Thursday, May 31, 2007

Federal Circuit Questions on Class Certification Standards

Is there going to have to be a Supreme Court decision somewhere along the line to amend an implied rift between the way federal courts seem to be determining class certification standards?

An article in May’s ABA Section of Litigation newsletter compares In re IPO Securities Litigation (2nd. Circuit, 2006) and Dukes v. Wal-Mart (9th. Circuit, 2007) as highlights of this divergent approaches seemingly being taken in applying Civil Rule of Procedure 23. (Here)

In IPO, despite “conflicting messages” associated with its previous precedents, the Second Circuit “aligned itself with other circuits, including the 4th., 7th., and 8th., in obliging district courts to determine whether all Rule 23 requirements had been met and allowing the courts to resolve factual disputes even if they overlapped merit issues or involved conflicting expert opinions.” This followed a 1982 standard set by the Supreme Court in General Telephone Co. v. Falcon, which “urged district judges to undertake a ‘rigorous analysis’ of a plaintiff’s class allegations, and adding that it sometimes ‘may be necessary for the court to probe behind the pleadings,’” according to the article.

In Dukes – what may be the largest class action in history, involving some 1.5 million female employees of WalMart Stores -- the Ninth Circuit Court of Appeals, repeatedly citing the 1974 precedent laid out in Eisen v. Carlisle & Jacqueline, “reasoned that in analyzing ‘commonality’ under Rule 23(a), the district court properly avoided resolving a ‘battle of the experts’ and was not required to apply the full-blown Daubert ‘gatekeeping’ standard.” [See Daubert v. Merrell Dow Pharmecuticals (1993)]

Subsequent to the article’s writing, a petition for rehearing was submitted in IPO, but was denied.

Wednesday, May 30, 2007

Ohio punitive damage awards in non-compete cases

The United States 6th. Circuit Court of Appeals last week added to an observed nationwide trend in holding punitive damage awards in non-compete cases to higher standards.

The case, Chicago Title Insurance Corp. v. James Magnuson/First American Title Insurance, presented numerous questions concerning both “not-to-compete” covenants and the jury verdict awarding damages.

Magnuson had been a regional vice-president with Chicago Title, having previously sold his own business to Chicago Title and entering into a five-year non-compete contract with them. He then left Chicago Title for a like job at First American, recruiting customers and other employees from his former employer. Filed in Southern Ohio District Court, a jury found Magnuson liable for breaching his contract with Chicago Title and First American for tortious interference, awarding Chicago Title $10.8 million in compensatory damages, and $32.4 million punitive – one of the biggest of that year. (Article)

On appeal, the Sixth Circuit, however, found that the District Court had committed an abuse of discretion in not including evidence of Chicago Title’s ability to take on new business in one of the intervening periods required to apply the law they did, and so reversed the District Court’s judgment, remanding for a new trial.

In its consideration of punitive damages, the Sixth Circuit cited State Farm Ins. Co. v. Campbell (2003), which confirmed three guideposts for lower courts to use when considering the constitutionality of a punitive damage award. That court said, “It should be presumed a plaintiff has been made whole for his injuries by compensatory damages, so punitive damages should only be awarded if the defendant’s culpability, after having paid compensatory damages, is so reprehensible as to warrant the imposition of further sanctions to achieve punishment or deterrence.” Here the 6th. Circuit found that Chicago Title was not made financially vulnerable by the actions of Magnuson or First American, and that First American’s conduct was neither repeated against other companies or sufficiently reprehensible. Awarding punitive damages was, therefore, inappropriate.

Ohio pre-income tax trust regulations

Ohio has finalized its commercial activity tax regulation regarding pre-income tax trusts (OAC 5703-29-21).

The regulation defines pre-income tax trusts and qualified pre-income tax trusts, explaining the timelines and procedures for revoking a trust’s election, and registering to become a CAT taxpayer. (See Information Release 2007-02).

Tuesday, May 29, 2007

Ohio smoking ban ruling appealed

The State of Ohio is appealing the Franklin County Common Pleas Court decision two weeks ago that there really is no “private club exemption” embodied in the state’s “Smoke Free Workplace Act,” apparently contrary to the understanding many people had (have). [Article]

At issue is ORC §3794.03(G) --- which, when read along with §3794.01(D), the Franklin County court reasoned -- “leads to the nullification of the ‘private club’ exemption when put into practical use.”

The Court also found that the Health Department’s promulgation of Rule 3701-52-04(G) added to the language of the statute which exceeds their authority to do.

Ohio Revised Code §3794.01 et. seq,

Thursday, May 24, 2007

6th. Circuit Children with Disabilities Supreme Court case

The U.S. Supreme Court, last Monday, held that the not only children with disabilities, but also their parents, are granted “independent, enforceable rights which are not limited to procedural & reimbursement-related matters, but encompass the entitlement to a free appropriate public education for their child.” (Decision)

Additionally, the Court said that “because parents enjoy rights under the Individuals with Disabilities Education Act (IDEA), they are entitled to prosecute IDEA claims on their own behalf” – addressing a recognized, decade old, disagreement among the circuit courts on just that idea.

Jeff and Sandee Winkelman had followed the prescribed administrative procedures in disputing the handling of their autistic son’s formal education in a public school under IDEA auspices, having taken put him in a private school pending resolution of the disagreement and having an attorney assist in certain aspects of the process. They, none-the-less, represented themselves.

Not satisfied with the administrative decision, they filed in Ohio Northern District Court for a reversal of that decision, reimbursement of private-school expenses and costs due the attorney. When the District Court found against them, they filed an appeal, pro se, with the Sixth Circuit Court of Appeals. The Appeals Court, too, dismissed the case – citing one of its own recent decisions (Cavanaugh v. Cardinal Local Sch. Dist.), where it had rejected the proposition that IDEA allows nonlawyer parents raising claims to proceed pro se in federal courts.

In Cavanaugh, the Sixth Circuit “joined the Second, Third, Seventh, and Eleventh Circuits in holding that non-lawyer parents could not represent their child in an action brought under the IDEA,” while “considering and rejecting the reasoning of the First Circuit in Maroni v. Pemi-Baker Sch. Dist. in interpreting the IDEA as including parents as ‘parties aggrieved’ who have a right to bring, pro se, a civil action under 20 U.S.C. § 1415(i)(2)(A), and adopting instead, the reasoning of Collinsgru v. Palmyra Bd.Educ. that the right of a disabled child to a free appropriate public education belongs to the child alone, and is not shared jointly with his parents.”

The full text of the Individuals with Disabilities Education Act can be viewed here, with sections on evaluations & eligibility and procedural safeguards here.

The National Dissemination Center for Children with Disabilities, a federally-funding Department of Education project, has this website with more IDEA information. IDEA information is also available on the Department of Education’s website.

Media article

Wednesday, May 23, 2007

Concurrent/Consecutive sentencing test case

Washington v. VanDelft

Read this article! this morning has an article about this pending case in the Supreme Court. In its private conference session tomorrow, the Supreme Court will decide whether to consider it.

Washington v. VanDelft, the article says, presents yet another wrinkle in the ever-evolving field of sentencing jurisprudence— following in the footsteps of Apprendi and Blakely v. Washington—whether the decision to impose consecutive rather than concurrent sentences is one that a judge can make, or one that’s reposed with a jury.

Supreme Court docket

Washington Supreme Court decision
Washington court of appeals decision

Tuesday, May 22, 2007

Ohio smoking ban update

It’s been a eventful three weeks for Ohio’s “Smoke Free Workplace Act.” Another update seems within reason.

Hamilton County’s common pleas court denied a motion for an injunction barring the State of Ohio’s implementing its new “Smoke Free Workplace Act” on May 2,2007; Judge Fred Nelson there being quoted by the media as commenting that “smoking is not a right.” That case is set for trial this November. (Article)

Last week, Franklin County Common Pleas Court said that private clubs can’t allow smoking despite language in the statewide ban that seems to exempt them, Judge David E. Cain saying that the state overstepped its authority in writing rules that attempted to resolve contradictory language in the Act which both allowed smoking in private clubs and restricted it in most workplaces. (Article)

On May 16th. the Toledo Blade was reporting that more than 100 activists were protesting the State’s plan -- which has already been ratified by the House -- to sell off 40 years of settlement payments that Ohio gets from major tobacco companies like Philip Morris and R.J. Reynolds-- $12, 000, 000, 000—to investors for an up-front lump sum of $5 billion without earmarking anything for continued smoking prevention or cessation programs. (Article)

Thursday, May 17, 2007

U.S. Sentencing Commission Guidelines

The U.S. Sentencing Commission earlier this month addressed Congress for approval of amendments to the federal sentencing guidelines, including a number addressing new crimes now defined by legislation on topics relating to sex offenders, terrorism, procuring confidential telephone records, and copyright & trademark infringement. (See Commission Press release)

Additionally, the amendments include the Commission’s proposal to lower recommended sentences for offenses involving crack cocaine, which Congress has rebuked in the past. One of the Commission’s positions is that the objectives established in 18 U.S.C. § 3553(a) would be better met by reducing the 100:1 crack/powder ratio used as a sentencing standard, a measure which would require further Congressional action.

Along with its proposed amendments, the Sentencing Commission also issued its 2007 “Cocaine and Federal Sentencing Policy” report to Congress. To provide some sort of contextual framework in which to access federal policy, the Commission surveyed state laws and contacted the sentencing commissions of those states that had one, finding, for instance, that “only 13 states have some form of distinction between crack cocaine and powder cocaine in their penalty schemes.” Ohio is one of those 13, using a graduated scale based on threshold amounts & felony categories. [ORC § 2925. 01(X)(GG)]

Also examined on the state level was whether imposed sentences were “determinate” (i.e., sentence imposed as approximates sentence served), or “indeterminate” (i.e., sentence or sentence range imposed with release back into the community after service of less than full sentence). Here, “27 states used some form of sentencing guideline; 40 have determinate sentencing structures, some in combination with guidelines… Statutory mandatory minimum penalties exist in 41 states for certain drug offenses (e.g., trafficking, and sale of drugs within a certain distance of a protected area such as a school).”

Proposed amendments
Federal Register

Monday, May 14, 2007

Ohio inmate DNA testing update

Post-scripting our post last Tuesday, a bill was introduced in the Ohio House of Representatives that following Wednesday that would provide eligibility for post-conviction DNA testing to inmates who had pleaded “guilty” or “no contest” to felony charges and were sentenced to prison terms or death.

Ohio Revised Code § 2953.72 (c)(2) at present bars that eligibility.

Ohio repeat-DUI offender legislation

The Ohio Senate, last Thursday, passed a bill increasing penalties for repeat DUI drivers, including alcohol-level monitoring bracelets, and having the potential for still more restrictions such as ignition locks, once it gets thru the House of Representatives, according to the Enquirer.

Senate Bill 17 has already been amended to include a public-accessible database of all DUI offenders having five or more convictions. According to the Department of Public Safety and the Enquirer, there have been almost 36,000 drivers with five or more DUI convictions in Ohio since 1973, about 10% from Cincinnati and southwest Ohio.

In 2005 there were 505 alcohol-related traffic deaths in Ohio, about the same number recorded five years earlier in 2000 (562 deaths). Kentucky had 313 and Indiana, 320, deaths in 2005, compared to 280 and 303, respectively, in 2000. (See stats compiled by Mothers Against Drunk Driving)

Also part of the bill would be provisions for mandatory blood-alcohol tests for drivers with two or more drug/alcohol convictions, holding police officers immune from any civil or criminal liability in the use of “any reasonable means necessary” to administer those tests.

Thursday, May 10, 2007

Death Penalty/ Lethal Injection

Most of you probably saw CNN’s article Tuesday about Dr. Jay Chapman’s having second thoughts about the lethal injection formula he helped develop some 30 years ago which is now used by most all of the states having capital punishment and the death sentence.

That article mentions the University of Miami study last month that indicated lethal injections aren’t always working the way they’re intended, and that the procedure has been ruled unconstitutional in two states-- with another 11 having stopped using it and halting executions. Yesterday, there were articles about New Jersey’s possibly scrapping the death penalty, and North Carolina having filed suit against its medical board for barring doctors from participating in executions on ethical grounds

New Jersey’s judiciary committee, today, will actually be looking at four bills to abolish the death penalty in that state; one that would have the attorney general, rather than county prosecutors, decide whether to seek the death penalty in capital cases; another one which would amend the rules of evidence to bar the death penalty in cases bearing heavily on in-custody informant or single eyewitness testimony; and one which would amend the state’s constitution providing that the “legislature shall not pass any law repealing the death penalty.”

The death penalty itself, though, has never been held to be unconstitutional, and has never been addressed in that determination, apparently. In Furman v. Georgia, back in 1972, separate opinions by Justices Brennan and Marshall called the death penalty unconstitutional, but the overall holding was that specific state statutes were arbitrary and capricious, and therefore unconstitutional.

Tuesday, May 08, 2007

Ohio post-conviction DNA testing

Post-conviction DNA testing of inmates in Ohio begins in 2003 when Senate Bill 11 was passed and codified as Ohio Revised Code §2953.71 et.seq..

Last month, the Ohio Supreme Court held that trial courts had the discretion to apply the provisions of those statutes based on specific facts & circumstances on a cases-by-case basis. The Court’s summary, there, states that “rather than stating a blanket rule, the Court held that when an eligible inmate files a post-conviction application for DNA testing, a trial court should analyze the facts of that case to determine whether the inmate must first demonstrate that negative results of genetic testing would almost certainly result in a reversal of his or her conviction, or whether the court should immediately order the prosecuting attorney to search for & report on any surviving genetic material from the inmate’s trial.” (See State v. Buehler)

That decision resolved a certified conflict sent to the Supreme Court by two Ohio appeal courts questioning whether § 2953.71 thru 2953.82 needed to be read sequentially, or the prosecuting attorney ordered in all cases to prepare the DNA evidence report required even though a showing that specific results still wouldn’t be “outcome determinate.”

One of the earliest cases addressing Ohio’s inmate post-conviction DNA testing statutes was the Ninth District Court of Appeals case State v. Rossiter in September 2004, where it was held that “the trial court clearly misread the statute” in denying Rossiter’s application. The Court, however, also noted in Rossiter that, while § 2953.82 requires “the prosecuting attorney to file a statement with the trial court that indicates whether the prosecuting attorney agrees or disagrees that the inmate should be permitted to obtain DNA testing,” such statement was not part of the record.

In Feb. 2005, the Eighth District Court of Appeals in Cuyahoga County said that, based on § 2953.82(D) – which states that “if the prosecuting attorney disagrees that the inmate should be permitted to obtain DNA testing… disagreement is final and not appealable by any person to any court..” – once a prosecutor had filed his statement of disagreement, the trial court properly denied the application for DNA testing, and the appeals court did not have any jurisdiction. (See State v. Ruiz)

Last week we muddled the waters a bit more as the Supreme Court again addressed prosecutors’ statements, upholding an Eleventh District’s opinion in 2005 that “because R.C. 2953.82(D) provides that a prosecuting attorney’s decision to disagree with an inmate’s request for DNA testing is final and not appealable by any person to any court… it interferes with the exercise of judicial authority, violates the separation-of-powers doctrine, and is unconstitutional.” ( State v. Sterling, case & court summary)

(Note: Ohio Attorney General’s Opinion 2005-009 addresses the length of time being prescribed to retain biological trial evidence; also see Ohio Attorney General’s “Protocol for Post-Conviction DNA Tests”)

Tuesday, May 01, 2007

Corporate "combined report" taxation

The Center on Budget & Policy Priorities, “one of the nation’s premier policy organizations working at the federal & state levels on fiscal policy & public programs affecting low- and moderate-income families and individuals, released a report the first part of last month describing tax reform measures known as “combined reporting.”

Twenty states have already adopted the reform, according to a press release issued on April 5th., with New York and West Virginia just enacting legislation on April 1 and 4, respectively.

“To avoid state corporate income taxes,” the release says, “a number of large, multi-state companies have devised strategies to move profits out of states where they are earned, and into those where they are taxed at lower rates or not at all, using subsidiaries largely or solely as tax shelters in the ‘haven states’ like Delaware, and then artificially shifting funds to them as royalties or rent.” Combined reporting creates an arena in which parent companies and most of its subsidiaries are treated as a single corporation for income tax purposes; the state taxing a share of the company’s combined nationwide income.

Neither Ohio, Kentucky, nor Indiana use this method according to the Center’s report.