April 20, 2018

Archives for July 28, 2011

Colorado Court of Appeals: Week of July 24, 2011 (No Published Opinions)

The Colorado Court of Appeals issued no published opinions and fifty unpublished opinions for the week of July 24, 2011.

Neither State Judicial nor the Colorado Bar Association provides case summaries for unpublished appellate opinions. Case announcements are available here.

Tenth Circuit: Money from Ponzi Scheme Must Be Returned to Victims before Discovery by Victim or Government in order to Earn Sentencing Credits

The Tenth Circuit Court of Appeals issued its opinion in United States v. Merriman on Wednesday, July 27, 2011.

The Tenth Circuit affirmed the district court’s sentence. Petitioner, in early 2009, “approached an otherwise unsuspecting U.S. Attorney’s Office and disclosed he had engaged in a longrunning Ponzi scheme that defrauded investors of over twenty-million dollars. At the time of his disclosure, [Petitioner] offered several million dollars of assets to the government so that it could liquidate the assets and eventually remit the proceeds to [his] victims. He cooperated with authorities throughout the proceedings and ultimately pled guilty to one count each of mail fraud and forfeiture.” Petitioner appeals two of the district court’s sentencing decisions: first, he argues the court should have counted the assets he initially turned over to the government as a credit against his victims’ measured aggregate loss, resulting in a two-point decrease, and second, he argues the court erred by finding he occupied a “position of trust” for a two-point enhancement.

The Application Notes of the Sentencing Guidelines “unambiguously require two conditions to be met before any credits are earned: the money must be returned to the victim, and this return must occur before the offense was detected or discovered by a victim or the government. . . . Here, the money was not returned by [Petitioner]; rather, it was returned by the government after a later liquidation of [Petitioner]’s forfeited assets. Even if [the Court] assume[d] the government ‘acted jointly’ with[Petitioner] to return his victims’ money, no money could have been returned until after [he] turned himself in and disclosed his crimes to the U.S. Attorney.” The Guidelines do not provide an exception “for crimes that are detected because the defendant confesses his crime to the government. Although the Guidelines permit a reduction for restoring victims’ losses prior to the onset of any government involvement, they do not contemplate similar treatment when payments are not returned to the victims until after the crime has been discovered by the government and the defendant has, for example, additional motivation to use his ill-gotten gains as leverage in a plea negotiation or other self-serving purpose.”

As to whether Petitioner occupied a position of trust, the Court found that “the parties do not dispute that [Petitioner] retained and exercised authority to make investments on behalf of his investors with complete discretion to invest however he desired. Investors did not scrutinize his financial accounting or investing decisions, nor was he obligated to disclose such matters. [The Court saw] no clear error in the district court’s conclusion that [Petitioner]’s authorized and exercised discretion and the resultant lack of transparency between [him] and his investors significantly contributed to his ability to avoid detection.” As such, even if his fraud was perpetuated in part by circumstances other than his position of trust, Petitioner’s complete control over his investors’ money significantly contributed to his fraud by “making the detection of the offense . . . more difficult.”

Tenth Circuit: Conviction for Sexual Contact-No Consent is a Forcible Sex Offense under the Sentencing Guidelines and Triggers Sentence Enhancement

The Tenth Circuit Court of Appeals issued its opinion in United States v. Reyes-Alfonso on Wednesday, July 27, 2011.

The Tenth Circuit affirmed the district court’s decision. Petitioner plead guilty to one count of illegal reentry after deportation. “Using the 2009 United States Sentencing Guidelines, the district court calculated an advisory guideline imprisonment range of forty-six to fifty-seven months. Then, the district court imposed a sentence at the bottom of that range: forty-six months’ imprisonment.” Petitioner now appeals and argues that “his prior conviction in Colorado for Sexual Contact–No Consent is not a forcible sex offense, which triggers the sixteen-level crime of violence enhancement . . . . [Petitioner] also argues that the sentence imposed by the district court is both procedurally and substantively unreasonable.”

The Court concluded that Petitioner’s conviction for Sexual Contact–No Consent is a forcible sex offense under the Guidelines and therefore triggers the sentence enhancement. Further, the Court concluded that the district court did not abuse its discretion by imposing a sentence of forty-six months’ imprisonment; the sentence was both procedurally and substantially reasonable.

Tenth Circuit: Foster Care Case Worker Did Not Abdicate Professional Responsibilities when Placing Abusive Child in Home

The Tenth Circuit Court of Appeals issued its opinion in J.W. v. State of Utah on Wednesday, July 27, 2011.

The Tenth Circuit affirmed the district court’s decision. The case arises from a situation of child-on-child abuse within the foster care system. Petitioners are “a foster couple and their now-adopted foster children who allege they incurred injuries after an abusive foster child was placed in their home in August of 2002. In this § 1983 action, Plaintiffs raised several state and federal claims against the State of Utah and the various State employees and entities involved in placing this child in their home. The district court dismissed several of [Petitioners]’ claims under Rule 12(b)(6) and granted summary judgment to [Respondents] on [Petitioners]’ remaining federal claims. [Petitioners]’ remaining state claims were then remanded to the state court for disposition. On appeal, [Petitioners] challenge the Rule 12(b)(6) dismissal of their negligence claims and the grant of summary judgment to the children’s caseworker and her direct supervisor on [Petitioners]’ Fourteenth Amendment due process claim.”

“Under Utah law, a battery is committed if (1) the actor deliberately makes a physical contact and (2) this contact is deemed harmful or offensive at law, regardless of whether the actor was aware of the harmful or offensive nature of the contact. See Wagner v. State, 122 P.3d 599, 603-04 (Utah 2005).” Although the abusive child may not have been aware of the harmful or offensive nature of his contact with A.W., the types of contacts alleged in Petitioners’ “complaint—repeated physical and sexual abuses—were of a deliberate nature, and they certainly fall within the definition of harmful or offensive contacts.” The Court was therefore persuaded that the Utah Supreme Court would apply the Wagner test to cases involving children as well as adults, and concluded that the abusive child’s “alleged conduct fell squarely within the definition of battery.” The Court then affirmed the district court’s dismissal of Petitioners’ negligence claims on governmental immunity grounds.

Petitioners also contend that the children’s caseworker abdicated her professional responsibilities when she placed the abusive child in the Petitioners’ home because she neither considered the child’s history nor deliberated on whether this placement would be in A.W. and M.W.’s best interests. “However, the undisputed evidence in the record refutes these contentions. The record reflects that the caseworker knew of the children’s histories and had observed their interactions, considered their safety, and received reports from [Petitioners] regarding W.C.C.’s pre-placement visits when she decided that this placement would be safe and appropriate for all involved.” The Court therefore affirmed the district court’s grant of summary judgment to the caseworker on Plaintiffs’ due process claim against her.

Tenth Circuit: Sufficient Expert Testimony Presented to Prove Causation and Coverage under Food Contamination Insurance Policy

The Tenth Circuit Court of Appeals issued its opinion in Leprino Foods Co. v. Factory Mutual Ins. Co. on Wednesday, July 27, 2011.

The Tenth Circuit affirmed the district court’s decision. Petitioner is a “Denver-based mozzarella manufacturer that customarily stores its products in third-party warehouses. In one of these warehouses, flavoring compounds derived from nearby-stored fruit products contaminated a large quantity of cheese.” Petitioner’s “all-risk” insurance policy with Respondent excluded contamination unless it was caused by “other physical damage.” When coverage was disputed, a jury determined the contamination was caused by other physical damage and therefore covered by the insurance policy. On appeal, Respondent claims the district court erred in several ways.

Respondent contends that the verdict is supported by insufficient evidence because Colorado law requires expert testimony, as opposed to lay testimony, to prove causation. The Court, however, concluded that Petitioner did in fact present sufficient expert testimony on this element. Respondent also challenges the district court’s jury instructions and its evidentiary ruling on Petitioner’s revised cold-storage guidelines. But, the Court did not find the instructions or ruling to be erroneous. The Court did agree with Respondent that Petitioner’s damages should be reduced by its settlement with the warehouse, so long as the setoff does not include the attorneys’ fees that Petitioner incurred in pursuing that litigation.

Tenth Circuit: Challenge to Length of Prison Sentence is Moot when No Longer in Prison and Seeking Shortened Supervised Release Term

The Tenth Circuit Court of Appeals issued its opinion in Rhodes v. Judiscak on Wednesday, July 27, 2011.

The Tenth Circuit affirmed the district court’s decision. Petitioner challenges only the length of his prison sentence, but he concedes he is no longer in prison. Although he remains subject to a long term of supervised release, the Court cannot issue a judgment on his § 2241 petition that will shorten his supervised release term. Petitioner has not asked a district court to reduce his term of supervised release under § 3583(e)(1), but merely asserts that, if he were to pursue such a remedy, it might be helpful for him to have something from the Court saying his sentence was too long. But Petitioner’s petition “overlooks the principle that to defeat mootness ‘it must be the effect of the court’s judgment on the defendant that redresses the plaintiff’s injury, whether directly or indirectly.'” There is nothing the Court can do to aid Petitioner, and any opinion would be advisory; there is no judgment the Court could render that would assist him in a future challenge to his supervised release. This petition is moot, but Petitioner will get a chance to ask for a judgment for a shorter term of supervised release.

Tenth Circuit: Petition for Rehearing to Amend Order and Judgment Granted; Revised Opinion Published

The Tenth Circuit Court of Appeals issued its opinion in United States v. Castellanos-Barba on Wednesday, July 27, 2011.

The Tenth Circuit granted Appellant’s petition for rehearing for the purpose of amending the order and judgment filed March 21, 2011. The revised opinion was also published.

The petition for rehearing en banc was transmitted to all of the judges of the court who are in regular active service. As none requested that the court be polled, that petition was denied.

Tenth Circuit: State Taxes Not Preempted by Federal Law, Even when Considered in Light of Purposes of Legislation and History of Tribal Sovereignty in the Field

The Tenth Circuit Court of Appeals issued its opinion in Ute Mountain Ute Tribe v. Rodriguez on Wednesday, July 27, 2011.

The Tenth Circuit reversed and remanded the district court’s decision. The case revolves around the issue of whether federal law preempts five state taxes imposed on non-Indian lessees extracting oil and gas from the Ute Mountain Ute Reservation in New Mexico. The district court found in favor of Petitioner tribe, holding that the five state taxes were preempted by federal law and enjoined the State of New Mexico from further imposing the taxes. The Respondent, Secretary of the New Mexico Taxation and Revenue Department, appealed that determination, arguing that the district court misinterpreted and misapplied Supreme Court precedent.

Respondent asserts that the five New Mexico state taxes are valid and enforceable under the Supreme Court case Cotton Petroleum Corp. v. New Mexico, 490 U.S. 163 (1998). The Court agreed. “[T]he evidence presented, particularly in light of the Supreme Court’s decision in Cotton Petroleum, demonstrates that (1) the federal regulatory scheme is not “exclusive,” although it is indeed “extensive”; (2) the economic burden—as that concept was applied by the Supreme Court in Bracker, Ramah, and Cotton Petroleum—falls on the non-Indian operators, not on the Tribe; and (3) the State has asserted a sufficient justification for imposing the taxes. Furthermore, although there is an ‘historical backdrop’ of relevant tribal sovereignty in this area, which was not present in Cotton Petroleum, this backdrop is not so strong as to completely tip the scales in the Tribe’s favor. Therefore, under the flexible preemption analysis applied in Bracker, Ramah, and Cotton Petroleum, we hold that the five state taxes are not preempted by federal law, even when considered in light of the purposes of the relevant legislation and the history of tribal sovereignty in the field.”

Tenth Circuit: Unpublished Opinions, 7/27/11

On Wednesday, July 27, 2011, the Tenth Circuit Court of Appeals issued seven published opinions and eight unpublished opinions.


United States v. Kelly

United States v. Fulton

Merryfield v. Jordan

Montez v. State of Wyoming

Kumar v. Copper Mountain, Inc.

Banks v. United States

United States v. Rios-Tapia

Brock v. Herbert

No case summaries are available for unpublished opinions. However, published opinions are summarized and provided by Legal Connection.

Huffington Post: Alec Baldwin Will Be The Keynote Speaker At Colorado’s Annual Family Law Institute Event

On the subject of divorce proceedings, Colorado’s Family Law Institute has gained its first keynote speaker: Alec Baldwin. On the subject in fact, the actor couldn’t be clearer. Baldwin’s only book, “A Promise to Ourselves: A Journey Through Fatherhood and Divorce,” is a memoir about the costly process that he argues needs to change from the inside out.

Each year the Colorado Bar Association hosts an intimate gathering of lawyers who specialize in family and divorce law for a three-day seminar focused on improving the practice. This year family attorney Brenda L. Storey, a partner at McGuane and Hogan, LLP, nabbed Baldwin as the keynote speaker for the theme, “Say You Want A Revolution” (inspired by the Beatles song) and cites his book, A Promise to Ourselves: A Journey Through Fatherhood and Divorce as the main reason why she selected him.

A selection that Storey admits, has raised some questions. In 2007 the Emmy-winner attracted worldwide media criticism when a message he left on his daughter’s voicemail was leaked to TMZ.com and cost him a suspension in his parental visitation rights, according to the Washington Post. Baldwin’s joint custody with Ex Kim Basinger was later reinstated however, and he made a public apology to his-then 11-year-old daughter on The View.

“I was getting a lot of, ‘Why would you get Alec Baldwin to speak?’ but a lot of lawyers even, didn’t understand that he wrote a book about the system and suggestions for fixing it. When they heard about the book, they understood,” Storey told The Huffington Post.

“I’m not saying every lawyer that practices family law, needs to listen to me or Alec Baldwin, but he does present some real insights from the other side. What our theme really means is a revolution of our system itself. That’s where Mr. Baldwin came in. He wrote a book about the ugly side of the system, he provides a voice about the system and gives suggestions for change.”

In his book, Baldwin writes that his own divorce and custody battle took more than six years and $3 million in legal fees. He further describes the emotional costs of the family litigation process as a cruel battle that promotes more irreparable damage for all parties involved than closure.

“To be pulled into the American family law system in most states,” Baldwin writes, “is like being tied to the back of a pickup truck and dragged down a gravel road late at night. No one can hear your cries and complaints, and it is not over until they say it is over.”

Part of the problem though, Storey says, is that law school doesn’t adequately prepare students for this specific area of law.

“We jump in and tear them apart, but they are the ones who have a kid to raise,” Storey said.

“Additionally, there are judges who push divorce cases through at their own pre-determined one-size-fits-all pace, without giving the parties and their case and their family the time truly needed for their particular circumstances. It is easier to get a one-week personal injury trial on some dockets than it is to get three days for a final hearing in a divorce case that impacts every aspect of a family’s future. Also a problem is that some judges do not enforce orders. They give second, third, fourth chances, that send a message that compliance is optional.”

The kickoff will cost lawyers between $115 and $1,150 to attend, with all proceeds going to Colorado’s Legal Aid Foundation–which provides free legal assistance to low-income individuals and was reportedly all Mr. Baldwin’s idea.

Below, Alec Baldwin explains his views on parenting through divorce and Parental Alienation Syndrome to Joy Behar, who was covering for Larry King on CNN.

[This article was reproduced with the permission of the copyright owner. It originally appeared in The Huffington Post on Wednesday, July 27, 2011. Click here to view the article.]

If you go: Kickoff to the Institute with Alec Baldwin

August 11 at the Marriott City Center Hotel, 1701 California St., Denver, Colorado, beginning at 5:30 pm. Dinner and a conversation about the family law system with Baldwin. Pre-purchase of Baldwin’s book, “A Promise to Ourselves,” is available when registering. Guests who pre-purchase the book with be entered into a lottery for an intimate book signing. The twenty-five selected will get to spend an hour with the actor following the event. The twenty-five participants will be notified of their selection by August 4th. Register by August 1 by calling (303) 860-1115 or email melissan@cobar.org. A registration form, available here, must be completed to RSVP.

J. Robert Brown, Jr.: Shareholder Protection Act of 2011 – Preemption, Prevention and Protection (Approval by the Board) – Part 3

The Shareholder Protection Act of 2011 seeks to regulate campaign contributions by public companies.  It would require shareholder approval of the amount available for these contributions.

The Act, however, goes well beyond the requirement of shareholder approval.  It also requires board approval of the contributions in certain cases. Proposed Section 16A of the Exchange Act (15 USC 78p-1) provides that listed companies must have in place a bylaw that “expressly provide[s] for a vote of the board” on any expenditure for political activities in excess of $50,000 (including amounts in excess of $50,000 in a “particular election”).  Moreover, the votes must be made public within 48 hours “including in a clear and conspicuous location on the Web site of the issuer.”

This provision promises to be far more intrusive than other federal efforts with respect to approval requirements imposed on the board.  While Congress has mandated other approval requirements, they have for the most part been limited to committees.  Thus, SOX required audit committee approval of the independent accounting firm.  This provision applies to the entire board, which presumably means it cannot be delegated to an officer or board committee.

The provision effectively preempts state law.  The board would effectively be required to approve expenditures that for large public companies are extraordinarily small in amount.  Moreover, by using a bylaw to accomplish this task, it suggests that shareholders can adopt bylaws that mandate board approval for other types of expenditures.  If so, this would substantially expand shareholder authority and give more teeth to proposals under Rule 14a-8.

This provision would only apply to listed companies.  As such, it is more narrow than the provision requiring shareholder approval of the total amount of campaign contributions.  Nonetheless, the provision may well affect the behavior of smaller public companies.  Many, particularly those anticipating an exchange listing, may well put the bylaw in place.  Moreover, because the shareholder approval process will be disclosed in the proxy statement, boards will have a hard time disclaiming knowledge of the campaign contributions.  To the extent shareholders bring actions over the contributions, the board may be at risk over the contributions even if not approved.

Finally, the obligation to disclose board results within 48 hours will create headaches.  Fro one thing, it will provide some directors with an incentive to dissent.  Those not wanting to be publicly associated with the recipients of the contributions may decided to vote against the expenditures.  In addition, companies may feel compelled (or Congress/SEC may eventually want to require) to provide an explanation for the vote.  It will entail some discussion of the inner workings of the board and, potentially, be the basis for an antifraud suit if inaccurate.

For more than two decades, J. Robert Brown, Jr. has taught corporate and securities law, with a particular emphasis on corporate governance. He has authored numerous publications in the area and several of his articles have been cited by the U.S. Supreme Court. He is a professor at the University of Denver Sturm College of Law and blogs for The Race to the Bottom, where this post originally appeared on July 27, 2011.