The Lawletter Vol 40 No 12

Tim Snider, Senior Attorney, National Legal Research Group

     Setting aside the cases involving criminal misconduct by priests and others affiliated with certain Roman Catholic Church dioceses, the First Amendment precludes courts from interfering with the internal operations and activities of churches. Few principles are more firmly enshrined in our body of constitutional law than that government, including the courts, should not become entangled in the internal or doctrinal affairs of churches. To do so would offend the First Amendment's Free Exercise Clause. For over a century, the Supreme Court has directed that courts may not entangle themselves in the internal functions of churches. Watson v. Jones, 80 U.S. (13 Wall.) 679, 728-29 (1871).

     Churches are at liberty to make employment decisions that are arbitrary, even capricious, and those decisions are immune from judicial scrutiny. Young v. N. Ill. Conference of United Methodist Church, 21 F.3d 184, 187 (7th Cir. 1994). To permit courts to review decisions that are alleged to be arbitrary or unreasonable would be to allow courts to inquire into internal doctrinal matters, and the courts may not do that. There are circumstances where a court may inquire into an action taken by a church, but those circumstances are rare and typically involve, for example, the contractual obligations between the church and an unaffiliated third party, such as a contractor repairing the roof of the church building. Those decisions, however, implicate no doctrinal issues, unlike the employment of a pastor, which is intimately bound up with a church's doctrinal principles. Thus, civil courts, as a general proposition, are not a constitutionally permissible forum for a review of ecclesiastical disputes. Serb. E. Orthodox Diocese v.      Milivojevich, 426 U.S. 696, 710 (1976).

The Lawletter Vol 40 No 12

Brett Turner, Senior Attorney, National Legal Research Group

     One of the hardest issues in all of family law is grandparent visitation. In Troxel v. Granville, 530 U.S. 57 (2000), the U.S. Supreme Court struck down a Washington state statute allowing the court to award grandparent visitation based only upon the best interests of the child, finding that such a broad standard violates the liberty interest of the parents in having custody of their children.

     But Troxel did not decide what the proper standard for grandparent visitation is; it decided only what that standard is not. Case law since Troxel has disagreed substantially as to what grandparents must prove in order to be awarded visitation.

     No state has written more opinions in fewer cases on this issue than Alabama. In Ex parte E.R.G., 73 So. 3d 634 (Ala.2011), a nine-judge court wrote six separate opinions on the subject. The end result was that the court struck down Alabama Code section 30-3-4.1, which allowed the court to award grandparent visitation on a pure best-interests basis.

The Lawletter Vol 40 No 12

Dora Vivaz, Senior Attorney, National Legal Research Group

     In a recent case involving the Kansas University and City of Lawrence ticket-fixing scandal, wherein traffic tickets were allegedly dismissed in exchange for tickets to university athletic events, a city employee, an African-American, who had been terminated as a result of the investigation into the scandal, brought claims for race discrimination and the violation of his due process liberty interests. Monroe v. City of Lawrence, Kan., Case No. 13-2086-EFM, 2015 WL 5006081 (D. Kan. signed Aug. 20, 2015). The court engaged in the usual burden-shifting analysis on the race discrimination claim, concluding that although the employee had clearly shown that he had been treated differently from a similarly situated white employee, he had failed to raise a disputed question of fact on the issue of motive, because he had not shown that the City's reasons were pretextual.

     The court then went on to the interesting due process question raised by the employee's claim, that the "termination report" filed by the City violated his liberty interest by foreclosing employment opportunities in his field. The court concluded that the viability of the claim rested on whether the report constituted "publication." First the court noted that the City was required by statute to submit the report to the Kansas Commission of Peace Officers' Standards and Training. It then noted that although the statute purports to provide absolute immunity for reporting, the City had abandoned that argument in light of Supreme Court precedent stating that state law cannot immunize conduct that is wrongful under federal law. The question therefore came down to whether the report constituted publication, as required to make out a claim, or merely intragovernmental dissemination, which falls short of publication.

The Lawletter Vol 40 No 12

Jim Witt, Senior Attorney, National Legal Research Group

     Given the steep rise in college tuition costs over recent years, the Qualified Tuition Plans ("QTPs") authorized by § 529 of the Internal Revenue Code of 1986 have become increasingly popular. The following summary describes the basic rules governing QTPs, but, as becomes obvious, the restrictions on these plans are formidable, and the rules can vary from state to state.

     There are two basic types of QTPs, a "prepaid qualified tuition program" and a "qualified tuition program savings plan" (informally known as a "college savings plan"). Under a prepaid qualified tuition program, a person may purchase tuition credits or certificates on behalf of a designated beneficiary (the student) that cover future tuition charges and fees, and, in some cases, a room and board option may be purchased. There is generally a premium charged over the current price of tuition, intended to account for inflation. The benefit of this type of QTP is that it locks in tuition costs to the extent of the credits purchased. Many state-sponsored prepaid tuition programs are guaranteed by the state (this is not true for college savings plans). Most state-sponsored plans require either the owner or the beneficiary of the plan to be a resident of the state (college savings plans have no residency requirement). Prepaid tuition plans have a limited enrollment period (there is no limited enrollment period for college savings plans).

The Lawletter Vol 40 No 12

Mark Rieber, Senior Attorney,  National Legal Research Group

     Two recent opinions in Arizona have come to different conclusions about the significance of the smell of marijuana in the determination of probable cause in light of the passage of the Arizona Medical Marijuana Act ("AMMA"), albeit in very different factual situations. In State v. Sisco, 359 P.3d 1 (Ariz. Ct. App. 2015) the court held that with the passage of the AMMA, the mere scent of marijuana coming from a warehouse, standing alone, was insufficient to provide probable cause for the issuance of a search warrant to search the warehouse. The court observed that its holding accorded "with well-reasoned jurisprudence from several other jurisdictions." Id. at 8, ¶ 29 (citing cases).

The Lawletter Vol 40 No 11

Paul Ferrer—Senior Attorney, National Legal Research Group

     Courts often give voice to the black-letter principle that a so-called "agreement to agree, where [material] terms are left to future negotiations, is unenforceable." In re Estate of Wyman, 8 N.Y.S.3d 493, 494 (App. Div. 2015). Some courts have concluded that an agreement to negotiate at a later date is an unenforceable agreement to agree. See, e.g., 77 Constr. Co. v. UXB Int'l, Inc., No. 7:13-CV-340, 2015 WL 926036, at *4 (W.D. Va. Mar. 4, 2015). But other courts have distinguished unenforceable agreements to agree from valid agreements to negotiate in good faith. See, e.g., Copeland v. Baskin Robbins, U.S.A., 117 Cal. Rptr. 2d 875 (Ct. App. 2002).

     In that case, Copeland negotiated with Baskin Robbins to buy an ice cream manufacturing plant. The purchase transaction was contingent on Baskin Robbins's agreeing to a "copacking" arrangement, by which Baskin Robbins would agree to buy the ice cream that Copeland manufactured at the plant. After several months of negotiations, Baskin Robbins sent Copeland a letter indicating that it would (1) sell Copeland the plant for $1.3 million, and (2) buy the ice cream manufactured at the plant for three years, "subject to a separate co-packing agreement and negotiated pricing." Id. at 878. Copeland indicated his agreement, after which the parties continued negotiating over the terms of the copacking agreement. Two months later, Baskin Robbins broke off the negotiations because due to recent business decisions, the copacking arrangement was no longer in alignment with its strategy. Copeland sued for breach of contract, but the trial court granted summary judgment in favor of Baskin Robbins because the essential terms of the copacking deal were never agreed to.

The Lawletter Vol 40 No 11

Brad Pettit—Senior Attorney, National Legal Research Group

     The Supreme Court of Mississippi recently addressed the issue of the enforceability of a renewal provision in a land lease agreement that left for future negotiation matters such as the renewal period, the rental amount, and increases in rent. The court held that the provision was unenforceable. Intrepid, Inc. v. Bennett, No. 2014-CA-00999-SCT, 2015 WL 5158397 (Miss. Sept. 3, 2015) (not yet released for publication). In ruling that the renewal clause in the parties' lease was not enforceable, the Intrepid court reasoned that since "the rental amount in a lease contract is an essential and basic requirement," the parties' failure to set forth a "definite method to determine the rent upon renewal" was fatal to the enforceability of the renewal clause in their lease agreement. Id. at *3. The court noted that "[t]he [lease] option, by its very terms, required that rent 'shall be renegotiated,' and its uncertain formula for determining the amount of increase made this task impossible." Id.

The Lawletter Vol 40 No 11

John Stone—Senior Attorney, National Legal Research Group

     A state must release a person who is involuntarily committed if the grounds for his commitment no longer exist. See O'Connor v. Donaldson, 422 U.S. 563, 574-75 (1975); cf. Jackson v. Indiana, 406 U.S. 715, 738 (1972) ("[D]ue process requires that the nature and duration of commitment bear some reasonable relation to the purpose for which the individual is committed."). If the requirement to release the committed when they deserve to be let out is to have any meaning, a state must also periodically review whether the grounds for commitment are still met. Otherwise, a state could circumvent the timely release requirement by simply refusing to ever consider the continued propriety of commitment. To effectuate that requirement, then, the state must undertake some form of periodic review. See Parham v. J.R., 442 U.S. 584, 607 (1979).

     Periodic review of continuing involuntary commitments need not consist of an adversarial proceeding involving a judge or even an administrator. Nonetheless, the person charged with periodically reviewing continuing involuntary commitments must be required to consider the propriety of ongoing commitment. That person must also be authorized to order a release if the criteria for commitment are no longer met. See id. ("It is necessary that the decisionmaker have the authority to refuse to admit any child who does not satisfy the medical standards for admission.").

The Lawletter Vol 40 No 11

Alistair Edwards—Senior Attorney, National Legal Research Group

     Does a party buying mineral rights have to disclose to the vendor before the sale that it already has a deal in place to sell the mineral rights to a third party for a much higher price? In McCarthy v. Evolution Petroleum Corp., 2014-2607 (La. 10/14/15), 2015 WL 5972515, the court recently considered the novel issue of whether a mineral lessee who had purchased the lessor's mineral rights was liable to the lessor under a fraud-by-silence claim when the lessee failed to disclose to the lessor at the time of the purchase that it had already negotiated the resale of the rights to a third party for a significantly higher price.

     In considering this issue, the court pointed out the well-established rule (codified by Louisiana statute) that "[a] mineral lessee is not under a fiduciary obligation to his lessor, but he is bound to perform the contract in good faith and to develop and operate the property leased as a reasonably prudent operator for the mutual benefit of himself and his lessor." La. Rev. Stat. Ann. § 31:122. This language, which focuses on mineral development operations, not the selling of mineral rights, did not, according to the court, impose on the lessee/purchaser a duty to disclose to the lessor/vendor that the lessee already had a deal in place to resell the mineral rights to a third party for a much higher price.

The Lawletter Vol 40 No 11

Anne Hemenway—Senior Attorney, National Legal Research Group

     There are a variety of reasons why a federal bankruptcy case may be reopened after the debtor has been discharged and the case closed. A debtor may discover a claim, not known at the time the case was pending, and seek to reopen the case to discharge the claim. More typically, a Chapter 7 trustee may seek to reopen a case after discovering potential bankruptcy estate assets that the debtor failed to schedule. The party seeking to reopen may find intense challenges to the motion to reopen, because the reopening can result in a major redistribution of assets. Under the Bankruptcy Code, the bankruptcy court has broad discretionary authority to reopen a case "to administer assets, to accord relief to the debtor, or for other cause." 11 U.S.C. § 350(b).

     Recently, in In re Ludvigsen, BAP No. MB 14-039, Bankr. No. 13-12232-WCH, 2015 WL 3733193 (B.A.P. 1st Cir. Jan. 16, 2015) (not for publication), the First Circuit Appellate Panel stated that a bankruptcy court properly exercises its discretionary authority to reopen a closed bankruptcy case when it does so to determine a substantive dispute on its merits, but does not exercise proper discretionary authority when only technical defects with the closed case are at issue. Further, when determining whether to exercise its discretionary authority, the court should look at each § 350(b) motion on a fact-by-fact basis. Id. at *4 (citing In re Dalezios, 507 B.R. 54, 58 (Bankr. D. Mass. 2014).