Wednesday, July 27, 2005

Blankenship Sues Governor for Violating Freedom of Speech

The State Journal notes here that "Massey Energy CEO Don Blankenship is suing Gov. Joe Manchin in federal court, alleging West Virginia's chief executive violated the coal operator's right to freedom of speech."

In the complaint (PDF), he alleges that "The Governor retaliated against [him] for exercising his First Amendment right to free speech by publicly threatening closer government scrutiny of the affairs of Plaintiff and Massey in response to Plaintiff's participation in the public debate over the pension bond amendment." Massey is not a plaintiff.

Tuesday, July 26, 2005

McGraw's Lawsuit Tossed Out

WTRF and several other news outlets point out that "Taylor County Circuit Judge Alan D. Moats dismissed [former state supreme court justice Warren] McGraw's suit against Charleston attorney George Carenbauer and West Virginia Media Holdings." The suit alleged that political ads that ran on WOWK-TV during last fall's election were untrue.

I'm sure there will be an appeal. I wonder which state supreme court justices will recuse themselves....

More cool stuff from Google

From Slashdot:

New Google Homepage Features

SecularG writes "It seems that Google has added new features to it's Personalized Home. To edit the content of your personalized homepage you click 'Add Content' in the top right, and a list of options slide out from the left. You can add your own bookmarks, select from more news feeds, and add your own RSS news feeds." Of course since Slashdot is already available from their default list of technology sites, why would you need the ability to include an RSS feed

Slashdot | New Google Homepage Features

EEOC Releases New Q & A about cancer

George's Employment Blawg mentions here "Today, the EEOC released a Q and A sheet on Cancer and the ADA in the Workplace." You can find it here.

Saturday, July 23, 2005

Upjohn, watered-down, turn around, attorney-client boogie

Okay, so it's getting late, and I had trouble getting a certain Brooks & Dunn tune out of my head when I was writing the title for this post...

The Fourth Circuit recently considered in In re Grand Jury Subpoena, No. 04-4410 (4th Cir. July 18, 2005) (PDF) whether three employees of AOL Time Warner could prohibit the Company from waiving the attorney-client privilege when responding to a grand jury subpoena for interview memos generated during the internal investigation. The case is a good reminder about the importance of so-called "Upjohn warnings" during internal investigations conducted by lawyers.

AOL Time Warner hired a law firm to conduct an internal investigation regarding AOL's relationship with a company called Purchase Pro, Inc. The attorneys conducted interviews with several of AOL's employees. Normally, attorneys conducting internal investigations are strongly encouraged to issue "Upjohn warnings," to the employees, named for Upjohn v. United States, 449 U.S. 383, 389 (1981). The investigating counsel should warn each interviewed employee at the beginning of the interview that:

(1) counsel represents only the company, and not the employee personally;
(2) the attorney-client privilege under which the interview is conducted belongs solely to the company; and
(3) only the company will decide whether any facts learned in the interview will be shared with any third party, including government officials.

The investigating attorneys in this case gave a variation of the Upjohn warnings that led to some confusion about who they represented. The attorneys stated
(1) "we represent the company" (so far, so good);
(2) "these conversations are privileged, but the privilege belongs to the company and the company decides whether to waive it. If there is a conflict, the attorney-client privilege belongs to the company" (again, no problem); and
(3) "we can represent you as long as no conflict appears" (ouch).

That last part seemed to cause the most confusion with the employees. The Fourth Circuit panel held that all of the "essential touchstones for the formation of an attorney-client relationship between the investigating attorneys and the appellants were missing at the time of the interviews." However, it also called the warnings "watered down 'Upjohn warnings'" that created "a potential legal and ethical mine field."

The district court denied the motion to quash as to all of the employees, and the unanimous panel of the Fourth Circuit affirmed. It reiterated that "[a]n individual’s subjective belief that he is represented is not alone sufficient to create an attorney-client relationship." The troublesome statement that the attorneys "could" represent the individuals was insufficient "to establish the reasonable understanding that they were representing" the employees.

The moral to the story here is that when you do an internal investigation, have a script ready to read to each employee that contains the Upjohn warnings, and do not deviate from it. Follow up the interview with a written memorandum of the warnings. Better yet, write out the warnings and have the employees read and sign them before the interview begins. Otherwise, you may be creating an attorney-client relationship with both the company and its employee, and you may have to withdraw where, as here, a conflict arises.

Friday, July 22, 2005

Federal court properly declined to hear declaratory judgment action where parallel state action pending

In New Wellington Fin. v. Flagship Resort, No. 04-2216 (4th Cir. July 21, 2005) (PDF), the Fourth Circuit ruled that a district court is entitled to exercise its discretion to decline to hear a declaratory judgment action in light of a parallel state-court case.

The case was a business tort suit between New Jersey timeshare resort operators and their agent, New Wellington Financial. The resort operators claimed New Wellington violated its duty as their agent by taking undisclosed payments from lenders. New Wellington filed a declaratory judgment in the Western District of Virginia on August 13, 2003. A month later, it amended to add a claim for tortious interference with contract. Between the complaints, the defendants filed their own suit in New Jersey state court alleging, among other things, fraud, commercial bribery, violation of New Jersey Racketeering law, breach of contract, breach of the implied covenant of good fiath and fair dealing, and breach of fiduciary duty. The conduct underlying the cases was identical.

In the federal case, after the tortious interference claim was released due to settlement, the District Court ruled that it lacked personal jurisdiction over the defendants, and that even if it had personal jurisdiction, it would exercise its discretion not to hear the declaratory judgment action in light of the New Jersey state-court suit. The plaintiff appeaeled.

Assuming that personal jurisdiction was present, the Fourth Circuit held that the district court did not abuse its discretion. The court noted that New Jersey had a "strong interest in having the dispute resolved in its courts," because the conduct at issue in the suits involved New Jersey companies, loans for New Jersey property, and claims based in New Jersey state law, "several of which can fairly be called complex," including those for commercial bribery, New Jersey RICO, and conspiracy to violate New Jersey RICO. Also, the court found that the state court could "resolve the matter more efficiently" because several parties who would have destroyed diversity in federal court could be joined in the state court case. Thus, the court held "we cannot conclude that the district court abused its discretion in deciding to decline to hear this declaratory judgment action if personal jurisdiction existed. Clear as day, considerations of 'federalism, comity, and efficiency,' counsel against running this action simultaneously with the New Jersey lawsuit. Accordingly, after careful consideration we conclude that the district court’s decision to dismiss is AFFIRMED." (citations omitted).

Thursday, July 21, 2005

FMLA claims cannot be settled without court or DOL approval

Yesterday in Taylor v. Progress Energy, Inc. , No. 04-1525 (4th Cir. July 20, 2005) (PDF), the Fourth Circuit held that "without prior DOL or court approval, 29 C.F.R. § 825.220(d) bars the prospective and retrospective waiver or release of the FMLA’s substantive and proscriptive rights." This ruling places FMLA claims in the same boat as FLSA claims. While claims under Title VII and the ADEA may be waived by private agreements (including employee severance agreements) out of court, FLSA and FMLA claims cannot.

In Taylor, the employee accepted a $12,000 severance package and signed a release of all claims. She then sued her employer for violating both her substantive FMLA rights and her proscriptive FMLA rights to be free from retaliation for complaining about the employer's FMLA abuses. concerned. The district court, relying on Faris v. Williams WPCI, Inc., 332 F.3d 316 (5th Cir. 2003), held that § 825.220(d) prohibits only the prospective waiver of substantive FMLA rights. Thus, according to the district court, the regulation did not apply to (1) the retrospective waiver or release of FMLA claims or (2) the waiver or release of claims that an employer has discriminated or retaliated against an employee for the exercise of her substantive FMLA rights. The Fourth Circuit disagreed with the district court and split with the Fifth Circuit's interpretation in Faris:
We disagree with the district court’s interpretation of § 825.220(d). The regulation’s plain language prohibits both the retrospective and prospective waiver or release of an employee’s FMLA rights. In addition, the regulation applies to all FMLA rights, both substantive and proscriptive (the latter preventing discrimination and retaliation). Finally, the DOL, by recognizing that the FMLA’s enforcement scheme is analogous to that of the Fair Labor Standards Act (FLSA), 29 U.S.C. § 201 et seq., has indicated that § 825.220(d) permits the waiver or settlement of FMLA claims only with the prior approval of the DOL or a court.
It would be nice if there were a summary proceeding available in the federal courts to obtain approval of FMLA and FLSA settlements. Have a special master appointed who could review the facts and the amount of the settlement, and give a speedy thumbs up or thumbs down would be great. Most employers balk at the prospect of involving the DOL in their affairs just to settle one employee's claim. But if an employer realizes it has some exposure and wants to settle with the employee, they shouldn't have to involve the courts or the DOL just to get a good release of the claims--especially where the employee is represented by counsel.

Wednesday, July 20, 2005

What does it take to state a claim?

In Chao v. Rivendell Woods, Inc., No. 04-2330 (4th Cir. July 19, 2005) (PDF), the Fourth Circuit reversed the dismissal--without prejudice--of the Secretary of Labor's suit against an employer for violations of the Fair Labor Standards Act. The district court had concluded that the complaint did not satisfy Federal Rule of Civil Procedure 8(a).

Why, you might ask, would Ms. Chao bother to appeal a case dismissed without prejudice. Apparently, her department uses the same style of pleading in cases across the United States, and she wanted to settle once and for all that her pleading was up to snuff.

The court was careful to note the difference between dismissal of a complaint without prejudice and dismissal of an entire action without prejudice. In this case, "the district court did not merely dismiss the complaint, but dismissed the 'action . . . in its entirety.' In Domino Sugar, we noted the difference between an order dismissing an action without prejudice and one dismissing a complaint without prejudice, stating that the latter order is generally not appealable." Still, you rarely see an appeal of a dismissal without prejudice because it is cheaper and more expeditious to refile rather than appeal. Money and time are not large concerns of the U.S Government here, however. This investigation had been ongoing for five years.

Rule 8(a) requires a complaint to include "(1) a short and plain statement of the grounds upon which the court’s jurisdiction depends . . . , (2) a short and plain statement of the claim showing that the pleader is entitled to relief, and (3) a demand for judgment for the relief the pleader seeks." Fed. R. Civ. P. (8)(a). In this case, the Fourth Circuit reemphasized that "a complaint need not 'make a case' against a defendant or 'forecast evidence sufficient to prove an element' of the claim. It need only 'allege facts sufficient to state elements' of the claim." (citations omitted). Ms. Chao's complaint, although a bit sparse, did meet this standard. Therefore, the Fourth Circuit reversed the dismissal of her pleading.

Monday, July 18, 2005

Cohabiting West Virginians are breaking the law

This article in USA Today notes that "[t]he almost 1 million unmarried heterosexual Americans who live together in Florida, Michigan, Mississippi, North Carolina, North Dakota, Virginia and West Virginia are violating state laws against 'lewd and lascivious' cohabitation."

I consulted the West Virginia Code and, by golly, they are right--at least about West Virginia:
§61-8-4. Lewd and lascivious cohabitation and conduct; penalty; when persons presumed to be unmarried.
If any persons, not married to each other, lewdly and lasciviously associate and cohabit together, or, whether married or not, be guilty of open or gross lewdness and lasciviousness, they shall be guilty of a misdemeanor, and, upon conviction, shall be fined not less than fifty dollars, and may, in the discretion of the court, be imprisoned not exceeding six months, and, upon a repetition of the offense, they shall, upon conviction, be confined in jail not less than six nor more than twelve months. In prosecutions for adultery and fornication, and for lewdly and lasciviously cohabiting together, the persons named in the indictment shall be presumed to be unmarried persons in the absence of proof to the contrary.

I'm not sure what it means to "lewdly and lasciviously" cohabit together, but for all I know, I might have broken this law back in college. My senior year at WVU, a group of six former resident assistants--three males and three females (including myself)--lived together in a six bedroom house known to many in Morgantown as "Earth House." Although none of us dated each other or engaged in any conduct that I would normally consider to be "lewd" or "lascivious," we did cohabit for a year. Did we break this law? Who knows.

The point of the USA Today article is that a lawsuit challenging the constitutionality of North Carolina's cohabitation statute is making its way through the courts and is drawing new attention to these old laws. Until I read this article, I had no idea cohabitation was illegal in this state.

Friday, July 15, 2005

Fourth Circuit affirms dismissal of civil rights suit involving rights of mentally retarded individuals

In Fonner v. Fairfax County, No. 03-1068 (4th Cir. July 14, 2005) (PDF), two mentally retarded adult men sued Fairfax County, alleging violations of their constitutional rights and the Americans with Disabilities Act (ADA). One of the men, Fonner, was a resident of a group home. He was prohibited by the group home's staff from visiting the private residence of the other man, Durie. Durie resided with an employee of the group home, and the rules of the group home prohibited residents from visiting the homes of staff members.

Fonner was dismissed from the suit after a guardian ad litem was appointed and reported that he did not want to proceed as a plaintiff. Durie proceeded with the suit, but a protective order prevented his counsel from deposing Fonner. Durie's claims were later dismissed on summary judgment.

Several points were addressed in the opinion:

1. Was the district court authorized to appoint a guardian ad litem under Fed. R. Civ. P. 17(c) even absent a determination of incompetency by the Commonwealth of Virginia?

Held: Yes. "Nothing in the rule [F.R. Civ. P., Rule 17(c)] prohibits the district court from appointing a guardian ad litem to represent a person not previously adjudicated as incompetent through a state proceeding." Moreover, "[t]he federal district court may, of course, appoint a guardian ad litem in its discretion" where the district court believes the appointment is in the infant or incompetent’s interests. " Genesco, Inc. v. Cone Mills Corp., 604 F.2d 281, 285 (4th Cir. 1975).

2. Was Fonner properly dismissed as a party?

Held: Yes. In the opinion of the guardian ad litem, Fonner had not knowingly authorized his attorney to represent him. On her report the district court dismissed Fonner from the case. The Court found the dismissal to be within the district court's discretion.

3. Did the district court properly enter a protective order under F. R. Civ. P. 26(c) prohibiting Fonner's deposition?

Held: Yes. The court relied on the report of Fonner’s court-appointed guardian ad litem and the affidavit of Fonner’s treating psychologist. The guardian ad litem’s report noted that Fonner is emotionally fragile and that his opinions and beliefs could be changed by the suggestions of others. The psychologist stated that a deposition would cause Fonner to be "emotionally overwhelmed and traumatized," that "the negative effects of the deposition would likely trigger a relapse of previous symptoms and problematic behaviors" in Fonner and "greatly interfere
with Fonner’s functioning in daily life." The court acted within its discretion in entering a protective order.

4. Were Durie's civil rights claims under 42 U.S.C. § 1983 properly dismissed on summary judgment?

Held: Yes. Durie claimed that the defendants violated his constitutional rights of free association, substantive due process, procedural due process, and equal protection. The Court held that "[t]he decision by the defendants to restrict residents from the group home was made in response to an investigation by Mental Retardation Services warning that the professional relationship between staff and residents of the Essex House could be compromised if residents were allowed to visit staff member’s homes. The need to maintain professional relationships between county staff and group home residents is a legitimate State interest. Therefore, even if Durie could establish that other similarly situated individuals were treated differently, the defendants’ decision should be upheld as rationally related to a legitimate State interest. Accordingly, we hold that the district court did not err in granting summary judgment for the defendants on Durie’s § 1983 claims."

5. Were Durie's ADA claims also appropriately dismissed on summary judgment?

Held: Yes. The applicable portion of the ADA provides that "no qualified individual with a disability shall, by reason of such disability, be excluded from participation in or be denied the benefits of the services, programs, or activities of a public entity, or be subjected to discrimination by any such entity." 42 U.S.C. § 12132 (1995). However, the court found that "[t]here is no evidence that Durie ever requested services or benefits from Essex House or Fairfax County, and no evidence that he was excluded from participating in any programs of Essex House or Fairfax County. Durie’s only allegation is that the defendants prohibited Fonner, a resident ... from visiting Durie at Durie’s home while ... a county employee and counselor, was also living there. This allegation is not sufficient to support a claim that Durie was denied the benefits of a service, program, or activity of a public entity, or subjected to discrimination by a public entity because of his disability."