People v. Lee (Cal. Ct. App. - Oct. 31, 2017)

Pao Lee is driving a vehicle that's obviously stolen; its steering wheel is cracked open and a different type of key has been jammed into the ignition.  It's an old, 90's style Honda -- the most commonly stolen vehicle in Sacramento (in part because it's just so darn easy to steal).

He's convicted of four wobblers (i.e., misdemeanor/felonies):  unlawfully driving or taking a vehicle (Veh. Code, § 10851, subd. (a); count 1), receiving a stolen vehicle (§ 496d, subd. (a); count 2), and carrying a concealed dirk or dagger (§ 21310; counts 3 & 4).  It's one of the easiest captures (as well as convictions) in the history of mankind:

"On August 18, 2013, Michael A., the owner of a 1999 red Honda Civic, got up in the morning and discovered his car was missing from the driveway. He called the police immediately.

On August 24, 2013, around midnight, Fresno Police Officer Vincent Zavala was driving behind a 1999 red Honda Civic driven by defendant. Zavala checked the license plate number and learned the car was stolen. He requested backup, then conducted a traffic stop. He told defendant to remove the keys and drop them outside the door. He ordered defendant out of the car and arrested him. When Zavala searched defendant, he found a sheathed, fixed-blade knife in his right rear pocket and another knife in his right front pocket. When Zavala searched the car, he noticed the center console of the dashboard had been cracked and pulled away, and the stereo had been forcibly removed. The key chain held a Toyota car key and two nonvehicle keys, but no Honda key. Zavala tried all the keys in the Honda ignition. Only the Toyota key worked, but it did not fit easily. It required force and inserted only halfway.

Zavala read defendant his Miranda3 rights and defendant agreed to talk. He said the car belonged to him; his cousin had given it to him for free. Zavala told him he thought that was weird. Defendant said he had had the car for three weeks. Zavala told him that was not possible because it had been reported stolen only about seven days earlier. Defendant said he got the key from his cousin and was using it to drive the car. When Zavala told him it was a Toyota key that only inserted halfway, defendant said he did not know much about cars. He said he was homeless."

Uh, yeah.  You're gonna get convicted on that one.

What's the sentence?

25 years to life.

Isayeva v. Barry (9th Cir. - Oct. 2, 2017)

The district court denied summary judgment, and when the defendants filed an appeal claiming that they were entitled to qualified immunity, the district court said that this appeal was "frivolous."

The Ninth Circuit panel unanimously agreed with the defendant that the appeal was not only not frivolous, but was affirmatively meritorious.  Finding that the defendant was entitled to qualified immunity as a matter of law.

Proof positive that you shouldn't always believe whatever the district court says.

Baxter v. Genworth North America (Cal. Ct. App. - Oct. 26, 2017)

The Ninth Circuit published . . . nothing today.  The California Supreme Court and the Court of Appeal published . . . nothing as well.

Gotta love those Fridays.

So I'll reach back to yesterday with a brief reminder that pigs get fat whereas hogs get slaughtered.

Which, in the arbitration context, translates into the principle that arbitration clauses are great when you can essentially compel your employees into giving up their rights to sue you, but if you get too greedy, and make the arbitration clause even more onerous than normal, you get holdings like this one, and the entire arbitration provision gets invalidated.  Welcome to court.

So be a pig, not a hog.

People v. Harrison (Cal. Ct. App. - Oct. 26, 2017)

It's so nice when the Court of Appeal includes an introduction that's simultaneously concise and comprehensive.  It makes reading the remainder of the opinion so easy.

As in today's opinion:

"The Brady rule (Brady v. Maryland (1963) 373 U.S. 83 (Brady)) is over 50 years old. It is alive, well, and as we explain, it is self executing. There need be no motion, request, or objection to trigger disclosure. The prosecution has a sua sponte duty to provide Brady information."

Couldn't be clearer.

Particularly in this context.  The police officer testified that defendant waived his Miranda rights before admitting that he used a firearm to threaten the victim.  But there's a dashcam video that establishes the opposite.  A video that the prosecution didn't provide to the defendant.

The Attorney General says that's not error because the defendant never asked for the video, and hence waived the error.  No dice.  "The Attorney General cites no authority, and we have found none, that Brady error is waived by defendant’s failure to object."

Concise and comprehensive again.

U.S. v. Wallen (9th Cir. - Oct. 25, 2017)

We do not get many fact patterns like this one down here in San Diego:

"In the spring of 2014, local residents reported the presence of three grizzly bear cubs to Tim Manley, a grizzly bear management specialist with Montana Fish, Wildlife & Parks (FWP). These bears were “food conditioned” and “habituated,” meaning they wanted unnatural foods like chicken feed and were not afraid of approaching humans to get them. Residents observed the bears frolicking in backyards, eating grass and “just being bears.” Others reported the bears for ransacking chicken coops. None reported aggressive behavior toward humans.

On the morning of May 27, 2014, Wallen discovered a number of dead chickens in his yard. The culprits had rammed through the fence to his chicken coop and killed two-thirds of his chickens. One perpetrator left behind a paw print that Wallen concluded belonged to a bear.

Neither Wallen nor his wife, Alison, called Manley or any other authority after discovering the dead chickens and the paw print. Instead, they went to work and returned home that afternoon.

Later that evening, Wallen and Alison watched their two boys (ages 8 and 11), their 16-year-old daughter (A.B.) and A.B.’s boyfriend play outside. The three bears then returned, heading for the chicken coop. The chickens scattered and the bears gave chase, running within 100 feet of where Wallen’s daughter stood. A.B. screamed and ran into the house through a glass back door as Wallen got in his truck and chased the bears away. Meanwhile, Alison called Manley’s cell phone and left a message telling him the grizzlies had come for their chickens twice and that her husband was trying to chase them away with the truck. She asked for advice as to what she and her husband could do about the bears.

The bears returned for a second time 10 to 15 minutes later. Again, the chickens ran, the bears gave chase and Wallen frightened them away with his truck.

After Wallen chased the bears, they entered the property of the Wallens’ neighbor, Tom Clark. Clark videotaped them milling about and crossing a nearby highway. At no point did the bears behave aggressively toward him. He stopped recording at 9:14 p.m. Shortly thereafter, he heard shots fired, followed by a roar from the direction of Wallen’s property. As later became clear, the sounds Clark heard were Wallen shooting and killing the three grizzlies.

Wallen has never denied shooting the three bears with an “old, rusty .22 caliber rifle” after they returned to his property for a third time that night. He has also never denied causing the bears’ deaths."

I must admit that when I first noticed that the opinion was about someone who had killed three grizzly bears, I wondered who would do such a thing.  A sentiment that was only magnified when I read that the grizzly bears were grizzly bear cubs.

Mr. Wallen testified that he shot the bear cubs in self-defense, but the judge didn't believe him, and found him guilty.  Because it's not okay to kill an endangered species without a darn good reason.

And the fact that they've killed some of your chickens doesn't count.

Makah Indian Tribe v. Quileute Indian Tribe (9th Cir. - Oct. 23, 2017)

You're an educated person, so you're undoubtedly going to tell me that seals and whales aren't fish, but are mammals.

Oh yeah?

Morrill v. Scott Financial Corp. (9th Cir. - Oct. 23, 2017)

Thank you, Ninth Circuit.

I often want to give my first-semester, first-year students in civil procedure a concrete example of the way you write an essay examination about civil procedure.  One that cogently articulates and applies the relevant tests and explains the answer it reaches.  Including responding to any counterarguments the other side might make.

The Ninth Circuit does precisely that for me.  And, as a bonus, it does it twice, as both the majority and the dissenting opinion set forth exactly the type of answer you'd want a smart person to make on an exam.

Now, do I expect my students to write 26 single-spaced pages, like the majority opinion, or even 16 pages (like the dissent)?  Nope.  No time for that.  You could definitely truncate the analysis if you needed to; e.g., were pressed for time.

But the Ninth Circuit is under no such constraint.  It may wax poetic for as long as it wants.  And, here, it definitely wants.

Fair enough.  Here are some good examples of competing essay exam answers that reach opposite conclusions and yet both of which would receive an "A".

People v. Rodriguez (Cal. Ct. App. - Oct. 19, 2017)

Maybe when you're wearing an active ankle monitor and aren't allowed to leave the county or the state you should temporarily give up your job as a long-haul truck driver.

Just a suggestion.

U.S. v. Preston (9th Cir. - Oct. 17, 2017)

The panel here does a lot of work to reverse this child molestation conviction.  A lot.

I'm not certain that a lot of panels would reach the same result.  This one's Judges Reinhardt, Kozinski, and Berg (sitting by designation from the Eastern District of Michigan).

People v. Lewelling (Cal. Ct. App. - Oct. 17, 2017)

One great thing about Court of Appeal opinions is that they sometimes give you a real-world glimpse into portions of society that you'd otherwise know little about.  Today's opinion, for example, takes the reader into the emergency room at San Francisco General Hospital:

"San Francisco General Hospital is a renowned safety net hospital, particularly well known for its emergency department. That department has a diverse and unpredictable patient population, much of it consisting of the homeless, the mentally ill, and those suffering from substance abuse problems. The chaotic population can make the emergency department a dangerous place: staff have been strangled, sexually assaulted, punched, kicked, and spit upon. Abuse by patients, both physical and verbal, is a daily, sometimes hourly, occurrence. As a result, patient behavior is tracked in a database provided by the Department of Public Health, so staff can communicate with others to alert them of potentially violent or abusive patients.

This has also resulted in the development of protocols and procedures to protect staff and patients. For example, patients without pending business in the emergency department are not permitted to loiter. People who are sleeping or lingering in the waiting area in the early morning hours without medical necessity are asked to leave. And once they are screened and cleared for discharge, verbally abusive or physically threatening patients are removed.

The emergency department is overseen by armed deputies from the San Francisco Sheriff’s Department, who are on the premises 24 hours a day to provide security. During the midnight shift, three officers are on duty, one at a podium just outside the department waiting area, another at a post behind the security doors to the department, and a third on foot patrol around the campus. There is also a dispatcher who monitors security cameras throughout the facility, one of which is pointed at the emergency department waiting room. . . . Generally speaking, on a nightly basis several people are escorted off campus for verbally or physically abusing the staff or other patients."

Better to read about it than have to go there.

Morales v. Fry (9th Cir. - Oct. 16, 2017)

Sometimes procedure can be a sly way to cut back on substance.  Here's a good example.

The Ninth Circuit holds -- as have most (but not all) circuits -- that it's error to submit a "qualified immunity" issue to the jury.  Instead, that issue is supposed to be decided by a judge.

Fair enough.  That's indeed how most qualified immunity issues are decided anyway:  on summary judgment.  It also makes sense.  An officer is entitled to qualified immunity if it was not "clearly established" that what he or she did violated the person's constitutional rights.  That inquiry in turn substantially relies on evaluating precedent to see which principles are clearly established and which are not.  That's a task that's well-suited to a judge and poorly suited to a jury.

Hence the holding.

The thing is, though, that lots of times, the issue of whether a certain violation is "clearly established" relies a ton on disputed facts.  Plaintiff says X, Defendant says Y.  X is a clearly established violation of rights, but Y is not.  You can't grant summary judgment since there's a genuine issue of material fact.  Which is why there's an incentive to turn the issue over to the jury and let them decide which is which.  Particularly when the facts do not involve a clear-cut choice between X and Y, but instead involves lots of factual gradations in between.

So when the facts are what determine whether there's qualified immunity, you can see why you might want to turn it over to the jury.  Since it's the one who gets to decide the facts.

But the Ninth Circuit says that's improper.  It's only for the judge.

You see the complexity there, though.  So does the judge get to resolve the disputed facts?

No, says the Ninth Circuit.  The jury still decides that.

But how?  And how do they communicate those findings to the judge if the qualified immunity issue is not submitted to it?

The Ninth Circuit suggests that a district court might want to submit special interrogatories to the jury.  That works.  But the district court isn't required to do so.  It can just have the jury render a general verdict instead.  Then we're back to square one.  Plus, there are some cases in which special interrogatories may not be particularly helpful -- or, worse still, confusing.  Maybe the relevant facts regarding qualified immunity are somewhat different than those involved in the underlying violation.  Or maybe it's just too difficult to say to the jury, for example, "Okay, I know you just found that there was excessive force, but can you please tell me how much excessive force, because that's what's going to tell us whether the underlying right was clearly established."  Some questions just can't be asked with the required precision.

So what happens then?

The Ninth Circuit (not surprisingly) has an answer.  It says that if you don't have the jury expressly find the relevant facts -- either because you can't or you choose not to have 'em do it -- then the judge who's deciding the qualified immunity issue adjudicates it viewing all inferences in favor of the non-moving party (i.e., the plaintiff).

And now you get what I mean when I said that sometimes procedure can be used to affect, sometimes dramatically, the substance.

Because now you're importing the summary judgment standard into the resolution of the merits at and after a trial.  Once you do that, qualified immunity is hard to win.  Because the defendant who claims such a defense already (presumably) lost that issue on summary judgment (as well as on interlocutory appeal), and was at this point to get the facts resolved by a jury and then -- with that actual resolution in hand (not merely a hypothetical one with all facts resolved against him) -- prevail on the defense.

No dice, however.  Now, unless there's an express factual finding by the jury, the judge does the same thing she did before on the summary judgment motion.  E.g., deny the motion, since you view all of the disputed facts in favor of the non-moving party.

Procedure makes a difference.

Stewart v. Superior Court (Cal. Ct. App. - Oct. 12, 2017)

Don't get old.

Teixeria v. County of Alameda (9th Cir. - Oct. 10, 2017)

When the panel issued its original opinion, I thought that Judge Silverman's dissent was spot on.  In a concise, targeted way that was infinitely better than anything I could ever write myself.  The entirety of that panel dissent reads as follows:

"The first thing you need to know about this case is who the plaintiffs are. They are not individuals who claim the right to keep and bear arms for self-defense or for other lawful purposes. Rather, they are entrepreneurs (and their supporters) who want to operate a gun shop in an area of Alameda County that is not zoned for that use.

The next thing you need to know is that there is no claim that, due to the zoning ordinance in question, individuals cannot lawfully buy guns in Alameda County. It is undisputed that they can. The record shows that there are at least ten gun stores already operating lawfully in Alameda County.

When you clear away all the smoke, what we’re dealing with here is a mundane zoning dispute dressed up as a Second Amendment challenge.

The Supreme Court has held that the Second Amendment confers an individual right to keep and bear arms. District of Columbia v. Heller, 554 U.S. 570, 595 (2008). Even assuming for the sake of discussion that merchants who want to sell guns commercially have standing to assert the personal, individual rights of wholly hypothetical would-be buyers – a dubious assumption, in my opinion – the first amended complaint does not explain how Alameda County’s zoning ordinance, on its face or as applied, impairs any actual person’s individual right to bear arms, no matter what level of scrutiny is applied. Instead, the first amended complaint alleges that would-be buyers are entitled to the enhanced customer service experience that plaintiffs could provide. Now, I like good customer service as much as the next guy, but it is not a constitutional right. What’s more, the Supreme Court specifically held in Heller that “nothing in our opinion should be taken to cast doubt on . . . laws imposing conditions and qualifications on the commercial sale of arms.” Id. at 626–27.

Conspicuously missing from this lawsuit is any honest-to-God resident of Alameda County complaining that he or she cannot lawfully buy a gun nearby. The district court was right on target in dismissing the plaintiffs’ zoning case for failure to state a Second Amendment claim, because the district court correctly ruled that the ordinance restricting the location of a gun store is “quite literally a ‘law[] imposing conditions and qualifications on the commercial sale of arms . . . .’” Therefore, I respectfully dissent from that portion of the majority’s opinion."

Pretty persuasive, right?

Not to the majority.  But the problem with having Judge O'Scannlain, joined by Judge Bea, author the majority opinion in a Second Amendment case is that these judges are not representative.  Not of the judiciary as a whole nor, particularly, the judges on the Ninth Circuit.

So when the case get taken en banc, as it predictably does, the vote's not even close.  9-1-1.  With only Judge Bea himself agreeing with the panel opinion, with Judge Tallman concurring in part and saying that at least an as-applied challenge should prevail.

But that's, at best, 2 out of 11.  Because, in truth, on the merits, this one's not especially difficult.

Kirkpatrick v. Chappell (9th Cir. - Oct. 10, 2017)

I seriously thought about quoting Judge Kozinski's dissent in this death penalty case in toto.

But even though it's deliberately concise (to the point of being staccato -- though powerfully so), it's still eight single-spaced pages long.

So I'll instead merely recommend, strongly, that you read it in its entirety.

It's pretty darn powerful.  Regardless of which side you're on in the global death penalty debate.

The guy's a great writer.  No doubt.

Longoria v. Pinal County (9th Cir. - Oct. 10, 2017)

Sometimes you write impassioned pleas to justice.  Sometimes you're writing to the Supreme Court to try to convince it not to reverse you.

Today's opinion reads like the latter.

It's a Judge Reinhardt opinion in a police shooting case that reverses the district court's grant of summary judgment in favor of the defendants.

That single sentence is all you have to know to understand why the opinion is moderate, restrained, and extraordinarily careful in its analysis.

Judge Reinhardt has three things going for him in this regard.  First, it's a unanimous opinion, with no dissent.  Second, he's got Judge Kozinski -- who's on the panel -- on his side.  Would it be even better if he had a law-and-order, don't-care-about-civil-rights-in-the-slightest conservative on the panel and on his side as well?  Sure.  But Judge Kozinski helps at least a little.

Finally, there are the actual facts.  Summed up by Judge Reinhardt as follows:  "Pinal County Deputy Sheriff Heath Rankin fired two shots into Manuel Longoria’s back and killed him just as he was raising his hands above his head. . . . Rankin shot Longoria after the car chase had ended. Longoria’s car was fully immobilized; he was surrounded by armed officers, and his erratic driving no longer posed any threat to bystanders. He had been hit by several bean bag rounds shot from close range as well as a taser dart. Viewing the circumstances in the light most favorable to Longoria, the inquiry is thus whether he posed an immediate threat to Rankin or the many officers around him, or whether a reasonable officer would have perceived Longoria to be an immediate threat, after the non-lethal force was used but before Rankin shot him dead."

Plus there's a video of the whole thing.

All that's very helpful to Judge Reinhardt's opinion.

We'll see soon enough if that's enough to avoid en banc review (or dissents from the denial of such review) and/or a grant of certiorari from the Supreme Court.

But one thing's for sure.  Judge Reinhardt's trying his best.

In Re Marriage of Kalinawan (Cal. Ct. App. - Oct. 6, 2017)

There's a lot fishy going on here.  But I think the Court of Appeal got the doctrine right when it held that the trial court overly extended the doctrine of estoppel.

Cesar marries Minerva, and then they get divorced.  But in those divorce proceedings, Cesar wants to claim that the marriage was a nullity because Minerva was essentially a bigamist because the divorce of her prior marriage was procured by fraud.

That prior marriage indeed seems sketch.  That happened when Minerva (a U.S. citizen) married Gerry (who was in the Philippines) so Gerry could come to the U.S.  Oh, and Gary's ex-wife was Minerva's sister.

After five years living in the U.S., Gerry files for divorce from Minerva.  The only reason why Gerry files for divorce appears to be so that Minerva can be allowed to marry Cesar.  Gerry files in Nevada, claiming that he's a bona fide resident of Nevada and has been so for quite a while.  The divorce gets granted, but that's the divorce that Cesar says was procured by fraud.

The trial court says that Cesar can't attack that prior divorce essentially because he "took advantage of it" to get married.  But the Court of Appeal seems right to me in saying that's wrong.  You can apply estoppel if the party to be estopped participated in the fraud, or was a party to that proceeding (so had a chance to contest it), or knew of the fraud.  That's one thing.

But if Cesar doesn't know about the fraud, then he's been victimized by the fraud (by marrying a "bigamist") and should have standing to object to it.  He wasn't a participant.

Justice Mihara's opinion is concise and looks to me to correctly distinguish the relevant contrary precedent.  You've got to cabin those estoppel cases to certain principles.  And they don't extend to cases like this one.

Maybe, when examining the facts under the proper legal lens, it'll turn out that the divorce was fine, or that Cesar is estopped, or whatever.

But you've got to apply the right law.

Jennifer S. v. Superior Court (Cal. Ct. App. - Oct. 3, 2017)

Sometimes these dependency cases must seem hopeless.

Here's a little background vis-a-vis the seven relevant prior children, plus this one (the eighth):

"K.S., the minor who is the subject of these proceedings, was detained by the San Francisco Human Services Agency (Agency) shortly after her birth in January 2017, due to a referral indicating that mother had tested positive for methamphetamines during a recent prenatal visit. According to the underlying dependency petition—as it was ultimately sustained by the juvenile court—K.S. (the couple’s only child in common) was described by subdivisions (b) and (j) of section 300 due to: mother’s long history of substance abuse for which she failed to receive treatment; the termination of mother’s parental rights with respect to four previous children based on her untreated polysubstance abuse; the parents’ history of domestic violence; father’s history of substance abuse, for which he failed to seek treatment until June 2017; and the termination of father’s parental rights to three other children in 2008."

A few more details about the mother's previous kids:

"According to records supplied by the Agency, in 2010 mother gave birth to a daughter, C.S., who was detained after mother and baby tested positive for cocaine at birth. Mother was found to have an on-going substance abuse problem, a history of psychiatric hospitalizations, and a lack of stable housing. Reunification services were ordered for mother, including residential drug treatment, individual therapy, a psychological evaluation, and parenting classes. Unfortunately, those services were terminated as unsuccessful, and mother’s parental rights were terminated with respect to C.S. in January 2012. Thereafter, in July 2012, mother’s next child, K.G., was detained shortly after birth due to mother’s unresolved problems with substance abuse, mental health issues, homelessness, criminality, and child welfare involvement. Mother was bypassed for reunification with respect to K.G., and her parental rights were ultimately terminated. In 2013, mother gave birth to twins—J.S. and R.S.—who were immediately detained due to positive toxicology screens for crack cocaine and marijuana (for mother and both babies) and mother’s substance abuse history. Mother was bypassed for reunification with respect to the twins, and her parental rights were terminated in July 2014."

Here's some information about the mother:

"Mother’s criminal history includes arrests for receiving stolen property, taking a vehicle without consent, and threatening a crime with intent to terrorize (2000); failure to obey a juvenile court order and loitering with the intent to commit prostitution (2001); possession of marijuana for sale (2003); battery on a person and obstructing/resisting a public officer (2008); assault with a deadly weapon (not a firearm) with great bodily injury likely (2008); domestic battery and vandalism (2008); transportation/sale of narcotics (2011); and possession of a controlled substance (2016)."

As for the father:

"Father’s criminal history spanned almost 30 years, with multiple arrests for possession of narcotics for sale, possession of a controlled substance, and possession of crack cocaine. Recent arrests include petty theft (2010); possession of a controlled substance and violation of probation (2010); second degree robbery, possession of a controlled substance, and trespass (2012); possession of a controlled substance for sale, possession of paraphernalia, and carrying dirk/dagger (2012); burglary, assault with great bodily injury, receiving known stolen property, and committing an offense while on bail (2012); unlawful driving/taking of a vehicle, possession of a controlled substance, and probation violation (2013); second degree burglary, vandalism, and battery (2014); possession of a controlled substance (2015); domestic violence (2015); assault with great bodily injury, possession of a switch blade, and resisting/obstructing police officer/EMT (2016); reckless driving, forgery of registration, driving without a valid license, and receiving stolen property (2016); and petty theft (2016)."

"Hopeless" may even be a bit of an understatement.  How incredibly, incredibly hard it must be to try to deal with these sorts of cases and get everyone's lives on track.

People v. Cruz (Cal. Ct. App. - Oct. 3, 2017)

"Juan Alexander Cruz, a three strikes offender, was sentenced to 26.5 years to life in state prison. He appeals a postjudgment order denying his petition to recall his sentence pursuant the Three Strikes Reform Act of 2012 (the Act), also known as Proposition 36."

Okay, there are lots of those types of cases.  Twenty-six years is indeed a lot of time.  Let's see what he's in prison for.

"In 2001, appellant was convicted by jury of false imprisonment by violence after he forced his way into a single mother’s (L.S.) home, clutched her two-year-old son, and threatened to rape him. L.S. begged appellant to let the boy go free. Appellant grabbed a kitchen knife, punched L.S. in the head, and tried to stab her in the stomach. He had ready access to other knives as well. Appellant ordered L.S. to her knees, struck her several times with his fists, and forced her to disrobe and lie down. Appellant then ran the kitchen knife between the victim’s legs and asked how she would feel if he put the knife into her. L.S. escaped when appellant was taking off his backpack."

Uh, yeah.  Those are bad facts.  Really bad facts.  He's not getting let out.

People v. Jo (Cal. Ct. App. - Oct. 3, 2017)

Why watch soap operas when you can read real-life appellate cases instead?

"Defendant and J.C. became friends, and eventually began dating. J.C. moved into defendant’s trailer shortly thereafter. In late 2007, defendant discovered she was pregnant. Defendant, then thirty-five years old, was overjoyed at the news. J.C. was decidedly less enthusiastic. At twenty-four years old, J.C. felt he was not ready to become a father. . . ."

("Decidedly less enthusiastic."  Love it.)

"Defendant’s one-year visa was due to expire in July 2009. In July 2009, defendant received a letter from immigration authorities indicating that her application to extend her stay had been denied. Defendant telephoned immigration authorities and learned that she was required to leave the country immediately.  Around the same time, defendant proposed marriage to J.C. J.C. thought the proposal was “absurd,” especially in light of the fact that defendant was still married to someone else."

Being married to someone else does seem sort of like a complicating factor vis-a-vis an engagement, no?

You can read the rest of the opinion if you'd like.  Drama, baby drama, baby abduction, etc.

Our lives are tame in comparison

Thankfully.

In Re Matter of Walldesign (9th Cir. - Oct. 2, 2017)

The majority opinion, written by Judge Marbley (sitting by designation from the Southern District of Ohio), begins by saying that "bad facts make bad law" and that this case "tests that maxim".  That's a nice way of saying that the horrible, facially inequitable result reached in the opinion allegedly makes sense notwithstanding that result.  Judge Tashima joins that opinion.

Judge Nguyen dissents.  She begins her opinion by saying:

"Bankruptcy courts 'are courts of equity' that 'appl[y] the principles and rules of equity jurisprudence.' [Cite] There is nothing equitable about today’s decision. Donald Buresh, Sharon Phillips, and Lisa Henry are not Michael Bello’s family members, friends, or even close associates. They are a married couple who sold their property to Bello to fund their retirement and a small business owner who performed design and construction services for him. Unbeknownst to them, the checks with which Bello paid them, which bore the name of his company, were in fact drawn from a sham bank account that he created to fraudulently siphon money away from his company and use for his personal expenses. Their dealings with Bello were legitimate, arms-length transactions. Yet they each now owe Bello’s creditors hundreds of thousands of dollars—a ruinous sum for most retirees and small businesses. I strongly disagree with this result."

Those are fairly starkly divergent ways of viewing the same case.

The majority's central argument is that it makes sense to impose liability on the innocent, bona fide recipients of these funds because they had "some" ability to root out the fraud, and hence "allocates the monitoring costs and risks of repayment" to the appropriate person.  And, in truth, there were at least some events that -- in retrospect -- might raise "red flags"; namely, the fact that the recipients were paid with a company check for seemingly personal services.

But two points.

First, I strongly doubt that most people would automatically think that a corporate officer had two sets of books and was siphoning money out of a company just because they received a company check.  Imagine that you're a groundskeeper, or (as here) a designer, and receive a company check for your services.  Would you say:  "No, sorry, I can't take this as payment, at least until you show me all the books for your corporation that proves that you're not illegally siphoning off funds?"  Or would you assume -- as I would -- that the guy was probably authorized to do it, or was paying you out of the business for tax reasons, or simply realized that it wasn't your province to try to decide how you got paid?  (Oh, and, as far as I can tell, the majority's holding would equally apply to cash payments from the company's tiller, right?  It doesn't rely on the fact that it was a company check, but only that the funds came from the company.)

So I think the majority's belief that "allocating" the responsibility to the recipients of the funds makes for good policy and/or best roots out fraud doesn't really work.  It defies what we know from our own experiences and common sense.

Second, the majority says that these innocent purchasers have a greater ability and incentive to root out fraud that then alternatives.  Really?  Remember:  the funds here are going to the creditors of the company (and/or the stockholders).  People who rationally invested -- at some level -- in the actual company itself.  Unlike an interior designer that, at the end of the process, merely receives a check, these people actually did conduct due diligence on the company before extending it credit.  Or at least easily could have.

What the majority is saying is that it makes more sense to allocate monitoring costs to a bona fide seller like the individuals here -- who, in truth, have absolutely no leverage or ability to monitor the transaction -- as opposed to creditors who routinely engage in precisely such monitoring.  I'm not so sure I'm persuaded by either the rationality or equity of that allocation.

Sure, if Congress had clearly and unambiguously said that any time you take money from anyone, you're hereby on notice that you're at risk of having to give that money back if the guy turns out to have stolen it, then, yeah, I'd be compelled to follow that rule.  But it clearly hasn't said that.  Not only is there is a majority and minority rule amongst the circuits, but bankruptcy courts get to both develop and apply equitable principles.  Including here.

As between business creditors who are hosed by a company versus third parties who just get money retrospectively from a person who secretly stole from that company, I'm not sure it doesn't make more sense to allocate losses to the former rather than the latter.

Even though the Ninth Circuit does the exact opposite here.