1st Cir. Discusses Split on Issue of Apportionment of Multi-Defendant Settlement Offers to Trigger Rule 68

Per King v. Rivas, 555 F.3d 14 (1st Cir. Feb 02, 2009):

The circuit courts have been divided about variations on the central problem. The Seventh Circuit has insisted that to trigger Rule 68 in multi-defendant cases an offer must contain amounts allocated to each defendant, Harbor Motor Co., Inc. v. Arnell Chevrolet-Geo, Inc., 265 F.3d 638, 648-49 (7th Cir.2001); but it did so citing a prior case, Gavoni v. Dobbs House, Inc., 164 F.3d 1071 (7th Cir.1999), involving joint plaintiffs, who present quite different problems; and the result in Harbor Motor was more than justified on a different ground, namely, that the verdict in favor of the co-defendant was being reversed, Harbor Motor, 265 F.3d at 644-45, so the plaintiff's total package could in the end well exceed the package offer.

Similarly, the Fifth Circuit also said the failure to allocate was fatal; but it did so on facts where it was otherwise plainly right to refuse to shift costs because the judgment against the defendant exceeded the offer-when combined with a settlement received from the other. Johnston, 803 F.2d at 870. The apportionment notion was invoked to reach a correct result but one properly reached by saying that the joint offer was less than the total amount actually recovered by the plaintiff.

The Third Circuit, by contrast, approved use of Rule 68 cost shifting where an unapportioned offer had been made that exceeded the amount recovered; it said that the suit against multiple defendants involved joint liability and an indemnification contract, although it is not clear how much this mattered to the court nor why it should matter. Le v. Univ. of Pa., 321 F.3d 403, 408 (3d Cir.2003). And district courts have employed Rule 68 without difficulty in multiple defendant cases where the offer was not apportioned and the total recovery was less than the unapportioned offer.FN4

. . . .

[W]e agree with the outcomes in the Seventh and Fifth Circuit decisions ( Harbor Motor and Johnston ) because comparability was impossible in the first case and favored the plaintiff in the second, but not the putative rationales adopted by those courts, and we align ourselves with the Third Circuit, save that we do not see why it matters whether liability was joint or several or how the defendants were related: a package offer is simply to be taken on its own terms and compared with the total recovery package.


6th Cir. Reveals Split Re Whether Comity and Federalism Preclude Federal Jurisdiction over State Taxation Claims

Per Commerce Energy, Inc. v. Levin, 554 F.3d 1094 (6th Cir. Feb 04, 2009):

Yet there is a circuit split. The district court heavily relied on DIRECTV v. Tolson, 513 F.3d 119 (4th Cir.2008), which, in dismissing a § 1983 claim, rejected the idea that Hibbs did anything to limit an expansive reading of Fair Assessment because the comity principle is “broader than the Act itself, and its scope is not restricted by § 1341.” DIRECTV, 513 F.3d at 127 (citing Fair Assessment, 454 U.S. at 110). To the Fourth Circuit, the comity principle's breadth “was simply not before the Supreme Court in Hibbs.Id. at 127-28.

Other circuits disagree. The Seventh Circuit, for instance, has reconciled these cases by holding that Fair Assessment cannot bar each and every challenge to a state's taxation scheme because Hibbs “restrict[s] comity to cases that could tie up rightful tax revenue.” Levy v. Pappas, 510 F.3d 755, 761 (7th Cir.2007) (quotations omitted).

. . . .

Similarly, the Ninth Circuit, in Wilbur v. Locke, 423 F.3d 1101 (9th Cir.2005), took at face value Hibbs's admonition that comity principles preclude jurisdiction “only when plaintiffs have sought district-court aid in order to arrest or countermand state tax collection” and observed that the plaintiffs before it sought “no such relief.” 423 F.3d at 1110 (quoting Hibbs, 542 U.S. at 107 n. 9, 124 S.Ct. 2276).

Animating these courts' disagreement with the Fourth Circuit are twin concerns. First, a sweeping reading of Fair Assessment runs squarely against Hibbs's instruction that comity guts federal jurisdiction only when plaintiffs try to thwart tax collection. Hibbs, 542 U.S. at 107 n. 9, 124 S.Ct. 2276.FN4 Second, an unduly broad view of comity would render an Act of Congress-the Tax Injunction Act-effectively superfluous, as its contours would never be dispositive so long as extant “comity principles” uniformly barred challenges to state taxation. In recognizing this, the Hibbs Court warned lower courts that prior cases in this area are “not fairly cut loose from their secure, state-revenue-protective moorings.” Id. at 107, 124 S.Ct. 2276.


SCOTUS Resolves Split Regarding Nature of Required Predicate Offense in the Gun Control Act

Last month the Supreme Court issued a ruling in U.S. v. Hayes, 129 S.Ct. 1079 (Feb. 24, 2009), which resolved a split regarding the question of whether 18 U.S.C. § 922(g)(9) requires that the offense predicate to a defendant's firearm possession conviction have as an element a domestic relationship between offender and victim. Here is an excerpt:

The federal Gun Control Act of 1968, 18 U.S.C. § 921 et seq., has long prohibited possession of a firearm by any person convicted of a felony. In 1996, Congress extended the prohibition to include persons convicted of “a misdemeanor crime of domestic violence.” § 922(g)(9). The definition of “misdemeanor crime of domestic violence,” contained in § 921(a)(33)(A), is at issue in this case.

. . .

Asserting that his 1994 West Virginia battery conviction did not qualify as a predicate offense under § 922(g)(9), Hayes moved to dismiss the indictment. Section 922(g)(9), Hayes maintained, applies only to persons previously convicted of an offense that has as an element a domestic relationship between aggressor and victim. The West Virginia statute under which he was convicted in 1994, Hayes observed, was a generic battery proscription, not a law designating a domestic relationship between offender and victim as an element of the offense. The United States District Court for the Northern District of West Virginia rejected Hayes's argument and denied his motion to dismiss the indictment. 377 F.Supp.2d 540, 541-542 (2005). Hayes then entered a conditional guilty plea and appealed.

In a 2-to-1 decision, the United States Court of Appeals for the Fourth Circuit reversed. A § 922(g)(9) predicate offense, the Court of Appeals held, must “have as an element a domestic relationship between the offender and the victim.” 482 F.3d 749, 751 (2007). In so ruling, the Fourth Circuit created a split between itself and the nine other Courts of Appeals that had previously published opinions deciding the same question. According to those courts, § 922(g)(9) does not require that the offense predicate to the defendant's firearm possession conviction have as an element a domestic relationship between offender and victim. We granted certiorari, *1084 552 U.S. ----, 128 S.Ct. 1702, 170 L.Ed.2d 512 (2008), to resolve this conflict.

. . .

Most sensibly read, then, § 921(a)(33)(A) defines “misdemeanor crime of domestic violence” as a misdemeanor offense that (1) “has, as an element, the use [of force],” and (2) is committed by a person who has a specified domestic relationship with the victim. To obtain a conviction in a § 922(g)(9) prosecution, the Government must prove beyond a reasonable doubt that the victim of the predicate offense was the defendant's current or former spouse or was related to the defendant in another specified way. But that relationship, while it must be established, need not be denominated an element of the predicate offense.


M.D.N.C. Chronicles Circuit Split Re Extent to which a RICO Complaint Must Allege Turkette “Enterprise” Factors

Per AARP v. American Family Prepaid Legal Corp., Inc., 2009 WL 485154 (M.D.N.C. Feb. 25, 2009):

Neither party has cited, nor has the court found, any precedent in the Fourth Circuit as to the extent to which a RICO complaint must allege the requisites of an “enterprise” as set forth in Turkette. Tillett was decided on a full record after conviction and therefore does not speak directly to the issue. 763 F.2d at 630-61. The circuits are split in their approach. See, e.g., City of New York v. Smokes-Spirts.com, Inc., 541 F.3d 425, 451 (2d Cir.2008) (affirming dismissal of civil RICO claim for failure to allege facts supporting Turkette factors); Odom v. Microsoft Corp., 486 F.3d 541 (9th Cir.2007) (holding enterprise does not require separate structure and finding sufficient under Turkette a complaint alleging enterprise had common purpose, ongoing organization, and continuing unit); Asa-Brandt, Inc. v. ADM Investors Servs., Inc., 344 F.3d 738, 752 (8th Cir.2003) (noting requirement of separate enterprise structure but affirming grant of summary judgment for lack of proof); Pavlov v. Bank of New York Co. ., 25 F. App'x 70, 71 (2d Cir.2002) (holding complaint sufficiently alleged enterprise without pleading centralized hierarchy formed for the sole purpose of carrying out a pattern of racketeering acts); United States v. Patrick, 248 F.3d 11, 19 (1st Cir.2001) (refusing to require structure requirement in jury instructions); Begala v. PNC Bank, Ohio, Nat'l Ass'n, 214 F.3d 776, 781-82 (6th Cir.2000) (dismissing complaint for failing to allege Turkette factors); Richmond, 52 F.3d at 645 (same); Montesano v. Seafirst Commercial Corp., 818 F.2d 423, 427 (5th Cir.1987) (same); Seville Indus. Mach. Corp. v. Southmost Mach. Corp., 742 F.2d 786, 790-91 (3d Cir.1984) (holding Turkette factors are burden of proof, not pleading); see also 1-7 CIVIL RICO P 7. 02, at 21 (Matthew Bender & Co., Inc.2008) (noting that ‘[t]he importance of the proper pleading of RICO's enterprise element cannot be overemphasized”). The court must therefore make a determination on a statute that our circuit has already characterized as “tormented,” Combs v. Bakker, 886 F.2d 673, 677 (4th Cir.1989), and whose interpretation remains in flux at the moment.

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