How to Get Away with Murder: Get Convicted in the D.C. Circuit

BACKGROUND

It goes without saying that killing an officer or employee of the United States is a punishable offense, but is that murder punishable if committed outside American territory? 18 USC § 1114 makes it illegal to kill or attempt to kill any officer or employee of the United States or of any agency in any branch of the United States Government (including any member of the uniformed services) while such officer or employee is engaged in or on account of the performance of official duties. Federal courts have long avoided reading statutes as applicable on foreign soil, except when Congress clearly indicates as such, by using the canon of statutory interpretation known as the presumption against extraterritoriality. Some courts, however, have used a 1922 Supreme Court decision, United States v. Bowman, to justify applying § 1114 outside American borders.

ISSUE

Can 18 USC § 1114 criminalize killing or attempting to kill an officer or employee of the United States outside the territory of the United States?

THE SPLIT

The Second and Eleventh Circuits have applied 18 USC § 1114 extraterritorially, concluding that Congress would have intended it to do so. The D.C. Circuit declined to apply the statute extraterritorially, holding firm to the presumption against extraterritoriality.

Second and Eleventh Circuits

The Eleventh Circuit, in United States v. Benitez (1984), held that § 1114 has extraterritorial application. In Benitez, the defendant was convicted of conspiracy to murder DEA agents engaged in the performance of their official duties in Colombia, among other crimes. The court held that “assault and attempted murder of DEA agents is exactly the type of crime that Congress must have intended to apply extraterritorially.” The Eleventh Circuit upheld the district court’s judgment of conspiracy to murder the agents.

The Second Circuit, in United States v. Al Kassar (2011), also held that § 1114 has extraterritorial application. In Al Kassar, three defendants were convicted of conspiring to kill U.S officers in Spain and Romania. The Second Circuit read Bowman to mean “the presumption that ordinary acts of Congress do not apply extraterritorially does not apply to criminal statutes.” § 1114 has no explicit provision for application on foreign soil, therefore, according to Bowman, congressional intent must “be inferred from the nature of the offense.” The court held “the nature of the offense – protecting U.S. personnel from harm when acting in their official capacity – implies an intent that it applies outside of the United States.” The Second Circuit explained that this is because a significant number of those employees perform their duties on foreign soil. The court in Al Kassar affirmed the convictions and sentences.

The Second Circuit affirmed the application of territoriality to § 1114 in United States v. Siddiqui (2012). In Siddiqui, the defendant was convicted of attempted murder of U.S. nationals, officers, and employees, among other crimes. The court held, “we see no basis for expecting Congress to have intended to limit these protections to U.S. personnel acting within the United States only.” The nature of the offense, the court concluded, implies a congressional intent outside U.S. territory. The court in Siddiqui affirmed the convictions and sentence.

D.C. Circuit

The D.C. Circuit, in United States v. Sota (2020), held that because § 1114 does not speak to extraterritorial application, one way or the other, the presumption against territoriality remains firm, and therefore does not apply beyond U.S. territory. In Sota, two defendants were convicted of killing an American law enforcement officer in Mexico, among other crimes. The court determined that the presumption against territoriality remained unrebutted because Congress had not “affirmatively and unmistakably instructed that the statute will” apply abroad. Congress passed § 1114 and nearby § 1116 in a single statute, the Antiterrorism and Effective Death Penalty Act of 1996. § 1116 criminalizes killing a U.S. officer or employee who is otherwise “entitled pursuant to international law to special protection against attack.” The court determined that §§ 1114 and 1116 must be read in pari materia, and therefore, “Congress’s explicit provision for extraterritorial jurisdiction in one provision (§ 1116) militates against inferring any such application for a closely related and nearby provision with no such signal (§ 1114).

The D.C. Circuit also concluded that the Second and Eleventh Circuits are misinterpreting Bowman because Bowman should be not be read so broad such that all criminal statutes can be applied extraterritorially. Instead, the D.C. Circuit asserted that Bowman stands for the notion that the presumption against extraterritoriality is rebutted if the criminal statutes in question would be greatly curtailed by scope and usefulness if limited to a strict territorial jurisdiction. The court in Sota vacated the defendants’ convictions under § 1114.

LOOKING FORWARD

As of now, it does appear that an individual, especially a foreign national, may be able to avoid punishment for murdering an officer or employee of the United States on foreign soil, if convicted under the jurisdiction of the District of Columbia Circuit. This issue may only get resolved if, unfortunately, someone attempts to murder or does murder an officer or employee of the United States outside of American territory and the Supreme Court takes up the case.

Should the Supreme Court decide on this matter, we may find an interesting and surprising split between Justices. One would typically expect Republican-appointed Justices to side in favor of law and order and interpret § 1114 to apply extraterritorially. However, an intentionalist interpretation, more favored by Democratic-appointed Justices, would lean in favor of expanding the scope of the law beyond American borders, and a strict textualist interpretation would refrain from reading intent and instead focus on the words of the statute which have no reference to international jurisdiction. Nonetheless, this issue is unlikely to reach the Supreme Court any time soon and will probably continue to yield a growing split among the circuits.  

Private Foreign Arbitration: Can U.S. Federal Courts Compel Discovery?

BACKGROUND

Section 1782 of Title 28 defines the “scope of discovery that foreign litigants may seek in the United States for use in foreign proceedings.” Specifically, Section 1782(a) authorizes the district court to compel discovery “for use in a proceeding in a foreign or international tribunal.” 

The Supreme Court encountered a Section 1782(a) dispute in the case of Intel Corp. v. Advanced Micro Devices, Inc. (2004). The Court held that Section 1782(a) “authorizes, but does not require discovery assistance,” and the Court decided to “leave it to the courts below to ensure an airing adequate to determine what, if any, assistance is appropriate.” The Court in Intel, however, only considered whether Section 1782(a) discovery would apply to public foreign tribunals; where it concluded that it would. The Court remained silent on whether Section 1782(a) discovery would also apply to private foreign arbitration, leading to the current division among the Circuit Courts. 

THE ISSUE

Is the definition of “foreign or international tribunal” under 28 U.S.C. 1782(a) limited only to state-sponsored public tribunals; or does the definition include discovery for private foreign tribunals as well? In other words, can district court judges compel discovery for private foreign arbitration?

THE SPLIT

The Seventh Circuit recently joined the Second and Fifth Circuits by adopting a narrow interpretation of “foreign or international tribunal” to only include public tribunals and exclude private ones. These circuits conclude that compelling discovery in private foreign disputes would undermine the speedy and cost-effective nature of the arbitration process. In recent years, however, the Fourth and Sixth Circuits have disagreed, opting for a broad interpretation of Section 1782(a). These circuits posit that the purpose of the Section 1782(a) is to foster international cooperation through discovery processes and conclude that district courts should have the discretion to apply Section 1782(a) to all foreign tribunals, both public and private. 

The Second, Fifth, and Seventh Circuits

In September 2020, the Seventh Circuit joined the Second and Fifth Circuits in affirming a narrow interpretation of Section 1782(a). In Servotronics, Inc. v. Rolls-Royce PLC (2020), (“Servotronics II”), the court held that Section 1782(a) “did not authorize the district court to compel discovery for use in a private foreign arbitration.” There was a separate case arising from the same arbitration that came before the Fourth Circuit in March 2020 and is discussed below. In Servotronics II, Rolls-Royce had manufactured an engine for a Boeing aircraft and incorporated a Servotronics valve in the design. The airplane was then destroyed in a fire during testing, and Rolls-Royce settled with Boeing for the loss of the plane. Subsequently, Rolls-Royce, a UK-based corporation, sought indemnification from Servotronics, which was based in the United States. The two companies had a long-term agreement that mandated binding arbitration in a London-based private tribunal called the Chartered Institute of Arbiters (“CIArb”). Servotronics then applied for a Section 1782(a) discovery request that would compel Boeing to produce documents that would be used in the London arbitration. The district court judge ultimately denied this discovery request, finding for Rolls-Royce and Boeing.

In interpreting Section 1782(a), the Seventh Circuit affirmed the district court ruling, stating that “foreign or international tribunal” should be defined as “a governmental, administrative, or quasi-governmental tribunal operating pursuant to the foreign country’s practice and procedure.” This definition would consequently exclude any private foreign arbitrations. The Seventh Circuit rejected the Fourth and Sixth Circuit’s broad definition of “foreign and international tribunals,” which included private arbitration. The Seventh Circuit noted that if the ambiguity of the word “tribunal” was interpreted broadly, this could expand the ability of federal courts to compel discovery in foreign arbitration past what is normally allowed in domestic arbitration. 

In January 1999, the Second Circuit was one of the first to confront an issue concerning Section 1782(a) in NBC v. Bear Stearns & Co. (1999). In NBC, the plaintiff, US-based news corporation NBC was involved in a Mexican arbitration with Mexican television broadcasting company Azteca, of which Bear Sterns was an investor. In interpreting Section 1782(a), the Second Circuit noted that “although the phrase ‘foreign or international tribunal’ does not unambiguously exclude private arbitral panels, neither does it unambiguously include them.” The court then concluded that the phrase, considered in the context of statutory and legislative history, is limited to public foreign arbitration and not private tribunals. Two months after the Second Circuit’s decision in NBC, the Fifth Circuit adopted this narrow interpretation of Section 1782(a) in Republic of Kazakhstan v. Biedermann Int’l (1999). The Fifth Circuit held that the statute was “not intended to authorize resort to United States federal courts to assist discovery in private international arbitrations.” The court highlighted the concern that allowing for discovery in private arbitrations would “complicate and undermine” the entire international arbitration process. 

The Fourth and Sixth Circuits

The Fourth and Sixth Circuits have both held that a broad definition of Section 1782(a) is more appropriate. In March 2020, the Fourth Circuit analyzed the scope of 1782(a) in the Servotronics, Inc. v. Boeing Co. (2020), (“Servotronics I”), a case arising from the same arbitration dispute that would later come before the Seventh Circuit. The Fourth Circuit came to a very different result than the Seventh Circuit, reasoning that the “district court functions effectively as a surrogate for a foreign tribunal by taking testimony and statements for use in the foreign proceeding” under Section 1782(a). The Fourth Circuit concluded that the application of Section 1782(a) should be determined by district courts and not parties, so the district courts should possess the ability to compel discovery for private foreign arbitrations. 

The Fourth Circuit’s decision in Servotronics I aligns with the Sixth Circuit’s September 2019 decision in Abdul Latif Jameel Transportation Co. v. FedEx Corp. (2019). In Abdul, the Sixth Circuit held that the word “tribunal” should be interpreted broadly and the “district court’s authority to compel discovery for use in foreign litigation extends to private foreign arbitrations.” The court stressed that the Supreme Court decision in Intel made the application of Section 1782(a) discretionary, and the broad interpretation would be best for giving this discretion to the district courts. 

LOOKING FORWARD

At this point, Rolls-Royce stated that it intended to file a petition for writ of certiorari to the Supreme Court. Whether or not the Servotronics case moves forward, the Court should review the interpretation of Section 1782(a) at some point, resolving the confusion left by Intel. If the Supreme Court opted for a broad interpretation of Section 1782(a), as given by the Fourth and Sixth Circuits, there would likely be a substantial increase in discovery for foreign private arbitrations, increasing costly litigation and further burdening the courts. 

Additionally, there is a pending case, HRC-Hainan Holding Co., LLC v. Yihan Hu (2020), before the Ninth Circuit that concerns a Section 1782(a) dispute involving discovery into a Chinese in vitro fertilization project that is before a Chinese arbitration commission. So, it will also be interesting to see what the Ninth Circuit decides and whether a decision, in this case, comes before a Supreme Court ruling on this issue.

 

When Unsubscribe Doesn’t Work: How Should We Define Autodialers in the Age of Cell Phones?

BACKGROUND

In 1991, Congress passed the Telephone Consumer Protection Act (TCPA) in an effort to curb unsolicited robocalls. Section 227(a)(1) of the TCPA defines an automatic telephone dialing system (ATDS) as “equipment which has the capacity (A) to store or produce telephone numbers to be called, using a random or sequential number generator; and (B) to dial such numbers.” Section 227(b)(1)(B) prohibits the use of ATDS devices to contact any residential telephone “without the prior express consent of the called party.” 47 U.S.C. § 227.

THE ISSUE

Under the TCPA, is the definition of an ATDS  limited to only those devices that both produce phone numbers using a random or sequential number generator and automatically dial those numbers; or does the definition encompass a broader scope of devices that can still store and automatically dial phone numbers, but do not use random number generators?

THE SPLIT

The Sixth, Second, and Ninth Circuits have adopted a broad interpretation of the language of the TCPA. These three circuits believe that the broad definition will ensure companies that use autodialers to harass individuals will be held accountable for their actions. The Third, Seventh, Eleventh, and D.C. Circuits have disagreed and instead interpret the TCPA narrowly. One of the main justifications posited by these circuits is that a broad definition would cover too many modern electronic devices never intended by Congress when it enacted the TCPA.

Broad Interpretation

In July 2020, the Sixth Circuit joined the Second and Ninth Circuits in affirming a broad interpretation of the TCPA definition of autodialers. In Allan v. Pa. Higher Educ. Assistance Agency (2020), the court ruled that the TCPA definition includes devices that do not use random or sequential number generators. In Allan, the plaintiff took out a student loan from the Pennsylvania Higher Education Assistance Agency (PHEAA) and in doing so, consented to future calls regarding her loan. The plaintiff later requested that she not be called. After requesting to be taken off the phone list, the plaintiff and her cosigner were called a combined 353 times with automated messages. The PHEAA used a system called Avaya, which stored phone numbers and could automatically dial them to send automated messages. Avaya did not use a random or sequential number generator to create the phone numbers to call. The plaintiff sued the PHEAA alleging that the automated phone calls she did not consent to were in violation of the TCPA.

In interpreting the TCPA, the Sixth Circuit in Allan ultimately held in favor of the plaintiff, stating that “the autodialer ban applies to stored-number systems.” Even though the Avaya system did not use a random number generator, it still fell within the type of device making the type of phone calls from which the TCPA was designed to protect. The court rejected the Seventh and Eleventh Circuit’s narrow definition of an autodialing system that requires the use of random or sequential number generators, noting that such a narrow definition would unreasonably defang the TCPA by allowing companies to use one device to randomly generate the phone numbers and a second device to call the numbers. According to the Sixth Circuit, a narrow definition would thus create a loophole for companies to escape prosecution under the TCPA.

In April 2020, the Second Circuit held similarly in Duran v. La Boom Disco, Inc. (2020). In Duran, the plaintiff sued the defendant for sending over 100 text messages through a computer program. In interpreting the meaning of the TCPA, the court contemplated both a broad and narrow definition of an autodialer, but ultimately reasoned that “in order for a program to qualify as an ATDS, the phone numbers it calls must be either stored in any way or produced using a random-or sequential-number-generator.” In other words, to be an ATDS, a program does not have to meet both criteria. Finally, the Ninth Circuit adopted a broad interpretation of an autodialer in 2018 in Marks v. Crunch San Diego, LLC when it reasoned that the definition of an ATDS includes devices with the capacity to dial stored phone numbers automatically, regardless of the existence of random number generators.

Narrow Interpretation

The Third, Seventh, Eleventh, and D.C. Circuits have all held that a narrow definition of an autodialer is more appropriate. In February 2020, the Seventh Circuit held for the defendant in Gadelhak v. AT&T Services(2020). The court reasoned that the capacity to generate random or sequential numbers is essential to the TCPA definition, and because an AT&T text messaging program did not use a random number generator, the TCPA did not apply. The Third Circuit held similarly in Dominguez v. Yahoo, Inc (2018), where the court ruled in the defendant’s favor because the plaintiff was unable to prove that an automated email and SMS program had the “capacity to function as an autodialer by generating random or sequential” numbers.

The D.C. and Eleventh Circuits both adopted the same narrow definition of an autodialer, but also brought up an interesting policy argument in support of their interpretation. In ACA Int’l v. FCC (2018), the D.C. Circuit posited that a broad definition that allows for any device that can store and automatically call a phone number would be unreasonable because it would include just about every modern cellphone. The Court worried that a broad interpretation would mean that “every smartphone user violates federal law whenever she makes a call or sends a text message without advance consent.” The Eleventh Circuit shared a similar worry in Glasser v. Hilton Grand Vacations Co., LLC (2020) when it said that “it’s hard to think of a phone that does not have the capacity to automatically dial telephone numbers stored in a list[.]”

Interestingly, the Sixth Circuit in Allan offered a counter to the D.C. and Eleventh Circuits’ cell-phone argument. The Sixth Circuit determined that just because a device has the capacity to store and dial phone numbers automatically, it is not automatically an autodialer under the TCPA. The court claimed that to be prosecuted under the TCPA, the device must not only possess the requisite qualities, it must be physically utilized as an autodialer as well. Using the Sixth Circuit explanation, a cell phone would not count as an autodialer unless someone purposefully programmed it to be used as one.

LOOKING FORWARD

The Supreme Court is scheduled to hear oral arguments in Facebook, Inc. v. Duguid in December 2020. In its petition for a writ of certiorari, Facebook is asking the Court to clarify which definition of the TCPA ought to apply. If the Supreme Court adopts the broader definition of the Second, Sixth, and Ninth Circuits, there could be interesting implications for essentially all modern cell phones. If all cell phones are found to qualify under the TCPA, we could see new legislation in Congress further limiting the scope of the TCPA.

More Harm Than Good? Considering Pleading Standards in ERISA Duty-of-Prudence Litigation

BACKGROUND

The Employment Retirement Income and Security Act (ERISA) was passed in 1974 to regulate private pension plans. Among other things, ERISA establishes standards of conduct for retirement plan fiduciaries (those who hold a legal relationship of trust with the plan participants), including a duty of prudence.

Wells Fargo’s fraudulent scheme to open fake customer accounts has been well documented and robustly litigated. In addition to consumers and regulators, Wells Fargo has faced legal pressure from many of its own employees. Specifically, Wells Fargo employees brought action against the company for alleged breach of the duty of prudence under ERISA in the management of the company’s 401k retirement plan. Plaintiffs argue that, in failing to disclose the ongoing fraud, Wells Fargo had artificially inflated the value of its own stock and thus the value of the employee retirement accounts which were invested in the company stock.

ISSUE

Could a reasonably prudent fiduciary, who is required under ERISA to manage their plans with “care, skill, prudence, and diligence” under 29 U.S.C. § 1104(a)(1)(B) have concluded that earlier disclosure of fraud would have been more beneficial than harmful to the employees’ stock plan?

THE SPLIT

            The relevant standard for duty of prudence in this case comes from the Supreme Court decision in Fifth Third Bancorp v. Dudenhoefer (2014). In that case, the Supreme Court created a high pleading standard for plaintiffs alleging a breach of duty of prudence under ERISA when such duty comes into conflict with securities law.

The  Fifth, Sixth, and Ninth Circuits

            In Martone v. Robb (5th Cir. 2018), a former employee of Whole Foods sued the company over a breach of duty of prudence when the company plan fiduciaries continued to invest in the company stock, which was alleged to be “artificially inflated due to a widespread overpricing scheme.” In dismissing the plaintiff’s claim, the Fifth Circuit held that the plaintiff could not successfully argue that disclosing the overpricing scheme would not have resulted in more harm than good to the company’s retirement plan.

            The Sixth and Ninth Circuits came to similar conclusions in, respectively, Graham v. Fearon (6th Cir. 2018) and Laffen v. Hewlett-Packard Company (9th Cir. 2018). In Graham, participants in the Eaton Corporation’s retirement plan alleged a breach of duty of prudence when the plan fiduciary bought and held Eaton stock while the company was engaging in fraud. The Sixth Circuit applied Dudenhoefer and affirmed the district court’s grant of defendant’s motion to dismiss. The court wrote

            Applying [Dudenhoefer’s] pleading standard to the facts alleged in Plaintiff’s Complaint, we conclude that the district court properly determined the Complaint does not propose an alternative course of action so clearly beneficial that a prudent fiduciary could not conclude that it would be more likely to harm the fund than to help it.

            The Ninth Circuit Court also applied Dudenhoefer’s pleading standard in Laffen, stating that “[A] prudent fiduciary in the same circumstances as Defendants-Appellees could view Laffen’s proposed alternative course of action as likely to cause more harm than good without first conducting a proper investigation.”

The Second Circuit

            The Second Circuit Court of Appeals has held otherwise. In Jander v. Retirement Plans Committee of IBM (2nd Cir. 2018), plaintiffs sued plan fiduciaries at IBM for breach of duty of prudence when the fiduciaries bought and held IBM stock when a particular division of the company was overvalued. The U.S. District Court for the Southern District of New York dismissed the plaintiff’s claim, but the Second Circuit reversed. The plaintiff in Jander argued that the defendant plan fiduciary could have disclosed the overvaluation earlier along with regular SEC reporting, and the Second Circuit accepted that argument. Applying Dudenhoefer, the Second Circuit determined that a fiduciary could plausibly find that early disclosure of the division overvaluation would be more beneficial than harmful to the plan:

[K]eeping in mind that the standard is plausibility – not likelihood or certainty – we conclude that Jander has sufficiently pleaded that no prudent fiduciary in the Plan defendants’ position could have concluded that earlier disclosure would do more harm than good. We therefore hold that Jander has stated a claim for violation for ERISA’s duty of prudence.

The Eighth Circuit

            The Eighth Circuit’s holding in Allen v. Wells Fargo & Co. is consistent with past holdings of the Fifth, Sixth, and Ninth Circuits. In Allen, and in Dudenhoefer, the plaintiff’s complaint states that the plan fiduciary did not act prudently in light of critical inside information. At the court noted in Dudenhoefer,

To state a claim for breach of the duty of prudence on the basis of inside information, a plaintiff must plausibly allege an alternative action that the defendant could have taken that would have been consistent with the securities laws and that a prudent fiduciary in the same circumstances would not have viewed as more likely to harm the fund than to help it.

            In Allen, Francesca Allen, among other plaintiffs, brought a suit against Wells Fargo that was ultimately dismissed by the United States District Court for the District of Minnesota for failure to state a claim. Allen appealed, and the Eighth Circuit Court of Appeals affirmed that Allen did not meet the pleading standards set forth in Dudenhoefer. In other words, the Eighth Circuit determined that Allen could not plausibly argue that disclosing the fraudulent activity would be more beneficial than harmful to the company retirement plan (or at least not more likely to harm than help). If Wells Fargo had disclosed such information, the company stock would almost certainly have plummeted and wiped out the wealth of plan participants.

Looking Forward

            Allen has not yet filed a petition for writ of certiorari, and it is not clear that she will. The Supreme Court did issue a per curiam opinion in Jander in January 2020, but the case was vacated and remanded on other grounds than those argued in the Second Circuit. When remanded, the Second Circuit decided the case the same as they had before. On November 9, 2020, the Supreme Court denied certiorari on the question of whether allegations that the harm of an inevitable disclosure of alleged fraud increases over time satisfies the “more harm than good” standard in Dudenhoefer. Thus, the Court declined the opportunity to lower the bar slightly for plaintiffs to bring imprudence claims.

 

Further Reading

For further reading, see: https://columbialawreview.org/content/the-duty-to-inform-in-the-post-dudenhoeffer-world-of-erisa/.

Sue Me Once, Shame on You; Sue Me Twice, Pay My Attorney’s Fees?

BACKGROUND

When a plaintiff voluntarily dismisses an action and then refiles it in federal court, “the court may,” under Rule 41(d)(1), “order the plaintiff to pay all or part of the costs of that previous action…” The goal of the rule is to deter plaintiffs from forum shopping.

Court fees, printing costs, costs to procure transcripts, and compensation for court-appointed interpreters have typically been considered costs that can be recovered under Rule 41(d)(1). But these costs often pale in comparison to the fees that defendants pay to their attorneys.

THE ISSUE

Under Rule 41(d)(1), can a court order a plaintiff to pay attorney’s fees?

THE SPLIT

Circuits have taken three different approaches to resolving this issue. The Sixth Circuit has held that attorney’s fees are not recoverable under the rule. The Second, Eighth, and Tenth Circuits have upheld awards of attorney’s fees under Rule 41(d) regardless of the underlying suit. And the Fourth, Fifth, and Seventh Circuits only allow for recovery of attorney’s fees when the statute under which the suit is brought allows a successful defendant to recover them.

The Sixth Circuit

In Rogers v. Wal-Mart Stores, Inc., the Sixth Circuit held that attorney’s fees could not be awarded under Rule 41(d) for a “simple” reason: “the rule does not explicitly provide for them.” The court reasoned that “the law generally recognizes a difference between the terms ‘costs’ and ‘attorney fees,’” and that “where Congress has intended to provide for an award of attorney fees, it has usually stated as much.”

The Sixth Circuit concluded that Rule 41(d) does not “evince an intent to provide” attorney’s fees, applying the Supreme Court’s test from Key Tronic Corp. v. U.S. for determining whether a statute authorizes awarding attorney’s fees when it does not do so explicitly. In reaching this conclusion, the court reviewed other parts of the Federal Rules of Civil Procedure (“FRCP”) that allow for the recovery of costs. Costs and attorney’s fees are listed as separate elements that can be recovered in rules 30(g)(2), 37(a)(4), 37(c), and 56(g), and thus, an interpretation of Rule 41(d) allowing the awarding of attorney’s fees would render words in other parts of the federal rules surplusage, the court reasoned. It also pointed to 28 U.S.C. § 1920, which lists costs that can be recovered under Rule 54(d) and does not include attorney’s fees, as evidence that “cost” was not intended to encompass attorney’s fees under the federal rules.

The Second, Eighth, and Tenth Circuits

In 2018, the Second Circuit addressed the issue in Horowitz v. 148 South Emerson Associates LLC. Like the Sixth Circuit, the Second Circuit concluded that neither Rule 41(d) nor the FRCP in general were explicit in including attorney’s fees as a part of costs.

But the Second Circuit concluded that Rule 41(d) did “evince an intent to provide” attorney’s fees. The purpose of Rule 41(d), the court reasoned, is “to serve as a deterrent to forum shopping and vexatious litigation,” and this purpose would be “greatly limited” if Rule 41(d) did not provide for attorney’s fees because oftentimes attorney’s fees account for a significant proportion of a defendant’s total cost. If attorney’s fees could not be awarded to the defendant in Horowitz, for example, the only costs that could be awarded under Rule 41(d) would be a $15 delivery fee and a $60.48 transcript fee. The court was “unconvinced such small payments would effectively deter litigants . . . from forum shopping or otherwise embarking on a course of vexatious litigation.”

While the Eighth and Tenth Circuits considered the issue before the Second Circuit did, neither directly addressed the issue of whether “costs” included attorney’s fees. In Meredith v. Stovall (2000), the Tenth Circuit held that “under the language of Rule 41(d), the decision whether to impose costs and attorney’s fees is within the discretion of the trial court.” And in Evans v. Safeway Stores, Inc (1980), the Eighth Circuit issued an unpublished decision concluding that the district court did not abuse its discretion in awarding attorney’s fees.

The Fourth, Fifth, and Seventh Circuits

The Seventh Circuit addressed this issue in Esposito v. Piatrowski (2000). The court extended the rationale of the Supreme Court’s decision in Marek v. Chesney (1985) in which the Court analyzed whether Rule 68, which also allows the recovery of costs without specifying further, allows for the recovery of attorney’s fees. In Marek, the Court held that “Rule 68 was intended to refer to all costs properly awardable under the relevant substantive statute” because the Advisory Committee was aware of the many statutes that allowed for recovery of attorney’s fees in particular cases, and therefore “given the importance of ‘costs’ to the Rule, it is very unlikely that this omission was mere oversight.”

The Seventh Circuit adopted this rationale for interpreting “costs” in Rule 41(d): “Like Rule 68, Rule 41(d) refers to ‘costs,’ but fails to define the term, and furthermore, neither the rule nor the Advisory Committee Notes address the question of whether attorney’s fees may be included in an award of costs. Because Rule 41(d) does not refer to costs any differently than does 28 U.S.C. § 1920, which provides the statutory specification of allowable costs [under rule 54(d)], fees may be included as costs only where the underlying statute so provides.”

The Seventh Circuit ruled, therefore, that attorney’s fees were only recoverable when a prevailing defendant could recover in the initial suit. In Esposito, the suit was a civil rights action arising under 42 U.S.C. § 1983. Because the initial suit had not been “frivolous, unreasonable, or groundless,” a requirement for the recovery of attorney’s fees by a successful defendant in an action under Section 1983, the court held that the statute under which the action arose did not allow recovery of attorney’s fees by the defendant.

In Andrews v. America’s Living Centers, LLC (2016), the Fourth Circuit adopted the Seventh Circuit’s rationale in an action arising under the Fair Labor Standards Act. It explained that the Seventh Circuit’s rule in Esposito “strikes the right balance between upholding the American Rule and furthering the goal of Rule 41(d) to deter forum shopping and vexatious litigation on the part of the plaintiff.” But, as in Esposito, because the plaintiff’s initial suit “was not undertaken in bad faith, vexatiously, wantonly, or for oppressive reasons,” the standard for recovery of attorney’s fees by a prevailing defendant under the FLSA, attorney’s fees were not recoverable. The Fifth Circuit adopted the same rule in Portillo v. Cunningham the following year.

LOOKING FORWARD

Because of the rarity of the situation, the question of whether attorney’s fees can be awarded under Rule 41(d) is one that is unlikely to be resolved soon. Even so, it is a question that affects the extent to which plaintiffs are incentivized to refile their cases in federal courts. It is also one that reflects a broader difference in methods between circuits in determining whether a cost-awarding provision in the FRCP allows for attorney’s fees, and therefore, it is an issue that may develop as courts address similar fee-shifting clauses.

Further Reading: Does Rule 41(d) Authorize an Award of Attorney’s Fees? by Edward X. Clinton Jr.

What Not to Do While Robbing A Bank (Alternatively: How to Get Away with Abduction)

BACKGROUND

The Federal Sentencing Guidelines offer judges parameters by which to calculate sentencing based on the severity of the crime and the defendant’s criminal history. The Guidelines aim to assign fair, relatively consistent sentences across the country.

The Guidelines include enhancements, which are provisions that increase the length of a sentence for a particular crime. A robbery, as a base offense, is a level twenty. However, the robbery guideline enhances the base offense level by four if any person was abducted to facilitate commission of the offense or to facilitate escape. The guidelines commentary defines “abducted” to mean a person was forced to accompany an offender to a different location. What constitutes a different location is up for debate.

ISSUE

Under the Sentencing Guidelines, does a defendant “abduct” a victim during a robbery by making them move to another room within the same building?

THE SPLIT

Rather than a two-way split, the various positions taken by circuits seem to fit into three categories. The Sixth, Seventh and Eleventh Circuits all concur that different rooms within the same store do not qualify as “different locations” under the enhancement. The Fourth and Fifth Circuits disagree. The Third and Tenth Circuit fall somewhere in-between, having adopted a novel three-prong test to make such a determination.

Sixth, Seventh, and Eleventh Circuits

In 2019, the Sixth Circuit became the latest to join the split in United States v. Hill. In this case, the robbers forced employees within a cellphone store to move from the sales area to the back room in order to tie them up. The district court applied the four-level “abduction” enhancement, which increased the defendant’s sentence by approximately two years.

When the defendant appealed his sentence, the Sixth Circuit overturned the enhancement. The court held that “the phrase ‘different location’ is best read to refer to a place different from the store that is being robbed. And a store’s back room does not qualify as a ‘different location’ from the store.” The court provided multiple reasons for their finding.

Amongst them, the court explained that ordinary speakers rarely specify the exact location within a store that was robbed, but rather generalize one location. For example, in common speech, one does not detail that the sales area of a store or vault at the bank was robbed, but rather simply state that a store or bank was robbed. Additionally, the court expressed that if the Sentencing Commission meant for such a short movement to count, it had no reason to add the phrase “different location.” Moreover, the example in the Guidelines commentary is of a robber forcing a bank teller into a getaway car—a location different than the store itself.

The Eleventh Circuit in 2013 reached the same conclusion in United States v. Whatley. The circuit provided further reasoning that “different location” must be read in light of “abduction,” explaining that a normal speaker “would conclude that [the robber] had taken the [employees] hostage during the commission of the . . . robberies but would not describe those employees as having been abducted or kidnapped.”

Similarly, in 2010, the Seventh Circuit held in United States v. Eubanks that dragging a store employee about six feet from back room to front room of a store was not abduction, stating that “[t]o find otherwise would virtually ensure that any movement of a victim from one room to another within the same building, without any other aggravating circumstances, would result in an abduction enhancement.” However, the court did note that each finding was a fact specific determination. The Sixth Circuit has agreed and held the same limitation applies.

Fourth and Fifth Circuits

In 2017, the Fifth Circuit joined the Fourth in finding that different areas within the same store do qualify as a “different location” and thus require an enhancement. In United States v. Buck, a robber forced store employees from the front of the store to the back. In upholding the abduction enhancement, the Court stated that the term “different location” must be interpreted with flexibility. The Court wrote: “we are satisfied that the conspirators forcing [employees] to move from the front of the stores to the backs was sufficient to make the abduction enhancement applicable.”

In United States v. Osborne, the Fourth Circuit also deemed the pharmacy section and the store area of a Walgreens to be discrete locations. Like the Eleventh Circuit, the court looked to ordinary language, but it reached a different conclusion: “It is in ordinary parlance to say that the pharmacy section and the store area are ‘different locations’ within the Walgreens building. This is especially true in view of the fact that the pharmacy section and the store area are divided by a counter, as well as a secured door intended to be passable only by authorized persons via keypad.”

Third and Tenth Circuits

The Third Circuit has taken a unique approach by creating a three-prong test to make a determination of whether to apply the robbery enhancement. In United States v. Reynos, the Court closely examined the language of the enhancement and engineered three predicates accordingly:

First, the robbery victims must be forced to move from their original position; such force being sufficient to permit a reasonable person an inference that he or she is not at liberty to refuse. Second, the victims must accompany the offender to that new location. Third, the relocation of the robbery victims must have been to further either the commission of the crime or the offender’s escape.

Following this test, the Court concluded that an abduction occurred where a robber, wielding a pistol, forced pizza shop employees from where they were hiding in the restaurant bathroom to the cash register area—a distance of approximately thirty-four feet—so that they could assist him in opening the cash register.

In 2017, the Tenth Circuit adopted this test as well in United States v. Archuleta. Though the test is meant to be a neutral arbitrator, it tends to favor using the enhancement.   

LOOKING FORWARD

The broad inconsistencies among the circuits frustrate the very purpose of the Federal Sentencing Guidelines. Varying interpretations continue to result in sentencing discrepancies across the country and are not limited to just the robbery enhancement. It has become clear that sentencing disparities due to the complexity of the Federal Sentencing Guidelines, coupled with judicial discretion, need to be addressed. While the Supreme Court could take up and address each incongruity, this solution would be inefficient and result in many defendants spending a disproportionate amount of time in prison. Rather, it may be time for a complete overhaul of the guidelines and fundamental criminal sentencing reform.

In the meantime, defendants may want to take note of what not to do during a robbery. 

 

 

 

 

Blocking the Work-Around: SLUSA’s Preemption of State Law Securities Class Actions

BACKGROUND

Due to an increasing volume of private securities fraud litigation being filed in the 1980’s and early 1990’s, Congress feared that plaintiffs were bringing abusive securities claims. Despite little chance of winning on the merits, these plaintiffs would often force defendants to settle due to the expensive nature of discovery in securities litigation. In 1995, Congress passed the Private Securities Litigation Reform Act (“PSLRA”). The Act raised the barrier for private federal securities fraud litigation, putting in place stringent new pleading standards for these lawsuits. Under the PSLRA, plaintiffs would need to provide evidence of fraud before any pretrial discovery took place.  In an effort to circumvent the new federal PSLRA standards, plaintiffs began bringing more securities fraud claims under state law.

To prevent these plaintiffs from avoiding the new pleading standards, Congress then passed the Securities Litigation Uniform Standards Act (“SLUSA”) in 1998. SLUSA precludes claimants from filing class actions that (1) consist of more than fifty prospective members; (2) assert state law claims; (3) involve a nationally listed security; and (4) allege a misrepresentation or omission of a material fact in connection with the purchase or sale of a covered security. The result is that private federal securities fraud claims can be pursued as a state law individual action or a federal securities fraud class action, but a plaintiff cannot pursue such claims as a state law class action.

However, Congress did not explicitly define which claims include misrepresentation or omission of material fact. In particular, it is unclear whether claims for breach of contract and breach of fiduciary duties, which are typically brought as state law claims, are treated as alleging misrepresentation or omission of material fact.

THE ISSUE

Does SLUSA preempt class action claims alleging a state law breach of contract and/or fiduciary duty in connection with the purchase or sale of a covered security?

THE SPLIT

The stances taken by the circuits do not fit into a simple binary. Each circuit with precedent on the issue has taken the approach that there are times that SLUSA does preempt these claims, but other times it does not. However, the circuits can be divided into three categories as to where the line has been drawn on preemption.

Sixth Circuit

            The Sixth Circuit has taken a literalist approach to this issue, where the court asks whether the complaint includes allegations of misrepresentation or omission. However, the Sixth Circuit has also instructed district courts to dismiss claims where the plaintiff has omitted allegations of misrepresentation or omission through artful pleading. So under Sixth Circuit precedent, any explicit or implicit allegation of misrepresentation or omission of material fact in a state law class action claim in connection with the purchase or sale of a covered security is sufficient to be preempted by SLUSA.

            In Segal v. Fifth Third Bank, N.A., the plaintiff brought state law class action claims for breach of fiduciary and breach of contract. The plaintiffs accused Fifth Third Bank of investing fiduciary assets in proprietary Fifth Third mutual funds rather than superior funds operated by the Bank’s competitors and providing standardized, largely automated management of the assets after promising individualized management. In the Amended Complaint, the plaintiff stated: “None of the causes of action stated herein are based upon any misrepresentation or failure to disclose material facts of plaintiff.” However, the Sixth Circuit upheld dismissal of the complaint, stating that SLUSA’s preemption does not depend on whether the complaint makes material or dependent allegations of misrepresentation, but “whether the complaint includes these types of allegations, pure and simple.” Additionally, the court made it clear that the question of preemption is dependent on “whether the complaint covers the prohibited theories, no matter what words are used (or disclaimed) in explaining them.”

Second, Third, and Ninth Circuits

            Under the precedent of the Second, Third, and Ninth Circuits, a class action claim for breach of contract and/or fiduciary duty is barred by SLUSA only if the claim requires proof of a misrepresentation or omission of material fact. These courts look to whether any misrepresentation or omission serves as the factual predicate of the state law claim.

            In Freeman Investments, L.P. v. Pacific Line Ins. Co., the plaintiffs alleged the defendant had breached their contracts and its duty of good faith and fair dealing by charging policyholders an excessive “cost of insurance.” The district court dismissed the complaint since it included allegations of systematic concealment and deceit involving hidden fees. However, the Ninth Circuit reversed the dismissal, holding that SLUSA preemption should depend on what the plaintiffs would be required to show to prove their claim. For the claims brought forth by the plaintiffs here, they need not show that the defendant misrepresented the cost of insurance or omitted critical details—they only need to persuade the court that their reading of the contract terms is the proper interpretation. A similar approach was taken by the Second Circuit in In re Kingate Management Ltd. Litigation and the Third Circuit in LaSala v. Bordier et Cie.

Seventh Circuit

            Lastly, the Seventh Circuit decided two cases in 2017, Goldberg v. Bank of America, N.A. and Holtz v. JPMorgan Chase Bank, N.A., where the court took a different approach than any other circuit. The court held that if a claim could be pursued under federal securities law, then it is preempted by SLUSA even if it also could be pursued under state contract or fiduciary law. The court elaborated that allowing plaintiffs to work around securities law by bringing state law contract or fiduciary duty claims would render SLUSA ineffectual. This approach has been the subject of significant criticism from commentators, as well as Judge Hamilton’s dissent in Goldberg, for taking SLUSA’s statutory purpose too far.

LOOKING FORWARD

            In his dissent in Goldberg, Judge Hamilton articulates his belief that only the Supreme Court can settle the circuit split on SLUSA preemption. While the Court may certainly choose to take a case to interpret SLUSA in a way that would resolve the differences between the circuits, the split may more effectively be resolved where it began—Congress. While relying on Congress to act may not be the most reliable option, a section defining the scope of SLUSA preemption could work its way into a much larger bill. After all, securities litigation is on the rise again, and Congress may be interested in helping to clarify an ambiguity that may affect many of these lawsuits.

Unintended Ambiguity: Sentencing Enhancements for “Physical Restraint” in the Federal Sentencing Guidelines

BACKGROUND

Congress created the United States Sentencing Commission (USSC) through the Sentencing Reform Act of 1984. The USSC established Federal Sentencing Guidelines––effective since 1987—to provide more structure and certainty to the administration of punishment in the federal court system. The sentencing guidelines aim to assign fair, relatively consistent sentences by providing different levels of offense seriousness: as the crimes get more serious, the offense level correspondingly rises. The aim of these Guidelines was to take away what many previously viewed as unfettered discretion held by federal trial judges. After the U.S. Supreme Court’s holding in United States v. Booker in 2005, these Guidelines are no longer mandatory, but judges must provide an explanation when exercising their discretion to depart from them.

The Guidelines include enhancements, which are provisions that increase the length of a sentence for a crime. Enhancements generally fall within two broad categories: 1) non-recidivist enhancements, which may stem from the particular circumstances of the offense or 2) recidivist enhancements, which are based on the defendant’s criminal history. In robbery charges there is, among other circumstance-based enhancements, an enhancement that increases the offense level by two levels if any person was physically restrained to facilitate commission of the offense or to facilitate escape. The Guidelines define “physically restrained” as “the forcible restraint of the victim such as by being tied, bound, or locked up.” 

THE ISSUE

Can the sentencing enhancement for physically restraining a victim apply when the defendant only threatened the victim with verbal threats and a firearm, but without actual physical contact?

THE SPLIT

A majority of circuits have taken a position on this issue and can generally be divided into two camps: 1) those that believe it can suffice to restrain from movement due to threats and 2) those that require actual physical contact. 

The First, Fourth, and Tenth Circuits take the position that threats without contact can suffice for “physical restraint” to have occurred. In United States v. Miera (2008), the Tenth Circuit held that the sentencing enhancement applied where the defendant stood in front of the bank’s door waving a gun and demanded that the bank’s occupants “don’t move.” The court posited that physical restraint is not limited to physical touching and that keeping someone from doing something is inherent within the concept of restraint. In the court’s view, the enhancement would not apply if Miera had simply walked up to the teller’s station with a gun visible in his waistband and demanded money. However, because Miera blocked the exit, pointed the gun, and commanded the individuals to not move, the actions in the aggregate amounted to physical restraint.

Similarly, the Fourth Circuit case United States v. Dimache (2011) involved the defendant pointing a gun at and threatening multiple bank tellers, ordering them to the floor and telling them not to move. The court determined these actions constituted physical restraint because the essential character of physical restraint is the deprivation of a person’s freedom of personal movement. So long as a victim is prevented from moving due to a threat of physical force, that is enough; physical restraint is not limited to actual touching. A case in the First Circuit, United States v. Wallace (2006), involved a defendant who blocked the victim’s path when she tried to escape and ordered her at gunpoint to stop. The court stated that the aggregate of the circumstances left “no doubt” that the one victim was physically restrained. 

The Second, Fifth, Seventh, Ninth, and D.C. Circuits hold differently, requiring “restraint” to involve actual physical contact. The Second Circuit in United States v. Taylor (2020) vacated the district court’s application of the sentencing enhancement and established its own standard in doing so. According to the Second Circuit, a finding of physical restraint is based on three factors: 1) the restraint must be physical (as opposed to mental); 2) it must be restraint, and not force, restricting the victim’s freedom of movement; and 3) it must be more than a direction to move that is typical of most robberies, given that it must facilitate—not constitute—the offense. Under those factors, “herding victims into a defined area” does not qualify as physical restraint. The court stressed in its reasoning that the enhancement should not be given excessive application to the point where it could apply to virtually every robbery (in which case the only instances the enhancement would not apply would be where the premises was unoccupied or where the robber actually instructed the victims that they should feel free to move about or leave).

The Fifth Circuit in United States v. Garcia, the Seventh Circuit in United States v. Herman, and the D.C. Circuit in United States v. Drew each stress the importance of the word “physical” as a modifier of “restraint.” The Fifth Circuit noted that “restraint” by itself may have many forms (physical, mental, moral, etc.) and that the word “physical” is doing at least some work. The D.C. Circuit similarly commented that physical restraint “must, as the language plainly recites, be physical.” The Seventh Circuit stated that “(w)ords should mean something . . . that the Guidelines call for physical restraint tells us that not all restraints warrant the two-level enhancement.” In other words, the Seventh Circuit has adopted a standard of looking at the defendant’s actions, not the victim’s inactions. 

LOOKING FORWARD

Congress intended the USSC to establish Guidelines that bring about more consistency in sentencing, not less. The “physical restraint” sentencing enhancement is a topic that is ripe for review, as circuit courts have divided on this issue. Even circuits in agreement have engendered their own distinct tests. The Supreme Court to date has denied certiorari to cases involving this subject. The Court must address the circuit split to resolve this issue and provide jurisprudential consistency. Until it does, criminal defendants will be given disparate sentences based on the jurisdiction in which they are convicted.

 

 

If a Sound Recording Is Copied and Nobody Hears It, Is There Copyright Infringement?

BACKGROUND

One of the exclusive rights of a sound recording copyright holder is the right to produce derivative works, or “copies that directly or indirectly recapture the actual sounds” of an original recording. 17 U.S.C. §114 (b). A copyright owner may rearrange, remix, or otherwise alter in sequence or quality “the actual sounds fixed in the sound recording” to create a derivative work. 17 U.S.C. §114 (b).  This right, however, does not prohibit “the making or duplication of another sound recording that consists entirely of an independent fixation of other sounds, even though such sounds imitate or simulate those in the copyrighted sound recording.” 17 U.S.C. §114(b).

Sampling refers to the copying of audio from an existing sound recording, potentially changing the pitch or tempo of the original recording and incorporating the clip into a new recording. In a copyright infringement suit, the de minimis exception applies when the alleged copying is so minimal that it is not actionable copying. See Ringgold v. Black Entm’t Television Inc. (2d Cir. 1997). A copied product exceeds the de minimis threshold when the copy is substantially similar to the original. However, the Sixth and Ninth circuits have split as to whether the de minimis exception applies when copyrighted sound recordings are sampled.

THE ISSUE

Does 17 U.S.C. §114(b) expand the exclusive rights of sound recording copyright holders such that the de minimis exception does not apply?

THE SPLIT

The Sixth Circuit has held the de minimis exception inapplicable for claims alleging sound recording infringement and has adopted a bright-line rule that any sampling of a sound recording violates the exclusive rights of a copyright holder. The Ninth Circuit has held the exact opposite, applying the de minimis exception to sound recording sampling infringement actions.

In Bridgeport Music, Inc. v. Dimension Films, the Sixth Circuit held that the de minimis inquiry did not apply when the defendant admitted to sampling, and therefore copying, a sound recording. The court argued that sampling violated a copyright owner’s exclusive right to create derivative works. The court concluded that a sample was a derivative work because of the statutory language in §114(b) describing derivative works as sounds from an original recording that “are rearranged, remixed, or otherwise altered.” Further supporting its holding, the Sixth Circuit interpreted the inclusion of the term “entirely” in §114(b) as signifying that a sound recording owner has the exclusive right to sample his own recording no matter the amount sampled. The court justified its elimination of the de minimisexception and adoption of this bright-line rule for three reasons. First, the court highlighted the “ease of enforcement” in requiring artists either “[g]et a license or do not sample.” The court did not view this bright-line rule as stifling creativity because an artist can imitate or duplicate a sound without sampling and infringing on the original. Second, the court maintained that the “market will control the license price” such that it will not become unreasonable. Third, the court argued that “sampling is never accidental.” The Sixth Circuit reasoned that because sampling “is a physical taking rather than an intellectual one,” the de minimis exception does not apply. 

In VMG Salsoul, LLC v. Ciccone, the Ninth Circuit expressly disagreed with its sister circuit’s decision, holding that sampling 0.23 seconds of audio did not exceed the de minimis threshold and therefore did not infringe on the original copyrighted sound recording. The court evaluated whether “an average audience would recognize the appropriation” to determine if the sampled audio exceeded the de minimis standard. Emphasizing that the plaintiff’s own expert witness could not discern which notes of the original sound recording were sampled, the court concluded that an “average audience would not do a better job,” and therefore, there was no infringement.

The plaintiff in VMG Salsoul urged the court to apply Bridgeport’s bright-line rule that for “copyrighted sound recordings, any unauthorized copying—no matter how trivial—constitutes infringement,” but the Ninth Circuit refused to do so. The court cited legal precedent showing that the “rule that infringement occurs only when a substantial portion is copied is firmly established in the law.” Then, the court turned to the statutory text. The court noted that 17 U.S.C. §102, which lists copyrightable works of authorship, “treats sound recordings identically to all other types of protected works” and nothing in the text indicates that sound recording should be treated differently than any other work. The court found nothing in the statutory text to suggest that “Congress intended to eliminate the de minimis exception” for sound recordings. The court then addressed 17 U.S.C. §114(b), which was central to the Sixth Circuit’s holding. Focusing on the sentence containing “entirely” just as the Sixth Circuit had, the court described the sentence as “imposing an express limitation on the rights of a copyright holder” and hesitated to “read an implicit expansion of rights into Congress’s statement of an express limitation on rights.” The court interpreted this provision as only dictating that a “new recording that mimics the copyrighted recording is not an infringement . . . so long as there was no actual copying” without eliminating the longstanding de minimis exception for sound recordings.

The court went so far as to call the Sixth Circuit’s decision illogical and emphasized that a “statement that rights do not extend to a particular circumstance does not automatically mean that rights extend in all other circumstances.” Further, the court explicitly rejected Bridgeport for three reasons. First, the court did not find the “physical taking” component of sampling as suitable justification for eliminating the de minimis exception. The court reasoned that physical taking “exists with respect to other kinds of artistic works as well, such as photographs,” and the de minimis rule still applies to those works. Second, the court acknowledged that even if sound recordings could be treated differently than other works according to the statute, “that theoretical difference does not mean that Congress actuallyadopted a different rule.” The court hesitated to eliminate the de minimis exception without Congress’s explicit intention to do so. Lastly, the court highlighted the contradiction between the Sixth Circuit’s argument that its decision would be beneficial for musicians by saving costs and the Supreme Court’s express assertion in Feist Publ’ns, Inc. v. Rural Tel. Serv. Co. that the Copyright Act does not protect the “sweat of the brow” or the fruit of an author’s labor.

LOOKING FORWARD

In the digital age, this issue cannot be left unresolved. Artists will continue to sample sound recordings as sampling is popular within the music industry, but this ambiguity makes it difficult to anticipate whether sampling invariably requires a license or whether a license requirement can be determined on a case-by-case basis. Because the deadline to submit a petition for certiorari to the Supreme Court has passed for both cases, this circuit split will remain unresolved for the foreseeable future.

Losing Your Second for a Lifetime: Does Prior Involuntary Institutionalization Trigger a Lifelong Ban on Firearm Possession?

BACKGROUND

Federal law prohibits the possession of firearms by persons who have been involuntarily committed to a mental health institution by a state court. This ban, part of the “Gun Control Act” and codified at 18 U.S.C. § 922(g), also applies to people who have been convicted of a felony, convicted of a domestic violence misdemeanor, or have been dishonorably discharged from the United States Armed Forces, among others. However, federal law does not dictate for how long one may be banned from possessing a firearm—is it weeks? Months? Years? Decades?

Duy Mai was seventeen years old in 1999, when he was involuntarily committed to a mental health institution by a Washington court. His commitment spanned more than nine months to account for the court’s ruling that Mai was “mentally ill and dangerous.” Since his release in 2000, Mai has earned a GED, a bachelor’s degree, and a master’s degree. He is a father and asserts that he is “socially-responsible, well-balanced, and accomplished.” And, he argues, he no longer has a mental illness. Now he wants to buy a gun. The Ninth Circuit Court of Appeals says he may not.

THE ISSUE

Does 18 U.S.C. § 922(g)(4) impose a lifetime ban on firearm possession after involuntary institutionalization?

THE SPLIT

The Ninth and Third Circuits have held that, yes, involuntary institutionalization does trigger a lifelong ban on firearm possession. The Sixth Circuit has held that it does not.

In Mai v. United States (2020), the Ninth Circuit affirmed the district court’s dismissal of Duy Mai’s claim. There, he argued that a lifelong imposition of 18 U.S.C. § 922(g)(4) violated his Second Amendment rights. Some states have been able to grant their citizens relief from this ban through inquiries allowed under 34 U.S.C. § 40915 (“Authority to Provide Relief from Certain Disabilities with Respect to Firearms”),  but Washington’s program did not meet the robust requirements to make Mai eligible for such relief. Assuming arguendo that the lifetime ban burdened Mai’s Second Amendment right to bear arms, the Ninth Circuit applied intermediate scrutiny to his claim. The judges balanced the statutory objectives and any important governmental purpose of § 922(g)(4) with the substantial limitations it places on Mai’s freedoms. Citing to prior United States Supreme Court precedent, the judges concluded that the government’s important responsibilities to prevent suicide and crime outweighed any as-applied limitation on Mai’s right to possess a firearm. After all, the Court noted, this right is not unlimited. The Ninth Circuit also cited to its own prior ruling on 18 U.S.C. § 922(g)(9) from United States v. Chovan, where the court determined that a lifetime ban on gun ownership was appropriate for someone who had been convicted of a domestic violence misdemeanor “regardless of present-day rectitude.”

The Sixth Circuit used the same general framework as the Ninth Circuit but came to a different conclusion. Like Mai, the plaintiff in Tyler v. Hillsdale County Sheriff’s Department (2016), argued that a lifetime ban on firearm ownership violated his Second Amendment right since he no longer suffered from mental illness. Tyler had been involuntarily committed more than thirty years ago following a particularly emotional divorce. Also like Mai, Tyler conceded that the ban may be appropriate where a person continues to suffer, which was not true in his case. The Court applied intermediate scrutiny for the same reasons as cited in Mai—assuming, arguendo, that the Second Amendment right is burdened, the decision to lifetime ban must be substantially related to the stated government justifications. Unlike Mai, however, the Sixth Circuit did not consider a lifetime ban fit for the justifications. The government failed to show that there was a substantial relationship between the two primary justifications (suicide prevention and crime reduction) and the ban, according to the Court. As such, the Sixth Circuit reversed and remanded for further application of as-applied intermediate scrutiny.

Like the Ninth Circuit, the Third Circuit also found that § 922(g)(4)’s lifetime ban passed muster. The plaintiff in Beers v. Attorney General of the United States (2020) was involuntarily committed to a mental health institution in Pennsylvania in 2005. He had expressed suicidal ideations to his parents and had also used a firearm to demonstrate these ideations. His mother noted that she feared his access to a firearm gave him the means to complete any plans to end his life. The state twice renewed Beers’s commitment before his final release in 2006. Not long after discharge, Beers attempted to purchase a firearm. His application was denied once a background check revealed his prior involuntary commitment.  Beers challenged this denial in the Eastern District of Pennsylvania, but that court dismissed the matter for failure to state a claim. Upon appeal, the Third Circuit affirmed the denial.

In a departure from the approaches taken by the Ninth and Sixth Circuits, the Third Circuit concluded that Beers’s Second Amendment rights were not substantially burdened, and therefore, the court did not apply intermediate scrutiny. The Third Circuit applied the framework it had established in Binderup v. Attorney General of the United States (2016), which requires a challenger to the federal firearm ban to “(1) identify the traditional justifications for excluding from Second Amendment protections the class of which he appears to be a member, and then (2) present facts about himself and his background that distinguish his circumstances from those of persons in the historically barred class.” Only if a litigant can demonstrate both elements will their rights be considered burdened, triggering intermediate scrutiny. In addition to outlining historical notions of mental illness in society, the Third Circuit also looked to pre-Second Amendment literature cited in Binderup. There, the court referenced The Address and Reasons of Dissent of the Minority of the Convention, of the State of Pennsylvania, to Their Constituents (1787). The Address notes that a citizen would be ineligible to bear arms if they were a “real danger of public injury.” The court interpreted this to extend to someone who creates a real danger to the self as well. In returning to Binderup’s logic, the Third Circuit concluded that Beers could not establish how he could distinguish himself from this class (mentally ill individuals). Binderuprecognized neither the passage of time nor evidence of rehabilitation as distinctions from the class of excluded individuals. With no other bases for distinction, the court concluded Beers’s right was not burdened. Beers filed a petition for certiorari to the U.S. Supreme Court, who granted certiorari, but remanded the case with instructions to dismiss as moot.

LOOKING FORWARD

            In 2019, nearly forty-thousand people were killed and thirty-thousand were injured by incidents involving a firearm. With the United States grappling with its relationship with guns and the Second Amendment, understanding the limits (or lack thereof) of Second Amendment rights is critical. This extends beyond the conversation here—who can have guns, when they may use them, and where they may be stored or taken is inherently a part of the national conversation on violence in this country. The issue, and many others, needs to be addressed at the highest level. Whether involuntary commitment to a mental health institution triggers a lifelong ban on firearm ownership is ripe for Supreme Court review—does such a record make you lose your Second [Amendment] for a lifetime?