, she was subject to a transfer penalty. Plaintiffs sued, claiming the denial was inconsistent with federal law. The district court upheld the agency’s application of the Medicaid statutes and granted summary judgment to the agency.
The Tenth Circuit held that the Medicaid laws permit a couple to convert joint resources into income for the community spouse by purchasing certain annuities without impacting eligibility. The income of the community spouse must not be available to the institutionalized spouse. The community spouse also may retain a resource allowance. Therefore, the annuity purchase did not disqualify the wife.
The Circuit also rejected the agency’s alternative ruling that the transfer of assets to the husband was subject to a disqualification penalty. The limit on spousal transfers applies only after a state agency has declared the institutionalized spouse eligible for Medicaid benefits. The district court’s judgment was reversed and the case was remanded so the district court could ascertain the precise timing of the Medicaid application relative to the annuity purchase.
No. 11-6173. United States v. Dugan. 07/10/2012. W.D.Okla. Chief Judge Briscoe. Special Release Conditions—Special Sex Offender Conditions—Remoteness of Relevant Criminal History.
Defendant pleaded guilty to the federal crime of robbing a post office. A probation officer prepared a presentence investigation report (PSR), which included a chronicle of defendant’s lengthy criminal history. Among the crimes listed were (1) a thirty-three-year-old conviction for sexual battery, and (2) a seventeen-year-old conviction for aggravated battery that originally had been charged as sexual battery. Neither offense related in any way to minors. The PSR recommended that, based on these crimes, defendant should be required to participate in a sex offender treatment program during his incarceration, and that several sex offender-related conditions be imposed during his term of supervised release, including restrictions on his ability to be present at a residence containing minor children and to associate with minor children. The district court approved all of these conditions.
On appeal, defendant challenged both the district court’s recommendation concerning sex offender treatment during incarceration and its imposition of the sex offender conditions during his term of supervised release. The Tenth Circuit concluded that it lacked jurisdiction to address the challenge to the sex offender treatment recommendation, because the recommendation was not binding on the Bureau of Prisons and therefore was not appealable. Turning to the special conditions of release, the Circuit considered whether the offenses on which the conditions were predicated were too remote to justify the imposition of such conditions. This involved not only considering the age of the convictions, but also whether they reasonably were related to factors such as defendant’s history and characteristics, the need to protect the public from his further crimes, and the need to provide defendant with correctional treatment.
Although a seventeen-year-old sex crime reasonably could be related to the imposition of such conditions—if, for example, it were part of the defendant’s extensive history of committing sex crimes that involved minors—that was not the case here. Defendant’s criminal history included only two isolated sexual offenses that did not involve minors. These offenses did not justify the imposition of conditions of release that implicated significant liberty interests. Even though defendant had spent some of the intervening years in prison, where he had less liberty to commit sexual offenses, the seventeen-year gap since defendant’s last conviction for a sex-related offense, coupled with the lack of evidence of any propensity on his part to commit a future sex offense, meant that the sex offender conditions of release were not reasonably related to the relevant statutory factors. Accordingly, the Circuit remanded the case with directions to vacate the special sex offender conditions of release.
No. 10-1534. Lederman v. Frontier Fire Protection, Inc. 07/11/2012. D.Colo. Judge Tymkovich. Fair Labor Standards Act—Overtime Pay—Outside Salesperson—Jury Instruction—Employee Fit Plainly and Unmistakably Within Exception—Erroneous Instruction—Prejudice.
Plaintiff sued his former employer for overtime pay under the Fair Labor Standards Act (FLSA). The employer responded that because plaintiff had been an outside salesperson rather than an employee, he was not entitled to overtime pay. Following a jury trial, the jury found that plaintiff was not an outside salesperson and the employer was liable for some of the amount he sought. The employer appealed, claiming the jury instructions improperly stated the law. The challenged instruction stated that an employer seeking an exemption from the FLSA overtime requirements had the burden to prove that the employee fit "plainly and unmistakably" within the terms of the claimed exemption.
The Tenth Circuit noted that the FLSA requires employers to pay employees overtime at time-and-a-half, and employers who fail to do so are liable for the unpaid overtime plus an equal amount as liquidated damages. However, the FLSA exempts employers from paying overtime to certain kinds of employees, including outside salespeople, which is a fact-intensive inquiry.
The Circuit then considered the challenged jury instruction and determined that the "plainly and unmistakably" language in the case law applies to a court’s finding whether the claimed exemption falls "plainly and unmistakably" within the terms of the statute, not to the employer’s burden of proof. The employer’s burden of proof is preponderance of the evidence. Once a court finds the employer eligible to claim the exemption, the fact finder evaluates the disputed facts to determine whether the exemption is met. The Circuit found that the jury instruction was given in error and then considered whether it was prejudicial. Concluding that it was, given the many disputed issues of fact, the Circuit reversed and remanded for further proceedings.
No. 08-3204. United States v. McKeighan. 07/17/2012. D.Kan. Judge Matheson. Sixth Amendment Right to Counsel of Choice—Use of Conflict of Interest to Disqualify Attorney.
Defendant was convicted of drug and firearms charges. Before trial, he retained a Texas attorney who was admitted pro hac vice to appear in the U.S. District Court for the District of Kansas. Although defendant had told law enforcement and pretrial services that he had no income or money, counsel was paid a $25,000 fee, $5,000 of which was allocated to pay Kansas local counsel. The money was delivered to counsel in cash by defendant’s girlfriend, who found the transaction suspicious. The government presented information under seal to the district court, arguing that it had concerns that the money paid to counsel represented forfeitable crime proceeds and that counsel’s continued representation of defendant might pose a conflict of interest. Local counsel then moved to withdraw, citing a conflict of interest, and the district court granted her motion.
The Texas attorney informed the district court that he had received several federal grand jury subpoenas regarding his fee information, and requested permission to place his fee into the court registry. The district court granted this permission. The district court then informed the Texas attorney of several possible conflicts of interest that might arise if it were determined that the funds delivered to him for the representation were determined to be the proceeds of illegal activity. The district court told defendant and his lawyer that it was not compelling the attorney to withdraw, and would permit defendant to proceed with the Texas attorney if he so chose. The Texas attorney subsequently moved to withdraw, however, on the basis that he had been unable to obtain the assistance of local counsel. The district court granted his motion. After the jury convicted defendant, he moved for a new trial, arguing that the court had compelled his counsel to disgorge the fee defendant had paid him for representing defendant, thus depriving him of his right to choice of counsel. The district court denied the motion.
On appeal, defendant first argued that the district court had deprived him of his Sixth Amendment right to choice of counsel. The Tenth Circuit noted that this right is not absolute and does not include the right to use the proceeds of crime to finance a defense. Here, the prosecution complied with its ethical duty to disclose conflicts of interest of defense counsel. There was no showing the government had acted in bad faith or attempted to manufacture a conflict of interest. The district court acted in accordance with its duty to balance defendant’s right to retain counsel against the public interest in professional responsibility and integrity and the interests of justice, and did not force defendant’s counsel to withdraw, other than by properly insisting that counsel obtain the assistance of local counsel. Moreover, it was Texas counsel’s suggestion that his fee be placed within the district court registry. Therefore, defendant was not deprived of his counsel of choice.
Defendant raised two other arguments on appeal. He contended that his right to an impartial jury was violated because some jurors slept during his trial. The trial transcript did not establish that jurors were actually asleep, however, only that some of them were "nodding off" from time to time. Moreover, defendant failed to establish prejudice by showing which parts of the trial the jurors may have missed by being asleep. Finally, defendant challenged the application of a two-level sentencing enhancement for obstruction of justice. The Circuit upheld the Sentencing Guideline enhancement, which was based on a note drafted at defendant’s behest that would have shifted the blame to someone else for items found in a storage unit that led to the charges in defendant’s case. The facts that defendant may not have drafted the note himself, that he did not introduce the note at trial, and that he was not charged or convicted of obstruction of justice or perjury did not prevent the application of the enhancement. Accordingly, the Circuit upheld defendant’s conviction and sentence.
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