Justia U.S. 10th Circuit Court of Appeals Opinion Summaries

Taxpayers Neil Feinberg, Andrea Feinberg, and Kellie McDonald were shareholders in Total Health Concepts, LLC (THC), a Colorado company allegedly engaged in selling medical marijuana. After the Taxpayers claimed THC’s income and losses on their tax returns, the IRS conducted an audit and disallowed certain deductions under 26 U.S.C. 280E, which prohibited deductions for businesses engaged in unlawful trafficking of controlled substances. The IRS then recalculated the Taxpayers’ tax liability and issued a notice of deficiency for the unpaid balance. The Taxpayers challenged that determination in tax court, which affirmed on the basis that the Taxpayers had failed to substantiate the business expenses. Both parties agreed the tax court erred by injecting a substantiation issue into this case not raised in the notice of deficiency, and then placed the burden for refuting that claim on the Taxpayers. But the Commissioner argued the Tenth Circuit should affirm on the alternative ground that the Taxpayers did not meet their burden of proving the IRS’s determination that THC was unlawfully trafficking in a controlled substance was erroneous. The Taxpayers disagreed and contended placing the burden on them would violate their Fifth Amendment privilege. Because the Tenth Circuit concluded allocation of the burden of proof did not constitute “compulsion” under the Fifth Amendment, and because the Taxpayers made no attempt to meet their evidentiary burden, the Court affirmed the tax court on the alternative ground that section 280E prohibited the deductions. View "Feinberg v. CIR" on Justia Law

The city of Fort Collins, Colorado, enacted a public-nudity ordinance that imposed no restrictions on male toplessness but prohibited women from baring their breasts below the areola. In response, Free the Nipple, an unincorporated association, and two individuals, Brittiany Hoagland and Samantha Six (collectively, Plaintiffs ), sued the City in federal district court, alleging (among other things) the ordinance violated the Equal Protection Clause, U.S. Const. amend. XIV, sec. 1, and they asked for a preliminary injunction to halt enforcement of the ordinance. The district court agreed and enjoined the City, pending the resolution of the case s merits, from implementing the ordinance to the extent that it prohibits women, but not men, from knowingly exposing their breasts in public. The City then brought this interlocutory appeal to challenge the injunction. The narrow issue presented for the Tenth Circuit's review asked whether the district court reversibly erred in issuing the preliminary injunction. The Court found the trial court did not, affirmed the district court's judgment and remanded the case for further proceedings. View "Free the Nipple v. City of Fort Collins" on Justia Law

Plaintiff Anupama Bekkem filed suit against her employer, the Department of Veterans Affairs, based on numerous instances of discrimination and retaliation she allegedly experienced while working as a primary care physician for the VA in the Oklahoma City area. The district court dismissed some of her claims under Rule 12(b)(6) and granted summary judgment in favor of Defendant on the remaining claims. Plaintiff appealed. Finding no reversible error in the trial court's grant of summary judgment on Plaintiff’s claims of discrimination based on unequal pay and retaliation based on her non-selection for the position as North May clinic medical director, and dismissal of her claim of discrimination based on a reprimand she received, the Tenth Circuit affirmed. However, the Court reversed summary judgment as to Plaintiff's claim of retaliation relating to the reprimand, and remanded that claim for further proceedings at the district court. View "Bekkem v. Wilkie" on Justia Law

Plaintiff Millard Lance Lemmings (“Lance”) was born at a government-operated hospital in Ada, Oklahoma. During his birth, Lance suffered a brain injury. Lance and his parents, suing as “parents and next friends,” sued Defendants Comphealth, Inc. and Comphealth Medical Staffing, Inc. for medical malpractice under the Federal Tor Claims Act. The parties settled the case on September 28, 2001. Lance’s parents were simultaneously engaged in a state court proceeding regarding guardianship of Lance. On the morning of October 25, 2001, Lance’s parents filed an application for an order approving the agreed settlement, attorneys’ fees, and litigation costs in the state court action. The state district court appointed Lance’s parents as the guardians of Lance’s estate. Following that court order, Lance’s parents withdrew their state court application for an order approving the settlement. Later that day, Lance’s parents appeared before the federal district court for a fairness hearing regarding the settlement and represented him at the fairness hearing. The district court did not appoint a guardian ad litem. Appellants Barbara Lemmings and Oran Hurley, Jr. filed a motion fifteen years later seeking to intervene, in which they contended: (1) the parties presented materially inaccurate information to the district court in 2001 in order to obtain the district court’s approval; (2) the district court did not have jurisdiction to approve the settlement because it did not appoint a guardian ad litem to represent Lance; and (3) a conflict of interest existed between Lance and his parents which required the appointment of a guardian ad litem. Belatedly, Appellants further sought access to the 2001 sealed fairness hearing transcript. In the motion to intervene, Appellants asserted that Lance’s parents spent a large portion of the proceeds and abandoned him in 2011, leaving him in the care of his paternal grandmother, Appellant Barbara Lemmings. The state district court appointed her Lance’s guardian in January 2017. After Ms. Lemmings suffered a health issue, the state court appointed Appellant Oran Hurley, Jr. as co-guardian. Appellants sought to reopen the district court action, vacate the dismissal, intervene, and rewrite the terms of the Irrevocable Governmental Trust in order to access the proceeds contained in that trust. The United States objected. The Tenth Circuit rejected Appellants' contention that Federal Rule of Civil Procedure 17 required the formal appointment of a guardian ad litem, and rejected the contention that an inherent conflict of interest always existed where a minor was represented by a parent who was a party to the same lawsuit as the minor. View "Kile v. United States" on Justia Law

This case involved an alleged worldwide Ponzi scheme and the antifraud provisions of the federal Securities Act of 1933 and the Securities Exchange Act of 1934. Defendant Charles Scoville operated an internet traffic exchange business through his Utah company, Defendant Traffic Monsoon, LLC. The Securities and Exchange Commission (“SEC”) initiated this civil enforcement action, alleging Defendants were instead operating an unlawful online Ponzi scheme involving the fraudulent sale of securities. In this interlocutory appeal, Scoville challenged several preliminary orders the district court issued at the outset, including orders freezing Defendants’ assets, appointing a receiver, and preliminarily enjoining Defendants from continuing to operate their business. The Tenth Circuit upheld those preliminary rulings, finding the SEC asserted sufficient evidence to make it likely that the SEC would be able to prove that Defendants were operating a Ponzi scheme. View "SEC v. Traffic Monsoon" on Justia Law

Jason Dean, director of the Labor Relations Division of the New Mexico Department of Workforce Solutions (“DWS”), appealed a district court's denial of qualified immunity against the claim that he violated Plaintiffs’ constitutional rights to substantive due process by failing to issue prevailing rates for wages and fringe benefits as required by New Mexico law. Plaintiffs were individuals who worked on public works projects in New Mexico, who filed claims under 42 U.S.C. 1983 on behalf of themselves and others similarly situated. As a result of this failure, from 2009 to 2015 plaintiffs alleged they did not receive the rates to which they were entitled under the Act. Defendants moved to dismiss, claiming qualified immunity. The district court granted it in part and denied it in part. Specifically, the district court granted the motion in its entirety as to Secretary Bussey, and as to Plaintiffs’ procedural due-process claim against Director Dean. However, the court denied the motion with respect to Director Dean on Plaintiffs’ substantive due-process claim. The Tenth Circuit dismissed plaintiffs' cross-appeal for lack of jurisdiction, and reversed and remanded the denial of qualified immunity as to Director Dean. View "Cummings v. Dean" on Justia Law

Lina Thoung emigrated from Cambodia to the United States in 2002 using a fraudulently obtained visa in the name and birthdate of another person. In 2007, she obtained U.S. citizenship and affirmed she had never provided false information to any government official while applying for any immigration benefit. Her fraud was discovered in 2012. She subsequently pleaded guilty to misusing a visa, permit, and other documents to obtain citizenship. As part of her plea agreement, she jointly stipulated to denaturalization under 8 U.S.C. 1451(e) and removal from the United States. Relying on 8 U.S.C. 1228(c)(5), the district court entered an order of removal. Immigration authorities, unable to deport Thoung back to Cambodia, eventually released her subject to an Order of Supervision. Under this order, Thoung could be arrested and deported at any time. Thoung filed a writ of habeas corpus with the district court alleging the court had lacked subject-matter jurisdiction to enter its order of removal. The district court reaffirmed its jurisdiction to order removal and rejected Thoung’s habeas petition. The Tenth Circuit held that, because of the REAL ID Act’s limitations on judicial review, the district court lacked jurisdiction to entertain Thoung’s habeas petition challenging the prior removal order. Because the district court lacked subject-matter jurisdiction and thus lacked power to enter its October 2017 Memorandum and Order, that judgment was vacated. View "Thoung v. United States" on Justia Law

Plaintiffs Maralex Resources, Inc. (Maralex), Alexis O’Hare and Mary C. O’Hare (the O’Hares) filed this action against the Secretary of the Department of the Interior (Secretary), the Department of the Interior, and the United States seeking review of a decision of the Interior Board of Land Appeals (IBLA) the upheld four Notices of Incidents of Noncompliance that were issued by the Bureau of Land Management’s (BLM’s) Tres Rios Field Office to Maralex for failing to allow a BLM representative to access certain oil and gas lease sites operated by Maralex on land owned by the O’Hares. The district court affirmed the IBLA’s decision. The Tenth Circuit determined the BLM, in issuing the Notices of Incidents of Noncompliance, lacked authority to require plaintiffs to provide BLM with a key to a lease site on privately-owned land or to allow the BLM to install its own locks on the gates to such lease site. Consequently, the Court reversed and remanded to the district court with instructions to enter judgment in favor of plaintiffs on this “key or lock” issue. View "Maralex Resources v. Barnhardt" on Justia Law

George Straub, an employee of BNSF Railway Company (“BNSF”), injured his back and neck when, in the course and scope of his duties, he attempted to adjust the engineer’s chair of Locomotive #6295. Straub brought suit, asserting BNSF was (among other things) strictly liable for his injuries under the provisions of the Federal Locomotive Inspection Act (“LIA”). BNSF moved to dismiss; the district court concluded Straub’s injuries did not implicate LIA. The district court ruled the adjustment mechanism of the engineer’s seat was not an “integral or essential part of a completed locomotive.” Instead, according to the district court, the seat adjustment mechanism was a non-essential comfort device. In reaching this conclusion, the district court relied on the Tenth Circuit’s decision in King v. Southern Pacific Transportation Co., 855 F.2d 1485 (10th Cir. 1988). Straub appealed, arguing the district court’s reliance on King was misplaced. The Tenth Circuit held that the allegations set out in Straub’s complaint (i.e., that the engineer’s chair failed when moved initially and stopped abruptly as Straub was attempting to adjust it) stated a violation of LIA: “Once BNSF installed an engineer’s chair with a seat adjustment mechanism, 49 U.S.C. 20701(1) mandated that BNSF maintain the chair so that the seat adjustment device be ‘in proper condition and safe to operate without unnecessary danger of personal injury’ and 49 C.F.R. 229.7 mandated that BNSF maintain the chair so that the seat adjustment mechanism was ‘in proper condition and safe to operate in service . . . without unnecessary peril to life or limb.’” The Court reversed the district court’s grant of BNSF’s motion to dismiss Straub’s claim to the extent it depended on LIA-based strict liability, and remanded this matter for further proceedings. View "Straub v. BNSF" on Justia Law

Utah officials had interpreted its old law to require Plaintiff Rainbow Direct Marketing to register and obtain a permit in the State of Utah to be a professional fundraising consultant. Rainbow viewed these requirements as unconstitutional and unsuccessfully sued in district court. But during the appeal, Utah substantially revised its law, prompting officials to concede that the new restrictions did not apply to Rainbow. The Tenth Circuit concluded this change in the law rendered the appeal moot. View "American Charities v. O'Bannon" on Justia Law