All posts by Troy Moody

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SCOTUS: States Cannot Exclude Religious Schools From Tuition Programs

Montana created a program that granted tax credits to organizations that awarded scholarships for private school tuition. Because Montana’s Constitution expressly prohibits “appropriation or payment” to sectarian schools—a “no-aid clause”—the State issued a rule prohibiting the scholarships from being used toward religious schools. Three mothers who wanted to use the scholarships to send their children to a Christian private school sued, arguing that the prohibition discriminated based on religion in violation of the Free Exercise Clause of the First Amendment. The trial court enjoined the restriction, reasoning that the tax credit program as structured did not violated the no-aid clause, but the Montana Supreme Court reversed and struck the entire program.

The Court, in a 5-4 opinion by Chief Justice Roberts, reversed again, holding that Montana’s no-aid clause discriminated against religious schools solely for being religious, which conflicted with the protection of the Free Exercise Clause. Applying strict scrutiny, the majority rejected the State’s argument that the ban promoted religious freedom, and held that the Montana Supreme Court could not use the State’s Constitution as an excuse to abrogate the First Amendment. Justice Thomas, joined by Justice Gorsuch, concurred, arguing that although this case was a Free Exercise Clause case, the Court’s prior Establishment Clause jurisprudence, requiring the government to treat religions equally to non-religion, continues to negatively impact the free exercise of religion. Justice Alito also filed a concurrence, arguing that the Montana Constitution’s no-aid clause was related to the anti-Catholic Blaine Amendments in the 1800’s.

Justice Gorsuch filed a concurrence arguing that the majority’s focus on religious status was functionally indistinct from consideration of a law’s effect on religious activity. Justice Ginsburg, joined by Justice Kagan, dissented, arguing that the State’s prohibition as applied did not burden religious exercise as applied by the State supreme court. Justice Breyer, joined in part by Justice Kagan, also dissented, arguing that the majority’s opinion risks further entanglement between church and state that could promote discord. Justice Sotomayor provided the final dissent, arguing that the majority was wrong to undo the State supreme court’s ruling.

A link to the decision in Espinoza v. Montana Dept. of Revenue is here: https://www.supremecourt.gov/opinions/19pdf/18-1195_g314.pdf

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SCOTUS Opinion: Court Declines to Extend First Amendment Protections to Foreign Corporate Affiliates

The United States Leadership Against HIV/AIDS, Tuberculosis, and Malaria Act was enacted in 2003 as a foreign aid program focused on global health. Congress dedicated billions of dollars in funding to the Act, but required that organizations could only receive funds if they had a “policy explicitly opposing prostitution and sex trafficking.” In Agency for Int’l Development v. Alliance for Open Society Int’l, Inc., 570 U.S. 205 (2013), the Court held that this policy violated the First Amendment rights of American organizations that received funds under the Act. In this case, the same parties returned to court, this time arguing whether the policy should also be enjoined from applying to the American organizations’ foreign affiliates. The Second Circuit held that the First Amendment protected the foreign affiliates.

The Court, in a 5-3 decision by Justice Kavanaugh (Justice Kagan recused), reversed, holding that it was a bedrock principle that foreign citizens did not have rights under the Constitution unless they were present in the United States. The Court also recognized that the foreign affiliates, as legally separate entities from the American companies, could not be held to enjoy the same rights. Justice Thomas lodged a concurrence noting his continued disagreement with the result of the prior case. Justice Breyer, joined by Justices Ginsburg and Sotomayor, dissented, arguing that the present case was really about the First Amendment rights of American organizations, not foreign affiliates.

A link to the decision in Agency for Int’l Development v. Alliance for Open Society Int’l, Inc. is here: https://www.supremecourt.gov/opinions/19pdf/19-177_b97c.pdf

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SCOTUS Opinion: Director of the Consumer Financial Protection Bureau Is Removable At Will

To ensure that consumer debt products were safe and transparent, Congress created the Consumer Financial Protection Bureau, which had power to investigate and seek relief on behalf of consumers, among other Executive Branch powers. Unlike other independent agencies, the Bureau was led by a single Director, appointed by the President with advice and consent of the Senate for a five-year term, who was removable only for “inefficiency, neglect of duty, or malfeasance in office.” When the Bureau issued an investigative demand to a law firm, the law firm objected on the basis that the Director’s office violated the separation of powers by vesting executive branch power in a single director who was not removable at the President’s will.

The Ninth Circuit rejected that argument, but the Court, in a 5-4 opinion authored by Chief Justice Roberts, reversed, holding that the novel structure of the Bureau was not akin to the Commissioners of the FTC or of the independent counsel’s office, which had been previously held to be compliant with the separation of powers doctrine. Given that the Bureau was granted broad executive branch authority to pursue consumer interests, Congress could not limit the President’s power of removal.

However, the Court also ruled, 7-2, that the removal provision was severable from the rest of the law establishing the Bureau, and therefore the Bureau could continue its work pending new leadership. Justice Thomas filed an opinion that was part concurrence and part dissent, joined by Justice Gorsuch, agreeing that the limitation on removal was unconstitutional, and that the Court should have gone farther in repudiating prior precedent in that area, but also arguing that there was no reason to engage in the severability analysis when all that was needed was to deny the request issued to the law firm. Justice Kagan, joined by Justices Ginsburg, Breyer, and Sotomayor, filed a dissent arguing that the removal limitations were proper as compared to other agencies, and were important in maintaining the Bureau’s independence.

A link to the decision in Seila Law, LLC v. Consumer Financial Protection Bureau is here: https://www.supremecourt.gov/opinions/19pdf/19-7_n6io.pdf

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SCOTUS Opinion: Narrow Majority Strikes Down Louisiana Abortion Law

The Louisiana law at issue in June Medical Services, LLC v. Russo was practically identical to the Texas law the Court struck down in Whole Women’s Health v. Hellerstedt, 579 U.S. ___ (2016), which required abortion providers to hold active admitting privileges at a hospital within 30 miles of where they perform abortions. Since that time, however, one member of the prior case’s majority, Justice Kennedy, had been replaced by Justice Kavanaugh. In this case, the district court held that the Louisiana law was unconstitutional under Whole Women’s Health, and found that the evidence supported the conclusion that the Louisiana law similarly imposed an “undue burden” on the right to an abortion. The Fifth Circuit reversed, disputing the district court’s interpretation of the evidence of undue burden.

The Court, in a 5-4 decision, reversed and struck down the law. Justice Breyer, for a 4-justice plurality, first determined that the petitioning health care providers had standing to raise the challenge, and Louisiana acted too late to challenge standing. The plurality next held that the Fifth Circuit failed to give proper deference to the district court’s factual findings, and that the evidence properly supported the conclusion that the Louisiana law caused the same unconstitutional undue burden that the Texas law did. Chief Justice Roberts, who dissented in Whole Women’s Health, provided the fifth vote on the sole basis that even though he still thought the prior case was wrongly decided, the doctrine of stare decisis required the same result.

Justice Thomas dissented, arguing that the abortion providers lacked standing to challenge the law, and that the right to an abortion lacked any constitutional basis. Justice Alito, joined by Justice Gorsuch in full and Justices Thomas and Kavanaugh in part, dissented, arguing that the plurality applied the wrong standard of review, and that the Chief Justice misapplied the doctrine of stare decisis. Justice Gorsuch also lodged a dissent, arguing that the majority sidestepped several established legal doctrines and mis-applied the rule in Whole Women’s Health to reach its conclusion. And finally, Justice Kavanaugh filed a dissent arguing that more fact-finding was needed before the law could be properly assessed.

A link to the opinion is here: https://www.supremecourt.gov/opinions/19pdf/18-1323_c07d.pdf

| Christopher A. Glaser

Client Alert: Dwight Deloatch v. Robin Deloatch

The District of Columbia Court of Appeals recently highlighted a United States Supreme Court decision that went largely unnoticed in the real estate industry. As the highlighted rule stems from the highest court in the land, real estate practitioners in all jurisdictions should take note.

In Dwight Deloatch v. Robin Deloatch, Mr. Deloatch noted an appeal nearly four (4) years after the District of Columbia Superior Court issued its final judgement of absolute divorce. Noting that the thirty (30) day window by which an appeal must be filed pursuant to the Rules of the Court of Appeals had long expired, the Court of Appeals issued an order directing Mr. Deloatch to show cause why the appeal should not be dismissed. The Court of Appeals—as with many other appellate courts—had previously held the deadlines by which to note an appeal were “mandatory and jurisdictional” such that any late appeal must be dismissed.

Notwithstanding the long line of caselaw confirming that appeal deadlines were jurisdictional, the Supreme Court has since noted its “own ‘less than meticulous’ use of the word jurisdictional” as the legislature alone can determine a court’s basic jurisdiction. The Court of Appeals, quoting the Supreme Court, held that “a time limit prescribed only in a court-made rule is not jurisdictional; it is, instead, a mandatory claim-processing rule subject to forfeiture if not properly raised by the appellee,” or, at least in the District of Columbia, sua sponte as provided for by the Rules.

The impact of appeal timelines not being jurisdictional has the potential of greatly disrupting the real estate industry. For example, the vast majority of escrow agreements used in real estate transactions provide for the disbursement of held funds upon either written joint instructions or a “final order”. As appeal deadlines are not jurisdictional, one wonders when a trial court’s order becomes “final” as it may not be the date set forth in the applicable rules. As a result, escrow agreements should likely be revised to be more precise and not rely upon the previously used “final order” language.

Jackson & Campbell, P.C. represents title insurers and insureds in Maryland, Virginia, and Washington, D.C. and we strive to keep our clients and other title professionals up to date on various developments in the law. Additionally, we present no cost in-house updates of the nation’s most noteworthy cases and national trends following the spring and fall American Land Title Association’s Title Counsel meetings.

If you have any questions about this case or laws impacting real estate in and around the Washington, D.C. region, feel free to contact us. Our Real Estate Litigation and Transactions Practice Group is ready to assist.

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SCOTUS Opinion: Court Upholds Limit on Habeas Corpus Review of Immigration Claim

An immigrant subject to expedited removal can argue for asylum based on a “credible fear of persecution” if they are returned to their country of origin, under the Illegal Immigration Reform and Immigrant Responsibility Act. However, the Act states that federal courts may not review a determination that an immigrant seeking asylum lacks such fear, pursuant to a writ of habeas corpus. In Department of Homeland Security v. Thuraissigiam, the issue was whether this limitation on habeas review violated either the Suspension Clause or the Due Process Clause of the Constitution. The Ninth Circuit held that it violated both, creating a circuit split.

The Court, in a 7-2 decision by Justice Alito, reversed on both counts. First, the majority held that the Act’s limitation did not violate the Suspension Clause because the end Thuraissigiam sought – review of his asylum claim – was not the end habeas corpus is meant to grant, which is a release from unlawful detention. The majority also held that since Thuraissigiam was detained almost immediately upon crossing the border, he was not entitled to protection under the Due Process Clause. Justice Thomas filed a concurrence to explain his view of the original meaning of the Suspension Clause, and how the Act’s limitation did not implicate it. Justice Breyer, joined by Justice Ginsburg, concurred in the judgment, arguing that the majority should have limited itself to an as applied challenge, rather than broadly ruling that the Act was constitutional under all circumstances.

Justice Sotomayor, joined by Justice Kagan, dissented, arguing that the Act’s restriction violated both Clauses. A link to the opinion is here: https://www.supremecourt.gov/opinions/19pdf/19-161_g314.pdf

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SCOTUS Opinion: Disgorgement Is An Equitable Remedy Available To The SEC

The Securities Exchange Act of 1934 permits the Securities and Exchange Commission to seek civil penalties and “equitable relief” in civil suits against those who violate securities laws. In the prior case of Kokesh v. SEC, 581 U.S. ___ (2017), the Court held that disgorgement was a “penalty” under the applicable statute of limitations for SEC enforcement actions, but declined to decide whether disgorgement constituted equitable relief. The case of Liu v. SEC placed that issue directly before the Court. In this case, the district court held that the defendants engaged in a scheme to defraud foreign investors, ordering that the defendants disgorge the entire amount of money raised, minus only the money remaining in the investment corporation’s accounts. The Ninth Circuit affirmed in all respects.

The Court, in an 8-1 decision penned by Justice Sotomayor, largely affirmed, holding that disgorgement was an equitable remedy under the Act. The majority likened disgorgement to traditional equitable remedies like an accounting and restitution, and noted how those remedies were carefully circumscribed to not constitute a penalty, which was not an equitable remedy. The Court finally noted that the disgorgement awarded by the lower courts, and typically sought by the SEC, exceeded the bounds of what equitable remedies allowed, and remanded the case with guidance, including to limit the disgorgement based on “legitimate expenses” and other items. Justice Thomas dissented, arguing that disgorgement was not a traditional equitable remedy.

A link to the opinion is here: https://www.supremecourt.gov/opinions/19pdf/18-1501_8n5a.pdf

| David L. Kelleher

Face Coverings in the Workplace: 5 Lessons You Need to Know

As more businesses reopen and workers – many wearing face masks – return to in-person interactions with co-workers, customers and clients, here are five things that every worker should know about face masks in the workplace.

  1. What are the different types of face coverings and masks?

Generally, there are three categories of face coverings and masks: cloth face coverings, surgical masks, and respirators/filtering masks.

Cloth face coverings have become commonplace during the national health emergency created by COVID-19. They may be commercially produced, homemade, or improvised (scarves, bandanas and other items.) A cloth face covering covers the wearer’s nose and mouth to form a barrier that reduces the spread of germs from the wearer to others by containing the wearer’s potentially infectious respiratory droplets. A cloth face covering is not, and may not substitute for, Personal Protective Equipment, as a cloth face covering does not protect the wearer because of its loose fit, inadequate seal and insufficient filtration.

Surgical masks are medical grade devices which generally are approved by the Food and Drug Administration. Do not be fooled, many commercially available face coverings resemble surgical masks in appearance but are not medical grade and do not offer medical grade protection. Surgical masks serve dual purposes – they protect the wearer from splashes, sprays and droplets of potentially infectious materials and they protect non-wearers by containing the wearer’s respiratory droplets.

Respirators/filtering masks are used to protect the wearer from small particles, including airborne and aerosolized infectious agents. These masks are not for everyone. They need proper filtering material (N-95 or better.) They must be certified by the National Institute for Occupational Safety and Health. They require special training, fit testing, oversight, and cleaning.

  1. Can employers require workers to wear cloth face coverings in the workplace?

Generally, employers may require cloth face coverings to enhance the safety of their workplaces. The General Duty Clause of the Occupational Safety and Health Act requires employers to provide workers with a place of employment “free from recognized hazards that are causing or likely to cause death or serious physical harm.” OSHA recognizes COVID-19 as a potential workplace hazard and expressly recommends that employers encourage workers to wear face coverings at work.

Cloth face coverings, however, are not suitable for all workers and all job tasks. Decisions on face coverings should be the result of employers’ individualized infectious disease preparedness and response plans. The plans should assess not just the advantage of face coverings, e.g. reducing the spread of germs, but the disadvantages and risks as well. For example, cloth face coverings will impair the ability of workers who lip-read to communicate so employers should determine whether cloth face coverings are appropriate under their accessible communications policies. Cloth coverings may absorb chemicals causing masked-workers who use cleaning and other products to inhale repeatedly any chemicals trapped in their masks. Where work is performed in high temperature or high humidity environments, cloth face coverings may exacerbate heat illness.

Even though OSHA recommends encouraging the use of cloth face coverings in the workplace and the Center for Disease Control recommends the use of cloth face coverings in public places, each employer should tailor its face covering policy to the individual needs of its workplace, work force and job tasks.

  1. Is an employer required to supply cloth face coverings to workers?

No. Cloth face coverings are not considered Personal Protective Equipment by OSHA. Specific to COVID-19, cloth face coverings are not intended to protect the wearer. They are intended to prevent a wearer who may have COVID-19 without knowing it (whether asymptomatic, pre-symptomatic or with misdiagnosed symptoms) from spreading the virus to others. When you see someone wearing a cloth face mask, that person is protecting you. When you wear a cloth face mask, you are protecting others.

In contrast, where surgical masks or filtered masks are required by OSHA as PPE to protect workers from particles in the work environment, employers are responsible for providing and maintaining the masks. For more information on masks as PPE please see 29 CFR 1910.132 and 29 CFR 1910.134.

  1. Do cloth face masks eliminate the need for social distancing?

No. OSHA expressly rejects the use of cloth face masks in lieu of compliance with social distancing guidance. Cloth face coverings generally are inadequate to prevent workers from inhalation hazards because of their loose fit, lack of seal and insufficient filtration. Social distancing plus appropriate face coverings should be included in every employer’s control plan unless they create a greater hazard for workers.

  1. Do not let cloth face masks lull you into a false sense of security.

Face coverings provide important, but limited, protection. Therefore, just as every employer should have a preparedness plan, every worker should have an individualized preparedness plan. Consider keeping a spare face covering, such as a mask, scarf or bandana, available in case one breaks or gets spoiled. If you wear a cloth face covering, bring it home and wash it regularly. Maintain social distancing, especially in places where ventilation is poor or you encounter others who are not wearing face coverings. Wash your hands at every opportunity. Disinfect surfaces in your work area and common areas with alcohol-based wipes (at least 60% alcohol) or other similar cleaners. Where possible, refrain from sharing headsets, food utensils, tools and office supplies; where this is not possible, clean the shared equipment thoroughly with alcohol-based cleaners before and after each use. Consider using a wipe, glove or other covering for opening doors in public places, pushing elevator buttons or doorbells, and holding handrails. If you become symptomatic during the day, tell your employer so someone can clean your work area and then go home and to the extent possible isolate yourself to protect others.

More information on face coverings in the workplace is available at www.osha.gov. More information on face coverings, including how to make your own face coverings, is available at www.cdc.gov.

This summary is not intended to contain legal advice or to be an exhaustive review. If you have any questions regarding this article, please contact David L. Kelleher at Jackson & Campbell, P.C.

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SCOTUS Decision: Court Preserves DACA Program… For Now

The case of Department of Homeland Security v. Regents of the University of California concerned the Trump administration’s decision to end the Deferred Action for Childhood Arrivals program initiated by the Obama administration. DACA was created in 2012 to allow certain children who enter the United States illegally to apply for a two-year forbearance of removal. Approximately 700,000 people had received DACA relief over the course of that program. Then, in 2017, the Department of Homeland Security decided to terminate the program and all granted benefits due to concerns that it violated the Immigration and Nationality Act. Several groups sued in three different federal courts, claiming that the DACA termination was arbitrary and capricious, and infringed on the equal protection guarantee of the Fifth Amendment’s Due Process Clause. During that litigation, DHS issued additional reasons for the rescission. Nevertheless, the Government’s argument to dismiss the cases lost in all three courts.

The Court, in a 5-4 majority opinion by Chief Justice Roberts, held that DHS’ decision to end the DACA program was arbitrary and capricious, and so remanded the cases for further litigation. Specifically, the majority held that although DHS was correct that DACA violated the INA because it provided benefits to illegal immigrants, that did not mean that DHS should have also terminated forbearance benefits already provided to prior applicants, which would cause great hardship to those beneficiaries. The decision to terminate both was arbitrary and capricious, and rejected DHS’ subsequent explanations as “post-hoc rationalizations.” The Court rejected the equal protection argument by an 8-1 vote—Justice Sotomayor filed a concurrence arguing that the equal protection claims should not be dismissed. Justice Thomas, joined by Justices Alito and Gorsuch, dissented in part, arguing that DACA was not the product of the proper rulemaking process in the first place, so rescinding the unlawful program was reasonable. Justice Alito filed a short dissent expressing frustration that the majority’s decision was essentially telling DHS “to go back and try again . . . without holding that DACA cannot be rescinded.” Justice Kavanaugh filed a dissent arguing that DHS’ decision was not arbitrary and capricious because the reasoning had been adequately explained by the subsequent reasoning offered.

A link to the opinion is here: https://www.supremecourt.gov/opinions/19pdf/18-587_5ifl.pdf

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SCOTUS Opinion: Failure to Elicit Abusive Childhood Constituted Ineffective Assistance of Counsel

In order to prove ineffective assistance of counsel under Strickland v. Washington, 466 U.S. 668 (1984), a defendant must prove by a preponderance of the evidence that his counsel’s representation fell below an objective standard of reasonableness, and there was a reasonable probability that the result of the proceedings would have been different but for counsel’s deficient performance. In Andrus v. Texas, Terence Andrus was convicted for killing two people during a carjacking when he was 20. During the sentencing phase, his counsel presented hardly any evidence of mitigating circumstances to the jury, and he was sentenced to death. During his habeas proceeding, a veritable “tidal wave” of mitigation evidence was revealed about Andrus’ abusive and dysfunctional childhood. The trial court found Andrus’ original counsel had been ineffective. The Texas Court of Criminal Appeals disagreed, writing without elaboration that Andrus had failed to meet his burden under Strickland.

The Court, in a 6-3 per curiam decision, reversed and remanded, holding that the evidence clearly showed Andrus received constitutionally deficient representation, and accused the Criminal Appeals court of having “failed to engage in any meaningful prejudice inquiry.” The majority required the state appellate court to take another look at the “tidal wave” of mitigating evidence to determine whether it would have had affected sentencing at his trial. Justice Alito, joined by Justices Thomas and Gorsuch, dissented, arguing that the Criminal Appeals court, by its own statement, did decide that the mitigating evidence would not have made any difference, and that there were plenty of aggravating factors in Andrus’ crime that would have overcome his mitigating evidence.

A link to the opinion is here: https://www.supremecourt.gov/opinions/19pdf/18-9674_2dp3.pdf

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SCOTUS Opinion: New Gas Pipeline Under Appalachian Trail Allowed To Proceed

In U.S. Forest Service v. Cowpasture River Preservation Association, the issue was whether the U.S. Forest Service had the authority to grant a right-of-way easement about 600 feet underneath a portion of the Appalachian Trail for the construction of a new natural gas pipeline. The Leasing Act gave the Forest Service authority to grant easements over lands that it administrated, and the part of the Appalachian Trail at issue was located within a forest governed by the Forest Service. However, the Fourth Circuit held that administration of the Appalachian Trail had been delegated by the Secretary of the Interior to the National Park Service, and thus concluded that the Trail was no longer within the authority of the Forest Service.

The Court, in a 7-2 decision by Justice Thomas, reversed, holding that the administration of the Trail by the National Park Service only delegated authority over the surface of the land that involved the Trail. The land underneath the Trail still belonged to the Forest Service, and thus the Service’s easement was valid. In particular, the majority determined that the right-of-way agreements between the Forest Service and the National Park Service regarding the Trail did not transfer any possessory rights to the National Park Service, as easements only transfer a right of access. Justice Sotomayor, joined by Justice Kagan, dissented, arguing that the Trail was designated as “land” under the Park System, and thus should have conveyed all possessory power to the National Park Service.

A link to the opinion is here: https://www.supremecourt.gov/opinions/19pdf/18-1584_igdj.pdf

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SCOTUS Opinion: Gay and Transgender Employees Are Protected Under Title VII of the Civil Rights Act

Bostock v. Clayton County consisted of several cases in which a long-time employee was terminated solely for being gay or transgender. Those employees sued under Title VII of the Civil Rights Act of 1964, which makes it unlawful to fire an employee “because of such individual’s race, color, religion, sex, or national origin,” arguing that employment discrimination on account of sexual orientation was part and parcel of their “sex.” The Eleventh Circuit ruled that it did not, while the Second and Sixth Circuits ruled that it did. The Court, in a 6-3 opinion by Justice Gorsuch, held that Title VII’s prohibition on discrimination based on “sex” incorporated sexual orientation, as an “employer who fires an individual for being homosexual or transgender fires that person for traits or actions it would not have questioned in members of a different sex.”

The majority acknowledged that the 1964 Congress that passed the law may not have anticipated or intended that interpretation, but ruled that the express terms of the statute compelled the result. Justice Alito, joined by Justice Thomas, dissented, accusing the majority of legislating from the bench, and arguing that the statute as passed by Congress in 1964 did not address sexual orientation, and that Congress should be the one to change the law. Justice Kavanaugh also dissented, arguing that judges are precluded from rewriting laws to fit their own policy views when Congress had tried, and failed, multiple times to do so itself.

A link to the opinion is here: https://www.supremecourt.gov/opinions/19pdf/17-1618_hfci.pdf

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SCOTUS Opinion: Court Strengthens Prison Litigation Reform Act’s “Three-Strikes Rule”

The Prison Litigation Reform Act of 1995 prevents a prisoner from bringing suit in forma pauperis (“IFP”) after having three or more prior suits dismissed for being frivolous, malicious, or failing to state a claim while he or she was imprisoned—called the “three-strikes rule.” Inmate Arthur Lomax sought IFP status in a fourth suit he brought as an inmate, which was dismissed by the district court because three prior suits he filed were dismissed for failure to state a claim. Lomax argued that two of those dismissals should not count because they were without prejudice.

In Lomax v. Ortiz-Marquez, the Court stepped in to resolve a decade-old split among the circuits on this issue, and unanimously held that the three-strikes rule applied whether the prior dismissals were with prejudice or not. Justice Kagan’s majority opinion noted that the plain language of the statute did not make any such distinction, and thus the Court, “[i]n line with our duty to call balls and strikes,” ruled that Lomax had “struck out.” The Court did note that if the district court granted an inmate leave to amend his or her complaint, that would not count as a strike, although Justice Thomas did not agree with that particular holding.

A link to the opinion is here: https://www.supremecourt.gov/opinions/19pdf/18-8369_3dq3.pdf

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SCOTUS Opinion: Court Declines to Preclude Nonsignatories from Being Able to Enforce Arbitration Provision

At the heart of GE Energy Power Conversion France SAS, Corp. v. Outokumpu Stainless USA, LLC is a construction contract with an arbitration clause. One of the signatories to that contract engaged a subcontractor to do part of that construction. When the subcontractor’s work allegedly failed, the owner sued the subcontractor. The subcontractor moved to dismiss the case and compel arbitration under the original contract’s arbitration clause, which the subcontractor never signed. The district court granted the motion, but the Eleventh Circuit reversed, holding that the Convention on the Recognition and Enforcement of Foreign Arbitral Awards precluded enforcement of an arbitration clause by a party that did not sign the agreement.

The Court, in a unanimous opinion by Justice Thomas, reversed, holding that the Convention was silent on enforcement by nonsignatories, and thus it did not conflict with common law equitable estoppel doctrines that permit such enforcement. The case was then remanded for consideration of how those estoppel principles affected the subcontractor’s request. Justice Sotomayor filed a concurring opinion arguing that the application of the estoppel doctrine “must be rooted in the principle of consent to arbitrate.”

A link to the opinion is here: https://www.supremecourt.gov/opinions/19pdf/18-1048_8ok0.pdf

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SCOTUS Opinion: Court Upholds Puerto Rico’s Financial Oversight and Management Board Against Appointments Clause Challenge

After Puerto Rico suffered a fiscal crisis starting in 2006, Congress enacted the Puerto Rico Oversight, Management, and Economic Stability Act, creating a Financial Oversight and Management Board that would be able to file bankruptcy on behalf of Puerto Rico or its instrumentalities, among other things, to regain financial stability. The members of the Board were to be appointed by the President without Senate advice and consent. President Obama appointed the Board members, and the Board thereupon filed bankruptcy petitions on behalf of Puerto Rico. Several creditors moved to dismiss, arguing that the Board members violated the Constitution’s Appointments Clause, and had to be subject to Senate review.

The First Circuit ruled for the creditors, and a unanimous Court, in Financial Oversight and Management Board for Puerto Rico v. Aurelius Investment, LLC, held that the Appointments Clause did not apply to the Board because the Board’s members were local officers vested with local duties, and not federal officers vested with the full powers of the national government. Justice Breyer’s opinion observed that the Board operated according to Puerto Rican law, not federal law, and it only represented the interests of Puerto Rico. Thus, as purely local officers, the Board’s members did not have to be vetted by the Senate. Justice Thomas concurred in the judgment, arguing that the Board members were not subject to the Appointments Clause because the members were not “Officers of the United States” as the term was originally understood. Justice Sotomayor also concurred in the judgment, arguing that the history of Puerto Rico’s home rule, and the agreements it forged with the United States, should have played a central role in the decision.

The opinion of the Court is here: https://www.supremecourt.gov/opinions/19pdf/18-1334_8m58.pdf

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SCOTUS Opinion: Motion to Amend Judgment in Habeas Proceeding is Not a Separate Habeas Petition

After Gregory Banister was sentenced to 30 years in prison in Texas state court, and after he had exhausted his appeals in the Texas courts, he filed a petition for habeas relief under the Antiterrorism and Effective Death Penalty Act of 1996, arguing, among other things, ineffective assistance of counsel. The district court denied the petition. Banister then filed a motion under Rule 59(e), requesting that the district court alter its judgment to fix “manifest errors of law and fact.” The district court denied the motion. Banister then appealed, but the Fifth Circuit dismissed the appeal as untimely, deciding that Banister’s Rule 59(e) motion was really a second habeas petition, making any appeal of the district court’s first habeas decision untimely.

Resolving a circuit split in Banister v. Davis, the Court, in a 7-2 opinion by Justice Kagan, reversed and remanded, holding that a Rule 59(e) motion does not count as a second habeas petition, and thus Banister’s original appeal was timely. The majority held that the motion to alter the district court’s judgment was not a collateral attack on that judgment, as a motion under Rule 60(b) would be. Justice Alito, joined by Justice Thomas, dissented, arguing that Banister’s Rule 59(e) motion was no different in substance than a Rule 60(b) motion, and should have been deemed as initiating a separate habeas proceeding.

A link to the opinion is here: https://www.supremecourt.gov/opinions/19pdf/18-6943_k5fm.pdf

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SCOTUS Opinion: Beneficiaries Receiving Full Benefits Have No Standing To Challenge ERISA Plan Governance

U.S. Bank maintains a retirement plan for its employees. Two of those beneficiaries, who had retired, were entitled to a fixed payment each month, and received every such payment. Regardless, they sued their former employer under the Employee Retirement Income Security Act of 1974, arguing that the plan had been mismanaged and should be re-payed about $750 million. The Eighth Circuit dismissed the case, holding that the beneficiaries had no Article III standing.

The Court, in a 5-4 opinion by Justice Kavanaugh, affirmed, holding that since the beneficiaries received their defined benefits, they had not “suffered an injury in fact” entitling them to relief. The majority also observed that, as defined benefit beneficiaries, the petitioners had no equitable or property interest in the plan in itself to provide standing. The Court also noted that petitioners had not argued that mismanagement was so egregious as to risk future nonpayment of their benefits. Justice Thomas, joined by Justice Gorsuch, filed a concurrence arguing that prior precedent regarding trusts unnecessarily complicate standing analysis for ERISA actions and should no longer be used. Justice Sotomayor, joined by Justices Ginsburg, Breyer, and Kagan, dissented, arguing that the beneficiaries’ interest in the plan’s integrity, and risk of future nonpayment, provided standing, along with the notion that the beneficiaries could sue on behalf of the plan itself, which was injured.

A link to the opinion in Thole v. U.S. Bank, N.A. is here: https://www.supremecourt.gov/opinions/19pdf/17-1712_0971.pdf

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SCOTUS Opinion: Court Enlarges Scope of Judicial Review of Orders Under the Convention Against Torture

Nidal Khalid Nasrallah received some stolen property, which made him eligible to be removed under federal immigration law. Nasrallah argued to the immigration court that he should not be removed to his home country of Lebanon under the Convention Against Torture because it was likely that, as a member of the Druze religion, he would be tortured upon his return. The immigration court held that Nasrallah was removable, but granted CAT relief as well. On appeal, the Board of Immigration Appeals vacated the grant of CAT relief and ordered Nasrallah removed to Lebanon. Nasrallah disputed the Board’s factual findings and appealed to the Eleventh Circuit, which held that federal immigration law precluded appellate courts from reviewing factual issues.

Resolving a split among the circuits on that issue, the Court, in a 7-2 opinion by Justice Kavanaugh, reversed, holding that federal appellate courts could review factual challenges to a CAT order. While federal law precludes judicial review of factual challenges pertaining to final orders of removal, the majority held that a CAT order was not such a final order and did not merge into a final order. The Court further held that such factual reviews are subject to a deferential standard and should only be overturned if a “reasonable adjudicator would be compelled to conclude to the contrary.” Justice Thomas, joined by Justice Alito, dissented, arguing that the plain language of the law required that CAT orders receive the same review standards as final orders.

A link to the opinion in Nasrallah v. Barr is here: https://www.supremecourt.gov/opinions/19pdf/18-1432_e2pg.pdf

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SCOTUS Opinion: Court Declines to Suspend COVID-19 Restrictions on Church Worship in California

The Governor of California issued an executive order to limit the spread of COVID-19, which in part limited attendance at places of worship to 25% of building capacity or 100 people, whichever is less. Several churches challenged that order, and asked the courts to enter an injunction staying its effect during the course of the litigation due to its First Amendment implications. On Friday, May 29, in a late-issued order, the Court denied the injunction request on a 5-4 vote.

Chief Justice Roberts filed a concurrence, stating that he believed the order proscribed similar restrictions to secular gatherings, and was more lenient only towards “dissimilar activities” like grocery stores. Thus, in his view, the order was likely “consistent with the Free Exercise Clause of the First Amendment,” and no injunction should issue. Justice Kavanaugh, joined by Justices Thomas and Gorsuch, filed a dissent, arguing that the secular exemptions from the 25% occupancy cap were discriminatory to religion, and thus violated the First Amendment, warranting an injunction. Justice Alito also dissented, but filed no opinion.

A link to the order in South Bay United Pentecostal Church v. Newsom is here: https://www.supremecourt.gov/opinions/19pdf/19a1044_pok0.pdf

| Christopher A. Glaser

Client Alert: District Court of the District of Columbia Denies Traditional Legal Defenses Raised by Title Companies

On May 22, 2020, the United States District Court for the District of Columbia issued an important decision denying an early motion to dismiss against a title company for its actions preceding a troubled transaction. The decision is significant in that the District Court denied each of the traditional legal defenses typically raised by title companies at such an early stage and effectively caused an apparently routine claim to survive until, at least, the costly summary judgment stage.

In Alex Yudzon v. Sage Title Group, LLC, Mr. Yudzon contracted to purchase a tenant-occupied property in the District of Columbia. Mr. Yudzon and the sellers hired Sage title to “serve as a settlement and escrow agent and title insurance issuing agency on the closing” and Sage Title provided the parties with its Scope of Work. The closing was completed notwithstanding that the proper forms pursuant to the Tenant Opportunity to Purchase Act (“TOPA”) were not filed with the District of Columbia beforehand. The failure to review the administrative record and ensure compliance with TOPA resulted in Mr. Yudzon being unable to collect rents or market the property for a period of three years. Mr. Yudzon filed suit against Sage Title alleging, inter alia, negligence and breach of contract.

Specifically, the District Court determined that Mr. Yudzon alleged Sage Title “had a duty to deliver clear, marketable, and insurable title, which included taking necessary steps to ensure the title was marketable, such as investigating whether the Sellers complied with the TOPA requirements” and, further, that Sage Title “should have known, through reasonable investigation, that the TOPA requirements were not satisfied.” The District Court held that, notwithstanding that the existence of a legal duty is a question of law, the question is more appropriately answered at the summary judgment stage and the allegations were sufficient to survive a motion to dismiss.

Similarly, the District Court held that the exchange of money for services and the provision of a Scope of Work by Sage Title could result in the creation of an implied contract to ensure that the TOPA requirements had been satisfied. Sage Title’s motion to dismiss was denied and it must now proceed through costly discovery to obtain those facts which support its contention that there was neither any contractual agreement or common law duty to ensure TOPA compliance.

Jackson & Campbell, P.C. represents title insurers and insureds in Maryland, Virginia, and Washington, D.C. and we strive to keep our clients and other title professionals up to date on various developments in the law. Additionally, we present no cost in-house updates of the nation’s most noteworthy cases and national trends following the spring and fall American Land Title Association’s Title Counsel meetings.

If you have any questions about this case or laws impacting real estate in and around the Washington, D.C. region, feel free to contact us. Our Real Estate Litigation and Transactions Practice Group is ready to assist.

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Client Alert: New York Assembly Bill Would Repeal State’s Healthcare Immunity Statute Passed in Wake of COVID-19 Citing Concerns Over Nursing Home Conduct

A New York Assemblyman has introduced a bill that would repeal Article D-30, Emergency or Disaster Treatment Protection Act of the New York Public Health Law, which was enacted on April 2, 2020, and provides health care facilities, health care providers, and volunteer organizations from immunity from civil or criminal liability for harm or damages sustained as a result of COVID-19.

Pursuant to Article 30-D, any health care facility or health care professional will have immunity from civil or criminal liability for any harm or damage alleged to have been sustained as a result of an act or omission in the course of arranging for or providing health care services so long as:

  • the health care facility or professional is arranging for or providing health care services pursuant to a COVID-19 emergency rule, as defined, or otherwise in accordance with applicable law;
  • the act or omission occurs in the course of providing health care services and treatment of individual is impacted by the health care facility or professional’s decisions or activities in response to or as a result of the COVID-19 outbreak and in support of the state’s directives;
  • the health care facility or professional is arranging for or providing health care services in good faith.

Additionally, volunteer organizations are immune from civil or criminal liability for harm or damages irrespective of the cause of the harm or damage occurring in or at its facility or facilities arising from the state’s response and activities under the COVID-19 emergency declaration and in accordance with any applicable COVID-19 emergency rule.

The immunity for health care professionals, facilities, and volunteer organizations will not apply if the harm or damage is caused by an act or omission constituting willful or intentional criminal conduct, gross negligence, reckless misconduct, or intentional infliction of harm by the health care facility or professional providing health care services or by the volunteer organization. However, acts, omissions or decisions of health care professionals or facilities resulting from resource or staffing shortages are not considered willful or intentional criminal misconduct, gross negligence, reckless misconduct, or intentional infliction of harm.

Article 30-D is effective from March 7, 2020 to the expiration date of the COVID-19 emergency declaration, to be determined by Governor Cuomo. The law was drafted by the Greater New York Hospital Association, which lobbies for hospitals and nursing homes, and goes further than most states in that it provides immunity for both civil and criminal liability with or without a COVID-19 or presumptive COVID-19 diagnosis.

Assembly Bill No. A10427, introduced by Assemblyman Ron Kim, would repeal the entirety of Article 30-D, citing as justification that negligence by administrators and executives of nursing homes has occurred at an extraordinary degree, and that Article 30-D “egregiously uses severe liability standards” as a means to insulate health care facilities, and specifically, administrators and executives of such facilities, from any civil or criminal liability for negligence. The bill further states that nearly 5,000 elderly and vulnerable residents have succumbed to COVID-19 in New York nursing homes, with zero accountability or transparency for the deaths. While the bill identifies concerns over nursing homes, the current text of the bill repeals the entirety of New York’s immunity provision, which would leave all health care providers, facilities, and volunteer organizations open to the threat of medical malpractice litigation. As currently written, the bill does not contain a retroactive repeal, so Article 30-D could arguably remain an effective bar to medical malpractice claims from March 7, 2020 until passage of the repeal. In a state that has seen at least 353,000 positive cases and 22,843 deaths, that potential protection is not insignificant.

The concern over nursing home conduct is not specific to New York, however. Industry advocate groups across the country are echoing the same sentiments. To date, at least 20 states have granted immunity provisions to protect health care providers and facilities from liability for COVID-19 related injuries or death, either through laws or executive orders, and many of those protect nursing homes and long-term care facilities from the same liabilities. Nursing homes were the site of some of the first major COVID-19 outbreaks in March, and nursing homes’ residents and staff have borne a heavy load of the pandemic’s burden, particularly because the virus appears to disproportionately affect the elderly and those with pre-existing conditions. Deaths in long-term care facilities now make up at least one third of the COVID-19 fatalities.

Nursing homes argue that the legal protections are necessary for staff, who have become first responders, to do their jobs as the pandemic has created an unprecedented burden in caring for the high-risk population. The CEO of the American Health Care Association (AHCA), which represents for-profit nursing homes, said in a statement that “[l]ong term care workers and centers are on the frontline of this pandemic response and it is critical that states provide the necessary liability protection staff and providers need to provide care during this difficult time without fear of reprisal.”

The New York Assembly bill, with 13 co-sponsors, is still in the early stages of consideration. Whether and to what extent the bill gains traction in New York, or starts a ripple effect of similar legislation across the country, it yet to be seen.

For information regarding other states’ enacted healthcare immunity provisions, please visit Jackson & Campbell’s Blog here, which is being periodically updated. For other legal developments related to the COVID-19 pandemic, visit the COVID-19 section of Jackson & Cambell’s Blog.

This summary is not intended to contain legal advice or to be an exhaustive review. If you have any questions regarding this article, please contact Annette P. Rolain or another member of Jackson & Campbell’s Insurance Coverage Practice Group.

| David L. Kelleher

Client Alert: OSHA Changes Guidance for Reporting Cases of Coronavirus (COVID-19) in the Workplace

On May 19, the Occupational Safety and Health Administration announced changes to its previously issued guidance on reporting COVID-19 in the workplace, effectively reversing its six-week old policy which allowed a lesser standard of inquiry for employers outside the health care industry, emergency response organizations and correctional institutions. OSHA’s new guidance demands that all employers conduct investigations of all COVID-19 cases. OSHA further now requires employers to take into account “all reasonable available evidence” when determining whether a COVID-19 case is work-related, and specifically warns employers that the determination must be case-by-case and “cannot be reduced to a ready formula ….”

OSHA’s new guidance, which is effective May 26, is entitled Revised Enforcement Guidance for Recording Cases of Coronavirus Disease 2019 (COVID-19) and can be found here or at osha.gov. OSHA’s previous guidance issued April 10, and highlighted in Jackson and Campbell’s Blog on May 13, is superseded by the new guidance.

What Has Not Changed —

Elements of OSHA’s prior guidance have not changed.

COVID-19 in the workplace still is a recordable illness and must be reported in accordance with OSHA’s general regulatory requirement governing injuries and illness in the workplace.

OSHA’s reporting requirement for COVID-19 cases still is confined to (1) a confirmed COVID-19 case, as defined by the Center for Disease Control and Prevention; (2) which are determined work-related; and (3) which involve one or more of the general reporting criteria.[1]

What Has Changed —                                                              

The revisions to OSHA’s guidance are significant.

First, OSHA will no longer suspend enforcement of the requirement for employers outside the health care industry, emergency response organizations and correctional institutions, to make fact-based determinations of the work-relatedness of COVID-19 cases. All employers will be required to conduct a reasonable, good faith investigation into the work-relatedness of all COVID-19 cases.

Second, OSHA no longer will allow employers to base work-relatedness determinations on “objective evidence,” as stated in prior guidance. Investigations now must take into account all reasonably available information. At minimum, OSHA now requires (1) asking the employee how she believes she contracted the illness; (2) discussing with the employee, while still respecting her privacy, her work and out-of-work activities that might have lead to the illness; and, (3) a review of the employee’s work environment for potential COVID-19 exposure, including other instances of COVID-19 illness.

OSHA makes clear, however, that the minimum rarely will be sufficient. OSHA expects employers also to consider such matters as the general rate of community spread or lack of spread, statements of public health officials, media reports, industry reports, and any available medical information relevant to the individual’s health and exposure.

Third, OSHA provides the following examples of how certain information, without alternative explanations, should be outcome-determinative of the employer’s investigation:

  • COVID-19 illness is likely work-related when several cases among workers develop who work closely together and there is no alternative explanation.
  • COVID-19 illness is likely work-related if it is contracted shortly after lengthy, close exposure to a particular customer or coworker who has a confirmed case of COVID-19 and there is no alternative explanation.
  • COVID-19 illness is likely work-related if the employee’s job duties include frequent, close exposure to the general public in a locality with ongoing community transmission and there is no alternative explanation.
  • COVID-19 illness likely is not work-related if the employee is the only worker to contract COVID-19 in her vicinity and her job duties do not include having frequent contact with the general public, regardless of the rate of community spread.
  • COVID-19 illness likely is not work-related if the employee, outside the workplace, closely and frequently associates with someone (e.g., a family member, significant other, or close friend) who (i) has COVID-19; (ii) is not a coworker, and (iii) exposes the employee during the period in which the individual is likely infectious.

Fourth, OSHA makes clear that the employer’s determination is based on a “more likely than not” standard. Only when, after conducting the reasonable and good faith inquiry demanded by OSHA’s guidance, the employer cannot determine whether it is more likely than not that exposure in the workplace played a causal role with respect to a particular case of COVID-19, is the employer exempt from reporting that COVID-19 illness. Even then, OSHA reminds employers that they must respond appropriately to protect other workers in the workplace.

It is plain that the range of information which employers must consider will change over time, and from time to time, and therefore will allow OSHA ample space for second-guessing employer judgments. Employers are well advised to develop a flexible checklist of factors to consider when making work-relatedness determinations and to maintain a complete record of the decision-making process to demonstrate the reasonableness of the employer’s investigation, the employer’s ultimate decision on work-relatedness, and the employer’s steps to protect other workers.

This summary is not intended to contain legal advice or to be an exhaustive review. If you have any questions regarding this article, please contact David L. Kelleher at Jackson & Campbell, P.C.

 

[1] See 29 CFR 1904 and Jackson & Campbell’s Client Alert issued May 13, 2020.

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SCOTUS Opinion: Republic of Sudan Exposed to $4.3 Billion In Punitive Damages

Victims of an al Qaeda terrorist attack sued the Republic of Sudan under the Foreign Sovereign Immunities Act, which carved a specific exception under 28 U.S.C. sec. 1605(a)(7) for states that sponsored terrorism. When the victims filed suit, Section 1605(a)(7) did not permit recovery of punitive damages. Then In 2008, Congress amended FSIA through the National Defense Authorization Act, which moved Section 1605(a)(7) to 1605A(c) and permitted punitive damages for claims under the new section, and in Section 1803(c)(3) permitted those who filed under the old section to file under the new section. The victims amended their complaint and were awarded $4.3 billion in punitive damages in addition to compensatory damages. On appeal, the D.C. Circuit vacated the punitive damages award because nothing in the NDAA expressly authorized punitive damages for pre-enactment conduct, and further ruled that punitive damages were unavailable for state-based claims because it would be “puzzling” if punitive damages were available for one and not the other.

In Opati v. Republic of Sudan, Justice Gorsuch entered a unanimous opinion (without Judge Kavanaugh, who recused) vacating and remanding the case, holding that plaintiffs who filed claims under the new section created by the NDAA could seek punitive damages for pre-enactment conduct. The Court found Congress’ language in the new Section 1605A(c) clearly applied to claims for pre-enactment conduct and made its relief retroactive in application. The Court then remanded for further consideration of whether punitive damages were available under the state claims as well.

A link to the opinion is here: https://www.supremecourt.gov/opinions/19pdf/17-1268_c07d.pdf

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SCOTUS Opinion: Court Refines Defense Preclusion Doctrine In Trademark Suit

Lucky Brand Dungarees, Inc. sells clothing using trademarks involving the word “Lucky.” Marcel Fashions Group, Inc. received a federal trademark for “Get Lucky,” and used that to sell their own clothing line. Inevitably, decades of litigation ensued between the two groups as they each defended their respective “Lucky” turf. In the first round of litigation, the parties signed a settlement agreement in which Lucky Brand agreed not to use “Get Lucky,” while Marcel released their claims on Lucky Brand’s other trademarks. In the second round, Lucky Brand alleged that Marcel was copying their designs and logos, and Marcel counterclaimed that Lucky Brand was using “Get Lucky.” Lucky Brand responded at first that the settlement resolved those counterclaims but did not press the defense and was ultimately enjoined from using “Get Lucky.” In the third round, Marcel sued again, alleging that Lucky Brand’s use of their other “Lucky” trademarks infringed upon Marcel’s “Get Lucky” mark. Lucky Brand again raised the settlement agreement, and this time won a dismissal.

The Second Circuit reversed, holding that Lucky Brand was precluded from raising the settlement agreement defense since it failed to litigate it fully in the second round. Resolving a split among the circuits as to when claim preclusion applies to defenses raised in subsequent suits, the Court, in a unanimous decision by Justice Sotomayor, reversed, holding that Lucky Brand could raise its defense because the claims in the third suit were different than those in the second suit. The court clarified that for defense preclusion to apply, there must be a “common nucleus of operative facts.” Here, there was no such common nucleus, since the third suit involved different marks and conduct. Accordingly, Lucky Brand could raise the settlement agreement as a defense, which already prevailed below. A link to the decision in Lucky Brand Dungarees, Inc. v. Marcel Fashions Group, Inc. is here:

https://www.supremecourt.gov/opinions/19pdf/18-1086_5ie6.pdf

| Christopher A. Glaser

The Court of Appeals of Maryland Clarifies a Receiver’s Ability to Sell Real Property

Similar to other businesses that are slowly beginning to reopen, the appellate courts are increasing the amount of decisions being issued. On May 12, 2020, the Court of Appeals of Maryland issued an important decision which reversed the intermediate appellate court and clarified a receiver’s ability to sell real property.

In Mayor and City Council of Baltimore v. Prime Realty Associates, LLC, the City of Baltimore initiated a receivership action against Prime Realty. The City sought to serve Prime Realty’s registered agent with the petition but was unable to locate him as he had moved and did not properly update his address. The agent had attempted to update his address to a post office box, but this request was rejected by the State Department of Assessments and Taxation (“SDAT”). After these failed attempts, the City made substitute service on the SDAT, Prime Realty’s designated agent pursuant to the Maryland Rules. During the receivership action, real property owned by Prime Realty was sold to a third party and the trial court ratified the sale. Prime Realty moved to vacate the sale after ratification, claiming that it was not served with the petition and that the decision was therefore void on due process grounds.

The trial court disagreed with Prime Realty but, on the first level of appeal, the intermediate appellate court agreed that Prime Realty’s due process rights were violated as the City had actual knowledge of a potential alternative address for the agent. The intermediate appellate court vacated the sale. Importantly, the intermediate appellate court’s action potentially jeopardized the title of other receivership sales as a claim of non-service is not time-barred by any Maryland statute.

The Court of Appeals examined the history of the substituted service rules, first enacted in 1937, and noted that they had not been previously challenged on due process grounds. Nowhere in the prior versions of the statute or rules, nor in the legislative histories, appeared any burden to look behind the appointment of SDAT as an agent. The Court of Appeals noted that it was Prime Realty’s burden to maintain the current address of its agent and failing to do so did not result in a due process violation. The intermediate appellate court erred in invalidating the sale, and the ratification by the trial court was affirmed.

Jackson & Campbell, P.C. represents title insurers and insureds in Maryland, Virginia, and Washington, D.C. and we strive to keep our clients and other title professionals up to date on various developments in the law. Additionally, we present no cost in-house updates of the nation’s most noteworthy cases and national trends following the spring and fall American Land Title Association’s Title Counsel meetings.

If you have any questions about this case or laws impacting real estate in and around the Washington, D.C. region, feel free to contact us. Our Real Estate Litigation and Transactions Practice Group is ready to assist.

| Mitchell B. Weitzman

COVID-19: District of Columbia Emergency Legislation Providing for Payment Plan Application Process and Rental Increase Restrictions Under Retail Leases

On May 13, 2020, the “Coronavirus Omnibus Emergency Amendment Act of 2020” was approved by District of Columbia Mayor Muriel Bowser which imposed new requirements upon landlords and tenants under residential and commercial retail leases, as well as touching upon many other areas of District of Columbia law including, but not limited to, alcohol beverage regulation, cooperative association remote meetings, building amenity fees, third party food delivery commissions, and credit reporting. This posting focuses on retail lease requirements that may be surprising to retail landlords and tenants.

Section 8 of the Act prescribes in detail rental payment plans to be made available to “eligible tenants.” That status requires, among other things, that a tenant demonstrate financial hardship resulting directly or indirectly from the public health emergency. Section 8 sets forth in detail the application process, requires landlords to notify tenants of the availability, terms and application process with respect to this program, and contains governmental reporting requirements. Section 8 prescribes payment limitations and requires landlords to make the application process available online and by telephone. Section 8 shall be “in effect during a period of time for which the Mayor has declared a public health emergency pursuant to section 5a of the District of Columbia Emergency Act of 1980… and for one year thereafter” in connection with the current pandemic. This Act follows earlier emergency legislation still in effect, that requires all commercial (not confined to retail) and residential landlords who obtained deferrals under their mortgages to grant tenants proportionate deferrals, with tenant repayment allowed with no interest over an 18 month period or earlier upon expiration of the lease term (see Section 202(g) of the COVID-19 Response Supplemental Emergency Amendment Act of 2020”). Landlords are advised to review all provisions of these emergency laws to ensure compliance.

Section 9 of the Act clarifies that rental increase prohibitions imposed by prior emergency legislation are confined to commercial “retail” leases. Section 10 of the Act prohibits the filing of landlord-tenant suits “during a period of time for which the Mayor has declared a public health emergency… and for 60 days thereafter.” This prohibition is quite broad and differs from the approach taken in Maryland and Virginia, which permit new filings but have extended hearing dates. Finally, Section 29 of the Act provides that it shall “apply as of March 11, 2020,” so is retroactive to that date.

This summary is not intended to contain legal advice or to be an exhaustive review. If you have any questions regarding this article, please contact Mitchell Weitzman at Jackson & Campbell, P.C.

 

| David L. Kelleher

Client Alert: OSHA Issues Guidance for Reporting Cases of Coronavirus (COVID-19) in the Workplace

Please Read: As of May 26, 2020, OSHA’s revised enforcement guidance is in effect and the below information may be outdated. Please see Mr. Kelleher’s detailed analysis of what has changed in the new guidance here.

The Occupational Safety and Health Administration recently confirmed that COVID-19 in the workplace is a recordable illness and must be reported to the government in accordance with OSHA’s general regulatory requirements governing injuries and illness in the workplace. OSHA also published interim enforcement guidance to assist employers in meeting the reporting requirements for COVID-19 cases.[1]

OSHA’s guidance is especially important and timely. Most employers in the United States are exempt from OSHA’s general reporting requirements and may be unfamiliar with what needs to be reported and when. In addition, many employers will face difficulty determining when a COVID-19 case is work-related, particularly in areas of community spread.

In an effort to clarify the employer’s responsibility, OSHA announced five factors that trigger the reporting requirement for a COVID-19 case:

  1. The case is confirmed as COVID-19, as defined by the Center for Disease Control and Prevention, i.e., at least one respiratory specimen tested positive for SARS-CoV-2.
  2. The case is work-related, as defined by 29 CFR 1904.5. Generally, an illness is work-related if an exposure in the work environment caused or contributed to the condition, but OSHA recognizes many employers may have difficulty making this determination for cases of COVID-19 in areas of community transmission.

Therefore, OSHA has partially suspended enforcement of this requirement. Until further notice, employers – except for employers in the health care industry, emergency response organizations and correctional institutions which must continue to make workplace-relatedness determinations – are required to make a work-related determination only where:

    1. There is objective evidence that a COVID-19 case may be work-related, such as when a number of cases develop among workers who work closely together without an alternative explanation; and
    2. The objective evidence is reasonably available to the employer, including information given to the employer by employees, as well as information that an employer learns regarding its employees’ health and safety in the ordinary course of managing its business and employees.
  1. The case involves one or more of the general reporting criteria in Section 1904.7 (the criteria for most employers is a fatality, in-patient hospitalization, amputation or loss of an eye.)[2]

OSHA hopes that publication of this enforcement policy helps employers focus their efforts on implementing recommended hygiene practices and other COVID-19 mitigation efforts in the workplace, rather than on making difficult reporting and work-relatedness decisions.

[1] OSHA’s guidance on the reporting requirements for COVID-19 is entitled Enforcement Guidance for Recording Cases of Coronavirus Disease 2019 (COVID-19) and can be found here or at osha.gov.

[2] 29 CFR 1904.1 and 1904.2.

This summary is not intended to contain legal advice or to be an exhaustive review. If you have any questions regarding this article, please contact David L. Kelleher at Jackson & Campbell, P.C.

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SCOTUS Opinion: Court Curtails Ninth Circuit’s Digression from Issues Presented By the Parties

Evelyn Sineneng-Smith was convicted of violating 8 U.S.C. sec. 1324(a)(1)(A)(iv) for “encouraging or inducing an alien to come to, enter, or reside in the United States, knowing or in reckless disregard of the fact that such . . . is or will be in violation of the law,” and of sec. 1324(a)(1)(B)(i) for doing so “for the purpose of commercial advantage or private financial gain,” when she charged her immigration clients to file applications for a program that had long expired. On appeal to the Ninth Circuit, Sineneng-Smith argued that she did not violate the statutes as written, and that the provisions violated the Petition Clause and Free Speech Clause of the First Amendment as applied. The Ninth Circuit, on its own, decided to consider whether the statute was overbroad under the First Amendment, an argument that Sineneng-Smith never raised, and went on to hold that it was unconstitutionally overbroad.

In United States v. Sineneng-Smith, the Court, in a unanimous opinion by Justice Ginsburg, reversed, admonishing the Ninth Circuit for its “drastic departure from the principle of party presentation” of cases. The Court held that there were no “extraordinary circumstances” that justified the Ninth Circuit panel’s takeover of the issues of the appeal. It was up to the parties to frame the issues for the court to decide. The case was sent back for reconsideration absent the overbreadth inquiry added by the Ninth Circuit. Justice Thomas filed a lone concurrence to argue that the Court’s overbreadth doctrine has no basis in the text or history of the First Amendment and should be reconsidered.

A link to the opinion is here: https://www.supremecourt.gov/opinions/19pdf/19-67_n6io.pdf

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SCOTUS Opinion: Controversial Bridge Lane Closures by Gov. Christie’s Campaign Not Fraud

When the mayor of Fort Lee, N.J. refused to support Gov. Chris Christie’s 2013 re-election campaign, the campaign decided to punish the mayor by shutting down two of the three lanes on the George Washington Bridge that were reserved for Fort Lee commuters into New York under the guise of a “traffic study.” That resulted in four days of gridlock before the scheme was stopped. Two members of Gov. Christie’s campaign who implemented the plan were convicted by a jury of wire fraud, fraud on a federal entity, and conspiracy to commit fraud, and the convictions were affirmed by the Third Circuit.

However, the Court, in a unanimous opinion by Justice Kagan, vacated and reversed, holding that what the campaign operatives did was an “exercise of regulatory power,” not fraud. To be fraud, the prosecution had to prove that the operatives were trying to obtain property as the object of the fraud. No such property was ever obtained. The operatives did not seek to obtain use of the lanes themselves, and did not obtain for their personal use the time and labor of the government employees who shut down the lanes. Therefore, although what the operatives did demonstrated “deception, corruption, [and] abuse of power,” it was not fraud, and thus the convictions could not stand.

A link to the opinion in Kelly v. United States is here: https://www.supremecourt.gov/opinions/19pdf/18-1059_e2p3.pdf

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Client Alert: Maryland Governor Larry Hogan Authorizes Remote Witnessing for Estate Planning Documents

Maryland Governor Larry Hogan has passed emergency Executive Order Number 20-04-10-01, which facilitates the execution of estate planning documents by allowing remote witnessing through video-conferencing. This Executive Order is a follow up to Executive Order 20-03-30-04 which authorized remote notarization of estate planning documents.

This temporary legislation suspends the traditional in-person witnessing requirement for Wills, Advance Medical Directives, and Financial Powers of Attorney, subject to the following requirements:

  • The signer must be a Maryland resident or physically located in Maryland at the time of signing;
  • Each remote witness must be a Maryland resident, physically located in the United States;
  • The signer, witnesses, and a Maryland licensed-attorney (who cannot serve as a witness) must be in the physical presence of one another or able to see and communicate with one another electronically;
  • The signer and witnesses must physically or electronically sign one or more counterparts of the same document at that time; and
  • After execution of the documents, the supervising attorney must prepare a certified copy of each document (which shall be deemed the original), containing each signature page of the signer and witnesses, and prepare a certification of compliance with the above requirements.

The Executive Order does not extend remote witnessing to Trusts. Although Trusts executed without witnesses are still valid under Maryland law, we strongly recommend that witnesses be utilized to ensure that the Trust will not be challenged at a later date. For clients who need to execute Trusts during the current crisis, we recommend that the Trust be re-executed, observing all ordinary formalities, once the virus has subsided.

The Executive Order will remain in effect for the duration of the COVID-19 State of Emergency. However, we have been informed that the Maryland State Bar Association Trusts and Estates Section has drafted emergency legislation designed to sustain remote witnessing after the expiration of the Executive Order. This legislation will either be introduced during the 2020 Special Session of the General Assembly (if not delayed or postponed), or in the next Regular Session in January 2021.

The District of Columbia continues to permit Wills to be witnessed and notarized remotely. Virginia has not yet authorized remote or electronic execution of any estate planning documents. Despite these limitations, our attorneys and staff are working diligently to ensure that clients are able to obtain the documents they need to protect their families and their assets – whether it be through remote execution or other means. For more information regarding your estate planning questions or concerns, please contact the author of this article Jamie K. Blair or any member of our Trusts and Estates Practice Group.