August 18, 2019

Archives for June 12, 2013

Colorado Supreme Court: Although Considering Adoption of Child, Foster Parents Had Not Initiated Adoption Process Therefore Due Process Rights Not Violated by Child’s Removal

The Colorado Supreme Court issued its opinion in M.S. v. People in Interest of A.C. on Monday, June 10, 2013.

Dependency and Neglect—Foster Parents—Due Process Rights of Foster Parents.

In this dependency and neglect case, the Supreme Court reviewed the court of appeals’ finding that removal of A.C. from his pre-adoptive foster parents’ home without prior notice to the foster parents did not violate their due process rights. The foster parents, though identified by the juvenile court as prospective adoptive parents, had not yet initiated the adoption process. Because of this, the Court concluded that their rights with regard to A.C. are indistinguishable from those of typical foster care parents.  Therefore, they do not possess a constitutionally protected liberty interest. Because they do not possess a constitutionally protected liberty interest, the Court did not consider whether a due process violation occurred. The judgment was affirmed.

Summary and full case available here.

Colorado Supreme Court: Dismissal of Defendant’s Petition for Postconviction Relief Based on Opposing Motion from Defendant’s Own Counsel Improper

The Colorado Supreme Court issued its opinion in Dooly v. People on Monday, June 10, 2013.

Post-conviction Relief—Crim.P. 35(c)—Crim.P. 12(a)—Ineffective Assistance of Counsel.

Defendant Joshua Dooly sought review of the court of appeals’ judgment in People v. Dooly (No. 10CA1751), which affirmed the district court’s dismissal of his application for post-conviction relief pursuant to Crim.P. 35(c). The district court denied Dooly’s request for new counsel and instead granted his existing counsel’s motion to dismiss his application altogether, on the ground that the issues it raised failed to state a claim and therefore were without arguable merit. The court of appeals upheld the district court’s order of dismissal, reasoning that Crim.P. 12(a) provides for a motion to dismiss an application for post-conviction relief, and that the public defender, as Dooly’s counsel of record, could file motions on behalf of his client, including a motion to dismiss his client’s application for relief from his convictions despite being in clear contravention of his client’s wishes.

Every person convicted of a crime is provided a statutory right to make application for post-conviction relief and is entitled to a prompt review and ruling on any motion substantially complying with Form 4 of the Rules of Criminal Procedure. Therefore, the district court erred in granting the motion to dismiss against defendant’s wishes. The judgment of the court of appeals was reversed with instructions to order that defendant’s application for post-conviction relief be reinstated.

Summary and full case available here.

Colorado Supreme Court: LLC Act Does Not Allow LLC’s Creditor to Assert Claim Against Managers of LLC

The Colorado Supreme Court issued its opinion in Weinstein v. Colborne Foodbotics LLC on Monday, June 10, 2013.

Limited Liability Company (LLC)—LLC Creditor’s Claims Against Members and Managers—CRS § 7-80-606—Fiduciary Duty of LLC Manager.

The Supreme Court held that, pursuant to CRS § 7-80-606, an LLC’s members are liable for an unlawful distribution to the LLC but not to the LLC’s creditors. The Supreme Court also held that an insolvent LLC’s managers do not owe the LLC’s creditors the same common law fiduciary duty an insolvent corporation’s directors owe the corporation’s creditors. Accordingly, plaintiff, a creditor of an LLC, may not assert a claim for either unlawful distribution against the defendant members or common law breach of fiduciary duty against the defendant managers absent express statutory authority.

Summary and full case available here.

Tenth Circuit: Sentence Enhancements Appropriate Where Defendant Pled Guilty to Trafficking of Counterfeit Goods

The Tenth Circuit Court of Appeals published its opinion in United States v. Zhou on Monday, June 10, 2013.

In 2009, federal agents began investigating Shengyang Zhou for selling counterfeit weight loss products to consumers throughout the United States. Over the course of the investigation, which lasted several years, undercover agents purchased tens of thousands of pills containing Sibutramine, a Schedule IV non-narcotic controlled substance that was at the time approved by the FDA only for the treatment of obesity in a patented drug commonly known as “Meridia.” Mr. Zhou’s pills were packaged and labeled as the weight loss drug “Alli.” The genuine product is manufactured by the pharmaceutical company Glaxo Smith Kline (GSK) and contains Orlistat. Mr. Zhou also packaged thousands of boxes of the Sibutramine labeled as “Super Slim” and “Meizitang,” two products listed in FDA alerts as containing ingredients that could put consumers’ health at risk.

Ultimately, at a meeting in Hawaii, a federal agent handed Mr. Zhou a stack of U.S. currency that was purportedly part of the $55,000 the agents had promised to pay him that day in exchange for a large shipment of counterfeit weight loss pills. Mr. Zhou was arrested after he accepted the money.

During a series of post-arrest interviews, Mr. Zhou told agents that he had been planning on completing a 10,000 unit order of counterfeit Alli and shipping the products to the undercover agents. He acknowledged that the contents of the capsules he had been distributing, and had been preparing to provide, did not contain the same ingredient as genuine Alli but instead contained Sibutramine.

Mr. Shengyang Zhou pled guilty to trafficking and attempted trafficking of counterfeit goods in violation of 18 U.S.C. § 2320 and § 2. He was sentenced to eighty-seven months’ imprisonment and three years’ supervised release, and he was ordered to pay restitution of $507,567.

Mr. Zhou raised four issues on appeal, and they were all objections to sentence enhancements.

A. Infringement Amount

Mr. Zhou first contended the district court erred in imposing a 14-level enhancement to his offense level by miscalculating the “infringement amount” under U.S.S.G. § 2B5.3(b)(1). He contended the court erred by including the not-yet-completed order of 10,000 bottles of counterfeit Alli without making findings regarding whether the sentencing guidelines provision on “attempt,” U.S.S.G. § 2X1.1, was satisfied.

The fact that the counterfeit Alli packaging was virtually indistinguishable from the authentic items supports the district court’s application of the 14-level enhancement. Samples of this packaging were sent to GSK employees who determined that, while counterfeit, the packaging was identical to or substantially indistinguishable from genuine packaging materials.

B. Mr. Zhou as Organizer or Leader

Mr. Zhou contested the four-level enhancement for being an “organizer or leader” under U.S.S.G. § 3B1.1(a), claiming the court failed to articulate the factual basis for this enhancement. Finding no clear error, the Tenth Circuit found that the record supported the district court’s conclusion that he was a leader or organizer for purposes of § 3B1.1(a). The record included Mr. Zhou’s statements to the agents that he owned two companies producing and distributing the counterfeit weight loss drugs, that he was “the boss” of this enterprise, and that he had no other partners in the venture.

C. Conscious or Reckless Risk of Death or Serious Injury

Mr. Zhou challenged the district court’s application of the two-level increase based on U.S.S.G. § 2B5.3(b)(5), asserting there was insufficient evidence he was consciously aware of a risk of death or serious bodily injury, and arguing the court failed to apply the correct standard of “recklessness” in making this determination.

The Tenth Circuit found no clear error in the district court’s finding that Mr. Zhou was consciously aware of both the FDA alerts describing the serious health risks posed generally by drugs containing Sibutramine, and the warnings specifically addressing the health risks of the counterfeit Alli he was producing and distributing. In light of this uncontested evidence, it was appropriate to add the two-level increase to Mr. Zhou’s offense level in accordance with § 2B5.3(b)(5).

D. Restitution

Mr. Zhou’s final argument was that the district court erred in ordering him to pay $417,396.39 in restitution to GSK under the Mandatory Victims Restitution Act (“MVRA”), 18 U.S.C. § 3663A. To the extent Mr. Zhou made legal arguments he failed to raise in district court, the Tenth Circuit found no  egregious or obvious and substantial legal error. A district court has broad discretion in crafting a restitution order under the MVRA. In sum, although the Tenth Circuit doubted there was any error at all, it affirmed the restitution order “because if there was error, it was not ‘clear or obvious under current law.’”


Tenth Circuit: Unpublished Opinions, 6/10/13

On Monday, June 10, 2013, the Tenth Circuit Court of Appeals issued one published opinion and five unpublished opinions.

United States v. Taylor

United States v. Lechuga

Summit Financial Resources v. Kathy’s General Store

Thompson v. McKune

United States v. Montoya

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