All posts by Troy Moody

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SCOTUS Opinion: “Safe-Berth” Clause In Maritime Contract Creates A Warranty of Safety

In Citgo Asphalt Refining Company v. Frescati Shipping Company, a punctured hull in a tanker caused a huge oil spill, which the owner of the tanker and the United States then paid millions to clean up. Those parties then sued the groups who chartered the tanker to recover those costs under a clause in the maritime contract that required the lessors to select a “safe” berth that would allow the tanker to be “always safe afloat.” The Third Circuit held that the clause created a warranty of safety, which imposed liability regardless of whether the lessors were diligent, while other circuits held that such clauses merely imposed a requirement of diligence.

The Court, in a 7-2 opinion by Justice Sotomayor, held that “safe-berth clauses” are warranties, reasoning that the plain language of the clause created an absolute duty to keep the ship “free from harm or risk.” The Court acknowledged that the parties to the contract could have limited the scope of that warranty, but there was no language to that effect in the given contract. Justice Thomas, joined by Justice Alito, argued that the language of the clause did not plainly indicate a warranty, and that the case should be remanded for factfinding as to whether such a warranty was part of the industry’s custom and usage. A link to the opinion is here: https://www.supremecourt.gov/opinions/19pdf/18-565_3d93.pdf

| Mitchell B. Weitzman

Client Alert: The Impact of COVID-19 on Commercial Leases – Force Majeure and Curtailed Court Operations

The COVID-19 pandemic has impacted the ability of many businesses to satisfy payment and other obligations under leases and other contracts.  As tenant income has precipitously dropped over the past few weeks, often as a result of government mandated closures or restrictions on operations, landlords and tenants are taking a hard look at “force majeure” provisions in leases.  First and foremost, clients should be aware that in all jurisdictions, the courts are expected to follow the express provisions in a lease, and this is especially so in the commercial context.  A sampling of office and retail  leases shows that these provisions nearly always list the types of events that will excuse performance and they often carve-out the payment of rent from the obligations excused. In other words, these provisions may suspend non-monetary obligations for the duration of the triggering event, such as construction, remaining open, operating, and the like – but not payment.   An illustrative provision states:

If either party shall be delayed or hindered in or prevented from the performance of any non-monetary act required hereunder by reasons of strikes, labor troubles, inability to procure labor or materials, failure of power, restrictive governmental laws, riots, insurrection, war, Acts of God, fire or other casualty, or other reason of similar or dissimilar nature beyond the reasonable control of the party delayed, then performance shall be excused for the period of the delay and the period for the performance of any such act shall be extended for a period equivalent to the period of such delay.  The provisions of this Section shall not operate to excuse Tenant from the prompt payment of rent or any other payments required by the terms of this Lease and shall not operate to delay or extend the term of the Lease.

Another provision states, “delays or failures to perform resulting from lack of funds shall not be deemed delays beyond the reasonable control of either party.”  One retail lease force majeure provision excused or suspended all of a tenant’s obligations except payment of rent and opening for business on the commencement date.  Clients must examine the force majeure provision in their leases to see if it provides for a temporary abatement of rent during the triggering event.  Businesses are just starting to file suits to determine whether the force majeure provisions in their leases abate rent.  Due to COVID-19, a tenant operating a large high-end shops and parking facility in New Orleans, with monthly rent of $580,000, filed suit last week seeking to abate rent under its force majeure provision, which provided for abatement of minimum rent in certain circumstances, including “for an Act of God beyond the reasonable control of the tenant.”  The court has not yet issued a ruling.

Some force majeure provisions benefit only one side – for instance, another provision expressly applied only to a landlord’s inability to perform and suspended only its obligations.   Some force majeure provisions might exclude virus outbreaks or other events as triggering occurrences and the courts would be expected to follow the provisions.  In addition, two other principles relating to these provisions are:  (1) force majeure provisions must actually be included in the lease – they must be express and are not implied into the lease by the courts; and (2) a party faces the risk of waiving such provisions if not timely invoked.  Parties should give prompt and factual notice to each other if they intend to rely on these provisions.

This blog does not discuss the separate legal principles of impossibility, commercial impracticability or frustration of purpose, which parties to a lease may argue suspend or cancel obligations due to the pandemic or government-mandated closings. The courts would then be required to determine if these theories are available, or precluded, when an express force majeure provision addressing the circumstances is contained in a lease.

It seems likely that parties to leases will be exploring temporary workouts during this extraordinary circumstance that has affected all aspects of the economy.

In response to the COVID-19 outbreak, the local jurisdictions have issued emergency declarations and orders suspending routine, non-emergency court proceedings, certain deadlines, execution of eviction writs and limiting courthouse functions.  These orders are regularly being updated and extended, and currently cover most of April 2020 in the three area jurisdictions.

Jackson & Campbell, P.C. represents many regional commercial real estate development and management firms, as well as businesses that lease space as tenants.

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.

| Christopher A. Glaser

Client Alert: Important Decisions Limiting a Carrier’s Duty to Defend

In difficult times, it is good to see courts continuing with their dockets and issuing favorable decisions for the industry.  On March 23, the United States District Court for the District of Columbia issued a very important decision limiting a carrier’s duty to defend.

In Security Title Guarantee Corp. of Baltimore v. 915 Decatur St NW, LLC, Decatur 915 alleged that it received a deed on December 7, 2016 executed by Bridget Fordham and, on December 8, 2016, transferred the property to Claremont Management.  The two deeds were recorded on December 15, 2016, two minutes apart.  In October 2017, Ms. Fordham filed suit against Decatur 915, Claremont Management, and others, alleging that her signature had been forged and that the December 7 deed was void.  Ms. Fordham’s lawsuit alleged trespass to title, trespass for mesne profits, unconscionability, negligence and conversion of personal property.

Decatur 915 made a claim on its title insurance policy.  The title insurer filed a declaratory judgment action seeking a determination that it had neither a duty to defend, nor a duty to indemnify.  The insurer essentially alleged that the claims made by Ms. Fordham did not qualify as covered risks, as Decatur 915 had transferred its interest before the claims were made, and that the risks were otherwise excluded.

The Court recognized that Decatur 915’s transfer of the property meant that coverage ended once title passed, but, nevertheless that coverage would continue for covered claims if the claims were premised on loss or damage incurred during the coverage period.  Ms. Fordham’s claims of trespass for mesne profits and conversion of personal could, arguably, result in damages which would have been suffered during Decatur 915’s possession of the property and, thus, were within the time period of coverage.  However, neither of these two claims related to defects in or encumbrances on the title, and—even if they did—each fell under the “created, suffered, assumed, or agreed to” exclusion.  The Court held that the insurer had no duty to defend.

This decision is a significant one, as it resolved continuation of coverage issues not previously addressed in the District of Columbia.  Importantly, however, while there was no duty to defend, this coverage case continues in order to resolve the question of indemnification.  The Court held that such a decision would only be reached once the underlying litigation had resolved.

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: Internal Revenue Service Suspends Certain Collection Actions

On March 25, 2020, the Internal Revenue Service (“IRS”) introduced its “People First Initiative” in which it will suspend certain tax collection activities currently ongoing and limit the number of new collection actions.  These limitations will run initially from April 1, 2020, through July 15, 2020.  The implication from the IRS is that the July 15th end date will be re-evaluated to assess the impact of COVID-19 at that time.  The IRS News Release, IR-2020-59, provides an overview of the program with more specific information coming soon.

The IRS’ overview includes the following broad principles:

  • Taxpayers currently on installment payments are excused from making payments from April 1 through July 15, 2020.
    • If payments are by direct-debit, taxpayers must request to have those payments suspended.
    • The IRS will not terminate the installment agreement for nonpayment.
      • However, interest will continue to accumulate on the unpaid balance.
    • The IRS will generally not start new tax examinations, unless the applicable statute of limitations is about to expire (generally three years from the date the tax was assessed/return filed).
    • All in-person meetings for any reason are suspended, but taxpayers are still encouraged to comply with requests for information that may be satisfied by transmitting documents, whether by mail, fax, or email.
    • Offers in Compromise:
      • Taxpayers are allowed until July 15, 2020, to provide any additional information that has been requested.
      • The IRS will not close any pending OIC requests before July 15, 2020, without the taxpayer’s consent.
      • Taxpayers may suspend all payments on accepted OICs until July 15, 2020.
    • Liens and levies (including seizures of personal residences) are suspended through July 15, 2020.
      • This includes automated liens/levies.

The IRS will provide more detailed guidance in the coming days.  The key principle is that if you are involved in an IRS Collection activity and have payments due, those payments are suspended through at least July 15, 2020.

Please contact Nancy Ortmeyer Kuhn at nkuhn@jackscamp.com if you have additional questions.

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Client Alert: Order of the Governor of the State of Maryland, Number 20-03-23-01

Governor Hogan issued an order on March 23 updating his office’s order of March 19 prohibiting large gatherings and closing certain facilities and non-essential businesses.  The amended order urges Marylanders to stay home and asks employers to adopt work-from-home policies.  It is not, however, a shelter-in-place order.

The amended order provides a non-exhaustive list of essential businesses that are not required to close.  Those essential businesses include certain companies in the following industries:

  •  Chemical sector.
  •  Commercial facilities sector.
  •  Critical manufacturing sector.
  •  Defense industrial base sector.
  •  Emergency services sector.
  •  Energy sector.
  •  Financial services sector.
  •  Food and agriculture sector.
  •  Government facilities sector.
  •  Healthcare and public health sector.
  •  Information technology sector.
  • Transportation systems sector.
  • Water and wastewater systems sector.
  • Firms providing staffing/payroll services or essential raw materials, products, or services to any businesses in the federal critical infrastructure sectors.

The order expressly mandates the closure of certain businesses, including casinos, racetracks, enclosed malls, and certain recreational and retail establishments.  To honor the social distancing guidelines issued by the CDC, the order also prohibits door-to-door solicitation – even when done by businesses that are otherwise permitted to remain open.

This summary of the Interpretive Guidance issued by the Office of Legal Counsel of Governor Larry Hogan regarding the Order of the Governor of the State of Maryland, Number 20-03-23-01, dated March 23, 2020 is not intended as legal advice.  For specific guidance, please contact the author, Erica Litovitz, Esq., or another member of Jackson & Campbell’s Employment Group.

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SCOTUS Opinion: Courts May Consider Whether Deadline To Contest A Removal Order Has Been Equitably Tolled

When the Government has ordered that an immigrant be removed from the country for committing certain crimes, the Immigration and Nationality Act allows judicial review only on “constitutional claims or questions of law.” In Guerrero-Lasprilla v. Barr, two such immigrants sought appellate review of their removal orders based on whether their motions to reopen their removal proceedings were untimely or if the usual 90-day deadline had been equitably tolled. The Fifth Circuit denied relief, holding that it lacked jurisdiction to review the “factual” consideration of whether they were eligible for tolling.

The Court, in a 7-2 ruling authored by Justice Breyer, reversed, holding that the phrase “questions of law” included determining whether a set of settled facts met a legal standard—here, whether the immigrants’ actions constituted due diligence that would permit tolling. The majority also determined that other provisions of the Act also indicated that Congress understood “questions of law” to mean applying the law to established facts. Justice Thomas, joined by Justice Alito, dissented, arguing that the majority’s holding “effectively nullifies a jurisdiction-stripping statute, expanding the scope of judicial review well past the boundaries set by Congress.” A link to the opinion is here:

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SCOTUS Opinion: Civil Rights Plaintiffs Must Prove But-For Causation

For years, Entertainment Studios Network, an African-American owned company, sought to have Comcast Corp. carry its channels. Comcast refused and ESN sued, alleging racial discrimination under 42 U.S.C. § 1981. ESN alleged that Comcast’s legitimate business reasons for refusing to carry ESN channels were pretextual. The district court dismissed the complaint, holding that ESN had failed to allege but-for causation based on racial animus. The Ninth Circuit reversed, holding that ESN only had to plead facts plausibly showing that race played “some role” in the decision.

The Court, in a unanimous opinion by Justice Gorsuch that resolved a circuit split, reversed, holding that the text and history of §1981 supported treating its pleading requirements the same as straight negligence claims, which require “but-for” causation. The Court remanded for a determination of whether ESN’s complaint met that standard. Justice Ginsburg filed a concurrence arguing that the determination of causation should be broader than any one point of the decision-making process. A link to the opinion in Comcast v. Nat. Assn. of African American-Owned Media is here.

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SCOTUS Opinion: States Need Not Have Insanity Defense Based on Moral Understanding

Kansas permits defendants to raise an insanity defense based on whether the defendant “lacked the culpable mental state required as an element of the offense charged.” James Kahler, who was charged with capital murder for killing four family members, argued that he should have been able to raise an insanity defense based on whether he had a mental illness that prevented him from distinguishing right from wrong, and Kansas’ failure to allow that version of the defense violated due process. The Kansas Supreme Court denied Kahler relief.

The Court, in a 6-3 ruling authored by Justice Kagan, affirmed, holding that the historical backdrop of the insanity defense did not require that States incorporate a moral-incapacity test into the insanity defense. The majority recognized that changing views of insanity required that States be the ones to properly define it, and not the Court. Justice Breyer, joined by Justices Ginsburg and Sotomayor, dissented, arguing that Kansas’ version of the insanity defense gutted a core component of the defense. A link to the opinion in Kahler v. Kansas is here.

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SCOTUS Opinion: States Immune from Copyright Claims

When North Carolina published a photographer’s copyrighted work recording operations to recover a shipwreck off of its coast, the photographer sued under the Copyright Remedy and Classification Act of 1990. The district court held that the Act abrogated State sovereign immunity from such claims, but the Fourth Circuit reversed, holding that the decision in Florida Prepaid Postsecondary Ed. Expense Bd. v. College Savings Bank, 527 U.S. 627 (1999) denied Congress the authority from depriving States of sovereign immunity.

The Court, in a unanimous opinion by Justice Kagan, affirmed, holding that Florida Prepaid controlled the outcome. The Court found that the circumstances that guided the result in Florida Prepaid, which addressed whether Congress could abrogate State sovereign immunity involving claims under the Patent Remedy Act, were present here. Justice Thomas, concurring in part and in the judgment, noted areas of the majority’s opinion that he did not join, and an area of law still left unsettled. Justice Breyer, joined by Justice Ginsburg, concurred in the judgment, disagreeing with the precedent set by Florida Prepaid, but recognizing that his view still does not “carry the day.” A link to the opinion in Allen v. Cooper is here.

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SCOTUS Opinion: Appellate Courts Must Review Late-Raised Arguments For Plain Error

Federal Rule of Criminal Procedure 52(b) provides that where a criminal defendant fails to raise an argument in the district court, the appellate court can review the issue for plain error. The Fifth Circuit, as opposed to other circuits, had the practice of refusing to review factual matters not raised before the district court. In Davis v. United States, a criminal defendant was convicted of certain 2016 federal offenses, and the district court held that the sentence should run consecutively with any sentence he would receive from pending 2015 state offenses.

On appeal, Davis argued for the first time that the sentences should run concurrently instead, as he claimed the violations were part of the same course of conduct. The Fifth Circuit, as usual, refused to review for plain error under Rule 52(b). The Court, in a unanimous per curiam decision, reversed and remanded, holding that Rule 52(b) “does not immunize factual errors from plain-error review,” and thus the Fifth Circuit must so review late-raised issues. A link to the opinion is here.

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Families First Coronavirus Response Act

On March 18, 2020, the 118th Congress of the United States signed into law the Families First Coronavirus Response Act, which will go into effect on April 2, 2020. The primary details of this newly enacted law are as follows:

EMERGENCY FAMILY AND MEDICAL LEAVE EXPANSION ACT (Section 3101)

  • Applies to employers with fewer than 500 employees, but more than 25.
  • An “eligible employee” is an employee with at least 30 calendar days of employment with current employer.
  • A “qualifying need” is the inability of an employee to work (or telework) due to the need to care for a son or daughter under the age of 18, if school or care provider has closed due to COVID-19.
    • First 10 days are unpaid, but the employee can elect to use accumulated sick/annual leave or the employee may use emergency sick leave – see below.
  • Amount to be paid is calculated at not less than 2/3 of the employee’s regular rate of pay. If hourly, the number of hours is based upon an average of the prior six months or normal schedule.
    • Paid leave not to exceed $200/day with no more than $10,000 in the aggregate.
    • Paid leave expires after 12 weeks.
    • Employee to be restored to same or equivalent position upon return.
  • 100% of the emergency leave and paid sick leave may be reimbursed via payroll tax credits; Subject to future Treasury Regulations. 
  • Law sunsets on December 31, 2020.
  • Health care providers and emergency responders and their respective employers may be generally excluded.
  • Employers with fewer than 50 employees may be excluded if this would jeopardize the viability of the business as a ongoing concern.
    • The Secretary of Labor is tasked with issuing regulations defining criteria for exclusions.

EMERGENCY PAID SICK LEAVE ACT (Section 5101)

  • Applies to employers with fewer than 500 employees, but more than 25.
  • Full-time employees: 80 hours of emergency sick leave.
  • Part-time employees: Number of hours the employee works, on average, during a two-week period is amount of emergency sick leave.
    • For immediate use regardless of date of hire.
    • Employer cannot require employee to use other sick leave the employer may provide prior to use of emergency sick leave.

Requested emergency paid sick leave must be for one of the following:

(1) The employee is subject to a Federal, State, or local quarantine or isolation order related to COVID–19.

(2) The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID–19.

(3) The employee is experiencing symptoms of COVID–19 and seeking a medical diagnosis. (Paid leave based upon regular compensation not to exceed $511/day with $5110 in the aggregate for absences due to (1), (2), or (3) above.)

(4) The employee is caring for an individual who is subject to an order as described in subparagraph (1) or has been advised as described in paragraph (2).

(5) The employee is caring for a son or daughter of such employee if the school or place of care of the son or daughter has been closed, or the child care provider of such son or daughter is unavailable, due to COVID–19 precautions.

(6) The employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services

  • Paid leave based upon 2/3 regular compensation not to exceed $200/day with $2000 in the aggregate for absences due to (4), (5), or (6) above.
  • Employee to be restored to same or equivalent position upon return.
  • 100% of the emergency leave and paid sick leave may be reimbursed via payroll tax credits; Subject to future Treasury Regulations. 
  • Emergency sick leave sunsets on December 31, 2020 with no carryover of unused leave and no payout upon resignation of employee.

This summary of the Families First Coronavirus Response Act is not intended as legal advice.  Please contact the author, Nancy Ortmeyer Kuhn, Esq., or a member of Jackson & Campbell’s Employment Law Practice Group if you need specific guidance.

Jackson & Campbell Coronavirus/COVID-19 Updates

At Jackson & Campbell, P.C. dependability is the cornerstone of our successful attorney-client relationships. Underlying our dependability is the care we have for our clients and their legal needs.

We are sharing this message to assure you that we are keeping up with the rapidly changing news regarding the health and safety concerns surrounding the COVID-19 virus. One of the biggest challenges is implementing the social distancing measures in a law firm environment. For your protection, we have thoroughly and successfully vetted the remote, usually at home, capabilities of our attorneys and staff, using our new cloud-based computer system. Satisfied that we will provide our high-quality legal services and also protect our lawyers and staff, we have implemented a firm-wide voluntary remote work option for our employees. You won’t be surprised to learn, of course, that we already used remote capabilities on an ad hoc basis in the past without any loss of effectiveness. For the duration of current conditions, it is now encouraged. The services that you want will be seamlessly provided, even if the lawyer or paralegal is working off-site.

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The Council of the District of Columbia Approves Emergency Bill Expanding Foreclosure Protections

On March 3, 2020, the Council of the District of Columbia approved an emergency bill amending certain portions of the Housing Finance Agency Act to extend the Agency’s Reverse Mortgage Insurance and Tax Payment Program (ReMIT). ReMIT is a pilot program crafted to address seniors facing foreclosure on a reverse mortgage by providing subsidy payments (up to $25,000) to help address unpaid property taxes and homeowner’s insurance. The program originally ran for 12 months (set to end on March 31, 2020), and in that time reportedly prevented 12 households from having their residence foreclosed.

The Reverse Mortgage Insurance and Tax Payment Program Emergency Amended Act of 2020 extends the ReMIT program for another six months (through September), and adds condominium fees and homeowners association fees as obligations the program could address. The new expansion is not anticipated to add costs, since there are still excess funds available from the original program.

The bill has been sent to Mayor Muriel Bowser for review. The Mayor, who has already indicated her approval of this bill, has 10 days to either sign the bill, allow the bill to pass without her signature, or veto the bill. Once signed, Congress then has 30 days to consider the bill and choose whether to enact a joint resolution disapproving of it, which would be sent to the President of the United States. If no joint resolution disapproving of the bill has been approved by the President within the review period, the bill becomes law.

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SCOTUS Opinion: No Pre-emption for States to Use Federal Immigration Information to Enforce State Identity Theft Law

Under federal law, employers must verify, through an I-9 form, that they have “verified” that each new employee “is not an unauthorized alien.” In Kansas v. Garcia, three persons who were living in the United States illegally used the same false Social Security number on their I-9 forms, as well as their tax withholding forms, and were prosecuted under Kansas law that made it a crime to commit “identity theft.” The Kansas Supreme Court vacated the convictions, holding that federal law precluded the state from using any information on the I-9 form for such prosecution. The Court, in a 5-4 decision by Justice Alito, reversed and remanded. First, the Court held that federal law did not expressly pre-empt state law, as the law itself only applied to penalties against employers for failing to provide the forms. Second, the Court held that information on an I-9 could be used if that same information was also on other forms, like the tax withholding forms that were used to prosecute the defendants. Finally, the Court did not find any implied pre-emption since the use of false information on those forms implicated issues not solely related to immigration. Justice Thomas, joined by Justice Gorsuch, filed a concurrence to argue that the Court should abandon “purposes and objectives” pre-emption altogether as mere “judicial guesswork.” Justice Breyer, joined by Justices Ginsburg, Sotomayor, and Kagan, concurred that federal law did not expressly preempt the prosecutions, but argued that they should be preempted anyway since federal law occupied the field of addressing fraud in work authorization.

A link to the opinion is here.

| Crystal S. Deese,

Health Law Practice Group Privileged to Serve MedStar Washington Hospital Center

Earlier this month, Jackson & Campbell, P.C.’s Health Law Practice Group obtained a defense verdict in a malpractice case alleging that a patient suffered permanent nerve damage during a lower left wisdom tooth extraction. She alleged the surgical technique and procedure choice were improper and denied giving her informed consent to the procedure. After a six day trial, the jury of five women and three men found the oral surgeon complied with the standard of care and obtained the patient’s proper consent to the extraction. The plaintiff’s counsel has agreed not to appeal the verdict. Attorneys Crystal S. Deese and Ashley M. Nickel are honored to have served our client in this capacity.

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SCOTUS Opinion: Court Strictly Interprets “Actual Knowledge” For ERISA Limitations Period

Under the Employee Retirement Income Security Act of 1974, a person with “actual knowledge” of an alleged fiduciary breach by the administrator of a pension plan must file suit within three years of gaining such knowledge—otherwise, a six-year limitations period applies. In Intel Corp. Investment Policy Committee v. Sulyma, Intel argued that its former employee filed such a claim too late because the plan administrators had disclosed their investment decisions to him more than three years before he filed suit. Sulyma testified that he did not remember reviewing those disclosures nor had he been aware of the decisions. The district court granted summary judgment to Intel, but the Ninth Circuit reversed, holding that Sulyma’s testimony created a dispute of fact that required a trial. The Court, in a unanimous decision by Justice Alito, affirmed, holding that Sulyma did not have “actual knowledge” of information contained in disclosures that he received but did not read or did not recall reading. The Court did suggest that “actual knowledge” could be proved through circumstantial evidence or a pattern of “willful blindness.”

A link to the opinion is here.

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SCOTUS Opinion: Criminal Defendant Preserves Appellate Claim by Arguing for Lesser Sentence

Under Federal Rule of Criminal Procedure 51(b), a criminal defendant wishing to “preserve a claim of error” for appeal must inform the trial judge “of the action the party wishes the court to take, or the party’s objection to the court’s action and the grounds for that objection.” In Holguin-Hernandez v. United States, when prosecutors sought a sentence of 12 to 18 months, the defendant argued that 18 U.S.C. sec. 3553’s sentencing factors required either no sentence, or a sentence under 12 months. When the trial court imposed a 12 month sentence, defendant appealed, arguing that the sentence was unreasonable because it was “greater than necessary[y] to accomplish the goals of sentencing” under Kimbrough v. United States, 552 US. 85 (2007). The Fifth Circuit held that the defendant had waived the argument by not properly lodging his objection to the trial court. The Court, in a unanimous opinion by Justice Breyer, reversed, holding that the defendant’s argument that he should get no sentence, or a lesser sentence, preserved his claim that his sentence was unreasonably long. There was no need for the defendant to specifically state that he was objecting based on “reasonableness.” Justice Alito, joined by Justice Gorsuch, filed a concurrence to note certain circumstances that were not addressed by the Court’s ruling.

A link to the opinion is here.

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SCOTUS Opinion: Court Rejects Comparison of State Offenses to Generic Offenses for Armed Career Criminal Act Enhancement

The Armed Career Criminal Act mandates a 15-year sentence for defendants that have prior convictions for a “serious drug offense” that “involve[es] manufacturing, distributing, or possessing with intent to manufacture or distribute, a controlled substance.” Eddie Lee Shular had six prior Florida convictions for selling and possessing cocaine with intent to sell. The federal trial court deemed those to be “serious drug offenses” under ACCA, and gave him a 15-year sentence when he pled guilty to possession of a firearm in connection with a felony (which was for trying to sell cocaine, of course). Shular appealed, arguing that the categorical approach required that the trial court compare the prior offenses to generic offenses described under ACCA. Under that approach, the ACCA language appeared to include a mens rea element that the Florida offenses did not have. The Eleventh Circuit rejected Shular’s argument, holding that the ACCA only requires comparison to the conduct outlined in the ACCA, not a generic offense. To resolve a circuit split on the issue, the Court, in a unanimous decision by Justice Ginsburg, affirmed, holding that a trial court need only compare the state offense’s conduct to the conduct specified in the ACCA—the state offense need not match any kind of generic offense. The Court also declined to apply the rule of lenity because the ACCA was not ambiguous. Justice Kavanaugh, in a concurrence, elaborated on why he thought the rule of lenity did not apply.

A link to the decision in Shular v. United States is here.

| Christopher A. Glaser

February Real Estate Update | Gan v. Van Buren Street Methodist Church

On February 13, 2020, the District of Columbia Court of Appeals issued an opinion which expressly declined to follow a troubling earlier decision regarding tacking in the context of adverse possession. The decision is significant because the Court clarified the confusing and contradictory prior decision, which muddied the adverse possession waters in Washington, D.C.

In Gan v. Van Buren Street Methodist Church, the Gans and the church owned adjacent properties with a driveway terminating on the border between the two properties. The church held record title to the driveway. The Gans’ predecessor-in-interest held a recorded easement over the driveway and, by no later than 2000, erected a fence preventing the church from gaining access. The deed to the Gans in 2008 described the easement but did not purport to either convey title to the driveway or an inchoate adverse possession interest in the driveway.

In support of their motion for summary judgment before the trial court, the Gans asserted they were entitled to tack their predecessor-in-interest’s period of adverse possession to meet the statutory 15-year period. The trial court relied upon the 2010 Sears v. Catholic Archdiocese case and rejected the Gans’ tacking argument. The Sears decision contradictorily held that a deed which fails to convey an inchoate adverse possession right is ineffective for tacking purposes and held that tacking is permitted unless it is established that the predecessor-in-interest did not intend to convey the disputed parcel.

The Gan Court first noted that Sears—which was decided only by a division of the Court of Appeals—did not mention the 1920 Brumbaugh v. Gompers case, which permitted tacking under broader circumstances and was binding on the Court of Appeals unless later overturned en banc, which it had not. The Court of Appeals took the opportunity to clarify the status of adverse possession law and expressly held in Gan that: (1) tacking is permissible even if the deed did not convey any ownership or interest in the disputed property; (2) tacking would be precluded if the deed disclaimed any transfer of any ownership or interest in the property; and, (3) tacking is permissible only if the claimant could establish through clear and convincing evidence that the processor-in-interest intended to surrender possession of the property to the claimant.

This decision clarifies a 10-year period during which the circumstances where tacking was permitted in Washington, D.C. were up for debate. The Court of Appeals’ decision should give guidance to drafters of contracts and deeds as well as help provide clarity in future litigation matters.

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 Permits Appellate Review of Added Mitigating Factor in Death Penalty Case

After James McKinney was convicted of two counts of first-degree murder, the trial court sentenced him to death upon the finding that he had two aggravating circumstances for each such murder. Twenty years later, a narrowly divided en banc Ninth Circuit reversed upon habeas review, holding that the state courts had not properly considered McKinney’s post-traumatic stress disorder as a mitigating circumstance as required under Eddings v. Oklahoma, 455 U.S. 104 (1982). On remand, the Arizona Supreme Court weighed the aggravating and mitigating factors under Clemons v. Mississippi, 494 U.S. 738 (1990), and upheld the death sentences. McKinney appealed, arguing that he should have been re-sentenced by a jury, in particular relying on Ring v. Arizona, 536 U.S. 584 (2002), which held that a jury must find the aggravating circumstance that makes a defendant eligible for the death penalty. The Court, in a 5-4 decision by Justice Kavanaugh, affirmed, holding that the rule of Clemons applied for review of an Eddings error, even though this case involved the adding of a mitigating factor as opposed to the removal of an aggravating factor. The Court also held that Ring did not require the reweighing of aggravating and mitigating circumstances by a jury, and Ring did not apply because McKinney’s case was being considered on collateral, not direct, review. Justice Ginsburg, joined by Justices Breyer, Sotomayor, and Kagan, dissented, arguing that McKinney’s case was on direct, not collateral, review, and thus Ring should have applied to require jury re-sentencing.

A link to the opinion in McKinney v. Arizona is here.

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SCOTUS Opinion: Court Strikes Down The “Bob Richards Rule”

The IRS allows affiliated corporations to file a group tax return. When the IRS issues a tax return to the group as a whole, federal law does not describe how to allocate the funds. The Ninth Circuit created a rule for that when it decided In re Bob Richards Chrysler-Plymouth Corp., 473 F.2d 262 (1973). The “Bob Richards Rule” mandated that unless the corporations had an agreement between themselves as to how to distribute the tax refund proceeds, the refund should go to those group members responsible for the losses that led to the refund. In Rodriguez v. FDIC, a bank (in receivership) and its parent company (in bankruptcy) each sought to obtain a $4 million refund issued to the companies as a group. The Tenth Circuit applied the Bob Richards rule and gave the tax refund to the parent company. The Court, in a unanimous decision by Justice Gorsuch, reversed, holding that there was no legal basis for the federal courts to apply its own rule where there was no federal interest at stake. Courts must look to state law to resolve these issues.

A link to the opinion is here.

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SCOTUS Opinion: Court Declines To Extend Bivens To Allow Suit Against Border Agent For Shooting

U.S. Border Patrol agent Jesus Mesa, Jr. shot 15 year-old Sergio Adrian Hernandez Guereca while Mesa was on U.S. land, and Hernandez had run back across onto Mexican soil. Hernandez’s family sued Mesa under Bivens v. Six Unknown Federal Narcotics Agents, 403 U.S. 388 (1971), which permits damages claims against federal agents even though no federal statute authorized the claim. The first time the claims were dismissed and upheld on appeal, the Supreme Court vacated and remanded for further consideration in light of Ziglar v. Abbasi, 582 U.S. ___ (2017). The Fifth Circuit again affirmed. The Court, in a 5-4 opinion by Justice Alito, affirmed, holding that Bivens did not apply to cross-border shootings. Noting that expanding the holding of Bivens risked implicating separation of powers concerns, the Court declined to extend it into this case due to the impact cross-border incidents might have on foreign relations and national security, and left it to Congress to address the matter. Justice Thomas, joined by Justice Gorsuch, filed a concurrence stating that “the time has come to consider discarding the Bivens doctrine altogether.” Justice Ginsburg, joined by Justices Breyer, Sotomayor, and Kagan, dissented, arguing that a Bivens remedy should be allowed to a noncitizen when a U.S. officer, acting stateside, caused a wrong suffered abroad.

A link to the decision in Hernandez v. Mesa is here.

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SCOTUS Opinion: Infant’s “Habitual Residence” Not Determined by Agreement of the Parents

The Hague Convention requires that a child wrongfully removed from her country of “habitual residence” must be returned to that country. In Monasky v. Taglieri, an infant was born in Italy to an American mother and Italian father. The relationship was abusive, and the mother soon relocated to America, taking the child with her. The father moved to have the child returned to Italy under the Convention. The district court granted relief to the father, holding that the child was too young to have acclimatized to Italy, but should go back anyway because the parents had no plans to raise the child in America. The Sixth Circuit affirmed, and the Court, in a unanimous opinion by Justice Ginsburg, affirmed again. The Court first held that the term “habitual residence” of an infant did not require evidence of an agreement between the parents on where to raise the child, but rather on the particular circumstances of each case. The Court then established that determinations by trial courts on that issue would be entitled to review for “clear error,” since a finding of “habitual residence” was a mixed question of law and fact. Justice Thomas filed a concurrence agreeing with the result, but stating that the plain language of the Convention was enough to resolve this case. Justice Alito also filed a concurrence to note that he thought the proper standard of review would be for abuse of discretion, given his view that the inquiry was more of a fact finding one.

A link to the opinion is here.

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SCOTUS Opinion: Court Enforces Removal Jurisdiction In Vacating Orders Against The Catholic Church

The case of Roman Catholic Archdiocese of San Yuan, Puerto Rico v. Feliciano concerned complaints filed by employees of Catholic schools in Puerto Rico alleging wrongful termination of their pension plan. Initially, the Puerto Rico trial court determined that the Roman Catholic and Apostolic Church in Puerto Rico was the proper entity that owed obligations to the plan, and ordered the Church to make payments. That ruling was ultimately upheld by the Puerto Rico Supreme Court. The Archdiocese appealed to the U.S. Supreme Court, arguing that the Puerto Rico courts should have deferred to the Church’s own view as to how it was structured (as a collection of separate legal dioceses and parishes). The Court, in a unanimous per curiam opinion, reversed, holding that the lower court rulings were all void because they were entered during a time the matter had been briefly removed to federal court due to a pending bankruptcy proceeding. The Court reinforced the rule that state courts lose all jurisdiction once a case is removed to federal court, and that jurisdiction does not re-vest even if the case is sent back nunc pro tunc to an earlier date. Justice Alito, joined by Justice Thomas, filed a concurrence arguing that the Puerto Rico Supreme Court misread precedent regarding the status of the Catholic Church as an entity, a noted other thorny issues that were likely to pop up on remand.

A link to the opinion is here.

| David A. Rahnis

Davis v. Echo Valley Condominium Association, 945 F.3d 483 (6th Circuit Court, December 19, 2019)

In a recent case before the U.S. Court of Appeals for the Sixth Circuit, the court heard a matter involving the intersection between fair housing law and community association governance. In this case, Phyllis Davis purchased a second-floor unit in a four-unit condominium building within the Echo Valley Condominium Association in Farmington Hills, Michigan. Davis suffers from asthma and chemical sensitivity disorder. Ella and Moisey Lamnin owned a first-floor unit in the Echo Valley Condominium Association building and, in 2012, rented their unit to Wanda Rule. Thereafter, Davis complained that smoke regularly emanated from the Lamnins’ condo, thereby aggravating her asthma. The Association’s governing documents contained no prohibition on smoking. In fact, the record showed that the Association has long read the bylaws to permit smoking and that Echo Valley residents have long smoked in their homes. Nevertheless, the Association took several steps to address the situation, including asking Rule to smoke outside and having an HVAC contractor install a fresh-air system on Davis’ ductwork. In addition, Rule agreed to use an air purifier to clean the air in her own unit. None of these steps satisfied Davis and she continued to log dates and times when she could smell smoke.

In 2017, Davis proceeded to sue the Association, the Lamnins, Rule, and the condominium management company. Davis alleged discrimination under the Fair Housing Amendments Act (FHA), 42 U.S.C. 3604(f), violations of condominium bylaws, and allowing a tortious nuisance to persist. Davis sought both damages and a community smoking ban. The basis of Davis’ FHA complaint was that by refusing to ban smoking in her building, the Association had discriminated against her because of her purported asthma-related disability. The FHA defines discrimination as “a refusal to make reasonable accommodations in rules, policies, practices or services when such accommodation may be necessary to afford such person equal opportunity to use and enjoy a dwelling.”

It should be noted that, after the litigation commenced, the Association’s board proposed to the condo owners a bylaws amendment that would prohibit smoking throughout the complex. The proposed amendment failed to pass when put before the ownership for a vote.

The Sixth Circuit affirmed the rejection of Davis’s claims on summary judgment and found the requested smoking ban was not a “reasonable accommodation” under the FHA to the Association’s longstanding policy of allowing smoking. The appeals court determined that Davis’ request would have constituted a “fundamental change” in the Association’s smoking policy, not a “moderate adjustment” to policy (which is all that the court deemed necessary), and that a smoking ban would have intruded on the rights of third parties. The appeals court also found no violation of the bylaws, since the bylaws do not restrict or even speak to smoking. In addition, the appeals court found no violation of the bylaws more general prohibitions on “offensive activities” and “nuisances” because the standard of liability must be tied to an ordinary resident, not a resident with unique needs, such as Davis.

The appeals court seemed to give great weight to the practical fact that the Association did not simply ignore Davis’ concerns. Rather, they sought to facilitate a compromise, including communicating with the Lamnins, purchasing a fresh air system for Davis’ condo (at the Association’s expense), and holding a condo owner vote on whether to ban smoking. From a community governance standpoint, even with FHA issues in play, the court showed deference to the Association’s bylaws and the vote of the owners. This decision highlights the point that not all requested accommodations under the FHA will be granted and deemed reasonable. However, for community associations, it also highlights the importance of having association bylaws and rules that clearly set forth any restrictions within the community in order to avoid confusion and minimize the chances of a dispute.

This summary is not intended to contain legal advice or to be an exhaustive review. 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.

| , John J. Matteo

Employers Receive Additional Guidance with the New Department of Labor Rule, Making It Easier to Avoid Classification as a Joint-Employer

The Department of Labor issued a final rule on January 12, 2020 regarding the interpretation of joint employer status under the Fair Labor Standards Act (FLSA).

The FLSA requires employers to pay employees the federal minimum wage for every hour worked and to pay overtime for every additional hour worked over 40 during a workweek. Liability for making such payments falls on the employer, which the FLSA defines as “any person acting directly or indirectly in the interest of an employer in relation to an employee.”

Since the FLSA’s enactment, the DOL has recognized that an employee can have two or more employers, known as joint employers. A Department of Labor regulation promulgated in 1958 described three situations in which two or more employers would be considered “joint employers:” The two employers had an arrangement to share the employee’s services; one employer was acting in the other employer’s interest in relation to the employee; and the two employers are not completely disassociated with respect to the employment of a particular employee and share control of the employee by virtue of the fact that one of the employers controls, is controlled by, or is under common control with the other employer.

The rule, which will go into effect on March 14, 2020, marks the first time that this regulation has been updated since it was adopted more than 60 years ago. The changes stem from the Department of Labor’s concern that the regulation does not adequately address the joint employer scenario that occurs most commonly under the FLSA, i.e., when an employer causes or allows an employee to work, and another person also benefits from that work. Currently, the regulation focuses on the relationship between the would-be employers, but offers no guidance as to whether the other person benefiting from the employee’s work is also the employer’s employer.

To address that topic, the Department of Labor issued the rule, which sets forth a four-factor balancing test for determining joint employer status under the FLSA when someone other than the employer benefits from the employee’s work. The test is derived from an opinion issued by the Ninth Circuit in 1983 in the case of Bonnette v. California Health & Welfare Agency.

The required factors examine whether the would-be employer:

  • Has authority to hire or fire the employee;
  • Supervises the employee’s schedule or conditions of employment;
  • Determines the employee’s compensation; and
  • Maintains the employee’s employment records.

The rule makes clear that no one factor is determinative, and the weight ascribed to each factor will vary based on the facts and circumstances of each case. However, the mere maintenance of the employee’s employment records is not, in and of itself, enough to demonstrate joint employer status. Instead, the would-be employer must exercise some control over the employee. Merely having authority to exercise control, without using such control, is insufficient to demonstrate joint employer status.

The rule acknowledges that additional factors may be relevant to the determination of joint employer status. For instance, it recognizes that the relationship between the potential joint employers is relevant in determining joint employer status in situations where multiple employers cause a single employee to work separate sets of hours during the same workweek, and there is a question as to whether those separate sets of hours should be aggregated for purposes of determining overtime eligibility. The final rule explains that the two employers described in the preceding sentence are deemed joint employers if they are sufficiently connected with respect to the employment of the employee.

Additionally, the rule also identifies factors that are not relevant to the determination. Among other things, the employee’s economic dependence on a would-be joint employer is not relevant to the determination. Likewise, the rule identifies certain business models (such as the franchise model), business practices, and contractual agreements that decrease the eligibility of the would-be employer from reaching joint employer status.

| Roy L. Kaufmann

Settlement Considerations on Acquisitions of DC Commercial Property – Plan Early and Keep Lines of Communication Open Between Settlement Company and Lender

The settlement process on commercial transactions and, more particularly, the completion of the FP7/C (Real Property Recordation and Transfer Tax Form) is markedly different than residential transactions. One particular pitfall has recently come to light that has plagued and delayed some transactions and has resulted in more money being due for recordation taxes than the buyer or lender had anticipated. Planning at the early stages of the loan and settlement processes may work towards everyone’s advantage.

By way of background, effective October 1, 2019 and expiring on September 30, 2023, the District increased the rate of transfer and recordation taxes on improved or unimproved commercial property (Class 2) if the actual or imputed consideration is greater than $2 million. The Office of Tax and Revenue issued OTR Tax Notice 2019-05 to provide general information.

The new rates also apply to mixed-use properties if any portion of the property is classified as Class 2, except in rare situations where a homestead deduction has been granted. The new rate imposes a surcharge so that transfer and recordation taxes are each at 2.5%.

Of interest here is calculation of the tax on deeds of trust. In short, there is a recordation tax to be collected on any amount of the deed of trust that is not exempt. For the purposes of calculating the $2 million threshold for deeds of trust, all debts recorded on the same day, as to the same property, are aggregated and, if threshold is met, the additional tax applies to all deeds of trust.

Keep in mind that, apart from transfer taxes on acquisitions, there is a recordation tax on the deed and a separate recordation tax on the deed of trust, although there may be some applicable exemption. Focusing on the recordation tax on the deed of trust, Part H asks for the “Purchase Money Amount” of the deed of trust to determine the dollar amounts of the deed of trust that are exempt from the recordation tax.

The field “Purchase Money Amount” is crucial. It seeks to elicit from the lender, what portion of its deed of trust is attributable to the acquisition price (as opposed to loan proceeds to be used for construction or other expenses). Only the “purchase money” component would be exempt. See DC Code §42-1102 which provides:

The deed of trust, on its face, needs a recitation as to the amount of the purchase money it is securing. See DC Code §42-1103(b-1)(2)(D) which provides:

The loan process should begin with an agreement between the lender and the borrower as to what portion of the deed of trust will be attributed to purchase money. The borrower would want that number to be higher, in order to take advantage of the exemption for purchase money.

The lender’s preference may be consistent because of the added legal protections for purchase money security interests.

The settlement company needs to keep the lender and the borrower informed. The lender must supply the purchase money dollar amount so that the settlement sheet can be calculated. The lender also needs to insure that the requisite language is printed on the deed of trust (by the way, that applies to all deeds of trust involving purchase money) and the dollar figure in that language must conform to the FP7/C.

If the settlement company does not focus on this element, there may be significant delays in trying to record the commercial deed of trust and the borrower may end up needing to bring more money to the table than anticipated for recordation taxes.

The most current version of the FP7/C must be used (at press time, the version is 08/2019). If the deed of trust is simultaneous with the acquisition, a single FP7/C may be used to record the deed and the deed of trust. Otherwise, a separate FP7/C must be filed for each deed of trust.

This summary is not intended to contain legal advice or to be an exhaustive review. 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: ERISA Case Remanded To Consider Alternative Arguments

Retirement Plans Committee of IBM v. Jander concerned a claim by Employee Retirement Income Security Act of 1974 (ERISA) plan beneficiaries that the fiduciaries in control breached their duty of prudence on the basis of insider information. The standard for stating such a claim had been previously set forth by the Court in Fifth Third Bancorp v. Dudenhoeffer, 573 U.S. 409 (2014), which required consideration, in part, of whether a plan fiduciary could not have determined that disclosing negative information would have caused more harm than good to the ERISA fund. Originally, the question presented in this case was whether Dudenhoeffer’s “more harm than good” pleading standard was satisfied by “generalized allegations that the harm of an inevitable disclosure of an alleged fraud generally increases over time.” However, the Court noted that the arguments raised by the parties concerned other matters not addressed by the lower courts. So the per curiam Court remanded the case to the Second Circuit for further consideration. Justice Kagan, joined by Justice Ginsburg, filed a concurrence noting that the Second Circuit may well decide not to consider those alternative arguments if not properly preserved, and suggesting that those arguments directly conflicted with Dudenhoeffer. Justice Gorsuch also submitted a concurrence, arguing his view that the claims  by the beneficiaries in this case appear to require the ERISA fiduciaries to take action in a wholly different corporate capacity—something not addressed in Dudenhoeffer.

A link to the decision is here.

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SCOTUS Opinion: Denial Of Request For Relief From Automatic Bankruptcy Stay Is A Final, Appealable Order

After Ritzen Group, Inc. sued Jackson Masonry, LLC over a contract, Jackson filed for Chapter 11 bankruptcy, which immediately halted Ritzen’s litigation. Ritzen moved the bankruptcy court for relief from the automatic stay, which was denied. Ritzen then filed a proof of claim, which was eventually disallowed. Ritzen then opted to file a notice of appeal of the bankruptcy court’s denial of relief from the automatic stay, well after the 14-day deadline provided under the Rules. The district court dismissed the appeal as untimely, and the Sixth Circuit affirmed, holding that the denial of relief from the automatic stay was a final appealable order, and thus Ritzen had to appeal that decision within 14 days to preserve its rights. The Court, in a unanimous opinion by Justice Ginsburg, affirmed. Using Bullard v. Blue Hills Bank, 575 U.S. 496 (2015) as a guide, the Court held that a denial of relief from the automatic bankruptcy stay was a discrete proceeding ancillary to the rest of the bankruptcy proceedings, and thus was a final order subject to appeal. Contrary to civil cases in which a final order generally comes only upon completion of the entire case, bankruptcy proceedings constitute an aggregation of individual controversies that can be individually addressed, as here.

A link to the opinion in Ritzen Group, Inc. v. Jackson Masonry, LLC is here.

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SCOTUS Opinion: Court Enforces The “American Rule” Of Costs Against The Patent And Trademark Office

The Patent Act provides that when an applicant for a patent brings suit against the Patent and Trademark Office (PTO) when the Office rejects the applicant’s patent, the applicant must pay “[a]ll the expenses of the proceedings.” In Peter v. Nantkwest, Inc., a patent applicant sued the PTO under the Act when the PTO denied its application for a method of treating cancer. The applicant lost in the district court and the Federal Circuit. The PTO then, under the Act, requested that the applicant pay for all of the PTO’s pro-rata salaries of its attorneys and a paralegal that worked on the case. The district court denied the request on the basis that the word “expenses” was not clear enough to rebut the “American Rule” that all parties are responsible for their own attorneys’ fees. An en banc Federal Circuit affirmed. The Court, in a unanimous opinion by Justice Sotomayor, affirmed again, emphasizing that the presumption of the American Rule applies to all statutes, and that the Act’s requirement to pay all “expenses” was not a “specific and explicit” directive by Congress to override that Rule. The Court also noted that this was the first time in the 170-year history of the Patent Act that the PTO had ever requested its attorneys’ fees, which was also a strong indicator that such an award was not intended.

A link to the opinion is here.