Monday, July 31, 2006

Federalizing of airport screeners did not force companies to violate labor laws

It its probably a once-in-a lifetime question considering the world we live in now, but it was one the 9th Circuit court of appeals was forced to answer. Did the privatization of airport screeners by the federal government after 9/11 force massive layoffs in violation of federal laws requiring employers to give 60 days notice before ordering such layoffs?

At the heart of the 9th Circuit's July 26 decision, is the termination of four San Jose International Airport screeners who worked for Globe Airport Security Services. The four plaintiffs and other airport security personnel were laid off after Congress passed the Aviation and Transportation Security Act in 2001. The airport screeners filed a class action lawsuit in California federal court alleging they were required to be given 60 days notice of the layoffs under the federal Worker Adjustment and Retraining Notification Act, also known as the WARN Act.

Congress passed the Aviation and Security act just over two months after the terrorist attacks on New York City and Washington D.C. It took effect in February of 2002 and the TSA began taking over airport screening operations on Oct. 1, 2002. From that date until January 2003, Globe laid off workers in four waves.

San Jose District Judge James Ware granted ruled in favor of Globe, holding that the federal government essentially eliminated the employees and Globe had no input on how or when the screeners were terminated.

The plaintiffs appealed, but the 9th Circuit agreed with Judge Ware. The question for the court was whether WARN applied to the federal government's privatization of an industry.

"We believe the language of the WARN Act is straightforward; it unambiguously provides that the Act applies when an employer orders a mass layoff," the court said in a 13-page decision authored by 9th Circuit Judge Pamela Ann Rymer. "There is no question here that the layoffs were the result of the federal government’s replacing private screeners with federal employees...Thus it was the government, not Globe, that ordered Globe’s employees out of work at [San Jose International Airport] Terminal C. This being so, the WARN Act does not apply."

Because of the uniqueness of the situation, there was little federal law to guide the judges, other than the traditional methods of statutory interpretation. The appellate panel held that the situation at the San Jose Airport was more akin to a Supreme Court decision rejecting the argument that the WARN act applied in a case where the FDIC took over a failing bank, sold of its assets and then terminated a number of employees.

"Although Globe was certainly the employer that executed the mass layoff, it did so as a result of the federally-ordered takeover that replaced private employees with federal
employees," the 9th Circuit said. "Nothing in the pleadings suggests that the government’s takeover of screening operations at [San Jose International Airport] Terminal C did not effectively oust Globe from providing screening personnel at that terminal. As TSA moved in to assume that responsibility, Globe had to move out."

The panel also rejected the plaintiffs invocation of court decisions holding that the WARN act applied to employers who lay off workers due to the cancellation of a government contract. The court said those cases involved the question of whether certain defenses applied to the employers, and not whether the act applied to the situation to begin with.

Based on their conclusions, the court affirmed Judge Ware's decision to rule in favor of Globe based on the pleadings.

Friday, July 28, 2006

Gay man beaten by Argentinean cops wins new asylum hearing

Sorry for another immigration post, but these decisions are fascinating in light of the global village we live in and the nebulous method for determining who stays in the U.S. and who gets deported (see previous post).

In a decision from the 3rd U.S. Circuit Court of Appeals, the appellate panel rejected a Board of Immigration Appeals decision that a gay man from Argentina who claims he was harassed, beaten and jailed by police because of his sexuality had not established the required evidence of past persecution and "well-founded fear" of future persecution needed to gain asylum.

"Although [Juan Pablo] Maldonado did not claim that the individual physical assaults resulted in severe injuries or that he was ever detained for more than twelve hours at a time, we conclude that the mistreatment Maldonado suffered at the hands of the police, which occurred at least twenty times over a period of several years, rises to the level of persecution," the 3rd Circuit said.

The court said that U.S. government officials notably did not dispute that the harassment was enough to establish persecution, but that Maldonado did not belong to a group of oppressed people.

As outlined in my previous post, those claiming persecution have to convince an immigration judge that they have suffered past persecution because of their inclusion in a particular social group - usually politically or religiously affiliaited - and that he had a "well-founded fear" of being persecuted upon returning to their home country. Discrimination alone is not enough to meet that threshold, appellat courts have held.

Immigrants from around the globe apply for asylum, trying to convince American judges that conditions in their home country qualify them for asylum. Chinese asylum seekers often claim to be escaping China's forced birth-control policies or the government's alleged oppression of of the Falun Gong religion. Those living in Muslim countries have sought asylum based on Christian beliefs or support or past dealings with the U.S. Natives of Colombia often claim fear of kidnapping or death at the hands of paramilitary forces there, while Haitians have claimed torture or oppression at the hands of the various factions who controlled that country at one time or another.

In this case, the 3rd Circuit rejected the idea that Maldonado was not a member of qualifying social group.

"Even assuming that Maldonado is a member of a particular social group, however, the
government alleges that the persecution was not 'on account' of that membership, but
occurred instead because he engaged in an activity (leaving gay discos late at night) that
he was free to modify," the 3rd Circuit explained. "This is a distinction without a difference. The fact that Maldonado was targeted by the police only while engaged in an elective activity does not foreclose the possibility that he was persecuted on account of his membership in a particular social group...It is clear that the police were motivated by Maldonado’s sexuality. The police targeted him only as he was leaving gay discos and made disparaging remarks about his sexual orientation while arresting him."

The court continued by explaining that Maldonado's claim were supported by a 2001 State Department Country Reports on Human Rights Practices detailing torture and harrassment of gays in Argetina by police, and explaing that police in Argentina are allowed to detain gays and other members of sexual minorities for non-criminal activites.

"The culture of anti-homosexual prejudice in Argentina is further supported in the record by reports from human rights organizations, newspaper stories, magazine articles, and excerpts from books, all of which detail mistreatment of homosexuals by the Argentinean police," the 3rd Circuit said.

Maldonado detailed two incidents and provided eyewitnesses statements supporting his claims of persecution by law enforcement. He claimed that in a Sept. 1998 incident, police stopped him and a friend for a purported ID check. When the police discovered they had come from a gay club, Maldonado alleges, the officers yelled, “you faggots have just come from seeing a transvestite show.” They then allegedly threw both men into a police car and took them to a police station where officers made threats like, “you faggots deserve to die” and “you need a hot iron bar stuck up your ass.” Maldonado said he and his friend were held for six hours and then released without charge.

In a December 1999 incident, Maldonado said he left a gay club and was immediately thrown into a police vehicle, where he was hit with a nightstick until he was "dizzy and confused." He was held again until morning and claims he had to pay a "tip" to get his ID card back.

Maldonado also claimed police did nothing to protect him when citizens attacked him, as they allegedly did in 1999 when they threatened his life, threw garbage cans at him, kicked and punched him, and urinated on him.

Maldonado came to the U.S. in April 2002 on a tourist visa. In February 2003 he applied for asylum, but deportation proceedings began in that July. The Immigration Judge in Maldonado's case held that he was persecuted not because he was gay -- which would have made him eligible for asylum, but "on account of his 'social preferences'", particularly choosing to spend all night at gay dance clubs and leaving in the early morning hours. (Because of procedural reasons, the 3rd Circuit noted it was reviewing the BIA's decision on whether Maldonado met the past persecution/"well-founded fear" of future persecution threshold and not the Immigration Judge's ruling.)

The Board of Immigration also agreed that Maldonado did not meet the past persecution/fear of future persecution threshold and denied Maldonado asylum. He then appealed to the 3rd Circuit.

As explained above, the court rejected the BIA's analysis of the case:

"In light of the evidence described above, we conclude that the record compels the conclusion that Maldonado was persecuted on account of his membership in a particular social group. Because Maldonado has shown past persecution, it is presumed that he has demonstrated a well-founded fear of future persecution, unless the government establishes by a preponderance of the evidence that the 'applicant could reasonably avoid persecution by relocating to another part of his or her country or that conditions in the applicant’s country have changed so as to make his or her fear no longer reasonable,'" the panel said, citing precedent. "We express no opinion, however, as to whether the presumption has been rebutted in this case."

The 3rd Circuit granted Maldonado's petition for review, vacated the BIA's decision, and remanded the case for further proceedings.

Iraqi Christian, anti-Baathist gets another shot at U.S. asylum

When Iraqi citizen Thamer Salem Toma, his wife Raide Emanuel Karim, and his daughter Maryan Toma arrived in the U.S. illegally in May 2002, they told immigration officials they were seeking asylum because Toma Thamer would be killed based he was Catholic, he sold Christian-themed video tapes, and opposed the government in power at the time.

As with most immigration cases, the challenge for the Immigration Judge was to determine whether Toma was 1.) a member of an oppressed group and 2.) whether the claims of oppression were "credible" and/or 3.) whether Toma had a "well-founded fear" of torture or murder if he was returned to Iraq.

In a 2-1 decision, the 6th Circuit held that an immigration judge had improperly found Toma's claims of religious and political persecution were not credible.

During the course of his immigration proceedings, Thamer told immigration officials that he ran a video store in Iraq - the opinion does not disclose the exact location -- where he sold anti-government and anti-Baathist videos. He said he had been arrested at his store in December 2001 and was held for several weeks, during which he was beaten and interrogated about his anti-government videos and non-Muslim beliefs.

When the immigration official asked Toma if he was being persecuted because he opposed the government or because he was a Christian, he replied that it was both.

Toma also claimed:
*His father was arrested and tortured for preaching Christianity
*His uncle and brother were executed for anti-government activities
*He, his father, and his brothers were harassed on their way to church, including having stones thrown at them and dirty water dumped on them.
*The persecution began when he was young. (He claimed to have received lower grades in school because he was not Muslim, had a teacher tear off his cross, was forced to study the Koran, and had a teacher encourage other students to beat him for being Christian.)
*He was even forced to serve an extra seven years in the Iraqi army in addition to the mandatory two years because of his religion
*He was treated poorly while in the army

When he was allowed to leave the army in 2000, Toma opened his video store. He claimed Baath party members extorted money from him and threatened to report him for selling illegal adult videos, even though Toma said the store sold Christian videos.

He finally stopped selling those videos after local Muslim leaders allegedly threatened to issue a religious order calling for people to burn down his store. He was finally arrested after Baath party members showed up at his store and allegedly demanded a tribute for Muslims killed during war. Toma said his religion required him to decline to donate, and so he was falsely accused of selling anti-government/anti-Baathist video tapes.

During his detention, Toma said his hands were tied, he was hung from a ceiling, and beaten on the stomach. Somehow, his brother managed to help him escape. But local religious leaders apparently found his brother and showed them a religious order, or fatwa, condemning him for preaching Christianity.

"The affidavit indicates that Toma’s 'blood was wanted' and that it was the 'duty of
every jealous Muslim to kill [Toma] and god would repay them,'" according to the appellate court's opinion. "Following the religious leader’s affidavit, Toma decided to flee Iraq with his wife and daughter."

In October 2003, an immigration judge held that Toma had indeed suffered political persecution at the hands of the Baath party, but did not face a "well-founded" fear of persecution if he was sent back because of political developments in the country since 2001, particularly the capture of Saddam Hussein and the U.S.'s disposal of the Baath-party government.

The judge also held Toma's fear of religious discrimination was not credible because he had not asserted it at the initial interview, but only after Hussein and the Baath party were removed from power. "The immigration court interpreted this alleged omission by Toma during his interviews by immigration officers as an indication that his later testimony was fabricated," the 6th Circuit majority said.

The immigration judge also found the religious persecution claim not credible because Toma did not mention the fatwas against him until later in the immigration proceedings. "The immigration court surmised that Toma 'in order to make his claim real or more readily grantable, came up with the story of the fatwa, something out of nothing,'" the 6th Circuit noted.

Based on that reasoning, Toma and his family's asylum application was rejected. Toma appealed to the Board of Immigration Appeals and was rejected again.

Although immigration decisions are often given great deference by the appeals courts, the 6th Circuit reversed the previous decisions after a third appeal by Toma. The court said the record showed that Toma did claim religious persecution in his early statements to immigration officials, although it was not explicit and not the only basis for his application for asylum.

"Additionally, it appears that the immigration court failed to appreciate a subtle but important
distinction in Toma’s testimony," the 6th Circuit continued. "The immigration court seems to have suggested that Toma originally alleged persecution for not being able to sell anti-government videos. This, however, is a completely different claim from Toma’s statements that he was falsely accused of selling antigovernment videos as a way of persecuting him for actually selling Christian videos and refusing to donate to Muslim causes."

Finally the appellate panel said it did not want to "penalize" an asylum-seeker for "failing to state with sufficient detail during an exceedingly brief initial interview the exact nature of the persecution he faces if he returns to his native land. We are reluctant to sustain an adverse credibility finding on the grounds that an applicant’s testimony during a credible fear assessment was not as complete as at the final hearing."

The appellate judges also rejected the lower court's suspicion of Toma's claim that fatwas were issued against him. "While Toma’s application did not use the word fatwa to describe these pronouncements by religious leader, as Toma later described them in his testimony, it is abundantly clear that these pronouncements fall squarely within the definition of a
fatwa. Thus, Toma’s application and his testimony were consistent regarding the actions of the
religious leaders — the only distinguishing feature was his word choice," the court said.

Based on those conclusions, the panel majority vacated the immigration's judges ruling and remanded the case to the BIA for assignment to a new judge and further proceedings.

In a two-page dissent, 6th Circuit Judge John M. Rogers argued that in light of the deference usually afforded to immigration judges, there was enough evidence to support that immigration judge's findings.

"In neither the first interview nor the second, lengthier interview two weeks later (consisting of 41 questions) did Toma discuss selling Christian videotapes, the two alleged Fatwas calling for his death, or any meaningful religious persecution," Rogers said. "In fact, in response to the interviewer’s question concerning how Toma knew he was to be executed if he returned to Iraq—an opportune time to mention the Fatwas—Toma stated only that it was because 'the way they treated me—there was no papers—nobody would know and my brother had a hard time' and because the 'Government is a dictatorship.' It is incredible that one who had two death edicts issued against him and who had such problems stemming from his sales of Christian
videotapes would state only that he feared death for selling anti-government videotapes. For this
reason, and because the panel is reviewing under a 'highly deferential standard,' Yu v. Ashcroft, 364 F.3d 700, 703 (6th Cir. 2004), I would hold that substantial evidence supports the immigration court’s adverse credibility determination."

Thursday, July 27, 2006

When is cheese worth suing over? When $13.5 million worth of it goes bad

That's right, Colorado-based Leprino Foods Company lost more than 8 million pounds of mozzarella cheese because of the conditions at a third-party warehouse.

Leprino, the largest domestic manufacturer of mozzarella cheese, tried to recoup the losses under its all-risk insurance policy underwritten by Factory Mutual Insurance Company. Factory Mutual rejected the claim, saying it was excluded under the "contamination exclusion" of its policy.

In a 19-page decision, the 10th U.S. Circuit Court of Appeals reversed the lower court judge on several holdings and ordered a new trial for Leprino.

According to the opinion, Leprino stores its outgoing cheese in a cold-storage warehouses, sometimes as much as 40 million pounds worth, before it is shipped out to customers.
In October 2001, Leprino began an investigation because of complaints about the suspicious flavor in its cheeses. The offending cheese was traced to a third-party warehouse in Pennsylvania. The cheese was recalled and new cheese sent out.

"Leprino executives investigated and noted a strong odor and an objectionable off-flavor in the cheese stored in the Pennsylvania warehouse," the 6th Circuit explained. "Also noted in the warehouse were spills of fruit juice concentrate on the sides of 55-gallon juice concentrate barrels, on the floor, and on pallets on which food was stored, and generally all over the warehouse. Numerous popsicle products appeared to have been smashed by forklifts in the warehouse. Leprino employees testified that they noted stagnant air and a strong odor in the warehouse."

The cheese was tested and found to have been contaminated by a handful of chemicals, making it unfit even for feeding to animals. 8.22 million pounds of it was then dumped and the battle over whether the loss was covered began.

Leprino’s policy excluded coverage for "contamination including but not limited to pollution; or shrinkage; all unless such damages directly results from other physical damage not excluded by this Policy."

After the denial of the insurance claim, Leprino filed suit in Colorado federal court arguing, “first, that the insured cheese was covered under the express terms of the FM policy, and second, that Leprino had a reasonable expectation of coverage under the FM policy such that it had coverage for all changes in flavor for its cheese," according to the 10th Circuit opinion.

Factory Mutual argued that because the chemicals altered the taste and smell of the cheese, meaning Leprino's loss was not covered. Leprino argued the loss was covered under the "other physical damage" portion of the policy.

The lower court judge issued summary judgment on the first claim, saying the cheese was clearly contaminated. The second claim of whether Leprino reasonably expected coverage was put to a jury, which ultimately decided that Leprino's expectation of coverage was unreasonable.

Leprino appealed the summary judgment and the jury verdict. Factory Mutual appealed the submission of the second claim to the jury.

The 10th Circuit reversed the judge's grant of partial summary judgment and remanded the case for a new trial because the trial judge improperly assumed that the cheese was clearly contaminated and thus excluded the parties from presenting evidence about exactly what caused the mozzarella to go bad.

"Factual disputes exist as to what precisely caused the contamination, despite FM’s suggestion that there was an insufficient amount of fruit concentrate to damage such large quantities of cheese," the 10 Circuit said. "We note that this argument also relates to disputed facts. Accordingly, we hold that the district court erred when it granted partial summary judgment to FM and when it excluded evidence regarding the application of the exception to [the "other physical damage" exclusion]."

Because that decision was in error, the 10th Circuit said it did not need to address the rest of Leprino's claims of error. The court also rejected Factory Mutual's cross-appeal.

The 10th Circuit reversed the partial summary judgment and the denial for a new trial. It vacated the judgment in favor of Factory Mutual, remanded the case for a new trial and denied Factory Mutual's cross-appeal.

Wednesday, July 26, 2006

Fair use is fair - even if it hurts book sales

Unfortunately for Reva and Lucretia Payne, their brother is a convicted rapist and a writer. In a lawsuit against the Louisville (KY) Courier-Journal, they sought $500,000 in damages after the paper published excerpts of a children's book, written by their brother Tom, in connection with a story about his college and professional basketball career and his two subsequent convictions for rape. Reva and Lucretia claim they own the copyright to the book, never gave the paper the right to quote it, and that its use in tandem with a story about Tom's legal troubles will hurt the book's prospects of being sold.

But in this decision from July 26, the Sixth U.S. Circuit Court of Appeals said that the Courier-Journal broke no copyright laws when it quoted paragraphs from the book.

Copyrighted material can be used without permission in certain exceptions. The "fair use" exception allows a copyrighted symbol, trademarked name, or other protected product to be used without permission in news or educational materials.

The Paynes filed suit in June 2004 in California federal court, alleging they own the rights to “The Angel Mimi and the Giant (A Lesson in Love),” and its illustrations. The book was penned by Tom Payne, a 7' 2" tall basketball player who was the first black player to join the University of Kentucky basketball team and went on to play for the Atlanta Hawks.

Tom is serving 15 years in Kentucky for rape, and served 14 years in California for the same crime. (For those interested in sports history, the recent film Glory Road depicted the story of the 1966 NCAA Championship in which an all white Kentucky team lost the tournament crown to the only all-black starting team in college basketball at the time, Texas Western, which is now known as the University of Texas at El Paso.)

"The plaintiffs allege in the complaint that 'the manner and use of the excerpts from Plaintiffs’ book by Defendant has caused irreparable damage to the character, nature, and meaning of the book,'" the Sixth Circuit said. "The Paynes further state in the complaint that the allegedly infringing newspaper article 'will possibly have an adverse effect on the potential market for the intended sales of the book in the tri-state areas (Kentucky, Indiana, and Ohio).' Finally, the Paynes allege that the “natural, probable and foreseeable result of” the newspaper article will be to “damage[] and deprive Plaintiffs the opportunity of possibly and potentially securing a large perspective [sic] customer base in the Kentucky, Indiana, and Ohio area.”

The case stems from a 2001 article in which Courier-Journal reporter Brian Bennett used blocks of the book, which he got from Payne's mother, to illustrate the book's parallels to Payne's life. The article began with this quote:


“Once there lived a very mean Giant. He didn’t smile, he didn’t laugh, and his face was always turned in a frown. When he would walk, he would stomp the ground just to shake the villages as [he] went by.”

The article went on to cover Payne's college career and his $750,000 contract to play for the Atlanta Hawks. It then discusses Payne's life since leaving basketball, and his attempt at writing children's books. The article quotes at least four passages from the book, which Reva and Lucretia Payne say they never authorized.

The case was transferred from California to Kentucky, but the federal judge there dismissed the case in May 2005 and the Paynes appealed. However, the Sixth Circuit also decided that the Courier-Journal's use of the book was legal.

"After examining the parties’ briefs, and the applicable law, this court determines that the district court properly held that the fair use defense applied as a matter of law," the three-judge panel said.

$5M Medicare Fraud + 3 month sentence = Reversal on Appeal

As some readers (are you out there?) might know, the federal sentencing guidelines were ruled advisory by the U.S. Supreme Court in 2005. Judges still have to calculate what a defendant's sentence would have been under the guidelines, but they are now free to sentence criminals more or less harshly than the guidelines proscribe. Appellate courts, however, have the power to review the sentence for reasonableness. That is, the appellate court can decide whether 20 years for child pornography or 6 months probation for a white collar crime (like in the HealthSouth case) are reasonable.

In this decision, issued on July 26 by the First U.S. Circuit Court of Appeals, the court was asked to review the reasonableness of a 3 month sentence for a man convicted of conspiring to defraud Medicare out of more than $5 million dollars.

Thurston was indicted in 1998 for crimes he allegedly committed in the 80's and 90's when he was an executive at Damon Clinical Laboratories, a company that provide medical diagnostic equipment to hospitals, doctor, etc.

"Thurston was indicted for conspiring with three others to manipulate Damon's service options to encourage physicians to order unnecessary tests for Medicare beneficiaries," the court said. "In particular, the indictment charged Thurston with conspiring to induce physicians to order rarely needed tests for ferritin and apolipoprotein by making them part of a battery of frequently ordered tests and informing physicians, falsely, that the tests did not cost extra."

According to the opinion, Massachusetts federal judge Edward F. Harrington, who handed down Thurston's three month sentence, said he was skeptical of the government's case and would probably only sentence the company's president, who was also implicated, to probation even if the prosecution won a guilty verdict.

"Aware that the judge had more than once granted unappealable acquittals in similar
cases, the government viewed its likelihood of gaining convictions and long sentences as remote. It therefore offered generous plea agreements to each of the defendants," the 1st Circuit said. "In exchange for a plea of nolo contendere to a one-count information, the government offered to dismiss the indictment and not to appeal the sentence imposed (which the judge had indicated would not involve imprisonment)."

The company's president, Joseph Isola, took the deal, but Thurston and another co-defendant did not. Thurston said he rejected the deal because a guilty plea would cause him to be "shunned" by the Mormon Church. Isola ultimately was sentenced to three years of probation.

After trial, Thurston was ultimately convicted. The statutory maximum sentence for his crime was 5 years. Instead, Judge Wolf gave Thurston 3 months in prison, citing the low sentence given to Isola - who the judge considered the "primary architect" of the fraud, and Thurston's "extraordinary contributions and service to society, and especially to his religious obligation."

Both parties appealed and, in a previous decision, the 1st Circuit vacated and remanded the case because Judge Harrington lowered Thurston's sentence on improper grounds. The appellate court ordered Harrington to give Thurston the 5 year sentence. Thurston appealed to the U.S. Supreme Court.

While his case was pending, Judge Harrington recused himself, saying he could not follow the orders given by the appellate court. Chief District Judge Mark Wolf then took over the case. Additionally, the U.S. Supreme Court ruled in U.S. v. Booker that the sentencing guidelines were advisory. The U.S. Supreme Court vacated the 1st Circuit's decision and remanded for consideration under Booker. The 1st Circuit then remanded again, asking for a review to determine if an obstruction of justice sentencing enhancement should apply.

On remand, Judge Wolf sentenced Thurston to three months jail time and 2 years of probation for essentially the same reasons as Judge Harrington. Prosecutors again appealed. The appellate court again rejected sentence, saying Isola's sentence could lower Thurston's sentence by some amount, but not as dramatically as Judge Wolf had done. The appellate court also rejected the idea that the 3-month sentence reflected the seriousness of the crime. Finally, it rejected Wolf's contention that the sentence would adequately deter future frauds because white collar criminals are usually concerned with whether they will go to prison, not with how long they will go to prison.

Thurston's sentence was vacated, but the 1st Circuit was concerned that sending his case back for a third time "without providing further guidance might lead to another contentious district court proceeding and a third appeal. This would benefit no one."

The court added: "Two district judges have concluded that a sentence below the guideline recommendation is warranted in this case. While we think that there are plausible reasons to support a below-guideline sentence, these reasons do not permit the extreme variance that has
been granted."

The court said Wolf could grant a sentence lighter than 60 months it certain circumstances. But based on the law and evidence, the court said a sentence lighter than 3 years "would fail reasonableness review in the present circumstances."

"In setting the minimum sentence that could withstand reasonableness review, we are not endorsing 36 months as the correct sentence for Thurston," the 1st Circuit concluded. "Indeed, given the seriousness of Thurston's offense and his role as an organizer and lead implementer of the fraud, this court would be inclined to impose a sentence at or near the guideline recommendation if it were acting as the sentencing court. But our role here is only to determine
the minimum sentence that could be considered reasonable on the present record. Accordingly, we emphasize that in remanding for resentencing, we are not ordering that a 36-month sentence be imposed. The district court is free to solicit further argument and evidence from the parties, but, absent an extraordinary development, the court must impose a sentence of no less than 36-months' imprisonment."

For more discussion on reasonableness in sentencing, see Professor Doug Berman's blog at Sentencing Law and Policy.

07/28/2006 - Corrected throughout to change trial judge from Mark Wolf to Edward F. Harrington. (Hat tip to anonymous commenter). Wolf was the judge brought in after Harrington recused himself.

United Airlines faces $261 million choice

Although United Airlines has emerged from bankruptcy, it may have to figure out how to pay back $261 million it was lent by the City of Denver, or give up its operating facilities there.

In a July 6 decision, the 7th U.S. Circuit Court of Appeals said the airline could not separate its traditional lease agreement from a complicated deal it struck with the City and County of Denver. If it had been successful, it might have been able to make the $261 million disappear, without losing access to some its Denver facilities.

United struck the deal in question in 1992, around the time the Denver International Airport opened a newly constructed airport. United agreed to lease 45 acres of space there - a practice common with most airlines - but it also agreed to lease space that had yet to be built, including terminal and concourse space, a plane maintenance facility, and an air cargo area.

Instead of building the space and then charging United a lease to pay for the construction, the city and county raised $261 million in municipal bonds and handed it over to United for construction of the proposed facilities. United would then pay back the money through a third party, in this case HSBC Bank, which would then repay the bonds.

When United filed for bankruptcy in 2002, it mounted a creative attempt at divesting itself of the responsibility for the $261 million. United wanted the bond money severed from the rest of its lease so it could treat the debt as a loan - which would be dischargeable under bankruptcy law - instead of a lease - which would require United to keep up payments during the bankruptcy proceedings or lose the property being leased.

But a bankruptcy and district judge both rejected that request. United then appealed to the 7th Circuit.

In its analysis, the court declared that under Colorado law and precedent, the agreement between United and the city/count of Denver "is a single, inseverable whole in that there would have been no bargain whatsoever had the ground provisions been absent from the deal. While the parties could have separated this complex arrangement into two contracts, they did not, and their decision to join their entire agreement into one contract at the outset cannot now be undone after the fact under Colorado law."

Tuesday, July 25, 2006

Victims' families can watch entire trial - and still testify

Typically a murder victim's relatives can watch the entire trial of the accused killer. And typically a witness can not watch a trial until after they have testified. So what does a judge do when the witness is a family member of the victim?

That very question was blocking the trial of four people -- Iouri Mikhel, Jurlius Kadamovas, Petro Krylov, and Natalya Solovyeva -- charged in Los Angeles district court with kidnapping, ransoming, and then killing five people. According to a recent report by California radio station KVML, Mikhel and Kadamovas targeted wealthy Russian immigrants living in L.A. But instead of handing over the five victims, they murdered them and dumped the bodies.

District Judge Dickran M. Tevrizian denied the crime victims the right to watch the trial, citing the traditional federal rules barring a witness from watching a trial until after they testify. Federal prosecutors then appealed to the Ninth Circuit, asking it to force the lower court to allow the victims/witnesses to watch the whole trial.

In a 7-page decision, handed down on July 7, the Ninth U.S. Circuit Court of Appeals found "Congress created just such an exception for crime victims when it enacted the [Crime Victims' Rights Act] and gave crime victims '[t]he right not to be excluded from any . . . public court proceeding.' 18 U.S.C. § 3771(a)(3)."

A family victim does not have a hard-and-fast right to attend the trial at the cost of the defendants rights, the three-judge panel noted, but a victim/witness can only be excluded if there is "clear and convincing" evidence that their testimony would change by observing the entire trial.

The appellate court said the lower court judge had to at least hold a hearing to determine whether the crime victims' testimony would substantially change if they were in the courtroom prior to testifying. "A mere possibility that a victim-witness may alter his or her testimony as a result of hearing others testify is therefore insufficient to justify excluding him or her from trial," the unsigned opinion said. "Rather, a district court must find by clear and convincing evidence that it is highly likely, not merely possible, that the victim-witness will alter his or her testimony."

The Ninth Circuit granted the prosecution's petition in part, ordering the lower court to decide whether the victims/witnesses testimony would be "materially altered" if they were allowed to watch the trial in its entirety.

Four days after the Ninth Circuit's opinion was handed down, KVML reported that jury selection would finally be starting, with opening arguments planned for sometime around Labor Day.

Union reps can accompany Sago mine inspectors

Union representatives should be allowed to accompany investigators exploring the damaged Sago mine, even though the Sago miners did not belong to a union, a 4th U.S. Circuit Court of Appeals decision recently held.

"The question in this case is not about mine safety or whether an investigation of the Sago Mine explosion should take place, or even whether the mine operator and the miners can have representatives present during the investigation," the court said. "Rather, the issue reduces essentially to a matter of protocol, centering on how the interests of the mine operator and the miners are to be represented during an investigation of an explosion."

In the 21-page decision, issued June 28, a three-judge panel ruled that because the surviving miners designated members of the United Mine Workers of America as their representatives, those union officials must be allowed to accompany the mine owner's staff during inspection of the mine.

The court noted in its conclusion that although the parties are arguing over procedural details, both sides are trying to hedge their bets in anticipation of future litigation. "At this point, the driving currents of this appeal relate more to the parties’ collateral and future concerns about the investigation than the investigation itself. The mine operator worries that the UMWA will use its role as a miners’ representative to advance its created purpose of organizing miners, and the Mine Safety Administration and UMWA worry that Wolf Run will retaliate against two miners who have designated the UMWA to represent their interests during the investigation. In the absence of direct evidence to support these concerns at this point, however, they remain only speculative."

Wolf Run Mining Company operates the Sago Mine in Upshur County, West Virginia. After the December explosion that killed 12 men and critically injured another, Wolf Run, the Mine Safety and Health Administration, and the United Mine Workers union clashed about how the investigation should move forward.

Federal law allows both the company's representatives and union representatives to tag along in any investigation conducted by the Secretary of Labor, which oversees the Mine Safety and Health Administration. 92 of the 97 Sago Miners picked co-workers to be their representative, but 2 miners asked that the UMWA represent them.

When those union reps showed up on the day the investigation began, Wolf Run refused to allow them onto the premises. The Secretary of Labor, which oversees the Mine Health and Safety Administration, sought a preliminary injunction in West Virginia district court. The lower court judge granted it, and the company appealed.

Wolf Run argued that the Mine Act and federal labor laws, together, prohibit a union from representing workers when an attempt at unionizing has failed in the past, and that the union needs a majority of the workers to agree to let the union represent them.

But the Fourth Circuit disagreed.

"[T]hese are arguments that should be advanced to Congress to modify the Mine Act and the regulations promulgated under it. As now written, the Act does not, in any way, restrict who may serve as a miners’ representative, and the regulations under the statute define "miners’ representative" as "any person or organization which represents two or more miners." 30 C.F.R. § 40.1 (emphasis added). Thus, it appears that while an organization may exist to represent miners for collective bargaining, nothing on the face of the Mine Act or its regulations bars such an organization from being designated as a miners’ representative for mine inspections and investigations when at least two miners make that designation."

Greetings and Salutations

Hello and welcome to Law Story. This is a place to find all those weird little stories that are born, shaped, and resolved by our justice system - and yet somehow don't manage to make it into the newspapers. Although I will attempt to keep this from being overly technical, it will often focus on interesting legal arguments or cases, usually from federal courts around the United States. Regular blogging should begin in the coming days.

Enjoy!