Appellate Law & Practice

CA1: pleading the Fifth in one proceeding prevents use in later MSJ

SEC v. Ficken, No. 07-2532 affirms a grant of summary judgment to the SEC and against a broker for Prudential in a case brought under 15 U.S.C. § 77q(a), 15 U.S.C. § 78j(b), and 17 C.F.R. § 240.10b-5, in which the SEC argued that “Ficken intentionally concealed his identity and the identities of his clients while trading shares of mutual funds, in order to mislead mutual fund companies into processing trades that they otherwise would not have allowed.”  There is the usual discussion of Scienter.   Ficken was trying game the lag-time between prices of shares and funds that hold them.  This isn’t illegal, but mutual funds don’t like it.  To get around this, Ficken used different ID numbers. 

There is a paper trial and transcripts of NASD proceedings where he plead the Fifth. The First says “Ficken’s refusal to answer pertinent questions in the NASD proceeding bars his reliance on that testimony in opposing summary judgment” and therefore, “Ficken’s testimony would not be admissible because his assertion of his Fifth Amendment privilege or his refusal to answer questions prevented development of his testimony on closely related issues.”   It then discussed how he became unavailable.

CA1: attorney fees in successful forfeiture cut

US v. One Star Class Sloop, No. 08-1152. 

Boat: 2   Government: 1

This is a forfeiture case, where the court earlier held that the government didn’t do enough to notify a part owner of the vessel that was owned by JFK.  “Since the government already had sold the vessel at auction, the court — which determined that the sales price equalled the vessel's fair market value — awarded a share of the net sales proceeds to Lane. It subsequently granted him attorneys' fees in an amount less than he had requested.”

The earlier opinion is here United States v. One Star Class Sloop Sailboat (Sloop I), 458 F.3d 16 (1st Cir. 2006) and our coverage is here.

Regarding fees under Civil Asset Forfeiture Reform Act of 2000 (CAFRA), 28 U.S.C. § 2465(b)(1).  The First says that it was okay to reduce fees because of “limited success.”  Then it says that the District Court was “uniquely suited” to determine whether the lawyers wasn’t their time “or the court’s” litigating “hopless” issues.  Whatever. Likewise, it wasn’t an abuse of discretion to rely on an agreed-upon rate.  The First then says that the District Court (somewhat vindictively) said that one of the lawyers engaged in "egregious overlitigation.” Strangely, the District Court reduced the rate, but not the hours.  However, the First does say that an inappropriate factor in calculating fees decision is “perceived lack of diligence in seeking to intervene in the forfeiture proceeding.”  But, the First says that substantive, there was no way that the client could have known, so the lawyer shouldn’t be dinged for not knowing.

As to value, the First turns back the argument that the part-owner didn’t have enough of a chance to present his evidence as a due process argument.  But, this really looks like summary judgment.

Substantively, the First says that a DOJ handbook on A Guide to Interlocutory Sales and Expedited Settlement (2003) isn’t doesn’t give rise to a “private right of action” and it isn’t relevant.  This misses the mark. The part-owner isn’t seeking to create a private right of action (one already has been).  Instead, he is arguing that the guide creates a rule of decision, or at least some kind of norm of behavior which the government is expected to follow. I don’t think Selya understands the distinction.  Anyway, the First says that the more rigorous methods required don’t apply when the court orders otherwise.

CA1: jury can always draw inferences against poor people

US v. Morales-Machuca, Nos. 06-1283, 07-1001 (10/17/08).  The underlying facts involve a couple of botched armored car robberies.  Most of it comes down to an unrenewed Rule 29 motion.  The Firsts gets in a few shots in the war on poverty by explaining that it is sufficient to show that someone was involved in a robbery if they are the kind of guy that earns minimum wage (a truly dishonorable act), yet had enough money to buy cars and stuff (a pro-American act.)  Besides the class-based stuff there were some vague statements from the other defendants. Most of the other points are resolved by saying that the jury “could” have drawn an inference in the government’s favor and by saying that the defendant didn’t develop his argument. 

Even on the sentencing, there really isn’t much here.

CA1: It’s okay to Begay outside of of the ACCA

US v. Herrick, No. 07-1553 (10/17/08) vacates a sentence for being a felon in possession of a firearm in violation of Title 18 U.S.C. §§ 922(g)(1) and 924(a)(2) under Begay v. United States, 553 U.S. ___, 128 S.Ct. 1581 (2008).  But, what really matters here is whether a Wisconsin conviction for negligent operation of a motor vehicle can be treated as a “crime of violence” pursuant to Guidelines section 4B1.2(a). The First concludes that “There is no possible formulation of the Wisconsin motor vehicle homicide statute that would criminalize conduct that would not constitute a violent felony under the formal categorical approach to Guidelines.”  However, after the initial briefing, Begay came out.   

The First then concludes that because the Wisconsin requires a mens rea below that that the Begay majority concluded fall under the residual clause in 18 U. S. C. §924(e)(2)(B)(ii).  Therefore, “conclude only that vehicular homicide involving criminal negligence does not involve the requisite purposeful, intentional or deliberate conduct” will not trigger 4B1.2.

The defendant seems to have pretty good arguments as to why he wasn’t really possessing weapons: his uncle and wife were possessing them for protection or hunting. 

Programming note

Sorry for the delay in getting cases out. I was meeting with some very important people that had a lot of social skills and I had to spend the three days prior to the meeting at a beauty spa to ensure that I looked masculine enough to represent them.

Programming note

Will get to Friday's opinions this weekend.  In the mean time, keep on talking about politics like someone that didn't go to law school.

CA1: $3.1 award affirmed in FBI-agent leak case

McIntyre v. US, Nos. 07-1663, 07-1664.  This case has a very long and celebrated history.  But not much law is made here. Essentially, an FBI agent leaked the identity of a mob informant, and the mob informant was killed.  But, the facts reveal that various FBI agents were aware of the close relationship between the agents and the mob, and protecting informants from prosecution.  The government’s appeal challenges the District Court’s finding that “claims that the court erred only in concluding that Connolly's leak of McIntyre's identity fell within the scope of his employment for the FBI, the prerequisite to liability against the United States under the FTCA.”  Specifically, “In the terms of the multi-prong framework of Massachusetts law, the United States maintains that leaking McIntire's identity was neither the kind of conduct Connolly was hired to perform (prong one) nor motivated by a purpose to serve the FBI (prong three)”  The First says that the evidence showed that it was the “custom” (that is, the way they fought the war on crime), and that the FBI really bent over backwards for them.  Some agents were not so pleased with this, but that doesn’t change the fact that the FBI was really going out of its way to help some bad people.

At the end there is some law on post-judgment interest.  The rate should be 5.1% and it “runs from the date of filing of the transcript of the judgment with the Secretary of the Treasury through the day before the date of the mandate of affirmance.”  31 U.S.C. § 1304(b)(1)

CA1: Pullman abstention doesn’t apply to fight over poor-people law fees

Batterman v. Leahy, No. 07-2653.  This is a long prolonged suit by a lawyer that was contracted to represent children that were being taken away from their poor parents.  There was a lot of underlying litigation, and the Committee for Public Counsel Services ("CPCS") balked to represent poor people in long trials that would decide the silly matter of whether they would have their kids taken away from them. CPCS decided to audit his billing records, but dragged its feet.  The suit alleged various constitutional and state law issues (the big one being a cap on the number of hours billed).  The District Court sua sponte invoked R.R. Comm'n of Tex. v. Pullman, 312 U.S. 496 (1941) abstention, so the plaintiff could proceed in state courts.  Now we are talking grown-up law.

The First says that Pullman abstention doesn’t apply here.  After all, state law is fairly clear.  It says Burford v. Sun Oil Co., 319 U.S. 315 (1943) abstention might apply, but that isn’t clear, either.

But, then the First goes even further, and it says that the attack on the cap is meritless.  Showing that the judges (and their clerks) never represented real people, it preaches that lawyers might get screwed over if they can’t withdraw from a non-paying representation.  This is oversimplistic: just because a rule of professional conduct says something, doesn’t make it constitutional.  Moreover, when the government seeks to use a rule of professional conduct as a sword against a lawyer state action is invoked, and there is a constitutional issue.  But the First doesn’t care. 

So, it tosses out this bone:

In all events, Batterman’s attack on the cap is meritless and his present hope of a vast monetary recovery may well be dubious. At the same time, he may be owed something under the manual and an agency cannot easily explain why it takes years for it to decide about reimbursement for past work. Both sides ought to consider whether this case can be resolved by discussion and without further litigation.

CA1: no reasonable expectation of privacy in unpaid storage locker

US v. Lnu, Nos. 07-1780, 07-2020 (10/10/08).  This is a social security card fraud case.  The defendant was convicted under 42 U.S.C. § 408(a)(6).  However, the underlying question revolves around whether the cops could search a storage locker that he had not made payments upon.  The First focuses on the fact that the owner of the self-storage place had a lien on the property under state law.

The First says that some parts of the closing argument were not misconduct because, on the facts, they were supported by the evidence.  Likewise, the defendant claims that he was denied his right to testify but testimony from his lawyer says that he was so adequately informed.

Saudi Arabia's respect for First Amendment values

For some crazy reason, the people that prattle on the most about how great the death penalty is, are the ones that howl the loudest about preventing the electorate from witnessing an election so that Americans can decide for themselves whether the death penalty is a good idea or not.

Said one composite advocate of the death penalty who gets paid to raise funds to support the death penalty, “If people saw an execution, they might vote to end them, and then I would starve to death, because I am a pathetic lawyer.”  He then excused himself to go talk to some non-lawyers.

Thankfully in Saudi Arabia, they execute people in public.  Executioners are proud of their work.  Executioners give interviews about how much they enjoy killing people.  They also let their kids clean the swords they use to kill women.  They pose for pictures. 

This is not to say that Saudis have any respect for the concept of a fair trial, but Arab culture appreciates random justice and brutality, so it is all good.