Justia Civil Rights Opinion SummariesArticles Posted in Corporate Compliance
Coscia v. United States
Coscia used electronic exchanges for futures trading and implemented high-frequency trading programs. High-frequency trading, called “spoofing,” and defined as bidding or offering with the intent to cancel the bid or offer before execution, became illegal in 2010 under the Dodd-Frank Act, 7 U.S.C. 6c(a)(5). Coscia was convicted of commodities fraud, 18 U.S.C. 1348, and spoofing, After an unsuccessful appeal, Coscia sought a new trial, citing new evidence that data discovered after trial establishes that there were errors in the data presented to the jury and that subsequent indictments for similar spoofing activities undercut the government’s characterization of Coscia as a trading “outlier.” He also claimed that his trial counsel provided ineffective assistance, having an undisclosed conflict of interest. The Seventh Circuit affirmed. Even assuming that Coscia’s new evidence could not have been discovered sooner through the exercise of due diligence, Coscia failed to explain how that evidence or the subsequent indictments seriously called the verdict into question. Coscia has not established that his attorneys learned of relevant and confidential information from its cited unrelated representations. Coscia’s counsel faced “the common situation” where the client stands a better chance of success by admitting the underlying actions and arguing that the actions do not constitute a crime. That the jury did not accept his defense does not render it constitutionally deficient. View "Coscia v. United States" on Justia Law
Braun v. Ultimate Jetcharters, LLC
In 2011 UJC private jet charter services hired Plaintiff as a co-pilot. After altercations between Plaintiff, a woman, and male pilots, which Plaintiff perceived to constitute sexual harassment, Plaintiff wrote an email to UJC management. About three weeks later, Plaintiff’s employment was terminated. Plaintiff sued, alleging retaliation. Defendants’ answer stated that UJC had converted from a corporation to an LLC. Plaintiff did not amend her complaint. Defendants’ subsequent motions failed did not raise the issue of UJC’s identity. UJC’s CEO testified that he had received reports that Plaintiff had used her cell phone below 10,000 feet; that once Plaintiff became intoxicated and danced inappropriately at a bar while in Atlantic City for work; that Plaintiff had once dangerously performed a turning maneuver; and that Plaintiff had a habit of unnecessarily executing “max performance” climbs. There was testimony that UJC’s male pilots often engaged the same behavior. The jury awarded her $70,250.00 in compensatory and $100,000.00 in punitive damages. When Plaintiff attempted to collect on her judgment, she was told that the corporation was out of business without assets, but was offered a settlement of $125,000.00. The court entered a new judgment listing the LLC as the defendant, noting that UJC’s filings and witnesses substantially added to confusion regarding UJC’s corporate form and that the LLC defended the lawsuit as though it were the real party in interest. The Sixth Circuit affirmed, stating it was unlikely that UJC would have offered a generous settlement had it genuinely believed itself to be a victim of circumstance, or that it would be deprived of due process by an amendment to the judgment; the response indicated a litigation strategy based on “roll[ing] the dice at trial and then hid[ing] behind a change in corporate structure when it comes time to collect.” View "Braun v. Ultimate Jetcharters, LLC" on Justia Law
Rose v. Anderson Hay & Grain Co.
The jeopardy element of the tort for wrongful discharge against public policy and whether the administrative remedies available under the Surface Transportation Assistance Act of 1982 (STAA) were at issue in this case. This was one of three concomitant cases before the Washington Supreme Court concerning the "adequacy of alternative remedies" component of the jeopardy element that some of Washington cases seemingly embrace. The complaint here alleged that Anderson Hay & Grain Company terminated petitioner Charles Rose from his position as a semi-truck driver when he refused to falsify his drivetime records and drove in excess of the federally mandated drive-time limits. Rose had worked as a truck driver for over 30 years, the last 3 of which he worked as an employee for Anderson Hay. In March 2010, Rose sued under the STAA in federal court but his suit was dismissed for lack of jurisdiction because he failed to first file with the secretary of labor. Rose then filed a complaint in Kittitas County Superior Court, seeking remedy under the common law tort for wrongful discharge against public policy. The trial court dismissed his claim on summary judgment, holding that the existence of the federal administrative remedy under the STAA prevented Rose from establishing the jeopardy element of the tort. The Court of Appeals affirmed. The Supreme Court remanded the case back to the appellate court for reconsideration in light of "Piel v. City of Federal Way," (306 P.3d 879 (2013)). Like the statute at issue in Piel, the STAA contained a nonpreemption clause. On remand, the Court of Appeals distinguished Rose's case from Piel, and again affirmed the trial court's decision. Upon review, the Supreme Court addressed the cases the Court of Appeals used as basis for its decision, and held that adequacy of alternative remedies component misapprehended the role of the common law and the purpose of this tort and had to be stricken from the jeopardy analysis. The Court "re-embraced" the formulation of the tort as initially articulated in those cases, and reversed the Court of Appeals. View "Rose v. Anderson Hay & Grain Co." on Justia Law
Rickman v. Premera Blue Cross
Plaintiff Erika Rickman brought this suit against her former employer, Premera Blue Cross, for wrongful discharge in violation of public policy. Rickman alleged she was terminated in retaliation for raising concerns about potential violations of the federal Health Insurance Portability and Accountability Act of 1996, and its Washington counterpart, the Uniform Health Care Information Act (UHCIA). The trial court dismissed Rickman's suit on Premera's motion for summary judgment, concluding Rickman could not satisfy the jeopardy element of the tort because Premera's internal reporting system provided an adequate alternative means to promote the public policy. The Court of Appeals affirmed. The Washington Supreme Court granted review of this case and two others in order to resolve confusion with respect to the jeopardy element of the tort of wrongful discharge in violation of public policy. Consistent with its decisions in the other two cases, the Court held that nothing in Premera' s internal reporting system, nor in HIPAA or UHCIA, precluded Rickman's claim of wrongful discharge. The Court reversed the Court of Appeals but remanded for that court to address Premera's alternate argument for upholding the trial court's order of dismissal. View "Rickman v. Premera Blue Cross" on Justia Law
Becker v. Comm’y Health Sys., Inc..
Respondent Gregg Becker began working for Rockwood Clinic PS, an acquired subsidiary of Community Health Systems (CHS) 1 as its chief financial officer (CFO) in February 2011. As a publicly traded company, CJ-IS is required to file reports with the United States Securities and Exchange Commission (SEC). As Rockwood's CFO, Becker was required by state and federal law to ensure that Rockwood's reports did not mislead the public, which also required his personal verification that the reports did not contain any inaccurate material facts or material omissions. In October 2011, Becker submitted to CHS' financial department an "EBIDTA," calculation. Becker was not told that when CHS acquired Rockwood, it represented to creditors that the acquisition would incur a $4 million operating loss. To cover the discrepancy, CHS' financial supervisors allegedly directed Becker to correct his EBIDTA to reflect the targeted $4 million loss. CHS did not provide a basis for its low calculation. Becker refused, fearing that the projection would mislead creditors and investors in violation of the Sarbanes-Oxley Act. The CEO made clear that Becker's refusal to do so put his position in jeopardy; Becker felt compelled to resign unless CHS responded to his concerns. CHS and Rockwood accepted Becker's resignation. CHS filed a CR 12(b)(6) motion to dismiss Becker's complaint for wrongful termination, contending that the jeopardy element of the tort had not been met because there were adequate alternative means to protect the public policy of honesty in corporate financial reporting. The Court of Appeals accepted review and determined that the jeopardy element had been satisfied because the alternative administrative enforcement mechanisms of SOX were inadequate and therefore did not foreclose common law tort remedies for employees. The Supreme Court's holding in "Rose v. Anderson Hay" instructed that alternative statutory remedies were to be analyzed for exclusivity, rather than adequacy. Under that formulation, neither SOX nor Dodd-Frank precluded Becker from recovery. The Court affirmed the trial court's denial of Community CHS' CR 12(b)(6) motion, and affirmed the Court of Appeals in upholding that decision upon certified interlocutory review. View "Becker v. Comm'y Health Sys., Inc.." on Justia Law
Equal Emp’t Opportunity Comm’n v. N. Star Hospitality, Inc
Miller, an African-American male, worked as a cook for Hospitality’s Sparx Restaurant. Miller became assistant kitchen manager and was a satisfactory employee. On October 1, 2010, Miler discovered racially offensive pictures at the kitchen cooler. Miller lodged a complaint. Two employees admitted responsibility. The manager agreed that the posting was a termination-worthy offense, but one offender was given a warning and the other was not disciplined. Soon after Miller’s complaint, supervisors began to criticize Miller’s work performance. Sparx fired Miller on October 23, 2010. The EEOC filed suit on Miller’s behalf under Title VII, 42 U.S.C. 2000e-2(a), 3(a). Before trial, Sparx had closed and Hospitality had dissolved. The court concluded that successor corporations could be liable. The jury awarded $15,000 in compensatory damages on the retaliation claim. The EEOC sought additional remedies. The district court denied the front-pay request but awarded Miller $43,300.50 in back pay (and interest) plus $6,495.00 to offset impending taxes on the award; enjoined the companies from discharging employees in retaliation for complaints against racially offensive postings; and required them to adopt policies, investigative processes, and annual training consistent with Title VII. The Seventh Circuit affirmed with respect to both successor liability and the equitable remedies. View "Equal Emp't Opportunity Comm'n v. N. Star Hospitality, Inc" on Justia Law
Burwell v. Hobby Lobby Stores, Inc.
Department of Health and Human Services (HHS) regulations implementing the 2010 Patient Protection and Affordable Care Act (ACA) require that employers’ group health plans furnish preventive care and screenings for women without cost sharing requirements, 42 U.S.C. 300gg–13(a)(4). Nonexempt employers must provide coverage for 20 FDA-approved contraceptive methods, including four that may have the effect of preventing a fertilized egg from developing. Religious employers, such as churches, are exempt from the contraceptive mandate. HHS has effectively exempted religious nonprofit organizations; an insurer must exclude contraceptive coverage from such an employer’s plan and provide participants with separate payments for contraceptive services. Closely held for-profit corporations sought an injunction under the 1993 Religious Freedom Restoration Act (RFRA), which prohibits the government from substantially burdening a person’s exercise of religion even by a rule of general applicability unless it demonstrates that imposing the burden is the least restrictive means of furthering a compelling governmental interest, 42 U.S.C. 2000bb–1(a), (b). As amended by the Religious Land Use and Institutionalized Persons Act of 2000 (RLUIPA), RFRA covers “any exercise of religion, whether or not compelled by, or central to, a system of religious belief.” The Third Circuit held that a for-profit corporation could not “engage in religious exercise” under RFRA and that the mandate imposed no requirements on corporate owners in their personal capacity. The Tenth Circuit held that the businesses are “persons” under RFRA; that the contraceptive mandate substantially burdened their religious exercise; and that HHS had not demonstrated that the mandate was the “least restrictive means” of furthering a compelling governmental interest.The Supreme Court ruled in favor of the businesses, holding that RFRA applies to regulations that govern the activities of closely held for-profit corporations. The Court declined to “leave merchants with a difficult choice” of giving up the right to seek judicial protection of their religious liberty or forgoing the benefits of operating as corporations. Nothing in RFRA suggests intent to depart from the Dictionary Act definition of “person,” which includes corporations, 1 U.S.C.1; no definition of “person” includes natural persons and nonprofit corporations, but excludes for-profit corporations. “Any suggestion that for-profit corporations are incapable of exercising religion because their purpose is simply to make money flies in the face of modern corporate law.” The Court rejected arguments based on the difficulty of ascertaining the “beliefs” of large, publicly traded corporations and that the mandate itself requires only insurance coverage. If the plaintiff companies refuse to provide contraceptive coverage, they face severe economic consequences; the government failed to show that the contraceptive mandate is the least restrictive means of furthering a compelling interest in guaranteeing cost-free access to the four challenged contraceptive methods. The government could assume the cost of providing the four contraceptives or could extend the accommodation already established for religious nonprofit organizations. The Court noted that its decision concerns only the contraceptive mandate, not all insurance-coverage mandates, e.g., for vaccinations or blood transfusions. View "Burwell v. Hobby Lobby Stores, Inc." on Justia Law
McBride v. Peak Wellness Center Inc.
Petitioner Lisa McBride was an accountant who worked as Respondent Peak Wellness Center’s business manager for about nine years. Peak terminated her in 2009, citing job performance and morale issues. Petitioner claimed she was terminated in retaliation for bringing various accounting improprieties to the attention of Peak’s Board of Directors. Petitioner brought several federal and state-law claims against Peak: (1) whistleblower retaliation under the federal False Claims Act (FCA); (2) violations of the federal Fair Labor Standards Act (FLSA); (3) breach of employment contract; (4) breach of implied covenant of good faith and fair dealing; (5) defamation; and (6) a federal sex discrimination claim under Title VII of the Civil Rights Act. After discovery, Peak moved for summary judgment on all claims, and the district court granted the motion. Petitioner appealed, arguing that significant issues of material fact remained unresolved and that her claims should have proceeded to trial. She also appealed district court’s denial of an evidentiary motion. Finding no error in the district court’s decision, the Tenth Circuit affirmed its grant of summary judgment in favor of Peak.