Ninth Circuit Notes Split, Concludes That Plaintiff Need Not Plead Absence of Probable Cause in Retaliatory Arrest Claim

Per Skoog v. County of Clackamas, 2006 WL 3353985 (9th Cir. Nov. 20, 2006):

Royster also asserted qualified immunity in his defense of the claim that he retaliated against Skoog for filing this lawsuit against the County and another officer. Turning to the first prong of the qualified immunity analysis, we must examine the facts pled in the light most favorable to Skoog to determine if he has asserted a violation of the First Amendment.

To demonstrate retaliation in violation of the First Amendment, Skoog must ultimately prove first that Royster took action that "would chill or silence a person of ordinary firmness from future First Amendment activities." The parties do not dispute that searching someone's office and seizing materials can satisfy this first requirement. The second requirement is the focus in this case. That requirement involves causation. Skoog must ultimately prove that Royster's desire to cause the chilling effect was a but-for cause of the defendant's action. Whether a plaintiff must plead the absence of probable cause in order to satisfy this second requirement and state a claim for retaliation is an open question in this circuit and the subject of a split in the other circuits. [FN31] After close review of the relevant precedent, we conclude that a plaintiff need not plead the absence of probable cause in order to state a claim for retaliation.

FN31. Compare Dahl v. Holley, 312 F.3d 1228, 1236 (11th Cir.2002); Keenan v. Tejeda, 290 F.3d 252, 261-62 (5th Cir.2002), Curley v. Village of Suffern, 268 F.3d 65, 73 (2d Cir .2001), and Smithson v. Aldrich, 235 F.3d 1058, 1063 (8th Cir.2000) (holding that an absence of probable cause was required in claims of retaliatory arrest); with Greene v. Barber, 310 F.3d 889, 895 (6th Cir.2002) and DeLoach v. Bevers, 922 F.2d 618, 620 (10th Cir.1990) (holding that a claim for retaliatory arrest could be made even if probable cause existed for the arrest).


D.N.H. Notes Split Re Whether Standing is Required for Rule 24(a) Intervenors

Per Brook Village North Associates v. JacksonSlip Copy, Not Reported in F. Supp. 2d.,2006 WL 3308328 (D.N.H. Nov. 13, 2006):

Under 28 U.S.C. § 1367(a), federal courts have supplemental jurisdiction over claims raised by intervenors that are part of the same case or controversy as the original case over which the court has jurisdiction. Nevertheless, "[w]here required, standing is fundamental." Mangual v. Rotger-Sabat, 317 F.3d 45, 61 (1st Cir .2003). The circuits are split as to whether standing is required for intervention as of right, and the First Circuit has not decided the question. Id.; see also San Juan County, UT v. United States, 420 F.3d 1197, 1204-05 (10th Cir.2005) (discussing circuit split). In addition, it is far from apparent whether the Tenants would have standing to bring their counterclaim. See, e.g., Gonzaga Univ. v. Doe, 536 U.S. 273, 285-86 (2002); Wright v. City of Roanoke Redevelopment & Housing Auth., 479 U.S. 418, 423 (1987); Perry v. Housing Authority of Charleston, 664 F.2d 1210, 1212-14 (4th Cir.1981); Kingston Square Tenants Ass'n v. Tuskegee Gardens, Ltd., 792 F.Supp. 1566, 1572-73 (S.D.Fla.1992).

To be entitled to intervene as of right, the Tenants bear the burden of showing that their participation is necessary because HUD cannot adequately represent their counterclaim to enforce § 1701z-(b) and its implementing regulations. See B. Fernandez & Hnos., 440 F.3d at 544-45. If the Tenants lack standing to bring their counterclaim, their intervention would not remedy a lack of adequate representation by the existing parties. Therefore, as currently presented, the Tenants have not shown that they can satisfy the fourth element which is necessary for mandatory intervention under Rule 24(a).


Eighth Circuit Discusses Split Re Whether Lost Fringe Benefits May Be Awarded to Employment Discrimination Claimants

Per E.E.O.C. v. Dial Corp., 2006 WL 3332815 (8th Cir. Nov 17, 2006):

Dial also challenges the award of lost medical premiums, arguing the claimants should have been required to prove they incurred medical expenses. Our court has not decided whether out of pocket expenses are required before health care benefits can be awarded, see Tolan v. Levi Strauss & Co., 867 F.2d 467, 470 (8th Cir.1989), and other circuits are divided on the issue. In the view of the Fourth Circuit, Congress intended fringe benefits to be part of the monetary award compensating claimants for the discrimination they suffered. See Fariss v. Lynchberg Foundry, 769 F.2d 958, 965-66 (4th Cir.1985) (awarding medical benefits to widow of age discrimination victim without requiring proof of out of pocket medical insurance costs); see also Blackwell v. Sun Elec. Co., 696 F.2d 1176, 1185-86 (6th Cir.1983) (granting the amount of health care premiums to claimant as part of recovery); but see Galindo v. Stoody Co., 793 F.2d 1502,1517 (9th Cir.1986) (reimbursing only out of pocket expenses incurred to obtain health care).

Health care benefits are an important element of an employee's overall employment package, and Dial does not contest that it would have awarded claimants health care benefits had they been hired. The district court only required Dial to compensate the claimants for the amount of health care premiums that would have been part of their employment package had they not suffered discrimination. No reimbursement for health care costs incurred by uninsured claimants was awarded. The court's limited award was reasonable, for "[t]his insurance coverage, not the proceeds, is the benefit for which the employer must be held liable." Fariss, 769 F.2d at 965.


Easterbrook Notes Split Re Whether Unsuccessful Indigent Litigants Must Pay Costs under FRCP 54(d)

Judge Easterbrook recently had the chance to note a circuit split in a concurring opinion in Rivera v. City of Chicago, --- F.3d ----, 2006 WL 3360536 (7th Cir. 2006):

"The court sensibly rejects Chicago's proposal to overrule Badillo v. Central Steel & Wire Co., 717 F.2d 1160 (7th Cir.1983), and its successors, which allow district judges to excuse unsuccessful but indigent litigants from paying costs under Fed.R.Civ.P. 54(d). Whether indigent litigants must be ordered to pay statutory costs is a subject that has divided the circuits. Only the Supreme Court or an amendment under the Rules Enabling Act can produce national uniformity; there is little point in our moving restlessly from one side of the conflict to the other."


D. Mass Discusses Split Re Standard of Review for Denial of Benefits Challenged under ERISA

Per Kieft v. American Exp. Co., 451 F.Supp.2d 289 (D. Mass. 2006)

The critical issue left for this Court's consideration is the correct standard of review to apply to defendants' denial of Long Term Disability (LTD) and Life Insurance benefits to Kieft. The plaintiff argues that de novo review is appropriate while defendants press for application of the "arbitrary and capricious" standard.

The United States Supreme Court has held that denials of benefits challenged under 29 U.S.C. § 1132(a) are to be reviewed de novo unless the plan under consideration gives the administrator discretionary authority to determine eligibility for benefits or to construe the terms of the plan, in which case an arbitrary and capricious standard applies. See Gritzer v. CBS, Inc., 275 F.3d 291, 295 (3d Cir.2002) (citing Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989)). Here, American Express funds the LTD Plan and that Plan gives it unfettered discretion to interpret the Plan and to determine entitlement to its various benefits. But this case is unique in that American Express, and MetLife as administrator of the LTD Plan, never made any effort to analyze Kieft's claim. Thus, there is no analysis or reasoning to which this Court can defer under the arbitrary and capricious standard.

There is a split among the circuit courts on the question now facing this Court, specifically whether a "deemed denied" claim is entitled to review de novo or under an "arbitrary and capricious" standard. See Nichols v. Prudential Ins. Co. of Am., 406 F.3d 98, 109 (2d Cir.2005) (surveying the cases). A majority of circuits have held that, absent substantial evidence of compliance with the deadlines, de novo review applies on the grounds that inaction is not a valid exercise of discretion and leaves the court without any decision or application of expertise to which to defer. See, e.g., id.; Jebian v. Hewlett-Packard Co. Employee Benefits Org. Income Prot. Plan, 349 F.3d 1098, 1106-07 (9th Cir.2003); Gilbertson v. Allied Signal, Inc., 328 F.3d 625, 632-33 (10th Cir.2003); Gritzer, 275 F.3d at 295-96. The Fifth Circuit Court of Appeals followed a different path, holding that a "deemed denied" claim is still entitled to deferential review on the grounds that a decision to deny is the same whether accomplished formally or by inaction. S. Farm Bureau Life Ins. Co. v. Moore, 993 F.2d 98, 101 (5th Cir.1993). The First Circuit has not provided guidance on this unique issue.

Having surveyed the various approaches, this Court is persuaded by the reasoning offered by the Eighth Circuit Court of Appeals. That court held that where an ERISA plan administrator denies a participant's initial application for plan benefits but fails to act on the participant's properly filed appeal, the administrator's decision is subject to judicial review de novo "rather than for abuse of discretion if the review panel's inaction raises serious doubts about the administrator's decision." Seman v. FMC Corp. Ret. Plan for Hourly Employees, 334 F.3d 728, 733 (8th Cir.2003). However, [when] a plan administrator fails to render any decision whatsoever on a participant's application for benefits, it leaves the courts with nothing to review under any standard of review, so the matter *296 must be sent back to the administrator for a decision. Id.


S.D.N.Y. Discusses Jurisdictional Disagreement Among Circuits Re Consideration of Forum Non Conveniens Doctrine

Per Turedi v. Coca Cola Co., --- F.Supp.2d ----, 2006 WL 3187156 (S.D.N.Y. Nov. 2, 2006):

As a preliminary matter, the Court considers whether it must address the jurisdictional objections raised by Defendants' motions before reviewing their grounds to dismiss under the doctrine of forum non conveniens. This question presents two issues that, with conflicting results, have arisen with some frequency in this context. First is whether a dismissal warranted by forum non conveniens constitutes a merits-based decision and therefore, consistent with the bounds of Article III of the federal Constitution, the doctrine cannot be applied without a prior adjudication of the court's subject matter jurisdiction. The second issue is whether, even if the rule implicates no determination on the merits of dispute, the Court nonetheless must address the forum question sequentially after confirming that it possesses jurisdiction over the subject matter and over the parties. A substantial Circuit Court split now exists concerning these questions.

In Dominguez-Cota v. Cooper Tire & Rubber Co., the Fifth Circuit ruled that it was unable to characterize forum non conveniens as a "non-merits" issue because in assessing a motion for dismissal on forum non conveniens grounds the court necessarily " 'becomes entangled in the merits' " of a dispute, and therefore a forum non conveniens determination could not be made before the court confirmed its subject matter jurisdiction. 396 F.3d 650, 654 (5th Cir.2005) (quoting Van Cauwenberghe v. Biard, 486 U.S. 517, 528 (1987)). In an earlier case examining the same issue, the D.C. Circuit reached an opposite result. See In re Papandreou, 139 F.3d 247 (D.C.Cir.1998). It concluded that a finding of forum non conveniens is "merits-free," and therefore a dismissal on such grounds before the Court's determination of subject matter jurisdiction "makes no assumption of law-declaring power that violates the separation of powers principles." Id. at 255.

The Second Circuit pronounced its position on these questions in Monegasque de Reassurances S.A.M. v. NAK Naftogaz of Ukraine, 311 F.3d 488 (2d Cir.2002). Subscribing to the reasoning in Papandreou, it held that neither it nor district courts in this Circuit are barred from bypassing questions of jurisdiction and proceeding directly to rule on an invocation of forum non conveniens, at least where any jurisdictional challenge does not implicate a threshold constitutional question. See id. at 497 (citing Fama v. Commissioner of Corr. Servs., 235 F.3d 804, 816 n. 11 (2d Cir.2000)). More recently, in Dattner v. Conagra Foods, Inc., the Second Circuit, noting the Circuit split on these issues and disagreeing with the contrary view articulated by the Fifth Circuit, reaffirmed its finding in Monegasque that a forum non conveniens dismissal "is a non-merits decision akin to dismissal for lack of personal jurisdiction," and hence requires no antecedent verification of jurisdiction. 458 F.3d 98, 102 (2d Cir.2006) (per curiam). . . .

Recently, the Third Circuit staked out another course, essentially departing from these courts on both counts. Rejecting the Fifth Circuit's reasoning, it ruled that forum non conveniens "is a non-merits ground for dismissal." Malaysia Int'l Shipping Corp. v. Sinochem Int'l Co. Ltd., 436 F.3d 349, 359 (3d Cir.2006), cert. granted, --- U.S. ----, No. 06-102, 2006 WL 2055541 (Sept. 26, 2006). At the same time, disagreeing with the D.C. Circuit and the Second Circuit, the Third Circuit declared that a ruling on a forum non conveniens "presumes that the court deciding this issue has valid jurisdiction (both subject matter and personal jurisdiction) and venue." Id. at 361. It held that district courts "must have jurisdiction before they can rule on which forum, otherwise available, is more convenient to decide the merits." Id. at 363-64; see also Kamel v. Hill-Rom Co., 108 F.3d 799 (7th Cir.1997); Patrickson v. Dole Food Co., 251 F.3d 795 (9th Cir.2001), aff'd in part, cert. dismissed in part, 538 U.S. 468 (2003).

Nonetheless, Monegasque represents the law in this Circuit on this subject, and the Court accordingly follows it in proceeding below to consider directly Defendants' invocation of forum non conveniens.


First Circuit Considers Split Re Whether District Courts May Modify an Injunction, Sua Sponte, Under FRCP 59(e) or 60(b)

Per Dr. Jose S. Belaval, Inc. v. Perez-Perdomo, 465 F.3d 33 (1st Cir. Oct 02, 2006):

There is an initial question whether the district court had authority to act on its own initiative. This circuit has not decided whether a district court may act sua sponte to modify an injunction under Fed.R.Civ.P. 59(e) or Fed.R.Civ.P. 60(b). The plain text of Rule 59(e) does not speak expressly to that question. [FN3] And whether Rule 60(b) bars a court from sua sponte issuing relief from judgment is an issue that has divided the circuits. Compare Eaton v. Jamrog, 984 F.2d 760, 762 (6th Cir.1993) (holding that Rule 60(b) bars sua sponte relief), and Dow v. Baird, 389 F.2d 882, 884-85 (10th Cir.1968) (same), with Fort Knox Music Inc. v. Baptiste, 257 F.3d 108, 111 (2d Cir.2001) (finding that Rule 60(b) permits sua sponte relief), Kingvision Pay-Per-View, Ltd. v. Lake Alice Bar, 168 F.3d 347, 351-52 (9th Cir.1999) (same), McDowell v. Celebrezze, 310 F.2d 43, 44 (5th Cir.1962) (same), and United States v. Jacobs, 298 F.2d 469, 472 (4th Cir.1961) (suggesting that sua sponte relief may be appropriate under Rule 60(b) in some cases).

FN3. One circuit has held that the district court has the inherent authority to act in this manner if it complies with Rule 59(e)'s ten-day limit. See Burnam v. Amoco Container Co., 738 F.2d 1230, 1232 (11th Cir.1984); see also Sun-Tek Indus., Inc. v. Kennedy Sky Lites, Inc., 848 F.2d 179, 181 (Fed.Cir.1988) (applying Eleventh Circuit procedural law). But cf. 12 Moore's Federal Practice--Civil § 59.33 (2006) (stating only that "[a]rguably" the court has this authority). The order in this case, coming some eleven months after the injunction was entered, did not comply with the ten-day limit.


Seventh Circuit Holds Probate Exception to Federal Jurisdiction Applies in Federal-Question Cases

Per Jones v. Brennan, 465 F.3d 304 (7th Cir. Aug. 14, 2006):

There is another jurisdictional obstacle to consider, however, and that is the "probate exception" to the federal courts' jurisdiction. See, e.g., Storm v. Storm, 328 F.3d 941, 943-44 (7th Cir.2003); Dragan v. Miller, 679 F.2d 712, 713-15 (7th Cir.1982). As recently clarified by the Supreme Court, the exception "reserves to state probate courts the probate or annulment of a will and the administration of a decedent's estate; it also precludes federal courts from endeavoring to dispose of property that is in the custody of a state probate court. But it does not bar federal courts from adjudicating matters outside those confines and otherwise within federal jurisdiction." Marshall v. Marshall, --- U.S. ----, ----, 126 S.Ct. 1735, 1748, 164 L.Ed.2d 480 (2006). The probate exception is usually invoked in diversity cases, and the courts are divided over its applicability to federal-question cases, such as this case. Compare In re Marshall, 392 F.3d 1118, 1131-32 (9th Cir.2004), rev'd on other grounds under the name Marshall v. Marshall, supra, and Tonti v. Petropoulous, 656 F.2d 212, 215-16 (6th Cir.1981), holding it applicable to such cases, with Goerg v. Parungao, 844 F.2d 1562, 1565 (11th Cir.1988), holding it inapplicable. We think it applicable.

. . .

There is no good reason to strain to give a different meaning to the identical language in the diversity and federal-question statutes. The best contemporary reasons for keeping federal courts out of the business of probating wills, resolving will contests, granting divorces and annulments, administering decedents' estates, approving child adoptions, and the like are two, and they are as persuasive when a suit is filed in federal court on the basis of federal law as when it is based on state law. First, the proceedings we have listed, or at least those involving child custody and probate administration, are in rem in character--they are fights over a thing of value that is in the court's control--and another court should not try to elbow its way into the fight. Second, state courts are assumed to have developed a proficiency in these matters, to have procedures tailored to them, and to work closely with and even employ specialized staff not found in federal courts. Ankenbrandt v. Richards, supra, 504 U.S. at 703-04, 112 S.Ct. 2206; Lloyd v. Loeffler, supra, 694 F.2d at 492, 13B Wright, Miller & Cooper, supra, at 461. This case, involving as it does a fight over an estate in the control of the state probate court, and the deployment of the public guardian, illustrates both points. See Ankenbrandt v. Richards, supra, 504 U.S. at 703-04, 112 S.Ct. 2206. And since state courts are authorized to decide issues of federal law unless Congress decrees otherwise, confining a class of federal-law cases to state courts does not deprive litigants of their federal rights.


Eleventh Circuit Acknowledges Split, Sides With Majority in Approving Heightened Pleading Standard for Nonfraud Securities Claims Under FRCP 9(b)

Per Wagner v. First Horizon Pharmaceutical Corp., 464 F.3d 1273 (11th Cir. Sep 18, 2006):

The question presented to us . . . regards whether there are circumstances when Federal Rule of Civil Procedure 9(b) would require nonfraud securities claims to be pled with particularity. Our sister circuits are split on this matter. Compare Cal. Pub. Employees' Ret. Sys. v. Chubb Corp., 394 F.3d 126, 161 (3d Cir.2004); Rombach v. Chang, 355 F.3d 164, 171 (2d Cir.2004); Lone Star Ladies Inv. Club v. Schlotzsky's, Inc., 238 F.3d 363, 368 (5th Cir.2001); In re Stac Elecs. Sec. Litig., 89 F.3d 1399, 1404-05 (9th Cir.1996), with In re NationsMart Corp. Sec. Litig., 130 F.3d 309, 314-15 (8th Cir.1997). In line with the majority of circuits to address the matter, we hold that Rule 9(b) applies when the misrepresentation justifying relief under the Securities Act is also alleged to support a claim for fraud under the Exchange Act and Rule 10(b)-5.

Rule 9(b) requires that, "[i]n all averments of fraud or mistake, the circumstances constituting fraud or mistake shall be stated with particularity." Fed.R.Civ.P. 9(b). The rule requires this particularity in order to "alert[ ] defendants to the precise misconduct with which they are charged and [to] protect[ ] defendants against spurious charges of immoral and fraudulent behavior." Durham v. Bus. Mgmt. Assocs., 847 F.2d 1505, 1511 (11th Cir.1986) (quotations omitted). "[T]he rule ensures that the defendant has sufficient information to formulate a defense by putting it on notice of the conduct complained of ... [and] protects defendants from harm to their goodwill and reputation." Harrison v. Westinghouse Savannah River Co., 176 F.3d 776, 784 (4th Cir.1999) (quotations omitted). The twin purposes of providing notice and protecting reputation guide our decision in determining the scope of Rule 9(b)'s reach.

We acknowledge that Federal Rule of Civil Procedure 8(e) allows a plaintiff to plead in the alternative and note that separate counts of the complaint must be read separately. Thus, if a complaint were to state properly a claim for battery and fraud, the allegations surrounding the fraud claim would have to be stated with particularity whereas the allegations surrounding the battery claim would need be stated only in accordance with notice pleading standards. However, the §§ 11 and 12(a)(2) claims in this case are different from the previous hypothetical in that the complaint alleges that the misrepresentation at issue in the nonfraud claims are also the beginning of--or otherwise part of--the predicate fraud for the Rule 10(b)(5) securities fraud claim.

We conclude that a § 11 or § 12(a)(2) claim must be pled with particularity when the facts underlying the misrepresentation at stake in the claim are said to be part of a fraud claim, as alleged elsewhere in the complaint. It is not enough to claim that alternative pleading saves the nonfraud claims from making an allegation of fraud because the risk to a defendant's reputation is not protected. It would strain credulity to claim that Rule 9(b) should not apply in this allegation: The defendant is a no good defrauder, but, even if he is not, the plaintiff can still recover based on the simple untruth of the otherwise fraudulent statement. Nor is it enough to present a general disclaimer in an attempt to immunize the nonfraud claims from the Rule 9 requirements, for the same common sense reasons. The purpose of the rule is to protect a defendant's good will and reputation when that defendant's conduct is alleged to have been fraudulent.


Tenth Circuit Notes Possible Split Re Scope of “Medical Assistance” Required by Medicaid Act

Per Mandy R. ex rel. Mr. and Mrs. R. v. Owens, 464 F.3d 1139 (10th Cir. Sep 21, 2006):

On the merits, the plaintiffs' reasonable promptness and comparability claims are two ways of characterizing one problem: that the individual plaintiffs are not receiving the comprehensive residential services they need. They are thus (1) not receiving them promptly and (2) not receiving them to the extent that others receive them. The outcome of both claims turns on the same question: What is the "medical assistance" that the State must provide promptly and equally?

The Medicaid Act defines "medical assistance" as "payment of part or all of the cost of the [described] care and services." 42 U.S.C. § 1396d(a). The statutory definition mentions payment for, but not provision of, services. In other words, "the statutory reference to 'assistance' appears to have reference to financial assistance rather than to actual medical services." Bruggeman ex rel. Bruggeman v. Blagojevich, 324 F.3d 906, 910 (7th Cir.2003); see also Westside Mothers v. Olszewski, 454 F.3d 532, 540 (6th Cir.2006) (concluding that 42 U.S.C. §§ 1396a(a)(8) and (10) do not "require the State to provide medical services directly" but rather require only financial assistance). [FN2] On its face, then, the Medicaid Act requires any state participating in Medicaid to pay promptly and evenhandedly for medical services when the state is presented with the bill. If that is all the statute requires, then the plaintiffs have no claim: they are on a waiting list for services, not a waiting list for payment for services.

FN2. Some courts have suggested that there exists a circuit split on the question of whether "medical assistance" requires a state to provide actual services. Sabree ex rel. Sabree v. Richman, 367 F.3d 180, 181 n. 1 (3d Cir.2004); Westside Mothers, 454 F.3d at 540. The existence of such a split is not entirely clear. Two circuits have held that "medical assistance" requires only financial assistance. See Bruggeman, 324 F.3d at 910; Westside Mothers, 454 F.3d at 540. Another circuit has reserved the question. Sabree, 367 F.3d at 181. Without expressly addressing the issue, two other circuits appear to have treated the statute as requiring the provision of actual services. Bryson v. Shumway, 308 F.3d 79, 81, 88-89 (1st Cir.2002); Doe v. Chiles, 136 F.3d 709, 714, 717 (11th Cir.1998).


First Circuit Discusses Split re Whether a State Drug Offense is an “Aggravated Felony” under the Immigration and Naturalization Act

Per Berhe v. Gonzales, 464 F.3d 74 (1st Cir. Sep 26, 2006):

The INA [Immigration and Naturalization Act] establishes a comprehensive list of offenses that qualify as aggravated felonies. . . . Included in this list is "illicit trafficking in a controlled substance (as defined in section 802 of Title 21), including a drug trafficking crime (as defined in section 924(c) of Title 18) .... whether in violation of State or Federal law." 8 U.S.C. § 1101(a)(43)(B) (emphasis added). . . .

The Board [of Immigration Appeals] has interpreted § 1101(a)(43)(B) to provide two paths for arriving at an aggravated felony finding. The first route is based on the "illicit trafficking in a controlled substance" language, and is not relevant to these cases. . . . The second route is premised on the language "drug trafficking crime" as defined in 18 U.S.C. § 924(c)(2). The Board concluded in Matter of Davis, 20 I & N Dec. 536, 1992 WL 443920 (BIA 1992), that in terms of the "drug trafficking crime" route, any state drug offense, whether classified as a felony or misdemeanor in that state, is an aggravated felony if the same conduct would have been punishable as a felony if charged under one of the three federal statutes enumerated in § 924(c)(2). Id. at 543; see also Gerbier v. Holmes, 280 F.3d 297, 306 (3d Cir.2002) This methodology is sometimes referred to as the "hypothetical federal felony" approach. See Gerbier, 280 F.3d at 306. . . . [U]nder the Board's strict "hypothetical federal felony" approach, the phrase "drug trafficking crime" meant any conviction punishable by more than one year of imprisonment under one of the federal drug laws.

This approach has received mixed reviews from the circuit courts. In the civil immigration context, several circuits have adopted the Board's hypothetical federal felony approach. E.g., Gonzales-Gomez v. Achim, 441 F.3d 532, 534-36 (7th Cir.2006); United States v. Palacios-Suarez, 418 F.3d 692, 698-700 (6th Cir.2005); Cazarez-Gutierrez v. Ashcroft, 382 F.3d 905, 912-18 (9th Cir.2004); Gerbier, 280 F.3d at 308-12; Aguirre v. INS, 79 F.3d 315, 317-18 (2d Cir.1996). Under this approach, the underlying state classification of the offense is irrelevant. The circuits that have adopted this approach emphasize that focusing solely on federal law properly accounts for the need to apply the nation's immigration laws uniformly, and that an approach that allows the vagaries of state law to influence the determination would defeat this purpose. See, e.g., Achim, 441 F.3d at 535; Gerbier, 280 F.3d at 311-12.

At least two circuits have taken a more flexible approach. These circuits hold that a state conviction constitutes an "aggravated felony" if it (1) is punishable under one of the federal drug enforcement statutes, and (2) is a hypothetical federal felony or is a felony under the law of the convicting state. E.g., Lopez v. Gonzales, 417 F.3d 934, 936-37 (8th Cir.2005), cert. granted, --- U.S. ----, 126 S.Ct. 1651 (2006); United States v. Hernandez-Avalos, 251 F.3d 505, 507-08 (5th Cir.2001). This "dual approach" derives from circuit decisions interpreting the meaning of "aggravated felony" in the criminal sentencing context.

In light of the split in circuit authority, the Board retreated from strictly applying the hypothetical federal felony approach in all cases, in favor of applying the approach of the circuit in which the case before it originated. See In re Yanez-Garcia, 23 I & N Dec. 390, 396-98, 2002 WL 993589 (BIA 2002). In those circuits that have not definitively ruled on the issue, the Board follows the position taken by the majority of the circuits in criminal sentencing cases--the dual approach. Id.

. . .

[W]e conclude that the Board was correct to employ the hypothetical federal felony methodology outlined in Amaral v. INS, 977 F.2d 33 (1st Cir.1992). For the purposes of determining whether a state drug offense is an "aggravated felony" under the INA, our circuit precedent permits an analysis that considers whether the underlying offense would have been punishable as a felony under federal law. As discussed above, we are not alone. While there is disagreement concerning whether it is permissible to consult state law in making the aggravated felony determination, as far as we can tell, all the circuits to have considered the issue agree that a state drug offense that would be punishable as a felony under the CSA is a "drug trafficking crime" under § 924(c)(2). To our knowledge, no circuit has endorsed the approach urged here--requiring that the underlying offense be a felony under state law.


Eleventh Circuit Notes Split Re Whether Deadline of FRCP 54(d)(1) Is Jurisdictional

Per Corwin v. Walt Disney Co., --- F.3d ----, 2006 WL 3091464 (11th Cir. Nov. 2, 2006):

The Federal Rules of Civil Procedure provide that after costs are taxed by the clerk, an objection may be made only "on motion served within 5 days thereafter." Fed.R.Civ.P. 54(d)(1). Although this deadline may not be considered jurisdictional, [FN14] it is still fully within the discretion of the district court to decline to review an untimely objection to costs.

FN14. There is a split among the circuits as to whether this deadline is jurisdictional, but we have found it not to be so. See Baum v. United States, 432 F.2d 85, 86 (5th Cir.1970) (per curiam).


E.D. Pa. Notes Intra-Circuit Split Concerning Correct Standard to Apply When Determining if Class Members are Similarly Situated

Per Duffy v. Sodexho, Inc., 2006 WL 3025958 (E.D. Pa. Oct. 20, 2006):

In considering whether potential class members are "similarly situated," the district courts within the Third Circuit are divided as to the appropriate standard to be applied. [FN5] Some courts require merely allegations of class-based discrimination, while others require a basic factual showing of similarly situated class members. This Court feels it most appropriate to adhere to the latter, requiring plaintiffs to make a basic factual showing that they are similarly situated to the proposed class before granting certification. While this standard necessitates only modest evidence to support Plaintiffs' claim of a broad discriminatory policy on the part of the Defendant, it nonetheless allows the court to manage the potential for abuse often inherent to class action suits. Hoffmann-La Roche Inc. v. Sperling, 493 U.S. 165 (U.S.N.J.1989). The Court believes this approach "provides a more efficient and effective means of managing FLSA litigation and comports with the Supreme Court's case-management recommendation and the Congressional intent behind FLSA." See Smith v. Sovereign Bancorp, Inc., No. Civ.A. 03-2420, 2003 WL 22701017, *3 (E.D.Pa. Nov. 12, 2003). Recognizing that there has already been discovery to determine the scope of the class in this case, the need for requiring some basic factual support is further justified.

FN5. See Smith v. Sovereign Bancorp, Inc., No. Civ. A. 03-2420, 2003 WL 22701017, *2 (E.D.Pa. Nov. 12, 2003), where the Court discussed the varying standards applied in other districts and circuits. Some courts have granted motions for preliminary certification and notice based solely on plaintiff's allegations of class-based discrimination, while other courts "apply a more stringent-although nonetheless lenient-test that requires the plaintiff to make a 'modest factual showing' that the similarly situated requirement is satisfied." Id.


Second Circuit Addresses Circuit Split Re: Deductibility of Investment-Advice Fees Under 26 U.S.C. § 67(e)(1); Joins 4th & Fed Circuits

Per William L. Rudkin Testamentary Trust v. Comm'r, ---F.3d----, 2006 WL 2972609 (2d Cir. Oct. 18, 2006):

The question presented on this appeal is whether investment-advice fees incurred by a trust are fully deductible in calculating adjusted gross income for purposes of the Internal Revenue Code ("IRC") under 26 U.S.C. § 67(e)(1) (2000), or whether these fees are deductible only to the extent that they exceed two percent of the trust's adjusted gross income under § 67(a). We affirm the decision of the tax court and hold that a trust's investment-advice fees are subject to the two-percent floor of § 67(a) and therefore not fully deductible in arriving at adjusted gross income.

The Sixth Circuit was the first federal court of appeals to consider the question presented here. It held that "the investment advisor fees paid by the Trust were costs incurred because the property was held in trust, thereby making them eligible for the § 67(e) exception and not subject to the base of two percent of adjusted gross income." O'Neill v. Comm'r, 994 F.2d 302, 304 (6th Cir.1993). . . . In short, O'Neill established the rule that a trust's costs attributable to the trustee's fiduciary duty, and not required outside the administration of trusts, fall within the § 67(e)(1) exception and are therefore fully deductible.

The Federal Circuit rejected this reasoning in Mellon Bank, N.A. v. United States, 265 F.3d 1275 (Fed.Cir.2001). In Mellon Bank, the court held that the second clause of § 67(e)(1) "serves as a filter" with respect to the first clause and "treats as fully deductible only those trust-related administrative expenses that are unique to the administration of a trust and not customarily incurred outside of trusts." Id. at 1280-81. . . .

The Fourth Circuit subsequently joined the Federal Circuit in holding that investment-advice fees incurred by a trust are subject to the two-percent floor of § 67(a). Scott v. United States, 328 F.3d 132, 140 (4th Cir.2003). . . . Stating a rationale similar to the Federal Circuit's in Mellon Bank, the court said that to find a trust's investment-advice fees to be fully deductible would lead to the conclusion that "[a]ll trust-related administrative expenses could be attributed to a trustee's fiduciary duties," rendering the second clause of § 67(e)(1) meaningless. Id.

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