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ADMINISTRATIVE LAW ATF can get gun resale information from dealers The bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) neither exceeded its authority nor acted arbitrarily when it demanded information from gun dealers that had not been accused of any wrongdoing, the 4th U.S. Circuit Court of Appeals said on April 21. Blaustein & Reich Inc. v. Buckles, No. 02-2329. The ATF sent letters to approximately 450 licensed dealers including a company doing business as Bob’s Gun and Tackle Shop, demanding information about their sales of second-hand guns. Bob’s sued, claiming that ATF had exceeded its authority and that its dealer-selection criteria was arbitrary and capricious. A Virginia federal court granted ATF summary judgment. Affirming, the 4th Circuit rejected the argument that the law only authorizes ATF to send demand letters in the course of a criminal investigation. It also said that ATF’s dealer-selection criteria was not arbitrary and capricious because ATF wrote to less than 1% of all dealers, selecting just those that were connected to 10 crime guns in one year, with the time from the original retail sale date to crime-scene recovery or trace of three years or less. The average time-to-crime is six years, it said. Full text of the decision CONSTITUTIONAL LAW No-trespass policy is no 14th Amendment breach The city of Richmond’s housing authority’s trespass policy is not unconstitutionally void for vagueness, the Virginia Supreme Court ruled on April 23. Commonwealth v. Hicks, No. 011728. Trying to eradicate what it called an open-air drug market in a low-income housing development, the authority devised a policy whereby visitors without legitimate reasons to be on its property were first warned and then arrested for trespass. Kevin Hicks, a nonresident, was warned in writing that he was not authorized to be on authority property. When he returned, he was arrested for trespassing and convicted. His conviction was upheld by a state appeals court panel. Sitting en banc, however, that court vacated the conviction, ruling that the authority’s policy violated the U.S. Constitution’s First and 14th amendments. Virginia’s Supreme Court agreed. But the U.S. Supreme Court overturned the state court’s First Amendment freedom-of-association ruling, reinstated the conviction and remanded the case to the Virginia high court for reconsideration of the 14th Amendment void-for-vagueness issue. On remand, Virginia’s high court upheld the conviction, stating that the notice to Hicks “could not have been any clearer.” It also distinguished this ordinance from an anti-loitering law struck down by the U.S. Supreme Court in 1999 because that law applied to public streets, not property controlled by a housing authority. Full text of the decision CIVIL PRACTICE Pleadings rightly struck after evidence is burned A trial court did not abuse its discretion in striking a plaintiff’s pleadings, without first considering a lesser sanction, the Texas Supreme Court ruled on April 23. Cire v. Cummings, No. 02-0670. Carla Cummings sued her former lawyer, George Cire, for legal malpractice. She claimed that when Cire had represented her he wrongly told her that settlement was tax-free. Cummings had made between 70 to 100 audiotapes of her meetings with Cire, but she refused to turn them over to Cire during discovery. The trial court held that Cummings’ discovery responses were evasive and incomplete and entered an order to compel production. The court then held a hearing to determine if it should strike her pleadings. Evidence was presented that Cummings burned the tapes, and the trial court struck her pleadings. The Court of Appeals reversed, saying that it was an abuse of discretion for the trial court not to consider lesser sanctions first. Reversing, the Texas Supreme Court found the “death penalty” sanction to be appropriate, and determined that it is not necessary for a trial court to explain why lesser sanctions were not first implemented. “This is an exceptional case where it is fully apparent . . . that no lesser sanctions would promote compliance with the discovery rules,” the court said. Full text of the decision CRIMINAL PRACTICE Estate must pay dead arsonist’s restitution The estate of a deceased convicted arsonist is not entitled to the return of his forfeiture payment and must honor his restitution order worth more than $1.3 million, the 5th U.S. Circuit Court of Appeals held on April 16. United States v. Parsons, No. 01-50464. Andrew Parsons was convicted of arson, mail fraud and money laundering following his intentional burning of a hotel and pavilion that he owned. The district court entered a preliminary judgment of forfeiture for more than $970,000, fined Parsons $75,000, ordered him to pay more than $1.3 million in restitution to the insurers who had reimbursed him and sentenced him to 78 months in prison. He paid the forfeiture judgment, appealed his conviction, then died. His estate sought a refund of the money and an abatement of the restitution order. Refusing to reverse, the 5th Circuit held that because the hotel was used in interstate commerce, the federal arson conviction was reasonable. It added that the estate was not entitled to a return of the money because restitution orders that are compensatory rather than penal in nature survive the convict’s death. Full text of the decision EMPLOYMENT Arbitration agreement applies to Title VII claim Affirming a New York federal court decision, the 2d U.S. Circuit Court of Appeals held on April 21 that a gay investment bank employee was bound by an arbitration agreement he signed with the bank and could not sue it in court for sexual harassment. Gold v. Deutsche A.G., No. 03-7283. Jonathan Gold worked for Deutsche Bank where he was allegedly subjected to harassment, then fired. Before starting there, he had signed a form containing an arbitration provision covering any employment dispute. When Gold filed a complaint under Title VII of the Civil Rights Act of 1964, the district court stayed the suit and compelled arbitration. An arbitration panel dismissed all of his claims and the district court denied Gold’s request to lift the stay. Affirming, the 2d Circuit held that there were no special circumstances warranting the invalidation of the arbitration agreement. Although Gold argued that he was not given a copy of the National Association of Securities Dealers rules and was unaware that discrimination claims were subject to mandatory arbitration, the court said that it was his responsibility to make sure he understood the document he signed. Full text of the decision HEALTH LAW Doc’s consent order leads to sanction by other state A doctor who consented to discipline by the Connecticut Medical Examining Board is also subject to reciprocal discipline under a Massachusetts rule, the Massachusetts Supreme Judicial Court held on April 16. Ramirez v. Board of Registration, No. SJC-08896. Randolph Ramirez, a doctor licensed in both states, entered into a consent order with the Connecticut Medical Examining Board. It contained allegations that he chose not to contest, but he admitted no wrongdoing. The allegations were that he had conducted an undocumented rectal exam of one patient who complained only of a boil on her leg and had asked a second patient, while she was naked, to talk about her sex life, perform stretches and submit to a rectal exam. He waived his right to a hearing, and agreed to three years of probation, a $2,000 penalty. The Massachusetts board then subjected him to its own sanctions, citing its reciprocal discipline regulation. The Massachusetts high court affirmed. Noting that the issue of reciprocal discipline in the context of consensual discipline was one of first impression, it held that the board’s complaint against Ramirez was properly founded on his having been “disciplined in another jurisdiction . . . by the proper licensing authority for reasons substantially the same as those set forth” in the Massachusetts regulations. Full text of the decision INSURANCE LAW Liability insurance policy has injury-in-fact trigger Adopting an “injury-in-fact” trigger for three occurrence-based comprehensive general liability (CGL) insurance policies, the New Hampshire Supreme Court said on April 23 that property damage must occur during the policy period to trigger coverage. EnergyNorth Natural Gas Inc. v. Underwriters and Lloyd’s, No. 2003-437. New Hampshire’s Department of Environmental Services notified EnergyNorth Natural Gas, a successor to companies that operated manufactured gas plants from before 1900 until 1952, that there was pollution damage at those sites. EnergyNorth spent a large sum of money remediating the damage. It then filed a declaratory judgment action in the New Hampshire federal court against insurers that had issued it CGL policies, seeking indemnification for the costs it incurred. The policies covered liabilities associated with property damage resulting from “occurrence(s).” The federal court certified to the state Supreme Court the question of what “trigger-of-coverage” standard applied under New Hampshire law to determine the point at which an “occurrence” causing property damage takes place. Analyzing three of the policies, the state’s high court said, “the occurrence of property damage during the policy period is the operative event that triggers coverage.” Emphasizing that it was describing an “injury-in-fact” trigger, it said that it is the damage, not the accident causing the damage, that must occur during the policy period. Full text of the decision LEGAL PROFESSION Malpractice action means arbitration waiver Once a client files a malpractice suit against an attorney, the client waives any rights under the Business and Professions Code � 6200-the Mandatory Fee Arbitration Act (MFAA)-which makes arbitrating attorney fee disputes voluntary for the client and gives a client who chooses to arbitrate the option of rejecting the arbitrator’s decision and going to trial, the California Supreme Court said on April 22. Aguilar v. Lerner, No. S099667. When lawyer Raul Aguilar hired attorney Esther Lerner to help him with his divorce, he signed a retainer agreement that included an arbitration agreement that covered any fee disputes or any other disputes related to the legal representation. Aguilar later fired Lerner, then sued her for professional negligence and breach of fiduciary duty. She countered with a claim for unpaid legal fees and costs and moved to compel arbitration of the entire dispute pursuant not to the MFAA, but under the California Arbitration Act, a separate statutory scheme. After the trial court granted her motion, Lerner prevailed in arbitration. Despite Aguilar’s claim that compulsory arbitration violated the MFAA, the trial court denied his motion to vacate the award and confirmed it. An intermediate appellate court upheld that decision. Affirming, the California high court said that the MFAA provides that a client’s rights under the statute are waived by “seeking affirmative relief against the attorney for damages or otherwise based upon alleged malpractice or professional misconduct.” Although the MFAA applied to Lerner’s claims, the court ruled that Aguilar waived his rights under the act by filing his suit. Full text of the decision

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