Thoughts on Sentencing Guidelines: Beckles v. United States

This post is written by Associate Editor Julie Allen. Opinions and views expressed herein are those of the writer alone.

The United States has a long and complicated history with criminal sentencing—and issues related to criminal sentencing are still being argued before the Supreme Court.  Beckles v. United States is the most recent in a long line of these cases.  In this case, the police charged Travis Beckles (the Petitioner) with one count of possession of a firearm by a convicted felon, in violation of 18. U.S.C. §922(g)(1).[1]  The presentence investigation report recommended that Petitioner be sentenced as a career offender, relying on the commentary to §4B1.2 (the advisory Guidelines), because Petitioner possessed a sawed-off shotgun.[2]  The designation as a career offender enhanced Petitioner’s sentence from a range of 262 to 327 months to a range of 360 months to life.[3]   Argued before the Supreme Court in November 2016 and decided in March 2017, Beckles raised the issue of whether commentary to the Sentencing Guidelines is void for vagueness, based on a similar argument made in Johnson v. United States, which the Supreme Court decided in 2015.[4]

The issue of enhanced sentences first arose in context of the Advanced Career Criminal Act (“ACCA”), under which this Court found the residual clause, which defined violent felony as “[…] any crime involves conduct that presents a serious potential risk of physical injury to another” unconstitutionally vague.”[5]  In determining the residual clause was unconstitutionally vague, the Court stated that the “indeterminacy of the wide-ranging inquiry [in the sentencing procedure] by the residual clause both denies fair notice to defendants and invites arbitrary enforcement by judges.”[6]  In other words, part of due process requires that when a defendant commits a crime he or she is aware of what the punishment may entail.  The residual clause of ACCA did not give the required notice because it was so vague as to be arbitrary (meaning that any defendant who committed a crime could not even guess as to what his sentence would be).

The defendant, Travis Beckles, argued that Johnson applied to the Sentencing Guidelines, because the residual clause that applied to Beckles used the same language that was found “void for vagueness” in ACCA.[7]  Writing for the majority of the Court, Justice Thomas found that the Sentencing Guidelines could not be subject to a vagueness challenge because judges have discretion to deviate from the Guidelines when determining a sentence—in other words, the Guidelines are advisory-only, unlike the ACCA.[8]

So, what does this decision mean for defendants going forward? This decision clearly (or maybe not so clearly, per Justice Kennedy) ends any vagueness challenges to the advisory guideline provisions.  Justice Thomas noted that all the advisory guidelines are all equally vague, so allowing one to be subject to vagueness challenge would open the proverbial floodgates.[9]  Although concurring with Justice Thomas, Justice Kennedy noted that the “vagueness” door may not be closed yet—and that there may be a time where a sentence, or a pattern of sentencing, that is so arbitrary that it implicates constitutional challenges.[10]  Until then, however, whenever a judge uses her discretion under the Sentencing Guidelines advisory guidelines to set a sentence, a defendant will not be able to raise vagueness to challenge it.

[1] Beckles v. United States, 580 U.S. 866, 891 (2017).

[2] Id.

[3] Id.

[4] Id.

[5] Johnson v. United States, 135 S. Ct. 2551 (2015).

[6] Id. at 2557.

[7] Beckles at 891.

[8] Id. at 894.

[9] Id. at 895.

[10] Id. at 897.

Short-Term Payday and Title Loans Present Long-Term Problems for Consumers

This post is written by Lead Articles Editor Alexa E. Wainscott[i]. Opinions and views expressed herein are those of the writer alone.

 

alex1

Advertised as convenient solutions for cash-strapped consumers seeking to cover an unexpected expense between paychecks, such as a car repair or medical expense, payday, auto title, and other short-term loans regularly become long-term problems for borrowers. Although purportedly intended to cover temporary, emergency expenses that will be repaid in weeks, payday loans are often used to cover ordinary or recurring expenses, such as utilities and credit card bills, and the average borrower spends five to seven months out of the year in “short-term” indebtedness.[ii]  Interestingly, lenders often disseminate advertisements warning that payday loans are not long-term financial solutions, while simultaneously offering incentive programs that offer discounts after increasing numbers of loan transactions, keeping consumers hooked in a dangerous cycle.[iii]

Preying on financially vulnerable populations—due to the widespread availability of the loans, despite consumer credit deficiencies— lenders charge sky-high interest rates and require prompt repayment, which can force borrowers to take out additional loans, trapping them in cycles of debt. Roughly four out of five short-term borrowers end up re-borrowing within a month, according to the Consumer Financial Protection Bureau (CFPB), and more than a quarter eventually re-borrow more than eight times.[iv] Many argue “that consumers are being set up to fail,” because unaffordable loan payments force them to “choose between defaulting, re-borrowing, or skipping other financial obligations like rent or basic living expenses.”[v] In addition to repeat borrowing, other problems commonly associated with short-term loans include defaults, vehicle seizures, bank penalty fees (for insufficient funds, etc.), and bank account closures.

The most common types of short-term loans in this context are payday and auto title loans. Payday loans are for small amounts and due in full at the time of the borrower’s next paycheck, generally two to four weeks.[vi] These loans usually carry absurdly high interest rates of well over 300%, and borrowers typically allow the lender access to their bank accounts to electronically debit the payments when due.[vii] Auto title loans are similar, but the borrow must put up her vehicle title as collateral for the loan. According to CFPB research, one out of five single-payment auto title loans end up in vehicle seizure for failure to repay.[viii]

 

The CFPB and New October 2017 Short-Term Lending Rules

To help regulate federal consumer protections and combat predatory lending activity, including high-risk short-term loans, the Consumer Financial Protection Act created the CFPB in 2010.[ix] The CFPB is charged with broad rulemaking authority under Title X, subject to few restrictions.[x] In October 2017, the CFPB promulgated a new rule[xi] aimed at forcing lenders to determine if borrowers can actually repay their loans, which expressly applies to single-payment short-term payday and auto title loans—i.e. loans that require the borrower to repay all or most of the borrowed amount at once.[xii]

One part of this rule requires a “full-payment test.”[xiii] Lenders are required to collect enough financial information from prospective borrowers to determine if they have sufficient income to repay the loan and meet all major financial obligations and cover living expenses during the term of the loan and for thirty days thereafter.[xiv] Household members’ income may be taken into account if the borrower has verified access to the income.[xv] Two other protections include: (1) a requirement that lenders must offer a thirty-day “cooling-off period” after the third covered loan taken out in quick succession; and (2) a “debit attempt cut-off,” meaning that after two unsuccessful attempts to debit the borrower’s account (for insufficient funds, or whatever reason), the lender is prohibited from debiting the account again without the consumer’s consent.[xvi] The rule provides that it is in addition to any state protections afforded to consumers.[xvii]

A second part of the rule allows an exception to the full-payment test “if [the loan] is structured to allow the borrower to get out of debt more gradually.”[xviii] Under this principal-payoff option, the consumer can repay the loan in one payment, or she can have up to two subsequent loans where the principal is slowly paid down.[xix] This option is restricted to lower-risk situations, up to $500 for an initial loan, and lenders cannot take vehicle titles as collateral.[xx] Additionally, lenders are barred from lending to consumers with other recent outstanding short-term loans.[xxi] Lenders also may not make more than three loans of this sort in quick succession, and this option does not apply if the consumer has already had more than six short-term loans or been in debt for more than ninety days on short-term loans over a rolling twelve-month period.[xxii] Also, the lender can only offer extensions under this option if the borrower has paid off at least one-third of her original principal per extension, a provision specifically aimed at combatting the debt trap.[xxiii] Lastly, the lender must disclose all terms of the option to consumers in plain language.[xxiv]

 

Ohio’s Short-Term Loan Protections: Mere “Smoke and Mirrors?”

The Ohio Legislature has also attempted to address predatory payday lending, passing the Short-Term Lender Act (STLA) in 2008.[xxv] Under the STLA, lenders may not issue short-term loans over the phone, by mail, or through the internet, and the maximum allowable loan amount is $500, with a minimum duration of thirty-one days.[xxvi] Additionally, the interest rate is capped at 28% APR, and the amount due under the loan cannot exceed 25% of the borrower’s gross salary.[xxvii] The STLA requires payday lenders to register as short-term lenders under the Act.[xxviii] However, under the current state of Ohio law, it is relatively easy for lenders to escape the Act’s requirements by—legally— circumventing its registration requirement.[xxix]

The Ohio Supreme Court ruled in 2014 that the STLA did not prohibit Mortgage Loan Act (MLA) registrants from making short-term single payment loans, and the traditional single-installment payday loan is alternatively covered under the MLA as an interest-bearing loan.[xxx] Thus, payday lenders have been able to evade the requirements of the STLA by registering as MLA lenders, bypassing the STLA’s consumer-protection restrictions. Additionally, many lenders avoid the MLA’s caps by tacking on substantial additional fees for their services in assisting the consumer in “finding” the loan, as the lender is characterized as a Credit Service Organization under Ohio Law.[xxxi]

In the Ohio Neighborhood Finance case, the lender had been previously licensed under the now-repealed Check-Cashing Lender Law, but he failed to register under the STLA when it was enacted. He was, however, licensed under the MLA, under which he could charge amounts less than those under the Check-Cashing Lender Law, but still greater than permitted under the STLA.[xxxii] The borrower asserted that payment was not required because the lender was not authorized to make short-term single-installment “payday” loans.[xxxiii] The questions presented to the Ohio Supreme Court were: (1) whether the MLA permits single-installment, interest-bearing loans; and (2) if so, whether the MLA prohibits lenders from making short-term loans of this sort.[xxxiv]

The court reasoned that the unambiguous statutory language of the MLA compelled the conclusion that registrants under it could issue payday-style loans, and the existence of the STLA does not preclude them from doing so freely.[xxxv] Recognizing the obvious weakness of the STLA, but careful not to exceed the bounds of its judicial authority, the court reasoned that “[i]f the General Assembly intended to preclude payday-style lending of any type except according to the requirements of the STLA, our determination that the legislation enacted in 2008 did not accomplish that intent will permit the General Assembly to make necessary amendments to accomplish that goal now.”[xxxvi] In his concurrence, Justice Pfeifer lamented the failure of the legislature to effectively combat the issue of predatory payday lending: “How can the General Assembly set out to regulate a controversial industry and achieve absolutely nothing? Were the lobbyists smarter than the legislators? Did the legislators realize that the bill was smoke and mirrors and would accomplish nothing?”[xxxvii]

The Ohio Neighborhood Finance case is an example of the lengths to which lenders will go to bypass strict lending restrictions, and it should serve as a reminder that, as a result, legislators must be responsive to courts’ intervention to facilitate the protections that the legislation was originally intended to provide. Accordingly, despite the hopeful outlook surrounding the CFPB’s October 2017 rules strengthening consumer protections against short-term predatory lending at the federal level, consumer optimism must be qualified and somewhat reserved. As in the case of the STLA in Ohio, there are almost always loopholes to be exploited in legislation and administrative regulations, and, in the case of payday and vehicle title loans, predacious lenders stand at the ready to find them.

 

[i] Alexa E. Wainscott is a third-year student at Chase College of Law and the Lead Articles Editor of the Northern Kentucky Law Review.

[ii] The Pew Charitable Trusts, Payday Lending in America: Who Borrows, Where They Borrow, and Why 15 (2012) http://www.pewtrusts.org/~/media/legacy/uploadedfiles/pcs_assets/2012/pewpaydaylendingreportpdf.pdf.

[iii] Id.

[iv] Jackie Wattles, New Payday Loan Rules: What You Need to Know, CNN Money (Oct. 7, 2017, 5:52 PM ET), http://money.cnn.com/2017/10/07/pf/payday-loans-cfpb-rule/index.html.

[v] Consumer Financial Protection Bureau, CFPB Finalizes Rule to Stop Payday Debt Traps 1 (Oct. 5, 2017) http://files.consumerfinance.gov/f/documents/201710_cfpb_fact-sheet_payday-loans.pdf.

[vi] Id.

[vii] Id.

[viii] Id. at 2.

[ix] See Prac. Guide to Consumer Fin. Protection Bureau Regs. § 3:1; see also Title X § 1002(14), 12 U.S.C. § 5481(14).

[x] See Prac. Guide to Consumer Fin. Protection Bureau Regs. § 3:3; see also Title X § 1022(b)(4)(A), 12 U.S.C. § 5512(b)(4)(A).

[xi] See 12 CFR Part 1041. The text of the rule is available at:  http://files.consumerfinance.gov/f/documents/201710_cfpb_final-rule_payday-loans-rule.pdf.

[xii] Consumer Financial Protection Bureau, CFPB Finalizes Rule to Stop Payday Debt Traps 1 (Oct. 5, 2017) http://files.consumerfinance.gov/f/documents/201710_cfpb_fact-sheet_payday-loans.pdf.

[xiii] Id. at 3.

[xiv] Id.

[xv] Id.

[xvi] Id. at 3, 6.

[xvii] Id. at 3.

[xviii] Id. at 4.

[xix] Id.

[xx] Id.

[xxi] Id.

[xxii] Id.

[xxiii] Id.

[xxiv] Id.

[xxv] Short-Term Lender Law (Payday Lending Law), Ohio Rev. Code Ann. §§ 1321.35– 1321.48.

[xxvi] Payday Lending in Ohio: How Lenders Get Around the Rules, Nolo Legal Encyclopedia (2017), https://www.nolo.com/legal-encyclopedia/restrictions-payday-lending-ohio.html.

[xxvii] Id.

[xxviii] Id.

[xxix] Id.

[xxx] Ohio Neighborhood Fin., Inc. v. Scott, 139 Ohio St.3d 536, 547 (Ohio 2014).

[xxxi] Payday Lending in Ohio: How Lenders Get Around the Rules, Nolo Legal Encyclopedia (2017), https://www.nolo.com/legal-encyclopedia/restrictions-payday-lending-ohio.html.

[xxxii] Ohio Neighborhood Finance, 139 Ohio St.3d at 540.

[xxxiii] Id.

[xxxiv] Id. at 541.

[xxxv] Id. at 547.

[xxxvi] Id. at 546.

[xxxvii] Id. at 547–8.

Is Ezekiel Elliot just delaying the inevitable?

This post is written by Senior Editor John Roberts. Opinions and views expressed herein are those of the writer alone.

In late July, 2016, an ex-girlfriend alleged that Dallas Cowboys’ star running back Ezekiel Elliott committed multiple acts of violence against her that amounted to domestic violence.  Weeks later, Ohio prosecutors announced that Elliott would not be charged with domestic violence, citing conflicting evidence gathered in their investigation.  However, as Elliott soon would soon find out the hard way, the lack of criminal charges did not immunize him from discipline in the workplace. On August 11, 2017, over a year after the alleged incidents took place, the NFL suspended Elliott six games for a violation of their personal conduct policy.  The suspension triggered a fascinating legal tug-of-war that has yet to conclude to this day.  This post will explore the intricacies of that legal battle that has assuredly confused many NFL fans unfamiliar with the law, and attempt to hash out the likely outcome for Elliott.

 

To begin, it is important to note what gave the National Football League [“NFL”] the power to suspend Elliott despite Ohio prosecutors declining to press charges.  As an employee of the NFL, Elliott is subject to the terms of the Collective Bargaining Agreement [“CBA”], the management-labor relationship entered into between the NFL and the NFL Players’ Association [“NFLPA”].  Article 46 of the CBA, titled “Commissioner Discipline”, empowers the commissioner to punish a player who engages in “conduct detrimental to the integrity of, or public confidence in, the game of professional football.”[1]  The effect of Article 46 is that the NFL commissioner, currently Roger Goodell, is given widespread authority to determine what conduct is actionable under this section.  In Elliott’s case, the NFL’s investigation yielded enough credible enough to convince the commissioner (and his four hired experts) that Elliott did violate the CBA’s personal conduct policy, leading to Elliott’s six-game suspension.

 

Next, before he could realistically file a lawsuit, Elliott had to utilize all administrative remedies available to him under the CBA.  Pursuant to Article 46 of the CBA, Elliott was required to appeal the suspension back to Goodell.  Article 46 instructs the commissioner to consult with the NFLPA and appoint a hearing officer to hear the appeal, reflecting a right collectively bargained for by the NFLPA.  After the appeal hearing but before the hearing officer came down with a decision to uphold, reduce, or vacate Elliott’s suspension, Elliott joined with the NFLPA in filing a complaint against the NFL in the U.S. District Court for the Eastern District of Texas.  The complaint, filed on August 31, 2017, sought that the court vacate any discipline upheld by the pending appeal pursuant to the CBA.  The lawsuit was a “forum-shopping” tactic adopted by the NFLPA and its lawyers in attempt to have his lawsuit heard in a favorable court for him, a forum that avoided the U.S. Court of Appeals for the Second Circuit where the NFL could rely on favorable precedent in the Brady case a year prior. In addition to the filing of the complaint, Elliott filed a separate petition for a temporary restraining order [“TRO”] a day later.  The TRO, if granted, would prevent the NFL from imposing any suspension until after the completion of the lawsuit.

 

It is important to note that Elliott’s success in court relied on him showing that the process employed by the NFL was badly flawed, not whether his conduct amounted to domestic violence against his former girlfriend.  The TRO presented the first question to be decided in Elliott and the NFLPA’s lawsuit against the NFL. Under the Federal Rules of Civil Procedure, a plaintiff seeking a TRO must show: “(1) a substantial likelihood of success on the merits, (2) a substantial threat that plaintiff will suffer irreparable harm if the injunction is not granted; (3) the threatened injury outweighs any damage that the injunction might cause the defendant; and (4) the injunction will not disserve the public interest.”[2]  This was an uphill battle faced by Elliott and his lawyers, as they had to convince a judge who had widespread discretionary power that all of the four factors were met.  As to the first element, Elliott cited a number of shady tactics employed by the NFL that amounted to the NFL denying him of his rights in the appeal process, including the NFL’s obscuring of evidence that weighed in his favor and the denial of his ability to cross-examine his ex-girlfriend on appeal.  Elliot also argued that he would be “irreparably harmed” without an injunction because even though monetary damages could make up for lost game checks, an NFL career lasts on average less than four years and missing part of the season could deprive Elliott of individual successes and honors.  In siding with Elliott on the first two elements and finding that issuing an injunction does not eviscerate the internal procedures employed under the CBA, on September 8, 2017, the U.S. District Court for the Eastern District of Texas granted the TRO and – stunningly – a preliminary injunction, which allowed Elliott to start the season and play for the foreseeable future until the court case was resolved in the federal court system.

 

In response, the NFL predictably appealed the case to the Fifth Circuit Court of Appeals seeking an emergency stay on the injunction, which would result in Elliott’s suspension being imposed immediately if granted.  The NFL asserted two main arguments: (1) Elliott’s lawsuit was not “ripe for review” in the sense that he had not exhausted administrative remedies when he filed the lawsuit before the appeal was upheld by a hearing officer under the CBA, and (2) the NFL complied with the relatively vague process agreed upon by the NFL and the NFLPA in the CBA. On October 12, 2017, the Fifth Circuit was convinced by the NFL’s argument to vacate the preliminary injunction, stressing that Elliott failed to wait for the potential resolution through the private arbitration process, and that judges have not been persuaded to recognize rights that the NFLPA failed to acquire through collective bargaining with the NFL.

 

Although Elliott had lost his injunction in the Fifth Circuit, the NFL had previously filed a lawsuit in the Southern District of New York, effectively seeking to have the Court confirm and enforce the arbitration discipline.  This gave Elliott a chance to litigate the rest of the case in New York or seek the long shot of review from the Supreme Court; Elliott of course decided to keep fighting the suspension in the New York court.  He filed for the identical TRO that he had in place in the Texas court, only in New York.  At this point, Elliott had been fortunate enough to have not missed a game yet in the NFL season, but the tides were turning in the NFL’s favor.  Just as it seemed he would miss his first game of the season in week 8, the Southern District of New York granted his request for a TRO in a October 17, 2017 ruling.  This allowed him to play until his preliminary injunction was ruled on within the next fourteen days.   When it came time to rule on the preliminary injunction though, Judge Katherine Failla of the Southern District of New York dissolved the TRO and denied his motion for a preliminary injunction on October 30, 2017.  This was the likely outcome in New York, which was a decidedly less favorable forum due to precedent from the Tom Brady “deflategate” ruling passed down in the Second Circuit the previous year.

 

However, the familiar theme in this case is that as long as there is a higher court, the party ruled against will continue appealing up the board.  This led Elliott to seek a temporary stay of his suspension with the Second Circuit Court of Appeals, which was the rung of the ladder above the New York federal court.  On November 3, 2017, the stay was granted until the Second Circuit Court of Appeals could hear his motion for an injunction, basically setting a placeholder to maintain the status quo until the Second Circuit could hear the argument in full.  Finally, on November 9, 2017, a Second Circuit three-judge panel denied Elliott’s motion for an injunction, reinstating his suspension effective immediately.

 

What does this mean for the future? If this case has taught us anything, it is that there is always another avenue to receive a favorable ruling.  As it stands, Elliott is suspended until an expedited December 1, 2017 ruling, meaning he will miss at the very least the Cowboys’ next four games.  Then, depending on the decision that is rendered, he will more than likely continue serving the remaining two weeks on his six-game suspension given the Second Circuit precedent from the Brady ruling.  However, if on December 1, Elliott is successful in convincing the Second Circuit that Judge Failla incorrectly sided with the NFL, he could receive monetary damages for the four games he missed (an empty victory in his mind) but would more than likely be able to play out the rest of the season until the Second Circuit could decide on his appeal in the offseason.  However, as the battle rages on, it appears less and less likely that Elliott will be able to somehow sit out less than six games.   The most likely outcome here is that the Second Circuit will side with Judge Failla and the NFL, which would likely cause Elliott to request an en banc review in front of all judges on the Second Circuit.  These reviews are granted in only one percent of cases.  In the same vein, Elliott could then appeal to the Supreme Court of United States, which only reviews one percent of those cases. All things considered, the December 1, 2017 ruling is in all likelihood Elliott’s last bite at the seemingly never-ending apple.  Unfortunately for him and the Cowboys, if he is unsuccessful, he will be sitting out weeks 10-15 of the NFL season, which are pivotal in setting up for the playoffs.  Despite the back and forth in the United States federal court system, it looks like Ezekiel Elliott’s appeal will join the ranks of unsuccessful appeals previously fought by players such as Adrian Peterson and Tom Brady.  If the NFLPA can learn anything from the NFL’s more contested enforcement of the personal conduct policy, it is that when it comes time to collectively bargain for a new CBA, the NFLPA should fight for a personal conduct procedure that seeks to level the playing field between the players and the commissioner.

 

 

[1] 2011 Nat’l Football League Collective Bargaining Agreement art. 46 (Aug. 4, 2011), archived at https://nfllabor.files.wordpress.com/2010/01/collective-bargaining-agreement-2011-2020.pdf.

[2] Nichols v.  Alcatel USA, Inc., 532 F.3d 364, 372 (5th Cir. 2008).

GPS Tracking of Government Employees: A Possible Fourth Amendment Violation

 

This post is written by Senior Editor Robert Thompson. Opinions and views expressed herein are those of the writer alone.

As technology advances and bottom lines diminish, companies are striving to find new ways to increase efficiency while maximizing profits. One such tactic is to track their employees’ efficiency through GPS tracking devices. Companies track and log their employees every movement hunting for a dawdling employee. In the “name of efficiency,” companies have begun placing GPS tracking devices on both private and company-owned vehicles and are tracking their employees’ every step using the location services available in most modern cell phones. But what happens when a government employer tracks its employees? Are the employees’ Fourth Amendment rights thrown to the curb, all in the name of efficiency? No—government employers must not track their employees who have a reasonable expectation of privacy without providing a legitimate reason for such tracking.

 

In O’Connor v. Ortega, the Supreme Court established a test for workplace privacy.[1] This case addressed whether a doctor who was an employee of a state-run hospital had a right to privacy to personal property within his office.[2] The Supreme Court held the Fourth Amendment restraints on search and seizure apply to government employers searching their employees.[3] However, the Court maintained “requiring an employer to obtain a warrant whenever the employer wished to enter an employee’s office, desk, or file cabinets for a work-related purpose would seriously disrupt the routine conduct of business and would be unduly burdensome.”[4] Thus, the Court created an exception to the warrant requirement in a public workplace.

 

The O’Connor Court outlined a two-prong test to determine the reasonableness of an employee search.[5] First, courts should look to the operational realities of the workplace to determine if the employee had a reasonable expectation of privacy.[6] Second, if the employee did have a reasonable expectation of privacy, courts should balance this expectation against the interest of the government employer.[7]

 

Yet, dose this 1987 test apply to today’s ever-growing workplace overflowing with technology? Yes. Courts can apply the O’Connor test to today’s workplace.  For example, in Cunningham v. New York State Dept. of Labor, a state employee claimed his Fourth Amendment rights were violated when he was tracked via GPS.[8] The government employer was investigating the employee for unauthorized absences and the falsification of records.[9] Without the employee’s knowledge, the employer attached a GPS device to the employee’s personal car.[10] This device recorded all of the employee’s movements during daytime, evenings, weekends, and even when the employee was on vacation.[11] This violation of the employee’s privacy continued for over a month.[12] The GPS data collected showed inaccuracies in time reports the employee submitted to his employer.[13] And the employee was ultimately terminated.[14]

 

The court applied the O’Connor v. Ortega framework. First, the court reasoned the employee had a reasonable expectation of privacy during his off-the-clock-time.[15] Second, the search was not reasonable because its scope was much broader than necessary to establish misconduct.[16] Therefore, because the search was not reasonable and was “excessively intrusive,” it constituted an invasion of the employee’s privacy.[17]

 

Employees are rarely awarded an expectation of privacy in the workplace, even in the most unreasonable situations. However, employers should still use caution when engaging in GPS tracking techniques. The reasonable expectation of privacy should be determined after a careful examination of the following: notice given to the employee regarding GPS monitoring policies, whether the device used to track the employee is company-owned, and whether the tracking is taking place during working hours.

 

Government employers must provide its employees the protection of the Fourth Amendment. Courts can use the O’Connor v. Ortega framework in GPS tracking circumstances. After determining an employee had a reasonable expectation of privacy, courts should balance that reasonable expectation of privacy against the government employees legitimate interest. If the reasonable expectation of privacy outweighs the government employer’s interest, the employer has violated the employee’s Fourth Amendment rights.

 

 

[1] O’Connor v. Ortega, 480 U.S. 709, 715 (1987).

[2] Id. at 710.

[3] Id. at 709.

[4] Id.

[5] Id. at 725–26.

[6] Id.

[7] O’Connor v. Ortega, 480 U.S. 709, 725–26 (1987).

[8] Cunningham v. New York State Dep’t of Labor, 997 N.E.2d 468, 471 (2013).

[9]   Id.

[10] Id.

[11] Id.

[12] Id.

[13] Id.

[14] Cunningham v. New York State Dep’t of Labor, 997 N.E.2d 468, 471 (2013).

[15] Id.

[16] Id. at 472-73.

[17] Id. (The court reasoned that “[the employee] examined much activity with which the State had no legitimate concern—i.e., it tracked petitioner on all evenings, on all weekends and on vacation. Perhaps it would be impossible, or unreasonably difficult, so to limit a GPS search of an employee’s car as to eliminate all surveillance of private activity—especially when the employee chooses to go home in the middle of the day, and to conceal this from his employer. But surely it would have been possible to [ ] stop short of seven-day, 24-hour surveillance for a full month. The State managed to remove a GPS device from petitioner’s car three times when it suited the State’s convenience to do so—twice to replace it with a new device, and a third time after the surveillance ended. Why could it not also have removed the device when, for example, petitioner was about to start his annual vacation?).

Immigration Status Evidence

This post is written by Senior Editor Rob Spicer. Opinions and views expressed herein are those of the writer alone.

In the current political landscape, immigration status is greatly debated.  Due to the polarity of this issue, a party in a civil case may want to introduce evidence of the opposing party’s immigration status.  Actions involving automobile accidents are a common area where a party would want to introduce evidence of immigration status.  In other words, if a party is operating a vehicle while being unlicensed, the opposing party may want to introduce that unlicensed status, and thus, the non-immigrant status as evidence of negligence.  The Kentucky Legislation has enacted the following:

Any driver involved in any accident resulting in any damage whatever to person or to property who is ineligible to procure an operator’s license, or being eligible therefor has failed to procure a license, or whose license has been canceled, suspended or revoked prior to the time of the accident, shall be deemed prima facie negligent in causing or contributing to cause the accident.[1]

 

The Supreme Court of Kentucky has examined the history of this statute in Rentschler v. Lewis, and discussed the relevance of introducing evidence of a failure to procure a driver’s license.[2]  Ultimately, the Court held that whether the driver was unlicensed or licensed did not prove or disprove that the driver operated the vehicle in a manner that caused the accident.[3]  Additionally, the statute only creates a rebuttable presumption, and that mere failure to procure a license alone does not have any relevance to whether or not the vehicle was improperly handled. By introducing evidence that the driver was not at fault in the accident, the presumption was rebutted, and evidence of being unlicensed was irrelevant and inadmissible.[4]

Admissibility of immigration status has not been directly addressed in Kentucky nor in the Sixth Circuit Court of Appeals.  However, amongst other jurisdictions, there are similar trends on the issue of whether or not to allow immigration status in as evidence.  The American Law Reports points to several cases from various jurisdictions which all share a common trend.[5]  There are two general circumstances that allow immigration status to be brought up: (1) the individual voluntarily testifies about it, or (2) the individual is claiming lost future earnings, and therefore, immigration status is relevant as it relates to the probability of deportation.[6]  Even if the individual is claiming future lost earning capacity, the courts seem to be divided on whether or not immigration status would be allowable.[7]  For instance, the Supreme Court of Indiana in May, 2017, held that if a court finds by a preponderance of the evidence that deportation is likely, then the immigration status is inadmissible.[8]

However, the standard is not as high when future lost wages are not being alleged. In Ayala v. Lee, two illegal immigrants were hit by a vehicle and injured and defendants wanted to introduce their immigration status.[9]  In its discussion this Court found that immigration status is typical prejudicial, and even if not, its relevance typically relates to whether a party is entitled to lost wages, and how they should be calculated.[10]  Additionally, immigration status alone does not reflect on an individual’s character and is not admissible for impeachment purposes.[11]  But, in this case, the individuals opened the door to questions about their status when their answers to interrogatories differed substantively from other evidence they submitted.[12]

Ultimately, immigration status should only be admissible in cases where that status has some relevance.  A lack of licensure alone is not enough to introduce immigration status, as it does not necessarily create an issue of negligence on its face.  However, if an individual who was a nonimmigrant made a claim for lost wages, that immigration status may be raised as wages are directly related to the ability to obtain employment as an immigrant.  Its seems though as a general rule, an opposing party will not be able to bring up immigration status unless that immigrant has either raised a claim that involves their status, or opens the door in their own testimony.

[1] Ky. Rev. Stat. Ann. § 186.640 (West)

[2] Rentschler v. Lewis, 33 S.W.3d 518, 519 (Ky. 2000)

[3] Id.

[4] Id at 521.

[5] Admissibility 79 A.L.R.6th 351 (Originally published in 2012).

[6] Id.

[7] Id.

[8] Escamilla v. Shiel Sexton Company, Inc., 73 N.E.3d 663 (Ind. 2017).

[9] Ayala v. Lee, 81 A.3d 584 (Md. Spec. App. 2013)

[10] Id. at 478-80.

[11] Id. at 480 (citing Figeroa v. U.S. I.N.S., 886 F.2d 76, 79 (4th Cir. 1989)).

[12] Id. at 481.

Much Ado About Nothing: The Kentucky Supreme Court Interprets the 1982 Guidelines of the Clean Water Act

This post is written by Associate Editor Katie Price. Opinions and views expressed herein are those of the writer alone.

In April of this year the Kentucky Supreme Court took a turn at interpreting federal law when it decided Louisville Gas and Electric Company v. Kentucky Waterways Alliance, et al. and Commonwealth of Kentucky, Energy & Environment Cabinet v. Kentucky Waterways Alliance, et al.[1] While the Jurisdictional and Administrative issues presented in this case were independently provoking, the main conflict centered around the interpretation of the 1982 Guidelines of the Clean Water Act.

The Louisville Gas and Electric Company (LG&E) is utilizing a process known as “coal-fired steam electric generation and transmission”, where “the combustion of coal is used to generate steam, which in turn propels electricity generating turbines.”[2] In compliance with the Clean Air Act, LG&E must attempt to lessen the sulfur emissions, which is accomplished through “wet scrubbing” – using a waste water stream to collect sulfur particles, and, ultimately, places the waste water into the Ohio River. Ironically, which was not lost on this Court, the attempt to control air pollution facilitated water pollution. Among others, mercury, arsenic and selenium were chemicals that were not being filtered from the waste water before it emptied into the Ohio river. These were the chemicals put at issue in this case. [3]

The disputed guidelines were created 25 years ago. The drafters of the 1982 Guidelines for the Clean Water Act refrained from specifying limits for the pollutants at issue, as they felt optimal protection could be better reached with future technology.[4] The Kentucky Waterways Alliance (KWA) and others argued that this implied that LG&E was under an obligation to use the most current technologies to prevent water pollution to get a permit to discharge into the river.[5] LG&E argued that there were jurisdictional issues and the case should be transferred.

Initially, the Circuit Court determined that “Best Professional Judgement” , a standard utilized by the Clean Water Act, had not been realized by the permit writer when she emitted technological standards, and LG&E’s permit was vacated. [6] The Appellate Panel affirmed.[7] The Kentucky Supreme Court then granted the motions for discretionary review.[8] The Court explored the jurisdictional issues, and determined that the Appellants were “not entitled to relief on their jurisdictional claim.”[9] However, the Court agreed that the Best Professional Judgement standard was met by the permit writer, who “imposed the technology-based effluent limitation required by the 1982 Guideline, but also required LG&E to test its effluent periodically for mercury and for toxicity and to keep records on the results. Further, the permit provided that it would be reopened in two years for reassessment in light of any new technological or regulatory developments.”[10]  In other words, the individual writing  the permit for LG&E not only included all the standards set by the 1982 Guidelines, but she set the permit to expire in two years – right around the time the EPA was scheduled to publish new standards. This, according to the Kentucky Supreme Court, was adequate use of the” Best Professional Judgement”. Therefore, the permit was reinstated by the Kentucky Supreme Court.[11]

In an ultimate testament to the slow workings of the legal system, or, optimistically, the rapid improvement of technology, the EPA’s 2015 Guidelines addressed the concerns of the KWA in this case.  The EPA established new Best Available Technology (BAT) limitations with “numeric effluent limits on the discharge of mercury, arsenic, selenium and nitrate/nitrite.”[12] Furthermore, the EPA did not utilize the Best Professional Judgement Standard for these guidelines, to the chagrin of, just about, everyone involved. [13] While it is easy to conclude that everyone “won” in this situation, and that this case became obsolete before it published, there are still lessons to be gleamed in this production. First, there is the practical merit of patience when new guidelines on point are scheduled to be published. If nothing else, this case seems to be a testament to wasted time and resources. More importantly, there is a downplay of an issue that should be on the minds of everyone: mercury, arsenic and other chemicals are streaming into the Ohio River. We can argue until we are blue-in-the-face about the amount of chemicals a company can dump into our river. However, we know that we will not escape the consequences of those chemicals being in our waterways, no matter the capacity. While I would agree that the permit writer was acting with her best professional judgement, and that the jurisdictional issues were handled fairly, the real issue in this case is one that spans larger than the scope of our legal system.

[1] 2015-SC-000462-DG, April 27, 2017.

[2] Id. at 2

[3] Id. at 4

[4] Id. at 3

[5] “ The Act Limits such discharges to those authorized by permit, a so-called ‘National Pollutant Discharge Elimination System’ (NPDES) Permit” , Id. at 11

[6] Id. at 7

[7] Id.

[8] Id. at 8

[9] Id. at 11

[10] Id. at 22; There was anticipation of an upcoming EPA report on these chemicals – the 2015 Guidelines id. at 4 , referring to 80 Fed. Reg. 67,838-01 (Nov. 3, 2015)

[11] Id. at 26

[12] Id. at 24

[13] Id.

International Terrorism and the Formal Emergence of Corporate Interplay on the International Playing Field: Alien Tort Statute and International Corporate Liability

This post is written by Associate Editor Charles Stone. Opinions and views expressed herein are those of the writer alone.

With the preeminence of corporations and their ability to act in the international community, there is a push to hold corporate entities liable for “their” actions. The test case before the Supreme Court involves the several alien individuals who were injured, kidnapped, or killed by terrorists in attacks against Israeli citizens overseas. The surviving aliens and families of the deceased have pointed the finger at Arab Bank, PLC whom allegedly funded and facilitated various terrorist organizations who were involved in the attacks. The claims were brought under the Alien Tort Statute (ATS) in the New York Federal Court. This issue is now before the Court because the opinion in Kiobel did not address the question of Corporate Liability.[1] The facts referenced above arise from the consolidation of five lawsuits, all filed in the Eastern District of New York.[2]

On Wednesday October 11, 2017, the Supreme Court heard oral arguments in Jesner v. Arab Bank. This case involves the use of the ATS, and seeks to answer whether the statute “categorically forecloses corporate liability.[3] The text of the statute is only one sentence, and has been used to allow non-U.S. Citizens to sue others in U.S. Federal Courts.[4]

There were many questions that were contemplated during the oral arguments, as the decision will inevitably have far reaching ramifications and will incite further litigation dealing with the nuances of the law. Among these arguments were:

  1. Whether holding corporations liable would increase foreign entanglement issues.
  2. Whether holding corporations liable would increase friction with other states.
  3. What the the reasons for the ATS are, why it was enacted, and is other statutes available that would allow a plaintiff to prevail on a claim that would not require the increased scope of the ATS.
  4. The date it was enacted prompted textualist questions during the oral argument that questioned whether or not corporate liability was hypothesized in 1789, and whether it is/should be recognized today.

The Statute was enacted in in Section 9 of the Judiciary Act of 1789 and provides that “[t]he district courts shall have original jurisdiction of any civil action by an alien for a tort only, committed in violation of the law of nations or a treaty of the United States.”[5] This Act was enacted in order to allow redress for a French Diplomat who was left without a remedy under the law.[6] Since this time, the Act has been contemplated in many different situations,[7] but the question as to corporate liability has yet to be addressed.

While the arguments and law in this area are dense and well-developed by the parties, a cursory point which was added in Footnote 11 of Appendix C of the petition, aligned with a question that I was curious about.[8] With the:

idea that corporations are ‘persons’ with duties, liabilities, and rights has a long history in American domestic substantive law. See e.g., N.Y. Cent. & Hudson River R.R. Co. V. United States, 212 U.S. 481, 492 (1909) (rejecting the argument that, “owing to the nature and character of its organization and the extent of its power and authority, a corporation cannot commit a crime”). See generally Leonard Orland, Corporate Criminal Liability § 2.03-2.04 (2006) (discussing the policy behind, and history of, corporate criminal liability). It is an idea that continues to evolve in complex and unexpected ways. See, e.g., Citizens United v. Fed. Election Comm’n, 558 U.S. 50 (2010). The history of corporate rights and obligations under domestic law is, however, entirely irrelevant to the issue before us – namely, the treatment of corporations as a matter of customary international law.[9]

My concern is how it would be reconcilable to hold that a corporation would not be considered liable under the ATS when in Citizens United the Court expressed that it had “rejected the argument that political speech of corporations or other associations should be treated differently under the First Amendment simply because such associations are not ‘natural persons’’; essentially treating a corporation as a person.[10] How can a corporation have a dual personality that allows it to have all the benefits and few of the drawbacks of a natural person? It seems they have solved the age-old proverb, that you can have your cake, and eat it too.

It will be curious to see the outcome of this highly contested case with enormous ramifications. The Supreme Court will ultimately decide whether corporations may be forcefully dragged into U.S. Federal Courts from around the globe to answer for “their” transgressions, and formally emerge as players on the international field; or, if corporations will continue to be shrouded and afforded protections against liability. The oral arguments did not shed light on the direction that all of the Justices were leaning. Corporations around the world collectively hold their breath.

[1] Kiobel v. Royal Dutch Petroleum Co., 133 S.Ct. 1659 (2013).

[2] Jesner v. Arab Bank, PLC, No. 06-CV-3869; Almog v. Arab Bank, PLC, No 04-CV-5564; Afriate-Kurtzer v. Arab Bank, PLC, No. 05-CV-0388; Lev v. Arab Bank, PLC, No. 08-CV-3251; and Agurenko v. Arab Bank, PLC, No. 10-CV-0626.

[3] Petition for Writ of Certiorari at i, Jesner v. Arab Bank, PLC., 2016 WL 6069100 (2nd Cir. 2016) (No. 16-499).

[4] 28 U.S.C. § 1350

[5] Id.

[6] Kiobel, 569 U.S. at 120.

[7] Id. at 121

[8] Petition for Writ of Certiorari at 71a, Jesner v. Arab Bank, PLC., 2016 WL 6069100 (2nd Cir. 2016) (No. 16-499) (attaching opinion from Kiobel v. Royal Dutch Petroleum Co., 621 F.3d 111 (2nd Cir. 2010)).

[9] Id.

[10] Citizens United v. Federal Election Commission, 558 U.S. 310, 343 (2010).