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BUSINESS LAW Telecom business stake not a securities holding despite his lack of technical knowledge, an investor’s financial stake in a limited liability company was not a securities holding under federal law that would enable him to maintain a securities fraud suit, the 4th U.S. Circuit Court of Appeals held on Nov. 13. Robinson v. Glynn, No. 03-1106. James Robinson invested $15 million in GeoPhone Co., a limited liability company formed by Thomas Glynn to market a telecommunications system Glynn had designed. When Robinson learned that Glynn had misled him about the system’s technical viability, he filed suit under Section 10b(5) of the Securities Exchange Act of 1934. A Maryland federal court, however, granted summary judgment to Glynn, holding that Robinson’s interest in GeoPhone was not a “security” governed by the act. Affirming, the 4th Circuit explained that federal securities law did not cover Robinson’s holdings because even though Robinson had little technical knowledge, he had management rights in the company. It said, “Because Robinson was an active and knowledgeable executive at GeoPhone, rather than a mere passive investor . . . we affirm. To do otherwise would unjustifiably expand the scope of the federal securities laws by treating an ordinary commercial venture as an investment contract.”   Full text of the decision CIVIL RIGHTS Affirmative action’s end in Fla. can be challenged the naacp has standing to challenge the administrative ruling of the Florida Board of Regents to eliminate some of its affirmative action policies for college admissions, the Florida Supreme Court ruled on Nov. 13. NAACP Inc. v. Florida Bd. of Regents, No. SC02-1878. The National Association for the Advancement of Colored People claimed that its membership included a large number of university students who would be affected by the change in policy. An administrative law judge (ALJ) allowed the suit, ruling that the board of regents was authorized to make such a change and holding that the changes were valid. Both sides appealed to an intermediate court, which remanded the case to the ALJ with instructions to dismiss the claim for lack of standing, saying that the NAACP had not shown that its members would suffer real injury from the rule change. However, the intermediate court then certified the question to the state Supreme Court as one of great public importance. A divided high court quashed the appeals court’s decision. Analyzing Florida’s Administrative Procedures Act, the majority concluded that the lower court had construed the act too narrowly. The court explained that a substantial number of the association’s members were both prospective applicants to the state university system and minorities that would obviously be affected by any change in minority admissions policy.   Full text of the decision CONSTITUTIONAL LAW Ten Commandments art doesn’t promote religion the presence on the grounds of the Texas state capitol of a granite monument depicting the Ten Commandments does not violate the First Amendment, the 5th U.S. Circuit Court of Appeals ruled on Nov. 12. Van Orden v. Perry, No. 02-51184. Thomas Van Orden challenged the monument, one of 17 on the capitol grounds, saying that it promoted the commandments’ religious principles. Aside from the text of the Ten Commandments, the monument includes patriotic symbols, as well as text and symbols of Christian and Jewish tradition. The district court rejected his challenge. The 5th Circuit agreed. The court found the monument to be neutral toward religion, that is it neither favored religion over nonreligion, nor promoted one religion over another. Noting that, according to the Supreme Court, analysis of symbols requires a court to apply a sense of proportion to the individual facts, the court pointed to the secular dimension of the monument as a whole. The court added that the monument, like others on the grounds, is overseen by a curator, leading to the conclusion that the display was neither a state endorsement of the commandments’ religious message nor a work that excludes those who don’t accept its religious statements.   Full text of the decision CRIMINAL PRACTICE No prejudice presumed absent showing of harm an intermediate appellate court erred in applying a presumption-of-prejudice standard to find constructive ineffective assistance of counsel in a drunken driving plea bargain case because the defendant could not show that he had actually been harmed, the Georgia Supreme Court held on Nov. 10. State v. Heath, No. S0G0528. Accused of driving under the influence in the wake of a head-on collision, Richard Heath pleaded guilty to three counts of serious injury by a vehicle under a negotiated plea agreement. After a trial court sentenced him to serve a longer actual jail time than prosecutors recommended, Heath sought to withdraw his plea based on alleged ineffective assistance of counsel. A trial court denied Heath’s motion, finding that he had failed to establish that, but for his counsel’s alleged errors, he would have gone to trial. An appellate court reversed, holding that Heath had been constructively denied counsel, and the state appealed. Reversing, the Georgia Supreme Court held that the intermediate appellate court erred in holding that Heath had been constructively denied counsel. Heath’s complaints about his counsel, including his not being advised of the possible sentence, did not rise to the level of constructive denial. Under U.S. Supreme Court precedent, Heath was required to show prejudice.   Full text of the decision U.S. pretrial delays can’t stop law’s toll time limit where it is clear that a defendant had repeatedly asked the court to set a case for trial and was ready to proceed to trial, the government’s pending pretrial motion could not serve as a basis for exclusion from the provisions of the Speedy Trial Act, the 9th U.S. Circuit Court of Appeals held on Nov. 13. United States v. Lewis, nos. 01-10666, 01-10668. Beau Lewis appealed his federal convictions for illegal wildlife smuggling, arguing that delays in his trial violated the 70-day limit mandated by the federal Speedy Trial Act. The government argued that there was no violation because it had a motion pending for approximately 20 months regarding a government agent’s testimony, and that, under the act, a delay based on a pending motion was excluded from the Speedy Trial Act time calculation. Reversing the convictions of Lewis, the 9th Circuit held that the trial court erred in excluding the 20-month delay for the motion from the Speedy Trial Act calculation. The court concluded, “We therefore hold that in the circumstances of this case, where it is clear that the delay in the trial caused the delay in the hearing, rather than the other way around . . . the government’s pending (and relatively unimportant) pretrial motion could not serve as a basis for exclusion.”   Full text of the decision EVIDENCE Search’s illegality doesn’t warrant dismissal of case an illegal search and detention did not justify the dismissal of an indictment or the suppression of evidence to be used against an allegedly material witness to the Sept. 11, 2001, terrorist attacks who, after being held, was charged with perjuring himself before a grand jury, the 2d U.S. Circuit Court of Appeals held on Nov. 7. U.S. v. Awadallah, No. 02-1269. In one of the Sept. 11 hijackers’ cars, FBI agents found a paper with a number that was later determined to be that of Osama Awadallah. On Sept. 20, 2001, agents visited Awadallah’s San Diego apartment and questioned him for approximately six hours. During that time he was neither advised of his rights nor told he could leave. Awadallah consented to a search of his apartment and cars, which, he later claimed, he did involuntarily. In the search, agents found photos of Osama bin Laden, videos on Bosnia and Islam and a retractable razor that could be described as a box-cutter. Awadallah submitted to a polygraph test, which, agents claimed, registered as lies his negative responses to questions about his advance knowledge of the 9/11 attacks. The FBI prepared an affidavit containing several inaccuracies to support an application for a material witness warrant under 18 U.S.C. 3144, and he was arrested as a material witness. Twenty days later, Awadallah allegedly perjured himself before a grand jury and was indicted. He moved to dismiss the charge on the ground that the proof of perjury came through an illegal arrest and detention. A New York federal court granted that motion, ruling that his seizure violated the Fourth Amendment, that the material witness statute does not apply to grand jury witnesses and that the FBI affidavit contained material misrepresentations. The district court suppressed Awadallah’s testimony and the evidence collected in the FBI’s searches. The 2d Circuit, however, reinstated the indictment and reversed the suppression order. The circuit court held that grand jury witnesses are not excluded from � 3144 and that Awadallah’s 20-day detention before his alleged perjury was not unreasonably prolonged. The panel also held that the application for the material witness warrant met the probable cause requirements, and found no basis on which to conclude that any inaccuracies were intentional or recklessly misleading. Awadallah’s failure to come forward with information about the hijackers, with at least one of whom he was acquainted, rendered the material witness warrant valid, it said.   Full text of the decision INSURANCE LAW No privilege for what is said to claims adjuster where an insured made statements to his insurance claims adjuster before litigation was initiated or imminent, the statements were not privileged as statements made in anticipation of litigation, the Colorado Supreme Court held on Nov. 10. In re Lazar, No. 03SA030. Judy Lazar sued Patrick Riggs, alleging Riggs was negligent in a motor vehicle collision. Lazar sought discovery of statements Riggs made to his insurance adjuster, but Riggs refused, arguing that the statements were privileged. A trial court agreed with Riggs, holding that the statements were privileged because they were made in anticipation of litigation. Reversing, the state’s highest court noted that Colorado had no “insurer/insured privilege” and that statements made before litigation was initiated or imminent were not privileged as they would be in anticipation of litigation. “It is the burden of the insurance company resisting disclosure to demonstrate that the documents in question were prepared in order to defend against a specific claim and that a lawsuit over that claim had already been filed or was imminent,” it said.   Full text of the decision LABOR LAW Migrant worker law shields straw gatherers the collection of pine straw by migrant workers is “agricultural employment” for purposes of the federal Migrant and Seasonal Agricultural Workers Protection Act (AWPA), the 11th U.S. Circuit Court of Appeals held on Nov. 14. Morante-Navarro v. T & Y Pine Straw Inc., No. 03-10387. Mexican nationals employed as pine straw collectors by T & Y Pine Straw Inc. sued the Florida company, alleging it violated AWPA and the Fair Labor Standards Act by failing to pay for their overtime hours and by making unlawful deductions from their wages. A district court partially denied the workers’ motion for summary judgment, holding that the collection of pine straw was not agricultural employment under AWPA. Reversing, the 11th Circuit held that the definition of agricultural employment under the act included the raking, gathering, baling and loading of pine straw performed by the workers. It said, “The district court’s focus on the fact that no cultivation by man is required in order to produce pine straw was misguided. To the contrary, the question is whether actual cultivation occurred, not whether the cultivation was required to produce the naturally-occurring pine straw.”   Full text of the decision LEGAL PROFESSION Appropriate to censure judge for antics in court censure was an appropriate sanction for a state judge who engaged in ex parte communication and showed “excessive personal familiarity” with a litigant in her court and who jokingly reached for a deputy sheriff’s genitalia and berated a Duke University attorney, the North Carolina Supreme Court held on Nov. 7. In re Inquiry Concerning a Judge, No. 31A03. North Carolina’s Judicial Standards Commission filed a complaint against Judge Evelyn Hill, alleging that she engaged in conduct prejudicial to the administration of justice, bringing the judicial office into disrepute, in violation of canons 2A and 3A(3) of the state Code of Judicial Conduct. It recommended that Hill be censured for her conduct, which reportedly included ex parte communication with the litigant, questioning the Duke lawyer’s competency and reaching for the deputy’s groin while allegedly saying, “its been a while since I shoved a male’s balls through his nose holes.” Acting as a court of original jurisdiction, the state’s high court adopted the commission’s recommendation. While acknowledging that some of Hill’s acts, considered independently, were unlikely to be viewed as conduct prejudicial to the administration of justice, it held that censure was appropriate, based on the “totality of the events.”   Full text of the decision WORKERS’ COMPENSATION Inertia at onset of heart attack robs man of award a heart attack victim is not entitled to workers’ compensation after he continued a business trip despite the onset of symptoms, the Iowa Supreme Court held on Nov. 13. Wilson v. Good Will Publishers & Cincinnati Cos., No. 94/00-2066. David Wilson was a sales trainer for Good Will Publishers. He had a history of significant coronary artery disease. During a business trip from Iowa to Missouri he spent a night in a motel room, where he awoke with some pain he initially considered to be indigestion. However, he finished the trip. When he arrived at his destination, he sought medical attention and was diagnosed with a possible heart attack and later had open-heart surgery. He filed for workers’ compensation, which was denied by the industrial commissioner and the district court. The court of appeals reversed. The Iowa Supreme Court reversed. Iowa law allows compensation for heart attacks if both “legal” and “medical” causation are proved, the court held. Legal causation can be shown if damage results from “continued exertion required by the employment after the onset of the heart attack symptoms.” Wilson claimed that he continued with his business trip on account of Good Will’s training manual, which warns that the trainee and his family “must be the most important thing” in the trainer’s life. The court concluded, however, that there was substantial evidence to support the commissioner’s findings that because Wilson was free to seek medical attention without employment restraints, he did not establish legal causation.   Full text of the decision

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