In a Proceeding under the Crime Victims' Rights Act, Abuse Victims Can Discover Plea Agreement Negotiations Between Prosecutor and Abuser

Jane Doe v. United States, No. 13-12923, from SDFla

 Judge Pryor joined by Judge Martin and District Judge Honeywell.

Summary:  The United States Attorney’s Office for the SDFla investigated the sexual abuse of minors by Jeffrey Epstein.  The prosecutor agreed to a non-prosecution agreement with Mr. Epstein, but did not confer with the victims before doing so.  Two victims filed suit under the Crime Victims’ Rights Act, 18 U.S.C. § 3771, seeking to discover correspondence between the prosecutor and Mr. Epstein’s attorney concerning the agreement.  Mr. Epstein (which will be used as shorthand for “Mr. Epstein and his lawyers”) intervened in the suit, claiming that the correspondence was privileged.  The district court overruled the objection and ordered disclosure of the correspondence. 

The panel first concluded that it had jurisdiction over Mr. Epstein’s interlocutory appeal.  There are five exceptions to the rule that discovery orders are not appealable: (1) the Perlman doctrine; (2) the collateral-order doctrine, Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541 (1949); (3) certification by statute, 28 U.S.C. § 1292(b); (4) a petition for a writ of mandamus; and (5) an appeal of a contempt citation.  Perlman allows an intervenor to file an interlocutory appeal of an order denying a motion to quash a grand jury subpoena.  The panel held that the logic of the Perlman doctrine applied to this case: Mr. Epstein could not challenge a final judgment in this proceeding to remedy the disclosure of the plea negotiations.  Moreover, the victims’ petition, like a grand jury proceeding, was ancillary to a criminal investigation.

The panel then concluded that the correspondence was not privileged.  There was no privilege under Rule 410, because that rule governs the admissibility of plea negotiations against a defendant, not their discoverability.  Any work-product privilege was waived when Mr. Epstein voluntarily sent the correspondence to the government during plea negotiations.  There was also no common-law privilege.  The panel accordingly affirmed the district court’s disclosure order and lifted the stay of that order. 

Note: The USAO dropped the ball in this case.  They did not confer with the victims, even though the FBI had issued victim notification letters, and they did not even inform the victims of the non-prosecution agreement for at least nine months. Indeed, after the agreement was entered in September 2007, the USAO asked the victims to explain why federal charges should be brought in June 2008.

In Nationwide Issue of First Impression, Panel Holds that Commodity Futures Trading Commission May Regulate Retail Commodity Transactions Offered on a Leveraged Basis

U.S. Commodity Futures Trading Comm’n v. Hunter Wise Commodities, LLC, et al., No. 13-10993, from SDFla

Senior Judge Dubina, joined by Judge Marcus and Senior Judge Walker (2d Cir)

Summary:  This case arose when the U.S. Commodity Futures Trading Commission ("the Commission") brought a civil enforcement action against the defendants alleging that they conducted fraudulent retail commodity transactions.  The defendants contended that the Commission lacked statutory authority for this enforcement action.  The district court rejected their argument, finding that certain amendments to the Commodity Exchange Act (“CEA”) made by the Dodd-Frank Act Consumer Protection Act of 2010 expanded the enforcement authority of the Commission.  Specifically, some of the amendments authorized the Commission to regulate retail commodity transactions that were offered on a leveraged or margined basis or financed by the offeror.  See 7 U.S.C. § 2(c)(2)(D).

As the panel noted, this case raised an issue of first impression in both the Eleventh Circuit and throughout the nation.  The defendants were involved in a multi-entity scheme that was organized as follows. One group of companies made margin trades in precious metals with the actual holders of precious metals.  These companies would then "sell" interests in these margin trades to retail customers through two layers of intermediary customers. The customers who "bought" these interests believed they were buying actual stakes in precious metals, but they were in fact only buying leveraged "interests" of the companies in precious metals. 

The issue was whether 7 U.S.C. § 2(c)(2)(D) granted the Commission the authority to seek a preliminary injunction against these transactions under the CEA.  The panel held that the Commission had authority to seek the injunction because the scheme involved a retail commodity transaction and the transactions at issue were leveraged, margined, or similarly financed. The Commission also made a sufficient showing a prima facie case of fraud.  Accordingly, the panel affirmed the district court's entry of a preliminary injunction.

Note: To obtain a preliminary injunction under the CEA, the Commission must simply make a prima facie showing of illegality. 

CGL Policy Exemption for Statuory Violations Involving Transmitting Information Upheld

Interline Brands, Inc. v. Chartis Specialty Ins. Co., No. 13-10025, from MDFla

Per curiam opinion joined by Judge Tjoflat, Senior Judge Cox, and Senior Judge Alarcon (9th Cir.)

Summary: The plaintiff procured commercial general liability policies from the defendant insurer, which contained an exclusion for any statutory violation that addressed transmitting material or information.  After the plaintiff was sued for violating the Telephone Consumer Protection Act (47 U.S.C. § 227), the defendant denied coverage, and the plaintiff filed a breach of contract action against the defendant, contending that the exclusion was void because of ambiguity and because it violated public policy.  The panel determined, applying Florida law, that the exclusion was not ambiguous, despite its broad language, and that it did not violate public policy, because even with the exclusion, the policy still provided extensive and meaningful coverage.  The panel therefore affirmed the district court’s decision to grant the defendant’s motion for judgment on the pleadings.

After Reversal by Supreme Court, Panel Finds that Magistrate Judge's Involvement in Plea Discussions Caused No Prejudice Under Plain Error Review

United States v. Davila, Nos. 10-15310& 11-10224, on remand from USSC

Per Curiam opinion joined by Judge Tjoflat, Judge Pryor, and Senior Judge Kravitch.

Summary:  The original panel opinion, 664 F.3d 1355, applied prior circuit precedent holding that a violation of Federal Rule of Criminal Procedure 11(c)(1) (which prohibits a judge from participating in plea discussions) required automatic vacatur of a defendant’s conviction.  The Supreme Court granted certiorari and reversed, 133 S.Ct. 2139, holding that no automatic vacatur was required.  On remand, the panel was instructed to determine whether the defendant was prejudiced by the magistrate judge’s comments, and whether extraordinary circumstances permitted the defendant’s claim to be evaluated under the harmless-error standard of Rule 52(a), rather than the plain-error standard of Rule 52(b) (since the defendant failed to object to the Rule 11 violation in the district court).   The panel held that plain error review under Rule 52(b) applied, and that there was not a reasonable probability that, but for the judicial comments, the defendant would have exercised his right to trial.  The panel therefore affirmed the defendant’s conviction. 

 Note: In determining that plain error review applied, the Eleventh Circuit decided not to follow dicta in cases from the Seventh, Ninth, and Tenth Circuits.

Good Faith Exception Applied to Information Obtained through GPS Device Installed Without a Warrant

USA v. Ransfer, No. 12-12956, from SDFla

Senior District Judge Baylson (EDPa), joined by Judge Martin and Judge Jordan

Summary: In this revised opinion, substituted for 743 F.3d 766, the panel rejected the defendant’s challenge to the admission of evidence obtained through the installation and use of a GPS tracking device without a warrant.  Although the search was a Fourth Amendment violation under United States v. Jones, 132 S.Ct. 945 (2012), the good-faith exception for reliance on clear, binding precedent pre-dating Jones applied, Davis v. United States, 131 S.Ct. 2419 (2011).  Within the Eleventh Circuit, United States v. Michael, 645 F.2d 252 (5th Cir. 1981), constituted binding precedent holding that the installation of a tracking beeper was not unconstitutional even if the installation was a search, because it did not violate any privacy concerns. The panel also addressed a number of minor evidentiary challenges related to expert testimony, hearsay, and limits on closing argument time. 

The panel ultimately affirmed the majority of the defendant’s convictions, although it vacated two of the convictions because of insufficient evidence.

 Note: The revised opinion modified the good-faith exception discussion on pages 13-18 of the revised slip opinion.  The original opinion only cited Michael in a footnote and expressed agreement with the Fifth Circuit’s opinion in United States v. Andres, 703 F.3d 828.  It also attempted to factually distinguish the Third Circuit’s contrary opinion in United States v. Katzin, 732 F.2d 187, reh’g en banc granted, opinion vacated by 12-2458.  The revised opinion states that Michael itself is sufficient support for the panel’s holding, and simply distinguishes Katzin on the basis that Michael was binding pre-Jones precedent.

 You can bet that when this opinion was circulated to the other judges of the Eleventh Circuit, at least some of them (perhaps Judge Hull or Judge Marcus) were uncomfortable with the panel’s opinion saying more than it needed to say.  In light of Michael, at least one other active circuit judge felt there was no need to adopt the reasoning of Andres, or to distinguish the reasoning of Katzin.

Panel Reverses Premises Liability Ruling in Favor of Landowner and Remands for New Trial

Collins v. Marriot Int’l., No. 12-15739, from SDFla

Senior Judge Walker (2d Cir.) joined by Judge Marcus and Senior Judge Fay.
 

Summary: The plaintiff sued on a premises liability claim after he fell to his death on land that was not owned by the defendants, but which was surrounded by a golf course owned that was owned by the defendants.  On Florida state law grounds, the panel reversed the district court’s grant of the defendants’ motion for a directed verdict, finding that the defendants had a duty to maintain their own property in a reasonably safe manner, and finding that the plaintiff had proffered enough evidence to infer causation.  The panel also reversed the district court’s denial of the plaintiff’s motion for a new trial because the jury’s findings that the defendants were 1% liable for the accident, but that the plaintiff was entitled to $0 in damages were inconsistent.  The case was remanded for a  new trial.

 
Note: I’m not extremely familiar with Judge Walker, but it appears based on this tight, concise, and thorough opinion that his reputation as one of the better federal appellate judges is well-deserved.

Fair Housing Act Does Not Impose an Ongoing Duty on Subsequent Owners to Remedy a Builder or Designer's Noncompliance

Harding v. Orlando Apartments, LLC, No. 13-11805, from MDFla

Per curiam opinion joined by Judge Hull, Senior Judge Black, and District Judge Walter (WDLa).

Summary: The plaintiff brought claims under the Fair Housing Act alleging that an apartment complex discriminated against people with handicaps in violation of 42 U.S.C. §3604(f)(1)-(2).  The panel found that the FHA’s design and construction guidelines do not provide a standard for determining whether discrimination under subsections (f)(1) and (f)(2) exists outside of the design and construction contexts.  In other words, the FHA does not imposing an ongoing duty on subsequent owners of property to remedy noncompliant designs made by a builder/designer.  The plaintiff thus could not state a claim under the FHA against the owner of the apartment complex, who did not design or build the complex.  The district court’s grant of summary judgment to the apartment complex is affirmed (albeit on different grounds).

Custodian Bank Breached No Duty By Accepting Fraudulent Securites

Lamm v. State Street Bank and Trust, No. 12-15061, from SDFla

Judge Jordan, joined by Judge Martin and Senior District Judge Baylson (EDPa). 

Summary: The plaintiff hired now-disgraced trader James Tagliaferri as an investment adviser.  Tagliaferri invested the plaintiff’s money in a variety of worthless securities, and the plaintiff sued the custodian bank holding his investment account for failing to protect him from these fraudulent transactions.  The panel holds, under New York and Florida law, that the custodian bank breached no duty by accepting on behalf of its customer securities that later turned out to be fraudulent and listing those securities on monthly account statements issues to the customer.  The district court’s decision to grant the custodian bank’s Rule 12(b)(6) motion to dismiss is affirmed.

Practice Pointer: In footnote 11, the panel affirms the district court’s denial of leave to amend because the “plaintiff did not submit a copy of or set forth the substance of the proposed amendment.”  In the Eleventh Circuit, the substance of the proposed amendment must be included within, or as an attachment to, the motion to amend.