April 23, 2019

Archives for September 7, 2012

Tenth Circuit: Statute of Limitations Begins to Run Under Mineral Leasing Act with Final Decision of Secretary

The Tenth Circuit Court of Appeals published its opinion in Impact Energy Resources, LLC v. Salazar on Wednesday, September 5, 2012.

Appellants are energy companies who submitted high bids on oil and gas leases at a BLM auction. Before the leases were issued, Secretary of the Interior Ken Salazar “announced his decision at a February 4, 2009, press conference and memorialized his determination in a February 6 memorandum to the BLM’s Utah State Director. On February 12, 2009, a subordinate BLM official mailed letters to the high bidders indicating that the leases would not be issued.” The energy companies sued 90 days after the February 12th letter. The district court dismissed the suit because 30 U.S.C. § 226-2 of the Mineral Leasing Act provides a 90-day statute of limitation “after the final decision of the Secretary relating to such matter,” and the final decision of the Secretary had occurred on February 6, not 12.

In a per curiam opinion, a majority of the Tenth Circuit panel agreed with the district court, and with its decision that equitable tolling did not apply here. “Judge Lucero would hold that under the plain text of the MLA, the Secretary’s decision was final on February 6 regardless of whether plaintiffs’ claims under the Administrative Procedure Act (“APA”) had accrued at that time. Judge Seymour would hold that the word “final” bears the same meaning in the phrase “final decision of the Secretary,” 30 U.S.C. § 226-2, as it does in the phrase “final agency action” under the APA, 5 U.S.C. § 704, and that final agency action occurred no later than February 6.”

Tenth Circuit: No Forfeiture Under ERISA’s Nonforfeitable Provision Where Third Party Fraudulently Took Benefits

The Tenth Circuit Court of Appeals published its opinion in Foster v. PPG Industries, Inc. on Wednesday, September 5, 2012.

Plaintiff William Foster had an ERISA-governed 401(k) account (Plan) with his former employer, PPG. Foster and his wife were getting divorced so Foster moved out of his home. He did not notify the Plan of his change of address for over a year. In the meantime, his ex-wife fraudulently changed his Plan user ID and password and changed the address of the Plan to her P.O. box. She then withdrew the entire amount of the account. When Foster became aware of this by receiving a 1099-R form showing the withdrawals, he demanded PPG return the money as he had not authorized the withdrawals. PPG consulted with outside legal counsel and investigated Foster’s account. Foster told the Plan his ex-wife had made the withdrawals. PPG informed Foster they would not be replacing the money as they were not liable.

Foster sued the Plan under ERISA. After an administrative record was developed in the district court, the court remanded the case to the Plan Administrator, who denied Foster’s request for repayment. Foster went back to district court, arguing because the money had been paid to another, the money had been forfeited under 29 U.S.C. § 1053(a), which provides that retirement benefits are nonforfeitable when the participant reaches normal retirement age. The district court upheld the Plan administrator’s decision under an arbitrary and capricious standard of review.

The Tenth Circuit reviewed the Plan administrator’s decision under an arbitrary and capricious standard because the Plan had complete authority to determine benefits. Because the Plan administrator had a conflict of interest, the court considered that as a factor, but found no abuse of discretion. The court found no forfeiture occurred. 29 U.S.C. § 1002(19) defines “nonforfeitable.” The court stated that “[w]e read ‘unconditional’ in § 1002(19) to mean that any and all conditions precedent to the participant’s asserting a claim to his benefits have been met. We do not read it to mean that a participant is entitled to a fixed amount of benefits regardless of any and all later-occurring conditions, such as the theft of savings plan funds by a participant’s ex-spouse. . . .”

Tenth Circuit: Murder Conviction Affirmed; Given Overwhelming Evidence of Guilt, Any Error Harmless

The Tenth Circuit Court of Appeals published its opinion in Banks v. Workman on Wednesday, September 5, 2012.

The defendant, Anthony Banks, was convicted of murder and sentenced to death. He and a companion had kidnapped, raped, and shot the victim. After losing his state court appeal, Banks appealed the denial of his federal habeas petition. He alleged a Confrontation Clause violation because the prosecution called Banks’s brother as a witness even after he stated he would plead the Fifth and asked if Banks had told him he shot the victim. The state court found that to be harmless error. The standard of review of the state court’s determination that a constitutional error was harmless is “whether the error had a ‘substantial and injurious effect’ on the jury’s decision.” To reverse a conviction under this standard, the reviewing court must “have a 1grave doubt1 about the effect of the error on the verdict.” Given the overwhelming evidence against the defendant, The Tenth Circuit had no such doubt.

Banks’s claimed violation of his due process right to a competent expert and Sixth Amendment right to effective assistance of counsel because his expert witness was allegedly intoxicated when he testified. Because the defendant did not object at the trial or argue this point on direct appeal, he was procedurally barred by Oklahoma statute from raising this issue. Because the few reasons a federal court would excuse compliance with a state procedural rule were not present, Banks lost on this issue as well.

The Tenth Circuit affirmed Banks’s conviction after disposing of his additional claims that the government failed to disclose exculpatory evidence, of prosecutorial misconduct, and cumulative error.

Tenth Circuit: Uninsured Motorist Claim Denial Proper Where No Bad Faith Proven

The Tenth Circuit Court of Appeals published its opinion in Bannister v. State Farm Mut. Auto. Ins. on Wednesday, September 5, 2012.

The plaintiff, James Bannister, was injured in a motorcycle accident. After his insurer, State Farm, denied his uninsured motorist claim because it found him to be majority at fault, Bannister sued for violation of the duty of good faith and fair dealing. A jury found for Bannister but the judge granted State Farm’s motion for judgment as a matter of law.

Refusal to pay a claim alone is not bad faith provided there is a legitimate dispute regarding coverage and the insurer’s denial is reasonable based on the facts known or knowable to it at the time of denial. To prove bad faith, the claimant must show either that (1) the insurer did not actually rely on the legitimate reason, or (2) the insurer failed to adequately investigate the claim. Because neither of these exceptions could be shown, the court affirmed.

Tenth Circuit: Colorado’s Authority to Regulate Hazardous Waste at Army Depot Preempted by 50 U.S.C. §§ 1521 and 1512a

The Tenth Circuit Court of Appeals published its opinion in Colorado Department of Public Health and Environment v. United States on Tuesday, September 4, 2012.

The United States has for many years stored chemical weapons at the Army’s depot near Pueblo, Colorado. Through RCRA, Congress authorized states to administer their own hazardous waste programs, which Colorado does through the Colorado Department of Public Health and Environment, Hazardous Materials and Waste Management Division (CDPHE). The CDPHE sought to enforce its regulations prohibiting storage of certain hazardous waste, 6 C.C.R. §268.50, against the Depot. The district court dismissed the case due to federal law preemption and the Tenth Circuit affirmed.

In 1985, Congress enacted 50 U.S.C § 1521, which directed the Secretary of Defense to destroy the stockpiles of weapons, including those at the Depot. Section 1521 has been amended several times to extend the deadline for destruction, which is currently 2017. The United States argued it could not comply with § 1521 and with Colorado’s hazardous waste law and regulations, which prohibited the continued  storage.

The Tenth Circuit found that given the level of detail Congress provided in its mandate to destroy the weapons, Colorado was preempted from enforcing its regulation against the Depot. Allowing the CDPHE to regulate the waste would “impede or interfere with the accomplishment of the objectives and purposes of 50 U.S.C. §§ 1512a and 1521.”