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• ADMIRALTY Court should ‘arrest’ disputed shipwreck A salvor can be required to reveal the precise location of a shipwreck when a state asserts a claim to the wreckage, but only after steps are taken to preserve the salvor’s ability to pursue its rights in federal court, the 6th U.S. Circuit Court of Appeals ruled on April 22. Great Lakes Exploration Group LLC v. Unidentified Wrecked and (for Salvage-Right Purposes) Abandoned Sailing Vessel, No. 06-2584. The Great Lakes Exploration Group claimed the wreckage of The Griffin, a French vessel thought to be one of the first sailing ships to navigate the Great Lakes, beneath Lake Michigan. The salvor filed an in rem admiralty action to be appointed custodian of the wreckage. The state of Michigan intervened to assert title under the Abandoned Shipwreck Act (ASA). The district court ordered the salvor to disclose the wreck’s location, but it refused unless the court blocked the state from seizing the wreckage. The district court dismissed the salvor’s claim for failure to follow a court order. The 6th Circuit reversed, in a case of first impression. The ASA recast admiralty law to assure states a right to shipwrecks “embedded” in their submerged lands. Therefore, the precise location of The Griffin is critical to Michigan. However, the state shouldn’t be allowed to leverage that information to assert sovereign immunity against the salvor’s claim. The solution is for the federal court to “arrest” the wreckage prior to disclosure, thereby ensuring federal jurisdiction. Full text of the decision • CIVIL PROCEDURE Proceeding didn’t amount to vexatious litigation An application for prejudgment remedy is not the same as a civil action and therefore cannot be the ground for a vexatious litigation lawsuit, the Connecticut Supreme Court ruled on April 22. Bernhard-Thomas Building Systems LLC v. Dunican, No. SC17899. Chet Dunican sued his former employer for wrongful discharge. While the suit was pending, Dunican filed an application for a prejudgment remedy of $3.5 million, but a trial court denied his application. The employer then sued Dunican and his lawyer, arguing that they had engaged in vexatious litigation by filing the application. The trial court struck the vexatious litigation count, holding that an application for a prejudgment remedy was not a civil action that ended favorably to the employer, a necessary element of vexatious litigation. The employer appealed, and an intermediate state appellate court affirmed. The Connecticut Supreme Court affirmed. A prejudgment remedy proceeding is usually a prelude to a civil action and tests whether a party’s property should be secured against any civil judgment. Unlike a civil action, there is no signed writ of summons carrying the authority of a court. A civil action, by contrast, turns on the merits of a party’s claims regardless of whether the party obtained a prejudgment remedy. • CONSTITUTIONAL LAW School enjoined from banning ‘Not Gay’ T-shirt A high school is not entitled to ban a student’s T-shirt that reads, “Be Happy, Not Gay,” pending litigation over whether the First Amendment protects that sentiment, absent evidence that the slogan would disrupt the school, the 7th U.S. Circuit Court of Appeals ruled on April 23. Nuxoll v. Indian Prairie School District #204. No. 08-1050. One school day after faculty and students at an Illinois high school observed “Be Who You Are Day,” promoting tolerance for homosexuals, a sophomore wore a T-shirt to school that read, “Be Happy, Not Gay,” as part of a counter-observance. A teacher marked out the “Not Gay” part of the message, invoking a school policy forbidding “derogatory comments” that “refer to race, ethnicity, religion, gender, sexual orientation or disability.” During a similar observance one year later, the student refrained from wearing a similar T-shirt for fear of discipline. Later, he brought a First Amendment challenge to the rule. A federal district court denied his motion for a preliminary injunction against enforcing the rule. The 7th Circuit reversed as to the specific T-shirt. The message was “only tepidly negative” and is not “derogatory” or “demeaning” to the extent that it might disrupt the school. “[W]e infer that if there is reason to think that a particular type of student speech will lead to a decline in students’ test scores, an upsurge in truancy, or other symptoms of a sick school � symptoms therefore of substantial disruption � the school can forbid the speech,” the court said. But speculation that the T-shirt would “poison the educational atmosphere” was “too thin a reed on which to hang a prohibition of the exercise of a student’s free speech.” State immunity trumps takings-clause claim The eleventh amendment grant of state immunity from federal lawsuits precludes a reverse condemnation claim filed under the Fifth Amendment’s takings clause, notwithstanding that the takings clause is self-executing, the 9th U.S. Circuit Court of Appeals ruled on April 21. Seven Up Pete Venture v. Schweitzer, No. 06-35384. After Seven Up Pete Venture acquired leases on state-owned gold and silver reserves in Montana, the state’s voters approved a ban on open-pit mining by cyanide leaching. The state later refused to grant the venture a mining permit. Seven Up Pete sued Montana’s governor in a reverse condemnation action, alleging a regulatory taking without just compensation in violation of the Fifth and Fourteenth amendments. A federal district court dismissed the federal action, citing the state’s sovereign immunity. Seven Up Pete appealed. The 9th Circuit affirmed, citing case law establishing that the federal courts lack jurisdiction over this issue. In Alden v. Maine, 527 U.S. 706 (1999), the U.S. Supreme Court “viewed the Eleventh Amendment as a recognition of, rather than the origin of, sovereign immunity of the states,” the 9th Circuit said. Notwithstanding the rights granted by the takings clause, that ruling “certainly did not purport to repudiate the command of the Eleventh Amendment precluding suits by private parties against unconsenting states in federal court.” The 6th Circuit, the only other federal appellate court to rule on the matter since Alden, reached a similar result in DLX Inc. v. Kentucky, 381 F.3d 511 (Ky. 2004). • CRIMINAL PROCEDURE HealthSouth probation reversed for a third time Because of procedural errors, a trial judge must re-sentence a former HealthSouth Corp. officer in the company’s $1.4 billion financial fraud, the 11th U.S. Circuit Court of Appeals ruled on April 23. It was the third time that the appellate court has rejected a sentence of probation in the case. U.S. v. Livesay, No. 06-11303. Kenneth K. Livesay, former HealthSouth assistant controller and chief information officer, pleaded guilty to fraud. He faced between 78 and 97 months in prison under sentencing guidelines, but instead drew 60 months’ probation. Prosecutors said they would accept a 12-month prison term because Livesay had become a government witness, but objected to a sentence of probation only. The 11th Circuit found the record inadequate to substantiate the sentence. On remand, the trial judge again sentenced Livesay to probation. The appellate court reversed a second time. Livesay appealed to the U.S. Supreme Court, which told the 11th Circuit to reconsider in light of Gall v. U.S., 128 S. Ct. 586 (2007), which held that a sentence should be upheld absent procedural error and if substantively reasonable. Reversing, the 11th Circuit again found procedural error. The trial judge offered no explanation of why 60 months’ probation reflected the seriousness of the crime. In a footnote, the court noted the trial judge has recused himself. • GOVERNMENT Ground Zero neighbors can’t sue over air quality Workers and residents around New York’s Ground Zero cannot sue the U.S. Environmental Protection Agency (EPA) for health problems associated with poor air quality, the 2d U.S. Circuit Court of Appeals ruled on April 22. Benzman v. Whitman, No. 06-1166-cv. Residents and workers near the site of the World Trade Center wreckage alleged that the EPA and its administrators misled them that the air quality near the site was safe. One count alleged that the EPA violated the plaintiffs’ substantive due process rights to be free from government-created health risks. Another alleged that the EPA failed in its obligations under the Administrative Procedures Act (APA). A federal district court refused to dismiss these cases. In a third case, the plaintiffs sought to compel the EPA to remove toxic dust from area building interiors. The district court denied this request. It dismissed a claim that the EPA’s actions violated the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA). The 2d Circuit reversed in the first two claims and affirmed in the third. Whether it was wise for administrators to allow people back into the area, the actions did not “shock the conscience” to the point of creating due-process liability. Some of the APA claims were foreclosed because they were premised on the foreclosed due-process argument. Others were moot, since a court “cannot undo a completed [cleanup] program.” A cleanup order was properly denied because the claim duplicated the APA actions. Finally, CERCLA does not allow citizen failure-to-act suits. • IMMIGRATION LAW Ambiguity resolved in favor of deportation A conviction for filing a false federal tax return is an aggravated felony meriting a permanent resident alien’s removal from the United States, the 5th U.S. Circuit Court of Appeals ruled on April 22, on a question that has split the federal circuits. Arguelles-Olivares v. Mukasey, No. 05-60914. Joel Arguelles-Olivares, a permanent resident alien since 1977, pleaded guilty to knowingly filing a false tax return. The U.S. Department of Homeland Security instituted removal proceedings on the ground that the offense was an aggravated felony. An immigration judge ordered removal and the Board of Immigration Appeals affirmed. On appeal, Arguelles-Olivares argued that the statute referred to tax evasion only, not the filing of a false return. The 5th Circuit affirmed on a 2-1 vote. Although the statute refers specifically to tax evasion, it would make no sense for Congress to have excluded other tax felonies involving fraud and deceit, and there was clear and convincing evidence of the accuracy of the pre-sentence report in the case. A dissent complained that the majority failed to explain the conflict between its “alien-hostile” statutory construction and the traditional principle of construing ambiguity in favor of aliens. • INTERNET LAW Only grand jury could subpoena ISP records Internet users have a reasonable expectation of privacy in the subscriber information they give to their service providers, and authorities cannot demand that information absent a grand jury subpoena, the New Jersey Supreme Court ruled on April 21. State v. Reid, No. A-105-06. Timothy Wilson discovered in August 2004 that someone had hacked his company’s Web site and changed the business-contact information. Wilson asked his Internet service provider (ISP) to identify the computer that made the changes. He reported the incident to the police and indicated that an employee, Shirley Reid, was the only one who knew his company’s computer access information. In response to a municipal court subpoena, the ISP identified Reid and supplied her private account information. A grand jury returned an indictment for second-degree computer theft. The trial court suppressed the evidence. An intermediate state appellate court affirmed. The New Jersey Supreme Court affirmed. A subscriber enjoys a constitutionally protected expectation of privacy in the information on file with her ISP. A grand jury can issue a subpoena to get the information without notice to the subscriber when there is a “possible relationship” that the subscriber is linked to the alleged crime, but a municipal court lacks that authority. • TAXATION Alaskan city’s port tax passes constitutional test It does not violate the U.S. Constitution for a municipality to apply an ad valorem tax with a port-day apportionment formula on large vessels docked at private facilities, the Alaska Supreme Court ruled on April 25. City of Valdez v. Polar Tankers Inc., No. S-12218. Valdez, Alaska, adopted an ad valorem property tax on large vessels docking at private port facilities. The apportionment formula was based on days spent in port by large vessels engaged in interstate commerce. Polar Tankers Inc. paid under protest and along with other oil tanker operators challenged the tax as violating the Constitution’s due process, commerce and tonnage clauses. A state trial court ruled that the tax would not violate the tonnage clause, which forbids levies for the privilege of entering a port, if fairly apportioned. Otherwise, the court found the tax unconstitutional as applied. Reversing, the Alaska Supreme Court ruled that the tax met all relevant constitutional tests. The vessels taxed had a substantial nexus with the taxing jurisdiction because they used a facility built with the city’s financial support. The tax was fairly apportioned according to a vessel’s time in the port and did not apply to time vessels spent in international commerce. Finally, the tax applied fairly to the services the port provided.

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