Legal News

Case Summaries

Securities Law

[06/28] Free Enterprise Fund v. Pub. Co. Accounting Oversight Bd.
In an action against the Public Company Accounting Oversight Board and its members, seeking, inter alia, a declaratory judgment that the Board was unconstitutional and an injunction preventing the Board from exercising its powers, the D.C. Circuit's affirmance of summary judgment for defendants is affirmed in part where the Board's appointment was consistent with the Appointments Clause. However, the judgment is reversed in part where: 1) the dual for-cause limitations on the removal of Board members contravene the Constitution's separation of powers; and 2) the unconstitutional tenure provisions were severable from the remainder of the statute.

[06/25] Hershey v. Engy. Transfer Ptnrs., L.P.
In a putative class action under the Commodities Exchange Act (CEA), alleging manipulation of natural gas futures and options prices, the dismissal of the complaint is affirmed where plaintiffs did not allege facts tending to show that defendants had specifically intended to manipulate the cost of natural gas.

[06/25] Lincoln Nat'l Life Ins., Co. v. Bezich
A petition for permission to appeal, arising from the district court's remand of plaintiff's class action lawsuit against an insurer for breach of contract claims on the basis that CAFA's exception to federal jurisdiction for the action applied, is dismissed for lack of jurisdiction as plaintiff's claim "related to the rights, duties,...and obligations relating to or created by or pursuant to...a security," as defined in the Securities Act of 1933.

[06/24] DDJ Mgmt., LLC v. Rhone Group L.L.C.
In an action claiming that defendants presented plaintiffs with corporate financial statements that were false and misleading, the appellate division's modification of the trial court's order dismissing plaintiffs' fraud claim is reversed where: 1) when a plaintiff has taken reasonable steps to protect itself against deception, it should not be denied recovery merely because hindsight suggested that it might have been possible to detect the fraud when it occurred; and 2) plaintiffs in this action for fraud have alleged facts from which a jury could find that they were justified in relying on the representations defendants made to them.

[06/24] Skilling v. US
The Fifth Circuit's affirmance of former Enron CEO Jeffrey Skilling's honest-services fraud conviction is affirmed in part where pretrial publicity and community prejudice did not prevent Skilling from obtaining a fair trial, and he did not establish that a presumption of juror prejudice arose or that actual bias infected the jury that tried him. However, the judgment is vacated in part where 18 U.S.C. section 1346, which proscribes fraudulent deprivations of "the intangible right of honest services," was properly confined to cover only bribery and kickback schemes, and Skilling's alleged misconduct entailed no bribe or kickback.

[06/24] Morrison v. Nat'l Australia Bank Ltd.
In a securities fraud action by Australian citizens claiming that defendant corporation and its officers manipulated financial models to make the company's mortgage-servicing rights appear more valuable than they really were, the Second Circuit's affirmance of the dismissal of the action is affirmed where: 1) the Second Circuit erred in considering Securities and Exchange Act section 10(b)'s extraterritorial reach to raise a question of subject-matter jurisdiction, thus allowing dismissal under Fed. R. Civ. P. 12(b)(1); and 2) section 10(b) does not provide a cause of action to foreign plaintiffs suing foreign and American defendants for misconduct in connection with securities traded on foreign exchanges.

[06/17] Trooien v. Mansour
In an action alleging violations of the Minnesota Securities Act, negligent and fraudulent misrepresentation, and breach of fiduciary duty, summary judgment for defendants is affirmed in part where: 1) plaintiff's misrepresentation claims based on the company at issue's revenue projections were properly dismissed by the district court since they were not false statements of past or existing fact, and were not pled with sufficient particularity; and 2) the injuries alleged in plaintiff's breach of fiduciary duty claims were those to corporate assets, and a claim to recover damages for such injuries must be brought as a derivative action. However, the judgment is reversed in part where claims arising under Minn. Stat. section 80A.01(b) required only a showing of negligence.

[06/15] SEC v. Byers
In nonparties' appeal from the district court's order holding that its jurisdiction in rem and its equitable powers provided it with sufficient authority to issue an injunction barring non-parties from filing involuntary bankruptcy petitions against any of the defendants, the order is affirmed where, while it should be sparsely exercised, district courts possess the authority and discretion to enter anti-litigation orders, including those that bar the filing of involuntary bankruptcy petitions absent the district court's permission.

[06/11] Kruss v. Booth
In a shareholder derivative suit, involving a variation on a pump and dump scheme, the trial court's judgment of dismissal is reversed where: 1) plaintiff must be given leave to amend his second amended complaint so as to allege violations of director fiduciary duty under California law as he had alleged violations of California law in his first amended complaint, but the trial court erroneously thought the case was governed by Nevada law and required plaintiff to plead violations of Nevada law in the second amended complaint; and 2) the trial court erred in dismissing the suit as the second amended complaint alleged self-dealing on the part of the defendant directors that continued into the period when the plaintiff did own stock in the company.

[06/08] US v. Laurienti
Defendants' convictions for securities fraud conspiracy are affirmed where: 1) defendants did not challenge, and overwhelming evidence supported the finding, that the conspiracy existed and that at least one member of it performed an overt act; 2) the district court erred by failing to give a "trust relationship" jury instruction, but defendants intentionally relinquished their right to challenge the jury instruction; and 3) the characterization of the sales practices as unlawful was relevant, because the government sought to prove that, as conducted by defendants (with an intent to defraud and in violation of trust relationship duties), the practices were indeed unlawful. However, defendants' sentences are vacated where the district court erred in calculating loss both for purposes of the Sentencing Guidelines and for purposes of restitution.

[05/27] Seijas v. Repub. of Argentina
In a class action by holders of defaulted bonds issued by the Republic of Argentina, the district court's order of class certification is affirmed in part where: 1) the fact that damages may have to be ascertained on an individual basis was not sufficient to defeat class certification; and 2) the district court correctly determined that proceeding individually would be prohibitive for class members with small claims. However, the order is reversed in part where estimating gross damages for each of the classes as a whole, without using appropriate procedures to ensure that the damages awards roughly reflected the aggregate amount owed to class members, enlarged plaintiffs' rights by allowing them to encumber property to which they have no colorable claim.

[05/24] Arkansas Teacher Ret. Sys. v. Caiafa
In an objection to the Vice Chancellor's approval of a settlement among a majority of Countrywide stockholders, Countrywide directors, and Bank of America (BOA), related to Countrywide's merger with BOA, denial of the objection is affirmed where the Vice Chancellor did not abuse his discretion by holding that objector's derivative suit claims for breach of asserted duties were worthless and, therefore, added no conceivable value to the merger.

[05/18] W. Coast Opportunity Fund, LLC v. Credit Suisse Secs. (USA), LLC
In defendant's appeal from the court of chancery's partial grant of judgment on the pleadings to plaintiff, holding that a "lockup" agreement prohibiting a transfer of stock did not govern the transfer of pledged shares to the plaintiff below, the matter is remanded where, during oral argument on appeal, the parties and the Supreme Court raised legal issues that had not been fully developed in the parties' pleadings and briefs.

[05/18] Slayton v. Am. Express Co.
In a securities fraud action challenging one allegedly misleading statement made in the defendants' May 15, 2001 quarterly report, dismissal of the complaint is affirmed where the alleged misleading statement was a forward-looking statement that was protected by the safe harbor of the Private Securities Litigation Reform Act.

[05/17] State of New Jersey v. Fuld
In New Jersey's Department of Treasury Division of Investment's suit against officers and directors of Lehman Brothers Holdings, Inc., arising from defendant-company's filing for bankruptcy protection three months after New Jersey purchased over $180 million of investment securities from defendant, defendants' motion to dismiss plaintiffs' appeal from a denial of its motion to remand is granted as the court lacks collateral order jurisdiction to review the district court's order denying plaintiff's motion to remand.

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Criminal Law & Procedure

[06/28] McDonald v. City of Chicago
In an action against the City of Chicago alleging that the City's handgun ban left plaintiffs vulnerable to criminals, judgment for defendants is reversed where the Fourteenth Amendment incorporates the Second Amendment right, recognized in Heller, to keep and bear arms for the purpose of self-defense.

[06/25] Dale v. Holder
In a petition for review of a decision by the Board of Immigration Appeals (BIA) upholding petitioner's order of removal under 8 U.S.C. section 1101(a)(43)(F) for being convicted of an aggravated felony, the petition is granted where: 1) although the argument petitioner presented to the BIA was not identical to that which he raised in his petition for review, the arguments were sufficiently related to establish that he presented his ground for relief to the administrative agency in the first instance; and 2) the BIA erred as a matter of law in concluding that petitioner could not legally plead guilty to an attempted violation of N.Y. Penal Law 120.10(3) or (4).

[06/25] Bailey v. Cain
In a murder prosecution, petitioner's appeal of the denial of his habeas petition is dismissed and the denial of petitioner's Fed. R. Crim. P. 60 motion is affirmed where: 1) omitted from petitioner's motion for a certificate of appealability was a specific reference to the judgment or order from which appeal was taken; and 2) petitioner made no attempt to show that he could not have obtained a transcription sooner if it were necessary to make his case before the district court.

[06/25] Woodfox v. Cain
In the state's appeal from a grant of petitioner's habeas petition in a murder prosecution, the order is reversed where: 1) petitioner failed to exhaust his Confrontation Clause claim in state court; 2) there was no indication in the state court adjudication that suggested a reliance on any procedural vehicle rather than the merits to deny relief; 3) it was not unreasonable to conclude that defense counsel did not render constitutionally deficient performance by failing to pursue a confrontation objection; and 4) the absence of a fingerprint expert did not cause petitioner prejudice that warrants habeas relief.

[06/25] US v. Williams
In a case involving a defendant's transport of 74 unlawful aliens, and the death of 19 of them after he left the aliens locked in the trailer of his tractor?trailer without activating the trailer's air conditioning unit, defendant's murder convictions are affirmed where: 1) the Government's articulated reasons for striking a veniremember were supported by the voir dire transcripts; and 2) it was not clear error for the district court to include defendant's first trip, during which he transported approximately 60 unlawful aliens, as part of the relevant conduct. However, his sentence is vacated where the district court erred in its definition of "act of violence" under the Federal Death Penalty Act and, under the correct definition, the evidence at trial cannot support a finding that the requisite threshold intent was met.

[06/25] US v. King
In defendant's appeal from the district court's judgment revoking his term of supervised release and imposing additional supervised release conditions on the basis of five violations of his supervised release conditions, the order is affirmed where: 1) 18 U.S.C. section 3605's language did not limit a transferee court's power to violations that occur after transfer; 2) together, the ordinary meaning of "associate," the court's cases, and defendant's probation officer's instructions adequately notified defendant that telephone and e-mail communications with felons were prohibited; and 3) the evidence was sufficient to support the district court's finding that defendant's misrepresentation was intentional.

[06/25] US v. Buzo-Zepeda
Defendant's sentence for reentry into the U.S. following deportation is affirmed where a "Johnson waiver" in California state court had no effect on the determination of whether a defendant qualifies for a point increase under United States Sentencing Guidelines Manual section 4A1.1, Criminal History Category.

[06/25] Kimbrough v. State of Cal.
In an action claiming that the California Department of Corrections and Rehabilitation's (CDCR) grooming regulations concerning hair length interfered with plaintiff's First Amendment right to free exercise of religion, the district court's award of attorney's fees to plaintiff is reversed where, because the district court did not actually adjudicate plaintiff's claims, the Ninth Circuit's decision in Siripongs foreclosed an award of attorneys' fees in this case.

[06/25] Lal v. State of Cal.
In an action against the California Highway Patrol and certain officers for the shooting death of plaintiff's husband, dismissal of the action with prejudice under Federal Rule of Civil Procedure 41(b) for failure to prosecute when her attorney failed to meet deadlines and attend hearings is reversed where an attorney's gross negligence constituted an extraordinary circumstance warranting relief from a judgment dismissing the case for failure to prosecute under Rule 41(b).

[06/25] People v. Bloom
Conviction of defendant for resisting arrest and other related charges, arising from making more than 40 harassing calls to 911 in a single evening, is affirmed over a challenge to a denial of a motion to suppress as a dispatcher lawfully arrested defendant for making the calls and she was not required to physically restrain him or to be present at the time of the arrest.

[06/25] US v. Womack
In a prosecution of defendant for distributing cocaine base, district court's application of a career offender enhancement when imposing a sentence of 360 months is vacated and remanded as, although the district court did not err by applying the career offender enhancement in defendant's guidelines calculation and the sentence imposed was within a correctly calculated guidelines range, the district court erred in stating that it could not consider the sentencing disparity between crack and powder cocaine offenses under the guidelines because district courts may disagree with the career offender enhancement on policy grounds related to the crack/powder disparity and impose sentences accordingly.

[06/25] US v. Robinson
District court's grant of pro se defendant's motion to reduce his sentence under 18 U.S.C. section 3582(c)(2) for crack cocaine and firearm related offenses is affirmed and his motion for appointment of counsel denied as, pursuant to section 3582(c)(2), a district court is not authorized to reduce a defendant's sentence below the amended Guidelines range.

[06/25] Davis v. Lafler
District court's denial of defendant's petition for habeas relief from convictions for carjacking and receiving and concealing stolen property is reversed as there was insufficient evidence on which to base defendant's conviction for aiding and abetting the carjacking.

[06/25] US v. Alexander
Defendant's sentence for being a felon in possession of a firearm is affirmed where: 1) a conviction under Fla. Stat. section 790.15(2) involved conduct that was "similar in kind and degree of risk posed" to burglary, arson, extortion, and crimes involving the use of explosives -- the crimes enumerated in the Guidelines' definition of crime of violence; and 2) the district court did not have authority to award credit for time served in state custody.

[06/25] US v. Huff
Defendant's convictions and sentences for bribery and conspiracy to commit wire fraud and bribery are affirmed in part where: 1) the evidence was sufficient to establish a single conspiracy in this case, and there was no material variance between the indictment and the evidence presented at trial; and 2) the district court did not err in basing the loss amount on defendant's substantive counts of conviction only. However, a restitution order is vacated in part where the circuit court was unable to determine whether the amount of restitution imposed by the district court exceeded the victims' actual losses.

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Sentencing

[06/25] US v. Williams
In a case involving a defendant's transport of 74 unlawful aliens, and the death of 19 of them after he left the aliens locked in the trailer of his tractor?trailer without activating the trailer's air conditioning unit, defendant's murder convictions are affirmed where: 1) the Government's articulated reasons for striking a veniremember were supported by the voir dire transcripts; and 2) it was not clear error for the district court to include defendant's first trip, during which he transported approximately 60 unlawful aliens, as part of the relevant conduct. However, his sentence is vacated where the district court erred in its definition of "act of violence" under the Federal Death Penalty Act and, under the correct definition, the evidence at trial cannot support a finding that the requisite threshold intent was met.

[06/25] US v. King
In defendant's appeal from the district court's judgment revoking his term of supervised release and imposing additional supervised release conditions on the basis of five violations of his supervised release conditions, the order is affirmed where: 1) 18 U.S.C. section 3605's language did not limit a transferee court's power to violations that occur after transfer; 2) together, the ordinary meaning of "associate," the court's cases, and defendant's probation officer's instructions adequately notified defendant that telephone and e-mail communications with felons were prohibited; and 3) the evidence was sufficient to support the district court's finding that defendant's misrepresentation was intentional.

[06/25] US v. Buzo-Zepeda
Defendant's sentence for reentry into the U.S. following deportation is affirmed where a "Johnson waiver" in California state court had no effect on the determination of whether a defendant qualifies for a point increase under United States Sentencing Guidelines Manual section 4A1.1, Criminal History Category.

[06/25] US v. Womack
In a prosecution of defendant for distributing cocaine base, district court's application of a career offender enhancement when imposing a sentence of 360 months is vacated and remanded as, although the district court did not err by applying the career offender enhancement in defendant's guidelines calculation and the sentence imposed was within a correctly calculated guidelines range, the district court erred in stating that it could not consider the sentencing disparity between crack and powder cocaine offenses under the guidelines because district courts may disagree with the career offender enhancement on policy grounds related to the crack/powder disparity and impose sentences accordingly.

[06/25] US v. Robinson
District court's grant of pro se defendant's motion to reduce his sentence under 18 U.S.C. section 3582(c)(2) for crack cocaine and firearm related offenses is affirmed and his motion for appointment of counsel denied as, pursuant to section 3582(c)(2), a district court is not authorized to reduce a defendant's sentence below the amended Guidelines range.

[06/25] US v. Alexander
Defendant's sentence for being a felon in possession of a firearm is affirmed where: 1) a conviction under Fla. Stat. section 790.15(2) involved conduct that was "similar in kind and degree of risk posed" to burglary, arson, extortion, and crimes involving the use of explosives -- the crimes enumerated in the Guidelines' definition of crime of violence; and 2) the district court did not have authority to award credit for time served in state custody.

[06/25] US v. Huff
Defendant's convictions and sentences for bribery and conspiracy to commit wire fraud and bribery are affirmed in part where: 1) the evidence was sufficient to establish a single conspiracy in this case, and there was no material variance between the indictment and the evidence presented at trial; and 2) the district court did not err in basing the loss amount on defendant's substantive counts of conviction only. However, a restitution order is vacated in part where the circuit court was unable to determine whether the amount of restitution imposed by the district court exceeded the victims' actual losses.

[06/24] US v. Adamson
Defendants' convictions and sentences for conspiracy to distribute and possession with intent to distribute 500 grams or more of methamphetamine and five kilograms or more of cocaine are affirmed where: 1) the district court properly considered the relevant conduct for which defendant was responsible in comparison to other members of the organization and did not commit clear error in its factual determination that defendant's role was not minor; 2) defendants were active, necessary, and well-compensated members of the conspiracy, and their roles as couriers did not necessarily entitle them to the minor role adjustment; 3) the presence of firearms in the garage where defendant received drugs and dispatched large sums of money to the west coast made the fact of his involvement in the drug conspiracy more probable and evidence of this was thus properly admitted; and 4) the district court did not clearly err in imposing a three-level enhancement for his role in the offense.

[06/24] US v. Robinson
Defendant's sentence for possession of a firearm as a previously convicted felon is vacated where the district court clearly erred in finding that defendant had stipulated to the requisite knowledge, or reasonable cause to believe, that the person knocking on his door was an officer.

[06/24] Suggs v. McNeil
In a capital habeas matter, a denial of the petition is affirmed where the decision of the Florida Supreme Court finding that petitioner failed to prove prejudice due to allegedly ineffective assistance of counsel under Strickland v. Washington, 466 U.S. 668, 104 S. Ct. 2052 (1984), was neither contrary to nor an unreasonable application of clearly established federal law.

[06/23] People v. Garcia
Trial court's restitution order following defendant's no contest plea to a single count of felony false imprisonment by force in exchange for dismissing a rape charge and another separate case is affirmed where: 1) the trial court appropriately allowed only a limited inquiry into the confidences of the psychotherapist-patient relationship, compelling disclosure of only those matters directly relevant to the issue of restitution for the victim's therapy costs; 2) by not requesting at the restitution hearing, enforcement of a subpoena duces tecum, defendant forfeited his objection on appeal; 3) there was sufficient evidence establishing that the doctor charged the victim $4,764.71 for therapy and that the victim was ultimately responsible for paying that amount; and 4) defendant's objection to the doctor's $500 witness fee is forfeited.

[06/23] People v. Tompkins
Defendant's conviction of multiple counts of lewd and lascivious acts with a minor under the age of 14 is affirmed over claims: 1) that the corpus delicti rule prohibited convicting him of acts described only by his out-of-court statements; 2) victim's generic testimony was insufficient to establish his guilt; 3) that there was no evidence that he filed the victim; 4) that the trial court erred in allowing a detective to testify as an expert on child sex abuse victims; and 5) that imposition the upper term for one count violated his constitutional rights.

[06/23] US v. Gonzalez
In a prosecution of defendant for conspiring to distribute and possessing with the intent to distribute cocaine and marijuana, district court's denial of a motion to suppress is affirmed where: 1) the test is not whether the individual actually lived in the apartment but whether she apparently had sufficient authority to consent to its search; 2) there was probable cause to arrest defendant; 3) there was sufficient evidence to support the search warrant of his vehicle; 4) district court clearly did not err by crediting a witness' testimony over defendant's; and 5) the district court did not err in imposing a two-level sentencing enhancement for obstruction of justice after finding defendant committed perjury at the suppression hearing.

[06/23] Spencer v. Sec'y., Dept. of Corr.
In a capital habeas matter, the denial of the petition is affirmed where: 1) petitioner's first five claims of prosecutorial misconduct were procedurally barred because the Florida Supreme Court had, on collateral review, denied them based on an independent and adequate rule of Florida procedure; and 2) where the evidence of guilt is overwhelming, an improper comment by a prosecutor usually does not render a trial fundamentally unfair in violation of the Constitution.

[06/22] In re Maes
Defendant's petition for habeas relief claiming that he is entitled to conduct credits during service of his term for spousal abuse conviction, is denied as section 2933.2 bars such credit as a defendant convicted of murder and sentenced to an indeterminate life term is not entitled to earn post-sentence conduct credit against a consecutive determinate term imposed for a separate offense, which section 669 directs to be served first.

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