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BANKRUPTCY Creditor delay doesn’t discharge student loan Though a creditor waited five years to move for relief from a discharge order, a student loan debt is still nondischargeable, absent a showing of undue hardship, the 7th U.S. Circuit Court of Appeals ruled on Feb. 2 in a case of first impression. In re Hanson, No. 04-2131. Craig Hanson got student loans from Great Lakes Higher Education Corp., but defaulted on the debt in July 1989. Great Lakes obtained a default money judgment against him for $31,583 in December 1992, a month after Hanson filed a voluntary petition for Chapter 13 bankruptcy relief. A Wisconsin court granted Great Lakes’ motion to vacate the default judgment with the right to reopen if the bankruptcy was dismissed. Hanson’s Chapter 13 plan to pay 19% of the claim over 60 months was confirmed without objection, and a discharge order was entered in September 1997 after Hanson had completed his payments. The order, however, reflected a 1996 “sunset provision” that had been repealed by Congress, so it violated the requirement that student loan debt may not be discharged without a showing of undue hardship�a showing Hanson never made. In May, 2003, Great Lakes’ successor-in-interest, Educational Credit Management Corp. filed a Fed. R. Civ. P. 60(b)(4) motion for relief from the discharge order. The bankruptcy court granted it. A Wisconsin federal court affirmed. The 7th Circuit affirmed, holding that despite “the passage of time without any challenge from ECMC,” Hanson cannot keep his “windfall” since his “failure to serve ECMC with a summons and an adversary proceeding complaint effectively denied ECMC the opportunity of presenting an objection prior to the adjudication of its rights.” Full text of the decision CIVIL PRACTICE Group can’t challenge university’s radio license The civil rights group, the Rainbow/PUSH Coalition, did not have standing to challenge the Federal Communication Commission (FCC)’s grant of a radio license to the University of Missouri on the basis of the university’s alleged racial discrimination, the U.S. Circuit Court for the District of Columbia held on Feb. 4. Rainbow/PUSH Coalition v. FCC, No. 01-1072. When the University of Missouri applied to renew its FCC license for its radio station, KWMU-FM radio in St. Louis, it failed to disclose Equal Employment Opportunity Commission racial discrimination complaints against it in violation of FCC regulations. The university claimed that there was no disclosure obligation because it had prevailed on the claims. Rainbow/PUSH petitioned the FCC to deny the license renewal, arguing that it had practiced racial discrimination and had misrepresented this on its license renewal application. The FCC denied the petition, and approved the university’s license renewal. Affirming, the D.C. Circuit held that Rainbow/PUSH did not have standing to challenge the license renewal because it had not met its threshold requirement for associational standing on account of its failure to demonstrate that “at least one of its members would have standing to sue in his own right.” The court said, “This is not to say that discriminatory employment practices cannot in some instances affect programming content and thus cause injury to audience members but to establish standing on this basis a complainant must demonstrate both the existence of injury to the audience and its causal link to the discrimination. The Coalition has not done so.” Full text of the decision CIVIL RIGHTS No Section 1983 suit for procedural breach of law An individual cannot bring a � 1983 civil rights suit against the judiciary for alleged violations of the Civil Service Reform Act (CSRA), the 2d U.S. Circuit Court of Appeals ruled on Feb. 2. Dotson v. Griesa, No. 01-6248. Allen Dotson, a federal parole officer, was terminated for purportedly misrepresenting his whereabouts and activities on a particular day. First notified of the termination in December 1997, Dotson went through various hearings, appeals and requests for reconsideration over a 10-month period. Dotson, an African-American, filed a pro se claim under 42 U.S.C. 1983 against the judges and court personnel who were part of the process. Dotson alleged that the judges gave false, racially improper reasons for terminating him, and claimed that similarly situated white officers were afforded more process. He said that the judges did not follow procedures mandated by the CSRA. The district court dismissed the action. The 2d Circuit affirmed, ruling that Dotson’s claim alleged a deprivation of rights under color of federal law, not state law. Also, the administrative and judicial review procedures of the CSRA do not apply to employees of the judiciary, so the act precludes Dotson or others from maintaining a civil rights suit for money damages or equitable relief. Full text of the decision No federal claim for killing of dogs and cats The owner of over 200 sick dogs and cats seized and euthanized by county officials had no cause of action for the seizure of property under 42 U.S.C. 1983 because the destruction of her animals was done contrary to state procedures, and the state’s post-deprivation procedures were sufficient to compensate her for her losses, the 4th U.S. Circuit Court of Appeals ruled on Feb. 2. Bogart v. Chapell, No. 03-2092. Judy Bogart participated in animal rescue activities, and acquired hundreds of animals over the years, which she kept in her small yard and in her mobile home. After receiving complaints regarding the condition of the animals, Robbie Chapell�a veterinarian and co-chairman of the York County Humane Society�and officials of York County Animal Control oversaw the seizure and euthanasia of 82 dogs and 129 cats from Bogart’s property. Obtaining expert evidence that many of the animals could have been saved, Bogart sued Chapell and county officials in state court, alleging violations of 42 U.S.C. 1983 and the South Carolina Constitution. Chapell and his co-defendants removed the case to federal court, where a district court granted summary judgment to the defendants. Bogart appealed, arguing the raid and destruction violated her procedural due process rights. Affirming, the 4th Circuit held that, although the destruction of her animals did not comply with state law, Bogart had no claim for a violation of procedural due process because her property had been destroyed through a state employee’s random and unauthorized act. Thus, the court held, the state’s only obligation was to provide her with an adequate remedy after the fact. The court said, “[T]he random and unauthorized euthanization of Bogart’s animals by the Defendants-however atrocious-did not constitute a violation of Bogart’s procedural due process rights because a meaningful postdeprivation remedy for the loss is available.” Full text of the decision CONSUMER PROTECTION Law firm’s lien to secure debt must follow law The fair debt Collections Practices Act (FDCPA) applied to a law firm’s efforts to collect municipal water obligations from a municipal client’s customers, the 3d U.S. Circuit Court of Appeals ruled on Jan. 31. Piper v. Portnoff Law Associates Ltd., No. 03-4399. The city of Bethlehem, Pa., hired Portnoff Law Associates to collect on overdue or delinquent water and sewer accounts. The law firm sent customer Bridget Piper several letters notifying her of her delinquent account, and of the lien against Piper’s house secured by the firm for the outstanding balance, as well as its own fees. When the firm did not receive payment, it moved to execute the lien. Piper filed a class action against the firm for violating the FDCPA, arguing that the firm didn’t include mandatory statutory disclosures within the letters. The firm argued that once it decided to proceed in rem, against the house, to satisfy the lien, its actions were outside the scope of the FDCPA. The district court granted a preliminary injunction, but certified the question of the FDCPA application to the law firm’s actions to the 3d Circuit. The 3d Circuit ruled that Piper’s delinquent water and sewer account amounted to a debt to the city and that the firm’s attempts to collect that debt on behalf of the city had to comply with the FDCPA. The firm cannot remove itself from the act’s application simply by proceeding in rem instead of in personam. To hold otherwise would be to thwart the purpose of the FDCPA. Though a person whose business does not primarily involve the collection of debts generally would not be a debt collector for purposes of the act, if his principal business is the enforcement of security interests, he must comply with the act’s provisions dealing with nonjudicial repossession abuses. Full text of the decision EVIDENCE Reconstruction expertise needed for testimony Absent separate credentials, a police officer is not qualified to offer evidence as to the “primary contributing cause” of a car accident, the Delaware Supreme Court ruled on Jan. 31. Lagola v. Thomas, No. 566, 2003. Walter Thomas sued Regina Lagola for injuries he received in a car accident with Lagola. At trial, Lagola’s sister testified that the road was icy at the time of the accident. On the other hand, the police officer who had been called to the scene testified that the roadway was wet, but not icy, saying that he had listed on the incident report that speeding by Lagola was the primary contributing circumstance of the accident. Thomas’ attorney stressed this part of the officer’s testimony during closing arguments, and the jury awarded Thomas $1 million. The Delaware Supreme Court reversed and remanded. The court overruled a 1995 case to the contrary, and held that a lay opinion by a police officer who is not qualified as an expert in accident reconstructions about the “primary contributing circumstance” of an accident is inadmissible evidence. And in this case, the error in admitting the testimony went directly toward the contested issue of causation and jeopardized the fairness of the trial. Full text of the decision GOVERNMENT Dealing with state makes company records public When a private corporation is performing a public function under a contract with a government entity, its records are subject to examination, the Iowa Supreme Court determined on Feb. 4. Gannon v. Nichols, No. 131/03-1658. Pursuant to a service agreement, the Iowa State University Foundation, a private nonprofit, independently contracted to raise and manage private gift support for the benefit of Iowa State University (ISU). Two Iowa taxpayers requested access to the foundation’s financial records. The request was denied by the Iowa Board of Regents and only partially granted by the foundation. The taxpayers sued under the Iowa Freedom of Information Act (FOIA). The trial court granted the respondents’ motion for summary judgment. The Iowa Supreme Court reversed and remanded. The Iowa FOIA allows everyone the right to examine, copy and disseminate “public records.” Iowa Code � 22.2(2) states that “[a] government body shall not prevent the examination or copying of a public record by contracting with a nongovernment body to perform any of its duties or functions.” The court said that the activities of the foundation-fund-raising and management- advance the institutional goals of ISU. Full text of the decision LABOR LAW Wal-Mart can reduce pay and not pay overtime Wal-Mart’s practice of prospectively reducing its pharmacists’ salaries does not effectively convert them from salaried to hourly employees entitled to overtime pay, the 10th U.S. Circuit Court of Appeals held on Feb. 1. In re Wal-mart Stores Inc., Fair Labor Standards Act Litigation, MDL 1139, No. 03-1432. A number of pharmacists employed full-time by Wal-Mart alleged that, pursuant to the Fair Labor Standards Act of 1938, they were entitled to overtime compensation of at least 1 1/2 times the hourly rate for hours exceeding a 40-hour week. Wal-Mart countered that the pharmacists fell within an exemption to the overtime rule, which says that it does not apply to people “employed in a bona fide executive, administrative or professional capacity”-people paid on a salary basis, according to a Department of Labor regulation. A Colorado federal court, holding that the pharmacists are not paid on a salary basis because of Wal-Mart’s alleged practice of prospectively reducing their salaries when workloads decreased, granted the pharmacists summary judgment. The 10th Circuit reversed and remanded, finding that the practice of prospectively changing salaries does not convert salaried employees to hourly employees entitled to overtime rates unless the purported “salary” becomes “a sham-the functional equivalent of hourly wages.” The pharmacists had not established such a sham. Full text of the decision MEDIA LAW Nonsubscription bulk mail ban unconstitutional The state of Washington Department of Corrections’ ban on inmates’ receipt of nonsubscription bulk mail and catalogs was unconstitutional in a suit brought by the publication, Prison Legal News, the 9th U.S. Circuit Court of Appeals held on Feb. 1. Prison Legal News v. Lehman, No. 03-35608. Prison Legal News, a Washington non-profit corporation publishing legal news of interest to prison inmates, sued Joseph Lehman and various other Washington State prison officials under 42 U.S.C. 1983, arguing that the Washington Department of Corrections’ ban on prisoners receiving nonsubscription bulk mail and catalogs violated its First and 14th amendment rights. The prison officials countered that the ban decreased the likelihood of incoming contraband, reduced mailroom work and helped decrease clutter in the cells, thus reducing the chance of fires and increasing the efficiency of cell searches. A district court granted summary judgment to the publication on its First Amendment claim, granted the prison officials’ motion for summary judgment on their qualified immunity claim on that issue, but denied the officials’ qualified immunity claim on the issue of prison restrictions on third-party legal materials. Both sides appealed. Affirming on all issues, the 9th Circuit held that the prison ban was not rationally related to a legitimate penological interest. Applying the four-pronged test articulated by the U.S. Supreme Court in Turner v. Safley, the 9th Circuit followed its previous holdings on subscription bulk mail and applied it to nonsubscription bulk mail in the instant case. The court distinguished the case from U.S. Supreme Court precedent upholding a ban on prison junk mail because Prison Legal News mail-while bulk mail-was sent in response to specific requests by each prisoner. Rejecting the officials’ argument on reducing contraband, the court said, “[w]e believe it is far more likely that contraband would be contained in first class mail rather than in bulk mail.” Full text of the decision TAXATION State tax scheme must complement federal tax The estate tax scheme in the state of Washington, though not automatically adopting specific federal law, must be administered complementary to federal law to guarantee that a separate state tax does not burden estates, and a new tax burden can be created only by law that states such a purpose, the Washington Supreme Court held on Feb. 3. Estate of Hemphill v. State Revenue, No. 74974-4. In a class action, the estates of three decedents who died in 2002 requested the refund of estate taxes paid to the state, claiming that taxes should have been calculated under the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) instead of a previous version of federal law as of Jan. 1, 2001. Under Wash. Rev. Code � 83.100.030(1), Washington’s estate tax is limited to “an amount equal to the federal credit.” In 2001, the Washington Legislature revised Wash. Rev. Code � 83.100 and referenced the federal tax code as “the United States Internal Revenue Code of 1986, as amended or renumbered as of January 1, 2001.” However, in 2001, the EGTRRA was enacted by Congress, ending the federal estate tax and repealing the federal estate tax credit for state estate taxes. The trial court ruled that the previous version of the tax law applied because Washington’s estate tax law specifically references and incorporates federal tax law as of Jan. 1, 2001. The Washington Supreme Court reversed and remanded. Since the current estate tax scheme in Washington looks to federal law in order to guarantee that there is no separate state tax to burden estates, the court found that a new tax burden may not be created simply because the Washington Legislature has failed to revise its statute. An independent Washington estate tax may only be created through a law that states such a purpose. Full text of the decision

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