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.
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.
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).
The Lawletter Voll 38 No 1
Steve Friedman, Senior Attorney, National Legal Research Group
Truth be told, being pulled over by the police is not one of my favorite activities. When I am pulled over, however, I am respectful of the officer and his authority. Do I have a legal right to mouth off to the police? Certainly. See City of Houston v. Hill, 482 U.S. 451, 461-63 (1987) ("The First Amendment protects a significant amount of verbal criticism and challenge directed at police officers."; in fact, that "is one of the principal characteristics by which we distinguish a free nation from a police state"). Would talking back to the officer help my situation? No—just ask Eddie Ford. See Ford v. City of Yakima, 706 F.3d 1188 (9th Cir. 2013).
As Ford was driving to work late one night, listening to music, he noticed a police car approaching rapidly from behind him. After he tried and failed to get out of the way of the police car, Ford abruptly stepped out of his vehicle at a traffic light and asked Officer Urlacher, the driver of the police car, why Ford was being followed so closely. Officer Urlacher told Ford to get back in his car and go. As the parties drove through the intersection, Officer Urlacher turned on his cruiser's lights and pulled Ford over. During the traffic stop, Ford let it be known that he believed that the traffic stop had been racially motivated. A verbal exchange ensued, with Officer Urlacher essentially informing Ford that if he would stop talking and cooperate, he might just be issued a ticket for violating the municipal noise ordinance but that if he kept running his mouth and "copping" an attitude, he would be going to jail. Officer Urlacher was persuaded by a backup officer who had arrived on the scene to take Ford to jail.
While en route to the booking facility, Ford invoked his right to free speech, to which Officer Urlacher responded by asserting his right to arrest Ford. Significantly, however, Officer Urlacher elaborated on his motivation for the action, commenting to Ford, "You talked yourself—your mouth and your attitude talked you into jail." See id. at 1191. Although Ford was prosecuted for violating the municipal noise ordinance, he was ultimately acquitted of the charged offense.
Ford then commenced a civil lawsuit against Officer Urlacher and the City of Yakima, alleging First Amendment retaliation by their booking and jailing him following his verbal criticism of Officer Urlacher.
The Ninth Circuit reversed the district court's grant of summary judgment in favor of the defendants and remanded the case so that Ford's claims could proceed to trial. Initially, the appellate court observed that Ford's speech, criticizing the police for what he felt was a racially motivated traffic stop, fell "squarely within the protective umbrella of the First Amendment." Id. at 1193. Under Ninth Circuit law, even where probable cause existed for an arrest, the arrest is nevertheless categorically unconstitutional if retaliation was a but-for cause of the arrest and the officer's actions would chill a reasonable person's First Amendment activities. Viewing the evidence in the light most favorable to Ford, a rational jury could find that both such elements were satisfied in this case.
Finally, the court held that in 2007, when the events in question took place, the relevant law was clearly established such that Officer Urlacher was not entitled to qualified immunity. "Police officers have been on notice at least since 1990 that it is unlawful to use their authority to retaliate against individuals for their protected speech." Id. at 1195 (citing Duran v. City of Douglas, 904 F.2d 1372 (9th Cir. 1990)). In 2006, the Ninth Circuit had held "that an individual has a right to be free from retaliatory police action, even if probable cause existed for that action." Id. at 1195-96 (citing Skoog v. County of Clackamas, 469 F.3d 1221 (9th Cir. 2006)). Accordingly, "[a] reasonable officer would have understood that he did not automatically possess the authority to book and jail an individual upon conducting a lawful arrest supported by probable cause" simply because the individual mouthed off. See id. at 1196.
As a matter of law, you have the right to criticize the police, but as a matter of common sense, you should choose your battles wisely. And if you decide to exercise your constitutional rights . . . well, let's just say I would appreciate the business.
The Lawletter Vol 37 No 12
Tim Snider, Senior Attorney, National Legal Research Group
It has been established that an excessive award of punitive damages may violate due process. State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408, 417 (2003). To aid the lower courts in determining whether an award of punitive damages may be so excessive as to violate due process, the Supreme Court has announced punitive damages "guideposts." The Court, however, has never held that the punitive damages guideposts are applicable in the context of statutory damages. Among the statutes that authorize the recovery of statutory damages is the Copyright Act, 17 U.S.C. § 504(c). The recovery of statutory damages is authorized in cases of infringement, because proof of actual damages can be very difficult.
An illustrative case is Capitol Records, Inc. v. Thomas-Rasset, 692 F.3d 899 (8th Cir. 2012). There, the defendant used a computer file-sharing program to download and share copyrighted musical performances without the consent of the copyright owners. Using a forensic service, the owners located and identified the defendant as the person who had initiated the unauthorized copying and file-sharing of the recordings. At trial, the plaintiffs were awarded substantial statutory damages in an amount that was well within the limits of damages authorized by the statute. A prevailing copyright-infringement plaintiff can elect to recover either actual damages or statutory damages. In Capitol Records, the plaintiff elected to recover statutory damages. The defendant argued that the district court should apply a standard of due process to the award of statutory damages analogous to awards of punitive damages.
The court of appeals was unpersuaded for several reasons. First, as noted earlier, the Supreme Court has never applied the due process limitation on punitive damages awards to the recovery of statutory damages. Second, due process prohibits excessive punitive damages because elementary notions of fairness require that a defendant be made aware of the penalties to which he or she might be subjected if he or she engages in the unlawful conduct at issue. This concern about fair notice does not apply to statutory damages, because those damages are identified and constrained by the authorizing statute.
Finally, the guideposts for the award of punitive damages announced by the Supreme Court would be nonsensical if applied to statutory damages. It makes no sense to consider the disparity between "actual harm" and an award of statutory damages when statutory damages are designed precisely for instances where actual harm is difficult or impossible to calculate. The availability of statutory damages is intended to have much the same deterrent effect on unlawful conduct as do punitive damages in other contexts. The amount of the award of statutory damages is up to the jury, so long as the amount does not exceed the amount authorized by statute (not less than $750 nor more than $30,000 per infringement, except in the case of willful infringement, when the court may increase the award to up to $150,000 per infringement).
The appellate court in Capitol Records found that an award of $9,250 per infringement was well within the statutory allowance and thus should be affirmed. The court probably was not well disposed to the defendant's arguments when it was determined during discovery that the defendant, after having received a cease-and-desist letter, had replaced the hard drive on her computer with a new hard drive that did not contain the copyrighted files. In many, perhaps most, copyright infringement cases, proving actual damages is so difficult that plaintiffs elect to claim statutory damages. If willful infringement is proven, courts are often favorably disposed to augment the jury's award of damages by a substantial amount.
The Lawletter Vol 37 No 12
Dora Vivaz, Senior Attorney, National Legal Research Group
Initially, under the civil rights laws the Equal Employment Opportunity Commission ("EEOC") was not itself empowered to bring suit. In 1972, the law was amended to provide for suits brought directly by the EEOC, but only after an investigation; a determination of reasonable cause; and an attempt to resolve the matter by informal methods of conference, conciliation, and persuasion. 42 U.S.C. § 2000e(5)(b). Since that time, the courts have been in agreement that a conciliation attempt is at least a condition precedent to suit by the EEOC. See, e.g., EEOC v. Radiator Specialty Co., 610 F.2d 178, 183 (4th Cir. 1979). However, as the court noted in a recent case, the circuits appear to be split as to the standard that should govern the court's inquiry into whether the conciliation obligation has been satisfied. EEOC v. St. Alexius Med. Ctr., No. 12 C 7646, 2012 WL 6590625, at *1-3 (N.D. Ill. Dec. 18, 2012).
In an early decision, the Tenth Circuit noted that the statutory language is mandatory and concluded that it was inconceivable that anything less than good-faith efforts is required. EEOC v. Zia Co., 582 F.2d 527, 532-33 (10th Cir. 1978). By the same token, it found that the court need not examine the details of offers and counteroffers between the parties. Although the court quoted language from the Conference Report on the law, which indicated that it was contemplated that the EEOC would "continue to make every effort to conciliate" and that it would file suit only "if conciliation proves to be impossible," id. at 533 (quoting 118 Cong. Rec. H1861 (Mar. 8, 1972)), the standard the court seemed to impose was simply a showing of "some effort" to conciliate and of "notice of the breakdown" of the effort. Id. at 532-33. The Sixth Circuit put forth a similar standard, adding that the EEOC is under no duty to pursue further conciliation if an employer rejects its offer. EEOC v. Keco Indus., 748 F.2d 1097, 1101-02 (6th Cir. 1984).
Both the Eleventh and Fifth Circuits have imposed a somewhat more specific and more stringent standard, requiring the EEOC to (1) outline for the employer the reasonable cause for its belief that the law has been violated; (2) offer the employer an opportunity for voluntary compliance; and (3) respond to the employer in a reasonable and flexible manner. EEOC v. Asplundh Tree Expert Co., 340 F.3d 1256, 1259 (11th Cir. 2003); EEOC v. Klingler Elec. Corp., 636 F.2d 104, 107 (5th Cir. 1981). These courts have found that the underlying question is the reasonableness and responsiveness of the EEOC, considering all the circumstances. The Fifth Circuit, in contrast to the Tenth and Sixth Circuits, specifically concluded that the court is required to make a thorough inquiry into the facts of the conciliation efforts in order to properly evaluate whether the EEOC has satisfied its duty.
Although the Ninth Circuit has not yet weighed in on the question and the district courts have variously applied both the deferential standard and the three-part test, in a recent case one district court focused on the duty to respond to the concerns of the employer in a reasonable and flexible manner and to provide the employer with an opportunity to confront all the issues. EEOC v. High Speed Enter., No. CV-08-01789-PHX-ROS, 2010 WL 8367452, at *5 (D. Ariz. Sept. 30, 2010). In order to satisfy those duties, the EEOC must also provide sufficient information about the basis of any charge such that the employer will be able to fully participate in the conciliation process. After reviewing the cases and noting that the Seventh Circuit, like the Ninth, had not yet chosen sides on the issue, the district court in St. Alexius Medical Center determined that it need not choose between the two standards, because under either standard the pleadings did not indisputably establish that the EEOC had satisfied its obligation. Accordingly, the court held that the EEOC was not entitled to judgment on the pleadings, which was the sole issue before the court.
The Lawletter Vol 37 No 10
Paul Ferrer, Senior Attorney, National Legal Research Group
Parties who secure a favorable judgment in federal court may be happy with the outcome but should not forgo seeking their recoverable costs as well. The Federal Rules of Civil Procedure specifically provide that "[u]nless a federal statute, these rules, or a court order provides otherwise, costs—other than attorney's fees—should be allowed to the prevailing party." Fed. R. Civ. P. 54(d)(1). The threshold question for any court prior to awarding costs under Rule 54(d) involves a determination of who the "prevailing party" is in the lawsuit. In general, a party prevails for purposes of Rule 54(d) when a final judgment awards it "substantial relief." Smart v. Local 702 Int'l Bhd. of Elec. Workers, 573 F.3d 523, 525 (7th Cir. 2009). A party that gets substantial relief prevails "even if it doesn't win on every claim." Slane v. Mariah Boats, Inc., 164 F.3d 1065, 1068 (7th Cir.), cert. denied, 527 U.S. 1005 (1999).
In Sommerfield v. City of Chicago, No. 06 C 3132, 2012 WL 5381255, at *2 (N.D. Ill. Oct. 31, 2012), for example, the plaintiff was determined to be the prevailing party because the jury had returned a verdict in his favor on two counts, awarding him $30,000, even though the jury had found against him on a third count and two other counts had been dismissed at the summary judgment stage. Sommerfield also exemplifies the concept that "a determination of who is the prevailing party for purposes of awarding costs should not depend on the position of the parties at each stage of the litigation but should be made when the controversy is finally decided." Repub. Tobacco Co. v. N. Atl. Trading Co., 481 F.3d 442, 446 (7th Cir. 2007) (quoting 10 Charles A. Wright et al., Federal Practice and Procedure § 2667 (3d ed. 2006)); see also Smart, 573 F.3d at 525 (a "final judgment" awarding substantial relief is "one that resolves all claims against all parties"). In Republic Tobacco, the court held that a party that had succeeded on a posttrial motion in having damages awarded against it reduced from $18.6 million to $7.44 million was not a prevailing party that could recover its costs in the district court under Rule 54(d). 481 F.3d at 446-47.
With regard to the nuts and bolts of recovering costs under Rule 54(d), the district court is generally vested with wide discretion to determine "whether and to what extent costs may be awarded to the prevailing party." Sommerfield
, 2012 WL 5381255, at *1. But a district court may not tax costs under Rule 54(d) unless a federal statute authorizes an award of those costs. See Crawford Fitting Co. v. J.T. Gibbons, Inc.
, 482 U.S. 437 (1987); Repub. Tobacco
, 481 F.3d at 447. Title 28 U.S.C. § 1920 specifically provides that costs may be taxed for (1) fees of the clerk and marshal; (2) fees for printed or electronically recorded transcripts; (3) fees and disbursements for printing and witnesses; (4) fees for exemplification and the costs of making copies; (5) docket fees; and (6) compensation of court-appointed experts and interpreters. Section 1920 requires that for costs to be awarded, "[a] bill of costs shall be filed in the case and, upon allowance, included in the judgment or decree." 28 U.S.C. § 1920. The district court must review a prevailing party's proposed bill of costs in "scrupulous detail," and the claimed expenses must be "reasonable, both in amount and necessity to the litigation." Sommerfield
, 2012 WL 5381255, at *1 (internal quotation marks omitted). While the prevailing party has the burden of demonstrating the amount of its recoverable costs, the losing party bears the burden of showing that the claimed costs are not appropriate. Sommerfield
provides a good recent example of the types of costs that may be recovered and the level of detail that should be included in a prevailing party's proposed bill of costs to document the claimed amounts. See id.
at *3-5 (listing claimed costs and refusing to award costs for certain items for which the plaintiff had failed to provide the court with an invoice or other supporting evidence).
The Lawletter Vol 37 No 9
Steve Friedman, Senior Attorney, National Legal Research Group
The Individuals with Disabilities Education Act ("IDEA"), 20 U.S.C. §§ 1400-1482, is a federal law designed to ensure that children with disabilities have the same opportunity to receive a free appropriate public education ("FAPE") as nondisabled children do. See id. § 1400(d). Once a child has been identified as being disabled within the meaning of the IDEA, see id. § 1401(3), a school district must create an individualized education program ("IEP") for the child in order to provide the requisite FAPE, see id. § 1414(d). If the school district fails to supply a FAPE, the child's parents may seek tuition reimbursement for the child's placement in a private school. See id. § 1412(a)(10)(C).
An IEP is "a written statement that sets out the child's present educational performance, establishes annual and short-term objectives for improvements in that performance, and describes the specially designed instruction and services that will enable the child to meet those objectives." D.D. ex rel. V.D. v. N.Y.C. Bd. of Educ., 465 F.3d 503, 507-08 (2d Cir. 2006) (internal quotation marks omitted). If a parent does not believe that the school district's proposed IEP meets this standard, the parent may file a due process complaint with the appropriate state agency and ultimately may seek judicial review of the administrative decision. See 20 U.S.C. § 1415(b)(6).
Given the nature of the IDEA and its review process, IDEA cases tend to be quite fact-intensive. See Haw. Dep't of Educ. v. M.F. ex rel. R.F., 840 F. Supp. 2d 1214, 1225 (D. Haw. 2011). Accordingly, the evidence presented in the administrative hearings is crucial to the outcome of a disputed IDEA matter. See J.L. v. Mercer Is. Sch. Dist., 592 F.3d 938, 949 (9th Cir. 2010) (judicial review under the IDEA is less deferential than in most administrative cases).
In a recent IDEA case, the U.S. Court of Appeals for the Second Circuit was faced with the question of whether what it termed "retrospective testimony"—testimony that certain services not expressly listed in the IEP would have been provided to the child if he or she had attended the school district's proposed placement in the public school system—could be used to rehabilitate an allegedly deficient IEP. See R.E. v. N.Y.C. Dep't of Educ., 694 F.3d 167 (2d Cir. 2012).
Although this case was a matter of first impression in the Second Circuit, the court noted that three other circuit courts of appeals had addressed similar issues in the IDEA context and that all three had expressed a distaste for retrospective evidence. See id. at 185 (citing Adams v. Oregon, 195 F.3d 1141, 1149 (9th Cir. 1999) ("[W]e examine the adequacy of [the IEPs] at the time the plans were drafted."); Carlisle Area Sch. v. Scott P., 62 F.3d 520, 530 (3d Cir. 1995) (holding that an IEP must be judged prospectively from the time of its drafting); Roland M. v. Concord Sch. Comm., 910 F.2d 983, 992 (1st Cir. 1990) ("[A]ctions of school systems cannot . . . be judged exclusively in hindsight. An IEP is a snapshot, not a retrospective.")).
Ultimately, the Second Circuit agreed with the majority view on the issue.
[W]e hold that testimony regarding state-offered services may only explain or justify what is listed in the written IEP. Testimony may not support a modification that is materially different from the IEP, and thus a deficient IEP may not be effectively rehabilitated or amended after the fact through testimony regarding services that do not appear in the IEP.
. . . .
We now adopt the majority view that the IEP must be evaluated prospectively as of the time of its drafting and therefore hold that retrospective testimony that the school would have provided additional services beyond those listed in the IEP may not be considered [in the due process] proceeding.
Id. But cf. id. at 188 (excepting any amendments made to the IEP during the statutory 30-day resolution period once a due process complaint has been filed).
The Second Circuit observed that in order for parents to make an informed decision about a school district's proposed IEP, as contemplated by the IDEA, it is necessary for them to have sufficient information about the IEP; because the written IEP is the only source of information for parents, it creates "considerable reliance interests for the parents." Id. at 186. "By requiring school districts to put their efforts into creating adequate IEPs at the outset, IDEA prevents a school district from effecting this type of 'bait and switch,' even if the baiting is done unintentionally." Id.
In so ruling, however, the court rejected the parents' proposed "four corners" rule, which would strictly prohibit any testimony that goes beyond the face of the written IEP; rather, the court adopted a rule that would permit evidence to explain and/or justify the services expressly listed in the IEP.
For example, if an IEP states that a specific teaching method will be used to instruct a student, the school district may introduce testimony at the subsequent hearing to describe that teaching method and explain why it was appropriate for the student. The district, however, may not introduce testimony that a different teaching method, not mentioned in the IEP, would have been used. Similarly, if a student is offered a staffing ratio of 6:1:1, a school district may introduce evidence explaining how this structure operates and why it is appropriate. It may not introduce evidence that modifies this staffing ratio (such as testimony from a teacher that he would have provided extensive 1:1 instruction to the student).
The prospective nature of the IEP also forecloses the school district from relying on evidence that a child would have had a specific teacher or specific aide. At the time the parents must decide whether to make a unilateral placement based on the IEP, they may have no guarantee of any particular teacher. Indeed, even the Department cannot guarantee that a particular teacher or aide will not quit or become otherwise unavailable for the upcoming school year. Thus, it is error to find that a FAPE was provided because a specific teacher would have been assigned or because of actions that [a] specific teacher would have taken beyond what was listed in the IEP.
Id. at 186-87.
December 4, 2012
John Stone, Senior Attorney, National Legal Research Group
Severe psychological disorders that plagued Josephine led to a stormy relationship between her and her employer, the California Department of Transportation ("Caltrans"). Caltrans wanted to terminate Josephine, and, according to her, it passed her over in promotions and harassed her because of her mental disability. These matters were resolved by a settlement that put her on disability retirement status, with the option of seeking reinstatement to active employment. When Josephine took that step, litigation ensued in which Caltrans contended that despite her "praiseworthy" attempts to get well, her disorders left her unable to perform duties as an accounting officer.
After her state court challenge to an administrative decision in favor of Caltrans failed, Josephine sued the responsible state officials in federal court. These claims failed as well, and in ways that suggest that state employees may sometimes need to resort to state law remedies, where they are available, to get full relief for alleged disability discrimination. Okwu v. McKim, 682 F.3d 841 (9th Cir. 2012). The reasons for dismissal of Josephine's federal claims were mostly legal rather than stemming from the facts of her particular case.
Josephine's claim under Title I of the Americans with Disabilities Act ("ADA"), which covers employment discrimination, was properly dismissed because the U.S. Supreme Court has ruled that when Congress enacted that provision, it did not intend to abrogate the States' Eleventh Amendment immunity. See Univ. of Ala. Bd. of Trs. v. Garrett, 531 U.S. 356, 360 (2001). The Court in Garrett stated that the legislative record of the ADA failed to show that Congress had identified a pattern of irrational state discrimination in employment against the disabled and that the record thus did not support abrogation of the States' Eleventh Amendment immunity from suits for money damages under Title I of the ADA; in any event, said the Court, the rights and remedies created by the ADA against the States raised concerns as to "congruence and proportionality," supporting the determination that Congress did not validly abrogate the States' immunity.
With no claim directly available to her under Title I of the ADA, Josephine's next theory was based on asserting the substantive rights provided by that statute in a claim brought under the broad civil rights statute, 42 U.S.C. § 1983. Section 1983 is more commonly used to obtain redress for violation of federal constitutional rights, but in some cases it can be the remedial vehicle for violation of federal statutory rights. Not so here. This claim collapsed under the principle that Congress's inclusion of a comprehensive remedial scheme, such as is set forth in Title I of the ADA, precludes any attempt to bootstrap a claim under that provision in a separate § 1983 cause of action. This is the required result, even though the State's immunity foreclosed a direct action under Title I of the ADA to get the benefits of that "comprehensive remedial scheme." The Supreme Court's decision in Garrett, which "defanged" the Title I scheme for state employees, did nothing to change the legislative intent to preclude asserting Title I rights by means of § 1983. As the Okwu court put it, "We are not free to interpret § 1983 in a way that provides a substitute remedy that Congress never provided." 682 F.3d at 846.
Next up for disposition by the Ninth Circuit was Josephine's § 1983 claim of disability discrimination brought under the Equal Protection Clause of the Fourteenth Amendment. Again, her status as a state government employee contributed to the claim's failure. In part, Josephine was arguing that she had been discriminated against as a "class of one," that is, that without any rational basis she had been treated differently from other similarly situated persons, but not that the differential treatment was due to her membership in any particular class. Unfortunately for her, the U.S. Supreme Court has foreclosed any such claim, when brought by public employees. In Engquist v. Oregon Department of Agriculture, 553 U.S. 591 (2008), the Court reasoned that the "class of one" theory was simply "a poor fit" in the context of public employment, because in that realm there is necessarily discretionary decisionmaking based on a vast array of subjective, individualized assessments. The rule that people should be "treated alike, under like circumstances and conditions," is not violated when one person is treated differently from others, because treating like individuals differently is an accepted consequence of the discretion granted to public employers. In that setting, allowing a challenge based on the arbitrary singling out of a particular person would undermine the very discretion that such state officials are entrusted to exercise.
The final federal claim decided against Josephine did turn on the facts of her case, not just on principles of law. That was a § 1983 contention based on denial of equal protection, but with Josephine as a member of the "class" of disabled persons, not a "class of one." Even if Josephine could identify disparate treatment, that is, better treatment of a similarly situated employee who was not disabled, the court had to affirm the employment decisions as long as they were supported by a rational basis. Caltrans's decision not to reinstate Josephine was rationally based on the State's determination that her psychological disorders, despite her best efforts, prevented her from fulfilling her former duties. Okwu, 682 F.3d at 846.
Cognizant of the fact that the doors to the federal courthouse had been closed in Josephine's case in which she sued for damages, the court added in a footnote, id. at 845 n.3, that state employees are not left without any remedy against disability discrimination, at least in California. California's Fair Employment and Housing Act, Cal. Gov't Code §§ 12900B12996, allows public employees to sue the State in state court for disability discrimination. Schifando v. City of Los Angeles, 79 P.3d 569, 573-74 (Cal. 2003). State employees may also seek relief from disability discrimination under California's Civil Service Act, Cal. Gov't Code § 19702.
Along the same lines, the Court in Garrett stated as follows:
Our holding here that Congress did not validly abrogate the States' sovereign immunity from suit by private individuals for money damages under Title I does not mean that persons with disabilities have no federal recourse against discrimination. Title I of the ADA still prescribes standards applicable to the States. Those standards can be enforced by the United States in actions for money damages, as well as by private individuals in actions for injunctive relief under Ex parte Young, 209 U.S. 123, 28 S.Ct. 441, 52 L.Ed. 714 (1908). In addition, state laws protecting the rights of persons with disabilities in employment and other aspects of life provide independent avenues of redress.
531 U.S. at 374 n.9.
The Lawletter Vol 37 No 8
Tim Snider, Senior Attorney, National Legal Research Group
The litigation involving liability resulting from damage caused by Hurricane Katrina to New Orleans and its environs in 2005 has taken an unexpected turn. More than 400 plaintiffs sued in federal court to recover for Katrina‑related damages, many naming the federal Government as a defendant. Seven plaintiffs from that number went to trial. The court found that neither the Flood Control Act of 1928 ("FCA"), 33 U.S.C. § 702, nor the discretionary‑function exception ("DFE") to the Federal Tort Claims Act ("FTCA"), 28 U.S.C. § 2680(a), immunized the Government from suit. In re Katrina Canal Breaches Consol. Litig., 533 F. Supp. 2d 615 (E.D. La. 2008). After 19 days of trial, the court found that three plaintiffs had proven the Government's full liability and four had not. Another group of plaintiffs had their cases dismissed on the Government's motion, the court having found both immunities applicable. Still a different group are now preparing for trial of their own case against the Government.
On appeal, the judgment of the district court was affirmed. In re Katrina Canal Breaches Litig., 673 F.3d 381 (5th Cir. 2012). On panel reconsideration, however, the court withdrew its earlier opinion, reversed the district court, and found for the Government on all claims. In re Katrina Canal Breaches Litig., Nos. 10-30249, 10-31054, 11-30808, 2012 WL 4343775 (5th Cir. Sept. 24, 2012). The theory of the plaintiffs was that their injuries had been caused by the failure of the navigation system known as the Mississippi River Gulf Outlet ("MRGO") due to negligent design and maintenance by the Army Corps of Engineers. Several studies commissioned by the Corps had recommended various design enhancements to the MRGO, which facilitates maritime traffic in and out of the Port of New Orleans. The Corps refused to implement these enhancements as not being cost-effective and because it insisted on local participation in the cost of those enhancements. Because the enhancements were not implemented, wave wash from passing shipping continued to erode the banks of the structure to the extent that the banks failed to prevent the inundation of parts of the New Orleans region as a consequence of Katrina's storm surge.
The court reaffirmed its earlier conclusion that the Government could not claim immunity under the FCA. The activities of the Corps with respect to the MRGO in failing to implement foreshore protection did not have as their purpose flood control. Hence its conduct in that respect was outside the immunity afforded by the FCA. The court did conclude, however, that the decision by the Corps not to implement enhancements to the MRGO structure that, if implemented, might have prevented or at least mitigated the damage at least to some degree was animated by policy considerations. Thus, the Government did qualify to claim DFE immunity. The Corps had considered various alternative strategies, including whether to armor the foreshore of the MRGO. The Corps had also issued permits for dredging that could have caused the 17th Street Canal to fail. Both actions involved discretionary decisions in the public interest. The court concluded that these acts, therefore, were squarely within the immunity afforded the Government under the DFE.
For a panel of a court of appeals to reverse itself in the absence of an intervening change in the law is rare. It is even less common for an appellate panel to have changed its mind on a fundamental issue that determined the outcome of the earlier case. In this case, the panel of the Fifth Circuit changed its mind regarding how the DFE applied under the facts of the case before it. The losing plaintiffs' sole recourse at this point would appear to be a petition for a writ of certiorari to the Supreme Court, which almost certainly is in prospect.