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BANKRUPTCY Crop-disaster payment isn’t part of estate A crop-disaster payment from the federal government to a debtor in a closed bankruptcy case is not included as property of the bankruptcy estate, the 5th U.S. Circuit Court of Appeals held on Dec. 9. In the Matter of Burgess, No. 04-30189. Farmer Edward Burgess received a bankruptcy discharge on Dec. 5, 2002. The Agricultural Assistance Act of 2003, which provided for crop-disaster payments to farmers for crop losses in 2001 and 2002, was passed on Feb. 20, 2003. Burgess applied for a disaster payment after his bankruptcy discharge. After Burgess’ bankruptcy case was administratively closed and discharged, the bankruptcy trustee received $24,829 from the Department of Agriculture’s Farm Service Agency as disaster payment for crop loss Burgess sustained in 2001. Upon reopening of the bankruptcy proceeding, the bankruptcy court decided that the payment should go to the creditors. A Louisiana federal court affirmed. The 5th Circuit reversed. 11 U.S.C. 541(a) provides that the bankruptcy estate includes “(1) all equitable and legal interests of the debtor in property as of the commencement of the case [and] . . . (6) Proceeds, product, offspring, rents, or profits of or from property of the estate, except such as are earnings from services performed by an individual debtor after the commencement of the case.” The court found that at the time Burgess filed for bankruptcy, the 2003 act had not been enacted and he only had a “mere hope” that future legislation would provide relief for his crop loss. Full text of the decision CIVIL PRACTICE Copy of local law needed if reliance is placed on it A federal court need not take judicial notice of an old industry standard that is incorporated by reference into a state statute, where the proponent failed to produce a copy of it, the 1st U.S. Circuit Court of Appeals held on Dec. 10. Getty Petroleum Marketing Inc. v. Capital Terminal Co., No. 03-2324. Capital Terminal Co., which owns a pier in Rhode Island, had an operating agreement with Getty Petroleum Marketing Inc., which operates certain pipelines connected to the pier. The agreement’s amendment made Getty responsible for the cost of compliance with all “regulations” applicable to pipeline operation. When the fire chief cited inadequate fire protection at the pier, and set forth minimal acceptable improvements, Capital demanded that Getty pay for them, as required by the regulations. After a jury trial in the ensuing declaratory judgment suit, Getty moved for judgment as a matter of law, contending that no regulation had been set forth. Capital claimed the improvements were required by the 1987 edition of the National Fire Protection Association’s Standard 30, which is incorporated by reference into a Rhode Island state statute. A Rhode Island federal court urged Capital to produce the 1987 Standard 30, but Capital did not. Getty won its motion. The 1st Circuit affirmed. Although federal courts are “bound to take judicial notice without plea or proof” of the law of any state, the court rejected Capital’s argument that, since NFPA 30 is part of Rhode Island law, the court should have taken judicial notice of its contents. The court said that even liberal use of such judicial notice occurs “only when the law to be noticed is readily available and there are no issues about accuracy or authenticity,” the opposite of the case here. Full text of the decision EVIDENCE Child-witness statement out of court is admissible A defendant’s right to confront his accusers was not violated by the admission of prior out-of-court statements of child witnesses, the Colorado Supreme Court ruled on Dec. 6. In re People v. Argomaniz-Ramirez, No. 04SA105. In a trial against a defendant charged with sexual assault on a child, the prosecution moved to admit out-of-court statements of the alleged victims, including two videotaped interviews by detectives. Although the trial court initially found the statements admissible, the court excluded the two videotaped interviews, in light of the U.S. Supreme Court’s holding in Crawford v. Washington. The Colorado Supreme Court reversed. In Crawford, the justices determined that “[t]estimonial statements of witnesses absent from trial have been admitted only where the declarant is unavailable and, and only where the defendant has had a prior opportunity to cross-examine.” Although the defendant did not have the opportunity to cross-examine the witnesses at the time they made the statements, the Colorado high court found the statements constitutional because the witnesses were to testify at trial and be subject to cross-examination. Full text of the decision GOVERNMENT Same-sex rights OK, not anti-discrimination law Though a Philadelphia ordinance extending employee benefits to “life partners” does not alter the state-defined definition of marriage, the ordinance provisions prohibiting discrimination against life partners and exempting them from real estate transfer taxes must be struck down, the Pennsylvania Supreme Court ruled on Dec. 6. Devlin v. City of Philadelphia, No. J-59-2004. A Philadelphia ordinance extended employee benefits to “life partners,” those described as being in an “adult, committed, financially independent, same-sex relationship.” The ordinance amended the definition of “marital status” to include “life partnership,” and prohibited discrimination by private employers and places of public accommodation. A second ordinance exempted property to life partners from taxation. A group of citizens challenged the ordinances, which the trial court upheld, but which the appellate court struck down. The appeals court said that the city had improperly altered the definition of “marriage,” the sole province of the state legislature. The Pennsylvania Supreme Court reversed in part, holding that the city’s inclusion of life partnerships as having “marital status” only redefines the group of people to whom the city wants to extend benefits. It does “not even begin to mirror the extensive fabric of rights and obligations that the Commonwealth has afforded to married couples.” Though ruling that, as a home-rule municipality, the city could extend benefits to whomever it wanted, the court affirmed the appeals court ruling striking the rest of the provisions, as those provisions improperly sought to define the relationships between individuals who may have no meaningful connection with the city. Full text of the decision LABOR LAW No overtime pay for vets under fair labor law Veterinarians fall under the “physicians and other practitioners” exclusion from the salary requirements for professional exemption under the Fair Labor Standards Act (FLSA), and thus, are not entitled to overtime pay, the 9th U.S. Circuit Court of Appeals held on Dec. 7. Clark v. United Emergency Animal Clinic Inc., No. 03-15267. Veterinarians Lisa Clark and Margaret Saiki were nonsalaried employees paid by the shift at United Emergency Animal Clinic Inc., which operated an after-hours veterinary clinic. In separate civil actions, Clark and Saiki sued United, arguing that it unlawfully refused them overtime pay. A California district court granted summary judgment to United, holding that veterinarians were professionals not entitled to overtime pay under an exception to mandatory overtime pay under the FLSA. Clark and Saiki appealed. Affirming, the 9th Circuit held that veterinarians were exempted from the overtime wage requirements of the FLSA. Holding that veterinarians fell under the FLSA’s “physicians and other practitioners” exclusion, the court said, “[A]s the district court concluded, veterinarians are doctors of medicine, they have advanced degrees, and they are licensed. Nothing in the language of the statute or regulations indicates a distinction between those who practice medicine on humans and those who practice on animals.” Full text of the decision LEGAL PROFESSION Subrogation deal refusal was no ERISA breach A multi-employer benefit plan did not violate the Employee Retirement Income Security Act (ERISA) by denying benefits to a plan participant whose attorney refused to execute a subrogation agreement to reimburse the plan for funds advanced to the participant, the 4th U.S. Circuit Court of Appeals held on Dec. 10. Kress v. Food Employers Labor Relations Ass’n and United Food and Commercial Workers Health and Welfare Fund, No. 03-2269. Paul Kress was an employee of a Giant supermarket that was a participant in the Food Employers Labor Relations Association and United Food and Commercial Workers Health and Welfare Fund when he was injured in an automobile collision. Under a provision of the fund’s welfare benefit plan, the fund offered to advance money to Kress to pay for accident-related expenses. As a condition of the advance, the fund required Kress and his attorney to execute a subrogation agreement to reimburse the fund in full out of any recovery he received from a third party before any other parties were paid. The attorney refused to execute the subrogation agreement, and as a result, the fund denied benefits to Kress. Kress sued the plan, arguing that, despite the attorney’s refusal to sign the agreement, the plan’s denial of benefits violated ERISA. A Maryland district court granted summary judgment to the plan. Affirming, the 4th Circuit held that the plan description’s requirement that the plan be reimbursed in full was unambiguous and that the policy did not violate ERISA. The court said, “Since circuit law interpreting ERISA plainly permits a plan to recoup any advance it has made to a participant before an attorney makes a claim on a subsequent award, we see no reason to impede a plan from requiring pre-commitment to this state of affairs.” Doing so, the court said, “would surely discourage plan sponsors from providing the very sorts of accident and sickness benefits that the Fund offered to Kress.” Full text of the decision MEDIA LAW Kidnapper/murderer is libel-proof in Kansas The Kansas Supreme Court would adopt the “libel-proof plaintiff” doctrine and apply it to a convicted murderer/kidnapper, the 10th U.S. Circuit Court of Appeals predicted on Dec. 9. Lamb v. Rizzo, No. 03-3179. Thomas Lamb is serving three consecutive life sentences for first-degree kidnapping and first-degree murder. A newspaper reporter, Tony Rizzo, wrote two articles about Lamb. Lamb sued Rizzo in state court for libel, alleging that false information published by Rizzo caused the subsequent denial of Lamb’s parole request. Lamb objected to Rizzo’s statement that he had been convicted of raping a woman he had kidnapped and another whom he had kidnapped and killed, claiming that he was never convicted of raping them. Rizzo removed the case to a Kansas federal court, which applied Kansas law when it dismissed the complaint for failure to state a claim upon which relief could be granted. The 10th Circuit affirmed, holding that the Kansas Supreme Court, which has never done so expressly, would adopt the “libel-proof plaintiff” doctrine, and would apply it here. The doctrine, which has been applied in federal courts and in a number of other jurisdictions for decades, holds that “when a plaintiff’s reputation is so diminished at the time of publication of the allegedly defamatory material that only nominal damages at most could be awarded because the person’s reputation was not capable of sustaining further harm, the plaintiff is deemed to be libel-proof as a matter of law and is not permitted to burden a defendant with a trial.” Full text of the decision TORTS Permitless inspection is no constitutional breach Two employees of the New York Department of Environmental Conservation (DEC) did not violate a homeowner’s Fourth Amendment rights by crossing his yard without permission to conduct a regulatory inspection, the 2d U.S. Circuit Court of Appeals ruled on Dec. 10. Palmieri v. Lynch, No. 03-9038. Paul Palmieri entered into a settlement with DEC allowing him to extend the dock on his waterfront home and to add a boatlift. Both this settlement and a subsequent agreement allowing construction of a bulkhead were made subject to DEC wetlands-impact inspection. Palmieri refused DEC physical access to his property to conduct the inspections, so inspections were carried out by boat. When Palmieri sought another permit to extend the dock further and to add yet another boatlift, two DEC agents entered Palmieri’s gated backyard to conduct an inspection, after getting no answer at the front door. Palmieri ordered the agents off the property, and filed suit against DEC for a warrantless search of his property. The district court dismissed. The 2d Circuit affirmed, finding the special needs exception to a warrantless search applied. The brief intrusion onto Palmieri’s land was in response to his request for a building permit, the agents left as soon as they were asked to and no damage resulted. Full text of the decision

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