Scenes from the Greenbrier

It's a great day at the Judicial Conference.
















And, I got to meet Howard Bashman, as evidenced by this out-of-focus photo attempt:

On new judges at the 77th Judicial Conference of the Fourth Circuit

The new judges at this year's Judicial Conference include several from Virginia. It will be interesting to hear them all speak. The list includes:

The Honorable Michael F. Urbanski
United States District Judge for the Western District of Virginia

The Honorable Arenda L. Wright Allen
United States District Judge for the Eastern District of Virginia

The Honorable Max O. Cogburn, Jr.
United States District Judge for the Western District of North Carolina

The Honorable Ellen L. Hollander
United States District Judge for the District of Maryland

The Honorable James K. Bredar
United States District Judge for the District of Maryland

The Honorable John A. Gibney, Jr.
United States District Judge for the Eastern District of Virginia

The Honorable Catherine C. Eagles
United States District Judge for the Middle District of North Carolina

The Honorable J. Michelle Childs
United States District Judge for the District of South Carolina

The Honorable Richard M. Gergel
United States District Judge for the District of South Carolina

The Honorable Irene C. Berger
United States District Judge for the Southern District of West Virginia

The Honorable Albert Diaz
United States Circuit Judge for the Fourth Circuit

The Honorable James A. Wynn, Jr.
United States Circuit Judge for the Fourth Circuit

The Honorable Barbara Milano Keenan
United States Circuit Judge for the Fourth Circuit

The Honorable Andre M. Davis
United States Circuit Judge for the Fourth Circuit

The Honorable G. Steven Agee
United States Circuit Judge for the Fourth Circuit.

On Ann K. Sullivan

Years ago, I went to the winter meeting of The Virginia Bar Association in Williamsburg and randomly sat at a banquet table with Ann Sullivan and her family (or at least one daughter), and ever since then, I've been a big fan and so I am delighted that she is featured on the cover of this year's Virginia Super Lawyers publication.

Other favorites who have been profiled in Super Lawyers include Anne Marie Whittemore and Bruce Cryder.

On making threats by way of one's own Myspace profile

Today in Holcomb v. Com., the Court of Appeals in an opinion by Judge Elder, joined by Judges Petty and Alston, affirmed the felony conviction of a Virginia Beach man for posting on his MySpace page items that were construed as knowingly communicating a written threat to his ex-girlfriend.

Notwithstanding the fact that millions are dropping off MySpace, evidently it was enough to support the conviction that the comments were posted where the ex was able to see them.

That old adage

In Horvath v. Bank of New York, N.A., Mr. Horvath claimed that only the original lender could sue on the note secured by the deed of trust on his property. The Fourth Circuit, in an opinion by Judge Wilkinson joined by Judges Keenan and Diaz, was unimpressed:

"Negotiable instruments like mortgage notes that are endorsed in blank may be
freely transferred. And once transferred, the old adage about possession being nine-tenths of the law is, if anything, an understatement. Whoever possesses an instrument endorsed in blank has full power to enforce it."

Blame President Bush

There has been much publicity over the fact that the Fourth Circuit panel that will review the challenges to health care reform includes Judges Davis, Wynn, and Motz.

Judge Davis was nominated by President Obama after President Bush failed to fill the vacancy on the Fourth Circuit that resulted from the death of Judge Murnaghan, as reported here:

"Under President Bush, three other nominees were named to fill the vacancy, but each was stalled or rejected — in disputes with Democrats that sometimes involved the Maryland senators."

Judge Wynn was nominated by President Obama after President Bush failed to fill the vacancy on the Fourth Circuit that resulted from Judge Phillips taking senior status in 1994. Three times, President Bush nominated Terrence Boyle, who was never confirmed. In 2007, President Bush nominated Robert Conrad, who also was never confirmed.

Of Judge Motz, I once walked down the stairs with her and her husband the district court judge at my first Fourth Circuit Judicial Conference, and they laughed that I was about to burst out of my skin with nervousness and excitement, and she told me she remembered well her first Judicial Conference - which made me a fan.

On the Planned Parenthood case in Indiana

Here is the much-publicized complaint filed by Planned Parenthood of Indiana over the new law in Indiana that prohibits the state from making any contracts with or appropriating any money for any entity that performs abortions or operates a facility where abortions are performed.

The claim is be based principally to the provision in the Constitution which bar the states from passing any law that impairs the obligation of contracts, the "Contract Clause" of Article 1, section 10. Planned Parenthood claims that it has existing contracts that would be impaired by the enforcement of the new law.

Virginia v. Virginia

In Virginia Office for Protection and Advocacy v. Stewart, the Supreme Court held that a Virginia state agency could sue Virginia officials in federal court.

Chief Justice Roberts dissented, because he thought there was something wrong with the idea that the Commonwealth can sue itself in federal court, despite the Eleventh Amendment and sovereign immunity. For one thing, the Chief Justice noted:

"Whatever the decision in the litigation, one thing is clear: The Commonwealth will win. And the Commonwealth will lose. Because of today’s holding, a federal judge will resolve which part of the Common-wealth will prevail."

A common affliction

In Carnell Construction v. Danville RHA, Judge Kiser wrote in a footnote:

"This case has suffered from excessive briefing. The parties’ briefs supporting and opposing pre- and post-trial motions alone total 660 pages, not including attachments. With attachments—which do not include full deposition transcripts—that number increases to 3,179 pages. Many individual briefs exceed 50 pages. The absence of a page limit in the Western District is not intended as an invitation for protracted argument. As the Fourth Circuit recently stated, “wisdom may reside in recognizing that less is sometimes more and that zealous advocacy need not always part company with forbearance and restraint.” Waybright v. Frederick Cnty., 528 F.3d 199, 210 (4th Cir. 2008). Put more succinctly, “brevity is the soul of wit.” SHAKESPEARE, HAMLET, act 2, sc. 2."

On Circuit Court Judge Chad Dotson

I read in the VLWBlog that the General Assembly has approved Chad Dotson for a vacancy on the bench of the Thirtieth Circuit. Well done, Judge Dotson.

When Judge Dotson was selected for the general district court bench, I wrote this. My first Chad Dotson post was this one.

On the evils of scanned as opposed to converted PDF files

The new Administrative Procedures for electronic filing in the W.D. Va. state the following, twice:

"Scanners should only be used to produce PDF files of documents that cannot be produced electronically. Scanned documents lessen the level of service we provide by slowing down the entire system. We have moved away from the utilization of scanned documents inside the Court for the most part and are requesting parties to do the same when possible."

The new book also says this about orders, which is a little bit different than before I think:

"3. Proposed orders must be submitted as outlined below:
a. A moving party shall submit to the judge, after filing a motion for which no supporting brief is required, a proposed order granting the motion and setting forth the requested relief.
b. Proposed orders must be filed in CM/ECF as a pdf attachment to the Motion (not combined with the motion in one document).
c. The proposed order must also be attached to an Internet e-mail sent to the email address of the assigned judge, in a format compatible with Microsoft Word. Judges will not accept the attachment in .pdf format."

I do not recall that the lawyers were previously required to submit and file proposed orders - in my experience proposed orders are rarely filed in this Court, unlike some others. I have more often e-mailed draft orders as word processing documents to the Court and counsel, when the orders were agreed.

On comity, abstention, and the Tax Injunction Act

In Buchanan County v. EQT, Judge Jones of the W.D. Va. rejected my arguments for the remand of a tax case. The issues were pretty interesting, if somewhat obscure.

On being in jail as a disability

In Lyslord-Duncan v. Bank of America, Judge Wilson of the W.D. Va. dismissed the plaintiff inmate's claim that the bank had violated the Americans with Disabilities Act by refusing to open a bank account because of his incarceration.

Judge Wilson concluded: "Though the court is sure that incarceration is limiting a number of Lyslord-Duncan’s activities, the court is also quite sure that Congress did not have incarceration in mind as a disability when it enacted the ADA."

Perhaps the plaintiff had confused the concept of disabled under the ADA with the notion of a "person under a disability" under the civil procedure title of the Virginia Code, which includes convicted felons during their incarceration, but only in the context of how they can sue and be sued in state court.

On the iPad and the Wise County Commonwealth's Attorney's office

This Findlaw technology blog post highlights the use of the iPad by Ron Elkins and his staff in prosecuting cases in Wise County, described here in a web interview and here in this post from the website for his office. Ron is about the biggest cyberdog around.

Dog custody case

In the case of Whitmore v. Whitmore, decided today, a panel of the Court of Appeals including Judges McClanahan and Haley and Senior Judge Willis addressed the thirteen assignments of error raised by the ex-husband protesting the Circuit Court's award of all right and title to the couple's Welsh Corgi to the ex-wife, without even providing for visitation. The appellant claimed among other things that the Circuit Court failed to consider "the best interests of the dog." The appellee didn't want to share the dog because she didn't want to have anything more to do with her ex-husband.

The dog is not named in the opinion.

I can't give advice to Mr. Whitmore, but in my own case I rooted around Petfinder until I found another who looked about like the last two, and she's had a pretty good life these past twelve months.

On Chief Justice Hassell

I learned today of the death of Chief Justice Hassell. There are reports here from the Norfolk paper and the Richmond paper. He was a strong character and an interesting man, a very compelling figure in Virginia's legal history for many reasons.

I met him once and told him of my adventures before the Supreme Court, which he found amusing. Later, on a trip to the law school at Grundy, he told me this story.

Here is his last speech on the state of the judiciary as Chief Justice, in which he relates much of his own history and experience, beginning on page 8.

A picture can say a thousand words, and none of them are hearsay

Today in Bynum v. Com., the Court of Appeals in an published opinion by Judge Petty, joined by Judges Elder and Beales, held that the trial court in a case where the defendant was convicted of possessing drugs within 1,000 feet of a school did not err in admitting over the defendant's hearsay objection the aerial photograph used by police to prove the defendant's proximity to the school.

The Court reasoned, in part, that photographs are not hearsay because there is no declarant:

"As with a caller ID and a call trap, there simply is no out-of-court declarant involved in this photograph. Officer Johnson used an aerial photograph of the Brighton Elementary School property and surrounding area to measure the distance between the school property boundary and the location where Bynum was observed with heroin and arrested. An aerial photograph of a geographic area does not contain 'simply the repetition of prior recorded human input or observation.' Tatum, 17 Va. App. at 588, 440 S.E.2d at 135. It is not the recordation or compilation of another human being’s assertions; it is not a communication of input from another person. Rather, it is simply a technological reproduction of an existing reality. Cf. Penny, 6 Va. App. at 498, 370 S.E.2d at 317 ('The scientific advances of modern technology have enabled the call trap device to make and record the occurrence of electronic events.'). As such, its 'reliability does not depend on an out-of-court declarant’s veracity or perceptive abilities.'"

Why stick the taxpayers with these claims?

Turning a good idea on its head, Delegate Janis has proposed a bill to amend the Virginia Fraud Against Taxpayers Act, Va. Code 8.01-216.1 et seq., to overrule the holding from the Supreme Court's decision in Ligon v. Goochland and waive the sovereign immunity of the Commonwealth and its counties and cities under the Act.

In Ligon, the Supreme Court held that the Act does not waive the immunity of Virginia's counties for wrongful discharge claims based on retaliation against whistleblowers.

In H.B. 1399, Delegate Janis proposes to insert language that would eliminate the sovereign immunity defense. The proposed waiver of sovereign immunity is entirely at odds with the policy of the Act. The taxpayers should be not be victimized a second time, suffering first whatever fraud the whistleblower spotted, and then having to pay in addition for the whistleblower's lawsuit.

Unlike private sector employees, government employees are already protected to some degree by the First Amendment, made applicable to the states by way of the Fourteenth Amendment, which prohibits state actors from retaliating against employees for speech on matters of public concern, which might include the much of the same subject matter as what is addressed by whistleblower protections of the Virginia Fraud Against Taxpayers Act.

On Judge Thomas Horne

In this article, a local newspaper for Loudoun County declares Circuit Court Judge Thomas Horne its "citizen of the year," and explains why in extensive detail. Among other things, Justice Mims credits Horne as the primary contributor to the bench book for circuit court judges.

On the NiSource royalty litigation in the W.D. Va.

In the famous Tawney case from Roane County, West Virginia, a group of royalty owners obtained a $405 million jury verdict against a group of natural gas companies on a variety of theories, including that the gas companies deducted more than they should have done from the sales price of the gas in calculating royalties and that the companies wrongfully included the below-market advance sales of gas in calculating royalties. Last year, in Kentucky, there was a class action settlement of claims related to some of the same transactions, in Thacker v. Chesapeake Appalachia.

The advance sales are an interesting story, that I have read a little bit about in the past. They are interesting because of the tie-in with Enron, the poster child for corporate greed. The record of one series of U.S. Senate hearings into the role of financial institutions in the collapse of Enron, which includes some discussion of the Mahonia transactions that also involved NiSource, can be accessed here. In those hearings, Senator Levin explained in his opening remarks:

"We will show how the banks arranged for Enron to carry out these so-called prepays by using offshore shell companies which the banks controlled, like Mahonia and Delta Energy--companies which have no employees, no offices, and operate in secrecy jurisdictions, that make it tough for law enforcement to uncover or understand their relationships to the banks behind them.

The offshore entities were passthroughs, controlled by banks, and helped disguise the loans so that they wouldn't show as debt on Enron's financial statements. Those offshore entities were not the independent entities which they needed to be in order for the promises of future delivery of commodities to them to be legitimate prepays. We will also hear how the banks acted to limit public disclosure of Enron's prepay obligations."

In other words, the claim is that transactions were set up to look like pre-paid sales of natural gas, when in fact they were loans. NiSource was not connected with Enron, but it allegedly engaged in similar transactions as those described by Senator Levin. The alleged effect on the royalty owners is that these prepays mixed in with real sales had the effect of reducing the average price on which the determination of royalties was based.

Claims of a similar nature as in the West Virginia and Kentucky cases have been raised in the case of Healy v. Chesapeake Appalachia, and in this opinion, Magistrate Judge Sargent dealt with the gas companies' motion to dismiss, which raised among other things the issue of the statute of limitations and whether there could be any tort claims for failure to pay accurate royalties. Judge Sargent recommended that the plaintiff's claims can go forward, for the most part.

One of the issues was the statute of limitations. The Defendants argued that notwithstanding the fact that they were obligated to pay royalties in installments, the breach if any occurred years ago and so the plaintiffs' cause of action accrued all at once. We argued a similar limitations issue years ago in United Mine Workers of America 1974 Pension Trust v. Big Star Coal Co., 1998 U.S. Dist. LEXIS 11530 (D.D.C. 1998), with somewhat better success. In that case, we argued that "[e]ven with respect to contracts requiring installment payments, when there is a repudiation or "total breach" of contract, the plaintiffs must bring suit on their whole claim in a single cause of action, and cited this quote from Corbin:

Suppose next that the contract requires performance in instalments or continuously for some period and that there has been such a partial failure of performance as justified immediate action for a partial breach. If this partial breach is accompanied by repudiation of the contractual obligation such repudiation is anticipatory with respect to the performances that are not yet due. In most cases the repudiator is now regarded as having committed a “total” breach, justifying immediate action for the remedies appropriate thereto. In determining the damages recoverable in such an action, it is necessary for the court to look into the future. In spite of the uncertainty involved in this, the trier of fact is permitted to make an estimate to be added to the damages awarded for the actual non-performance that has already occurred. In most cases this remedy is regarded as adequate and the injured party is allowed only one action for his wrong. The non-performance plus the repudiation constitute one and only one cause of action.

4 CORBIN ON CONTRACTS § 954, pp. 831-32.

Probably the most interesting issue in the opinion from the oil and gas lawyer's perspective is whether the plaintiff can bring claims for breach of implied duties. On the one hand, Virginia is not a big implied duty state - the tendency in Virginia law moreso than in more "liberal" jurisdictions is to enforce contracts as written. On the other hand, there is a wide body of case law in the jurisdictions where oil and gas production has been a way of life for over 100 years dealing with the implied duties of gas producers. Judge Sargent concluded: "I hold that Virginia courts would recognize an implied duty on the part of oil and gas lessees to operate diligently and prudently, including a duty to market the gas produced."

Interesting to me is the discussion of offensive collateral estoppel. In the Buchanan County RICO case, Judge Jones was convinced to apply offensive collateral estoppel in favor of the plaintiff and against the defendants on the issues necessarily determined by their criminal convictions. Judge Sargent concluded that the issue of collateral estoppel against the gas companies based on the outcome of the Tawney case would have to be determined at a later stage of the case.