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

Petitioners opened brokerage accounts with Stifel, Nicolaus & Company, managed by Coleman Devlin. Dissatisfied with Devlin's performance, they filed for arbitration with the Financial Industry Regulatory Authority (FINRA), alleging negligence, breach of contract, breach of fiduciary duty, negligent supervision, and violations of state and federal securities laws. After nearly two years of hearings, the arbitration panel ruled in favor of Stifel and Devlin without providing a detailed explanation, as the parties did not request an "explained decision."Petitioners moved to vacate the arbitration award in the United States District Court for the District of Maryland, arguing that the arbitration panel manifestly disregarded the law, including federal securities law. The district court denied the motion, stating that the petitioners failed to meet the high standard required to prove manifest disregard of the law. The court noted that the petitioners were essentially rearguing their case from the arbitration.The United States Court of Appeals for the Fourth Circuit reviewed the case. The court noted that the Supreme Court's decision in Badgerow v. Walters requires an independent jurisdictional basis beyond the Federal Arbitration Act (FAA) itself for federal courts to have jurisdiction over petitions to vacate arbitration awards. Since the petitioners did not provide such a basis, the Fourth Circuit vacated the district court's judgment and remanded the case with instructions to dismiss the petition for lack of jurisdiction. The court emphasized that claims of manifest disregard of federal law do not confer federal-question jurisdiction. View "Friedler v. Stifel, Nicolaus, & Company, Inc." on Justia Law

Jake's Fireworks Inc., a large importer and distributor of consumer fireworks, sought judicial review of several warning notices it received from the U.S. Consumer Product Safety Commission. The notices were issued after the Commission's staff sampled fireworks imported by Jake's Fireworks and found that about one-third of those samples indicated that the fireworks were dangerously overloaded with explosive material, rendering them "banned hazardous substances" under the agency’s regulations. The Commission's Compliance Office accordingly sent Jake's Fireworks several “Notice[s] of Non-Compliance,” requesting that the distribution of the sampled lots not take place and that the existing inventory be destroyed.Jake's Fireworks first sued the Commission in federal court in 2019, seeking injunctive and declaratory relief from the agency’s enforcement of its fireworks regulations via the Notices. The district court dismissed the lawsuit, determining that the Notices did not constitute final agency actions under the Administrative Procedure Act because they did not consummate the Commission’s decisionmaking process. After the dismissal of its first lawsuit, Jake's Fireworks requested an informal hearing with the Compliance Office to contest the Notices. The Compliance Office declined to hold a hearing or to revisit its findings, and Jake's Fireworks filed a second lawsuit, which was also dismissed by the district court on the same grounds as the first lawsuit.On appeal, the United States Court of Appeals for the Fourth Circuit affirmed the district court's decision. The court held that the Notices did not constitute final agency actions under the Administrative Procedure Act. The court reasoned that the Compliance Office’s Notices of Noncompliance did not mark the consummation of the agency’s decisionmaking process, as it is the Commission itself, not its Compliance Office, that makes final determinations on whether goods are banned hazardous substances. The court also found that the language of the Notices confirmed that they conveyed preliminary findings and advice from agency staff rather than a final determination from the Commission itself. View "Jake's Fireworks Inc. v. United States Consumer Product Safety Commission" on Justia Law

Family Health Physical Medicine, LLC, an Ohio-based company, filed a lawsuit against Pulse8, LLC and Pulse8, Inc., Maryland-based companies. The dispute arose when Pulse8 sent a fax to Family Health inviting it to a free webinar on medical coding technology, a product that Pulse8 sells. Family Health claimed that this fax was an unsolicited advertisement and thus violated the federal Telephone Consumer Protection Act (TCPA). Pulse8 argued that the fax did not qualify as an advertisement under the TCPA because the webinar was free.The United States District Court for the District of Maryland granted Pulse8's motion to dismiss the case, agreeing with Pulse8's argument that the fax did not qualify as an advertisement under the TCPA. Family Health appealed this decision to the United States Court of Appeals for the Fourth Circuit.The Fourth Circuit Court disagreed with the lower court's decision. The court found that the fax did have a commercial component, as it was sent by a company that sells a product related to the subject of the webinar. The court concluded that the fax was being used to market Pulse8's product. The court also found that Family Health had plausibly alleged that accepting the invitation to the webinar would trigger future advertising. However, the court rejected Family Health's argument that the fax was an advertisement because it offered a chance to win a gift card in exchange for completing a survey. The court reversed the district court's judgment and remanded the case for further proceedings. View "Family Health Physical Medicine, LLC v. Pulse8, LLC" on Justia Law

The case involves the South Carolina Department of Parks, Recreation and Tourism (SCPRT) and Google LLC. The State of South Carolina, along with several other states, sued Google for violations of federal and state antitrust laws. Google subpoenaed SCPRT for discovery pertinent to its defense. SCPRT refused to comply, asserting Eleventh Amendment immunity and moved to quash the subpoena.The district court denied SCPRT's motion, holding that any Eleventh Amendment immunity that SCPRT may have otherwise been entitled to assert was waived when the State, through its attorney general, voluntarily joined the federal lawsuit against Google. SCPRT appealed this decision.The United States Court of Appeals for the Fourth Circuit affirmed the district court's decision. The court found that by joining the lawsuit against Google, the State voluntarily invoked the jurisdiction of a federal court, thereby effecting a waiver of its Eleventh Amendment immunity as to all matters arising in that suit. And because SCPRT’s immunity derives solely from that of the State, South Carolina’s waiver of Eleventh Amendment immunity equally effected a waiver of SCPRT’s immunity. The district court, therefore, properly denied SCPRT’s motion to quash. View "SC Dept of Parks, Recreation and Tourism v. Google LLC" on Justia Law

The case involves 360 Virtual Drone Services LLC and its owner, Michael Jones, who sought to provide customers with aerial maps and 3D digital models containing measurable data. However, the North Carolina Board of Examiners for Engineers and Surveyors argued that doing so would constitute engaging in the practice of land surveying without a license, in violation of the North Carolina Engineering and Land Surveying Act. Jones and his company sued the Board, arguing that the restriction on their ability to offer these services without first obtaining a surveyor’s license violates their First Amendment rights.The district court granted summary judgment in favor of the Board. The court concluded that Jones had standing to challenge the statute based on his desire to create “two-dimensional and three-dimensional maps with geospatial data.” It also concluded that the Engineering and Land Surveying Act implicated the First Amendment. However, it found that the Act constituted “a generally applicable licensing regime that restricts the practice of surveying to those licensed” and primarily regulated conduct rather than speech, such that intermediate scrutiny applied. Finally, the court concluded that the Act survived intermediate scrutiny.On appeal, the United States Court of Appeals for the Fourth Circuit affirmed the district court's decision. The appellate court concluded that the Act, as applied to the plaintiffs, was a regulation of professional conduct that only incidentally impacts speech. Therefore, it applied a more relaxed form of intermediate scrutiny that mandates only that the restriction be “sufficiently drawn” to protect a substantial state interest. The court found that the Act met this standard and therefore did not violate the plaintiffs' First Amendment rights. View "360 Virtual Drone Services LLC v. Ritter" on Justia Law

This consolidated opinion, delivered by the United States Court of Appeals for the Fourth Circuit, pertains to the appeals of defendants Richard Tipton and James Roane, Jr. Both were convicted in 1993 and sentenced to death and multiple years in prison for involvement in a drug-related enterprise that also included firearms, murders, and other racketeering activity. They have consistently sought post-conviction relief, and in light of recent Supreme Court decisions, they contested their sentences related to their firearm-related 18 U.S.C. § 924(c) convictions in 1993.The court affirmed the district court's decisions, rejecting the defendants' challenges to their § 924(c) sentences. The court concluded that Violent Crimes in Aid of Racketeering Activity (VICAR) murder constitutes a "crime of violence" under § 924(c). The defendants failed to demonstrate that there was more than a reasonable possibility that the jury did not rely on the valid VICAR murder predicate for any of their § 924(c) convictions. Therefore, the validity of any other alleged § 924(c) predicate did not need to be decided. The court held that the defendants' § 924(c) convictions and sentences were legally sound. View "United States v. Tipton" on Justia Law

A massage parlor, Elegant Massage LLC, filed a class action lawsuit against State Farm Mutual Automobile Insurance Company, asserting claims of breach of contract and other related claims. The suit stemmed from State Farm's denial of insurance coverage to businesses that had to shut down partially or fully due to Virginia executive orders during the COVID-19 pandemic. Elegant Massage claimed that the forced closure constituted a "direct physical loss" under its insurance policy. The district court certified the class and denied State Farm’s motion to dismiss. State Farm appealed.The United States Court of Appeals for the Fourth Circuit used its pendent appellate jurisdiction to review the district court's denial of State Farm’s motion to dismiss in conjunction with the appealable class certification order. The appellate court referred to the precedent set in Uncork & Create LLC v. Cincinnati Insurance Co., which held that a similar business closure during the pandemic did not constitute a "direct physical loss" requiring material destruction or harm to the property. The court found that this precedent was directly applicable to the case at hand.Consequently, the court of appeals held that the district court had erred in denying State Farm's motion to dismiss. It ruled that the temporary closures ordered by the executive did not result in a "direct physical loss" under the policy terms. As a result, the court also found no basis for class certification. The court reversed the district court’s decisions and instructed it to dismiss the entire case. View "Elegant Massage, LLC v. State Farm Mutual Automobile Insurance Co." on Justia Law

In this case, a South Carolina court-appointed receiver brought an action against Travelers Casualty and Surety Company and other insurers, alleging breaches of insurance policies issued to a defunct company within a state receivership. Travelers removed the action to federal court, asserting diversity jurisdiction. However, the district court granted the receiver’s motion to remand the case back to state court. The court held that it lacked subject-matter jurisdiction because the case involved property of a state receivership exclusively under the jurisdiction of the state court (based on the doctrine articulated in Barton v. Barbour), and the removal lacked unanimous consent of all defendants due to a forum selection clause in some of the insurance policies issued to the defunct company.Upon appeal, the United States Court of Appeals for the Fourth Circuit dismissed the appeal, holding that the district court's conclusions in support of remand were at least colorably supported. The court found that the district court's reliance on a lack of subject-matter jurisdiction and procedural defect as grounds for remand were colorably supported, and thus, not reviewable under 28 U.S.C. § 1447(d). The court also concluded that it lacked jurisdiction to review the district court's remand order and dismissed the appeal. View "Protopapas v. Travelers Casualty and Surety Co." on Justia Law

In a dispute between SmartSky Networks, LLC and DAG Wireless, Ltd., DAG Wireless USA, LLC, Laslo Gross, Susan Gross, Wireless Systems Solutions, LLC, and David D. Gross over alleged breach of contract, trade secret misappropriation, and deceptive trade practices, the United States Court of Appeals for the Fourth Circuit ruled that the district court did not have the jurisdiction to enforce an arbitration award. Initially, the case was stayed by the district court pending arbitration. The arbitration tribunal found in favor of SmartSky and issued an award, which SmartSky sought to enforce in district court. The defendants-appellants argued that, based on the Supreme Court decision in Badgerow v. Walters, the district court lacked subject matter jurisdiction to enforce the arbitration award. The Fourth Circuit agreed, noting that a court must have a basis for subject matter jurisdiction independent from the Federal Arbitration Act (FAA) and apparent on the face of the application to enforce or vacate an arbitration award. The court concluded that the district court did not have an independent basis of subject matter jurisdiction to confirm the arbitration award. As such, the court reversed and remanded the case to the district court for further proceedings. View "Smartsky Networks, LLC v. DAG Wireless, LTD." on Justia Law

In the case, Remy Holdings International, LLC ("Remy") sued Fisher Auto Parts, Inc. ("Fisher") after Fisher terminated their business relationship and sold its inventory to a different manufacturer. Remy claimed that Fisher wrongfully terminated their agreement and that the inventory Fisher sold belonged to Remy. Remy brought claims for breach of contract, unjust enrichment, and conversion. Fisher counterclaimed for breach of contract due to Remy's poor performance.The United States Court of Appeals for the Fourth Circuit affirmed the district court's decisions, which were all in Fisher's favor. The court found that Remy committed the first material breach of the contract by failing to keep Fisher competitive in the marketplace. Furthermore, Fisher did not waive its right to assert the first material breach defense by continuing to order from Remy and occasionally waiving the order-fill penalty. Therefore, Remy was precluded from enforcing the contract and its breach of contract claim related to ownership of the inventory was dismissed.The court also rejected Remy's argument that the district court should have reinstated its unjust enrichment claim after declaring its contractual rights unenforceable. Remy had failed to respond to Fisher's motion for summary judgment seeking the dismissal of the unjust enrichment claim, and as a result, forfeited any opposition to its dismissal.Lastly, the court found no error with the district court's evidentiary rulings, including the admission of expert testimony and the USA Core Policy, and its refusal to instruct the jury on certain defenses. View "Remy Holdings International, LLC v. Fisher Auto Parts, Inc" on Justia Law