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

Plaintiffs filed a complaint seeking declaratory and injunctive relief against defendants alleging that the seal provisions of 31 U.S.C. § 3730(b)(2)-(3) of the False Claims Act ("FCA") were unconstitutional. At issue was whether the FCA seal provisions violated the public's First Amendment right of access to judicial proceedings, violated the First Amendment by gagging qui tam relators from speaking about their qui tam complaints, and infringed on a court's inherent authority to decide on a case-by-base basis whether a particular qui tam complaint should be sealed and thereby violate the separation of powers. The court held that plaintiffs' claims were properly dismissed where the FCA's seal provisions did not violate the First Amendment when the United States has a compelling interest in protecting the integrity of ongoing fraud investigations and the seal provisions were narrowly tailored. The court held that plaintiffs' claims were properly dismissed for lack of standing where plaintiffs failed to identify any particular qui tam relator who was willing to speak with plaintiffs. The court also held that the seal provisions do not violate the separation of powers where the seal provisions are a proper subject of congressional legislation and do not intrude on "the zone of the judicial self-administration to such a degree as to prevent the judiciary from accomplishing its constitutionally assigned functions."

The Commissioner of Internal Revenue ("Commissioner") challenged the way that defendants reported a series of transactions with investor partners in defendants' 2001 and 2002 federal tax returns. At issue was whether certain transactions between a partnership and its partners amounted to "sales" for purposes of federal tax law. The court reversed the Tax Court's finding that the Commissioner properly treated the challenged transactions as "sales" under IRC § 707 and agreed with the Commissioner that the defendants should have included the money received from investors as income in their tax returns.

Plaintiff appealed an Internal Revenue Service ("IRS") denial of a refund claim after an investigation revealed that plaintiff had so under-reported its 1994 income that there was sufficient tax liability to use up all of the credits in that year. At issue was whether the IRS may recalculate plaintiff's 1994 taxes to defeat a refund claim for 1991 and 1992. The court held that summary judgment was proper where the IRS could recalculate tax liability for a year beyond the statute of limitations in order to determine whether excess tax credits can be carried back to previous years to support a refund.

Plaintiffs, relatives of a participant of a life insurance plan governed by the Employee Retirement Income Security Act of 1974 ("ERISA"), sued Metropolitan Life Insurance Company ("Metlife") when Metlife awarded life insurance benefits to the participant's husband. At issue was whether Metlife had fulfilled its statutory duty under ERISA by awarding benefits to the husband where the husband was legally separated from the participant at the time of her death and where the husband was also the beneficiary designated in the documents the participant filed with the plan. The court held that Metlife did fulfill its duties under ERISA in light of Kennedy v. Plan Administrator for DuPont Savings & Investment Plan and therefore, by extension, the "plan documents rule."

Plaintiff sued defendant, Freightliner, LLC ("Freightliner"), alleging violations of Title VII of the Civil Rights Act ("Title VII") and North Carolina law after Freightliner terminated plaintiff. At issue was whether summary judgment was proper where Freightliner's motion to strike the declaration of a belatedly-disclosed witness was granted. Also at issue was whether summary judgment was properly granted in favor of Freightliner on plaintiff's claims of hostile work environment sex discrimination, disparate treatment sex discrimination, and retaliation under Title VII. The court held that there was no abuse of discretion in striking from the summary judgment record the belatedly-disclosed declaration. The court also held that the district court erred only on its disposition of the hostile work environment claim as a matter of law and therefore, vacated the judgment and remanded the case as to the hostile work environment claim.