Maine Appeals

what if they used hand puppets?

The First Circuit issued an en banc decision last week construing the meaning of the word "make" in SEC Rule 10b-5(b).  SEC v. Tambone, 07-1384, http://www.ca1.uscourts.gov/

The issue was whether you can sue under Rule 10b-5(b) when the defendant broker doesn't utter false statements itself or draft a prospectus with false statements, but bandies the document with the false material in it about to investors.  The relevant language in the rule is that one may not "make any untrue statement of a material fact ... in connection with the purchase or sale of any security."  The majority concluded that "make" is a narrower concept than the statute's reference to "use or employ," and doesn't include this type of conduct.  The dissent (Judges Lipez and Torruella) disagreed, focusing on the statutory duty of an underwriter and concluding that this showed that the documentation it distributes constitutes implied statements from the underwriter that the underwriter has a reasonable basis to believe that the information in the prospectus is truthful and complete.  The issue was one of first impression.  While the statute gets at the broader "using" conduct,   whether the conduct violates the rule matters for the purposes of private plaintiffs having the right to sue.     

nuggets

I always learn something new even from the most straightforward decisions.  In a case involving a common law trespass claim relating to neighbors who, putting it midly Do Not Get Along, I learned two new things.  Sebra v. Wentworth, 2010 ME 21 [http://www.courts.state.me.us/court_info/opinions/documents/01me182t.pdf ].

First, claim preclusion doesn't apply if the first decision only sought a declaratory judgment, and didn't ask for injunctive or any other coercive relief (paragraph 10).  When do you ever ask only for declaratory relief?  Well, there's a line of authority that stands for the proposition that you should only ask for a declaration in the first instance against a governmental body (they are supposed to then do the right thing without a court order requiring them to according to some case law).  So the takeaway is that plaintiffs should think twice before including the boilerplate request for an injunction. 

Second, the court addressed the claim that the award of attorney's fees was improper, and agreed with the appellant, reversing the trial court, even though the issue hadn't been raised at the trial court level.  I can't remember the last time that happened in a civil case.  The decision cited as precedent for doing so when the resolution doesn't require the introduction of additional facts, proper resolution is clear and a failure to consider it may result in a miscarriage of justice, is a 2001 decision, Truman v. Brown, 2001 ME 182 [http://www.courts.state.me.us/court_info/opinions/documents/01me182t.htm ].  In that decision, however, the Court said that it would look at a fee appeal because it had been partially raised below.

I guess this gets filed in the "there are exceptions to every rule" pile, and I wouldn't rely on this too much going forward.  Maine Appellate Practice says that the obvious error rule is infrequently applied to overturn a ruling in a criminal case and "almost never applied to overturn a ruling in a civil claim." (p. 4.) 

Ding dong, the writs are dead

Yesterday the Maine SJC issued a handful of decisions, including State v. Blakesley, 2010 ME 19 [http://www.courts.state.me.us/court_info/opinions/2010%20documents/10me19bl.pdf], in which the Court ruled that the ancient writs of coram nobis and audit querela were unavailable because they had been eliminated with the enactment of post-conviction statute provisions in the 1960's.  As a result, the petitioner, a legal resident from the U.K. who had been convicted of various crimes in his youth, could not obtain judicial relief from any of them now, when the Department of Homeland Security, having been woken up by his existence in the U.S., is seeking to deport him.  After reviewing the legislative history, the Court concluded that it is up to the other branches of the government, e.g. gubernatorial clemency, should the determination be that the deportation consequences are too grave.

As I have  blogged upon previously, not all the writs have been eliminated (that habeas corpus one, for example, remains pretty darn important).  A statute, 14 M.R.S. s. 5301 [http://www.mainelegislature.org/legis/statutes/14/title14sec5301.html] seems to keep habeas corpus, prohibition, error, mandamus and quo warranto in play (although as previously noted, the writs are probably superseded by the APA and 80B when governmental agencies are involved).  4 M.R.S. s. 8 [http://www.mainelegislature.org/legis/statutes/4/title4sec8.html] references the Court's authority regarding forms of writs, but expressly provides that no additional substantive powers are being bestowed on the Court.

The potential, given the current security environment, for rehabilitated or otherwise valuable contributors to our society being deported is a serious one.  The New York Times just finished a series of articles about an immigrant who when sentenced as a youth by a judge was told by that judge that if he worked hard to turn around his life, the judge would support him.  The immigrant did so, and then found himself caught up, many years later, in this deportation problem.  The retired judge stepped up, arguing for pardon or other relief, and, in the end, it happened.  

We represented a defendant in a somewhat similar situation in State v. Kargar, 679 A.2d 81 (Me. 1996) [http://www.pierceatwood.com/files/452_State%20v.%20Kargar%20(W1066587).PDF].  There, the defendant was deemed to have technically violated criminal laws by kissing his baby's penis, although everyone agreed that there had been nothing sexual about the act. For various good reasons, our criminal laws regarding sex acts with children don't have a mens rea requirement - body part X contacting body part Y will do it, period.  Kargar wasn't sentenced to any time, but because he was from Afghanistan, he was subject to deportation.  Fortunately, Maine has an off-ramp for this type of unjust result - the de minimis statute 17-A M.R.S.A. s 12 (1983) [http://www.mainelegislature.org/legis/statutes/17-A/title17-Asec12.html], which allows the court to find no violation when, while technically meeting the elements of the crime, it's evident that the conduct at issue was never intended by the Legislature to fall within the criminal statute.

That avenue for relief appears unavailable here from the limited facts presented in the decision, and I'm sure the counsel for the petitioner here have scoured precedent for any other possible judicial remedy.  Now that the deportation consequences of criminal convictions are clear, the issue can and is properly addressed at the time of the conviction.  The problem is, as here, with convictions from long ago in light of our new security and immigration environment.  If these potential deportation consequences were not present at the time of the convictions, there does seem to be some sort of ex post facto unfairness here.  If there is a problem with defendants convicted of sexual transgressions having to register, etc., if those burdens did not exist at the times of their convictions, then similar reasoning would appear applicable in this context when the consequences are even more draconian.  On the other hand, it's not the state system imposing the consequence, but rather federal law.  A very thorny problem.                 

Husson

On Thursday, the Maine SJC denied Husson University's application to circumvent the Maine Bar Admission rule requiring graduation from an ABA accredited law school to be eligible to take the Maine Bar exam - In re Petition of Husson University School of Law, SCJ-242, http://www.courts.state.me.us/court_info/opinions/supreme/index.shtml#mostrecent  The SJC declined Husson's invitation set pre-approval standards before the Husson School of Law was in operation, or to set forth alternative criteria to be administered outside the ABA framework, so Husson would not need to obtain ABA accreditation to ensure that its students would be eligible to practice in Maine.

The SJC really had no other practical option - it simply lacks the time and resources to create its own non-ABA accreditation system.  This means, as I understand it, that Husson will need to start operations without any guarantees and seek ABA accreditation.  One sticking point seems to be tenure - while currently being debated, the ABA requires a certain portion of the school's teachers to be tenured or on a tenure track, while Husson doesn't grant tenure.  It will be interesting to see what Husson will do.  It could start operating, without tenured professors, apply for ABA accreditation, and see what happens in the next few years - either the ABA could change its mind and excise the requirement, or perhaps if the ABA ruled that Husson met all of its criteria but tenure, Husson could go back to the SJC and seek relief.  But that would require a lot of faith on the part of the students that their three years of study would not be for naught.  

Is this fair?  On the one hand, some would say that having teachers be tenured doesn't seem to be a critical requirement to produce competent lawyers.  Indeed, haven't we all encountered the tenured  "lifer" professor who last updated his course outline when the Rule in Shelley's Case was new and has no incentive to improve his teaching?  And one goal of the Husson school is to try to keep costs down so that less wealthy candidates can become lawyers and serve the northern half of the State.  Certainly the high cost of law school is a serious problem, freighting students with crippling loans that reduce their job options (and in a current economy where the options aren't quite as rosy as they used to be).

On the other hand, some would say that tenure may not be required if you treat lawyering like other skills such as learning to dance the rhumba or play the guitar, but admission to the bar can put other people's lives literally in your hands, so maybe a little more is involved.  And tenure isn't really the issue in itself - rather, tenure acts as a proxy for a certain quality of education generally.  It also appears that Husson might not want to meet the ABA's library criteria.  More broadly, the value of ABA accreditation isn't really meeting each and every substantive ABA criterion, but meeting those standards as applied by the ABA.  The ABA's accreditation criteria are fairly straightforward and intuitive.  If you compare them to California's, for example -- the only separate accreditation standards I'm aware of -- they are practically the same.  The key is having competent and experienced evaluators applying those standards.  No one in Maine has that capability, again making the SJC's decision here fairly self-evident -- again without belittling the laudatory goals articulated Husson.

The current system for making lawyers is certainly imperfect and we should welcome action to think outside the box and try something new.  But ensuring minimum competency is critical given what's at stake.  While one could certainly posit creation of lawyers without tenure or other ABA requirements on an individual basis (I'm pretty sure Lincoln didn't have any tenured professors teaching him and he turned out ok), we don't have the luxury of individualization of the profession they had back in the Eighteenth Century.  And if we did use that kind of approach, the exposure to subjectivity and discrimination and other problems would be manifest.  (In some countries, being admitted to the bar requires an oral exam by a local lawyer.  I have been told that in practice, unsurprisingly, this leads to "who you know" results as opposed to a fair test of competency).

I hope Husson - or someone else - figures out a way to make law school more affordable, and to get legal services to the folks up north who need it.  But trying to invent an entirely separate Maine set of accreditation criteria is simply not a workable avenue for achieving those goals.        

  

  

top of the class (almost)

The Jan/Feb 2010 copy of the ABA's Landslide magazine has an interesting article by Roy E. Hofer called "Supreme Court Reversal rates:  Evaluating the Federal Court of Appeals."  He goes through the statistics for the last ten years to see which court has the highest reversal rate. 

The theme of his article is that while everyone thought the Ninth Circuit was the "rogue court," it's really the Federal Circuit - it has the highest reversal rate at 83.3%.  The Ninth Circuit is second highest, with 80.0%  The lowest reversal rate?  The Seventh Circuit at 55.3%.  The median reversal rate is 68.29%.

And how about our First Circuit?  Second lowest at 55.6% ("we're #2, we're #2").

He also includes statistics about the volume of appeals heard.  By far CTA9 had the most - 114,199 cases disposed of in that ten-year period.  The lowest volume?  The DC Circuit, followed by the Federal Circuit, followed by us (13,215, 15,781 and 16,620, respectively.)

Do these statistics mean anything?  Given the small number of cases that the Supreme Court takes, it's difficult to say.   In that ten-year period, for example, there were only 18 cases heard by the Supreme Court from CTA1 (8 reversed, 8 affirmed and 2 vacated).   

  

Nuisance NUs

On April 27, I will be in Chicago speaking on a panel at my old alma mater, Northwestern University (I am a double wildcat - both undergraduate and law school).  The subject matter is the Expansion of Liability under Public Nuisance, and the audience is the judiciary.  There will be a session on our Rhode Island lead pigment case, [http://www.courts.ri.gov/supreme/pdf-files/04-63_7-2-08.pdf].  I will also be on a panel discussing the recent climate change cases, including Comer v. Murphy Oil, [http://www.ca5.uscourts.gov/opinions/pub/07/07-60756-CV0.wpd.pdf], in which rehearing en banc was granted a few days ago.  I recently posted an entry on my blog over at www.nuisancelaw.com noting that the law of nuisance is not the only body of law which seems to a current hunting ground for a judicial avenue to address these policy questions.

I am always happy to return to my old stomping grounds in the Windy City and am looking forward to discussion on an interesting topic.  I thought I'd focus on some of the logistical and administrative problems in processing these types of claims in courts, and how these practical difficulties can be viewed as further support for the conclusion that some issues, like climate change, are simply not meant to be addressed by the judicial branch.

  

The nerve!

A unanimous Supreme Court in Hertz Corp. v. Friend  adopted the "nerve center" test today for citizenship under 28 U.S.C. s1332.

http://www.supremecourtus.gov/opinions/09pdf/08-1107.pdf

Basically this means that plaintiffs in California can't avoid federal court by arguing that the proportional percentage of a corporation's business in California  is so large (since California is so large and populous) that the corporation is a California citizen.   So a corporation does still have some control over the identity of the state of which it will be deemed a citizen.

Between a rock and a hard place

The SJC issued a rather straightforward decision that, per usual, has led to musings on more difficult situations.   MSAD 37 v. Pineo, 2010 ME 11.  [http://www.courts.state.me.us/court_info/opinions/2010%20documents/10me11pi.pdf ] 

 

This is a Rule 80B mandamus action that required selectmen to put something out to warrant that they thought was statutorily wrong.  The Court court rejected their statutory interpretation and held that the statute says they "shall" put it out, so they had no discretion.  The decision has a threshold discussion on mootness and is an example of how the Court seems to interpret the interface between the statutory continuation of mandamus with the rule eliminating it - file the action as "a Rule 80B mandamus."  (As a practical matter, I think this means that you must always seek relief in the Superior Court per Rule 80B instead of having the option of going directly to the SJC per the statute in the administrative agency context, i.e. if you are seeking a mandamus requiring a state or local administrative body to act.)      

 

The more interesting question to me is what happens if the statute or ordinance says a selectman, board member or other administrative adjudicator must do something that he or she thinks is unconstitutional?  

 

This can come up, for example, when referenda are used to advance discriminatory aims.  Citizens, for example, can vote to preclude approvals to hoard resources in violation of the commerce clause, or discriminate against classes.  It is legendary in my home town in Illinois how, when it appeared that some low income housing was going to be built, all of sudden the citizenry felt a burning need to build a public pool at that very location.

 

What should the administrator do?  On the one hand, an ordinance or law may compel him or her to engage in the ministerial acts that allow this discriminatory conduct to go forward.  On the other hand, isn't that administrator's highest duty to the constitution?  And if he or she goes along with the action, he or she could end up a defendant in a civil rights suit.  See Suss v. American Society for the Prevention of Cruelty to Animals, 823 F.Supp. 181, 187 n.11 (S.D.N.Y. 1993) (“the duty to obey constitutional requirements to the best of one’s ability applies to the entire public sector at federal, state and local levels.  It is an abdication of responsibility if administrative and other public sector personnel who make crucial decisions on the spot leave application of established constitutional principles to judicial enforcement alone”) (citation omitted).  See also Cooper v. Eugene School District No. 4J, 301 Or. 358, 364-65,723 P.2d 298, 303 (1986).

 

One solution, of course, is to get some good legal counsel throughout the process to avoid these conundra if possible.  But sometimes a section of the populace is simply not interested in constitutional niceties, and often municipalities are strapped for funds to hire lawyers upfront, while if they get sued, the civil rights act their insurance will pay. 

 

A board member faced with this sort of situation ultimately can quit.  That would certainly make for another mess, wouldn't it?  What if all the board members refusing to put out the warrant just resigned? 

 

One of the many things I like about 80B and 80Cs is that the adjudicator is this interesting mix of an elected representative and a neutral adjudicator.  We all know the pitfalls of elected judges.  But our board members to some extent engage  in similar decision-making every day.  Another murky area of the law is when a board member must recuse him or herself based on political grounds - if someone runs for the very purpose of e.g. keeping a business out of town, does that predisposition then bar that person from adjudicating an application by that business?

 

Nobody said democracy was easy.   

Losing

So last week I lost an appeal.  I'm not going to blog on that case because there is nothing one can say in this situation that puts one in a positive light.  It's over, the ice cream cone is on the sidewalk, the definition of the right interpretation of Maine law is what the SJC says it is, end of story.

Instead, I want to talk more generically about strategies to make the hopefully infrequent experience of losing more palatable.

1.  Make it a learning experience.  This sounds lame, but I think it's true that you learn more from your losses than your wins.  After all, if you win, you did what you thought made sense and it worked - yay, but the lessons learned are not obvious.  There are times when the lesson from a loss is very clear - from one experience, for example, I learned the perils of not briefing a non-waivable issue that the other side hadn't brought up.  I thought I had a simple explanation should the issue be brought up in oral argument.  Wrong.  Don't throw new matter up in the oral argument; get it in the brief.  Other times, the lesson may be less obvious.  But even if you can't think how you could have presented your case any differently, you are still learning something about the court and its decision-making that you can incorporate in your approach going forward.    

2.  Be born Irish.  With this comes an instinctive sense of Celtic fatalism, accompanied by the understanding of the glories of a heartfelt if ultimately unsuccessful effort.  As long as you have given your client a realistic cost-benefit analysis, and have a reasonable argument, there's nothing unworthy about a game but unprevailing attempt.  This lesson was brought home to me in law school, when I was working for a very good and very successful criminal defense lawyer in Chicago, who not-so-laughingly referred to the Seventh Circuit as the Court of Affirmance.  Some challenges -- many in the criminal defense arena -- are uphill; that doesn't mean you don't climb.

3.  Get cancer.  Obviously this strategy has its downsides, but it does wonders for giving you perspective. 

Yes, victory always feels better, and hopefully loss doesn't become a habit, but no one said that this would be easy, and sometimes tackling the more challenging cases is the better part of valor. Litigators protecting their win-loss percentages can get too risk adverse to the detriment of the best interests of the client.  So when you lose say, "Rats!" in the privacy of your home or office; take a deep breath identify what you've learned; pat your dog on the head; and move on.    

is timing everything?

Last week the Maine SJC decided another 80B case, so of course I must blog on the same:  Adams v. Town of Brunswick, 2010 ME 7, majority opinion by Justice Mead, Justice Jabar dissenting:

http://www.courts.state.me.us/court_info/opinions/2010%20documents/10me7ad.pdf

Basically, Brunswick has ordinances the spirit of which I think it's safe to say is to prevent Bowdoin students from piling into off-campus housing like a bunch of gerbils.  Justice Jabar thought there was enough language in the ordinances to achieve that anti-gerbilizing objective in the particular context presented (leasing a house divided into two apartments to a total of 11 students); the majority thought such language was lacking.  That aspect of the opinion provides a good example of how the Court parses ordinances and more specifically the use of the "family" concept, the modern version of which, for various reasons, most ordinances do not focus on the need for blood relations.

But the aspect of the decision that has a more universal application is the court's discussion of the difference between an appealable decision on the merits, interpreting whether a use fits the ordinance, and an unappealable decision to enforce or not enforce the ordinance, so interpreted.

In May 2007, the neighbors learned the gerbils were coming -the owners leased the first apartment to 6 students beginning September and 5 students to the other apartment in the same time frame.  After their discovery, the neighbors contacted the CEO, and on May 30, the CEO issued an opinion that it was an allowed use, then appealed to the ZBA.  The ordinance recited that the ZBA has authority "to hear and decide appeals where it is alleged there is an error in any order, requirement, decision or determination made by the" CEO.  The ordinance also expressly recited that whenever anyone files a complaint with the CEO that the ordinance "is being" violated, the CEO shall examine the complaint and if he declines to take action than neither that non-action "nor any written record or report on the complaint" constitutes an appealable order, requirement, decision or determination.

So was the CEO's conclusion an appealable decision or an unappealable declination to take action?  The SJC ruled it was the former, for two reasons.  First, it said that because the ordinance gave the CEO prosecutorial discretion when a complaint is filed asserting that the ordinance "is being" violated, and the students hadn't moved in yet, so the Ordinance was just going to be violated, this made a difference.  So one takeaway from this decision is if you find out about the violation before it occurs, that apparently is relevant, at least under the language of this ordinance.

Second, the SJC deemed the CEO's memorandum "an advisory opinion, not a decision declining to take an enforcement action, because absent a violation occurring at that time there was nothing to enforce."  While this is couched in terms of a second point, it's really related to the first point - if it hasn't happened yet, there's nothing to exercise discretion about.  The language of the court's reasoning on this second point, however, I think is infused with a separate concept, focusing on the contents of the memo.  Because the violation hadn't occurred yet, the CEO's language in his memo was all and only about whether the use was allowed under the ordinance.

I will be interested in seeing how this ruling works in application.  For example, from one perspective, the timing issue seems a little metaphysical - why should it matter whether you learn about the violation before or after it starts and what tense the ordinance uses?  Can a CEO bulletproof his conclusion simply by saying something like "whether or not this use is an allowed use, I am not going to enforce it?"  Or what if the CEO doesn't issue anything in writing?  If someone complains about something (before or after it starts) and the CEO thinks that his interpretation of the ordinance is correct, can he avoid review by simply doing nothing, and the complanant is stuck?

There's a balance that needs to be struck between the inequity of a flagrant ordinance violation with no ability of a neighbor to do anything about it (although if the use is sufficiently unreasonable and damaging, he can always file a common law private nuisance action against the neighbor), and the inequity of a newbie or harassing neighbor complaining (and in theory repeatedly) about a longstanding inoffensive use. It's the in-between is murky.  Looking only at the equities, as represented in this opinion, it seems more on the fairness side to allow judicial review - the complaint wasn't harrassing regarding a longstanding use; the issue presented, for the first time, was whether the use fit the ordinance; and the CEO's memo was couched exclusively in terms of ordinance interpretation, not enforcement.     

Because the enforcer in the non-80B/80C context (e.g. a criminal prosecutor) is a separate person from the adjudicator, it's easy to figure out whether a decision is an adjudication or an exercise of prosecutorial discretion.  The AAG could send a letter to the complainant saying "I'm not going to prosecute because I think X hasn't violated the law," and that would still be deemed an exercise of prosecutorial discretion, not an appealable decision by an adjudicator, even though he couched his decision in terms of interpreting the statute.  It's the dual role of CEO as enforcer and adjudicator that complicates things.  The SJC's citation of the timing factor as key to finding the dividing line could make sense in this context because if you complain about something before it happens, as the Court noted, obviously there's no discretion to exercise.  If you called up a criminal prosecutor and said "X is going to rob a bank tomorrow," that prosecutor (absent some conspiracy evidence, i.e. something already happening) can't do anything and isn't exercising any prosecutorial discretion.

In sum, I look forward to seeing how this ruling plays out. Is the timing factor dispositive?  Or is the nature and content of the CEO's reaction determinative?  

Stay tuned.