Seventh Circuit Notes Split re Accrual of Unlawful Arrest Claim That Would Undermine the Defendant’s Conviction

Per Wallace v. Chicago, 440 F.3d 421, (7th Cir. Mar. 8, 2006):

. . . [We] reaffirm our holding in Booker v. Ward that a " § 1983 unlawful arrest claim ... accrue[s] on the day of [ ] arrest." Id. at 1056-57. Individuals and attorneys who wish to preserve a claim for false arrest or similar Fourth Amendment violations should file their civil rights action at the time of arrest. It will still be possible, of course, for a district court to stay any such action until the criminal proceedings are concluded, should it conclude in its discretion that a stay would be useful. We note as well that we are addressing only the question of accrual; other doctrines, such as equitable tolling, may also affect the time in which a particular suit may be brought. See Heck, 512 U.S. at 489, 114 S.Ct. 2364 (reserving judgment on whether equitable tolling applies in this context).

One additional qualification is necessary, which in our view answers the concerns expressed in the dissent. Heck itself recognized that it is possible for a § 1983 claim based on false arrest or a similar Fourth Amendment violation "necessarily [to] imply the invalidity of [a plaintiff's] conviction or sentence," Heck, 512 U.S. at 486 n. 6, 487, 114 S.Ct. 2364 (example of plaintiff convicted of resisting arrest who challenges legality of arrest). The case to which the Court pointed, however, is one in which the fact of a Fourth Amendment violation is an element of the claim. In that relatively uncommon set of cases, there is an independent reason to insist that a plaintiff wait to sue until the criminal conviction has been set aside; if she does not, the possibility of inconsistent rulings on the validity of the arrest is too great. Our ruling addresses the normal run of cases, in which the Fourth Amendment violation affects only the evidence that might or might not be presented to the trier of fact. In those instances, we are convinced that a clear accrual rule is superior to a case-by-case approach.

As the parties have noted, the question of the proper rule for accrual is an issue that has divided our sister circuits. Although their reasoning varies, the Second, Fourth, Fifth, Sixth, and Ninth Circuits have held that false arrest claims that would undermine the defendant's conviction cannot be brought until the conviction is nullified. See Harvey, 210 F.3d at 1015 (acknowledging circuit split and holding flatly that "a § 1983 action alleging illegal search and seizure of evidence upon which criminal charges are based does not accrue until the criminal charges have been dismissed or the conviction has been overturned"); Covington, 171 F.3d at 124; Shamaeizadeh v. Cunigan, 182 F.3d 391, 399 (6th Cir.1999) (explicitly rejecting suggestion that § 1983 illegal search claims accrue at the time of injury, since such a rule would "misdirect the criminal defendant" from focusing on "mounting a viable defense to the charges against him"); Cabrera v. City of Huntington Park, 159 F.3d 374, 380 (9th Cir.1998) (holding that success on false arrest claim would "necessarily imply" that conviction for disturbing the peace was invalid as not based on probable cause); Brooks v. City of Winston-Salem, 85 F.3d 178, 183 (4th Cir.1996) (Heck bars civil rights claims "when a § 1983 plaintiff's success on a claim that a warrantless arrest was not supported by probable cause necessarily would implicate the validity of the plaintiff's conviction or sentence"); Mackey v. Dickson, 47 F.3d 744, 746 (5th Cir.1995) (stating that "a claim of unlawful arrest, standing alone, does not necessarily implicate the validity of a criminal prosecution following the arrest," but staying the civil action until the criminal prosecution was completed).

The First, Third, Eighth, Tenth, and Eleventh Circuits have held that false arrest claims accrue at the time of the arrest. Nieves v. McSweeney, 241 F.3d 46, 52-53, 52 n. 4 (1st Cir.2001) (stating that "it is pellucid that all claims based on the officers' physical abuse or arrest of the appellants accrued at the time that those events occurred ... because the appellants had ample reason to know of the injury then and there," and characterizing as "rare and exotic" the "circumstances in which a section 1983 claim based on a warrantless arrest will not accrue at the time of the arrest"); Beck v. City of Muskogee Police Dep't, 195 F.3d 553, 558, 559 n. 4 (10th Cir.1999) ("We generally disagree with the holdings in [Covington and Mackey ] because they run counter to Heck 's explanation that use of illegally obtained evidence does not, for a variety of reasons, necessarily imply an unlawful conviction."); Montgomery v. De Simone, 159 F.3d 120, 126 (3d Cir.1998) (finding § 1983 false arrest claim not barred by Heck ); Simmons v. O'Brien, 77 F.3d 1093, 1095 (8th Cir.1996) (finding § 1983 coerced confession claim not barred by Heck ); Datz v. Kilgore, 51 F.3d 252, 253 n. 1 (11th Cir.1995) (per curiam) (finding § 1983 illegal search claim not barred by Heck ). By aligning ourselves with one side of this debate, we do not break any new ground.

Supreme Court Settles Circuit Split re Whether SLUSA Preempts State Class-Action Fraud Suits by Mere Holders of Securities

BNA’s Class Action Litigation (Volume 07 Number 06, Fri., Mar. 24, 2006, Page 194, ISSN 1529-8000) is reporting on Merrill Lynch v. Dabit, --- S. Ct. ---, 2006 WL 694137 (Mar. 21, 2006). Here's an excerpt:

The 1998 Securities Litigation Uniform Standards Act preempts class securities fraud suits not only by purchasers and sellers, but by investors who held on to covered securities, the U.S. Supreme Court concluded . . . .

Settling a circuit split, the court rejected the view of the Second Circuit that there can be no preemption without a purchase or sale of a security.

Here's an excerpt from the opinion for the Court by Justice Stevens:

Title I of the Securities Litigation Uniform Standards Act of 1998 (SLUSA) provides that "[n]o covered class action" based on state law and alleging "a misrepresentation or omission of a material fact in connection with the purchase or sale of a covered security" "may be maintained in any State or Federal court by any private party." § 101(b), 112 Stat. 3227 (codified at 15 U.S.C. § 78bb(f)(1)(A)). In this case the Second Circuit held that SLUSA only pre-empts state-law class-action claims brought by plaintiffs who have a private remedy under federal law. 395 F.3d 25 (2005). A few months later, the Seventh Circuit ruled to the contrary, holding that the statute also pre-empts state-law class-action claims for which federal law provides no private remedy. Kircher v. Putnam Funds Trust, 403 F.3d 478 (C.A.7 2005). The background, the text, and the purpose of SLUSA's pre-emption provision all support the broader interpretation adopted by the Seventh Circuit.

. . .

The holder class action that respondent tried to plead, and that the Second Circuit envisioned, is distinguishable from a typical Rule 10b-5 class action in only one respect: It is brought by holders instead of purchasers or sellers. For purposes of SLUSA pre-emption, that distinction is irrelevant; the identity of the plaintiffs does not determine whether the complaint alleges fraud "in connection with the purchase or sale" of securities. The misconduct of which respondent complains here--fraudulent manipulation of stock prices--unquestionably qualifies as fraud "in connection with the purchase or sale" of securities as the phrase is defined in Zandford, 535 U.S., at 820, 822, 122 S.Ct. 1899, and O'Hagan, 521 U.S., at 651, 117 S.Ct. 2199.

E.D. Cal. Notes Circuit Split re Whether Individuals Can be Liable under ADA Title V

Per Louie v. Carichoff, 2006 WL 662742 (E.D. Cal. Mar. 16, 2006):

There currently is a split among the circuits as to whether individuals can be liable under Title V of the ADA. Compare Shotz v. City of Plantation, Fla., 344 F.3d 1161, 1179-80 (11th Cir.2003)(holding that an individual may be sued in his personal capacity for violating § 12203) with Baird v. Rose, 192 F.3d 462, 472 (4th Cir.1999) (holding that Congress did not intend individuals to be liable under § 12203). The Ninth Circuit has not addressed the issue in a published opinion and district courts within this circuit are split on the matter. Compare Cable v. Dep't. of Dev. Servs. of the State of Cal., 973 F.Supp. 937, 943 (C.D.Cal.1997)("individuals cannot be held liable under Title V of the ADA") and Stern v. California State Archives, 982 F.Supp. 690, 691 (E.D.Cal.1997)("the court holds that individuals who do not qualify as 'employers' are not subject to personal liability under section 12112(a)" with Ostrach v. Regents of the Univ. of Cal., 957 F.Supp. 196, 200 (E.D.Cal.1997) ("[p]laintiff may sue the individual defendants under the anti-retaliation provision of the ADA").

Nonetheless, even if the Ninth Circuit were to determine that individuals can be held liable under § 12203(a) and (b), the court finds that the actions allegedly engaged in by defendants Carichoff and Coleman do not fall within the "retaliation," "coercion," "intimidation," "threats," or "interference" contemplated by Congress in enacting § 12203.

Ninth Circuit Notes Split re Whether Intervenor-Applicant Must Independently Satisfy Article III Standing to Intervene as of Right

Per Prete v. Bradbury, 438 F.3d 949 (9th Cir. Feb. 22, 2006) in Footnote 8:

There is some question, however, whether an intervenor-applicant must independently establish Article III standing to intervene as of right. For example, in the case at hand, Article III standing is satisfied between plaintiffs and defendant. But a circuit split exists whether an intervenor-applicant must also independently satisfy Article III standing to intervene as of right. Compare Planned Parenthood of Mid-Missouri & Eastern Kansas, Inc. v. Ehlmann, 137 F.3d 573, 576-77 (8th Cir.1998) (requiring independent intervenor standing) and Building & Const. Trades Dep't v. Reich, 40 F.3d 1275, 1282 (D.C.Cir.1994) (same), with Associated Builders & Contractors v. Perry, 16 F.3d 688, 690 (6th Cir.1994) (no independent intervenor standing required), and U.S. Postal Serv. v. Brennan, 579 F.2d 188, 190 (2d Cir.1978) (same). The U.S. Supreme Court has not yet settled the issue. See 7C Charles Alan Wright et al., Federal Practice and Procedure § 1908 (2d ed.2005). This court also has not definitively ruled on the issue. Although some sources (such as Federal Practice and Procedure) cite Yniguez v. Arizona, 939 F.2d 727 (9th Cir.1991), for the proposition that this court does not require independent Article III standing for intervenors, id. at 731, that opinion was vacated by the U.S. Supreme Court. See AOE, 520 U.S. at 80, 117 S.Ct. 1055; League of United Latin Am. Citizens v. Wilson, 131 F.3d 1297, 1305 n. 5 (9th Cir.1997) (noting Yniguez was vacated by the U.S. Supreme Court and "is thus wholly without precedential authority").

D. Md. Notes Split Within Fourth Circuit re Preemption of State Law Claims by National Flood Insurance Law

PerReeder v. Nationwide Mut. Fire Ins. Co., --- F.Supp.2d ----, 2006 WL 618814 (D.Md. Mar. 13, 2006):

The Fourth Circuit . . . recently declined to address preemption of state law claims in the national flood insurance context. See Battle v. Seibels Bruce Ins. Co., 288 F.3d 596, 609 n. 20 (4th Cir.2002) ("Given our disposition of the Remaining Claims, resolution of the various preemption issues raised by SCIC in this appeal would be premature."). In addition, United States District Courts within the Fourth Circuit appear to be divided with respect to whether state law tort claims are preempted by national flood insurance law. Compare Bleecker v. Standard Fire Ins. Co., 130 F.Supp.2d 726, 735 (E.D.N.C.2000) (Finding that "NFIA does not preempt plaintiff's state law tort claims" under "North Carolina's Unfair Trade Practices Act, N.C.Gen.Stat. § 58-63-15.") with Peal v. N.C. Farm Bureau Mut. Ins. Co., 212 F.Supp.2d 508, 517 (E.D.N.C.2002) (Concluding that "subjecting WYO companies to North Carolina's bad faith statutes-- §§ 75-1.1 and 58-63- 15(11)--would frustrate NFIA's objectives" and "respectfully reject[ing] the Bleecker court's reasoning for declining to find a conflict between the NFIA and § 58-63-15(11) ...."); see also Houck v. State Farm Fire & Cas. Co., 194 F.Supp.2d 452, 461-69 (D.S.C.2002) (finding that conduct in the policy procurement context constituting fraud and civil conspiracy raises matters that predominantly deal with state law); Waltrip v. Brooks Agency, Inc., No. 2:05CV627, 2006 WL 268880, *3-4 (E.D.Va. Feb.1, 2006) ("[F]ollowing the persuasive reasoning provided in Houck, the court determines that the legal issues in dispute implicate primarily state law because plaintiffs' allegations do not involve a claim under an SFIP, the interpretation of an SFIP, or a dispute related to the NFIP rules and regulations, but rather primarily focus on the procurement of an insurance policy and the alleged wrongful conduct of the agent.").

Having reviewed the cases, statutes, and regulations cited by the parties, this Court finds that state law tort claims arising out of alleged misrepresentations made during the procurement of an SFIP are not preempted in the flood insurance context.

E.D. Tex. Notes Split re Whether Crawford Is Retroactive on Collateral Review

Per Eldridge v. Dir., TDCJ-CID, 2006 WL 573924 (E.D.Tex. Feb. 8, 2006):

In Crawford, the Supreme Court established "a categorical rule barring the admission of out-of-court testimonial statements against the accused absent opportunity for cross-examination." United States v. Holmes, 406 F.3d 337, 347 (5th Cir.2005). It is noted that Roviaro and Crawford were direct appeals, as opposed to collateral attacks in habeas corpus proceedings. The Fifth Circuit has not decided whether Crawford is retroactive on collateral review. Summers v. Dretke, 431 F.3d 861, 877 (5th Cir.2005); Lave v. Dretke, 416 F.3d 372, 378-79 (5th Cir.2005). Other circuits are split on the issue. See Juarez v. Nelson, 127 Fed. Appx. 401 (10th Cir.2005) (Crawford not retroactive); Murillo v. Frank, 402 F.3d 786, 789-91 (7th Cir.2005) (Crawford not retroactive on collateral review); Mungo v. Duncan, 393 F.3d 327 (2nd Cir.2004) (Crawford not retroactive); Bockting v. Bayer, 399 F.3d 1010 (9th Cir.2005) (held that Crawford applied retroactively).

S.D.N.Y. Notes Split within Second Circuit re When a Civil Copyright Infringement Claim Accrues

Per Roberts v. Keith, 2006 WL 547252 (S.D.N.Y. Mar. 7, 2006):

The Copyright Act states with deceptive simplicity that a civil copyright infringement claim must be brought "within three years after the claim accrued," 17 U.S.C. § 507(b), without bothering to define when a claim accrues. Conceptually there are two alternatives. An infringement claim may "accrue" at the time of the infringement (the "injury rule") or when the plaintiff knows or has reason to know of the injury upon which the claim is based (the "discovery rule"). Whether a copyright infringement action accrues as of the date of injury or as of the date of discovery is far from a settled question in the case law. Neither the Supreme Court nor the Second Circuit has ruled on the issue, and district courts within this Circuit are divided, with a majority of the earlier decisions holding that a copyright claim accrues on the date of its discovery by the plaintiff. See Auscape Int'l v. Nat'l Geographic Soc'y, No. 02 Civ. 6441, 2004 WL 1798130, at *4 (S.D.N.Y. Aug. 12, 2004). . . .

Judge Kaplan's thorough and lucid opinion in Auscape forcefully challenges those decisions by other district courts in this Circuit holding that civil copyright infringement claims accrue as of the date of discovery. Ausscape correctly observes that those cases "rely almost exclusively upon Merchant v. Levy, 92 F.3d 51 (2d Cir.1996)," which in turn "followed Stone v. Williams, 970 F.2d 1043 (2d Cir.1992). . . .

But Merchant and Stone can not be regarded as applicable to, let alone determinative of, the question of when a claim for copyright infringement accrues. That is because they antedate the Supreme Court's decision in TRW v. Andrews, 534 U.S. 19 (2001), which Judge Kaplan rightly said in Auscape "altered this landscape." 2004 WL 1798130, at *5. TRW shifted the tectonic plates because, in determining when a claim accrued under the Fair Credit Reporting Act, the Supreme Court "rejected the previously dominant view that federal courts should apply an injury rule only when Congress explicitly has adopted that rule, requiring instead that federal courts look beyond the specific language of a statute to its text and structure in determining what rule should apply when the statute is silent." Id.

In Auscape Judge Kaplan, correctly perceiving the generality of the rule the Supreme Court announced in TRW and that there was no principled difference in respect of the statute of limitations calculus between the Copyright Act and the federal statute involved in TRW, looked to the statutory structure and legislative history of the Copyright Act in determining whether a discovery or injury rule should apply in copyright infringement claims. His careful examination of the legislative history demonstrates in convincing fashion that "Congress intended to adopt a three-year limitations period running from the date of the infringement, as a discovery rule would have defeated its overriding goal of certainty." 2004 WL 1798130, at*7. After a similarly thorough review, Judge Kaplan concluded that "Supreme Court precedent concerning statutes of limitations in other contexts also supports the application of the injury rule here." Id., at *7. I find the analyses conducted and conclusions reached in Auscape to be entirely persuasive, adopt them as my own in the case at bar, and accordingly hold that the injury rule governs the application of the three-year statute of limitations in this copyright infringement case.

D. Utah Notes Split Re Whether Trading Drugs for a Firearm Constitutes Possession of Firearm in Furtherance of a Drug Trafficking Crime

Per U.S. v. Sanchez, Slip Copy, 2006 WL 472739 (D. Utah, Feb. 27, 2006) re 18 U.S.C. § 924:

In its Trial Brief, the government has submitted a proposed jury instruction which would instruct the jury that they may find the defendant guilty of possessing a firearm in furtherance of a drug trafficking crime if he acquired a gun by trading drugs for it. Defendant has objected to the proposed instruction and has filed a Motion to Dismiss Count III of the Indictment on the basis that trading drugs for a gun is not "use" of the gun in violation of § 924(c) and that there is no Tenth Circuit authority for such an instruction. The Court finds that trading drugs for a gun does constitute "use" under § 924(c) and will therefore deny Defendant's Motion to Dismiss and will permit the proposed jury instruction.

. . .

This issue requires the Court to determine whether one who trades drugs in exchange for a gun possesses a gun in furtherance of a drug trafficking crime in violation of 18 U.S.C. § 924(c). There is a split of authority in the circuits on this issue and the Tenth Circuit has not yet spoken on this point.

In Smith v. United States, the Supreme Court held that a defendant who had traded his gun in return for drugs had 'used' the firearm in relation to a drug trafficking crime in violation of § 924(c)(1). There the Court stated that "one who transports, exports, sells, or trades a firearm 'uses' it" within the meaning of the statute.

In 1995, the Supreme Court clarified its construction of the term "use" by holding that it required "more than mere possession of a firearm by a person who commits a drug offense." The Court stated that "use" required active employment of the firearm during the commission of the crime. The Court, however, did not disturb Smith's holding, concluding that bartering one's firearm for drugs was sufficiently active employment of the firearm to constitute "use." The Court in Bailey made clear that "use" includes bartering. The Supreme Court, then, has twice held that bartering constitutes "use" under § 924(c).

Congress changed the language of § 924(c) in 1998. Congress broadened the language of the statute by prohibiting not only using a firearm in relation to a drug trafficking crime, but also merely possessing a firearm in furtherance of a drug trafficking crime.

As noted above, the circuits have split as to whether trading drugs for a firearm constitutes possession of a firearm in furtherance of a drug trafficking crime. The Third, Fifth, Eighth, and Ninth Circuits have held that such a transaction does fall within the meaning of the statute. The Sixth, Seventh, Eleventh, and District of Columbia Circuits have held that it does not. The Sixth Circuit, however, has recently reversed its position concluding "that acquisition of a firearm in exchange for drugs is a sufficient 'specific nexus' between the drugs and the guns to constitute possession 'in furtherance of' the drug sale." The Second Circuit has recognized this split, but has not ruled on the issue.

As noted, the Tenth Circuit has not yet addressed this issue. The Court can find only one district court within the Tenth Circuit which has ruled upon it. In 2005, the District of Kansas, in an unpublished opinion, recognized the split in the circuits. That court agreed with the majority position and held that "[b]ecause the government presented evidence that defendant traded drugs for the gun, sufficient evidence existed to convict on the 'use' element of § 924(c)."

Moreover, some of those cases which have held that such an exchange falls outside the scope of § 924(c) are distinguishable from the case before the Court. In Warrick, the Sixth Circuit--which has since reversed its position on this issue--held "that Warrick's passive receipt of the shotgun from the undercover officer in exchange for marijuana did not constitute a 'use' of a firearm within the meaning of § 924(c), where Warrick merely acquiesced to the undercover officer's proposal that he accept the firearm as partial payment for the marijuana." Similarly, in Westmoreland, the Seventh Circuit held that where a Defendant does nothing more than receive a gun in payment from a government agent, he cannot be convicted under § 924(c). The court also noted that in that case "the agent admitted that he had deliberately made the gun a part of the transaction in order to set up a conviction under § 924(c)(1)." The Court considered it to be significant that the government introduced the weapon into the transaction, rather than the defendant requesting the gun in payment for the drugs.

Here, there is no indication that Defendant was a passive recipient of the firearms at issue. Rather, the evidence the government intends to introduce allegedly shows that Defendant sought to trade drugs for the firearms and that be bartered with the undercover officer as to how much methamphetamine he would be willing to trade for the two guns.

While the Court recognizes the split among the circuits, the Supreme Court's holdings in Smith and Bailey remain in force. The Supreme Court has now twice held that bartering constitutes use. The majority position within the circuits is that trading drugs for guns constitutes a violation of § 924(c). For these reasons, the Court will deny Defendant's Motion to Dismiss and will offer the instruction proposed by the government to the jury.

E.D. Va. Notes Circuit Split Re First Amendment Protections For Public School Teachers

Per Lee v. York County School Div., --- F.Supp.2d ----, 2006 WL 453460 (E.D.Va. Feb 23, 2006):

The federal courts of appeals have developed at least two competing tests for determining to what extent, if at all, the First Amendment protects speech communicated by a teacher in a public school setting. Chiras v. Miller, 432 F.3d 606, 617 n. 29 (5th Cir.2005) (detailing the circuit split); Cal. Teacher's Ass'n v. Bd. of Educ., 271 F.3d 1141, 1149 n. 6 (9th Cir.2001) (same); Karen C. Daly, Balancing Act: Teachers' Classroom Speech and the First Amendment, 30 J.L. & EDUC. 1, 1-30 (2001) (discussing and analyzing the circuit split); W. Stuart Stuller, High School Academic Freedom: The Evolution of a Fish out of Water, 77 NEB. L. REV. 301, 304 and 328-29 (1998) (same). Some courts of appeals examine teacher speech by applying Supreme Court cases concerning student speech (the "Tinker-Hazelwood " standard). See, e.g., Ward v. Hickey, 996 F.2d 448, 452-53 (1st Cir.1993). Other courts of appeals analyze teacher speech by utilizing Supreme Court cases regarding the First Amendment rights of government employees (the "Pickering-Connick " standard). See, e.g., Kirkland v. Northside Indep. Sch. Dist., 890 F.2d 794, 797-800 (5th Cir.1989).

The Fourth Circuit has adopted the Pickering-Connick approach. See Boring v. Buncombe County Bd. of Educ., 136 F.3d 364, 371 n .2 (4th Cir.1998) (en banc) (explaining that Tinker-Hazelwood involved student speech, but a case regarding teacher speech is a matter about employee speech to be decided under Pickering-Connick ); see also id. at 372-74 (Luttig, J., concurring) (explaining why Tinker-Hazelwood is inappropriate when analyzing teacher speech and that Pickering-Connick is the correct standard); Chiras, 432 F.3d at 617 n. 29 (listing the Fourth Circuit as among the courts of appeals applying Pickering-Connick and rejecting Tinker-Hazelwood ); Cal. Teacher's Ass'n, 271 F.3d at 1149 n. 6 (same); Daly, Balancing Act: Teachers' Classroom Speech and the First Amendment, 30 J.L. & EDUC. 1 at 16 (same); Stuller, High School Academic Freedom: The Evolution of a Fish out of Water, 77 NEB. L. REV. at 328 (stating that the Fourth Circuit held "that Hazelwood did not supply the controlling test, but that the Pickering/Connick line of cases should be applied").