Thursday, December 30, 2010

People v. Martin (Cal. Supreme Ct. - Dec. 30, 2010)

Martin wins in the California Supreme Court!  No, wait.  Martin loses in the California Supreme Court!  Oh.  Martin wins!

It's confusing.  Plus, it's not our favorite Martin (yours truly).  Rather, the defendant here is Louis Martin.  He pled guilty to resisting a police officer and, in return, got a dismissal of a domestic violence charge.  But the trial court imposed probation conditions related to the dismissed d.v. charge.  Martin appealed, claiming this violated the plea bargain.

The California Supreme Court initially agreed with Martin.  Holding that even in the probation context -- where trial courts ordinarily have broad discretion -- a trial court can't impose probation conditions that arise out of charges dismissed pursuant to a plea agreement unless the dismissed charge has a transactional relationship to the charge to which the defendant pled guilty.  So Martin wins on this point.

But he also loses.  Because, in this particular case, when the trial court said it was going to impose the domestic violence conditions, defendant objected, to which the trial court essentially said:  "Fine.  Then I'm going to reject the plea bargain."  At which point the defendant relented, and said he still wanted the plea and was willing to accept the conditions.

Well then.  Martin loses.  The trial court had the power to reject the plea.  You accepted the conditions, thereby waiving your right to object.

But, in a larger sense, Martin still wins.  Just not this Martin.  I'm talking now about the trial judge.  Judge John Martin.  Coincidentally enough.

Wednesday, December 29, 2010

Olsen v. Harbison (Cal. Ct. App. - Dec. 28, 2010)

I wish this one had remained unpublished.  Or, better yet, had been decided the other way.

It's not that Justice Hull necessarily analyzes precedent inaccurately.  Mind you, the cases don't require a decision one way or the other, so it's really up to the court.

But the Court of Appeal holds that when Lawyers A and B jointly represent a client agree on a fee-split (here, in a typical referral situation), and comply with the formalities of getting valid client consent, A can't get his agreed-upon fees from B -- on any basis -- as long as Client fires A and stays with B.

This is incredibly bad policy, and I think the wrong rule to adopt.

Justice Hull concludes -- and precedent is clear -- that if A and B agree upon a fee split and don't get the required consent, A can sue B in quantum merit for the work.  The California Supreme Court has held as much.  But according to the Court of Appeal, if the lawyers actually comply with their ethical duties and get the client's consent, A is suddenly out of luck:  now he can't sue B.  This creates exactly the opposite incentive from what we want.  It doesn't work for me.

Justice Hull also leaves open the possibility of A suing the client.  But why should we want that?  It's B who refused to give the agreed-upon money to A, not the client.  Why bring the client into it?  Plus, the client has a right to fire whoever she wants.  It isn't obvious to me that the client has done anything wrong -- and hence A might be totally out of luck and unable to sue anyone, which is clearly the wrong result -- and even if she has, it seems to me that the principal (or at least partial) wrongdoer is B.

B got brought into the case by A.  B agreed that A would get 40%.  Then B shoves A out of the picture by having the client fire A and gets to keep 100%?  That's wrong.  It's inequitable.  It shouldn't be the result.

Look, one can have various takes on California's referral rules.  I could easily see tightening them up.  But given what our rules are, once lawyers comply with them, they shouldn't be screwed.  They especially should not be worse off for complying with them -- e.g., by getting client consent -- than had they simply ingored them.

So I was sad to see this result.  Which is also a stark warning to all you co-counsel out there.

Watch out for your colleagues stabbling you in the back.  'Cause the Court of Appeal is fine with it.

Rezner v. Bayerische Hypo-Und Vereinsbank (9th Cir. - Dec. 28, 2010)

It's hard to know who to root for it this one.

Do you root for the plainitiff, John Rezner?  He's a rich co-founder of Yahoo! (who created Geocities) who didn't have enough money already, so he decided to enter into a tax scam with fake transactions to diminish the portion going to the United States.  Sounds pretty sympathetic.

Do you root for the defendants, Bayerische Hypo-Und Vereinsbank AG and HVB Structured Finance, Inc.?  They've both got pretty cool names, and they made up the tax scams, recruited rich investors (like Rezner), and pocketed tons of fees -- skimming just a small part of the millions ripped off from the government.  I'm totally sympathetic to them as well.

Tough to figure out who to root for when the one sues the others for RICO violations for inducing him to enter into the tax scam.  Which plaintiff would have been totally happy with except that the IRS caught wind of the scam and disallowed his deductions.

Hold on.  I've figured out who the heroes are.  They're the lawyers at Sidley Austin and LeBoeuf Lamb.  They're the one's who blew the whistle on the scam, ignoring their self-interest and doing the right thing.

Oh.  Wait a minute.  They didn't blow the whistle.  No, they provided tax and other legal advice claiming that the whole thing was legitimate -- and pocketed (like everyone else) healthy fees for doing so.

The only people or entity that I really like in this whole thing is . . . the IRS.  Which has got to make you wonder.

At least the good guys eventually got their due.  Referring, of course, to the taxpayers.  Oh yeah.  And the attorneys at Howard Rice and Gibson Dunn.  Who represented the parties on appeal.  For, obviously, yet another boatload of fees.

Merry Christmas!

Tuesday, December 28, 2010

In Re Murguia (9th Cir. - Dec. 24, 2010)

Let's ring in the holiday with a welcome to the newest member of the Ninth Circuit:  Judge Mary Murguia, who was confirmed last week.  Welcome.

I don't know if anyone else actually noticed (as no one I've read has ever mentioned this fact), but by my calculation, we're not just welcoming the newest member.  At least if things go as I'd anticipate, we may also be welcoming the future Chief Judge of the Ninth Circuit.  Assuming that Chief Judge Kozinski stays on until his term expires 2014 (as I have every reason to anticipate he shall), then it'll be Sid Thomas' turn as Chief.  Since Judge Thomas will be a spry 61 at the time, he can serve all seven years if he'd like.  Which, if it happens, will take us to 2021.  At which point the judge with the highest seniority who's not yet 65 will be . . . Judge Murguia.

Now, Goodwin Liu was nominated first, and would have taken this spot had he been confirmed first, but we all know what's transpired on that front.  So one consequence of Liu's stalled nomination is that Murguia gets the nod as Chief.

This assumes, of course, that Judge Thomas' term runs its course.  Maybe he goes senior.  Or gets elevated.  Or feels like handing it off early.  If anything like that happens, depending on the timing, lots of people are in the running for the next Chief.

But don't be surprised if the newest, and youngest, member of the Ninth Circuit eventually moves from the extreme side of the en banc panel seating chart to occupy that center chair.  And, unless procedures change, to be on every en banc panel.

So welcome, Judge Murguia.  As they say:  Your future's so bright, you ought to wear shades.

Thursday, December 23, 2010

U.S. v. Newhoff (9th Cir. - Dec. 16, 2010)

Judges don't have to be unnecessarily harsh.  Or even harsh at all.  Here's a case in point.  In which Judge Kleinfeld says:

"As for whether the error of reading back Officer Cochran’s testimony without an admonition was plain, we conclude that it was. We need not explore the reasons why, because the district judge expressly decided that he should give the admonition against undue emphasis. His exercise of discretion to give the admonition was sound. The only explanation we can see on this record for not giving the admonition was that the judge forgot. That is an easy thing to do in a trial. And it is a reason why judges do, and this judge did, ask counsel for objections. They are called “counsel,” in part, because they counsel the court. It is incumbent on defense counsel to protect his client and the court from judicial error, including forgetting something, and incumbent on the prosecutor to protect the court from error, even where the error might, at least before appeal and possible reversal, benefit the prosecution. The only explanation for why both attorneys said they had no objection to failure to give the admonition is that they too forgot, again an easy thing to do in a trial. But error it was."

Pretty nice way of saying it.  Guess it's the holiday spirit, eh?

Tuesday, December 21, 2010

People v. Puentes (Cal. Ct. App. - Dec. 20, 2010)

I'm not going to claim that I totally understand California's vindictive prosecution jurisprudence.  I know a little bit about the U.S. Supreme Court's precedent in the area, which I generally find pretty lame.  But when it comes to California, well, I am quite confident that there are lots and lots of people who know lots more about it than I do.  Lots and lots and lots.

But let me reason from first principles.

When a prosecutor first files a misdemeanor charge against someone -- on the theory that's the right charge -- and then, after an appeal (or an acquittal), files a felony charge, well, that seems vindictive to me.  Can't do that.  We don't want to have prosecutors punish people for exercising their rights.

(Except, of course, for their right to go to trial.  We punish people for that all the time.  Plea bargaining wouldn't work otherwise.  But that's a whole other story.)

So I definitely understand why we don't allow vindictive charges, and how that works in a classic example like the one above.

But let's take this case.  There, the prosecutor charges the defendant with a felony (statutory rape) as well as a misdemeanor (contributing to the delinquency of a minor).  At the first trial, the jury hangs on both counts.  So the prosecutor retries both charges.  Clearly not a problem there.  At the second trial, the jury hangs on the felony but convicts on the misdemeanor.  Defendant is then sentenced pretty heavily on the misdemeanor count -- a year in prison (the maximum) and registration as a sex offender.  Having obtained that sentence, the prosecution elects not to retry the felony count, and dismisses it.  Fair enough.

But thereafter, the Court of Appeal reverses the misdemeanor conviction, and on remand, the trial court dismisses it for insufficient evidence.  So now there's no misdemeanor.  At which point the prosecutor refiles the felony charge.  The trial court thinks that's okay, but the Court of Appeal reverses.  That's vindictive prosecution, the Court of Appeal holds.  You thought the felony was too much, and so you dismissed it.  You changed your mind only because the defendant was successful.  Can't do that.

Which makes internal sense.  In a way.

But wait a minute.  The reason the prosecutor dismissed the felony was because the dude had already been sentenced to a year in prison and registration as a sex offender.  At that point, this was punishment enough.  Or at least punishment sufficient not to make it worth it to try a third time on the felony charge (with the consequent resource drain) and putting the victim through yet another trial.

But I totally understand the prosecutor's thought process here, and don't think I understand (or at least don't appreciate) why it's not legitimate.  Once the defendant's conviction gets reversed, and he's going to be totally unpunished for his offense, the calculus now radically changes.  It's not that we hate the guy for beating us in the Court of Appeal.  It's just that a third trial wasn't worth it compared to the then-preexisting punishment.  An extra year or two in prison on a felony count wasn't worth a speculative third trial.  But once that sentence goes away, well, at that point, it's totally worth it.  Because otherwise, absent the felony charge, you've got a dude with no record, no requirement to register as a sex offender, and who can potentially do it again to another victim.  That matters, and none of it existed prior to the reversal of the sentence.

To express it mathematically -- not that this necessarily helps anyone except hard-core geeks such as myself -- the first decision only reflects that (PF * DF) - TCF < DF - DM, where PF is the probability of a felony conviction, DF is the deterrent effect of a felony conviction, TCF are the transaction costs of a felony conviction, and DM is the deterrent effect of a misdemeanor conviction.  The fact that this condition exists -- which is why the prosecutor drops the felony charge after the misdemeanor conviction -- doesn't mean that once DM goes away, (PF * DF) - TCF < DF.  You've dropped out the DM.

It'd be one thing if the prosecutor never charged the defendant with a felony -- and instead only charged him with a misdemeanor -- in the first place.  Because that decision reflects that the prosecutor indeed thought that  (PF * DF) - TCF < DF.  So if the dude gets convicted of a misdemeanor, then gets off on appeal, the decision to then file a felony charge is indeed presumptively vindictive, since we already established that a felony charge wasn't worth it.

But if, as here, the guy was charged with a felony initially, and the decision to drop that charge was made only after the guy was found gulity of and given a particular sentence for a misdemeanor, then the fact that marginal deterrent effect of a continued felony charge was not justified in such a setting doesn't mean that the decision to refile that charge when that margin radically changes (i.e., because the existing conviction is reversed) is vindictive.  We're not punishing a guy for beating us.  It simply means that the margin is now different.  Not because we're angry -- after all, we charged him with a felony in the first place.  But rather because, objectively, the consequences are now different than when we made the decision to drop the charges.

So I think I come out the other way on this one.  My gut tells me what what the prosecutor did here was okay.  Indeed, that I -- or any other neutral person -- might have done the exact same thing.  Not for illegitimate reasons.  But for entirely legitimate ones.

Monday, December 20, 2010

People v. Albillar (Cal. Supreme Ct. - Dec. 20, 2010)

Can a rape be committed "for the benefit of" a street gang?  I wouldn't have normally thought so.  Nor do Justices Werdegar and Moreno, who dissent.

But Justice Baxter makes a nonfrivolous argument to the contrary, and persuades the remainder of the California Supreme Court.

It's a tough call.  On the one hand, clearly the conduct here -- both during and after the rape -- was "related" to the defendants' status as gang members.  On the other hand, unless you're going to call any crime collectively committed by gang members as "for the benefit of" the gang" -- so they can giggle and taunt others about it, and feel collectively more brazen about their violations of the law -- it seems a pretty big stretch to say that was transpired here was designed to benefit the gang.

So both the majority and the dissent have a point.  Not an easy case.

Friday, December 17, 2010

Chino Commercial Bank v. Peters (Cal. Ct. App. - Dec. 13, 2010)

Never, ever, ever -- ever -- respond to an e-mail about some purported moneymaking scheme.  Never send money overseas to someone you don't personally know.  Never assume that just because the bank said that a check has cleared that means that it has actually "cleared" in the sense that it's not forged and the bank won't come back to you for the money.  Never do any of the above, much less all of them.

Ignore the above at your half-million dollar peril.

Good advice heading into the weekend, I figure.  Going to need some savings to pay those credit card bills in January.

Thursday, December 16, 2010

Balsam v. Tucows, Inc. (9th Cir. - Dec. 16, 2010)

I guess if you're going to lose your million-dollar-plus default judgment, it's at least nice that Judge McKeown lets you down easily, saying:

"There is no simple remedy for the vast number of unsolicited emails, popularly known as 'spam,' that fill our electronic inboxes daily. Even though federal and state legislatures have adopted various laws to combat this problem, 'spammers' continue to find new ways to advertise. Daniel Balsam, a victim of spam, seeks an alternative method of enforcement by bringing claims against the registrar of a domain site that bombarded him with more than 1,000 unwanted emails advertising a pornographic website. He claims that the registrar utilizes a system to hide the identity of spammers, making it difficult to identify the spammer. We consider Balsam’s claim that he is an intended third-party beneficiary of an agreement between the registrar and the Internet Corporation for Assigned Names and Numbers(“ICANN”). Under Balsam’s theory, the agreement’s provisions on wrongful use of domain names inure to his benefit. Although his approach is novel and creative, it cannot survive a motion to dismiss."

So no prize for you, contestant.  But we do have some nice parting gifts.

Overhill Farms v. Lopez (Cal. Ct. App. - Dec. 14, 2010)

Assume that I call you a racist.  Is that defamatory?  Remember:  Truth is a defense.

Let's be more concrete.  Assume you run a company that employs a lot of low-skilled laborers.  Assume further that the IRS contacts you in connection with an audit and tells you that 231 of your current employees have invalid social security numbers -- which is common for undocumented/illegal immigrants -- and that you could be penalized a substantial amount for employing such individuals. You then tell each of these employees that they better give you a right social security number within 30 days.  Only one does so, with several others admitting that they were in the country illegally.  For everyone who can't (or doesn't) give you a valid social security number, you send 'em another letter giving them another 30 days, and when they can't (or don't) provide the required information, you fire them.

The fired employees, and other activists, then take to the streets.  Calling your company "racist" for its acts, which disproportionally affected -- as you might imagine would be in the case -- Hispanics.  The company then sues for defamation.  Defendants file an anti-SLAPP motion -- as, again, you might expect -- arguing that their speech is protected and that their assertions are opinion and are not demonstrably false.

Who's right?

On the one hand, I'm pretty convinced that the company didn't fire the employees on account of their race.  Or gender, or anything else that's protected.  They fired them because they couldn't provide valid social security numbers, and were probably undocumented/illegal immigrants.  Either way, they were someone who the company could get in trouble for employing.  So I'm confident that any inference that the company fired people on account of their race is demonstrably false.  As indeed the employer would undeniably prove, even on summary judgment, were any of the fired employees to sue for race discrimination.

On the other hand, what does it mean to be a "racist," or to be called such during a labor dispute?  After all, your act did indeed have a disproportionate effect on a particular racial group.  Maybe what we're saying is that you engaged in a "racist" act because it had such an effect.  Or, more accurately, that you were insufficiently sensitive to such consequences, and were all-too-willing to engage in such an activity -- that you should (and would) have borne the risk of IRS scrutiny if the affected workers had been of another race.  Or maybe calling someone a "racist" is simply an inherently subjective assessment, and not "demonstrably false" for purposes of defamation law.

So see who you think's right in this one.  I've slightly changed (and added to) each side's arguments.  But you've got both a majority opinion and a dissent.  Who comes out the winner?

P.S. - I can't believe the Court of Appeal didn't initially publish this one.  It not only meets the standards for publication, but is also thought-provoking.  Good call to publish it.  Albeit belatedly.

Tuesday, December 14, 2010

County of Los Angeles v. LA County Employee Relations Comm. (Cal. Ct. App. - Dec. 15, 2010)

I was on a plane and out-and-about nearly all day, but when I returned to the intertube this evening, I saw this case.  Which made me feel just fine, and seems to strike an entirely appropriate balance.

Some LA County employees are represented by the SIEU, but don't have to pay certain portions of union dues if they don't want to, even though the union is required to represent them.  Fair enough.  The SIEU wants contact information for these quasi-members so it can properly represent their interests.  Fair enough as well.  But L.A. County doesn't feel like giving it out, reasoning that some of these members might not want the union to have this information.  Fair enough as well.

So the Court of Appeal holds that, as a matter of state constitutional law, the members have a protected privacy right in their information, and that before disclosure, they should receive notice and an opportunity to opt out.  That seems like a pretty fine balance.  Especially, in my view, since these individuals get an annual Hudson notice anyway, and it's easy to supplement that information with notice that the union wants their contact information and an opportunity to object if they don't want that to happen.  Seems reasonable.

Two quick points.  First, here's an example of a state court using state constitutional provisions that are more expansive than federal law.  I like that.  It doesn't happen much.  Or as often as it should.

Second, in this particular case, I couldn't help wondering about preemption.  The Court of Appeal doesn't talk about it, so I assume that federal labor law doesn't apply (even though at least one of the lower tribunals relied upon federal law in ordering disclosure).  At least for those uneducated readers such as myself, my curiosity would have been satiated by a single footnote or something reminding me why state law wasn't preempted.  Maybe it was there and I missed it.  Entirely possible.  But it was a lingering question for me.

But, all in all, I thought this one was pretty fair and balanced.  Like Fox News.

(Just kidding about the reference.  Obviously.)

Monday, December 13, 2010

U.S. v. Goyal (9th Cir. - Dec. 10, 2010)

Look, Alex, I'm with you.  Seriously.  I too don't like it when the government files criminal charges against someone who's not guilty of anything.  It's an abuse (and waste) of government power.  It destroys people's lives.  It's normatively wrong.

So when you write a long concurrence -- with flourish and outrage -- about the impropriety of the government doing so, please don't think I'm not sympathetic.  Because I am.  Truly.

But is this really the best case in which to get up on that horse?

I'll take the panel's word that the evidence against the defendant was insufficient because the government didn't introduce enough  proof that the altered revenue in this criminal securities case was material.  I'm not at all sure about that.  The heightened revenue consisted of huge deals, worth millions of dollars -- almost a full quarter of the company's annual revenue -- and this is no small company:  it's McAfee (now known at Network Associates).  If you're frontloading fake revenue in that amount, I think it's at least plausible that that's material.

But let's assume you're right; and, again, I think that's plausible.  Is this really the best case to write a lengthy concurrence that bemoans the injustice of erroneously charging a criminal defendant, the harm to someone that results from criminal charges, and the alleged adequacy of alternative civil suits?

I mean, let's face the facts.  Yes, the evidence might not have been sufficient, but it sounds like that's only because the AUSA thought that either the stipulation or the undisputed size of the transactions would be sufficient.  So Goyal's perhaps "innocent" not primarily because of what he did, but rather from an erroneous tactical decision by the government.  Hardly the best case in which to raise the banner of actual innocence and government overreaching.

But let's ignore all that.  Judge Kozinski's concurrence cries for Goyal, and says:  "Although we now vindicate Mr. Goyal, much damage has been done. One can only hope that he and his family will recover from the ordeal."

I feel extremely badly for people unjustly convicted.  But in the pantheon of those people -- of whom there are no shortage -- Mr. Goyal is pretty low on mylist.  For one thing, he did something wrong.  Maybe it wasn't criminal, but it was wrong.  He manipulated revenue by doing deceptive (and essentially fake) quarter-end deals.  He did it deliberately:  to deceive others into buying (or holding) his company's stock.  He did it for personal gain:  he benefitted reputationally and through his stock options, and to a significant degree.  His conduct was "illegal" in that it was, at a minimum, a civil tort.  As well as morally inexcusable.  It distorted the market and harmed both the company and its investors.  The fact that lots of companies do the same thing -- and I assure you they do -- only makes it worse, not better.  These shenanigans are hardly morally praiseworthy.  They're bad things.

So this is not, for example, a woman who's unjustly convicted of shaking her baby to death and spends a decade in prison as a result.  For cases like that, I'd definitely write (or, better yet, sign onto) Judge Kozinski's powerful concurrence.  But here's a guy who does something demonstrably wrong and at least arguably gets off on a technicality due to a prosecutor's mistake.  That's really the best case for something like this?

Plus, is this really the best case for Judge Kozinski to argue that we should leave stuff like this to civil courts?  Sure, they'll be a lawsuit.  Several.  And you know what will happen?  They'll be settled.  For pennies on the dollar.  With the money coming from an insurance company, most likely.  The actual wrongdoer will pay not a cent.  Boy, that really deters misconduct.  I can't see at all why anyone would maybe want to add some potential criminal responsibility as well.

So it's not that I didn't like Judge Kozinski's concurrence.  I did.  A lot.  But I'd have written it in an entirely different case.  And, at best, would have referred to that concurrence in this case obliquely: e.g., by saying:  "I have previously expressed my distaste for criminal charges brought against innocent defendants.  See [Citation].  I reiterate those comments here."  'Cause I've seen far, far worse cases than this one.  So has Judge Kozinski.  And given the facts of this case, and the underlying conduct, to me, the presentation of these arguments here detracts, rather than adds, to the power of what Judge Kozinski says.

Which is too bad.  'Cause there's really great stuff here.  Which I'd be praising effusively, and without reservation, if said in a different type of case.

In short:  I'd have picked a different horse.

Friday, December 10, 2010

Pollard v. The GEO Group (9th Cir. - Dec. 10, 2010)

Judge Bea understands how difficult it is sometimes to come up with the first paragraph of a petition for certiorari.  So he helps the defendants through their anticipated writer's block by writing it for them in this dissent from the denial of a rehearing en banc.  The first paragraph of which reads:

"The panel majority—over a vigorous dissent by Chief Judge Restani of the Court of International Trade—extends and grants a Bivens claim to a prisoner against private company prison guards who are unprotected by notions of qualified immunity, available only to government employees.  It does so for personal injury claims between California litigants, for acts and omissions which took place in California, and for which California tort law provides adequate remedies through compensatory and punitive damages. In doing so, the panel majority frankly admits its opinion creates an irreconcilable conflict with the decisions of two federal circuits, the Fourth and Eleventh. Further, it disregards the Supreme Court’s narrowing instructions on Bivens, which have limited recognition of new Bivens actions to those situations where, for one reason or another, damages were unavailable under both state and federal law. [S]uch an unprecedented opinion demands further review. . . ."

Don't be surprised if you see that same first paragraph as the first paragraph of defendant's petition for certiorari.  It'd be mine.

Thursday, December 09, 2010

U.S. v. Johnson (9th Cir. - Nov. 29, 2010)

I just stepped off a plane at SFO, am giving a talk today (alongside Gerald Uelmen and Justice Grodin) on the legacy of Chief Justice George (feel free to check it out), and am flying back this afternoon, so I won't have the ability to read opinions today.  Sadly.

But I can still talk about opinions from a little bit ago that struck my fancy.  For example, in an otherwise nonremarkable opinion, the Ninth Circuit recites the following plea colloquy in a case in which the deal was that defendant would plea guilty and waive his right to appeal.  Discourse that anyone who's spent some time in a federal district court will immediately recognize as something that happens all the time:

"THE COURT: Sir, do you understand that by entering into this agreement and pleading guilty you’ve agreed to give up your right to appeal any sentence you receive in accordance with the terms of this agreement?
THE COURT: Did you discuss waiving your right to appeal with your lawyer?
THE COURT: And based on that conversation, having considered the matter, do you wish to give up your right to appeal on the terms and conditions set forth in the plea agreement?
Oopsies.  Wrong answer.  So do we engage in extensive conversation with the defendant to make sure he really and truly knows what's going on?  Let's see.  Immediately after the "No," here's what happens:
"THE COURT: Okay. Why don’t we try that again. Okay. As part of this plea agreement there are certain conditions that he just recited that you’ve agreed to waive that pertain to your right to appeal. Do you understand that?
THE COURT: Okay. Now, do you still wish to go forward with the plea agreement and agree to waive your right to appeal on the terms and conditions set forth in the plea agreement?

Ah.  The Magical "Yes."  That's what we were looking for.  Glad we got the kabuki play back on track.

Wednesday, December 08, 2010

Stahl v. U.S. (9th Cir. - Nov. 29, 2010)

I'm utterly fascinated by this one.

It's a tax opinion.  So you wouldn't initially think it likely to result even in interest, much less total fascination.  But fascinating it is.

Because it's basically about how the U.S. tax laws treat communists.  In particular, religious communists engaged in capitalism.  Or, more specifically, how we tax (or don't tax) people who eschew private property and live in a religious commune in which all income and expenses are owned and distributed collectively.

I admit that I didn't know much about Hutterite communities before I read the opinion.  But now I do.  They seem pretty similar to other utopian communities like the Oneida colony.  The one at issue here runs a huge (30,000 acre) farm in Washington and has 65 members.  It's incorporated as a religious corporation, all of the members eschew private property, every member works on the farm, and the corporation provides all of the members' food, clothing, medical care, etc.  Your basic communist organization working in a captialist society.

Fair enough.  Everyone gets to organize their private lives how they want.  All we care about is this:  How do we tax 'em?

Well, there's a special provision in the tax code that basically says that since the organization is a nonprofit religious corporation that doesn't pay taxes, income is imputed to the individual members based upon their pro rata share of the corporation's net income.  Makes sense, right?  We don't want such entities to be entirely untaxed, including whatever profits they make.  That'd be unfair, since we tax profits for everyone else.  At least when, as here, they get used to benefit the standard of living of their constituent members.

But here's the problem:  Can the members essentially deduct their living expenses -- food, clothing, etc.?  The corporation paid for these things, after all.  It's a "ordinary" business expense in the sense that that's the basic purpose of the corporation, and as the owner of all the property with the responsibility for paying these things, that's the whole point of the enterprise.  So doesn't that reduce the corporation's "profit" and hence the pro-rata tax liability of the members.

But why should members of these organizations get to deduct such expenses when no one else gets to?  For example, Person A works on a regular non-profit collective farm, gets $30,000 as his pro-rata share of the net profits of this enterprise, and subsequently spends $30,000 on food, shelter, and clothing.  He's taxed on the entire $30,000 he received.  No deduction for food or (unmortgaged) housing.  Should the result change if the enterprise is structured in the way that Hutterite communities are structured?

Every court to have considered the issue thus far has said "No" -- holding that the individual members of such communities don't get to deduct their living expenses.  But the Ninth Circuit holds otherwise, and reverses the grant of summary judgment to the United States.  So it may end up that the members get to deduct their living expenses.

Judge Fernandez's opinion makes some doctrinal sense, and he limits the opinion to discussing the particular "employee" issue on which the district court granted summary judgment.  Though I still have a lingering and somewhat uneasy opinion about the net result.  This from someone who's pretty pro-Utopia.

The one thing that I thought Judge Fernandez might have explored a bit more is the nature of "control," as he concedes that this is a pretty decisive tax factor.  In a broader utopian community, I have little doubt that the corporation "controls" its employees/members, and this control is exercised in an ordinary fashion that's fairly typical and understandable by tax law.

But this particular Hutterite community -- as well as many others -- is somewhat special in a way that might be highly relevant to the control issue; in particular, the fact that all of its 65 members are part of one family.  The Stahl family is the community at issue, and consists of eight brothers, two sisters, their spouses, and their children.  So what the Stahls have basically done is to incorporate their family (and family business) and are using that entity to provide food, shelter, and other living expenses for the family.  Do they get to deduct that stuff?

Now, I have no doubt whatsoever about the sincerity of the Stahl's family's beliefs.  I'm positive that they are true believers, and profoundly respect their decision.  But I can't help but wonder whether the definition of "control" that's normally used in tax law for typical employer/employee relations doesn't get distorted a bit when we're talking about a communal family.  When my mother tells me what to do, and I obey -- either as an adult or a child -- I'm not sure that I'm doing so because I'm an "employee" of hers, or are subject to the same control dynamics and are typically at work in a corporate setting.  It seems qualitiatively different to me.

Moreover, when an organization consists entirely of a single family, I just get nervous -- at least potentially -- about the potential results elsewhere.  Imagine that I truly believe, for example, that my own family, consisting of myself, my spouse, and my four children, should all live communally.  As we in fact do.  With no individual "owning" any particular piece of property, but with me (like John Stahl) as the "President" who's in charge of making decisions about the community.  With input and direction, of course, from my fellow members.

I sincerely believe this.  God wants us to be a family.  Undiluted by individual ownership.  Do I now get to deduct all of our living expenses; food, clothing, shelter, etc.?  If so, I'm definitely going to check out the Bible in more detail this weekend.  With a sympathetic view about anything that God might say about the unity of the family.  With more than casual references, if necessary, to the Koran, Book of Mormon, and anything else that might be helpful.  The end of the tax year is coming up, after all.

I've got additional thoughts on this, and it's a really complicated issue (and not one that's definitively resolved by this particular Ninth Circuit opinion anyway), but this post is already too long.

My short take:  It's clearly a topic worth thinking about.  Maybe even worth someone's time (not mine) to write a law review article about.  It'll definitely get read more than a lot of law review articles about tax.

Tuesday, December 07, 2010

Doe v. Albany USD (Cal. Ct. App. - Nov. 30, 2010)

You've gotta have phys ed.  At least for 20 minutes a day.

That's what the statute says.  That's what the Court of Appeal rightly holds.

The law couldn't be clearer.  Justice Hull writes a direct and cogent opinion.

Some cases are easy.  I don't know how the trial court got this one wrong.

U.S. v. Lopez-Velasquez (9th Cir. - Dec. 7, 2010)

You'd think it was an easy case.

Eduardo Lopez-Velasquez gets deported in 1994 at a group proceeding in which he wasn't advised of the potential availability of discretionary relief from deportation.  He was married to a U.S. citizen at the time, and had two young U.S. citizen children, so it was at least possible that he was eligible for such relief.  Then, in 2006, he gets indicted for illegal reentry after being deported.  The question is whether the prior failure to advise him of his rights meant that the indictment should be quashed.

The answer seems pretty clear.  The district court said:  "Yes."  The case then went up to the Ninth Circuit.  Which also said "Yes."  Without dissent.

So there you have it.  A pretty easy case, huh?

Yep.  Totally.  Mind you, the case gets taken en banc.  But even there, the vote's unanimous.  11-0.

The other way.

It's pretty rare for the en banc panel to be unanimous.  I'm sure that there are other cases in which that's happened when the district court and panel below were unanimously the other way.  But I'm confident it's darn rare.

But we get to see it today.

Monday, December 06, 2010

Goldberg v. Pacific Indemnity Co. (9th Cir. - Dec. 6, 2010)

I'm writing my Civil Procedure exam today.  Or at least I'm supposed to be writing it.  It was due on Friday.  Instead, I'm reading the eight Ninth Circuit opinions that were published today.  Those couple hundred pages have somewhat gotten in the way of my "academic" productivity today.  Not to mention the California Court of Appeal opinions, which continue to roll in.

Fortunately, my various functions somewhat overlap today.  Amongst the various Ninth Circuit opinions was this one.  Which raises a classic Erie question:  Whether a federal court is required to follow Arizona Rule 68 and allow recovery of expert witness fees and double costs when a defendant makes a federal Rule 68 offer, it is rejected, and plaintiff's ultimate recovery is less than the offer.

It's such a classic Erie question that I might be willing to make this fact pattern part of my exam, but the fact that there's an actual opinion out there (and that the essay portion open-book) probably means I won't do so.  Probably.  If I can't get my exam written pretty soon, taking a ready-made hypothetical and retyping it as my exam might start looking pretty good.  The Dark Side.  It's seductive.

The First Circuit held, in an analogous context, that the federal court was required to follow the state rule.  The Ninth Circuit concludes otherwise, holding that Federal Rule of Civil Procedure 68 is sufficiently broad to cover the matter and hence a federal court is not required (or allowed) to follow the state rule.

Were I to give this question as my exam, the Ninth Circuit's opinion would receive an A.  Maybe even an A+ -- though I have to somewhat adjust my grading scale, as the panel had several months to write the opinion, whereas the most my students would have is three hours or so.  To get an A++, the Ninth Circuit might have wanted to write a little bit more about potential conflicts between even plaintiff offers and Rule 68; there is, in my view, a decent argument that federal courts cannot impose post-offer penalties even when plaintiffs make an offer, on the theory that Rule 68 deliberately omits plaintiff offers from coverage and hence involves a policy decision that sufficiently covers the area.  But I admit that's somewhat of a tangent, so I wouldn't give that topic many points.  I'd just be a bit more skeptical about that than the Ninth Circuit's opinion is.

The First Circuit's opinion, by contrast, would receive a D.  It doesn't discuss the Erie question virtually at all.  It's takes a ton of things virtually for granted.  It's simply not good at all.  So, seriously, it'd receive a D if one of my students wrote it as an exam answer.

Which is somewhat ironic.  Since the author of that First Circuit opinion was a former professor of mine -- to whom I once turned in a exam.  A guy you may have heard of.  Whose last name is Breyer.

Oh, Stephen.  You know you can do better work than this.  The Ninth Circuit crushed you.  And we grade on a curve.

Tijani v. Holder (9th Cir. - Dec. 6, 2010)

Here's a neat little puzzle.

It's a three-judge panel, and all of its members are Ninth Circuit judges.  An opinion gets written, and the inevitable post-opinion petitions are filed.  One judge votes to grant the petition for panel rehearing.  Another judge would vote to grant the petition for rehearing en banc.

But the petition for rehearing en banc is denied, with no judge requesting a vote.  How does that happen?

Here's one way.  Check out the panel composition, and how they vote.  Pretty neat.

U.S. v. Bush (9th Cir. - Dec. 3, 2010)

It was true in the twentieth century.  It's true in the twenty-first.  Barring an economic castastophe, it's always going to be true.  It nonetheless bears repeating, if only because so many people fail to understand it.  So I'll do my public service message for the day:

When someone promises you a 25% return on your investment every month, it's a scam.  They're lying.  It's not true.  Run -- don't walk -- from the guy.  (It's almost invariable a dude.)

Here's the latest Ponzi scheme to reach the Ninth Circuit.  In which (1) the guy gets sentenced to 30 years, (2) his convictions get affirmed, and (3) I couldn't be happier.

Friday, December 03, 2010

Javhlan v. Holder (9th Cir. - Dec. 3, 2010)

It's "Dissent Friday" today on the Ninth Circuit.  A day in which each of the last three published opinions involves a 2-1 decision.  Each with a dissent by the most conservative member of the panel.

Judge Ikuta dissents in this case, an immigration opinion (asylum) authored by Judge Pregerson and joined by Judge Dorothy Nelson.  The second case is the one I mentioned earlier today -- Peterson -- in which Judge Randy Smith dissents from an opinion authored by Judge Betty Fletcher and joined by Judge Thomas.  The third is Milovanovic -- the latest installment in the avalanche of recent "honest services" cases -- in which Judge Fernandez dissents to an opinion by Judge Kleinfeld joined by Judge Clifton.

Feel the love.

Peterson v. Iran (9th Cir. - Dec. 3, 2010)

We just went over affirmative defenses in my Civil Procedure I class.  What counts as one, as well as what the consequences are of not raising it.

Think it matters?  It does here.  To the tune of over two billion dollars.

This is admittedly a somewhat unusual case, and involves plaintiffs who sued Iran -- successfully -- for sponsoring the 1983 bombing of the U.S. Marine barracks in Beruit.  Plaintiffs got their $2.6 billion-plus judgment by default and then moved to enforce it -- no easy task -- by attempting to seize Iran's right to obtain payments from a French shipping company that does business in Iran.

The district court raised the issue of Iran's sovereign immunity sua sponte and denied the requested seizure.  The Ninth Circuit, in an opinion by Judge Betty Fletcher, affirms.  Judge Randy Smith dissents, arguing that sovereign immunity is an affirmative defense that Iran waived by failing to defend the action.

It's a good discussion on both sides.  The Ninth Circuit joins the Fifth Circuit in so holding, but the Seventh Circuit has a pending appeal that raises the same issue.  Particularly given the stakes involved, Judge Smith's dissent gives plaintiffs a tolerable (but by no means certain) shot at certiorari.  Though it's possible that the Supreme Court would wait until the Seventh Circuit decides to see if there's a circuit split.  Plus may not want to get into troubling foreign affairs issues like this one unless it absolutely needs to.

But for now, plaintiffs are out of luck.  Sorry about that.  Congratulations -- I guess -- to Iran.  Not the most sympathetic defendant, but it wins this one.

Thursday, December 02, 2010

People v. Favor (Cal. Ct. App. - Dec. 2, 2010)

Here's a guy I'm glad will be off the streets.

Golin v. Allenby (Cal. Ct. App. - Nov. 30, 2010)

This opinon seems entirely correct.  As far as it goes.

Jeffrey Golin and Elise Golin are surely vexatious litigants.  Of that there can be little doubt.  But defendants didn't show that their claims had no reasonable probability of success.  So the trial court's imposition of a half-million dollar bond requirement gets reversed.  Makes sense.

But I wonder if the Court of Appeal might have done a little more.  For example, among their other frivolous acts, the Court of Appeal notes that it's pretty clear that the Golins forged various proofs of service.  What about referring the matter to the District Attorney?  Moreover, the Golins also apparently ghost-wrote a large number of their attorney's filings in the trial court, and the Court of Appeal found that the attorney had little to no control over what was failed.  How about referring that attorney to the relevant Bar?

None of this is required, of course.  But I'm left with the impression that, to a degree, the Golins have "gotten away" with making the case a nightmare for the defendants below.  Which don't seem right.

Wednesday, December 01, 2010

People v. Smith (Cal. Ct. App. - Nov. 29, 2010)

Police officers perform a valuable and socially beneficial function.  They're not the enemy.  We should help them when we can.
We should even be willing to offer our assistance when it comes at some cost to us.  For example, were a police officer to come to my home and ask for my help -- for a glass of water, to make a phone call, to let him check out my back yard for a suspected burglar, etc. -- my very strong instinct would be to say "Yes."  That's what being a member of a society is all about.

Cases like this one, however, push me the other way.  Sending, in my view, exactly the wrong message.

There, police officers were doing probation/parole checks.  They thought that a particicular parolee lived at a certain house.  So they went there and knocked on the door.  No problem.

It's early, mind you -- 6:00 a.m. -- and before knocking, they peek through the window of the apartment and see a woman sleeping on a couch.  She wakes up when the police talk to her through the window, at which point the police say they're there to do a compliance check on a parolee (Mr. Jones).  The woman says that there's no Mr. Jones there, and that no one by that name lives there.   The police officers say that they'd like to come in anyway to check.  At which point the woman -- consistent with my admonition that we should try to help the police when we can -- agrees, saying: "Hold on.  Let me get dressed."

She then (understandably) goes into a back room, presumably to get dressed, but the officers also hear her doing something quickly in the kitchen and then hear her start the dryer, which starts "clunking" around like it has some metal in it.  She then returns and opens the door and steps aside.  The officers again say that they are there to check for Mr. Jones, telling her "Look, we're just here to check, [to] make sure [Mr. Jones] isn't here."

She again says:  "You can check, but [Mr. Jones is] not here. . . . Just me and my kids and my brother."  A statement that, again, is fine.  Go ahead and check.  It invades my privacy a bit.  But I'm happy to help.

The police, however, are suspicious.  Not of Mr. Jones, who's indeed not there.  But of Ms. Smith.  She put something in the dryer, probably.  And there's a marijuana smell in the apartment as well.  Which may explain why Ms. Smith was crashed on the couch.

So the police "check" for Mr. Jones.  Where do they "check" for him?  In the dryer.  Which they open up outside of the sight of Ms. Smith.  And which, predictably, contains some marijuana.  At which point they arrest Ms. Smith.

Ms. Smith says that she only consented to the police looking for Mr. Jones, and that since he clearly was not in the spinning dryer, that search violated the Fourth Amendment.  The police, by contrast, say that the only reason they opened the dryer was because it was "loud" (and they wanted to turn it off) and, in any event, it was legitimate to look inside for weapons or anything else that might be used against them.

Which is a total crock, of course.  They looked inside (rather than just opening the door a crack and shutting it to turn of the dryer) to see if anything illegal was inside.  And they had no reason whatsoever to think that a person who had just invited them inside her home was planning on killing them with a weapon that she hid in her dryer -- a dryer in an entirely different room than she was.

Nonetheless, the Court of Appeal holds that it's a legitimate search.  No Fourth Amendment violation.

Which, in turn, makes me much more reluctant to help.  You've got a citizen here who would have been entirely within her rights to say "Mr. Jones doesn't live here.  I don't give consent.  Go to hell."  But instead tries to accommodate the police.  And, for her help, ends up getting burned.  By officers who expand her consent to start searching for evidence against her.  And by a judiciary that says that's entirely okay.

Which perhaps doctrine allows.  Indeed, at this point, given the Court of Appeal's holding, undeniably does.

But it makes me that much less likely to help out officers.  This case will unquestionably enter my mind if the police ever come to my home and ask to enter.  Before, I'd have clearly let them in.  After, I'm not at all so sure.  Because if letting them in means they can -- and might well -- rummage through my dryer, drawers, etc., looking for evidence against me or even just invading my privacy, well, that's something very different.  Personally, it makes it much less likely for me to say "Yes."  Which is a bad thing.  But a direct consequence of opinions like this one.