April 15, 2013 4th Circuit published opinions

Village of Bald head Island v US Army Corps of Engineers 

After several years of dredging and beach management operations, the Corps informed Village that for budgetary reasons there would be no services in 2010. Village sued in federal court seeking injunctive relief. The district court dismissed for lack of subject matter jurisdiction. The panel affirmed. The panel held that review under the Administrative Procedures Act is limited to “actions” that demine rights such as granting or denying a permit and thus the alleged “action” of not doing eh dredging services was an effort to get the court involved in day to day operations which is outside the scope of APA review. Additionally, the decision to not dredge was not final because it is not the end of the decision making process, it is not legally required and it was not a “failure to act” as that term is limited to failures to promulgate rules or similar activities. The panel also ruled that there was no admiralty jurisdiction as the plans to replenish beaches were not contracts aimed at maritime commerce. Thus, there was no basis for subject matter jurisdiction and dismissal was required.

United States v Cone and United States v Zhao 

Cone and Zhao were jointly tired for trademark counterfeiting, conspiracy and money laundering.  Cone was convicted of conspiracy to commit trademarks counterfeiting and Zhao was convicted of trademark counterfeiting, conspiracy and money laundering. At their joint trial, his statement, with Zhao’s name removed, was admitted as were emails between them and from customers complaining the goods received were fake. The panel, with one judge dissenting in part, vacated certain convictions and remanded. The panel held that affixing a valid mark on different goods did not violate 18 USC 2320 as the operative language of the statute required proof of a “spurious” or false mark. Thus, one of Zhao’s counterfeiting charges and three money laundering convictions were vacated. Another count was upheld as Zhao failed to raise any challenge on appeal. The panel upheld the conspiracy convictions because the jury had set out in special verdict forms that it convicted Cone and Zhao of conspiracy on both the invalid theory and the valid theory of counterfeiting marks. Thus, while his conviction stood and most of Zhao’s convictions also stood, their cases were remanded for resentencing. The panel also rejected claims that the Cone statement was improperly admitted as the removal of Zhao’s name made the statement comply with the Sixth Amendment. The panel held that the customer emails were properly admitted, but the trial court erred by not giving a limiting instruction. However, the evidence of guilt was overwhelming and any error was harmless. The dissent argued that Zhao had raised the issue that the prosecution argued an improper theory for one count of counterfeiting in a motion in liminie and in any event the issue was too important to not address. As the argument allowed conviction on an improper theory, the dissent would have vacated that conviction as well.


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