The Lawletter Vol 35 No 2, January 21, 2011

John Stone, Senior Attorney, National Legal Research Group

Taneia, a 14‑year‑old girl, attended a field trip with a youth outreach program organized by a public university and the State of Iowa.  On the field trip, she was injured when she was struck by a car as she attempted to cross the street.  Before Taneia had been allowed to go on the field trip, her mother had been required to sign two documents, entitled "Field Trip Permission Form" and "Release and Medical Authorization."  The gist of these documents was that they purported to waive any potential claims against the university and the State arising from injuries to participants in the field trip.

When Taneia's mother sued the trip organizers in negligence for Taneia's injuries, an Iowa trial court granted the defendant State summary judgment on the basis of the agreements signed by the mother before the field trip.  The Iowa Supreme Court recently reversed that decision and remanded the case to the trial court.  Galloway v. State, 790 N.W.2d 252 (Iowa 2010).  The court joined what it described as a majority of the states which have concluded that it is against public policy for a parent to waive liability for a child's injury before the injury has occurred.

The Lawletter Vol 35 No 2, January 21, 2011

Alistair Edwards, Senior Attorney, National Legal Research Group

In order to reform the real estate settlement process, Congress passed the Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C. §§ 2601-2617.  The purpose of the statute was to ensure that consumers are "provided with greater and more timely information on the nature and costs of the settlement process" and "protected from unnecessarily high settlement charges caused by certain abusive practices."  12 U.S.C. § 2601(a).  One significant section, RESPA § 8(b), deals with "splitting charges":

(b)        Splitting charges

No person shall give and no person shall accept any portion, split, or percentage of any charge made or received for the rendering of a real estate settlement service in connection with a transaction involving a federally related mortgage loan other than for services actually performed.

Id. § 2607(b).  Although that provision talks about "splitting charges," the U.S. District Court for the Southern District of Ohio in Augenstein v. Coldwell Banker Real Estate LLC, No. 2:10‑cv‑191, 2010 WL 4537049 (S.D. Ohio Nov. 9, 2010), recently opined that the above  provision can be violated even when there are not multiple settlement service providers splitting charges.  The court held that the RESPA provision directing that "[n]o person shall give and no person shall accept any portion, split, or percentage of any charge made or received for the rendering of a real estate settlement service" except "for services actually performed" does not by its plain terms prohibit only the splitting of fees between multiple settlement service providers.

In the Ohio case, the Augensteins had entered into a federally related loan in order to finance their purchase. In connection to the sale and settlement, the Augensteins obtained settlement services from Coldwell Banker.  At closing, Coldwell Banker charged the Augensteins an administrative fee of $199 in addition to the total sales/broker commission of $19,710.  The Augensteins alleged that Coldwell Banker had not provided any services in exchange for the administrative fee and that the charging and the accepting of the fee violated RESPA because (1) it was a fee for which no services were rendered; and/or (2) it was a duplicative fee for services already rendered as part of the total sales/broker's commission.  In holding that the Augensteins had stated a claim under RESPA and that a violation of § 2607(b) did not require multiple providers, the court commented:

This Court finds that the text of RESPA § 8(b) clearly and unambiguously prohibits undivided unearned fees.  The statute explicitly states that "[n]o person shall give and no person shall accept" any part of a fee "other than for services actually performed." RESPA § 8(b).  In OfficeMax, Inc. v. United States, the Sixth Circuit said that "and" should presumptively be read conjunctively. 428 F.3d 583, 589 (citing Crooks v. Harrelson, 282 U.S. 55, 58, 51 S.Ct. 49, 75 L.Ed. 156 (1930)).  But if this reading would lead to incoherent or absurd results, then "and" should be read disjunctively to mean "or."  Id. at 589‑90.  Keeping in mind that "[i]t has long been a 'familiar canon of statutory construction that remedial legislation should be construed broadly to effectuate its purposes,[']" Carter, 553 F.3d at 985 (quoting Tcherepnin v. Knight, 389 U.S. 332, 336, 88 S.Ct. 548, 19 L.Ed.2d 564 (1967)), it would lead to absurd results if two settlement service providers could violate § 8(b) by sharing an unearned fee, but one settlement service provider could freely charge consumers such fees.  Thus, the "and" in § 8(b) creates two prohibitions:  it prohibits a settlement service provider from charging a fee for which no work is performed, and it prohibits a settlement service provider from receiving such a fee.  The violation exists regardless of whether the provider is sharing that fee with another.  See Sosa, 348 F.3d at 982; see also Santiago, 417 F.3d at 388.

The Lawletter Vol 35 No 2, January 21, 2011

Paul Ferrer, Senior Attorney, National Legal Research Group

Courts in a number of states have addressed the enforceability of an arbitration clause prohibiting one party to a contract from bringing a class action against the other party.  For example, in Scott v. Cingular Wireless, 161 P.3d 1000 (Wash. 2007) (en banc), the representative plaintiffs had purchased cellular telephones and calling plans from Cingular.  The contracts they had all signed were standard preprinted agreements that included a provision requiring mandatory arbitration.  That arbitration provision, in turn, contained a clause prohibiting consolidation of cases, class actions, and class arbitration.  The plaintiffs in Scott nevertheless filed a class action against Cingular, alleging that it had overcharged individual consumers between $1 and around $45 per month by unlawfully adding roaming and other hidden charges.  Obviously, the ability to bring this suit as a class action was crucial because, as the plaintiffs alleged, while no individual consumer suffered a significant overcharge, Cingular unilaterally overcharged the public by very large sums of money in the aggregate.

The Lawletter Vol 34 No 10, November 4, 2010

Steve Friedman, Senior Attorney, National Legal Research Group

Various open meeting and sunshine laws are intended to make governmental meetings and records accessible to the public.

The purpose of such acts is to eliminate much of the secrecy surrounding deliberations and decisions on which public policy is based and to give the public the fullest and most complete information regarding affairs of government as is compatible with the conduct of governmental business.

73 C.J.S. Public Admininstrative Law and Procedure § 32 (Westlaw database updated May 2010) (footnotes omitted).

In this regard, and similar to other state statutes around the country, the Virginia Freedom of Information Act ("VFOIA"), Va. Code Ann. §§ 2.2‑3700 to ‑3714, provides for public access to all public records held by the Commonwealth, its officers, and its employees.  See Va. Code Ann. § 2.2‑3700.  Notably, however, the VFOIA restricts access to a certain segment of the public:  "citizens of the Commonwealth [of Virginia]."  Id. § 2.2‑3704(A).

The Lawletter Vol 34 No 10, November 4, 2010

John Stone, Senior Attorney, National Legal Research Group

When it enacted the Religious Land Use and Institutionalized Persons Act ("RLUIPA"), "Congress endeavored to codify existing Free Exercise jurisprudence" in the area of land use regulations.  Murphy v. New Milford Zoning Comm'n, 402 F.3d 342, 350 (2d Cir. 2005) (citations omitted).  The RLUIPA has not elevated federal courts into appellate zoning boards, id. at 348-49, but it protects against "subtle forms of discrimination when, as in the case of the grant or denial of zoning variances, a state delegates essentially standardless discretion to nonprofessionals operating without procedural safeguards," Sts. Constantine & Helen Greek Orthodox Church v. City of New Berlin, 396 F.3d 895, 900 (7th Cir. 2005) (Posner, J.) (citations omitted).

Section 2(a)(1) of the RLUIPA, the substantial-burden claims provision, provides that

No government shall impose or implement a land use regulation in a manner that imposes a substantial burden on the religious exercise of a person, including a religious assembly or institution, unless the government demonstrates that imposition of the burden on that person, assembly or institution—

(A)      is in furtherance of a compelling interest; and

(B)      is the least restrictive means of furthering that compelling interest.

42 U.S.C. § 2000cc(a)(1).  In  Fortress Bible Church v. Feiner, No. 03 Civ. 4235(SCR), 2010 WL 3199876 (S.D.N.Y. Aug. 12, 2010), a Town's determined efforts to keep a church from establishing itself in a new location in the town after the church congregation had outgrown the property where it had been for 40 years led a court to find a violation of the RLUIPACand a not so "subtle" violation at that.

In addition to injunctive relief, the court in Fortress Bible Church ruled that the church could recover damages, not by means of the RLUIPA, but under a separate claim under 42 U.S.C. § 1983.  Courts are divided on the issue of whether the "appropriate relief" available under the RLUIPA extends to monetary damages.  Compare Madison v. Virginia, 474 F.3d 118, 131B32 (4th Cir. 2006) (monetary damages are not available under the RLUIPA), with Smith v. Allen, 502 F.3d 1255, 1265 (11th Cir. 2007) (monetary damages are available under the RLUIPA).  The Second Circuit has yet to resolve the issue.  The same Town conduct that violated rights under the RLUIPA offended the First Amendment Free Exercise Clause and the Fourteenth Amendment Equal Protection Clause, thus supporting the § 1983 claim.

The evidence presented at a 26-day bench trial established that the proposed use of the church's new property, including the operation of a school, would be devoted to religious purposes.  A single structure would house both the church and school and would include a sanctuary, offices, library, kitchen, classrooms, and a gymnasium.  The proposed facility would host prayer, religious ceremonies, fellowships, visiting ministries, religious education, and other religious activities.  The minister for the church testified regarding the religious significance of these activities to the church and its congregants.  Also, a preexisting single‑family house on the same property would be used as the parsonage for the church.

The Lawletter Vol 34 No 10, November 4, 2010

The Court of Appeals of Michigan recently held, in the case of Mickel v. Wilson, No. 289037, 2010 WL 3418897 (Mich. Ct. App. Aug. 31, 2010) (unpublished per curiam opinion), that a father could not be held liable for the negligent supervision of his daughter, who died while in the father's care.  In Mickel, the plaintiff mother and defendant father had divorced, and the father had custody every other weekend of the couple's three daughters, aged nine, seven, and three and a half.  On the day of the incident, the father had taken the girls to a relative's graduation party, which was being held at a home situated on an inland lake.  The father knew that the youngest girl could not swim.

The Lawletter Vol 34 No 11, November 19, 2010

Matt McDavitt, Senior Attorney, National Legal Research Group

The federal estate tax officially expired on January 1, 2010, a repeal that was signed into law a decade ago as part of the Economic Growth and Tax Relief Reconciliation Act of 2001.  I.R.C. § 2210(a).  According to the Act's sunset provision, the federal estate tax will revert to pre-Act levels after December 31, 2010, absent action by Congress, but in the meantime, the absence of a federal estate tax is causing problems in administering the estates of persons dying during 2010 where bypass trusts are to be created, the funding of which is expressly tied to a federal estate tax exemption, exclusion, or the like.  Depending upon the wording of the bypass trust funding clause, the impact of the federal estate tax repeal would result in either the bypass trust's not being funded at all or the entire corpus flowing into the bypass trust.  Neither circumstance is ideal, as such results leave another class of primary trust beneficiaries (such as cestuis of marital trusts) without means of support from the trust, thereby defeating settlor intent.  Undeniably, it is a black-letter principle of trusts law in every jurisdiction that, in administering a trust, courts are bound to ascertain and effectuate the intent of the settlor as plainly discernible by reference to the text of the trust instrument.

The Lawletter Vol 34 No 12, December 7, 2010

Steve Friedman, Senior Attorney National Legal Research Group,

Title VII prohibits employers from taking adverse employment action simply because an employee's "appearance . . . does not conform to stereotypical gender roles."  Doe v. Belleville, 119 F.3d 563, 580 (7th Cir. 1997), vacated and remanded on other grounds, 523 U.S. 1001 (1998).  The Supreme Court has long held that sex stereotyping can violate Title VII when it influences employment decisions.  See Price Waterhouse v. Hopkins, 490 U.S. 228 (1989).  The critical issue in these cases is whether members of one sex are exposed to disadvantageous terms or conditions of employment to which members of the other sex are not.  Oncale v. Sundowner Offshore Servs., 523 U.S. 75, 80 (1998).

Although Title VII provides an exception for "bona fide occupational qualification[s] reasonably necessary to the normal operation of that particular business or enterprise," 42 U.S.C. § 2000e‑2(e)(1), that exception does not typically include one's attractiveness.  Thus, whereas physical attractiveness may well be a bona fide occupational qualification for cheerleaders and fashion models, see Lewis v. Heartland Inns of Am., 591 F.3d 1033, 1043 (8th Cir. 2010) (Loken, C.J., dissenting) (suggesting same), it is clear that "female sex appeal" is not a bona fide occupational qualification for flight attendants and ticket agents, see id. at 1036 n.1 (citing Wilson v. Sw. Airlines, 517 F. Supp. 292 (N.D. Tex. 1981)).