Wednesday, January 31, 2007

Jones v. State (Ct. of Special Appeals)

Filed January 30, 2007. Opinion by Judge Deborah S. Eyler.

Defendant/appellant Jones appealed his conviction in Baltimore County of first-degree sexual offense, second-degree sexual offense, sodomy, and second-degree assault. On appeal, Jones challenged his conviction on the grounds that the trial court erred in rejecting his territorial jurisdiction argument as a matter of law, instead of submitting the issue to the jury, and in ruling the evidence was legally sufficient to establish a proper chain of custody for the DNA evidence.

Somewhere around midnight in early December, 1998, the victim went to a bar on Liberty Road in Baltimore County. After drinking heavily and passing out after falling outside, she was abducted from the bar's parking lot into the back seat of a car. Although she couldn't describe her assailant, she recalled being beaten and sodomized in the back seat, while a driver in the front seat drove the car, sometimes at high speed. When she began to throw up, the assailant dragged her out of the car. She then passed out again or fell asleep, and woke up some time later to find herself in Leakin Park in Baltimore City, dressed only in shirt and socks, some four or five hours after her abduction. She was taken to Mercy Medical Center, where a SAFE (Sexual Assault Forensics Examination) nurse performed an examination, and took an anal swab sample from the victim.

When after two months no viable suspect had been found, the case was closed by the Baltimore County police. Then, in 2004, DNA evidence from the swabs was sent to an independent lab for analysis. The results matched Jones' records in the State's DNA database, and he was indicted in early 2006.

At trial, the victim had not been able to testify as to her location during the period of her abduction, other than the beginning point in Baltimore County and the end point in Baltimore City, and couldn't rule out the possibility that she had been in the District of Columbia or Virginia when the assaults had actually taken place. At the end of the trial, the defense moved to dismiss for lack of territorial jurisdiction. The judge denied the motion, finding that the jury could make a reasonable inference from the testimony that the assault had in fact taken place in Maryland. Counsel for defense failed to request a jury instruction on territorial jurisdiction, but did mention in closing argument the lack of certainty of location as one element leading to reasonable doubt.

The Court noted that in Maryland, territorial jurisdiction is not an element of the offense, but must be raised as an affirmative defense based on evidence presented at trial. The Court distinguished the case at hand from the earlier cases of West v. State, Painter v. State, State v. Butler and McDonald v. State, finding that unlike the earlier cases, the issue of territorial jurisdiction had not been preserved for appellate review by the failure to request a jury instruction, and in any event the evidence here did not generate a genuine dispute of fact, at most raising a mere possibility or speculation that the crime might not have been committed on Maryland.

The Court then considered the evidence at trial on the issue of chain of custody of the DNA material, and found that it was sufficient to show by a reasonable probability that the DNA sample had not been tampered with, notwithstanding some missing details that did not indicate tampering or contamination. Accordingly, the Court affirmed the judgments against Jones.

This opinion is available in PDF format.

Tuesday, January 30, 2007

Stratakos v. Parcells (Ct. of Special Appeals)

Filed January 30, 2007. Opinion By Judge Mary Ellen Barbera.

In this case, the Court affirmed the decision below in an appeal from an award of attorney's fees to the prevailing party in a real estate contract dispute, where the contract in question provided for the award of such attorney fees in a dispute "arising out of" the contract.

The appellants ("Stratakos") purchased improved real property in Montgomery County from the appellees ("Parcell ") in December 2000. pursuant to a written contract of sale. In connection with the contract, Parcells provided the mandated Maryland Residential Property Disclosure Statement (the "disclosure statement") to Stratakos; an addendum to the contract referred to the disclosure statement. Among other disclosures, Parcells stated that they were not aware of any defects in the structure of the property, nor of and previous wood-destroying insect infestations of or repairs to the property.

While doing renovations in August 2003, Stratakos discovered extensive damage in a covered crawl space,which they claimed was caused by wood-destroying insects, and in December, 2004 filed a complaint against Parcells, alleging fraudulent and negligent misrepresentations and breach of warranty, in that the statements in the disclosure statement were false. In addition to compensatory and punitive damages, Stratakos asked for attorney's fees pursuant to a provision in the real estate contract.

In late 2005 and early 2006, Parcells filed motions for summary judgment, denying the allegations, and the court granted the motions, upon finding that Stratakos had failed to show that they had incurred actual injury from the alleged misrepresentations, such as increased renovation costs. Subsequently, Parcells filed for costs and attorney's fees based on the same provision in the contract, and Stratakos filed a motion for reconsideration. The court granted costs and attorney's fees to Parcells, and denied the motion to reconsider, whereupon Stratakos appealed.

Stratakos claimed the provision allowing award of attorney's fees to the prevailing party did not apply to misrepresentations made in the disclosure statement, since such misrepresentations did not arise out of the contract. Parcells argued that Stratakos could only bring suit because the parties had entered into the contract, and that the disclosures are inexorably intertwined with the contract, and further that Stratakos had specifically referred to and relied upon the contract provision in requesting attorney's fees in the suit.

The Court began by noting the background law in Maryland that ordinarily a prevailing party may not recover attorney's fees, but noted that the parties did not dispute that, if applicable, the contract provision would be enforceable, rather instead disputing how the contract provision should be read. The Court further noted that Maryland adheres to the objective theory of contract interpretation, and that no Maryland case had directly addressed what is meant in a contract provision for attorney's fees by "a dispute . . . arising out of" the contract.

For guidance, the Court turned to Maryland and other cases interpreting "arising out of" language, such as CSX v. MTA (later affirmed in MTA v. CSX). After considering all of the relevant cases, the Court was persuaded that the dispute between the parties, even though focussed only on alleged misrepresentations in the disclosure statement, "flowed from" or "grew out of" the contract, and that the provisions of RP Art. Sec. 10-702, which mandate the disclosure statement, reflected the extent to which the disclosure statement is intertwined with the real estate contract itself.

This opinion is available in PDF format.

Oxedine v. SLM Capital Corp. (Ct. of Special Appeals)

Filed: January 30, 2007--Opinion by Judge Timothy Meredith.

In the Supreme Court of the State of New York, SLM Capital Corporation, appellee, obtained a default judgment against Willie and Joan Oxendine, appellants, for $332,845.02. SLM recorded the foreign judgment against the Oxendines in the Circuit Court for Prince George’s County. The Oxendines moved to vacate entry of the foreign judgment, and, in support of their motion, argued that the State of New York did not have sufficient contacts to exercise personal jurisdiction over them.

The circuit court ruled that the Oxendines had waived any challenge to personal jurisdiction by failing to raise the issue in the New York proceedings. Relying on Dixon v. Keeneland Associates, Inc., 91 Md. App. 308, the lower court stated that, under Dixon, "the full faith and credit clause of the Constitution precludes a party from attacking a decree on jurisdictional grounds [in] the courts of a sister state where the party was afforded full opportunity to contest the jurisdictional issues."

The Court of Special Appeals disagreed. It contrasted Dixon, in which the Maryland resident had actually litigated the jurisdictional issues in the out-of-state court, with the present case, where the issue of personal jurisdiction over the Oxendines was not even brought up, much less "fully adjudicated" in the foreign court.

Overruling the lower court's finding that the issue of personal jurisdiction was waived by the Oxendines' failure to participate in the New York proceedings, the Court of Special Appeals remanded the case to allow the circuit court to take evidence and inquire into whether the New York court had a sufficient basis to exercise long-arm jurisdiction over the Oxendines, under the principles enunciated in International Shoe. It further instructed the circuit court that, if it finds that the State of New York did not have a sufficient basis to exercise long-arm jurisdiction over the Oxendines, it must vacate the entry of the SLM judgment.

The full opinion is available in PDF here.

Monday, January 29, 2007

Atkins v. Winchester Homes (Maryland U.S.D.C.) (not approved for publication)

Decided January 26, 2007. Memorandum and Order by Judge Catherine C. Blake. (Not approved for publication)

Atkins, a Maryland resident of Native American national origin, filed suit against Winchester (his former employer), Weyerhaeuser Company (Winchester's parent company) and three manager/supervisors, alleging violations of Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. §2000e, et seq. and 42 U.S.C. §1981. All defendants moved to dismiss Atkins' amended complaint, raising both procedural and substantive arguments in support of their motions.

Atkins alleged that for years he had been subjected to daily racial harassment and that the manager/supervisors witnessed or knew of the harassment, but did nothing to prevent it. He also alleged that he was subjected to adverse actions on account of his national origin or in retaliation for asserting his civil rights. The alleged adverse actions included being called into a supervisor's office, being disciplined when a non-Native American peer was not, and ultimately being discharged.

Procedural Arguments: Atkins did not oppose Weyerhaeuser's motion, and the court dismissed all claims against Weyerhaeuser. In doing so, the court noted that Atkins did not adequately allege that Weyerhaeuser was his employer, stating that without "allegations of common management, interrelation of operations, centralized control, or degree of financial control, the mere fact of a parent-subsidiary relationship is not sufficient to sustain" an action for discrimination.

Winchester argued that the Charge of Discrimination that Atkins filed with the EEOC lacked sufficient detail to be effective and that Atkins did not provide sufficient detail until after the 300 days for filing a charge had passed. The court pointed out that the "function of a charge is to initiate the investigatory and conciliatory procedures contemplated by Title VII." Here, the initial charge contained enough information for EEOC to begin its investigation. Moreover, EEOC regulations provide that later amendments to a charge relate back to the date of initial filing.

The manager/supervisors alleged that they were not properly served within the 120-day window provided by F.R.C.P. 4(m). Process was served on a co-worker and not on the individual defendants. The defendants, however, had actual knowledge of the suit and did not assert that they were prejudiced in any way by the failure to serve them individually. For that reason, the court liberally construed the rules and declined to dismiss the suit.

Substantive Arguments: Winchester challenged Atkins' claims of disparate treatment, retaliation and harassment/hostile work environment. The court found that neither being called into a meeting with a supervisor about allegations of discrimination nor a counseling session with a supervisor arose to the level of an adverse employment action sufficient to support a claim of discrimination. Termination of employment, however, clearly was such an adverse action. As for retaliation, Atkins failed to plead sufficient facts showing that his protected activity was the cause of his termination, and too much time passed between the activity and his dismissal to establish a causal connection without such specifics. On the harassment/hostile work environment claims, the allegations that the manager/supervisors witnessed the acts harassment and that Atkins had made complaints about the acts were sufficient to impose liability on his employer.

Because Title VII does not authorize claims against individuals, the Title VII claims against the individual defendants were dismissed. In addition, the court dismissed all of the Section 1981 claims against the individual defendants, except the claims against the manager/supervisor who fired Atkins. In reaching this result, the court reasoned that the acts attributed to the other manager/supervisors did not rise to the level of adverse employment actions, but that termination of employment did. In addition, the court ruled that allegations that the manager/supervisors failed to investigate or to prevent harassment by Atkins' co-workers were not sufficient to impose liability under Section 1981.

The memorandum is available in PDF The order is also available in PDF

Friday, January 26, 2007

Harby v. Wachovia Bank (Court of Special Appeals)

Filed January 26, 2007. Opinion by Judge Sally D. Adkins.

Issue: Are "no acceptance" and “no consideration” viable defenses to enforcement of an arbitration clause contained in a bank's depositary agreement?

Held: No. A depositor who signs a signature card or other agreement adopting the terms of a separate agreement containing an arbitration clause is bound by that arbitration clause. Judgment of the circuit court affirmed.

Facts: The court-appointed guardian of the property of a minor opened a bank account and deposited funds for the benefit of the minor. To open the account, the guardian signed a document that referred to and incorporated the terms of a depositary agreement containing a mandatory arbitration clause. The guardian did not sign the depositary agreement separately. The guardian then allegedly defalcated portions of the fund. The guardian was replaced by a substitute guardian who sued the first guardian and the bank in circuit court.

The bank moved to enforce the mandatory arbitration clause and asked that the litigation be stayed or dismissed. The plaintiff opposed the motion, raising as grounds 1) no acceptance of the clause, and 2) no consideration given for the clause. The circuit court enforced the arbitration agreement and stayed the litigation. The plaintiff appealed.

On appeal, the Court of Special Appeals identified and discussed a line of precedent establishing the principle that a depositor who accepts the terms of a separate deposit agreement by executing a signature card or other agreement is bound by the terms of the deposit agreement, even if the deposit agreement is not separately executed. The Court held that the guardian was bound by the terms of the second agreement, and that the substitute guardian was bound by the acts of her predecessor. The Court rejected the argument that, to be enforceable, the arbitration clause must be specifically referenced in the agreement signed by the depositor.

The plaintiff argued, alternatively, that the arbitration agreement was unenforceable for lack of consideration, because it remained subject to unilateral modification by the bank under the terms of the depositary agreement. The plaintiff argued that the bank's unilateral right to change the terms meant it could "opt out" of arbitration at its discretion. This rendered the mutual promise of arbitration "illusory," and thus inadequate as consideration for a binding agreement. The Court held that the bank's agreement to provide 30-days notice of any change to the agreement meant that the bank was bound to the terms for at least 30 days. The Court held that this was sufficient consideration to support a binding agreement to arbitrate.

Accordingly, the Court affirmed the decision of the Circuit Court.

A copy of the opinion is available in PDF.

Jones v. Jones (Ct. of Special Appeals)

Decided January 26, 2007--Opinion by Judge Deborah S. Eyler.

On September 1, 2000, Corporal Carlton Jones was conducting an undercover surveillance operation. That night, Cpl. Jones followed a vehicle owned and operated by decedent, Prince Carmen Jones, Jr. (no relation), a Maryland resident, from the District of Columbia, into Maryland, and finally into Virginia. In Virginia, decedent, who was not the suspect sought by the police, confronted Cpl. Jones and attempted to ram the officer's unmarked vehicle with his own. Cpl. Jones fired sixteen shots at decedent, striking him six times and killing him.

Wrongful death claims were brought against Cpl. Jones in Maryland on behalf of decedent's father, mother, and minor child alleging excessive force, negligence and battery based on conduct that occurred in both Maryland and Virginia. An earlier appeal dealt with the mother's standing to bring a wrongful death claim. There, the Court of Appeals applied the principle that the law of the forum state controls procedural matters such as standing and allowed the mother's claim to go forward. (Jones I)

At trial, the defense moved for judgment as to all counts at the close of plaintiffs' case. One of the issues raised was whether wrongful acts occurred in Maryland, in Virginia, or in both. During argument on that motion, counsel for one of the plaintiffs advised the court if wrongful acts occurred only in Virginia, neither parent could recover under the Virginia Wrongful Death Act The court reserved ruling on that issue, and the jury returned a verdict in favor of both parents and the minor child, but only on the excessive force count. A JNOV followed, and the court, ruling that the only wrongful acts occurred in Virginia, applied the Virginia Wrongful Death Act and struck the verdicts in favor of the parents.

On appeal, the mother argued that the defense had waived the argument that she was not a permissible beneficiary under the Virginia Wrongful Death Act by not raising it in its motion for judgment.

The court disagreed, finding that the permissible beneficiary issue, albeit initially raised by one of the plaintiffs, was before the trial court, which reserved ruling on the issue. Therefore, the issue could properly be raised in a JNOV. As to the overall applicability of the Virginia Act, the court noted that whereas the proper procedural law was that of the forum state, the proper substantive law was that of the state where the wrongful acts occurred, in this case, Virginia. Questions of access to the courts, such as standing to sue, are procedural in nature. Questions of who has the legal right to recover damages, however, are substantive. Accordingly, it was proper for the Maryland courts to apply Virginia law. Because it was clear under the facts of this case that the mother had no right to recover under the Virginia Wrongful Death Act, the verdict in her favor was properly stricken.

The opinion is available in PDF.

Thursday, January 25, 2007

Price v. State (Ct. of Special Appeals)

Decided January 25, 2007--Opinion by Judge James R. Eyler

Price was convicted by a jury of possession of heroin, possession of cocaine, possession of marijuana, and possession of a firearm under sufficient circumstances to constitute a nexus to a drug trafficking crime. The court sentenced Price to eight years imprisonment on the heroin possession, a consecutive eight years imprisonment on the cocaine possession, two years concurrent on the marijuana possession, and another twelve years imprisonment consecutive on the possession of a firearm conviction.

Four issues were raised on appeal:

1) Whether the evidence was sufficient to sustain Price's convictions;

2) Whether the court erred by refusing to ask an impaneled juror, who was later dismissed, whether he had discussed the reason for his dismissal with any of the other jurors;

3) Whether the court erred by doubling Price’s sentences for all three drug possession convictions pursuant to Maryland Code (2002 Repl. Vol.) §5-905 of the Criminal Law ("C.L.") Article;

4) Whether the court erred by allowing the jury to convict Price of possession of a handgun in connection with trafficking, and acquit him of all other drug trafficking charges.


1) To support a conviction for the offense of simple possession, the evidence must show directly or support a rational inference that the accused did in fact exercise some dominion or control over the prohibited drugs in the sense contemplated by the statute, i.e., that the accused exercised some restraining or directing influence over it. Additionally, the accused, in order to be found guilty, must know of both the presence and the general character or illicit nature of the substance and referred to the following factors to determine the issue of possession:

(i) proximity between the Defendant and the contraband, (ii) the fact that the contraband was within the view or otherwise within the knowledge of Defendant, (iii) ownership or some possessory right in the premises or the automobile in which the contraband is found, or (iv) the presence or circumstances from which a reasonable inference could be drawn that the Defendant was participating with others in the mutual use and enjoyment of the contraband.

The evidence adduced at trial consisted mainly of testimony of the police officers who were conducting surveillance. From this testimony, the court found, the jury could have reasonably concluded that Price was in close proximity and had knowledge of the presence of the drugs, inferred that Price was participating in the sale and that the gun and money thrown by Price were instruments related to the sale of the drugs. Thus, the evidence was sufficient to support Price's possession convictions.

2) A note left by juror number 4 for the judge indicated concern by the juror of potential reprisal given that he resided within close proximity to the neighborhood where Price was arrested. Prior to dismissal of the juror, Defense argued that the juror should be questioned as to whether he explained his dismissal to other jurors, potentially tainting the jury. The court found that, on several occasions, the jurors had been admonished not to discuss the case, and the trial court did not abuse its discretion by dismissing the juror without further inquiry as to whether he had discussed with anyone his reasons for wanting to be dismissed.

3) The State contends that C.L. §5-905 authorized the court to double Price's sentences because of his status as a repeat offender. Price countered that doubling his sentences is explicitly limited to one count only. The court found the language of §5-905 ambiguous; that the language of the statute does not make clear whether an enhanced penalty can be imposed on each and every count arising out of a single course of conduct, or whether an enhanced penalty can only be imposed on one count of a multi-count charging document based on a single course of conduct. Relying on Diaz v. State, the rule of lenity applied and required vacating Price's sentences.

4) The court noted that although unexplained, inconsistent verdicts rendered by a trial judge cannot stand, inconsistent verdicts in a jury trial are generally tolerated under Maryland law. At the appellate level, the court will review such inconsistent verdicts where real prejudice is shown and the verdicts may be attributable to errors in the jury charge.

The jury, without finding Price guilty of one of the drug trafficking offenses, found him guilty of possession of a firearm with a nexus to drug trafficking. Price conceded that the jury instructions were correct and the court decided not to disturb the jury’s verdict.

A copy of the opinion is available in PDF.

Pope v. Barbre (Ct. of Special Appeals)

Decided January 25, 2007--Opinion by Judge Sally D. Adkins.

Pope suffered paralyzing injuries when Mark Barbre, appellee and Queen Anne's County Deputy Sheriff, shot him in the neck following a traffic stop. The Circuit Court for Montgomery County granted summary judgment on Pope's claims against Barbre, and dismissed his claims against the State of Maryland and Queen Anne's County, because Pope mistakenly notified Queen Anne's County of his claim under the Maryland Tort Claims Act (MTCA), rather than notifying the State Treasurer or one of two specified designees. Pope challenges those rulings, arguing that he complied with the mandatory notice requirements of Md. Code (1984, 2004 Repl. Vol.), section 12-106(b) of the State Government Article (SG), and that such notice is not a prerequisite to his claim against Barbre individually.


1. The "substantial compliance" doctrine under the Maryland Tort Claims Act can be expanded to encompass such defective notice. Pope had provided notice of his claim to the Queen Anne's County Commissioner. However, the Court concluded that the Queen Anne's County Commissioner was not a "Treasurer’s designee" for purposes of accepting notice of tort claims under the MTCA. Furthermore, service on the County does not constitute substantial compliance with §12-106(b) of the MTCA.

2. Notice under the MTCA is not necessary to sue an individual State officer in his individual capacity for torts allegedly committed with malice or gross negligence, or outside the scope of employment. The Court found that:
When, as in this case, the claimant pursues tort remedies against an individual classified as State personnel, based on acts allegedly committed with malice or gross negligence, a requirement of notice to the State would not serve the investigation and settlement purposes underlying section 12-106(b). Nor would notice to individual State personnel serve such purposes. Thus, the State Treasurer does not require early notice of a claim against an individual officer alleging a malicious or grossly negligent tort.

A copy of the opinion is available in PDF.

Tuesday, January 23, 2007

AES Sparrows Point LNG, LLC v. Smith (Maryland U.S.D.C.)

Decided January 23, 2007--Opinion by Judge Richard D. Bennett.

The Plaintiffs sought a declaration that an amendment to section 256.4 of the Baltimore County Zoning Regulations, as set forth in Bill 71-06 ("the Zoning Amendment") and providing for absolute prohibitions and limitations on the siting of liquified natural gas ("LNG") importation facilities, is preempted under the Supremacy Clause of the United States Constitution1 by the Natural Gas Act, 15 U.S.C. §§717, et seq. ("NGA" or "the Act"), as amended by the Energy Policy Act of 2005, Pub. L. No. 109-58, §311, 119 Stat. 594, 685 (2005). The Plaintiffs filed a Motion for Summary Judgment and the Defendants filed a Motion to Dismiss.


1. The Defendants invoke the variation on the well-pleaded complaint rule to argue that Plaintiffs' preemption claim is insufficient to support federal subject matter jurisdiction. In making this argument, Defendants relied on the "complete preemption" exception to the well-pleaded complaint rule. That exception permits a plaintiff to "invoke federal subject matter jurisdiction to obtain a declaratory judgment that a state law requirement or prohibition is preempted, notwithstanding the defensive nature of the preemption contention. . . ." Fleet Bank v. Burke, 160 F.3d 883, 886 (2d Cir. 1998), cert. denied, 527 U.S. 1004 (1999). Defendants maintain that this Court lacks subject matter jurisdiction over the instant matter because there is simply no basis for applying the doctrine of complete preemption in the "hypothetical wellpleaded complaint" presented by this case.

The Court found that the Defendants' argument failed because the Plaintiffs requested injunctive relief. Because the Complaint requests both declaratory and injunctive relief, this case is within the purview of Shaw v. Delta Air Lines, Inc and Verizon Maryland, Inc. v. Public Service Commission.

2. Defendants argued that this matter was not ripe for judicial review, because, until approval to build the proposed liquefied natural gas plant is received, the relation between the local zoning ordinance and the federal statute at issue remains "what is in reality an abstract question of law." The Court concluded, however, that any efforts for authorization by the FERC would be futile if the County can simply execute a veto by local zoning legislation. Delaying resolution of the preemption issued in this case, moreover, would frustrate one of the purposes of the recent amendments to the Natural Gas Act, i.e., clarifying the respective roles played by FERC and the states in the administrative process. In sum, there is no need to withhold court consideration under such circumstances.

3. The Plaintiffs have sufficiently established that they have standing.The injury to the Plaintiffs is "certainly impending" in that any efforts for FERC approval is futile if the Baltimore County Council can exercise veto power by the subject Zoning Amendment.

4. The text, context, and legislative history of the Natural Gas Act ("NGA") clearly reflect the intent of the United States Congress to preempt local governments with respect to the siting of liquefied natural gas ("LNG") facilities.

5. Apart from the express preemption, in the alternative, the Court found that the Zoning Amendment is preempted because Congress intended for the NGA and its regulations to occupy the entire field of LNG regulation.

6. The Court also found that the Zoning Amendment is in direct conflict with the NGA and is therefore preempted (i.e., "conflict preemption").

7. The Court found that there are no circumstances under which the Zoning Amendment could be constitutionally valid. Thus, the U.S. v. Salerno standard is satisfied and the Zoning Amendment is facially unconstitutional.


The amendment to section 256.4 of the Baltimore County Zoning Regulations enacted pursuant to Baltimore County Bill 71-06 is unenforceable because it is preempted under the Supremacy Clause of the United States Constitution by the Natural Gas Act, as amended by the Energy Policy Act of 2005 and the Defendants are enjoined from enforcing the Zoning Amendment.

The opinion is available in PDF. The Order and Judgment may be found here.

Halkas v. Grigsby (Maryland U.S.D.C.)(not approved for publication)

Decided January 22, 2007--Memorandum Opinion by Judge Deborah K. Chasanow (not approved for publication)

Debtor initially filed Chapter 7 bankruptcy petition in 2001 which was ultimately converted to Chapter 13 in 2002. At the time the Chapter 13 plan was confirmed, Debtor owned two residential properties. The plan called for Debtor to retain both properties while making payments to her creditors; however, in 2003, Debtor consented to sell one of the properties, the proceeds of which would be partially retained by Debtor, partially paid to Trustee for the benefit of the creditors, and partially remitted to Debtor’s former spouse who had been co-owner before the sale. In August 2005, a motion to dismiss by Trustee was pending because Debtor did not stay current on payments agreed to in a modified plan from 2004 reducing her monthly payment. Debtor moved to sell the second residential property and in October 2005 the bankruptcy court ordered that all net sale proceeds be paid directly to Trustee and disbursed to pay creditors, up to the amount required to pay all claims against Debtor’s bankruptcy estate.

After completion of sale and Trustee’s distribution of proceeds, Debtor filed a motion contesting whether Trustee had the right to retain all proceeds of the sale. The bankruptcy court denied this motion in September 2006. Debtor filed a notice of appeal and filed an emergency motion in the bankruptcy court to stay the disbursement of the sale proceeds, which motion was denied September 29, 2006. On or about September 30, 2006, Trustee disbursed all remaining funds in the bankruptcy estate pursuant to the bankruptcy court’s Orders. Trustee filed a notice of plan completion in the bankruptcy court on October 5, 2006, and the bankruptcy court granted Debtor a discharge the next day.

On Debtor’s appeal, Trustee argued for dismissal pursuant to the doctrine of equitable mootness, definining mootness as when the issues presented are no longer ‘live’ or the parties lack a legally cognizable interest in the outcome. To survive an assertion that a claim is moot, a party must have suffered an actual injury that can be redressed by favorable judicial decision. Even the availability of a partial remedy is sufficient to prevent a case from being moot. Since Trustee paid out all the proceeds of the sale pursuant to the bankruptcy court’s Orders, and no creditors were parties to the appeal, it would be impossible to fashion any relief for Debtor even if she prevailed in the appeal because the nonparty creditors could not be ordered to return funds they had received. Consequently, the action was moot.

Debtor argued that the case was not moot because if she were to prevail on appeal, she could attempt to enforce a money judgment against Trustee for the distributed funds. The Court found that Debtor could not recover funds from Trustee personally because Trustee never held the proceeds from the sale for her own use and Trustee indicated that the funds were distributed pursuant to the bankruptcy court’s Orders.

Debtor relied on an unpublished opinion, Walker v. Grigsby, No. AW-06-62, slip op. at 4 (D.Md. April 11, 2006), in which the court concluded that an appeal by a debtor’s attorney contesting an order granting him only part of his requested fee was not constitutionally moot. Because the Debtor and Trustee remained parties to the case and at least one creditor continued to be subject to the bankruptcy court’s jurisdiction, the court reasoned that the attorney might have the ability to seek payment, if he succeeded on appeal, from the Debtor, the Trustee, or other creditors. The instant case, however, differs in that the Trustee alleged she had paid out all available funds to nonparty creditors pursuant to the bankruptcy court’s Orders.

The full opinion is available in PDF

Monday, January 22, 2007

Jacob v. Didlake (Maryland U.S.D.C.)(not approved for publication)

Decided January 19, 2007 – Opinion by Judge Deborah Chasanow (not approved for publication)

In this employment discrimination case, the Court considered Defendant Didlake Corporation’s motion for summary judgment.

Plaintiff Ronni Jacob sued Didlake for employment discrimination and a hostile work environment based on her disability from muscular dystrophy, diabetes, and certain cognitive disabilities. Prior to terminating Jacob, Defendant Didlake had sent her a memorandum documenting that she had been verbally warned on multiple occasions about several work related issues. Jacob subsequently requested certain accommodations for her disability. She was terminated after evaluation for those accommodations had begun, but before they were completed.

The Court considered but could not resolve whether certain duties for which the Plaintiff had sought accommodation were essential. Ultimately, however, the Court concluded that regardless of whether those duties were essential, the uncontroverted evidence showed that Didlake had provided reasonable accommodation. The Court further concluded that conflicting evidence produced by Jacob on the existence of a hostile work environment was insufficient to create a triable issue of fact on that issue. Thus the Court granted summary judgment to Didlake on those issues.

On the issue of whether Jacob was subjected to disparate terms and conditions of employment, the Court determined that that some evidence revealed that Jacob was not meeting some of Didlake’s undeniably legitimate expectations. Other evidence, however, suggested that Jacob’s inability to meet additional physical expectations may also have been considered in the decision to terminate her. Therefore summary judgment for Didlake on that issue was denied.

The full opinion is available in PDF.

U.S. v. Atwell (Maryland U.S.D.C.)

Decided January 5, 2007 --Opinion by Magistrate Judge Susan Gauvey

Defendant Atwell was charged with driving under the influence under Md. Code Ann. Transportation §21-902(a) and failing to drive right of center under Md. Code Ann. Transportation §21-301(a) and the Assimilative Crime Acts, 18 U.S.C. §§7 and 13. Here the Court considered Atwell’s motion to suppress all evidence and observations on the ground that he was stopped off of federal property.

Atwell argued two primary points: (1) when a police officer effectuates a stop outside of his territorial jurisdiction, all evidence obtained after the arrest must be suppressed as illegally obtained; and (2) a police officer outside of his jurisdiction may not stop an individual for a minor traffic offense. The government has acknowledged that the stop and arrest took place beyond the special territorial jurisdiction of the United States. It argued that the arresting officer nonetheless had authority to arrest under Seip v. State of Maryland, 153 Md. App. 83 (Md. App. 2003).

In this 44-page opinion, the Court agreed with Atwell that Seip v. State does not authorize federal military officers to make an extra-territorial arrest. Further, the Court found that there is no authority under any federal or state statute or governing Maryland common law for the extra-territorial arrest. Nonetheless, the Court found that the arrest was not unreasonable under the Fourth Amendment to the United States Constitution. Thus the Court refused to suppress the evidence derived as a result of the arrest and DENIED Atwell’s motion.

The full opinion is available in PDF.

Baron Financial Corp. v. Natanzon (Maryland U.S.D.C.)

Decided December 13, 2006 – Opinion of Judge Susan K. Gauvey

Plaintiff had sued the named Defendant in the above caption above and multiple other defendants and filed a Second Amended Complaint in that case ("the 2004 case"), one of defendants (an attorney, "Rombro") had obtained a dismissal of all counts against him. Plaintiff subsequently filed a new complaint against Rombro ("the 2006 case"), for which Rombro intended to seek a dismissal or summary judgment due to collateral estoppel or res judicata. The general subject matter of both suits was Plaintiff's claims of tortuous and contractual harm arising out of Plaintiff's claims of security interests in certain merchant accounts of one of the Defendants.

After Rombro's dismissal from the 2004 case but before service of process on Rombro of the 2006 case Complaint, Plaintiff sought to depose Rombro as a non-party witness regarding the 2004 case, and Rombro sought a protective order against such deposition, on the grounds that it was inter alia, a mere "fishing expedition" and an attempt to "sidestep" the terms of his dismissal as a defendant from the 2004 case.

After a teleconference with counsel, the Court held that Rombro had not met the burden of "good cause" to merit a general protective order against a non-party witness deposition under Rule 26(c) of the Federal Rules of Civil Procedure ("FRCP"), noting that the burden was a high burden, that protective orders were to be granted sparingly and cautiously and that Rombro was likely to have considerable information relevant to the 2004 case. The Court passed an order allowing the deposition to proceed but set conditions and limits as to its promptness and duration.

The full opinion and order are available in PDF.

Saturday, January 20, 2007

Toulan v. DAP Products, Inc. (Maryland U.S.D.C.)(not approved for publication)

Signed January 17, 2007 -- Opinion by Judge Catherine C. Blake (not approved for publication)

Plaintiff Toulan brought suit against her employer, DAP Products, Inc. ("DAP"), alleging violations of Title VII of the Civil Rights Act of 1964 ("Title VII") and the Equal Pay Act ("EPA"). Upon consideration of DAP's motion for summary judgment, the judge entered judgment in favor of the defendant and dismissed the case.

Toulan had alleged discrimination based upon her race (Caucasian), national origin (American) and gender (female) while working under a male supervisor of Asian Indian descent. Toulan's problems began in 2004 during a reorganization of her workplace, when she was assigned to work under the supervisor by the Vice President of Technology, also an Asian Indian male. Her initial objections were because her supervisor had the same job title, Chemist II, but Toulan and her supervisor did not work well together, and after a month she was reassigned to another supervisor. Toulan subsequently received several disciplinary warnings and negative comments, and was temporarily reassigned to another location, returning a few months later. Toulin continued to receive pay raises, and was not demoted or otherwise penalized in spite of the disciplinary actions.

Upon consideration, the judge found no direct evidence of employment discrimination, nor had Toulan established a prima facie case (a showing that 1) she is a member of a protected class, 2) she was performing her duties in a satisfactory manner, 3) she was subjected to an adverse employment action, and 4) circumstances surrounding the adverse employment action support an inference of discriminatory intent) sufficient to shift the burden to DAP to prove a non-discriminatory basis for the alleged discrimination, in that no sufficient adverse employment action was alleged.

Toulan's wage discrimination claims under Title VII and EPA also fell short, since her evidence did not amount to a showing that she received lower pay than her male co-workers for performing work substantially equal in skill, effort and responsibility under similar working conditions, since there was little evidence to support the similarity of, and evidence of a number of key differences between, the compared positions, and the ranges of compensation for male and female co-workers were co-extensive.

Toulan was also found to have failed to establish retaliatory action by DAP (in temporarily reassigning her to a less desirable location, giving her warnings and negative evaluations, requiring her to use unpaid leave after her paid leave was exhausted, and creating a hostile work environment), either by again failing to establish adverse employment actions even under the more relaxed standards applied to claims of retaliatory action, or by failing to rebut DAP's proffered non-discriminatory basis for those actions when found.

In concluding, the judge acknowledged that Toulan may have been correct in claiming the terms, conditions and privileged of her employment differed from other co-workers, but found that that such differences arose from personality differences rather than discrimination, and declined to sit as a "super-personnel department", citing Beall v. Abbott Labs.

The full opinion is available in PDF.

Kent v. Maryland Transportation Authority (Maryland U.S.D.C.)(not approved for publication)

Signed December 21, 2006 -- Opinion by Judge Catherine C. Blake (not approved for publication)

Kent, a telecommunications operator with the Maryland Transportation Authority ("MTA"), fell and injured her knee in 2004, and requested leave under the Family and Medical Leave Act ("FMLA"). To supplement the supporting materials submitted by Kent, MTA required Kent to submit to two examinations by their physicians. Kent sued MTA, alleging damages and losses sustained as a result of breaches by MTA of the FMLA statute, and specifically being required to undergo two examinations and not being provided timely notifications by MTA.

On consideration of MTA's Rule 12(b)(6) motion, the court found that Kent had failed to state a claim for which relief could be granted. Per the court, Kent did not allege that she had failed to receive time off to which she was entitled, but rather only that she was forced to see two doctors to qualify for the time off, and the statute explicitly allows for such second opinions. Further, though noting that the notifications provided by MTA fell short of what the FMLA contemplates, the court found no prejudice to Kent from the failure of timely notice, and dismissed the case.

The full opinion is available in PDF.

Tobacco Technology, Inc. v. Taiga International, N.V. (Maryland U.S.D.C.)(not approved for publication)

Decided January 17, 2007--Opinion by Judge Catherine C. Blake (not approved for publication)

Plaintiff, TTI, a Maryland corporation, is a manufacturer of tobacco flavors and products. Taiga, a Belgium corporation, agreed to serve as the exclusive European agent for TTI's tobacco flavors. Ronald Whitehead, TTI's former president, sat on the board of directors for both Taiga and TTI. In its Complaint, TTI alleges Taiga committed numerous breaches of contract and agent's duty. TTI further asserts Whitehead had knowledge of these breaches and aided Taiga in their concealment, thereby acting as Taiga's agent and in breach of his duty of loyalty owed to TTI.

The basis for Plaintiff's motion to seal is a post-employment agreement between TTI and Whitehead, which states in relevant part: "Neither of the parties shall publish or make any comments about the other that are disparaging." Without admitting that its allegations in the Complaint violate this agreement, TTI has moved to seal the record in order to protect itself from the possibility of contract liability.

The Court denied TTI's motion, stating that:
The common law presumes a general right to inspect and copy all judicial records and documents, although this can be rebutted if "countervailing interests heavily outweigh the public interests in access." Under this common law balancing analysis, the Fourth Circuit has found sealing appropriate "only in unusual circumstances." TTI bears the burden of showing that its fear of contract liability outweighs the strong presumption of public access.
* * * * *
Case law makes clear that courts have a duty to protect the public interest even in private civil cases. Moreover, the already strong presumption of access is further strengthened when a document directly affects an adjudication, such as a complaint in a motion to dismiss proceeding, as is the case here.
* * * * *
TTI has presented no compelling reason or unusual circumstance justifying its motion to seal. Instead, TTI seeks protection from the possibility that any disparaging statements concerning its former president contained in the Complaint might constitute a breach of contract. This is not sufficient to outweigh the common law’s strong presumption in favor of open access. Consequently, the plaintiff's motion to seal will be denied.
(Citations omitted.)

The full opinion is available in PDF.

Wednesday, January 17, 2007

Retail Industry Leaders Ass'n v. Fielder (4th Cir. Ct. Appeals)

Decided January 17, 2006-Opinion by Judge Paul V. Niemeyer, in which Judge M. Blane Michael joined. Judge William B. Traxler, Jr., dissented.

(Note: Currently, Maryland Courts Watcher does not regularly cover Fourth Circuit decisions. We have made an exception in this case due to the public interest in this case.)

On January 12, 2006, the Maryland General Assembly enacted the Fair Share Health Care Fund Act, which requires employers with 10,000 or more Maryland employees to spend at least 8% of their total payrolls on employees' health insurance costs or pay the amount their spending falls short to the State of Maryland. Resulting from a nationwide campaign to force Wal-Mart Stores, Inc., to increase health insurance benefits for its 16,000 Maryland employees, the Act's minimum spending provision was crafted to cover just Wal-Mart. The Retail Industry Leaders Association, of which Wal-Mart is a member, brought suit against James D. Fielder, Jr., the Maryland Secretary of Labor, Licensing, and Regulation, to declare that the Act is preempted by the Employee Retirement Income Security Act of 1974 ("ERISA") and to enjoin the Act's enforcement. On crossmotions for summary judgment, the District Court entered judgment declaring that the Act is preempted by ERISA and therefore not enforceable, and this appeal followed.


Because Maryland's Fair Share Health Care Fund Act effectively requires employers in Maryland covered by the Act to restructure their employee health insurance plans, it conflicts with ERISA's goal of permitting uniform nationwide administration of these plans. The Court concluded therefore that the Maryland Act is preempted by ERISA and it affirmed the District Court's judgment.

The Court rejected Maryland's attack on the Retail Industry Leaders Association's assertion of "associational standing" to enforce the rights of its members (See Hunt v. Washington State Apple Advertising Comm’n, 432 U.S. 333, 345 (1977) (authorizing the standing of an association when (a) its members would otherwise have standing to sue in their own right; (b) the interests it seeks to protect are germane to the organization's purpose; and (c) neither the claim asserted nor the relief requested requires the participation of individual members in the lawsuit)) and ripeness. It also turned aside a jurisdictional attack based upon the Tax Injunction Act, 28 U.S.C. §1341. Maryland characterized the Fair Share Act as a state law that imposes a tax on employers. The Court concluded that the Fair Share Act constitutes a "healthcare regulation," rather than a "tax."

In dissent, Judge Traxler argued that:
[B]ecause the Act does not force a covered employer to make a choice that impacts an employee benefit plan. An employer can comply with the Act either by paying assessments into the special fund or by increasing spending on employee health insurance. The Act expresses no preference for one method of Medicaid support or the other. As a result, the Act is not preempted by ERISA.
* * * * *
Maryland is being buffeted by escalating Medicaid costs. The [Maryland] Act is a permissible response to the problem. Because a covered employer has the option to comply with the Act by paying an assessment — a means that is not connected to an ERISA plan — I would hold that the Act is not preempted.

The opinion is available in PDF.

Conyers v. Dept of the Army (Maryland U.S.D.C.)(not approved for publication)

Filed January 16, 2007 –Opinion by Judge J. Frederick Motz (not approved for publication)

In an action arising from an accident in 2002, in which Plaintiff Conyers was severely burned while cooking dinner in the Army housing assigned to his family, the Plaintiff asserted a negligence claim against the United States. The United States moved to dismiss, based on lack of subject matter jurisdiction and failure to state a claim.

The Court noted that the Defendant may have had knowledge of a potentially dangerous condition (the absence of a fire extinguisher) and it was at least arguably foreseeable that the lack of an available fire extinguisher in the apartment would make the consequences of a cooking fire more serious. The Court found lacking, however, any allegation that Defendant retained control over the apartment in which Plaintiff and his wife lived. Thus the Court found no basis under Maryland law for a finding that Defendant owed any duty to Plaintiff to provide him with a fire extinguisher. Having found that Defendant owed no duty to Plaintiff, the Court held that the Plaintiff's claim therefore failed as a matter of law.

In a footnote, the Court thanked the attorney it had appointed, James S. Zavakos, for the highly professional services he rendered to the Plaintiff and to the court. Although the Plaintiff originally instituted this action pro se, the Court appointed Mr. Zavakos to represent the Plaintiff because of the extremely unfortunate nature of the accident, the extent of the injuries the Plaintiff sustained, and the closeness of the legal issues.

The full opinion is available in PDF. The order appears here.

Tuesday, January 16, 2007

Spry v. State (Ct. of Appeals)

Decided January 16, 2007—Opinion by Judge Lynne Battaglia, dissent by Chief Judge Robert Bell.

Petitioner, George Junior Spry, sought review following the affirmance by the Court of Special Appeals of his conviction for failure to obey a police officer's reasonable and lawful order to prevent a disturbance to the public peace, in violation of Section 10-201 (c)(3) of the Criminal Law Article, Maryland Code (2002). Spry was convicted after he had been arrested pursuant to a warrant secured on the day following the disturbance. The Court of Appeals affirmed the conviction, holding that a police officer does not have to arrest an individual immediately after the first disobedience of a lawful order made to prevent a disturbance to the public peace to initiate prosecution under Section 10-201 (c)(3).

Chief Judge Bell dissented. In Judge Bell's view, the object of the statute is the prevention of a disturbance of the public peace, and when the arrest is made both the threat to the public peace and the willful failure to obey the order made in pursuance of abating it must still persist. Judge Bell considers that the offense was not committed where the defendant complies and there is no threat to the public peace. The record showed that the petitioner complied with the officer's order, albeit belatedly and accompanied by profanity and a disrespectful attitude. Judge Bell opined that the use of profanity and the failure to show what an officer may regard as proper respect are not the elements of the offense, and thus can not, and should not, be the basis for his conviction.

The full opinion is available in PDF.

Hill v. Knapp (Ct. of Appeals)

Decided January 6, 2007—Opinion by Judge Irma Raker

The appellant, Christopher Hill, was injured when a load of plywood dropped on him from a forklift while he was working on a pier in Baltimore. Hill filed a state common law negligence action against the forklift operator, appellee Daniel Knapp. On the primary issue of whether the federal Longshore and Harbor Workers’ Compensation Act (33 U.S.C. §§901-950), preempts a state tort claim for damages by a longshoreman against a co-employee in the “twilight zone,” the Court of Appeals held that the federal act preempts such a claim.

The full opinion is available in PDF.

Mundey v. Erie Insurance Group (Ct. of Appeals)

Filed January 16, 2007 -- Opinion by Judge Clayton Greene

Richard Mundey, Jr., age 21, was a passenger in a motor vehicle driven by his friend, Amber Burgess. As a result of Amber's negligent operation of her automobile a collision occurred and Mundey suffered serious physical injuries which exceeded $20,000.00, the maximum amount of liability coverage on the vehicle in which he was a passenger. At the time of the collision, Mundey resided temporarily in the home of his grandmother and was not permitted to reside in the home of his parents. Mundey sought a declaration that he was covered under his parents' automobile liability insurance policy for payment of his damages pursuant to the uninsured/underinsured motorist provision of that policy.

In affirming the decision in the Court of Special Appeals, the Court held that Mundey was not entitled to recover under his parents' uninsured motorist endorsement because, at the time of the collision, he was not a resident of their household or otherwise insured under the automobile liability policy in question. In addition, the Court held that consistent with Md. Code (1997, 2006 Repl. Vol.), §19-509 of the Insurance Article, Mundey was not a "clause 1 insured" under his parents' automobile liability policy at the time of the accident.

This opinion is available in PDF format.

Saturday, January 13, 2007

Poole v. Dotson (Maryland U.S.D.C.)

Decided January 12, 2007--Opinion by Judge Alexander Williams, Jr.

This is a habeas corpus action. The petitioner had been convicted in August, 1997, of a one count of possession of cocaine with intent to distribute. His sentence had been enhanced under §4B1.1 of the Uniform Sentencing Guidelines because, at the time of his sentencing, the court believed that he had been convicted of two prior felonies, one in the Circuit Court for Prince George's County.

In 1991, the petitioner had been convicted in the Circuit Court for Prince George's County of the felony of possession with intent to distribute narcotics. In April of 1997, the petitioner's 1991 conviction was reduced to a misdemeanor. Subsequently, however, for reasons that were not explained, in June of 1997, the Circuit Court for Prince George's County denied a previously filed motion for reconsideration of the 1991 conviction, essentially reviving it.

As part of this proceeding, the federal court sought clarification from the Circuit Court for Prince George's County as to which order (April, 1997, or June, 1997) was controlling. In response, the Circuit Court for Prince George's County vacated the entire 1991/1997 series of convictions and set the matter in for a new trial.

Under the circumstances, the District Court swept aside a host of procedural questions raised by the Government and held that the enhanced sentence was illegal because the petitioner had only one prior felony conviction. The petitioner's prior sentence was vacated and the matter set in for a re-sentencing.

A copy of the opinion is available in PDF. A copy of the order is here.

Mirchandani v. Home Depot USA, Inc. (Maryland U.S.D.C.)

Decided January 11, 2006--Opinion by Magistrate Judge Beth P. Gesner.

Products liability claim by a consumer against a retailer for injuries suffered as a consequence of using an allegedly defective ladder sold by the retailer. The retailer, Home Depot, moved for summary judgment based on the "sealed container defense" which provides that a seller of a product may avoid liability for property damage or personal injury allegedly caused by the defective design or manufacture of a product if it can establish that:

(1) The product was acquired and then sold or leased by the seller in a sealed container or in an unaltered form;

(2) The seller had no knowledge of the defect;

(3) The seller in the performance of the duties he performed or while the product was in his possession could not have discovered the defect while exercising reasonable care;

(4) The seller did not manufacture, produce, design, or designate the specifications for the product which conduct was the proximate and substantial cause of the claimant's injury; and

(5) The seller did not alter, modify, assemble, or mishandle the product while in the seller's possession in a manner which was the proximate and substantial cause of the claimant's injury.

Md. Code Ann. Cts. & Jud. Proc. §5-405(b).

There are several exceptions to the sealed container defense as follows:

(1) The manufacturer is not subject to service of process under the laws of this State or the Maryland Rules;

(2) The manufacturer has been judicially declared insolvent in that the manufacturer is unable to pay its debts as they become due in the ordinary course of business;

(3) The court determines by clear and convincing evidence that the claimant would be unable to enforce a judgment against the product manufacturer;

(4) The claimant is unable to identify the manufacturer;

(5) The manufacturer is otherwise immune from suit; or

(6) The seller made any express warranties, the breach of which were the proximate and substantial cause of the claimant’s injury.

Md. Code Ann. Cts. & Jud. Proc. §5-405(c).

The Court denied Home Depot's motion for summary judgment and held that:

(1) Home Depot had participated in a recall of a similar ladder by the same manufacturer and other accidents continued to be reported to Home Depot after the recall. Because the sealed container defense does not apply where the seller could have discovered the defect by "exercising reasonable care" while the product was in the seller's possession, there are genuine issues of material fact as to whether Home Depot could have discovered a defect in the ladder at issue in this case, the third element of the sealed container defense.

(2) The manufacturer had filed for bankruptcy. In that proceeding, the Bankruptcy Court converted the bankruptcy from a reorganization case under Chapter Eleven to a liquidation case under Chapter Seven. The Court found that "there is a genuine issue as to whether the effect of the bankruptcy order [converting the proceeding from a Chapter Eleven to a Chapter Seven] was a judicial declaration of insolvency based on a finding that [the manufacturer] was unable to pay its debts as they become due in the ordinary course of business. The clear import of the court's actions supports such a finding." Furthermore, "there is no indication that the availability of insurance proceeds to satisfy a judgment against the manufacturer has any bearing on the application of the sealed container defense."

The opinion is available in PDF. The order is available here.

State v. Borchardt (Ct. of Appeals)

Filed January 12, 2007--Opinion by Judge Irma Raker. Dissenting opinion by Chief Judge Robert Bell in which Judge Lynne Battaglia joins, in part, and in which Judge Clayton Greene, Jr., joins, in part.

The Defendant had been convicted of two counts of murder and robbery with a deadly weapon and had been sentenced to death. His conviction had been sustained on appeal. However, the Circuit Court for Anne Arundel County granted a Petition for Postconviction Relief pursuant to Md. Code (2001, 2005 Cum. Supp.), §7-102 of the Criminal Procedure Article. The Circuit Court concluded that the Defendant was denied effe ctive assistance of counsel in the sentencing proceeding.

The Court of Appeals held, in essence, that various decisions by the Defendant's counsel at the sentencing proceeding not to present certain evidence were expressions of reasonably sound trial strategy. In dissent, Chief Judge Bell, joined by Judge Battaglia, argued that the various decisions made by Defendant's trial counsel were not "fully informed."

Also, before the Circuit Court, the Defendant alleged, on the basis of Dr. Raymond Paternoster's study entitled "An Empirical Analysis of Maryland’s Death Sentencing System With Respect to the Influence of Race and Legal Jurisdiction" (the "Paternoster Study"), that the Maryland death penalty permits the arbitrary and capricious selection of capital defendants in violation of the Eighth and Fourteenth Amendments to the U.S. Constitution. This issue was not considered by the Circuit Court.

The Court of Appeals held that the Circuit Court erred and should have considered questions arising under the Paternoster Study. However, the Court also concluded that the Defendant's claim was without merit because he "makes no claim whatsoever that there is any specific evidence of discrimination in his case." Chief Judge Bell, joined by Judge Greene, argued that:
The simple fact is that [the Defendant] is asserting a claim that he was selectively prosecuted in violation of his constitutional rights,and that this affected his conviction.

Additionally, and more important, an adequate presentation of specific evidence of discrimination by the defendant cannot occur without adequate discovery from the State. It follows, then, that until an adequate presentation of specific evidence of discrimination is heard, the merits cannot be decided; to do so would be premature. The Paternoster study illustrates that death-eligible defendants in Baltimore County are more likely to receive a sentence of death than in any other county. This study alone satisfies the [U.S. v.] Armstrong standard, justifying further discovery.

The opinion and dissent are available in PDF.

Friday, January 12, 2007

MCW Survey

On the right side of the page, you will find a short survey. We would very much appreciate it if you would take a moment to give us your input.


Koshko v. Haining (Ct. of Appeals)

Filed January 12, 2007--Opinion by Judge Glen T. Harrell, Jr. Dissenting Opinion by Judge Dale R. Cathell

Maternal grandparents established significant relationship with the grandchildren while their daughter and first grandchild resided with them and after the daughter married and moved away. This substantial relationship encompassed the child that had resided under their roof, as well as two grandchildren born after their daughter moved away.

Following a family disagreement between the grandparents and husband on how the husband should act toward his dying mother, the daughter and her husband cut off all visitation. Grandparents brought an action for visitation in the Circuit Court for Baltimore County under the Grandparent Visitation Statute (GPS), found at Md. Fam.Law Code Ann.§9-102. The trial judge established a rolling schedule of four-hour visits every 45 days and quarterly overnight visits. The trial court also directed that the parents and grandparents attend at least four joint, professional counseling sessions to discuss issues relating to the visitation. After an unsuccessful bid for a new trial, the Koshkos appealed the judgment of the Circuit Court.

The Court of Special Appeals affirmed the judgment, Koshko v. Haining, 168 Md.App. 556, 897 A.2d 866 (2006), holding that the GVS was neither facially unconstitutional nor unconstitutional as applied to the Koshkos. The intermediate appellate court rejected the argument that the GVS violated the Koshkos' fundamental right to parent, as articulated in Troxel v. Granville, 530 U.S. 57, 120 S. Ct. 2054, 147 L. Ed. 2d 49 (2000) (plurality), simply because it lacked an express presumption that parental decisions are in the best interests of children. Under the principle of constitutional avoidance, the court interpreted the GVS to contain such a presumption. Upholding the trial court's order of visitation The Court of Special Appeals disagreed with the parents' position that there must be a threshold finding of either parental unfitness or exceptional circumstances as a predicate to the statutorily-imposed best interests of the child inquiry.

The Koshkos petitioned the Court of Appeals, which granted a writ of certiorari to consider the Koshkos' substantive due process challenge to the GVS.


The natural parents' decisions regarding the care, custody and upbringing of their minor children are presumptively correct which can only be overcome by a threshold showing of either parental unfitness or exceptional circumstances demonstrating current or future detriment to the child, absent visitation from his or her grandparents, as a prerequisite to application of the best interests analysis, overruling the portions of Fairbanks, Maner, Beckman, Herrick and Wolinski that are inconsistent with the ruling.

While less of an intrusion than custody, parents in a visitation case have a fundamental constitutional right to parent their children which is only rebutted by a showing of unfitness or exceptional circumstances.

In deciding the issue of fundamental constitutional rights afforded to parents the court stated that visitation was a temporary form of custody.

Because of the fundamental constitutional right afforded to parents, the proper standard in reviewing the constitutionality of the GVS is strict scrutiny.

Under the principal of constitutional avoidance, The GPS as interpreted and glossed by the Court of Appeals was not facially unconstitutional because of the requirement of a threshold finding of parental unfitness or exceptional circumstances demonstrating the detriment that has or will be imposed on the children absent visitation by their grandparents before the best interests analysis may be engaged.

In applying the strict scrutiny standard the Court held that the GVS was unconstitutional as applied.

In affected cases pending at the time this opinion was filed, where appropriate, courts may allow amendments to pleadings or the presentation of additional evidence in light of the holdings announced here. In cases filed after this opinion, the petitioners, in order to avert or overcome a motion to dismiss their petition, must allege a sufficient factual predicate in the petition so as to present a prima facie case of unfitness or exceptional circumstances, as well as invoking the best interest standard.

In a dissenting opinion, Judge Eldridge agreed that the GVS was not facially unconstitutional, but argued that the Court placed a great deal of reliance on Justice O'Connor's opinion in Troxel, which was not the opinion of the Supreme Court and did not appear to reflect the views of a majority of the Supreme Court.

Full opinion PDF.

E-Citation Update

The proposed E-citation system, noted here, was the subject of a story in today's Baltimore Sun:
Judicial and law enforcement officials are pushing a program that would allow state troopers and other officers to swipe a driver's license and registration, generating a ticket that would be transmitted electronically to the court system. Eventually, violators would have the option of paying tickets via the Internet.

E-citations, as they were called at a Senate Judiciary Committee hearing yesterday, would help cut down on the 1.3 million paper tickets processed annually and help protect police, who can be hit by passing vehicles or assaulted by motorists during traffic stops.

Twenty-five states including California, Florida and New York have electronic citation systems or are implementing pilot programs, Chief District Court Judge Ben C. Clyburn told state senators. In those states, the number of traffic tickets overturned because of human error, such as violations checked incorrectly or writing that is illegible, has dropped.

A driver would still receive a paper copy of a ticket - a receipt of sorts - printed on a system installed in police cruisers.
* * * * *
Increased efficiency could have drawbacks for drivers hoping to get out of a traffic ticket by exploiting mistakes. A 2003 report issued by the U.S. Department of Transportation and two other federal agencies found that an estimated 10 percent of citations contain errors including misspellings, poor handwriting and inconsistencies between violation codes and descriptions.

The report concluded that electronic citation technology can eliminate "most, if not all" such errors.
* * * * *
Faster ticketing means getting back on the road faster, Hartnett said.

"People who are speeding are late for something anyway," he said.

Circuit Court for Prince George's County

Governor Ehrlich has appointed A. Michael Chapdelaine to the Circuit Court for Prince George's County to replace retiring Judge Steven I. Platt.

Circuit Court for Baltimore City

Governor Ehrlich appointed George L. Russell, III and Pamela J. White to the Circuit Court for Baltimore City to replace retiring judges Clifton J. Gordy and Joseph P. McCurdy, Jr.

Thursday, January 11, 2007

Ehrlich v. Grove (Ct. of Appeals)

Decided January 11, 2007 -- Opinion by Judge Dale Cathell.

In a case involving a suit by a senior official of the Maryland Department of the Environment for wrongful termination by Governor Robert Ehrlich upon the beginning of his term as Governor in January 2002, the Court of Appeals held that an interlocutory appeal is appropriate under the extraordinary circumstance of a discovery order being directed to a Governor of Maryland when the collateral order doctrine’s four-part test is met, namely, when:
the interlocutory order sought to be reviewed:

(1) conclusively determines the disputed question,

(2) resolves an important issue,

(3) resolves an issue that is completely separate from the merits of the action, and

(4) would be effectively unreviewable if the appeal had to await the entry of a final judgment.
The Court of Appeals further held that the Circuit Court for Baltimore City had abused its discretion when, in the course of resolving a complex and extended discovery dispute between the parties, it ordered expanded in camera review with the active participation of the attorney for the Plaintiff of documents protected by attorney-client privilege or the work product doctrine and when it actively solicited by its draft of a solicitation letter the consent of 341 former executive-branch employees of the State of Maryland to the release of employment and other documents that the Circuit Court itself had held to be irrelevant and not reasonably calculated to lead to admissible evidence in this case.

The full opinion is available here in PDF.

Rodriguez v. Gutierrez (Maryland U.S.D.C.)(not approved for publication)

Decided December 29, 2006--Opinion by Judge Catherine C. Blake (not approved for publication)

Pro se complaint against Secretary of the U.S. Department of Commerce alleging discrimination based on race and national origin in violation of Title VII of the Civil Rights Act, 42 U.S.C. §§2000e, et seq.

The Plaintiff alleged a hostile work environment claim under Title VII. To prevail on a hostile work environment claim, a plaintiff must show that: 1) the conduct in question was unwelcome, 2) the harassment was based on race, 3) the harassment was sufficiently pervasive or severe to create an abusive working environment, and 4) that some basis exists for imputing liability to the employer. The Court dismissed this claim because the Plaintiff did not allege that her harassment was based on race, and because her alleged harassment was not sufficiently pervasive or severe to create an abusive working environment.

The Plaintiff did allege that her supervisor made alleged statements that she did not like Mexicans and did not want the Plaintiff to speak Spanish. However, these incidents occurred in 1998 or 1999. The Plaintiff did not contact an EEO counselor about the events until six or seven years later. She was required to contact an EEO counselor within 45 days of an alleged discriminatory act. Thus, her claim was time-barred.

While a claim alleging a hostile work environment claim will not be time barred so long as all acts which constitute the claim are part of the same unlawful employment practice, the supervisor's statements are not properly linked to the other, timely acts of discrimination and harassment alleged by the Plaintiff for several reasons:
[The supervisor] allegedly told [the Plaintiff] that she didn't like Mexicans in 1998-1999, and [the Plaintiff] did not begin to suffer the alleged harassment from co-workers until 2003. In the time period between 1999 and 2003, [the Plaintiff] alleges no harassment occurred. Second, [the supervisor's] harassment occurred while she was supervising [the Plaintiff] in CTMS, while [the Plaintiff's] co-workers allegedly harassed her while she was working in SASB. Although [the Plaintiff] directly worked with [the supervisor] in CTMS, [the supervisor] was not [the Plaintiff's] direct supervisor while [she] worked in SASB, and [the Plaintiff] does not allege that she worked on a regular basis with [the supervisor] in SASB. Third, there is no allegation that [the supervisor's] statements are related in any way to [the Plaintiff's] co-workers' harassment. . . .Thus, [the supervisor's] 1998-1999 statements are not part of the same "unlawful employment practice" alleged against [the] co-workers, and are time-barred.
The claim was dismissed without leave to amend.

The full opinion is available in PDF. The order is available here.

E-Citation Legislation

The Maryland Courts Information Office has issued a press release as follows:
Briefings to Be Held on E-citation Legislation

(Annapolis, MD – January 11, 2007) The Maryland Judiciary is sponsoring legislation to develop an e-citation project. The electronic filing of citations would increase efficiency and police officer safety, while also saving police and court resources.

Media who are interested in learning more about the e-citation project may attend briefings to be held at 2 p.m. Thursday, January 11, before the Senate Judicial Proceedings Committee and at 10:30 a.m. Thursday, January 18, before the House Judiciary Committee.

The Judiciary is collaborating on this effort with the Maryland State Police, Maryland Transportation Authority, Maryland Department of Transportation, Maryland Defense Council, Maryland Trial Lawyers Association, Office of the Public Defender, Maryland State's Attorney's Association, Motor Vehicle Administration, and the Maryland State Bar Association.

The full press release is available here.

Wednesday, January 10, 2007

River Walk Apartments, LLC v. Twigg (Ct. of Appeals)

Decided January 10, 2007--Opinion by Judge Lynne A. Battaglia, with Judges Dale R. Cathell and Glenn T. Harrell, Jr. joining in the judgment only.

In November 2000, the Mayor of the City of Frederick entered into an agreement ("November Agreement") with Property Owners wherein the Property Owners would dedicate to the City for no charge "any and all rights-of-way needed for the upgrade and widening of Gas House Pike along the frontage of the Property," which was to be made "free and clear of all liens and/or encumbrances." It is unclear from the Agreement whether the conveyance was fee-simple or merely encumbered the land with a thoroughfare for the use of the public. The Property Owners also agreed to give their consent and sign all necessary documents to subject the properties to a "Tax Increment Financing District" (TIF) to enable the City to finance the completion of Monocacy Boulevard, with the caveat that the Property Owners shall have no additional tax assessment or liability as a result of the TIF.

In consideration for the Property Owners’ dedications and agreement to the TIF, the contract provided that the Properties and Property Owners would be subject to a "deferred contribution special assessment" of $1.00 per square foot of each building to be constructed to be paid once to the City "upon application to the City for the Shell Construction Permit for such building." The contract was signed by a representative of each of the Property Owners and by Mayor James Grimes for the City of Frederick.

In October 2002, the City of Frederick passed Ordinance G-02-19, §1, which titled Chapter 11 of the City Code, a reserved chapter, "Fees," and levied impact fees for the first time in the City for the purpose of requiring that new residential, commercial, institutional and industrial development pay for its appropriate share of capital improvements to the city’s water and sewer treatment and distribution systems through the imposition of water and sewer impact fees which will be used to finance, defray and reimburse the city for all or a portion of the costs of capital improvements to the city’s water and sewer treatment and distribution systems. Another fee imposed by the new chapter was the "Park Facilities development impact fee," which states in relevant part, "Any person who undertakes a residential development project shall pay a park facilities development impact fee and shall not receive a building permit until such park facilities development impact fee is paid."

In June 2004, then Mayor Jennifer Dougherty and the Property Owners entered into a second agreement entitled "Agreement to Defer Public Improvements" ("Deferral Agreement"), granting the Property Owners an exception to the Subdivision Regulations of the City of Frederick which required installation and acceptance of necessary public improvements prior to the final approval of subdivision plats.

In October 2004 and again in March 2005, applications were submitted for shell construction permits along with payment of the $1.00 per square foot for each proposed structure, as required by both the November and the Deferral Agreements. The City denied the applications, stating that "in addition to the $1.00 per square foot fee, all impact fees must be paid prior to the issuance of any of the aforementioned building permits," to include payment of water, sewer and park fees. Consequently, a complaint for a writ of mandamus and specific performance was filed against the City requesting they be directed to issue shell construction permits based on the municipality being bound by its contracts. The City responded, in part, that the Agreements only exempted the property from regulatory fees, not water, sewer and park facility impact fees, and that even if the Agreements did exempt the Property Owners from those fees, because they constitute taxes, they can only be waived by the Maryland General Assembly and therefore, without such authorization, the waiver was ultra vires and not enforceable.

Upon timely appeal of a finding for the Property Owners, the City maintained that the legislative body of the municipality must enact ordinances in order to establish impact fees and that the two Agreements were not legislatively authorized, but instead constituted private agreements between the Property Owners and the two mayors. The Court of Special Appeals reversed the Circuit Court holding that Section 2 of Article 23A and Section 7 of Article II of the City of Frederick Charter mandate that all fees imposed by the City, and any waiver thereof, must be authorized by ordinance, and because no ordinance authorizing either the November or the Deferral Agreement was enacted, both contracts were ultra vires and therefore void ab initio.

Before the Court of Appeals, the Property Owners contended that the Mayor possesses the executive power to purchase or condemn property, such as the rights-of-way at issue in this case, and as an executive act, no ordinance or legislative act was required in order for the City to enter into the Agreements. The Agreements represented nothing more than the implementation of an already authorized and existing public project and, as such, constituted executive, not legislative, actions, which the Mayor, as the chief executive officer of the City, possessed the requisite authority to do on behalf of the City. Conversely, the City maintained, in part, that before any fee can be imposed by the municipality, it must be legislatively authorized. The waiver of fees is a corollary to the imposition of fees, so it, too, would require legislative authorization.

The Court held that neither the Mayor who signed the November Agreement, nor the Mayor who signed the Deferral Agreement, possessed the requisite authority to create a special fee or to waive impact fees; those actions required legislative authority, which was never obtained. A municipality is not bound by those actions which transcend its authority and the authority of those allegedly acting on its behalf; those actions are ultra vires and unenforceable.

Judges Cathell and Harrell join in the judgment only consistent with their position in J.P. Delphey L.P. v. Mayor and City of Frederick.

The full opinion is available in PDF.

Tuesday, January 9, 2007

Haas v. Lockheed Martin (Ct. of Appeals)

Decided January 9, 2007--Opinion by Judge Glenn T. Harrell, Jr.

Respondent had employed Petitioner in Montgomery County as a human resources specialist since 1998. Following a corporate restructuring, Petitioner applied for a newly created human resources position with Respondent in April 2001, said new position to subsume many or most of Petitioner's prior professional duties of employment. Respondent did not extend an offer to Petitioner for that new position, and notified Petitioner in writing on October 9, 2001 that Petitioner would be laid off effective October 23, 2001, which date indeed became Petitioner's last day of work with Respondent.

Petitioner filed suit against Respondent in the Circuit Court for Montgomery County on October 23, 2003 for alleged discrimination on the grounds of disability under Md. Ann. Code, Art. 49B, Sec. 42(b), a Maryland statute specific to Montgomery County, said discrimination alleged to have occurred on the basis of Petitioner's Attention Deficit Disorder. Respondent moved for summary judgment, citing the two-year limitations provision in that statute. The Circuit Court granted summary judgment and the Court of Special Appeals affirmed.

The Court of Appeals ("the Court") reversed and remanded the case to the Court of Special Appeals with instructions to reverse the Circuit Court's grant of summary judgment and to remand the case to the Circuit Court for further proceedings.

In its opinion, the Court held that the two-year limitations period from the date of "discharge" - an undefined term - ran not from the date of discovery of an impending discharge or of a notice of such discharge, but from the actual discharge upon cessation of employment. The Court noted that this view was a minority view among the states with largely similar statutes, but cited a number of grounds for the ruling including the rule's bright-line simplicity for the benefit of employers, employees and courts and the furtherance of the remedial purpose of the statute in sustaining meritorious claims. The Court rejected the so-called "Ricks/Chardon" majority rule dating a discharge to the date of notice thereof, due to that rule's potential to interfere with possible conciliation and to propagate unripe suits.

In dissent, Judge Battaglia opined that the discriminatory act of discharge prohibited under section 42(b) is, in fact, the decision to discharge the employee, rather than the termination of employment itself. Judge Battaglia noted that an employee suffers harm upon the very notice of discharge, not merely later on her last date of employment, and that the federal employment statutes which section 42(b) and similar Maryland statutes mimic calculate the date of discharge for limitations from the date of notice. Judge Battaglia cited as a policy ground for her view the benefit to employees of a longer grace period in which to find new employment and to continue to receive benefits before the last date of employment; calculating the limitations period from the last date of employment would discourage employers from extending such benefits and grace periods. Judge Raker joined in part A of the dissenting opinion expressing the foregoing grounds.

In part B of the dissenting opinion, Judge Battaglia cited the "discovery rule" applied to many Maryland statutes of limitations and urged that the calculating "discharge" from the date of notice of discharge would be consistent with that principle.

The full text of the opinion and dissent can be found here in PDF.

Centre Insurance Co. v. J.T.W. (Ct. of Appeals)

Filed January 9, 2007--Opinion by Judge Dale R. Cathell.

Issue: When, under Title 2 of Maryland's Insurance Article does the 30-day filing period for a petition for judicial review of an administrative decision begin?

Held: The plain language of the pertinent statutes provides that, in the context of the relevant sections of the Insurance Article, the 30-day filing period for a petition for judicial review of an administrative decision under §§2-204(c) and 2-215(d)(1) begins when the order resulting from a relevant administrative hearing is mailed.

Not considered in opinion: The effect of Maryland Rule 1-203(c)

Full opinion available in PDF.

Legacy Funding LLC v. Cohn (Ct. of Appeals)

Decided January 9, 2007 - Opinion by Judge Alan M. Wilner.

In each of these three consolidated cases, Appellant, Legacy Funding LLC, purchased owner occupied residential real property ("Property") at foreclosure. The sales were ratified, and some time thereafter, Legacy paid the funds and otherwise complied with the terms of the sale. The funds received at the sale, after payment of proper expenses, resulted in a surplus, which ordinarily would go to the borrower. After it had complied with the terms of the sale, Legacy moved for possession of the Property. Legacy then sought payment from the excess proceeds for the reasonable rental value of the property during the time the owner continued to live on the property dating back to the time the sale had been ratified. The Circuit Court granted the motions for possession, but denied the motions for a portion of the surplus funds.

Held: The Court noted that the foreclosure action was the proper venue to raise the issues Legacy raised. It then held that the elements for non-statutory wrongful detainer theory are: "(1) [claimant] was lawfully entitled to possession, (2) [claimant] demanded possession following its entitlement to do so, and (3) the possession was wrongfully denied." (This is in contrast to a claim for income actually received from the real property, where upon payment of the sales price, the purchaser is "automatically entitled to rents and profits accruing from the property after the date of the sale.") The court reiterated its opinion in Empire v. Hardy, 386 Md. 628, 873 A.2d 1187 (2005), that a "purchaser at a foreclosure sale is not actually entitled to possession [the first element of wrongful detainer] until the purchase price is paid and, through delivery of a deed of conveyance, legal title passes." (However, the Court noted a court of equity may, in its discretion, grant possession upon ratification and before the purchase price is paid.) Because in this case, Legacy was not entitled to possession until after it had paid the purchase price, its claim for wrongful detainer could only arise after that payment was made.

The Court noted that there is also a distinction in calculating damages as between income producing properties and residential properties. The damages for a claim based on income producing property is the "rents and profits accruing from the property after the date of sale." On the other hand, a claim for wrongful detainer is in the nature of an action for trespass. The damages for such an action are based on the injury to the claimant, not the benefit derived by the defendant, and are "'usually measured by a reasonable rent for the land wrongfully occupied.'"

Having determined when Legacy was lawfully entitled to possession of the Property, the Court remanded the case back to the Circuit Court for a determination as to when Legacy demanded possession and when, if at all, the demand was rejected.

The full opinion is available in PDF

Environmental Integrity Project v. Mirant Corp. (Maryland U.S.D.C.)(not approved for publication)

Informal Memorandum Opinion and Order--January 3, 2007 by Judge J. Frederick Motz (not approved for publication)

Through an informal memo to counsel, the Court granted Defendant's motion to dismiss based on lack of subject matter jurisdiction but denied Defendant's request for attorneys fees because the Court found the instant action not "frivolous, groundless, pursued in bad faith, or maintained after its baselessness became apparent."

Plaintiffs sought to rebut the presumption of diligence by asserting that (1) the process by which the consent decree came into being suggests a lack of diligence, (2) the penalties imposed by the consent decree are trivial and actually discouraged compliance by making it cheaper to continue to violate opacity standards, (3) the consent decree does not require Defendant to switch from oil to natural gas, and (4) the terms of the consent decree do not require compliance with federal and state opacity standards.

Defendants conceded that a 60-day notice letter was "the catalyst for an accelerated evaluation of emissions from fossil-fuel fired electric generating units at power plants in Maryland and the resulting negotiations ended in a consent decree filed in P.G. County just one day before Plaintiff’s could file suit pursuant to an order entered separately by the U.S. Bankruptcy Court for the Northern District of Texas." The Court found that §7604(b)(1) recognizes that citizens’ notice may provide the catalyst for regulatory action and regulatory agencies must be given 60 days to decide whether to take action. Consequently, there must be other indicia that a consent decree was entered into collusively in order for a lack of diligence to be found on the basis of allegedly tainted process.

The Court further rationed that, economic benefit analyses aside, the fact that state proceedings result in the imposition of minimal penalties is not itself a basis for finding that the state prosecutions were not diligent, particularly where the consent decree requires the defendant to incur substantial capital costs in complying with its terms and where the state court retains jurisdiction to enforce the decree.

The Plaintiffs seemed to suggest that the "requiring compliance" element of defendants’ subject matter jurisdiction defense is separate and apart from the "diligent prosecution" element of that defense. The court found that position lacked merit based, in part, on Clean Air Council, 2003 WL 1785879, at *5-6, wherein while considering the "requiring compliance" issue, indicated that the relevant question is whether the regulatory prosecution was "totally unsatisfactory,’ not whether it required the remedy which the [plaintiffs] would have preferred." The standard of review in Clean Air Council is the proper one because the inquiry into whether a consent decree is reasonably designed to require a polluter’s compliance with applicable standards is part and parcel of the inquiry into whether state regulatory authorities have diligently prosecuted an action against the polluter. Accordingly, the views and actions of the regulatory authorities are entitled to deference.

The full opinion is available in PDF.