Justia U.S. 4th Circuit Court of Appeals Opinion Summaries

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After Affinity was sued for allegedly submitting Medicaid reimbursement claims for services that they never provided, it sought coverage for the suit under its insurance policy with StarStone. StarStone denied coverage because the lawsuit's claims did not fall within the policy's coverage for "damages resulting from a claim arising out of a medical incident." The district court agreed and granted judgment on the pleadings against Affinity on a declaratory judgment claim and breach of contract claim. The Fourth Circuit first found that it had appellate jurisdiction over the appeal, because Affinity properly appeals from a "final" decision. In this case, Affinity properly appealed the district court’s order dismissing its contractual claims after voluntarily dismissing extra-contractual claims that were necessarily precluded by the order. On the merits, the court applied North Carolina law and held that the allegations in the underlying complaint fall within the insurance policy's coverage provision. The court found that the False Claims Act action "arises out of" a medical incident as required to fall under the coverage provision of StarStone's policy. Accordingly, the court vacated the district court's order granting StarStone's motion for judgment on the pleadings and vacated the order denying Affinity's motion for partial summary judgment. View "Affinity Living Group, LLC v. Starstone Specialty Insurance Co." on Justia Law

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CSX argued that SCVA impermissibly discriminates against railroads in violation of the Railroad Revitalization and Regulatory Reform Act of 1976. The Fourth Circuit reversed the district court's determination that South Carolina had provided sufficient justification for the discriminatory tax. The court held that CSX has made a prima facie showing of discriminatory tax treatment based on the appropriate comparison class of other commercial and industrial real property taxpayers in South Carolina. Furthermore, the state's three justifications -- the equalization factor applied to railroad assessments, the combined effect of other tax exemptions applied to rail carriers, and assessable transfers of interest which trigger new appraisals -- were insufficient to justify the discriminatory tax scheme. View "CSX Transportation, Inc. v. South Carolina Department of Revenue" on Justia Law

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Plaintiff filed suit pro se against Brivo, alleging discrimination based on race in violation of Title VII. In this case, within an hour of starting orientation at Brivo, Brivo's security architect approached plaintiff and confronted him about a newspaper article that he had found after running a Google search on plaintiff. The article reported plaintiff's tangential involvement in a shooting for which he faced no charges. Nonetheless, the security architect berated plaintiff about the incident, declared plaintiff unfit for employment at Brivo, and terminated him on the spot. The district court dismissed the case with prejudice, because plaintiff failed to plead sufficient facts to plausibly support a claim of discrimination. The Fourth Circuit held that it had appellate jurisdiction despite the district court's dismissal of the complaint without prejudice. Under Domino Sugar Corp. v. Sugar Workers Local Union 392, 10 F.3d 1064, 1067 (4th Cir. 1993), the order is appealable because the district court held that the circumstances surrounding plaintiff's termination did not expose Brivo to legal liability, and plaintiff has no additional facts that could be added to his complaint; under Chao v. Rivendell Woods, Inc., 415 F.3d 342, 345 (4th Cir. 2005), the order is appealable because the district court dismissed the complaint and directed that the case be closed; and the order is likewise appealable under Chao and In re GNC Corp., 789 F.3d at 511, because plaintiff has elected to stand on his complaint as filed. On the merits, the court held that the district court did not err by dismissing the Title VII claims at this point in the proceedings. The court held that plaintiff failed to plead sufficient facts to plausibly claim his termination or the Google search that lead to it was racially motivated. Accordingly, the court affirmed the judgment. View "Bing v. Brivo Systems, LLC" on Justia Law

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Fessler sued, alleging that his former employer, IBM. unlawfully “capped” his sale commissions despite representing to him that his commissions would be uncapped. The district court dismissed his claims on the basis that the Incentive Plan Letters (IPLs) that IBM presents to its employees foreclosed any reasonable expectation that Fessler would receive additional commissions. The Fourth Circuit vacated, finding that Fessler adequately stated claims for fraud, constructive fraud, unjust enrichment, quantum meruit, and punitive damages. Although the IPLs stated that they did not constitute a promise and IBM reserved the right to adjust the plan’s terms,.Fessler can plausibly allege that he reasonably relied on PowerPoint presentations that repeatedly informed him that his commissions would be uncapped, and his past experience that IBM never capped a commission before 2016. A jury could find that since the representations that his commission would be uncapped were presented subsequent to Fessler receiving IPLs, it was reasonable for Fessler to understand them as adjustments to the plan’s terms. Fessler can plausibly allege the requisite intent to deceive, based on IBM’s motivation to recruit good salespeople who would not work for IBM if they knew that their commissions would be capped. Fessler’s quantum meruit claim is sufficient because of the lack of a meeting of the minds with regard to the exact payment he would receive for his work. View "Fessler v. IBM Corp." on Justia Law

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The District of Columbia and the State of Maryland sued the President in his official capacity, alleging violations of the U.S. Constitution’s Foreign and Domestic Emoluments Clauses. The district court dismissed claims concerning Trump Organization operations outside the District, for lack of standing, but denied the President’s motion with respect to alleged violations at the Washington, D.C. Trump International Hotel. After the denial of a motion for certification to take an interlocutory appeal (28 U.S.C. 1292(b)), the President petitioned for mandamus relief. A Fourth Circuit panel reversed and remanded with instructions to dismiss the complaint. The Fourth Circuit, en banc, vacated the panel opinion. The court accorded the President “great deference,” but stated that Congress and the Supreme Court have severely limited its ability to grant the extraordinary relief sought. The President has not established a right to a writ of mandamus. The district court promptly ruled on the request for certification in a detailed opinion that applied the correct legal standards. The court’s action was not arbitrary nor based on passion or prejudice; it “was in its nature a judicial act.” The President does not contend that the court denied certification for nonlegal reasons or in bad faith. Reasonable jurists can disagree in good faith on the merits of the claims. Rejecting a separation of powers argument, the court stated that the President has not explained how requests pertaining to spending at a private restaurant and hotel threaten any Executive Branch prerogative. Even if obeying the law were an official executive duty, such a duty would not be “discretionary,” but a “ministerial” act. View "In re: Donald Trump" on Justia Law

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The District of Columbia and the State of Maryland sued the President in his official capacity, alleging violations of the Constitution’s Foreign and Domestic Emoluments Clauses. The district court granted a motion to amend the complaint to add the President as a defendant in his individual capacity. The President, in that capacity, moved to dismiss the action, asserting absolute immunity. Approximately seven months passed without a ruling on that motion. The President in his individual capacity filed an interlocutory appeal. A Fourth Circuit panel concluded that the district court had effectively denied immunity to the President in his individual capacity so that the panel had jurisdiction to consider the interlocutory appeal. “[E]xercising that jurisdiction,” the panel held that Plaintiffs lacked Article III standing and remanded the case with instructions to dismiss. Acting en banc, the Fourth Circuit vacated the panel opinion and dismissed the interlocutory appeal. The district court neither expressly nor implicitly refused to rule on immunity but stated in writing that it intended to rule on the President’s individual capacity motion. A district court has wide discretion to prioritize its docket and the deferral did not result in a delay “beyond reasonable limits.” During the seven months, the district court managed the many other aspects of this litigation and issued opinions on the President’s motion to dismiss in his official capacity and a motion to certify an interlocutory appeal of the court’s rulings. View "District of Columbia v. Trump" on Justia Law

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Under the federal tax offset program, the Secretary of the Treasury has the discretion to set-off "any" tax overpayment against a taxpayer's preexisting tax liabilities, and the bankruptcy code provides that exempt property cannot be used to satisfy "any" of the bankruptcy debtor's prepetition debts. At issue was which of these statutory directives controls when a bankruptcy debtor claims, as exempt property, a tax overpayment that the government seeks to set-off under the offset program. The Fourth Circuit agreed that debtors' interest in their tax overpayment became part of the bankruptcy estate. However, based on the plain language of the various statutes, particularly the plain language of 11 U.S.C. 553(a), the court held that the government's right to offset the debtors' tax overpayment under 26 U.S.C. 6402(a) cannot be subordinated or otherwise affected by debtors' attempts to claim the overpayment as exempt property. Accordingly, the court vacated the district court's judgment, remanding for further proceedings. View "Copley v. United States" on Justia Law

Posted in: Bankruptcy, Tax Law
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After AutoZone was found liable for creating a hostile work environment and for intentional infliction of emotional distress, plaintiff was awarded both compensatory and punitive damages. The Fourth Circuit reversed the award of punitive damages for plaintiff's claim under Title VII of the Civil Rights Act of 1964 and plaintiff's state law claims. In this case, the evidence does not permit a finding that the sales manager at issue served in a managerial capacity such that liability for punitive damages could be imputed to AutoZone. Furthermore, plaintiff failed to carry his burden of presenting sufficient evidence from which a reasonable jury could conclude that the store manager and district manager at issue engaged in an intentionally discriminatory practice with malice or reckless indifference. The panel remanded with instructions for the district court to determine the final amount of plaintiff's compensatory damages award under his Title VII claim. The court rejected AutoZone's duplicative recovery, jury instruction, and evidentiary error challenges, affirming as to these claims. View "Ward v. AutoZoners, LLC" on Justia Law

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The Fourth Circuit denied petitions for review of the BIA's final order of removal. Applying the modified categorical approach, the court held that defendant's prior conviction for distribution of cocaine under Virginia Code 18.2-248, including distribution of that substance as an accommodation under Virginia Code 18.2-248(D), satisfies the federal definitions of an "aggravated felony" and of a crime "relating to a controlled substance" pursuant to 8 U.S.C. 1227(a)(2)(A)(iii), 1227(a)(2)(B)(i). The court also held that the district court did not abuse its discretion in denying petitioner's motion to reconsider. View "Cucalon v. Barr" on Justia Law

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Defendant was convicted for possessing a firearm as a felon and sentenced to 63 months' imprisonment and a three-year period of supervised release. The district court additionally recommended, without explanation, that defendant receive addiction treatment while incarcerated and ordered, as a special condition of his supervised release, that defendant participate in an addiction treatment program. The Fourth Circuit held that defendant's sentence is procedurally unreasonable because the district court failed to provide an adequate explanation for imposing as a special condition of supervised release the requirement of addiction treatment. The court also held that the district court failed to address defendant's nonfrivolous mitigation arguments. Therefore, the court remanded for resentencing. View "United States v. Lewis" on Justia Law

Posted in: Criminal Law