December 14, 2017

Tenth Circuit: Article III “In Custody” Requirement Treats Consecutive Sentences as One Continuous Stream

The Tenth Circuit Court of Appeals issued its opinion in Hagos v. Raemisch on Tuesday, December 29, 2015.

Abraham Hagos is incarcerated in Colorado state prison for multiple convictions stemming from two prosecutions. In the first case, he was convicted of first-degree murder, attempted first-degree murder, conspiracy to commit first-degree murder, and two counts of retaliation against a witness (the murder case). In the second, he was convicted of first-degree kidnapping, first-degree burglary, felony menacing, and conspiracy (the kidnapping case). He is serving two consecutive life sentences, one from each case. Hagos appealed his convictions in the kidnapping case, which were affirmed on direct appeal by the Colorado Court of Appeals. The Colorado and United States supreme courts denied certiorari. Hagos then sought state post-conviction relief, which was denied by the district court, court of appeals, and supreme court. He then filed a federal § 2254 petition, which the district court dismissed, concluding it did not satisfy the Article III case or controversy requirement. The district court issued a COA on this issue.

Hagos also appealed his convictions in the murder case. The Colorado Court of Appeals affirmed on direct appeal, and the Colorado and United States supreme courts again denied certiorari. Hagos filed a § 2254 petition in the murder case, which the district court denied. The Tenth Circuit dismissed the matter after denying Hagos’ request for a COA. Hagos then filed a post-conviction motion in state court, which is still pending.

Hagos’ § 2254 petition was pending in the Tenth Circuit when he filed his § 2254 petition in the kidnapping case. The district court sua sponte ordered Hagos to show cause why the kidnapping case proceedings should not be stayed pending the outcome of the murder case proceedings. The court evaluated the “in custody” requirement for habeas relief and decided that even if it invalidated the kidnapping convictions, Hagos would remain incarcerated for life due to the murder convictions. The district court concluded that if granting habeas relief in Hagos’ kidnapping case would not reduce his confinement, the Article III case or controversy requirement was not satisfied. The district court disagreed with Hagos’ arguments against the stay and enforced it during the pendency of the proceedings in the murder case. After the Tenth Circuit dismissed Hagos’ petition and the U.S. Supreme Court denied certiorari, the district court dismissed Hagos’ § 2254 petition in the kidnapping case for the same reasons it outlined in its stay order.

The Tenth Circuit conducted a de novo review of the district court’s dismissal of Hagos’ § 2254 petition. The Tenth Circuit first noted that Hagos is “in custody” for Article III purposes because his two life sentences run consecutively, following Supreme Court precedent that explains that consecutive sentences are to be treated as a continuous stream. The Tenth Circuit found the district court’s reliance on a different case misplaced, since that ruling only affected expired concurrent sentences. The Tenth Circuit further explained that Hagos’ petition satisfied the case or controversy requirement because even though providing habeas relief in the kidnapping case would not affect the duration of his sentence, it could affect his prisoner level and availability of certain prison programs.

The Tenth Circuit reversed and remanded for consideration of Hagos’ § 2254 petition.

Tenth Circuit: Cases Properly in Federal Court but Arising Under State Law Trigger Article III Protections

The Tenth Circuit Court of Appeals issued its opinion in In re Renewable Energy Development Corp.: Loveridge v. Hall on Friday, July 10, 2015.

Renewable Energy Development Corporation (REDCO) entered into Chapter 7 bankruptcy proceedings and attorney George Hofmann was appointed the bankruptcy trustee. Hofmann consulted with Summit Wind Power, LLC, to determine the value of REDCO’s wind leases on private properties, and eventually discovered that REDCO had failed to pay consideration for some of the leases. Hofmann concluded REDCO’s options were unenforceable and encouraged Summit to pursue its own leases with the private property owners, which it did. Later, Hofmann decided the property owners could not cancel their leases with REDCO in favor of Summit without first offering REDCO the opportunity to cure, so he asked Summit to forgo its leases, but Summit refused. Eventually Hofmann brought adversarial claims in bankruptcy on behalf of REDCO against his other client, Summit. Summit responded with state law claims against Hofmann and his firm for malpractice, breach of fiduciary duty, and more. Hofmann was replaced as REDCO’s bankruptcy trustee. Summit filed suit against Hofmann in federal district court, alleging diversity jurisdiction and the right to have the case resolved in an Article III court. Hofmann argued the case should be resolved in an Article I bankruptcy court, and the district court agreed, removing the case to the bankruptcy court but certifying its decision for immediate appeal.

The Tenth Circuit evaluated Article III jurisdiction under the test articulated in Stern v. Marshall, 131 S. Ct. 2594 (2011) and the public rights doctrine. The Tenth Circuit recognized the conflict between the public rights doctrine and bankruptcy cases, noting that the Supreme Court has suggested certain aspects of public rights may properly find resolution in Article I courts. The Tenth Circuit analyzed Stern‘s holding that when a claim is a state law action not necessarily resolvable by a ruling on the creditor’s claim in bankruptcy, it implicates private rights and thus cannot be finally resolved in bankruptcy court. The Circuit found this scenario present, since the Summit’s claims against Hofmann were far removed from the bankruptcy proceeding. The Tenth Circuit recognized that perhaps cases involving similar factual scenarios should create a new exception to Article III, but declined to issue such a rule. The Tenth Circuit also found that the bankruptcy court could hear the case but not decide the issues, acting as a sort of magistrate or special master, and then deferring to the district court for decisionmaking. The Tenth Circuit also found that the district court retained diversity jurisdiction over the case.

The Tenth Circuit remanded the case to district court.