February 21, 2014 4th Circuit published opinions

Stevenson v City of Seat Pleasant, Maryland

Stevenson brought a 1983 action against City, a county and several police officers alleging excessive force and other theories. In a series of pre and post-trial motions, the district court dismissed several claims, including all against City,  and allowed recovery for bystander liability as to one defendant and denied motions to change these outcomes. The panel affirmed in part, reversed in part and remanded. It held that the complaint adequately pled facts which if true would support a claim for bystander liability as officers are alleged to have seen a police assault against Stevenson and failed to stop it. However, only one officer besides Bond was identified in the complaint and only that officer’s summary judgment motion needs to be revisited. The panel thus affirmed dismissal as to City, the county and all other defendants. It affirmed as to excessive force by two officers as the affidavits submitted by Stevenson in opposition to their summary judgment motion contradicted prior deposition testimony and thus there was no genuine dispute as to the facts.

United States ex rel Rostholder v Omnicare, Incorporated

Rostholder brought a qui tam suit alleging Omnicare presented false claims for drugs packaged in violation of FSDA regulations. The district court dismissed for failure to state a claim. The panel affirmed. It held that Rostholder was not barred by the public disclosure rule as he had independent knowledge of the packaging violations for he had spoken to people at the facility involved prior to any government action and in fact complained to the FDA. The panel held that there was no false statement involved here because Medicare and Medicaid do not require compliance with the packaging regulations in order for Omnicare to get reimbursement payments only that the drugs be approved by the FDA. As the drugs here were FDA approved, there were no false statements. The panel noted ruling otherwise would turn the False Claim Act into a mechanism for regulatory enforcement which would be improper. The panel finally affirmed the denial of a motion to amend the complaint as Rostholder failed to follow the local rules and in any event the amendment would have been futile.

United States v Robinson

Robinson pled guilty to drug charges. At sentencing he challenged the basis for the drug amount used at his sentencing, but, asked to be senesced instead of starting the presentence report over as offered by the district judge. He also objected to an enhancement based on a one day probation sentence. He renewed these arguments on appeal. The panel, with one judge dissenting in part, affirmed. The majority held that by choosing to be sentenced instead of starting the process over, Robinson waived his right to have the drug amount argument reviewed. It also held that the district court did not clearly err in finding the probationary sentence was another conviction and not relevant conduct as the drug charges covered the same time frame, involved different substances and the probation sentence involved possession not trafficking. The dissent argued that Robinson in fact never agreed to be sentenced under the drug amount in the presentence report and if anything only waived a chance for delay. The dissent argued the statements relied upon by the district court were unworthy of belief and the government thus failed to meet its burden. The dissent would have remanded for resentencing but would have barred further evidence from the government or reliance on the drug amount in the presentence report.

Gold v First Tennessee Bank National Association (In re Taneja)

Gold, the trustee in Taneja’s bankruptcy, sought reimbursement of certain payments made to Bank. Bank raised the good faith defense under 11 USC 548(c). The bankruptcy court ruled bank proved the defense and dismissed the case. The district court affirmed. The panel, 2-1, affirmed. The majority adopted the 4th Circuit rule for cases arising under 11 USC 550 and held Bank was required to show subjective and objective good faith. Applying clear error review, the majority held that Banks evidence from two of its employees about the relevant market, the market conditions and their efforts to verify the legitimacy of the mortgage transactions involving Taneja including conferring with another bank involved in similar transactions coupled with the financial meltdown during the period Bank received the payments were sufficient to sustain a finding of objective good faith. The dissent argued bank failed to present any evidence whatever as to the standards in the relevant industry because all the testimony was about Bank’s practices not industry practices. Therefore, there was no evidence of objective good faith. As Bank bore the burden of proof, the dissent would have reversed.

Clear Shy Car Wash LLC v City of Chesapeake, Virginia

City filed a quick take proceeding in state court and seized Clear sky’s land in order to widen a highway. Clear Sky sued alleging violations of 46 USC 4601-4655. The district court ruled there were no private rights under that act and dismissed. The panel affirmed. It held that the statute is directed to agency members, not the public and in any event explicitly states there are no private rights created by the statute. The panel also held 42 USC 1983 provides no basis for relief as that statute does not create any enforceable rights. Finally, failure to monitor, which is the graveman of the complaint, is not a final agency action and thus review under the Administrative procedures Act is also not available.

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