Legal News

Case Summaries

Securities Law

[06/26] Horning v. SEC
In a petition for review of an SEC order barring Petitioner from associating with a broker or dealer in a supervisory capacity based on his failure to adequately supervise two of his employees, the petition is denied, where the SEC's order was reasonable and supported by substantial evidence.

[06/24] Warfield v. Bestgen
In an action by the receiver of a foundation found to have engaged in fraudulent investment sales to recover commissions paid to the foundation's salespersons, judgment for Plaintiff is affirmed, where the charitable gift annuities sold by Defendants were investment contracts under federal securities law.

[06/23] Zacharias v. SEC
In a petition for review of the SEC's finding of securities law violations by Petitioners, the petition is granted in part, where the SEC failed to explain its finding that certain omissions by Petitioners involved a material fact; but denied in part, where the scheme at issue clearly involved an "underwriter," which refuted Petitioners' theory that they properly relied on the Regulation S and Section 4 exemptions.

[06/19] Alaska Elec. Pension Fund v. Flowserve Corp.
In a securities fraud class action, the District Court's denial of class certification and grant of Defendants' summary judgment motion are reversed where: 1) the District Court conducted its Fed. R. Civ. P. 23 hearing under an erroneous legal standard for proving loss causation; and 2) a reasonable trier of fact could conclude that one of Defendant's alleged misstatements regarding its earnings caused some portion of Plaintiff's loss after the "relevant truth" began to leak out.

[06/19] Henry v. U.S. Trust Co.
In an ERISA action challenging a stock purchase under an Employee Stock Ownership Plan (ESOP), the dismissal of the complaint is reversed where, when an ESOP incurs debt to finance a purchase of shares of stock and then later sells the shares in exchange for cancellation of some of that debt, the debt cancellation in the second transaction should not be construed as having reduced the purchase price paid in the first transaction.

[06/18] Yeager v. US
In an appeal from the District Court's order denying Defendant's motion to dismiss his wire fraud indictment on Double Jeopardy grounds, the order is reversed where an apparent inconsistency between a jury's verdict of acquittal on some counts and its failure to return a verdict on other counts does not affect the acquittals' preclusive force under the Double Jeopardy Clause.

[06/17] In re HealthSouth Corp. Sec. Litig.
In an objection brought by former HealthSouth CEO Richard M. Scrushy to the District Court's order approving a securities class action settlement with HealthSouth Corporation, the order is affirmed where the settlement's bar order was consistent with the Private Securities Litigation Reform Act insofar as it barred not only the Scrushy's contribution claims, but also his indemnification claim for amounts he might pay in settlement of actual or threatened liability to the underlying plaintiffs.

[06/12] Sec. Exchange Comm. v. Fed. Labor Relations Auth.
In a petition for review of an FLRA order requiring the SEC to provide back pay for unilaterally ending within-grade pay increases, the petition is denied, where: 1) the FLRA's credibility determinations were supported by substantial evidence; and 2) back pay was appropriate because the within-grade increases were virtually automatic and non-competitive.

[06/09] Oravecz v. New York Life Ins. Co.
In an action for securities fraud, negligence, negligent misrepresentation, and breach of fiduciary duty, trial court judgment is affirmed in part and reversed in part where: 1) the court erred in sustaining the demurrer to the claim for breach of fiduciary duty as the complaint adequately stated a prima facie claim for breach of fiduciary duty against defendant; 2) the court properly sustained the demurrer as to the claim for negligent hiring and negligent interference with prospective economic advantage; 3) the court properly granted summary judgment on the remaining claims as the evidence is undisputed that defendant made no negligent misrepresentation, there is no merit in the claim of negligent supervision, and the statutory securities fraud claim is time-barred.

[06/09] Pension Comm. of the Univ. of Montreal Pension Plan v. CITCO Fund Serv.
District court judgment dismissing plaintiffs' claims and ruling that plaintiffs failed to satisfy their burden of pleading proximate causation for their losses is vacated and remanded where the complaint plausibly and in adequate detail set forth the allegations and pled that defendant Banc of America Securities aided and abetted frauds and breaches of fiduciary duty in a manner which proximately caused losses to the plaintiffs.

[06/05] Roth v. Reyes
In an action on behalf of a corporation under Section 16(b) of the Securities Exchange Act of 1934 to recover short-swing profits from the company's executives, the dismissal of the complaint is affirmed, where the statute of limitations had expired and was not tolled by allegedly inaccurate Section 16(a) disclosures.

[06/04] Eurycleia Ptnrs., LP v. Seward & Kissel, LLP
In a fraud action against counsel for a failed hedge fund for failure to disclose certain information, dismissal of the complaint is affirmed, where neither Plaintiffs' allegations nor the circumstances gave rise to a reasonable inference that Defendant participated in a scheme to defraud or knew about the falsity of the contested statements.

[06/04] Koehler v. Bank of Bermuda Ltd.
The Court of Appeals answered a certified question from the U.S. Court of Appeals for the Second Circuit as follows: A court sitting in New York may order a bank over which it has personal jurisdiction to deliver stock certificates owned by a judgment debtor (or cash equal to their value) to a judgment creditor, pursuant to CPLR article 52, when those stock certificates are located outside New York.

[06/03] Holmes v. Grubman
In a fraudulent misrepresentation action involving securities, district court judgment is affirmed in part where: 1) the court properly denied plaintiff's motion to amend, as the record is devoid of evidence supporting plaintiffs' contention that good cause existed for the district court to modify its scheduling order; and 2) the court properly dismissed plaintiff's claim brought under Georgia's "blue sky" law, as plaintiffs did not cite a specific provision of the statute or refer to particular false or misleading statement that allegedly violated the statute and thus failed to provide defendant with fair notice of their claim and the grounds upon which it rested. The remaining three issues on appeal are certified to the Supreme Court of Georgia, as the state's highest court has not directly addressed the issues and the present court is unable to predict with certainty how the court would rule on them in the instant case.

[05/29] Whitcraft v. Brown
The District Court's civil contempt order against Defendant and her counsel is affirmed in part, where Defendant's counsel assisted in the transfer of Defendant's assets in violation of the District Court's freeze order, but vacated in part, where Defendant was not personally aware of the details of the order.

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Criminal Law & Procedure

[07/02] US v. Pepper
Sentence for drug crimes is affirmed where: 1) this court's prior remand did not require the district court to grant defendant a 40 percent downward departure for substantial assistance as the remand was a general remand for resentencing and did not place any limitations on the discretion of the district court judge in resentencing; 2) the court did not abuse its discretion by refusing to grant more than a 20 percent reduction based on defendant's substantial assistance; 3) the court did not abuse its discretion by denying defendant's request for a downward variance based on his post-sentencing rehabilitation and the cost of his incarceration; and 4) defendant's sentence was not unreasonable.

[07/02] US v. Davis
Conviction for firearms possession is affirmed where: 1) the search of defendant's vehicle without a warrant was permissible under the Fourth Amendment as it was lawful search incident to arrest, and thus firearm found in vehicle was admissible; and 2) the court properly ruled that the search was permissible under the automobile exception to the warrant requirement as well.

[07/02] US v. Schmidt
Conviction and sentence for being a felon in possession of a firearm and ammunition is affirmed where: 1) the district court had jurisdiction over the offense as defendant's possession of a firearm manufactured out of country and ammunition manufactured out of state was sufficient to satisfy 18 U.S.C. sec. 922(g)(1)'s required nexus to interstate commerce; and 2) defendant's sentence was not unreasonable.

[07/02] US v. Lee
Sentence for aiding and abetting assault with intent to rob a post office is affirmed where: 1) the district court did not err in overruling defendant's objections to the sentencing enhancements without requiring the government to present any evidence as there was sufficient evidence in the record to support each of the enhancements; and 2) the court did not err in imposing an enhancement under Guidelines sec. 2B3.1(b)(4)(B), as one of his accomplices struck a woman attempting to leave the post office during the robbery, thereby physically restraining the victim.

[07/02] Roubideaux v. North Dakota Dep't of Corr. and Rehabilitation
In a sex discrimination action brought by female prison inmates, district court grant of summary judgment for defendant is affirmed where: 1) the female inmates had standing to challenge the constitutionality of the two challenged gender-explicit statutes; 2) the evidence in the record raises no inference of gender discrimination in the decision-making process because the statutes in question substantially relate to the important government objective of providing adequate segregated housing for female inmates, and any equal protection claim arising out the inmates' previous housing was mooted by their transfer to the Correction and Rehabilitation Center; 3) prison industry assignments were not subject to Title IX as the primary purpose of the program is employment, not education; and 4) the vocational education programs were within the scope of Title IX, and the district court did not err in finding that any differences in the programs offered men and women were a function of the location of the facilities and not gender discrimination.

[07/02] People v. Nguyen
Court of Appeals judgment is reversed where the absence of a constitutional or statutory right to jury trial under the juvenile law does not, under Apprendi, preclude the use of a prior juvenile adjudication of criminal misconduct to enhance the maximum sentence for a subsequent adult felony offense by the same person under California's Three Strikes law.

[07/02] People v. Farley
Conviction for first degree murder and other crimes and sentence to death is affirmed where: 1) the trial court did not err in denying defendant's motions for a change of venue and in its rulings on various challenges to the makeup of the jury; 2) the court did not err in denying several motions to suppress and in its evidentiary rulings, in various instructions it made to the jury, and in denying requested defense instructions; 3) the court did not err denying defendant access to data concerning his past employment and in prohibiting him from introducing evidence on that subject, and did not err in refusing to give proposed instructions on aggravating and mitigating circumstances; and 4) there is no merit to defendant's argument that the death penalty statute violates the United States Constitution.

[07/02] US v. McGraw
Conviction for drug possession is affirmed where: 1) the district court did not err in denying defendant's motion to suppress and finding that defendant voluntarily consented to the officers' search; and 2) the merits of defendant's challenge to his sentencing classification cannot be reached as defendant's plea agreement included an unambiguous waiver of his right to challenge the district court's sentencing determinations.

[07/02] Nguyen v. Holder
In a petition for review of the BIA's order removing Petitioner from the U.S. for committing a "crime of violence," the petition is granted where the theft of an automobile under the California grand theft statute is not a "crime of violence" under 18 U.S.C. section 16(b).

[07/02] Harbison v. Little
In a 42 U.S.C. section 1983 action challenging Tennessee's lethal injection protocol under the Eighth Amendment, judgment for Plaintiff is vacated where Baze v. Rees, 128 S. Ct. 1520 (2008), addressed the same risks identified by the District Court, but reached the conclusion that they did not rise to the level of a constitutional violation.

[07/02] US v. Blake
Defendant's carjacking conviction is affirmed, where the District Court did not err in refusing to suppress his post-arrest statements, because no evidence suggested that the arresting officer's provision of a statement of charges was anything other than an action normally attendant to arrest and custody.

[07/02] US v. Pearson
Sentence for producing, transporting, receiving, and possessing child pornography is vacated and remanded further sentencing proceedings where a restitution order pursuant to 18 U.S.C. sec. 2259 may include an amount for estimated future medical expenses, but the district court did not explain adequately its calculation of the restitution amount in the order. The district court's judgment of conviction is affirmed in all other respects.

[07/01] Reber v. Steele
In a prosecution for felony wanton destruction of wildlife, Petitioner's habeas petition is remanded with instructions to dismiss where the premature filing of Petitioner's 18 U.S.C. section 2254 petition deprived the District Court of jurisdiction, and thus precluded the Court of Appeals' review.

[07/01] County of Butte v. Superior Court of Butte County
Petition for writ of mandate to overrule a trial court ruling regarding rights related to possession of medical marijuana is denied where the Constitution and laws of the state provide real party in interest Williams relief at law to bring a civil action based on a violation of his constitutional rights, and seek an adjudication as to whether the deputy had probable cause to order Williams to destroy his property or whether a lack of probable cause led to a violation of his constitutional rights.

[07/01] People v. Johndrow
Trial court order committing defendant to the Department of Mental Health (DMH) for an indeterminate term following a jury's finding that he is a sexually violent predator is affirmed where: 1) the commitment to the DMH for an indeterminate term of custody does not violate defendant's due process rights as sexually violent predators are afforded a full panoply of due process protections under sections 6605 and 6608 before being committed; and 2) the commitment for an indeterminate term does not violate his equal protection rights as defendant has neither shown nor attempted to show that sexually violent predators are similarly situated with mentally disordered offenders and persons committed because they were found not guilty by reason of insanity.

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Sentencing

[07/02] US v. Pepper
Sentence for drug crimes is affirmed where: 1) this court's prior remand did not require the district court to grant defendant a 40 percent downward departure for substantial assistance as the remand was a general remand for resentencing and did not place any limitations on the discretion of the district court judge in resentencing; 2) the court did not abuse its discretion by refusing to grant more than a 20 percent reduction based on defendant's substantial assistance; 3) the court did not abuse its discretion by denying defendant's request for a downward variance based on his post-sentencing rehabilitation and the cost of his incarceration; and 4) defendant's sentence was not unreasonable.

[07/02] US v. Schmidt
Conviction and sentence for being a felon in possession of a firearm and ammunition is affirmed where: 1) the district court had jurisdiction over the offense as defendant's possession of a firearm manufactured out of country and ammunition manufactured out of state was sufficient to satisfy 18 U.S.C. sec. 922(g)(1)'s required nexus to interstate commerce; and 2) defendant's sentence was not unreasonable.

[07/02] US v. Lee
Sentence for aiding and abetting assault with intent to rob a post office is affirmed where: 1) the district court did not err in overruling defendant's objections to the sentencing enhancements without requiring the government to present any evidence as there was sufficient evidence in the record to support each of the enhancements; and 2) the court did not err in imposing an enhancement under Guidelines sec. 2B3.1(b)(4)(B), as one of his accomplices struck a woman attempting to leave the post office during the robbery, thereby physically restraining the victim.

[07/02] People v. Farley
Conviction for first degree murder and other crimes and sentence to death is affirmed where: 1) the trial court did not err in denying defendant's motions for a change of venue and in its rulings on various challenges to the makeup of the jury; 2) the court did not err in denying several motions to suppress and in its evidentiary rulings, in various instructions it made to the jury, and in denying requested defense instructions; 3) the court did not err denying defendant access to data concerning his past employment and in prohibiting him from introducing evidence on that subject, and did not err in refusing to give proposed instructions on aggravating and mitigating circumstances; and 4) there is no merit to defendant's argument that the death penalty statute violates the United States Constitution.

[07/02] US v. McGraw
Conviction for drug possession is affirmed where: 1) the district court did not err in denying defendant's motion to suppress and finding that defendant voluntarily consented to the officers' search; and 2) the merits of defendant's challenge to his sentencing classification cannot be reached as defendant's plea agreement included an unambiguous waiver of his right to challenge the district court's sentencing determinations.

[07/02] US v. Pearson
Sentence for producing, transporting, receiving, and possessing child pornography is vacated and remanded further sentencing proceedings where a restitution order pursuant to 18 U.S.C. sec. 2259 may include an amount for estimated future medical expenses, but the district court did not explain adequately its calculation of the restitution amount in the order. The district court's judgment of conviction is affirmed in all other respects.

[07/01] Bible v. Ryan
In a capital habeas matter, the denial of Petitioner's petition is affirmed, where Petitioner was not prejudiced by any of his counsel's alleged errors during the sentencing phase of his trial, because there was no reasonable probability that the sentencing judge would have reached a different result in the absence of the alleged errors.

[07/01] US v. Cruz-Zuniga
Conviction for drug crimes is affirmed where: 1) the district court did not abuse its discretion in using Eighth Circuit Model Jury Instruction 4.05A on the credibility of cooperating witnesses as opposed to defendant's proposed non-pattern instruction on the issue; 2) the court did not abuse its discretion by giving Model Instruction 3.11 on reasonable doubt; 3) the court did not err uin applying a preponderance of the evidence standard to determine the drug quantity attributable to defendant for sentencing purposes; 4) the court's refusal to grant defendant a downward variance for acceptance of responsibility did not wrongfully punish him for exercising his constitutional right to stand trial; and 5) the court properly considered and applied the 18 U.S.C sec. 3553(a) sentencing factors and did not impose an unreasonable sentence.

[07/01] US v. Myers
Conviction and sentence for attempted arson is affirmed where: 1) even if the government erred and made improper statements at closing, defendant was not prejudiced by the statements, and thus he failed to show a violation of his right to a fair trial or a Confrontation Clause violation; 2) no error occurred at sentencing and remand is unnecessary as the court considered the guidelines range to be advisory, took into account defendant's apparent change in behavior and job history, and imposed a sentence below the guidelines range; and 3) the court properly considered defendant's acquitted conduct during sentencing as those actions had been proven by a preponderance of the evidence.

[07/01] US v. Moran
In a firearm possession prosecution, the District Court's order setting the terms of Defendant's supervised release is affirmed where a defendant is not entitled to notice before a District Court may impose special conditions of supervised release to address a defendant's proclivity to sexual misconduct when the crime of conviction did not involve sexual activity.

[06/30] US v. Sanchez-Ramirez
Conviction and sentence for firearms possession and other crimes is affirmed where: 1) the district court acted within its discretion in denying defendant's third motion for a competency hearing based on the record evidence of his behavior; and 2) the court did not err in concluding that defendant's three prior third-degree burglary convictions in Florida were violent felonies within the meaning of the Armed Career Criminal Act and sentencing him accordingly as the convictions satisfied the elements of the Act's residual clause.

[06/30] US v. Huffstatler
Sentence for producing child pornography is affirmed where: 1) the district court did not err in sentencing defendant, as the court was not obligated to sentence him below the range recommended by valid sentencing guidelines; and 2) defendant's sentence, though above the guidelines range, was reasonable.

[06/30] US v. Cole
Appeal of a sentence imposed by the district court for defendant's drug possession is dismissed where the district court did not nullify defendant's plea agreement when it rejected the drug-quantity stipulations in the agreement and independently quantified the amount of drugs attributable to defendant based on information in the presentence report, and thus the appeal waiver in the plea agreement is enforceable.

[06/30] US v. Canipe
Defendant's firearm possession conviction and sentence are affirmed where: 1) the arresting officer possessed probable cause to believe that a traffic violation occurred when he observed Defendant not wearing a seatbelt; and 2) the duration of the detention and questioning were reasonable.

[06/30] US v. Johnson
Defendants' drug possession sentences are affirmed where neither Defendant was eligible for a reduced sentence under 18 U.S.C. section 3582(c)(2), because their sentences were based solely on powder cocaine, meaning that Amendment 706 to the Guidelines would not have the effect of lowering their sentences.

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