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• BANKRUPTCY Wrong Social Security number vitiates notice A chapter 13 bankruptcy debtor’s failure to provide an accurate Social Security number in his notice to a creditor deprived the creditor of adequate notice of the bankruptcy and invalidated the discharge of the debt to that creditor, the 9th U.S. Circuit Court of Appeals held on Oct. 29 in a case of first impression. Ellett v. Goldberg, No. 05-16677. When James Ellett petitioned for bankruptcy under Chapter 13 of the Bankruptcy Code, his petition misstated the last digit of his Social Security number. This erroneous number was also sent to one of his creditors, the California Franchise Tax Board, in the notice required by 11 U.S.C. 341(a). FTB received the notice of Ellett’s bankruptcy, but did not file a proof of claim. Because FTB did not file a proof of claim, it did not receive a distribution under Ellett’s Chapter 13 plan. After Ellett’s bankruptcy was discharged, FTB demanded payment of back taxes. Ellett filed an adversary proceeding against FTB in order to determine the dischargeablity of the debt. A bankruptcy court held that the debt was not discharged because the incorrect Social Security number deprived the FTB of notice. A California federal court affirmed. Affirming, the 9th Circuit held that Ellett’s failure to provide his correct Social Security number deprived FTB of notice and that, as a result, the debt was not discharged. “[D]ue to Mr. Ellett’s negligence in listing an erroneous SSN on his bankruptcy petition and � 341(a) notice, proper notice was not provided to the FTB. Consequently, Mr. Ellett’s Chapter 13 plan did not ‘provide for’ the FTB taxes. The FTB should not be punished because Mr. Ellett failed to provide proper notice including his correct SSN.”   Full text of the decision • BUSINESS LAW No duty of loyalty breach in majority partner’s sale Under a partnership agreement that allows for the sale of partnership assets by majority vote, a controlling partner does not violate the duty of loyalty when it causes the partnership to sell its assets to a related party, the Washington Supreme Court held on Oct. 25. J&J Celcom v. AT&T Wireless Servs. Inc., No. 79884-2. J&J Celcom and others were the minority partners in nine regional cellular telephone partnerships, with AT&T Wireless Services as the majority partner. AT&T decided to buy out the minority partners’ interests in each partnership, sending out letters saying that if any of them declined the offer, AT&T would vote to sell the assets to an affiliated party and pay the minority partners their share. Because some minority partners declined the offer, AT&T went ahead with the asset sales. The minority partners that opposed the sales filed suit in a state of Washington federal court. The court granted AT&T’s motion for summary judgment. The 9th Circuit affirmed on all but one issue and certified to the state high court the question of whether a controlling partner violates the duty of loyalty when it causes the partnership to sell its assets to an affiliated party. The Washington Supreme Court answered in the negative. The Washington Revised Uniform Partnership Act stipulates that a partner’s duty of loyalty is limited to accounting for any profit or benefit and refraining from competing or having an adverse interest against the partnership. The high court said that there had been no breach of the duty of loyalty in this case because AT&T had disclosed material information, paid fair consideration and acted in good faith during the sale transactions. • CONSTITUTIONAL LAW Federal law regulating explicit images overbroad The record-keeping provisions of a federal law regulating sexually explicit images are unconstitutionally overbroad, the 6th U.S. Circuit Court of Appeals ruled on Oct. 23. Connection Distributing Co. v. Keisler, No. 06-3822. Connection Distributing Co. distributes magazines that contain sexually explicit pictures. Connection challenged in an Ohio federal court the federal Prosecutorial Remedies and Tools Against the Exploitation of Children Today Act, which is part of the Child Protection and Obscenity Enforcement Act. The laws require “producers” of sexually explicit images to keep extensive records about the source of the photos they distribute, as well as records about the people in the photos, including their names, aliases and dates of birth. Producers are also required to affix statements, using a particular-sized font and color-contrasted background, identifying where their records are kept. The court ruled against Connection on its claim that the record-keeping rules violated the First Amendment. The 6th Circuit reversed. The law, the purpose of which is to protect children from sexual exploitation, extends to anyone who creates a sexually explicit image, without regard to motivation. The law burdens a huge class of protected speech (a married couple’s videotape of themselves having sex, for example) and applies regardless of how old the people in the image are. The court said the law cannot be rehabilitated by severing parts of it and leaving other parts intact. • CRIMINAL PRACTICE Judge’s coercion of jury denied defendant’s rights A Georgia trial judge’s admonition to a deadlocked jury had a coercive effect, depriving a criminal defendant of fundamental fairness, the 11th U.S. Circuit Court of Appeals held on Oct. 22. U.S. v. Jones, No. 06-15203. Deon Monroe Jones was on trial in a Georgia federal court for possession of ammunition by a convicted felon and possession of ammunition by a controlled substance user, violations of 18 U.S.C. 922(g)(1) and 922(g)(3), respectively. After two hours of deliberation, the jury sent two notes to the judge announcing deadlock. The judge instructed the jurors to return to court the next day, saying they would continue deliberating “until you reach a verdict.” The next morning a juror called in sick and an alternate was named. The judge told the jury to begin deliberating anew, adding that they needn’t send in any notes about the failure to agree “because you are going to stay here for a long time.” Within the hour, the jury returned a guilty verdict The 11th Circuit reversed, holding that “An instruction which appears to give a jury no choice but to return a verdict is impermissibly coercive.” The judge’s instructions constituted a plainly incorrect statement of law to the jury. The error affected Jones’ substantial rights as well as the “fairness, integrity, and public reputation of judicial proceedings.” • IMMIGRATION LAW Presumption of receipt invalid for regular mail The presumption of receipt for immigration notices sent by regular mail is lower than it is for notices sent through certified mail, the 3d U.S. Circuit Court of Appeals ruled on Oct. 22. Santana-Gonzalez v. Attorney General of the United States, No. 06-2965. On Nov. 5, 2003, Haidee de Regla Santana-Gonzalez, a Cuban national, arrived at Newark International Airport without a valid visa. The Department of Homeland Security (DHS) paroled her into the United States. She provided immigration officials with the Union City, N.J., address of her uncle where she would be staying. On Jan. 7, 2004, DHS sent her a Notice of Hearing by regular mail of a Jan. 15 hearing to remove her. Unbeknownst to DHS, Santana-Gonzalez had moved from Union City to Homestead, Fla., where she contacted local social services officials to help her with her immigration case. At the Jan. 15 hearing, the immigration court, in Santana-Gonzalez’s absence, issued a removal order. By February 2004, Santana-Gonzalez had moved to Las Vegas, where she contacted an immigration attorney to pursue her case. The attorney found out about the removal order and sought to reopen the case. Santana-Gonzalez provided affidavits in which she swore she never received notice of the hearing while still in Union City, and that her uncle did not forward her any mail from DHS. The immigration judge rejected the petition, and the Board of Immigration Appeals affirmed. The 3d Circuit reversed, finding that the “strong presumption” of effective service of immigration notices that applies to certified mail � and that can be overcome only by “substantial and probative evidence” � does not apply to notices sent through regular mail. Evidence that Santana-Gonzalez actively sought help with her case suggests that she had no reason to avoid the hearing and helps defeat the presumption of receipt of the notice of hearing. • INSURANCE LAW No financial impunity for alienation of affections It is against state policy to require insurers to provide coverage in an alienation of affections claim, the South Dakota Supreme Court ruled on Oct. 24. State Farm Fire & Casualty Co. v. Harbert, No. 24366. A married woman began an affair with a doctor in the health care clinic in which she worked. When he learned of the affair, the woman’s husband filed for divorce, then filed suit against the doctor alleging alienation of affections and invasion of privacy. The doctor asked his insurance company to defend the suit under the personal liability coverage. The insurer refused, citing the exemption from coverage for intentional torts, and initiated a declaratory judgment action in South Dakota state court. The court granted the insurer’s motion for summary judgment. The South Dakota Supreme Court affirmed, holding first that the husband’s invasion of privacy claim was essentially a repackaging of the alienation of affection claim, since both claims extended from conduct leading to the couple’s divorce. The court next held that alienation of affections is an intentional tort, not accidental conduct, since the resulting injury � the taking of one spouse away from the other � is always “expected or intended.” Thus, the policy issued by State Farm does not provide coverage for an alienation of affections tort action, since it falls within the policy’s intentional tort exclusion. The court said that alienation of affections is conduct that should not be encouraged by the protection of financial impunity: “To permit such ‘affair insurance’ would defeat the purpose of punishing and deterring individuals for their own tortious acts.” • INTELLECTUAL PROPERTY Appropriations bills can be used to amend laws A federal district court erred in invalidating a section of a federal appropriations bill barring use of federal funds to register trademarks for the phrase “The Last Best Place” because Congress has the power to amend substantive legislation through appropriations riders, the 4th U.S. Circuit Court of Appeals held on Oct. 24. Last Best Beef LLC v. Dudas, No. 06-2219. After Montana writer William Kittredge entitled his anthology of Montana poetry and prose The Last Best Place, the phrase became popular in the state and was used by local businesses and the state government. The name was not trademarked. Some years later, Last Best Beef LLC, a Nevada business, filed multiple trademark applications for the phrase with the U.S. Patent and Trademark Office (PTO). Many groups in Montana were opposed to the registration, and, when President George W. Bush signed the 2006 appropriations act for the U.S. Department of Commerce, it contained a section prohibiting use of federal funds to register, issue, transfer or enforce any trademark of the phrase, “The Last Best Place.” As a result, the PTO refused to proceed with the trademarks for the phrase. Last Best Beef sued, arguing that the section improperly circumvented the federal Lanham Act. A Virginia federal district court held for Last Best Beef, noting that appropriations measures were not proper vehicles “for the amendment of general laws.” Reversing, the 4th Circuit found that Congress intended to enact a discrete and narrow exception to the Lanham Act and held that Congress could amend substantive law through appropriations measures. “Where possible, courts should attempt to harmonize statutory provisions and not go searching for implied repeals. Where, as here, reconciliation is not possible, courts have no choice but to give effect to the later enactment. To adopt appellee’s position would be to construct artificial obstacles to the efforts of current democratic majorities to enact their views into law,” the court said. • TORTS Ruling verdict ‘excessive’ isn’t abuse of discretion An appellate court should not reverse an order for a new trial when there is “competent, credible” evidence that an excessive verdict was influenced by passion, prejudice or attorney misconduct, the Ohio Supreme Court held on Oct. 25. Harris v. Mt. Sinai Med. Ctr., No. 2007-5587. In a medical malpractice trial concerning the Caesarian birth of Walter Hollins, an Ohio jury awarded $30 million against Mount Sinai Medical Center, Dr. Ronald Jordan and Northeast Ohio Neighborhood Health Services Inc. The plaintiff, the child’s guardian, alleged that a delay in the procedure resulted in Hollins’ permanent injuries. After a three-week trial, the jury returned a verdict of $15 million in economic and $15 million in noneconomic damages. Ruling that the verdict was excessive because it was influenced by passion, prejudice or attorney misconduct, the trial judge granted a new trial. An intermediate appellate court reversed, holding the new trial order to be an abuse of discretion. The Ohio Supreme Court reversed, noting that the important consideration for trial judges is “the evidence establishing grounds for a new trial, not the evidence supporting the jury’s verdict.” If credible evidence exists, as it does in this case, to support the trial court’s finding that a verdict was influenced by passion, prejudice or attorney misconduct, an order granting a new trial isn’t an abuse of discretion.

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