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ATTORNEY FEES No fees for plaintiff who wins $1 civil judgment A federal district court erred in awarding $371,362 in attorney fees and $70,828.84 in costs in a case in which the prevailing party obtained no declaratory relief and was awarded only $1 in damages, the 9th U.S. Circuit Court of Appeals held on Aug. 25. Benton v. Oregon Student Assist. Comm’n, No. 03-35075. Melinda Benton, a community college professor who received a degree from unaccredited Bob Jones University prevailed in a civil action against the Oregon Student Assistance Commission, in which she argued that sanctions against her for her unaccredited degree were not because of the unaccredited status of her degree-granting institution, but because the administrator of the Oregon Office of Degree Authorization objected to the conservative orientation of the school. An Oregon federal district court held for Benton, but did not grant declaratory relief and awarded only $1 in damages. Benton sought $857,278 in attorney fees and $104,213.05 in costs. The district court awarded her $371,362 in attorney fees and $70,828.84 in costs, and both sides appealed. Reversing, the 9th Circuit held that it was an error to award the fees because Benton obtained only $1 in damages and she received neither declaratory relief nor sufficient benefit to the public at large from her court victory. The court said, “[t]o justify an award of attorney’s fees in this case, the district court must identify ‘some way in which the litigation succeeded, in addition to obtaining a judgment for nominal damage.’ “  Full text of the decision BANKRUPTCY Stock redemption claims can’t be downgraded Bankruptcy courts must use equitable discretion to decide whether to subordinate particular claims on a case-by-case basis, the 1st U.S. Circuit Court of Appeals held on Aug. 25. In re Merrimac Paper Co. Inc., No. 05-1010. Ralph Harrison, a Merrimac Paper executive, participated in its employee stock ownership plan, which was qualified under the Employee Retirement Income Security Act of 1974 (ERISA). The plan provided that upon a participant’s separation from service, the vested portion of his individual account, would be distributed to him in the form of Merrimac stock. Upon his retirement, Harrison received the shares and sold them back to Merrimac, which gave him a promissory note for the appraised value of the shares, less a cash advance paid earlier. The note bore interest and called for the principal balance to be amortized in three installments. Harrison received the first installment, but Merrimac failed to make the next one. Harrison accelerated the note and brought suit in Massachusetts state court for breach of contract. After Merrimac filed for bankruptcy, Harrison filed a claim. The bankruptcy court granted Merrimac’s summary judgment motion and subordinated Harrison’s claim. A Massachusetts federal court affirmed. The 1st Circuit reversed, holding that bankruptcy courts may not use their powers of equitable subordination to downgrade stock redemption claims on a categorical basis. Instead, they must evaluate the propriety of equitable subordination case by case. The stock redemption note here, which was delivered in partial liquidation of the retirement benefits of a retiring employee under a stock ownership plan, may not be equitably subordinated, because the debtor has not made a particularized showing of special circumstances, such as misconduct on the part of the note holder. CIVIL PRACTICE Wrong to stop disclosure of discovery documents A district court wrongly imposed a blanket order prohibiting disclosure of all documents filed during discovery in a case of public importance, the 3d U.S. Circuit Court of Appeals ruled on Aug. 24. Shingara v. Skiles, No. 05-2376. John Shingara, a Pennsylvania State Police employee, filed a civil rights suit against the police department over alleged retaliation for Shingara’s outspokenness about supposedly faulty radar devices the department used. Shingara’s attorney gave documents received in discovery to Pennsylvania Newspapers Inc. After the newspaper printed a story about the possibly defective devices, the department asked the district court for a protective order preventing further disclosure of all discovery documents to the media. The newspaper intervened, and the district court granted the request. The 3d Circuit reversed, finding that the district court erred in giving almost exclusive weight to the fact that further disclosure to the media could be prejudicial. By focusing only on prejudice that might occur, the district court had unacceptably downplayed the fact that this case involves public officials and issues important to the public. The court left open the possibility that the department could seek a protective order for specific documents, and reminded the attorneys to abide by their ethical obligations. Patient can sue on basis of future risk of harm A heart-surgery patient has standing to sue the maker of a medical device for future medical monitoring costs, even though the device had not caused an injury, the 6th U.S. Circuit Court of Appeals ruled on Aug. 23. Sutton v. St. Jude Medical S.C. Inc., No. 04-5211. Representing a class of approximately 50,000 people who underwent cardiac bypass surgery using a medical device called the Symmetry Bypass System Connector, Michael Sutton sued St. Jude Medical S.C. Inc., raising three arguments: (1) The device is defective and unreasonably dangerous; (2) its implant puts Sutton and class members at a substantially greater risk for developing restenosis and occlusion of the bypass graft; and (3) this increased risk necessitates both current and future medical testing and monitoring. St. Jude moved to dismiss, arguing that Sutton lacked standing because he could not show that the device had injured him. The district court granted the motion. The 6th Circuit reversed, holding that Sutton had alleged sufficient facts that, if true, would suggest an increased risk of future harm resulting from being implanted with St. Jude’s device. Assuming that Sutton is capable of proving that the device puts implantees at a substantially greater risk for developing restenosis and occlusion of the bypass graft, medical monitoring will undoubtedly help to remedy the situation. Thus, he had standing to seek medical testing and monitoring allegedly made necessary by the implantation of a medical device that has not yet malfunctioned, but presents an increased risk of future harm. CONSTITUTIONAL LAW Being a college athlete is no due process interest A champion swimmer from Singapore doesn’t have a protected due process interest in being a member of the University of Texas swim team, the Texas Supreme Court ruled on Aug. 26. National Collegiate Athletic Association v. Yeo, No. 03-0753. Joscelin Yeo was a member of the University of California, Berkeley swim team in 1999. Next year, Yeo transferred to the University of Texas. National Collegiate Athletic Association rules require those who transfer from one four-year college to another to sit out a full academic year. Yeo competed in the 2000 Olympics before resuming competition in 2001. Berkeley repeatedly objected to Yeo’s participation in meets. University of Texas complied, but without telling Yeo that it was Berkeley that was objecting. When she finally found out about Berkeley’s objections, Yeo hired an attorney who secured Berkeley’s consent. Yeo sued Texas, claiming she had been denied procedural due process, because Texas did not tell her of Berkeley’s objections. Yeo, as a world-famous swimmer, suffered damage to her reputation and earning capacity. The trial court sided with Yeo. An appeals court affirmed. The Texas Supreme Court reversed, holding that Yeo has no constitutionally protected property interest in being a college athlete, regardless of her fame and reputation. The court further declined to equate an interest in intercollegiate athletics with an interest in graduate education, as it did when it said a medical student was entitled to procedural guarantees before being dismissed from medical school. Regulating telefunders isn’t unconstitutional A Federal Trade Commission (FTC) rule limiting telemarketing by professional fund-raisers hired by charities did not violate the First Amendment or exceed the FTC’s authority, the 4th U.S. Circuit of Appeals held on Aug. 26. National Federal for the Blind v. FTC, No. 04-1378. In 1994, Congress passed the Telemarketing Consumer Fraud and Abuse Prevention Act, otherwise known as the “Telemarketing Act,” which restricted the activities of telemarketers. The act did not cover charities because they were not under the FTC’s jurisdiction. However, the USA Patriot Act of 2001 contained provisions restricting charities’ fund-raising efforts. After conducting a rule-making proceeding, the FTC concluded that consumers were bothered by telemarketing regardless of the source, and, pursuant to the provisions of the Patriot Act, the FTC promulgated changes to the Telemarketing Sales Rule (TSR) that restricted the activities of professional fund-raisers. The National Federation for the Blind and Special Olympics Maryland Inc. challenged the rule, arguing that it violated the First Amendment and was beyond the scope of the FTC’s authority. A district court granted summary judgment to the FTC. Affirming, the 4th Circuit held that the FTC had neither exceeded its authority nor violated the First Amendment. The court said, “Since it is ‘narrowly drawn’ to serve the ‘strong subordinating interest’ of protecting residential peace, the TSR embodies a proper compromise between the important speech interests of charities and the equally important need to protect the public from excessive intrusions into the home.” CRIMINAL PRACTICE Jury can view defendant during its deliberations A trial court committed no error by granting a jury’s request to have close-up views of a nontestifying criminal defendant during its deliberations, the District of Columbia Court of Appeals held on Aug. 25 in a case of first impression. Washington v. United States, No. 00-CF-613. Yogi Washington didn’t testify in his trial for armed burglary and assault, but was identified in court by prosecution witnesses. During deliberations, jurors asked the court to allow them to view Washington at close range. Over Washington’s counsel’s objections, the trial court granted the jury’s request. Washington appealed, arguing that his mere presence in the courtroom did not place him into evidence and that the identification amounted to the introduction of new evidence during deliberations. Affirming, the D.C. Court of Appeals distinguished the jury’s viewing of Washington from the two cases he cited that held that such inspections constituted new evidence during deliberations. The court said, “[b]oth of these cases are distinguishable from the facts of the present appeal in one important and, we think, controlling respect-the jury, in this case, did not ask to observe any aspect of Mr. Washington which it could not previously have viewed during his trial. Instead, the jury asked to re-examine Mr. Washington’s facial profile, something which it had had the opportunity to view at various times and at various angles throughout the course of trial.” ENVIRONMENTAL LAW Clean Water Act liability for point-source owners Point-source owners can be liable under the Clean Water Act for discharges that occur from their land, even if they are not affirmatively causing the discharge, the 10th U.S. Circuit Court of Appeals held on Aug. 24. Sierra Club v. El Paso Gold Mines Inc., No. 03-1105. The Sierra Club and others filed a citizen suit against El Paso Gold Mines, whose abandoned mine shaft allegedly discharges pollutants on an ongoing basis into “navigable water,” as defined by the federal Clean Water Act. A Colorado federal magistrate judge granted summary judgment to the plaintiffs, holding that the conduct in this case does not amount to a “wholly past violation,” (which would have eliminated subject-matter jurisdiction), that Congress intended to require owners of inactive mines such as El Paso to obtain discharge permits under the National Pollutant Discharges Elimination System, and that the plaintiffs had met their burden of showing that pollutants were actually discharged into the creek at issue. The 10th Circuit affirmed on the first two issues, but reversed and remanded, finding that genuine issues of material fact precluded summary judgment. The court rejected El Paso’s argument that, as the successor owner of the mining company that constructed the mine shaft point source, it had never conducted any mining operations on its property, and that it was thus a purely “passive landowner,” which cannot be liable for the “discharge” of pollutants. GOVERNMENT Arm of state, community college enjoys immunity A Florida community college is an arm of the state entitled to 11th Amendment immunity, the 11th U.S. Circuit Court of Appeals held on Aug. 23 in a case of first impression. Williams v. District Bd. of Trustees of Edison Community College, Florida, No. 05-11860. Ken Williams, a math professor at Edison Community College, filed a complaint with the Florida Commission on Human Relations (FCHR) contending that the school’s policy of sending grades to students electronically violated the federal Family Educational Rights and Privacy Act. The FCHR concluded that the policy did not violate the statute. The District Board of Trustees of Edison Community College didn’t renew Williams’ contract for the following school year. Williams sued the trustees, alleging that his contract was not renewed in retaliation for his complaint with the FCHR, that various constitutional rights and rights under the Florida Whistleblower Act were violated. The Florida federal court granted summary judgment to the trustees under the 11th Amendment, which prohibits suits in federal courts against states. The 11th Circuit affirmed. In January 2003, the Florida Legislature had enacted a new educational code that transferred the powers of the former board of regents to the Florida Department of Education, an agency governed by the State Board of Education. The state of Florida, through the State Board of Education, exercises a great deal of control over community colleges, and there is no local control of community colleges. In terms of funding, the board of trustees of a community college must submit a budget to the State Board of Education and account for all expenditures. Finally, the state is ultimately responsible for any judgments against a community college. LABOR LAW Union decertification doesn’t end CBA terms Decertification of a union does not necessarily relieve an employer of its obligation to contribute to a multiemployer pension plan, and thus doesn’t trigger withdrawal liability, the 7th U.S. Circuit Court of Appeals held on Aug. 23. Central States v. Schilli Corp., No. 04-4217. Schilli Corp. participated in the Central States Pension Fund, a multiemployer pension plan. Schilli owns Truck Transport (TT), whose employees were represented by the Teamsters Local Union No. 878, and had a series of collective bargaining agreements (CBAs) that obligated TT to contribute specified amounts to Central States’ pension fund on behalf of all employees in the bargaining unit of the Batesville, Ark., terminal. TT and the union also had a participation agreement requiring weekly contributions to Central States. In 1997, Batesville employees voted to decertify the union. TT continued contributing, however, until the Batesville terminal closed in 1998. Central States held Schilli liable, under the Multiemployer Pension Plan Amendments Act (MPPAA) for its alleged withdrawal from the plan in part in 1997. After Schilli paid the assessment under protest, an arbitrator found that Schilli had not withdrawn from the plan in 1997, and ordered a refund. Central States filed suit to vacate that award. An Illinois federal court affirmed. The 7th Circuit affirmed. Central States argued that the decertification of Local 878 terminated TT’s obligation to contribute under the CBA and the agreement, by operation of law, triggering withdrawal liability in 1997. The 7th Circuit held that decertification is not a bar to liability under Section 1145 of the MPPAA, which allows multiemployer plans to sue for delinquent contributions under the terms of CBAs. The 7th Circuit expressly rejected the rationales used by several sister circuits that suggest that decertification is a defense in Section 1145 actions. The court thus held that TT remained obligated to contribute until it complied with the agreement’s notice provision, which it did not do in 1997. Thus, its parent did not partially withdraw from the plan in 1997.

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