ANALYSIS OF AUGUST 18, 2022 SUPREME COURT OPINIONS

 

(Posted August 18, 2022) Today is the 53rd anniversary of the closing of Woodstock. It was supposed to end the previous day, Sunday, August 17, 1969; but Zeus intervened, dumping rain throughout the weekend. That rain pushed the schedule back so that the final act, Jimi Hendrix, took the stage just after sunrise on Monday the 18th.

You can probably win a bar bet with this: Hendrix wasn’t the festival’s executive producer’s first choice to close the stage. That first choice turned down the opportunity, so those few fans left on Max Yasgur’s dairy farm that Monday morning heard Jimi perform “Hey Joe” as the last tune from the stage.

The producer’s preference was to have Roy Rogers take the stage at the very end and perform “Happy Trails.” No, really.

 

Declaratory judgments

I’ve mentioned here recently that most circuit court judges don’t mind so much if an appellate court reverses them. That’s part of the job. What they hate-hate-hate is a remand for further proceedings. Once they finish with a given case, they want to be done with it forever.

In that vein, a northern Virginia judge is probably kicking himself this morning after seeing the opinion in Ames Center, LC v. SOHO Arlington, LLC. It’s a declaratory-judgment action to ascertain what rights a neighbor has over adjacent hotel property in Arlington.

The hotel is run by a company that holds a ground lease on the land. The lease contains an unusual provision: If any neighboring properties plan to excavate nearby, the hotel operator has to allow that neighbor onto the hotel premises to permit the excavating activities.

The appellant here, Ames, is one such neighbor. It planned to develop its property with two 30-story buildings, and needed access to the hotel property to prepare its development plans. Ames notified the hotel’s owners of its intent to enter for this purpose. That generated this response:

After learning of Ames’s intentions, SOHO’s counsel informed Ames that “no one from your company is welcome within the hotel or on the grounds of the property, for any reason.” If any Ames representatives entered the SOHO property, counsel added, SOHO “will contact authorities to have such individuals removed for trespassing” and “will take full advantage of all actions available to it under the law, both civil and criminal.” A subsequent letter from SOHO’s counsel specifically warned Ames not to use a construction crane that may “swing” over SOHO’s airspace. SOHO further advised that it would be “vigilantly monitoring the project activities and [would] seek recompense for any trespass or damages that may occur.”

Well, now. Where I come from, we’d call that an “actual antagonistic assertion and denial of right.” The hotel warns the neighbor, “If you or your boys set one foot on our property, we’re gonna sic the law on ya.”

Hence the DJ proceeding. The neighbor sued to determine if it was indeed an intended third-party beneficiary of the lease provision and could enforce the right to enter. After a hearing, the circuit court ruled that the provision did protect the neighbor. But when the parties asked the court to declare what specific rights the neighbor enjoyed, the judge replied, “Not my job. This is just a suit to determine if you’re a 3PB, and I’ve made that decision.” The court then dismissed the suit without interpreting the contract.

I’ve telegraphed the result of the ensuing appeal: The Supreme Court sends the case back for a ruling on what rights the neighbor has. There’s no indication that the hotel owners cross-appealed the ruling that the judge did make. But the justices rule today that the circuit court stopped short of performing the function of DJ actions: to declare what the parties’ rights are.

In theory, the Supreme Court could have gone ahead and declared those rights itself instead of remanding. After all, the interpretation of a contract is a legal matter, to which a reviewing court affords no deference to the decision below. The Supreme Court often takes the initiative to enter final judgment instead of remanding for purely legal rulings. See, for example, McGinnis v. Commonwealth, 296 Va. 489, 501 (2018), and its many jurisprudential cousins.

Today’s opinion mentions the possibility of a jury trial, and if there truly are disputed fact issues, then remand is absolutely the correct course. I just don’t know what facts would be necessary to decide what rights a contract provision confers on a third-party beneficiary. At least one judge up in Arlington will find out.

 

Utilities

I occasionally mention here that the subject matter of a given appellate decision is bone-dry, so I have to do what I can with the prose to hold your interest through the course of  a detailed trek through the rulings. This morning, the court hands down Appalachian Power Company v. State Corporation Commission, an appeal with lots of zeroes at stake and plenty of interest among those who advocate for consumers.

I know my own limitations. Having read the opinion, there’s no way I can do it expository justice in a reasonable number of words, and no meaningful way for me to hold your interest through a detailed discussion. Want proof? Behold this one paragraph, setting out what the SCC ruled in the rate-review process:

Following the evidentiary hearing on Appalachian’s triennial-review application, the Commission found that “Appalachian has not established that it was reasonable to conclude in December 2019 that the remaining costs of these retired units were no longer probable of future recovery” for the purposes of recording them as asset impairments. J.A. at 5914-15. The Commission also rejected Appalachian’s argument that the Commission had no discretion to review Appalachian’s decision to record the asset impairments. The Commission reasoned that “[i]n every historical earnings review under [Code § 56-585.1], the Commission has necessarily been required to rule on the reasonableness of the utility’s regulatory accounting entries, along with other proposed regulatory adjustments from both the utility and case participants.” Id. at 5914. After the Commission has determined the reasonableness of these entries and adjustments, Code § 56-585.1 dictates certain outcomes.

You got all that? Unless you’re an accountant or a tax jock, the rulings in today’s 43+-page opinion (including a short partial dissent by Justices Mims and Powell) will bring glazed, watery eyes. I therefore do not choose to inflict the appeal upon you. Instead, mourn for poor Justice Kelsey, who drew the short straw and had to write the majority opinion here. If you’re feeling mean and want to give it a try, have at it; the slip opinion is just a mouse click away.

The outcome of the appeal is a partial win for APCO on its appeal, and a wholesale loss for the OAG’s Division of Consumer Counsel on its separate appeal. (The court combines the two appeals into a single opinion.) The Supreme Court remands the case – that’s two remands in one day! – to the Commission to correct one error. That correction will presumably result in an outcome that’s more to APCO’s liking.

*   *   *

These two decisions reduce the court’s list of argued-and-undecided appeals to five. There are two outstanding from the June micro-session, plus one each from April, March, and January. The September docket, which currently lists just seven appeals, will add to this. But this is the closest that I can remember to the court’s fully clearing its argued cases since it transitioned to rolling release dates in late 2015.

 


IMPORTANT NEW FINALITY RULE FROM FOURTH CIRCUIT

 

(Posted August 17, 2022) Finality, and hence appealability, can be tricky. Today’s published order in Britt v. DeJoy is thus vital news for practitioners. The remarkable thing is, we don’t even learn today who wins the appeal.

This is an employment-discrimination suit brought by a postal worker. She added a count for retaliation. The district court dismissed the discrimination count with prejudice for failure to state a claim. It then dismissed the retaliation claim without prejudice, but didn’t grant leave to amend. The employee appealed.

But can she? A dismissal with prejudice is plainly final, but when the district court declines to apply the bar of prejudice, that looks more like an interlocutory order that isn’t appealable. Most such orders give the pleader X days to file an amended pleading or accept the ruling under protest and appeal immediately. This order didn’t address amendment at all.

The appeal matured to the point of oral argument – lucky litigants; 90% of Fourth Circuit appeals end without a single “May it please the Court” – last autumn. That panel evidently picked up on the jurisdictional issue. We learn today that the court sua sponte polled itself and decided to ask the parties for supplemental briefing for an en banc ruling on jurisdiction.

In a published order, the court discards an earlier rule that it felt was unworkable, and adopts one that’s based on the approaches used in the D.C. and Sixth Circuits: “We now hold that when a district court dismisses a complaint or all claims without providing leave to amend, we need not evaluate the grounds for dismissal or do anything more—the order dismissing the complaint is final and appealable.” This means that if a district court does what the court had done in this appeal, dismissing without prejudice but saying nothing about amendment, the Fourth will consider it to be a final, appealable order.

The order notes that this new rule can create a trap where a plaintiff gets a dismissal-without-prejudice order but wants to amend. The new rule means that the dismissal order is immediately appealable, and the plaintiff has to act promptly. A vigilant plaintiff will move the district court to reopen or vacate the judgment (FRCivP 59, 60). That postpones finality and appealability until the court adjudicates those motions. A different plaintiff might want to stand on the original pleading and appeal immediately. “To do so, however, the plaintiff must waive her right to amend the complaint by requesting that the district court take further action to finalize its decision.”

I’ve omitted one key component of today’s order: the outcome. Applying this new rule, the full court rules that the employee can indeed appeal the judgment here because the district court’s order meets the finality requirements. The en banc court then does something truly rare: Having granted en banc review, it sends the appeal back to the three-judge panel for a decision on the merits. That’s one that you don’t see every day.

Ultimately, the best rule for advocates is the simplest: You don’t play around with finality, because getting it wrong can have fatal consequences. Be proactive and protect your client’s appeal rights.

 


ANALYSIS OF AUGUST 11, 2022 SUPREME COURT OPINIONS

 

(Posted August 11, 2022) The printing presses at Ninth and Franklin crank out two published opinions this morning.

 

Criminal procedure

The issue in Hill v. Commonwealth is narrow, in my view: When a circuit court revokes a suspended sentence and extends a period of probation, does that act necessarily resuspend the original sentence?  Hill received a three-year prison term in 2015, with 2½ years of that suspended. The circuit court later revoked the suspension for a probation violation and reimposed the three-year term, suspending two years. Effectively, the court gave him six more months to ponder his misdeeds.

A year after that, Hill landed in hot water again. The court issued a bench warrant, but Hill moved to dismiss it because his original three-year suspension had expired. He claimed that the court no longer had jurisdiction to act on his original sentence.

The circuit court disagreed and imposed the entire three-year term. The Court of Appeals affirmed in a published opinion last year. Today the Supreme Court agrees, so Hill has gone 0-for-appellate in this case.

In a short opinion by Justice Kelsey, the court reasons that “a revocation order that extends a period of probation necessarily extends the period of sentence suspension.” This is true even if the sentencing order doesn’t expressly say that.

Hill argued that the courts speak only through their orders, and that the law doesn’t read into those orders matters that aren’t stated there. Justice Kelsey offers this concise riposte: “In judicial orders, as in ordinary conversation, meaning can be clearly expressed and just as clearly implied.” Count me among those who foresee that this sentence will be among the most-cited future references to this morning’s opinion.

 

Attorney discipline

In the 17+ years that I’ve been posting essays on Supreme Court opinions, I’ve come to recognize categories of appeals that I find truly distasteful. Grisly murders, malicious assaults, and child-abuse cases clearly fit that bill, but among nonviolent cases, legal discipline proceedings may be the most demoralizing. That’s in part because they’re comparatively rare. There are over 30,000 active lawyers licensed in Virginia, and the State Bar has active investigations open on only about 1% of them. That means that 99% of lawyers play by the rules, including those governing honesty.

The public doesn’t know that. When word hits the newspapers about attorneys’ misconduct, it feeds the false narrative that our profession is inherently dishonest. This is the stereotype of the lawyer who will say anything, no matter how false, to secure a win for his client and a fee for himself. We know it’s false, but John Q. Public doesn’t.

In the first substantive paragraph of today’s opinion in Haley v. Virginia State Bar, we learn that the respondent lawyer bounced a trust account check that he had written to one of his employees. That’s two strikes; there’s not much defense to a rubber-check allegation, and what’s he doing paying an employee from the trust account?

In the next paragraph, we discover that the lawyer “regularly deposited unearned advance fees from his clients directly into his operating account,” and that he had bounced 53 checks over a 27-month period. That’s two a month.

In the next paragraph, the opinion reveals that the lawyer made false or misleading statements to a Bar investigator. Before the short facts section ends, we’ll find out that the lawyer had been disciplined by the North Carolina Bar, and hadn’t reported that sanction to the Virginia State Bar. The North Carolina discipline was for – get this – failing to report previous discipline when he filed a pro hac vice motion in the Tar Heel State. We ultimately learn that New York was investigating him for a similar omission in a PHV application filed up there.

In fairness to the lawyer, he admitted in the disciplinary proceeding that he had blown it regarding his trust account, and the Bar stipulated that he had taken steps to clean up his account-keeping act. But a subcommittee certified charges against him, and the Bar found the charges to be substantiated. It recommended an 18-month license suspension.

The lawyer exercised his automatic right of appeal – no writ required – to the Supreme Court. Today, the justices affirm the Bar’s decision. Justice Chafin’s opinion for a unanimous court lays out the evidence in the case and finds that the Bar’s finding and its recommended disposition are both appropriate.

The recitation of facts and the procedural history of the disciplinary proceeding is fairly straightforward, but I’ll mention one aspect that caught my eye – especially as I had read the Hill criminal decision just before this one.

One of the charges lodged against the attorney related to false statements to the Bar investigator about a client named Campbell. That client had paid a fee that the lawyer had deposited directly into his operating account, before the fee was earned. The lawyer, who is licensed here and in South Carolina, told the investigator that he represented multiple people with that exact name, and he believed that this fee came from a South Carolina client.

That matters because in the Palmetto State, bar regulations permit lawyers to deposit advance fees directly into an operating account, contrary to the rule here. As it turns out, the lawyer hadn’t represented the South Carolina Campbell for several years; this check came from his Virginia namesake, whom the lawyer was representing when the Bar investigation began.

When the disciplinary subcommittee certified the charges here, it mentioned the failure to report the NC discipline but didn’t specify the Campbell misstatement. It did state that, in the words of today’s opinion, the “false and material misstatements were ‘not limited’ to the statements that were expressly referenced in the certification.” The lawyer objected at the Bar hearing and again in the Supreme Court to any mention of the two-Campbells issue.

He may have a point here. Bar discipline is civil and administrative, not criminal; it exists to protect the public, not to punish lawyers. Even so, I believe that most lawyers would perceive that it’s a matter of fundamental fairness that the charging document should identify the specific misconduct at issue in the case. The lawyer should be properly informed of what he’s being accused of.

Today’s opinion notes that the Rules require that the certification “include sufficient facts to reasonably notify Bar Counsel and Respondent of the basis for such certification and the Disciplinary Rules alleged to have been violated.” In affirming the sanction today, the Supreme Court holds that while a specific mention of the Campbells incident would have been better practice, it’s close enough in this context, particularly because the certification included the “not limited to” reference.

Because of my sense of fair play, described two paragraphs above this one, that doesn’t quite sit well with me. In both of the decisions handed down today – Hill being the other one – the Supreme Court has ruled that it’s permissible to read unstated words into critical documents. The first case is a criminal matter, involving significant incarceration; the second implicates a person’s career. We aren’t talking about a $15,000 monetary judgment here.

Considering everything, I agree with the Supreme Court’s disposition of the disciplinary appeal. This morning’s opinion states that the 18-month suspension “was an appropriate sanction.” I might have phrased it slightly differently: “… was not excessive.” The combination of trust-account malfeasance and dishonesty fully justifies a significant response, and I see 18 months as being at the lower end of the proper spectrum.

 


UPDATE ON APPELLATE DEVELOPMENTS

 

 

(Posted July 28, 2022) We see no new published rulings today from the SCV, so let’s take one of our periodic looks around the appellate milieu.

 

ABA Appellate Summit

Registration is open for the 2022 Appellate Judges Education Institute, better known to the appellate crowd as the ABA Appellate Summit. This year’s gathering will be in Scottsdale, Arizona, and will convene November 10-13. This is the best nationwide assembly of appellate judges and advocates; the level of CLE programming is always quite high. If you go, you will see me there.

 

Virginia Appellate Advocacy Academy

Speaking of legal education, the good folks at Virginia CLE will present a two-day program of intensive, one-on-one teaching just for appeals. The program is next Thursday and Friday in Charlottesville. It’s hopelessly late to register now, as the program, which maxes out at 24 participants, filled very quickly. If you’re interested in participating in a future academy, let Virginia CLE know, so they can judge demand and plan accordingly.

 

SCV posts September argument docket

The docket for the September session at the Supreme Court of Virginia is available. There are just seven appeals; the court will hear arguments over two days, September 14-15.

I’ll pause to note two things about this news. First, this is the earliest I can recall seeing a docket and schedule. I’m accustomed to seeing it perhaps three weeks before the session week; the courts website promises that it’ll appear “approximately two weeks before each session.” This docket arrived seven weeks in advance.

Second, these seven cases, added to the previous dockets this year, aggregate to 47 appellate arguments in 2022. This projects to somewhere around 55 for the year. (My best guess, based on the writs-granted page, is that seven more will be ready for argument in the November session, though the clerk may manage to squeeze in a couple more.) If you’re a long-time reader, I don’t have to tell you that that’s the lowest we’ve ever seen in a year, at least in our lifetimes.

This, of course, translates to a tiny number of published opinions. Of the previous 40 argued this year, the court has decided 18 by published rulings and eight by unpubs, and at least one has settled. (The other 13 haven’t come down yet.) This means that if you’re one of those folks, like me, who deliver CLE retrospectives on the year’s SCV decisions, you won’t have a lot of raw material next year.

 

VBA Summer Meeting programs

One such review came last Saturday, in the Virginia Bar Association’s gathering in Hot Springs. Two learned judges, Dan Ortiz of the Court of Appeals and Everett Martin of the Norfolk Circuit Court, reprised their annual presentation on SCV decisions over the past year. The VBA’s Appellate Practice Section was one of the co-sponsors.

The APS also co-sponsored another recurring program, a review of the Roberts Court’s October Term 2021. While the SCV’s yearly cases may have been relatively peaceful, the SCOTUS term was aflame, as you no doubt know. My pal Bill Hurd, now of Eckert Seamans, again capably moderated a discussion by three panelists, including the relatively new Solicitor General of the Commonwealth, Andrew Ferguson.

The meeting’s closing session was a thunder-and-lightning presentation on the January 6 insurrection and its aftermath. Those panelists included former Fourth Circuit Judge Mike Luttig, Jamie Raskin of the House of Representatives, former US Attorney Tim Heaphy, and journalist Betsy Woodruff Swan. Senior Justice Bill Mims was gracious and graceful as usual in moderating an edge-of-your-seat program over the course of 90 minutes. C-SPAN recorded the segment and broadcast it later that day; I don’t know if the network will re-air it, but I heartily recommend it if you can find it.

 

Not quite yet …

I’ve been keeping an eye on the docket postings for the Court of Appeals of Virginia, to see when the stream of new civil appeals will begin to appear. The latest docket that’s now on the court’s website is August 23, and I don’t see any civil cases (other than domestic relations and Workers’ Comp, which have been in the CAV’s bailiwick all along).  My best guess is that we’ll see some in September; I’m confident that they’ll arrive in force in October.

This leads to the question of the court’s workload, with all civil appeals heading there now before a possible discretionary appeal to the Supreme Court. I’ll want to see the 2023 stats, which won’t arrive until early in 2024, to assess the effect of a year’s worth of civil cases. I know better than to start guessing now.