August 16, 2008
Thoughtful Essay on Hamdan, Military Commissions, Etc.
The statutory issues were discussed long ago here, but this essay I found quite interesting, though it's not so much about statutory interpretation as about broader issues and the meaning of war, punishment, and the difference between criminal and military law. Call it a Saturday morning diversion.
August 15, 2008
Split on Meaning of "materiality" under False Claims Act
In U.S. v. Bourseau, 531 F.3d 1159 (9th Cir. 2008), the court affirmed convictions of defendants under the False Claims Act (“FCA”), 31 U.S.C. §§ 3729-3733. Title 31 U.S.C. § 3729(a)(7), the reverse false claims provision of the FCA, punishes anyone who “knowingly makes, uses, or causes to be made or used, a false record or statement to conceal, avoid, or decrease an obligation to pay or transmit money or property to the Government.” Interestingly, the statute does not contain a requirement of materiality, but because of the legislative history of the act, it has been read into it. And, courts split on what that implied element means:
The Supreme Court has stated that "[i]n general, a false statement is material if it has 'a natural tendency to influence, or [is] capable of influencing, the decision of the decisionmaking body to which it was addressed.' " Neder v. United States, 527 U.S. 1, 16, 119 S.Ct. 1827, 144 L.Ed.2d 35 (1999). Yet, circuit courts are split on how to measure materiality in the context of the FCA. See Medshares Mgmt. Group, Inc., 400 F.3d at 445. The Fourth and Sixth Circuits have adopted a "natural tendency test" for materiality, which focuses on the potential effect of the false statement when it is made rather than on the false statement's actual effect after it is discovered. Id. The Eighth Circuit has adopted a more restrictive "outcome materiality test," which requires a showing that the defendant's actions (1) had "the purpose and effect of causing the United States to pay out money it is not obligated to pay," or (2) "intentionally deprive[d] the United States of money it is lawfully due." Id. (citing Costner v. URS Consultants, 153 F.3d 667, 677 (8th Cir.1998)). We agree with the Fourth and Sixth Circuits that the natural tendency test is the appropriate measure for materiality because it is more consistent with the plain meaning of the FCA. Id. Applying the natural tendency test to this case...
August 14, 2008
Recent Decision of First Impression On Michigan Property and Child Support Law
In Walters v. Leech, __ N.W.2d __ (Mich. App. July 22, 2008), the court analyzed an interesting property law/tax law question involving whether a child support lien could be asserted against real property owned by the plaintiff and spouse as a tenancy by the entirety. The statute at issue provided:
The amount of past due support that accrues under a judgment as provided in [MCL 552.6032] or under the law of another state constitutes a lien in favor of the recipient of support against the real and personal property of a payer.
The question the court faced was whether property owned under a tenancy by the entirety -- which essentially presents an undivided interest by both spouses -- was "property of a payer." The court held it was not, basing its decision on in pari materia and under the presumption that legislatures know the common law when enacting statutes.
I'm guessing that this presents an enormous loophole in the ability to enforce child support liens. Interesting case.
August 13, 2008
Are Dogs "Livestock"?
This isn't a straight up statutory interpretation case, but rather one involving an easement, but the court relies heavily on the fact that statutes differ in their definitions of "livestock" in holding that whether dogs were "livestock" in terms of an easement presented a question of fact for the jury. Thanks to Professor Brian Slocum for this one! It's U.S. v. Park, __ F.3d __ (9th Cir. Aug. 8, 2008).
Fifth Circuit Applies Louisiana Statutory Directives in Case of First Impression
In Bernhard Mechanical Contractors, Inc. v. St. Paul Companies, 2008 WL 3244145 (5th Cir. Aug. 8 2008), the court gave a first impression interpretation of La. Rev. Stat. 9:5606, which is essentially a statute of limitations for claims against insurance agents, known as a "peremption" period under Louisiana law. Specifically, it stated that any action against "any insurance agent, broker, solicitor, or other similar licensee" had to be filed within a year; the claim against the insurer was filed more than a year after the agent's wrongful action.
The court held that the statute did not apply to claims against the insurer for whom the agent worked, even though liability was imputed to the insurance company under agency law. In reaching its conclusion, the court relied on Lousiana Civil Code Article 9, which requires courts to apply the language of the statute if clear (which raises a question about Erie -- is statutory interpretation a procedural, or substantive issue, an issue discussed elswhere in this blog), but nonetheless also applied case law holding that peremption statutes should be construed against finding a claim barred. Applying these principles, the court held that "other licensee" clearly did not include insurers, because of ejusdem generis and also because other Louisiana statutes made clear distinctions between insurers and their agents.
What's surprising to me is that, despite the fact that this is a case of first impression, and the court reversed a grant of summary judgment to the insurer, it held that the decision was non-precedential.
August 12, 2008
Split on interpretation of mens rea requirement in 21 USC 841(c)(2)
This statute makes it illegal for any person to knowingly or intentionally possess or distribute “a listed chemical knowing, or having reasonable cause to believe, that the listed chemical will be used to manufacture a controlled substance . . . .” The defendant in U.S. v. Khattab, __ F.3d___, 2008 WL 2971808 (7th Cir. Aug 05, 2008) conceded the government sufficiently proved that he had attempted to knowingly possess pseudoephedrine, but focused on the second element, arguing that the government at trial did not prove that the defendant, Khattab, knew the pseudoephedrine would be
used to manufacture methamphetamine—a controlled substance. In deciding the case, the court noted the circuit split on the mens rea required:
There is a split among our sister circuits as to the proper interpretation of the mens rea requirement in 21 U.S.C. § 841(c)(2)-one circuit believes the statute requires a defendant's subjective knowledge that the drugs he possesses or distributes will be used to manufacture a controlled substance, while at least three other circuits parse the statute to allow conviction based upon either subjective knowledge or an objective "cause to believe." Compare United States v. Truong, 425 F.3d 1282, 1289 (10th Cir.2005) (requiring government to prove "actual knowledge, or something close to"), and United States v. Saffo, 227 F.3d 1260, 1269 (10th Cir.2000) ("The 'reasonable cause to believe' standard thus comports with the subjective 'guilty mind' or 'guilty knowledge' requirement for imposing criminal liability."), with United States v. Galvan, 407 F.3d 954, 957 (8th Cir.2005) (rejecting proposed jury instruction that required actual knowledge and ignored "reasonable cause to believe" statutory language); United States v. Kaur, 382 F.3d 1155, 1157-58 (9th Cir.2004) ("[C]onsistent with the text of the statute, the instruction incorporates both subjective and objective considerations."); and United States v. Prather, 205 F.3d 1265, 1270 (11th Cir.2000) ("[T]he jury thus needed to find either that he knew the pseudoephedrine would be used to manufacture methamphetamine or that he had reasonable cause to believe that it would be."). The district court applied the more stringent standard of the Tenth Circuit, which requires "actual knowledge, or something close," and concluded that the government sufficiently proved that Khattab knew that the pseudoephedrine he attempted to purchase would be used to manufacture methamphetamine.