Public Law Legal Research Blog

CIVIL RIGHTS: A Civil Rights Civil War: Religious Observance and Educational Rights of the Disabled

Posted by Steven G. Friedman on Tue, Nov 3, 2015 @ 11:11 AM

The Lawletter Vol 40 No 9

Steve Friedman, Senior Attorney, National Legal Research Group

     One of the bedrock principles of American jurisprudence is the freedom of religion guaranteed by the First Amendment. See U.S. Const. amend. I. More recently, the law had mandated that disabled students are to receive certain minimum educational benefits at public expense. See 20 U.S.C. §§ 1400–1491o (Individuals with Disabilities Education Act ("IDEA")); 29 U.S.C. § 794 (Rehabilitation Act of 1973 ("RA")). At times, these two distinct rights may overlap and conflict with one another. As illustrated by two fairly recent cases, however, public schools need not accommodate the student's (or the parents') religious beliefs in providing a free appropriate public education ("FAPE") as required by the IDEA and the RA.

      In M.L. ex rel. Leiman v. Starr, No. PWG-14-1679, 2015 WL 4639569 (D. Md. filed Aug. 3, 2015), appeal filed, No. 15-1977 (4th Cir. Aug. 27, 2015), the parents of a child with an intellectual disability brought suit against Maryland's Montgomery County Board of Education, alleging that the Board had failed to provide the student with a FAPE as required by the IDEA. The student is part of the Orthodox Jewish community, and, thus, it is very important to his parents that he learn the rules and customs of Orthodox Jewish life. Consequently, the parents sought an individualized education program ("IEP") that placed the student at a private school where the basics of Orthodox Jewish life are a part of the curriculum. Instead, the school district proposed an IEP that placed the student at a public school that did not include instruction on Orthodox Jewish life.

     The U.S. District Court for the District of Maryland held that the IDEA does not require an IEP to be so personalized that it incorporates the student's and/or the parents' religious and/or cultural beliefs.

     Try as the Plaintiffs do to distinguish their misgivings with the IEP from its failure to provide for instruction geared to the Student's religious and cultural identity as an Orthodox Jew, that is the crux of this dispute: Is the education proposed in the IEP a FAPE when it does not account for the Student's individual religious and cultural needs? The short answer is yes. Simply put, a FAPE, to which a child with a disability is entitled, is the education that any student without disabilities would receive. The IEP is "individualized" or "personalized" to ensure that a child can access that education, considering his or her individual or personal cognitive and developmental capabilities and needs. In this regard, Plaintiffs have pointed to no authority, nor have I found any, that expands the requirement of the IDEA that an IEP be "individualized" to the extent that it affords a qualified student with an educational program specifically tailored to the religious and cultural enclave in which the student lives.

Id. at *8 (citation omitted).

      In D.L. ex rel. K.L. v. Baltimore City Board of School Commissioners, 706 F.3d 256 (4th Cir. 2013), the parents of a disabled student brought suit against the Baltimore City Board of School Commissioners ("BCBSC"), alleging that public school officials had violated the RA by not providing the student with educational services related to certain disorders when the student was enrolled exclusively in private religious school. The BCBSC determined that the student was eligible for services under the RA but informed the parents that the BCBSC could not provide such services unless the student were enrolled in one of its public schools. The BCBSC further informed the parents that because Maryland law did not permit simultaneous dual enrollment in a private and a public school, the student would have to withdraw from his private religious school and enroll in a local public school in order to obtain services under the RA.

     In the ensuing litigation, the U.S. Court of Appeals for the Fourth Circuit agreed with the school district. The RA "and its implementing regulations prohibit discrimination on the basis of disability, not on the basis of school choice" such that "[p]ublic schools are only required to make a FAPE available on equal terms to all eligible children within their district." Id. at 260-61. Accordingly, the BCBSC is not required to "provide access to eligible individuals that opt out of the program by enrolling in private schools." Id. at 261. Furthermore, the court held that the BCBSC's prerequisite that private-school students cease enrollment in private religious institutions and enroll in public schools in order to access services under the Act did not violate either the Supremacy Clause or the Free Exercise Clause. Although the BCBSC's policy might increase the overall cost of this student's private education, it did not substantially infringe on his right to attend a private religious school. His right to a religious education did not extend to a right to demand that public schools accommodate his educational preferences. The BCBSC had legitimate financial, curricular, and administrative reasons to require that the student enroll exclusively in a public school in order to take advantage of services under the Act, and, therefore, his parents were required to shoulder the full cost of their decision to exercise their religious beliefs by keeping him enrolled in private school, including the cost of services that the student needed in order to address his challenges.

Topics: civil rights, Steven G. Friedman, religious observance, educational rights

CONSTITUTIONAL LAW: Denial of Medical Care for an Inmate Was Cruel and Unusual Punishment

Posted by John M. Stone on Thu, Sep 10, 2015 @ 17:09 PM

CONSTITUTIONAL LAW: Denial of Medical Care for an Inmate Was Cruel and Unusual Punishment

The Lawletter Vol 40 No 7

John Stone, Senior Attorney, National Legal Research Group

     It is no easy task for a prisoner to succeed on a claim that he was denied medical care in circumstances that violated his federal constitutional rights. Such a cause of action is not simply a prisoner's version of a medical malpractice case but, rather, requires a more demanding showing by the plaintiff. Mere negligence in diagnosis or treatment will not suffice. To state an Eighth Amendment claim for cruel and unusual punishment based on deficient medical care, a prisoner must allege an objectively serious medical condition and an official's deliberate indifference to that condition. Estelle v. Gamble, 429 U.S. 97 (1976). "Deliberate indifference" to a prisoner's serious medical needs occurs when a defendant realizes that a substantial risk of serious harm to a prisoner exists but then disregards that risk.

     In a recent case, a prisoner appearing on his own behalf, and perhaps benefiting from the relative leniency afforded pleadings from pro se litigants, convinced a federal appeals court to reinstate his claim under 42 U.S.C. § 1983 for denial of medical care after his claim had been dismissed by a federal district court. Perez v. Fenoglio, No. 12-3084, 2015 WL 4092294 (7th Cir. July 7, 2015). While an inmate at a state prison, Perez was injured during a prison basketball game. He suffered a torn ligament in his right hand, dislocation of his thumb, tissue damage, and a "gaping wound" between his thumb and right index finger. What ensued was a succession of failures by medical personnel and prison officials to see to it that Perez received adequate treatment for his serious injuries. The recurring theme was unnecessary delays, prison red tape, some outright indifference to Perez's condition, and, at least as to some of the defendants, a desire to retaliate against Perez. The result was permanent damage to his hand and a diminished ability to use it.

     Not only did Perez's complaint state a violation of his Eighth Amendment right to medical care, but a succession of persons or entities who made contact with him after his injury were found by the Seventh Circuit to be culpable, assuming that Perez could support his allegations with proof. The prison physician determined that the wound was so serious that it required a specialist's care, but then Perez had to wait four days and file a grievance before he was sent to the specialist, by which time it was too late for the wound to be sutured. Then Perez had to wait seven months and file another grievance before he was sent to the specialist for follow-up care. The prison physician also ignored recommendations of the specialist. Altogether, Perez was forced to wait 10 months from the time of his injury until receipt of meaningful treatment in the form of surgery, despite his complaints of ongoing symptoms, including pain, bleeding, swelling, and loss of function.

     A prison nurse had knowledge of the severe injury yet failed to provide adequate treatment to Perez herself, such as by suturing his wound, or to ensure that others did, such as by contacting supervisory personnel to voice any concerns about the treatment being provided to him. The private corporation that served as the prison's health-care provider also could be found liable on allegations that the prison nurse told Perez that she could not stitch his wound or prescribe medication without a "doctor there" and that a doctor was not "there" because of the provider's policy or practice of not having a full-time doctor stationed at the prison at all times or on call to suture open wounds as necessary. The prison's health-care administrator also contributed to the violations, as he was the individual responsible for approving requests for inmates to be seen by outside doctors. Furthermore, despite the prison physician's determination that Perez's gaping wound and open dislocation were so serious that he should see a specialist, the administrator, without explanation, refused to grant the referral request for four days, causing Perez needless pain and suffering and worsening the injury.

     Even some nonmedical personnel at the prison were subject to being held liable. Grievance officials, who had been made aware of Perez's predicament by way of his grievances and other correspondences, obtained actual knowledge of the serious medical condition and inadequate medical care through coherent and highly detailed grievances and other correspondences from Perez. Each of these officials failed to exercise his or her authority to intervene on behalf of Perez to rectify the situation, suggesting that they either approved of, or turned a blind eye to, his allegedly unconstitutional treatment.

     According to Perez's handwritten complaint, the suffering experienced from the neglected injuries to his hand was compounded by the fact that the defendants were retaliating against him over an earlier series of events. He sufficiently alleged that because he had brought a previous grievance against prison officials for the withholding of his prescribed depression medication, members of the prison's medical staff, including the prison physician and the prison's health-care administrator, denied him adequate care when he severely injured his hand. This constituted a separate, additional violation, this time of his rights under the First Amendment. To state a First Amendment claim for retaliation, a plaintiff must allege that (1) he engaged in activity protected by the First Amendment; (2) he suffered a deprivation that would likely deter First Amendment activity in the future; and (3) the First Amendment activity was at least a motivating factor in the defendants' decision to take the retaliatory action. Bridges v. Gilbert, 557 F.3d 541 (7th Cir. 2009).


Topics: constitutional law, John M Stone, Eighth Amendment, The Lawletter Vol 40 No 7, medical care, inmate

PUBLIC LAW: Ability to Obtain Shelter Is a Major Life Activity

Posted by Steven G. Friedman on Thu, Jul 9, 2015 @ 11:07 AM

The Lawletter Vol 40 No 5

Steve Friedman, Senior Attorney, National Legal Research Group

     The Fair Housing Act ("FHA"), 42 U.S.C. §§ 3601–3631, the Americans with Disabilities Act ("ADA"), id. §§ 12101–12213, and the Rehabilitation Act ("RA"), 29 U.S.C. §§ 701–796l, each prohibit certain forms of discrimination based on physical impairments. See 42 U.S.C. § 3604(f)(1) (making it unlawful "[t]o discriminate in the sale or rental [of], or to otherwise make unavailable or deny, a dwelling to any buyer or renter because of a handicap"); id. § 12112(a) (making it unlawful to discriminate against disabled persons in employment); id. § 12132 (same regarding public services); id. § 12182(a) (same regarding public accommodations); id. § 594(a) (same regarding "any program or activity receiving Federal financial assistance").

      "The relevant portions of the FHA, ADA, and [RA] offer the same guarantee that a covered entity . . . must . . . make the entity's benefits and programs accessible to people with disabilities," and, thus, the analysis "under the three statutes is treated the same." Sinisgallo v. Town of Islip Hous. Auth., 865 F. Supp. 2d 307, 337 (E.D.N.Y. 2012) (internal quotation marks omitted). A person is considered to have a disability under the FHA, ADA, and RA if that person has, in fact, a record of, or is merely regarded as having, "a physical or mental impairment that substantially limits one or more of the major life activities of such individual." 42 U.S.C. § 12102(2) (ADA); id. § 3602(h) (FHA). "[M]ajor life activities include, but are not limited to, caring for oneself, performing manual tasks, seeing, hearing, eating, sleeping, walking, standing, lifting, bending, speaking, breathing, learning, reading, concentrating, thinking, communicating, and working." Id. § 12102(2)(A) (emphasis added).

     Recently, the U.S. Court of Appeals for the Second Circuit joined the Fourth Circuit in adding another category to the list of major life activities: obtaining housing/shelter.

     [The Second Circuit] has not determined whether "obtaining housing" is a major life activity, but the Fourth Circuit has held that it is. United States v. S. Mgmt. Corp., 955 F.2d 914, 919 (4th Cir. 1992). We agree. "Major life activities means functions such as caring for one's self, performing manual tasks, walking, seeing, hearing, speaking, breathing, learning and working." 24 C.F.R. § 100.201(b). But this list is "not exclusive." Reeves [v. Johnson Controls World Servs.], 140 F.3d [144,] 150 [(2d Cir. 1998)]; see also Bartlett v. N.Y. State Bd. of Law Exam'rs, 226 F.3d 69, 79-80 (2d Cir. 2000). Major life activities are "those activities that are of central importance to daily life," Toyota Motor [Mfg., Ky., Inc. v. Williams], 534 U.S. [184,] 197 [(2002)], including reading, Bartlett, 226 F.3d at 80, and interacting with others, Jacques v. DiMarzio, Inc., 386 F.3d 192, 202-04 (2d Cir. 2004). On the other end of the spectrum are those activities that are "insufficiently fundamental," such as performing housework and shopping. Colwell v. Suffolk Cnty. Police Dep't, 158 F.3d 635, 642-43 (2d Cir. 1998). The ability to obtain shelter is among the most basic of human needs and thus is a "major life activity" for purposes of the FHA. We note that a person is not substantially limited in the major life activity of obtaining housing simply because she is unable to, or regarded as unable to, live in a particular dwelling. Rather, a person is substantially limited if, due to her impairment, she cannot live or is regarded as unable to live in a broad class of housing that would otherwise be accessible to her.

Rodriguez v. Vill. Green Realty, Inc., No. 13-4792-CV, 2015 WL 3461554, at *13 (2d Cir. June 2, 2015); see also Jeffrey O. v. City of Boca Raton, 511 F. Supp. 2d 1328, 1336-37 (S.D. Fla. 2007) (assuming without deciding that the ability to secure housing is a major life activity); Oxford House, Inc. v. Township of Cherry Hill, 799 F. Supp. 450, 459 n.21 (D.N.J. 1992) (recognizing, in dicta, that the Fourth Circuit has held that the ability to obtain housing is a major life activity).

     Although this issue has arisen mostly in the context of drug and alcohol rehabilitation centers, see, e.g., United States v. S. Mgmt. Corp., 955 F.2d 914 (4th Cir. 1992); Jeffrey O., 511 F. Supp. 2d 1328; Oxford House, 799 F. Supp. 450, it is clearly not limited to that context, see, e.g., Rodriguez, 2015 WL 3461554, at *1, *3 (parents alleged that real estate agent forced them to leave their home because of their daughter's epilepsy). Furthermore, it is important to note, as emphasized in the above-quoted material, that the major life activity of obtaining housing does not mean the housing of one's choice. See, e.g., Rodriguez, 2015 WL 3461554, at *13.

     Given that the class of major life activities remains open, see 42 U.S.C. § 12102(2)(A), it is prone to further development through litigation.

Topics: Rehabilitation Act, Fair Housing Act, Americans with Disabilities Act, Steven G. Friedman, The Lawletter Vol 40 No 5, housing/shelter, major life activity

PUBLIC LAW UPDATE: Circuits Split on Showing Required in Reverse Discrimination

Posted by Dora S. Vivaz on Thu, Jun 11, 2015 @ 16:06 PM

Dora Vivaz, Senior Attorney, National Legal Research Group

     The procedural requirements and burdens for showing race discrimination in employment are by now fairly well delineated and established. This is apparently not yet so for claims of reverse discrimination. In a recent case, the U.S. District Court for the Western District of Virginia, faced with such a claim, first noted that there is a split amongst the circuits as to whether the same requirements and burdens apply to reverse discrimination claims as apply to discrimination claims. Shomo v. Apple, Inc., Civ. Act. No.: 7:14cv00040, 2015 WL 777620, at *4 n.3 (W.D. Va. Feb. 24, 2015). The court referenced McNaught v. Virginia Community College System, 933 F. Supp. 2d 804, 817-20 (E.D. Va. 2013), which includes a detailed discussion of the subject and outlines the circuit split on the issue.

     In McNaught, the court reviewed the decisions by the circuit courts. It noted that the Sixth, Seventh, Eighth, Tenth, and District of Columbia Circuits all require an enhanced showing by a reverse discrimination plaintiff—a showing of background circumstances that tend to demonstrate that the employer has either reason or inclination to unlawfully discriminate against a "majority" applicant or employee. The court explained that the rationale for the enhanced requirement is that the usual proof scheme developed under Title VII was developed by the courts based upon this country's history of race discrimination against minorities, particularly African-Americans.

     The court then noted that the Third, Fifth, and Eleventh Circuits have held that the same standard applies to all discrimination claims. The court explained that the rationale for employing the same standard is essentially the constitutional requirement for equal protection. Finally, the court noted that the Fourth Circuit has repeatedly refused to decide the issue, with the result that there is an intracircuit split amongst the district courts of the Fourth Circuit. After reviewing the cases, the court sided with those courts that have applied the same standard, concluding that the enhanced requirement is vague and hard to apply and that a uniform standard better reflects the approach of the Supreme Court.

     The Shomo court likewise concluded that it would apply the same standard to all discrimination claims. In Shomo, there was simply no evidence to support a reasonable inference of unlawful reverse discrimination under either standard, so the issue was unimportant to the decision in that case. Inevitably, however, this issue will have to be decided by the Supreme Court.

Topics: legal research, Dora S. Vivaz, The Lawletter Vol 40, No 4, equal protection, reverse discrimination

CIVIL PROCEDURE: Simultaneous Involvement in Cobell Settlement Claim Bars Plaintiffs' Mineral Lease Complaint Against United States

Posted by Charlene J. Hicks on Thu, Mar 19, 2015 @ 12:03 PM

Charlene Hicks, Senior Attorney, National Legal Research Group

     A class action settlement may have far-reaching, unintended effects for particular class members who choose not to opt out of the settlement. This point is highlighted in a recent decision by the U.S. Court of Federal Claims in Two Shields v. United States, No. 13-90 L, 2015 WL 513315 (Fed. Cl. Feb. 6, 2015).

     In that case, two Native Americans filed claims against the United States, alleging that the Government had breached its fiduciary duty to prudently manage their mineral rights, which were held in trust by the United States. The plaintiffs were allottees of Indian lands on the Fort Berthold Indian Reservation who, in 2007 and 2008, had granted oil leases to a private party known as Dakota-3. The plaintiffs alleged that the United States had rubber-stamped its approval of the leases at below-market rates. In November 2010, Dakota-3 re-leased the plaintiffs' allotments for a bonus price roughly 20 times the original lease rate. The plaintiffs alleged that the United States had breached its duties under the Indian Long-Term Leasing Act, 25 U.S.C. § 396, which requires the Government to approve only those mineral leases that are in the best interests of the Indian owners.

     The Court of Federal Claims entered summary judgment on the plaintiffs' breach-of-fiduciary-duty claims, based on a prior release entered in a class action case known as the Cobell Settlement, Cobell v. Salazar, No. 1:96CV01285 (TFH), 2011 WL 10676927 (D.D.C. July 27, 2011), aff'd, 679 F.3d 909 (D.C. Cir.), cert. denied, 133 S. Ct. 543 (2012). Cobell involved claims for Government mismanagement of Individual Indian Money ("IIM") accounts. The United States entered into a comprehensive settlement that released the Government from all known and unknown Indian land administration claims that had been or could have been asserted through September 30, 2009.

     The Two Shields plaintiffs were members of the Cobell class because they held IIM accounts in their names and they had not opted out of the Settlement. The Court of Federal Claims ruled that the Two Shields plaintiffs' breach-of-fiduciary-duty claims against the United States were land administration claims within the meaning of the Cobell Settlement because they were known or unknown claims that accrued when the oil leases were originally executed in 2007 and 2008. As a result, the claims were barred by the Cobell Settlement. This was true despite the fact that the Settlement did not mention the Fort Berthold oil leases, and the underlying action in the Cobell case involved IIM accounts rather than mineral leases. If the plaintiffs had wanted to protect their claims, the court indicated that they should have exercised their right to timely opt out of the Cobell class.

     As Two Shields demonstrates, a class action settlement in one case may be broad enough to encompass seemingly unrelated causes of action that may exist in a wholly different context but that involve the same defendant. Accordingly, a class action member who potentially may have more than a single claim against the defendant should exercise great caution in choosing not to opt out of the class, lest his or her participation in the class have the effect of barring all other potential causes of action.

Topics: breach of fiduciary duty, civil procedure, class action

PUBLIC LAW UPDATE: Tort Liability for Third-Party Criminal Conduct

Posted by Gale Burns on Thu, Jun 12, 2014 @ 12:06 PM

John Stone, Senior Attorney, National Legal Research Group

     The mass murders committed on the campus of Virginia Tech in 2007 led to wrongful death claims on behalf of some of the victims against multiple defendants, including the Commonwealth of Virginia. Initially the perpetrator shot and killed two individuals in a dormitory and fled that scene. It was not until a little over two hours later, as police were investigating the initial murders and college officials were meeting to determine their responses, that the killer reappeared in another college classroom building and committed the rest of his crimes. About 20 minutes before those later attacks, the University had sent out a campus-wide "blast email" about the first "shooting incident" and the police investigation, and advising students to be alert for anything suspicious. The plaintiffs' theory of recovery was that the defendants owed a duty to the victims, which they had breached by not doing more, sooner, to warn students about the possibility of a shooter on campus.  A jury returned a multimillion dollar verdict for the plaintiffs (reduced to $100,000 by the trial court because of a damages cap in Virginia's Tort Claims Act).

     The Supreme Court of Virginia reversed the judgment for the plaintiffs. Commonwealth v. Peterson, 286 Va. 349, 749 S.E.2d 307 (2013). In Virginia, as in most jurisdictions, as a general rule a person does not have a duty to warn or protect another from the criminal acts of a third person, especially when the third person commits an assault or physical attack, because such acts cannot reasonably be foreseen. A narrow exception to this principle applies if the plaintiff establishes that there is a "special relationship," either between the plaintiff and the defendant or between the third-party criminal actor and the defendant. Examples include common carriers and their passengers, innkeepers and their guests, and employers and their employees. But, as the court in Peterson noted, these exceptions are very fact-specific, and are not conducive to drawing bright-line rules for all cases.

     The absence of such a special relationship often marks the quick end of claims based on a third party's criminal conduct. In Peterson, however, in a sense the plaintiffs crossed that first threshold in that the court was willing to assume, without deciding, that a special relationship existed between the university officials and the slain students. Even so, the court reversed the verdict for the plaintiffs, because the facts taken as a whole did not give rise to a duty to warn the students of the shooter on campus. It was not known, nor reasonably foreseeable, that students faced a risk of injury or death from a mass shooting on campus after officials began investigating the first shooting in the dormitory earlier that morning. Based on such limited information as they had at the time, neither the police officers nor university officials knew who the shooter was, but they initially believed with some cause that the first murder victim's boyfriend, whom they had already questioned, may have been the shooter. Again, based on such information as was available at the time, the officials reasonably believed that the shooter had fled the area and posed no danger to others on campus. That this belief was soon shown by events to be tragically mistaken was not a ground for holding the defendants liable.

     Peterson illustrates the difficulty of prevailing on a negligence claim arising from a third party's criminally violent conduct, even where a special relationship between the parties exists or is assumed to exist. The law as it has developed has built-in headwinds reflecting a deep-seated reluctance to hold anyone legally accountable for the injuries or deaths other than the perpetrators themselves.

Topics: legal research, public law, John M Stone, tort liability, Virginia Tech murders, wrongful death claim, Commonwealth v. Peterson, Va. Supreme Court, reversed judgment for plaintiffs, reasonably unforeseeable that students faced risk, difficulty prevailing on negligence claim even if

TORTS: Economic Loss Doctrine as a Bar to Negligent Misrepresentation Claims

Posted by Gale Burns on Mon, Dec 30, 2013 @ 15:12 PM

The Lawletter Vol 38 No 10

Fred Shackelford, Senior Attorney, National Legal Research Group

     Does the economic loss doctrine preclude recovery for negligent misrepresentation? The supreme courts in Kansas and Nevada recently addressed this issue and reached opposite conclusions.

     In its original form, the economic loss doctrine prohibited a commercial buyer of defective goods from suing in negligence or strict liability when the only injury consisted of damage to the goods themselves. The doctrine reflected courts' concern that the rise of implied warranties and strict liability for dangerous products would allow tort law to consume contract law. Over the years, many courts extended the doctrine's application beyond the commercial product sphere as a means of preserving distinctions between contract and tort law.

     In the Kansas and Nevada Supreme Court cases, the issue was whether the doctrine applied in actions for negligent misrepresentation arising from construction contracts. In Rinehart v. Morton Buildings, Inc., 305 P.3d 622 (Kan. 2013), property owners who had contracted with a builder for a preengineered building sued the builder. They alleged claims for breach of contract and warranty, as well as a claim under the state's Consumer Protection Act. As part of their statutory claim, the owners alleged that the builder had negligently misrepresented that the building would be completed in a timely matter, accommodate the owners' need to relocate its operations, and meet or exceed all industry standards. After difficulties arose during construction over the structure's quality, the owners sued for damages to compensate for shop rent at an alternate facility, lost production, relocation costs, and interest expenses on a line of credit. The builder argued that the economic loss doctrine barred the negligent misrepresentation claim.

     The Rinehart court disagreed, concluding that the scope of a negligent misrepresentation claim is narrow enough that it is unnecessary to limit recovery by applying the economic loss doctrine. The court reasoned as follows:

     The elements of the negligence misrepresentation tort sets the bounds on the scope of liability by imposing the duty in the limited circumstances when a defendant supplies information to guide others in business transactions in the course of the defendant's business. The tort also limits the universe of those who may pursue such claims to those for whose benefit the defendant supplied the information and whom the defendant intends to influence or knows will be influenced in the transaction. Therefore, the doctrine's second purpose of restricting potential extensive liability to a commercial user "downstream" from the manufacturer does not apply here.

     . . . .

     We hold negligent misrepresentation claims are not subject to the economic loss doctrine because the duty at issue arises by operation of law and the doctrine's purposes are not furthered by its application under these circumstances. We leave for another day whether the doctrine should extend elsewhere.

Id. at 632-33 (citation omitted).

     Conversely, in Halcrow, Inc. v. Eighth Judicial District Court, 302 P.3d 1148 (Nev. 2013), the court ruled that the economic loss doctrine barred a claim for negligent misrepresentation brought by a general contractor against a developer. The case arose out of construction of the Harmon Tower, a mixed-use urban development that was owned by MGM Mirage Design Group ("MGM"). MGM retained an architectural firm and a general contractor ("Perini") to assist with the project. The architectural firm hired Halcrow to design the Harmon Tower and perform other services, while Perini hired Century Steel to install steel for the project. (Century Steel later assigned its contract to Pacific Coast Steel ("PCS").)

     Although Halcrow had no contract with PCS, Century Steel, or Perini, PCS and Century Steel were required to follow Halcrow's design and specifications for installing reinforcing steel in the Harmon Tower. Problems arose with the steel installation, which forced the tower to be limited to 26 floors instead of over 40 floors. After construction had been stopped and a flurry of complaints and counterclaims filed and dismissed, PCS and Century Steel sought leave to amend their complaints to include a cause of action for negligent misrepresentation against Halcrow, alleging that Halcrow had owed them a duty to act with reasonable care in communicating information to them about the steel installation. They alleged that Halcrow had failed to conduct timely inspections in accordance with its representations that inspections would take place and that it had erroneously stated that on‑site adjustments would alleviate errors in its plans. Century Steel and PCS therefore contended that as a result of their foreseeable reliance on Halcrow's false representations, Halcrow could be held liable for negligent misrepresentation.

     Clarifying the scope of its prior holding in Terracon Consultants Western, Inc. v. Mandalay Resort Group, 206 P.3d 81 (Nev. 2009), the Halcrow court concluded that the economic loss doctrine should be applied in order to protect parties from unlimited economic liability that could result from negligent actions taken in commercial settings. The court stated:

     Determining that design professionals have a separate and distinct duty to any subcontractor that must rely on their plans would essentially allow any party to recast their barred negligence claim into a negligent misrepresentation claim. In the context of commercial construction projects, the evidence that would need to be presented in order to prove a negligent misrepresentation claim is almost identical to that which would be necessary in proving a claim for negligence. Allowing one and not the other would create a loophole in Terracon's objective of foreclosing professional negligence claims against commercial construction design professionals and would, essentially, cause the economic loss doctrine to be nullified by negligent misrepresentation claims.

302 P.3d at 1154 (citation omitted).

     As the Rinehart and Halcrow cases illustrate, the proper scope of the economic loss doctrine is debatable, and courts may draw different conclusions as to its application to negligent misrepresentation claims. Courts in other states may continue to grapple with this issue as future cases arise.

Topics: legal research, Fred Shackelford, torts, construction contract, Halcrow, Inc. v. Eighth Judicial District Court, NV, Rinehart v. Morton Buildings, KS, economic loss doctrine, negligent misrepresentation

PUBLIC LAW: Lanham Act's Prohibition of Trademarking Governmental Insignia Applies Even to the Governmental Entity Itself

Posted by Gale Burns on Tue, Nov 19, 2013 @ 12:11 PM

The Lawletter Vol 38 No 9

Steve Friedman, Senior Attorney, National Legal Research Group

     The Trademark Act of 1946, 15 U.S.C. §§ 1051-1141n, commonly known as the "Lanham Act," is intended "to prevent individuals from misleading the public by placing their competitors' work forward as their own." Summit Mach. Tool Mfg. Corp. v. Victor CNC Sys., Inc., 7 F.3d 1434, 1439 (9th Cir. 1993) (internal quotation marks omitted). The purpose of the Act is twofold.

First, it serves the general interest of the public by protecting consumers from false and misleading representations concerning the source, identity, or quality of a product or service. Secondly, the law protects the right of the owner of a trade or service mark to have his or her product or service identified by a distinct name or label. See Industrial Rayon Corp. v. Dutchess Underwear Corp., 92 F.2d 33, 35 (2d Cir. 1937), cert. denied, 303 U.S. 640, 58 S. Ct. 610, 82 L. Ed. 1100 (1938).

Birthright v. Birthright Inc., 827 F. Supp. 1114, 1133 (D.N.J. 1993).

     Accordingly, the Lanham Act permits persons to apply to the U.S. Patent and Trademark Office ("PTO") for federal trademark registration of their commercial mark(s), provided that certain parameters set forth therein are satisfied. The general rule is that a distinguishable mark on commercial goods can be trademarked unless the mark falls within one of five specified categories of marks. See 15 U.S.C. § 1052(a)-(e).

     One such exception is for a mark that "consists of or comprises the flag or coat of arms or other insignia of the United States, or of any State or municipality, or of any foreign nation, or any simulation thereof." Id. § 1052(b). Despite the seemingly straightforward exception, the City of Houston, Texas, and the District of Columbia ("District") each sought to register its official seal. See In re City of Houston, Nos. 2012-1356, 2012-1418, 2013 WL 5433432 (Fed. Cir. Oct. 1, 2013). Whereas Houston sought to trademark its city seal in connection with various municipal services, including commerce, tourism, business administration, and public utility services, the District sought to trademark its official seal to cover various items such as shirts, pens, cups, and hats.

     The PTO had denied both applications, citing § 1052(b), and both decisions were affirmed by the Trademark Trial and Appeal Board. Both municipalities appealed their respective adverse decisions to the U.S. Court of Appeals for the Federal Circuit. The appellate court decided to address the two appeals together because they raised the same question of first impression in
the courts: Can a local government entity obtain a federal trademark registration for its official insignia? Notably, although both municipalities conceded that their subject marks were insignias and argued that § 1052(b) did not preclude their registration, each municipality presented distinct theories to reach the same conclusion. As detailed below, however, the court affirmed the PTO's rejection of both theories.

     Houston argued that as a governmental entity, it was not an "applicant" within the meaning of § 1052(b). Although the Lanham Act defines "applicant" to include a "juristic person," which includes any "organization capable of suing and being sued in a court of law," Houston focused on the introductory sentence providing that the Act's definitions apply "unless the contrary is plainly apparent from the context." 15 U.S.C. § 1127. Specifically, Houston argued that the context of § 1052(b) suggests that Congress intended the term "applicant" to mean something other than a governmental entity seeking to register its own seal. Rejecting Houston's argument, the court reasoned that it need not consider the "context" of § 1052(b), given that nothing in the plain and unambiguous language of § 1052(b) suggested that Houston should be exempt from the statutory prohibition. Further, the court refused to add a "silent exemption" to the statute, especially where, as here, Congress has demonstrated that it knew how to express exceptions when it intended to do so. If Houston insisted on trademarking its seal, then it would have to take up its cause with Congress rather than the courts.

     The District took a different tack, relying instead on the treaty obligations of the United States, negotiated in the Paris Convention for the Protection of Industrial Property of 1883 ("Paris Convention"), as subsequently modified at Stockholm, T.I.A.S. No. 6923, 21 U.S.T. 1583, 828 U.N.T.S. 303 (July 14, 1967). In relevant part, the Paris Convention provides that "[e]very trademark duly registered in the country of origin shall be accepted for filing and protected as is in the other countries of the Union," Paris Convention art. 6 quinquies (A)(1), but specifically exempts "armorial bearings, flags, and other State emblems, of countries of the Union," id. art. 6 ter (1)(a). Rejecting the District's argument, the court reasoned that even assuming that the Lanham Act was intended to implement the obligations of the Paris Convention, the Paris Convention did not give the District any right relating to its official insignia. The "Union" referred to in the Paris Convention means "the countries that have joined in the treaty" and not "local public bodies such as municipalities." City of Houston, 2013 WL 5433432, at *7.  Undisputedly, the District was not a "country of the Union," id., and thus was not entitled to the exemption. Furthermore, the treaty exemption "by its own terms applies only to trademarks that are 'duly registered in the country of origin.'" Id. (quoting art. 6 quinquies (A)(1)). Since the question presented was whether the trademark could be registered in the United States, i.e., the country of origin, invoking the Paris Convention for the answer was circular logic. Moreover, the District's argument that such an interpretation would have the effect of preventing a foreign municipality from obtaining a registered mark in the United States, in violation of the Paris Convention, failed for two reasons. Not only was the question before the court limited to whether the District, a domestic entity, was entitled to register its mark, but the court refused to decide the rights of hypothetical third parties.

     Therefore, despite the creative arguments in favor of registration, the Federal Circuit affirmed the PTO's decisions denying both municipal trademark applications. Accordingly, the question of first impression has been answered: A local government entity cannot obtain a federal trademark registration for the entity's official insignia.

Topics: legal research, Lanham Act, distinguishable mark can be trademarked excepting, flag/insignia/coat of arms of US or a state, In re City of Houston, Fed. Cir., city argued that it was not an applicant, parallel case DC as local entity cannot obtain reg, The Lawletter Vol 38 No 9, public law

PUBLIC LAW UPDATE: Silence Is Not Obstruction of Police

Posted by Gale Burns on Thu, Apr 25, 2013 @ 10:04 AM

April 25, 2013

John Stone, Senior Attorney, National Legal Research Group

A tan Infinity hit an unoccupied car in a jewelry store parking lot. The Infinity was driven by a female and carried a male passenger. The driver inspected the car she had hit, spoke briefly with her male passenger, and then drove away without leaving any information. Someone witnessed the incident, took down the Infinity's license plate number, and reported these observations to the Colorado State Patrol.

Two troopers investigated the report, first by running a search on the license plate number of the Infinity and determining that it belonged to a Mr. Kaufman. They also checked the jewelry store's receipt records and found that Kaufman had made a purchase in the store a few minutes before the accident. When the troopers reached Kaufman by telephone, he agreed to allow them to speak with him at his residence later that day.

At the meeting, Kaufman asked the troopers to reveal what they had learned during their investigation. They declined to do so, except to tell Kaufman the name of the owner of the damaged car. Within the troopers' hearing, Kaufman then called the victim and offered to pay for the damage incurred by the victim. The troopers continued to question Kaufman, in particular asking him who had been driving his vehicle on the day of the accident. Citing "privilege," Kaufman declined to identify the driver of his vehicle.

Frustrated by Kaufman's silence, and after consulting a supervisor, one of the troopers presented Kaufman with a choice:  reveal the driver's identity or be arrested for obstruction of a peace officer.  Kaufman still declined to reveal the driver's identity and was arrested and taken to jail. The charges against him were eventually dropped by the local district attorney's office.

Kaufman filed suit pursuant to 42 U.S.C. § 1983, alleging violations of his Fourth and Fifth Amendment rights. The defendant troopers moved for summary judgment on the ground of qualified immunity. In opposition to the summary judgment motion, Kaufman argued that he had been subjected to a false arrest in violation of his Fourth Amendment rights, because Colorado's obstruction statute does not criminalize a refusal to answer police questions during a consensual encounter (as opposed to questions following a valid arrest). (Kaufman eventually dropped his argument that the defendants had infringed his Fifth Amendment rights by retaliating against him for having asserted his Fifth Amendment privilege.)

The district court granted the defendants' motion for summary judgment, concluding that there had been no false arrest, because the troopers had had probable cause to believe that Kaufman's silence, accompanied by an assertion of privilege, constituted a violation of the obstruction statute.  Kaufman v. Higgs, Civ. Act. No. 10-cv-00632-LTB-MEH, 2011 WL 3268346 (D. Colo. July 29, 2011).  In an appeal by Kaufman, the Tenth Circuit Court of Appeals reversed, holding that the shield afforded by the qualified immunity defense was not available to the troopers, because their arrest of Kaufman for obstruction of a peace officer was objectively unreasonable under the facts of the case and established case law.  Kaufman v. Higgs, 697 F.3d 1297 (10th Cir. 2012).

The doctrine of qualified immunity protects government officials from liability for civil damages insofar as their conduct does not violate clearly established statutory or constitutional rights of which a reasonable person would have known.  To defeat an assertion of qualified immunity in a summary judgment motion, a plaintiff must properly allege a deprivation of a constitutional right and must further show that the constitutional right was clearly established at the time of the violation.  However, it weighs in a plaintiff's favor that in a summary judgment motion, courts construe the facts in the light most favorable to the plaintiff as the nonmoving party.

For false arrest claims in particular, in determining whether the law was clearly established at the time of the alleged violation—as is required to defeat an assertion of qualified immunity—courts require the § 1983 plaintiff to show that it would have been clear to a reasonable officer that probable cause was lacking under the circumstances.  In Kaufman, the troopers lacked probable cause to make an arrest for obstructing a peace officer in violation of Colorado law after Kaufman had refused to disclose the identity of the person who was driving his vehicle when it was involved in the hit‑and‑run incident. The refusal to answer questions during a consensual encounter, expressed through silence and an assertion of privilege, was not an "obstacle" to the officers' investigative efforts.

The Colorado statute under which Kaufman was arrested provides, in pertinent part, that

[a] person commits obstructing a peace officer . . . when, by using or threatening to use violence, force, physical interference, or an obstacle, such person knowingly obstructs, impairs, or hinders the enforcement of the penal law or the preservation of the peace by a peace officer, acting under color of his or her official authority[.]

Colo. Rev. Stat. § 18-8-104(1)(a) (emphasis added).  The troopers conceded that Kaufman's conduct did not amount to the use or threatened use of "violence," "force," or "physical interference," leaving only an argument, rejected by the appellate court, that there was probable cause to believe that Kaufman had used or threatened to use an "obstacle" that impeded them from carrying out their duties.

An "obstacle" is "a thing that blocks one's way or prevents or hinders progress." Oxford New English Dictionary 1211 (3d ed.).  Silence accompanied by an explanation of the basis for that silence does not obstruct anything, and, in fact, it is hardly "a thing" at all. It is a null action that simply maintains the status quo.  Kaufman's silence did nothing to the investigative efforts of the police, allowing them to continue unimpeded. They were able to continue putting questions to Kaufman, they could have sought out other members of his family for questioning, and they could have even sought to compel Kaufman to answer their inquiries with a grand jury subpoena.

Kaufman's cause of action under § 1983 was supported not only by the language in Colorado's statute on obstruction of peace officers but also by a precedent from the Supreme Court of Colorado interpreting that law.  Dempsey v. People, 117 P.3d 800 (Colo. 2005).  That court's interpretation of the statute confirmed the proper understanding of the word "obstacle."  The court defined the terms "obstacle" or "physical interference" in the obstruction statute, concluding that "[t]he obstacle or physical interference may not be merely verbal opposition."  Id. at 810.  Furthermore, the court noted, "mere remonstration does not constitute obstruction."  Id. at 811.  "Mere verbal opposition" to the police does not suffice; instead, "a combination of statements and acts by the defendant, including threats of physical interference or interposition of an obstacle," is required.  Id.  The only relevant conduct in Kaufman was Kaufman's refusal to answer questions and a very brief explanation for that refusal.  Because words alone are not enough for obstruction, it followed a fortiori that silence is not enough.  Kaufman, 697 F.3d at 1302.  Kaufman's § 1983 claim was reinstated and sent back to the district court for further proceedings.

BANKRUPTCY: Judicial Estoppel in Post-Bankruptcy Court State Court Actions

Posted by Gale Burns on Tue, Apr 2, 2013 @ 17:04 PM

The Lawletter Vol 38 No 1

Anne Hemenway, Senior Attorney, National Legal Research Group

Many considerations come into play before an entity or individual files for bankruptcy relief.  Included among them is the careful consideration the potential debtor must give to other nonbankruptcy claims or lawsuits to which it is, or may be in the future, a party.  If it goes forward as a debtor, it must avoid the pitfall of having the doctrine of judicial estoppel preclude it from seeking future relief in a nonbankruptcy court.

Judicial estoppel is an equitable doctrine applied at the discretion of the court.  New Hampshire v. Maine, 532 U.S. 742 (2001).  The primary purpose of the doctrine of judicial estoppel is to protect the integrity of the judicial process and to guard the judicial process against improper use.  Milton H. Greene Archives, Inc. v. Marilyn Monroe, LLC, 692 F.3d 983, 993 (9th Cir. 2012) (the doctrine is invoked because of "general considerations of the orderly administration of justice and regard for the dignity of judicial proceedings and to protect against a litigant playing fast and loose with the courts" (internal quotation marks omitted)).  The fundamental requirement for the application of judicial estoppel is that the party against whom estoppel is asserted must be assuming a position of fact inconsistent with a stance that that party has taken in prior litigation.  Bland v. Doubletree Hotel Downtown, Civ. No. 3:09CV272, 2010 WL 723805 (E.D. Va. Mar. 2, 2010).  Judicial estoppel is most often applied where in its schedules the debtor has failed to disclose assets or contingent assets to the bankruptcy court but then later pursues a known claim in state court.  In re Knight-Celotex, LLC, 695 F.3d 714 (7th Cir. 2012); Guay v. Burack, 677 F.3d 10 (1st Cir. 2012).

The specific elements of judicial estoppel are (1) the party to be estopped must be advancing an assertion that is inconsistent with a position taken during previous litigation; (2) the position must be one of fact instead of law; (3) the prior position must have been accepted by the court in the first proceeding; and (4) the party to be estopped must have acted intentionally and not inadvertently.  Love v. Tyson Foods, Inc., 677 F.3d 258 (8th Cir. 2012). Importantly, judicial estoppel requires that the party adopting the inconsistent positions must have acted with some intent in doing so.

In Bland, the court held that judicial estoppel applied where the debtor had failed to properly disclose a claim in her bankruptcy proceedings.  Even though the debtor had actually amended her petition to include the claim against the defendant hotel, she stated that the claim's value was only one dollar.  The court stated:

While the Court would be receptive to the conclusion that Bland neglected to initially include the Doubletree claim in the bankruptcy proceeding as a result of inadvertence where she amended her petition upon supposedly learning for the first time of the necessity for doing so, the Court cannot ignore or discount the undisputed fact that she valued the claim at such a negligible amount while seeking a bounty in this litigation.  The Court simply cannot tolerate such purposeful action.

2010 WL 723805, at *5.  The court held that the debtor's later Title VII claim against her employer was barred under the doctrine of judicial estoppel because of her failure to disclose the contingent or unliquidated claim in her bankruptcy case and because her actions were not inadvertent.

Ultimately, how the court applies the doctrine of judicial estoppel is discretionary, and it is an equitable tool.  The doctrine can lead to harsh results and, therefore, must be applied with caution.  Lowery v. Stovall, 92 F.3d 219 (4th Cir. 1996); John S. Clark Co. v. Faggert & Friedmen, P.C., 65 F.3d 26 (4th Cir. 1995).

Topics: legal research, The Lawletter Vol 38 No 1, bankruptcy, Anne Hemenway, judicial estoppel is discretionary tool of the cou, protection of judicial integrity and process, invoked against party asserting inconsistent stanc, not disclosing assets or contingent assets, acted intentionally

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