The Lawletter Vol. 49 No. 3

Anne Hemenway, Senior Attorney

CONSTITUTIONAL LAW/SECOND AMENDMENT:  United States Supreme Court Allows Statutory Ban on Possession of Firearms by Persons Subject to Domestic Violence Restraining Order

          In United States v. Rahimi, 144 S. Ct. 1889, 219 L. Ed. 2d 351 (2024), the United States Supreme Court, in an unusual nearly unanimous 8-1 decision, upheld a 1994 federal criminal law, 18 U.S.C. § 922(g)(8), against a challenge that the law violated the Second Amendment. The statute bans the possession of a gun by someone who has been the subject of a domestic violence restraining order or any order that restrains a person from harassing, stalking, or threatening an intimate partner or child of such partner or engaging in other conduct that would place an intimate partner in reasonable fear of injury.

      The statute was originally challenged by Rahimi as violating the Second Amendment, although he conceded that the restraining order against him satisfied the statutory criteria for banning him from possessing a firearm. The federal district court denied Rahimi's motion to dismiss the indictment for possessing a firearm in violation of Section 922(g)(8) on Second Amendment grounds. On appeal, the Supreme Court decided New York State Rifle & Pistol Ass’n v. Bruen, 597 U.S. 1, 142 S. Ct. 2111, 213 L. Ed. 2d 387 (2022). In light of that ruling, the Fifth Circuit Court of Appeals reversed, holding that the indictment should be dismissed because Section 922(g)(8) does not fit within the “Nation's historical tradition of firearm regulation.” United States v. Rahimi, 61 F.4th 443, 461 (5th Cir. 2023).

The Lawletter Vol. 49 No. 3

 Matthew McDavitt, Senior Attorney

ESTATES:  Enactments of the Uniform Electronic Wills Act

        Traditionally, to be valid, a last will and testament had to be executed on paper with the requisite will execution formalities, with the testator and the dual attesting will witnesses physically signing the instrument together at the will execution ceremony. In recent years, however, an increasing proportion of contracts and instruments nationally are executed wholly electronically, wherein the requisite signatures and witness attestations are now often made via digital means. Similarly, in states exacting the Uniform Electronic Wills Act, the testator, attesting witnesses, and notary may now appear via video conference in the “electronic presence” of each other, rather than in person. The Uniform Electronic Wills Act thus empowers testators in jurisdictions that have enacted this model statutory text to execute wills electronically, with the attesting witnesses able to appear and witness the will execution via video conference. Additionally, a valid electronic will under the Act must be a “tamper-evident electronic record” to guard against fraudulent tampering with such digital testamentary instrument post execution. Also, under the model Act, an electronic will, once validly executed, may be revoked via (1) a subsequent inconsistent will, or (2) by “physical act,” which, though not defined, may mean deletion of the authenticated, executed digital will file.

Trish Sifka—Senior Attorney

          It should be no surprise that a federal appellate court generally does not have jurisdiction to review immediate appeals of denials of motions for summary judgment. See Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541, 546, 69 S. Ct. 1221, 93 L. Ed. 1528 (1949); Iko v. Shreve, 535 F.3d 225, 234 (4th Cir. 2008) (noting this exception to the rule that "interlocutory appeals are generally disallowed"). “But, under the collateral order doctrine, appellate jurisdiction extends to ‘a narrow class of decisions that do not terminate the litigation,' but are sufficiently important and collateral to the merits that they should 'nonetheless be treated as final.'" United States ex rel. Citynet, LLC v. Gianato, 962 F.3d 154, 158 (4th Cir. 2020) (“Gianato”) (citing Will v. Hallock, 546 U.S. 345, 347, 126 S. Ct. 952, 163 L. Ed. 2d 836 (2006) (quoting Digital Equip. Corp. v. Desktop Direct, Inc., 511 U.S. 863, 867, 114 S. Ct. 1992, 128 L. Ed. 2d 842 (1994))).

ZONING:  Virginia Court of Appeals: A Rezoning Application for a Private Facility Need Not Substantially Accord with the Comprehensive Plan or the Factors Set Forth in Va. Code §§ 15.2-2283 and 15.2-2284

Lawletter Vol. 49 No. 2

Charlene Hicks—Senior Attorney

            In Hartley v. Board of Supervisors, 80 Va. App. 1, 897 S.E.2d 217 (2024), the Virginia Court of Appeals issued a published opinion that deliberately discounts the role that a locality’s comprehensive plan must play in the Board of Supervisors’ decision to approve a private rezoning application. The decision also requires a court to view with great leniency the Board’s rezoning decision in light of the requirements set forth in Virginia Code §§ 15.2-2283 and 15.2-2284. Hartley thus paves the way for localities to quite easily effectuate a substantial change in the character of a single parcel of private property from the surrounding neighborhood.

Lawletter Vol. 49 No. 2

Nadine Roddy—Senior Attorney

      May an employer ask an employee whether they are thinking about retiring sometime in the foreseeable future without running afoul of the Age Discrimination in Employment Act (ADEA)? Some federal courts of appeals have answered this question in the affirmative.

          In a recent Fourth Circuit case, Palmer v. Liberty University, Inc., Nos. 21-2390, 21-2434, 2023 U.S. App. LEXIS 18467 (4th Cir. June 30, 2023), a 79-year-old professor was notified by the university where she had taught studio art for over 30 years that her annual contract would not be renewed. Nearly all of the university’s faculty members were employed on an annual basis and served without tenure. Before informing the professor of the nonrenewal of her contract, the Dean and the Provost had privately decided to offer the option of retirement to the professor, but only if she brought up the subject herself. After receiving the nonrenewal notice, the professor “responded unfavorably” but she did not raise the issue of retirement. As a result, she was not offered that option, and she lost her employment upon the expiration of her contract. In the ensuing ADEA lawsuit, the district court entered summary judgment for the university.

Lawletter Vol. 49 No. 2

Amy G. Gore—Senior Attorney

            The attorney-client privilege has traditionally limited the disclosure of properly qualified communications between an attorney and a client who is seeking legal advice. The limits of the privilege were tested in a recent Illinois decision in MacDonald v. Wagenmaker, 2024 IL App (1st) 230089, ¶ 1. There, HBC, an evangelical Christian megachurch terminated its senior pastor and retained attorneys to investigate claims of financial misappropriations. The church instructed the attorneys to post a letter outlining the attorneys’ findings on the church website which referenced financial misappropriations by the senior pastor. The pastor brought suit against the attorneys alleging, inter alia, defamation, false light invasion of privacy, and civil conspiracy. During discovery, the pastor sought to subpoena communications between the attorneys, the church, and their accountants to which an attorney-client privilege was asserted. The pastor replied that the crime-fraud exception of the attorney-client privilege destroyed the protection from discovery. The trial court, relying on a passage in Radiac Abrasives, Inc. v. Diamond Technology, Inc., 177 Ill. App. 3d 628, 638 (1988), in which the Illinois Supreme Court indicated that crime-fraud exception could extend to other torts, examined the communications in camera and ruled for the pastor, finding that the attorneys were aware that the publication of the letter may amount to tortious conduct. The trial court’s ruling was reversed by the appellate court.

Lawletter Vol 49 No. 2

Anne Hemenway—Senior Attorney

            On March 15, 2024, the United States Supreme Court decided a pair of cases from Michigan and California on the issue of whether a public official violates the First Amendment by blocking individuals from the public official's personal social media page. In the Michigan case, Lindke v. Freed, 601 U.S. 187, 144 S. Ct. 756, 218 L. Ed. 2d 121 (2024), Kevin Lindke, a private citizen argued that James R. Freed, the unelected city manager of Port Huron, Michigan, violated his free speech rights when the unelected official blocked the complaining citizen from his personal Facebook page. In the California case, O'Connor-Ratcliff v. Garnier, 601 U.S. 205, 144 S. Ct. 717, 218 L. Ed. 2d 138 (2024), two elected school board members blocked from their social media pages the parents who criticized the board of trustees. In both cases, the blocked citizens were outraged that they were barred from the private internet sites.

The Lawletter Vol. 49 No. 1

Lee Dunham—Senior Attorney

             Closely related people or entities often make loans, including promissory notes, to each other without the formalities that usually accompany business transactions between strangers. Later—sometimes years later—such transfers can become problematic if the IRS seeks to treat the transfer as a distribution or gift for tax purposes. Is the parties’ failure to execute a promissory note contemporaneously with the loan fatal to treatment of the transaction as a loan? Can the parties retroactively document the loan with a newly executed promissory note?

          “The question of whether a taxpayer has entered into a bona fide creditor-debtor relationship pervades Federal tax litigation.” Dynamo Holdings Ltd. P'ship v. Comm’r, Nos. 2685-11, 8393-12, 2018 Tax Ct. Memo LEXIS 60, at *47 (May 7, 2018). For tax purposes, the answer turns on intent: “[t]he parties must have actually intended to establish a debtor-creditor relationship,” i.e., “at the time the advances were made there [must have been] ‘an unconditional obligation on the part of the transferee to repay the money, and an unconditional intention on the part of the transferor to secure repayment.’” Id. at *47–48, citing Calloway v. Comm’r, 135 T.C. 26, 37 (2010), Ellinger v. United States, 470 F.3d 1325, 1333 (11th Cir. 2006), and Haag v. Comm’r, 88 T.C. 604, 616 (1987), aff'd without published opinion, 855 F.2d 855 (8th Cir. 1988).

The Lawletter Vol. 49 No. 1

Paul Ferrer—Senior Attorney

                The Virginia Supreme Court’s July 2023 decision in Monroe v. Monroe, 889 S.E.2d 646 (Va. 2023), turned on the trial court’s lack of jurisdiction to enter a sanctions order more than 21 days after the trial court had entered its final order dismissing the case. See Va. S. Ct. R. 1:1. For corporate attorneys, however, the case is more notable for Justice Kelsey’s admirably lucid discussion of the nature of a shareholder-derivative action and the status of the plaintiff seeking to maintain such an action.

            Lisa Monroe and Joseph Monroe were the married co-owners of MEPCO Materials, Inc., with 51% and 49% ownership interests, respectively. A week after Joseph filed for divorce, he, as the sole director at that time, caused MEPCO to file a civil action against Lisa for conversion and breach of fiduciary duty, alleging that she had used MEPCO funds for personal use. The following year, Joseph resigned from his position. Because he could no longer speak directly for MEPCO, he sought to convert the action against Lisa—which alleged classic claims that devolved to the benefit of the corporation and both of its shareholders, and not just to Joseph individually—to a shareholder-derivative action, that is, “an equitable proceeding in which a shareholder asserts, on behalf of the corporation, a claim that belongs to the corporation rather than the shareholder.” Monroe, 889 S.E.2d at 650 (quoting Little v. Cooke, 274 Va. 697, 709, 652 S.E.2d 129, 136 (2007)). Under the Virginia Stock Corporation Act, however, a shareholder “shall not commence or maintain a derivative proceeding unless the shareholder,” among other things, “[f]airly and adequately represents the interests of the corporation in enforcing the right of the corporation.” Va. Code Ann. § 13.1-672.1(A)(3). Justice Kelsey referred to this as a “statutory standing requirement that the putative representative must satisfy from the beginning to the end of the derivative action.” Monroe, 889 S.E.2d at 650.

The Lawletter Vol. 49 No. 1

Cassidy Crockett—Senior Attorney

      Many lawyers believe that advising a cannabis business, or cannabusiness, is the same as advising any other business. However, there are several considerations to take into account before taking on these clients.

Legal Ethics

      Attorneys know that ABA Model Rule 1.2(d) forbids attorneys from counselling or assisting clients in criminal conduct. While many states have either modified this rule or issued opinions exempting cannabis businesses, some still consider it an ethics violation to work with these businesses. In 2021, the Georgia Supreme Court denied a motion by the state bar to amend this rule to allow attorneys to engage with the newly legalized low-THC medical cannabis program. In re Motion to Amend 2021-3 (Ga. June 21, 2021). As long as cannabis remains a federally illicit substance, the first step that any attorney looking to engage with a cannabusiness client should take is to check their state ethics rules before proceeding.

Regulatory Compliance

     Cannabis laws are changing very quickly across the country, but cannabis regulations change even faster. While in most states, new laws take effect on a specified date, regulations can take effect and change throughout the year. It may also be warranted in some cases to attend agency hearings as well if the attorney is engaged in the permitting process. It is imperative that attorneys working with the cannabis industry familiarize themselves with their state’s administrative process, relevant agencies, and the administrative code.