ANALYSIS OF FEBRUARY 21, 2019 SUPREME COURT OPINIONS

(Posted February 21, 2019) After a slow drip-drip-drip of recent opinions, today the Supreme Court turns the faucet on fully. We get five published opinions plus a published order today.

Personal jurisdiction

Virginia’s long-arm jurisdiction statute is at the heart of Mercer v. MacKinnon, a suit against a Canadian citizen. This is a family dispute in which one party (the American) accuses another (the Canadian) of self-dealing after obtaining a power of attorney from an elderly relative.

This is actually the second action involving these parties. The first was fully litigated and ended in an appeal that the Supreme Court refused in 2016. The American then filed this lawsuit. Unlike in the first case, where the Canadian appeared and participated without objecting to the Virginia court’s jurisdiction over her, the Canadian moved to dismiss this second suit on jurisdictional grounds.

The American asserted several grounds for jurisdiction, but the court ruled otherwise, finding that the only possible basis was subsection A(4) of the statute:

Causing tortious injury in this Commonwealth by an act or omission outside this Commonwealth if he regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered, in this Commonwealth …

The trial judge ruled that the facts didn’t establish a persistent course of conduct here, so the Virginia court couldn’t adjudicate this claim against the Canadian.

Despite her having asserted several arguments below, the American chose to raise only the A(4) argument on appeal. Today the justices agree with the trial court and affirm. The key to this holding is the requirement that the defendant’s conduct here must be persistent.

In this case, the Canadian allegedly did several things. She (1) came to Virginia and took her ward back to Canada; (2) got a power of attorney and allegedly used it to change ownership or POD nominee of bank accounts; (3) filed a guardianship petition in the original litigation; (4) defended that litigation without objecting; and (5) appealed the original judgment. The Supreme Court rules today that this limited contact wasn’t persistent enough to satisfy the statute.

It is at least possible that one of the other asserted grounds for long-arm jurisdiction might have succeeded on appeal, but we’ll never know. The justices limit their analysis to the only ground in the assignments of error, without discussing any of the other grounds.

Arbitration

Here’s an elementary arbitration question: Is a disagreement over whether a given dispute is arbitrable, arbitrable? In Brush Arbor Home Construction, LLC v. Alexander, two homeowners sued a construction company over claimed defects in their home. The construction contract contained an arbitration clause that consigned to arbitration “any controversy or claim arising out of or relating to this contract,” but it didn’t specify whether a dispute over arbitrability was itself subject to arbitration.

There’s a twist here: The clause specified “arbitration administered by the Better Business Bureau under its Construction Industry Arbitration Rules.” The fact that the last four words are capitalized indicates to me, at least, that that’s the title of a document. But there is no such document; the BBB doesn’t have any rules relating to arbitration in the construction industry.

The trial judge seized on this in denying the motion to compel arbitration. He concluded that the absence of such rules made this clause impossible to perform.

The builder filed an interlocutory appeal – the Arbitration Act allows that when a court refuses to compel arbitration, though not when it actually compels it – and today the Supreme Court reverses in a short opinion. The justices conclude that the question whether this dispute can be arbitrated is a “controversy or claim arising out of or relating to” the contract, so it’s presumptively arbitrable even without a specific clause saying that.

As for those phantom BBB rules, today’s opinion states that that doesn’t require that the BBB have promulgated the rules; it’s perfectly okay for the BBB arbitrator to employ generic construction-industry arbitration rules.

This last point gives me at least minor heartburn for a reason I’ve mentioned here: The capitalized words in the contract do indicate to me that the parties contemplated a specific – though, as it turns out, nonexistent – document. When page 4 of this opinion refers to generic arbitration rules, the capital letters are notably absent. I’m not sure if I would have dissented on this basis if I had a vote; I still believe that the court correctly decided that this call belongs to an arbitrator.

Civil forfeiture

For the second consecutive day, we’ve received an appellate decision in this field. The first one, yesterday, arrived at One First Street across the Potomac, as the Supreme Court of the United States ruled in Timbs v. Indiana that the Eighth Amendment’s ban on excessive fines applies to the states, and thus can apply to a forfeiture. Today, by the banks of the beautiful James, we get Commonwealth v. Hall, where the Virginia justices rule that a valid forfeiture doesn’t require proof of more than one drug transaction.

Hall fell for a time-honored police trick: a controlled drug buy. He drove to an agreed location in his pickup truck to meet the police’s informant. Without getting out of his truck, he made the exchange – the informant handed over cash and Hall tendered oxycodone pills – after which Hall drove away.

Because the gendarmes had him cold, Hall pleaded guilty to the crime. The Commonwealth later sought forfeiture of the truck, reasoning that Hall had used it in substantial connection with the sale. After a hearing on stipulated evidence, the trial court denied the forfeiture, because Hall had only used the truck in a single drug sale.

The Commonwealth got a writ to review that ruling, and today the justices unanimously reverse. There’s nothing in the forfeiture statute that requires multiple drug transactions, so the Supreme Court remands the case for entry of a forfeiture order.

But wait; what about yesterday’s ruling from SCOTUS? Doesn’t that mean that the forfeiture of a truck – exactly the forfeiture in issue in Timbs – is an excessive fine? Not necessarily; the Robes in the District didn’t come out and say that all such forfeitures are excessive. The only question before the court in that appeal was the ruling below that the Excessive Fines Clause didn’t apply to the states. What’s more, it’s quite possible that Hall – the Virginia drug dealer – didn’t preserve an Eighth Amendment objection, so he might not be able to assert it now.

Hall will assuredly try to make that argument, given the gentle cattle prod of a SCOTUS opinion (and a unanimous one, at that). You should expect the Commonwealth to oppose that, since today’s Hall opinion remands specifically for the circuit court to enter forfeiture orders; not to conduct further hearings. We may have to stay tuned on this one to see what eventually happens.

Criminal law and procedure

The Code of Virginia carries out the mandate of Miranda v. Arizona, providing for appointment of counsel for indigent criminal defendants. One such statute provides that if a defendant’s financial circumstances change after the court appoints an attorney for him, he must hire his own lawyer and forthwith notify the court of the change. The statute continues, “The court shall grant reasonable continuance to allow counsel to be obtained and to prepare for trial.” That’s the playing field for today’s decision in Reyes v. Commonwealth.

Reyes responded, “guilty” when arraigned on a robbery charge. Between then and sentencing, he became able to hire a private lawyer. His family paid that lawyer just before the sentencing hearing, so the new lawyer filed an appearance and a motion to continue the day before, and appeared at the hearing to press his request for a continuance.

After an extensive colloquy, the trial judge refused the continuance request, despite that troublesome shall in the statute. This would have been a second continuance at the defendant’s request, both times inconveniencing a victim who had appeared to testify. The court allowed the appointed counsel to handle the sentencing hearing, which resulted in a lengthy prison term.

The Court of Appeals affirmed the judgment, noting that Reyes hadn’t shown “exceptional circumstances” to warrant the continuance. Today the justices agree. This ruling rests on what may be a surprising conclusion: The defendant isn’t the intended beneficiary of the statute I quoted above. The real beneficiary is the taxpaying public; the statute is designed to minimize the financial burden on the state when a defendant turns out not to be so indigent after all.

The only basis for relief here would be the Sixth Amendment, but Reyes didn’t press that argument at trial, so it was waived for appellate review. As for that pesky shall, Justice Mims’s opinion for a unanimous court cites the recent Rickman decision for the premise that, in this context, it’s directory and not mandatory, leaving it up to the trial court to fashion a remedy. Here, the ultimate issue may be the adjective in the phrase, “reasonable continuance.” The justices today agree that the trial court’s approach was reasonable.

A small percentage of appellate dockets comprise proceedings that aren’t truly appeals. These are original-jurisdiction proceedings, known to court insiders as “OJ cases,” where the appellate court is the original decision-maker, and isn’t reviewing a lower-court finding.

One key issue in many of these proceedings is the appellate court’s inability to take evidence. That issue is the determining factor in Dennis v. Commonwealth, which stems from a petition for a writ of actual innocence.

Because the grounds for this petition were non-scientific – testimony, not DNA findings – the court of original jurisdiction was the Court of Appeals. Dennis was convicted after a jury trial twenty years ago of malicious wounding and attempted murder in connection with a robbery. Years later, while in prison, he learned that another man had confessed to other inmates that he had committed the crime. Other witnesses testified that the two men were lookalikes – almost like brothers.

Dennis filed an actual-innocence petition, supported by numerous affidavits calling the conviction into question. The Commonwealth responded to the petition with affidavits of its own, including two from inmates who suggested that Dennis tried to bribe two of his own supporting affiants to implicate the other man. The Court of Appeals considered the competing submissions and dismissed the petition, finding that Dennis hadn’t shown that the evidentiary support for his petition was true and not merely contrary to the trial evidence.

Dennis appealed that dismissal to the Supreme Court. The standard of review in such appeals is lenient: abuse of discretion. Nevertheless, the justices reverse here, ruling that the CAV did abuse its discretion by not employing the statutory tool of remand to the trial court for an evidentiary hearing. Trial courts, unlike appellate courts, can listen to and observe witnesses as they testify. That’s the key to resolving conflicted testimony, and the justices today direct the CAV to go back and employ that approach. Dennis doesn’t have his writ yet, but he’s back in the game.