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

A jury convicted Lindsey Springer of one count of conspiring with Oscar Stilley to defraud the United States, three counts of tax evasion, and two counts of willful failure to file a tax return. Mr. Stilley was convicted of one count of conspiracy and two counts of aiding and abetting Mr. Springer’s tax evasion. The district court sentenced both men to fifteen years in prison, three years of supervised release, and restitution for tax losses exceeding $2 million. Mr. Springer and Mr. Stilley (Defendants) respectively challenged their convictions and sentences. Mr. Springer founded "Bondage Breakers Ministries" to offer legal and tax advice to individuals embroiled in tax disputes for which he was paid thousands upon thousands of dollars. He eventually met Mr. Stilley (now a disbarred lawyer) and together they devised a scheme to channel Mr. Springer's unreported income through Mr. Stilley's client trust account. "By 2005, Mr. Springer had gained the full attention of the IRS." The government executed a search warrant of Mr. Springer's residence, and Mr. Stilley was served with a grand jury subpoena. During the course of the investigation, Defendants denied receiving any income for their advice, representing instead that people simply made donations to Mr. Springer’s ministry, with no expectation of services in return. But at trial, the government refuted those statements, offering testimony from numerous witnesses who had paid large sums of money to defendants in exchange for their supposed tax and legal expertise. Based on this and other evidence, the jury convicted Defendants on all counts to which Defendants appealed. Upon review, the Tenth Circuit affirmed Defendants' convictions for substantially the same reasons articulated by the district court. The Court affirmed Defendants' respective convictions and sentences.

Plaintiff-Appellant Eugene S. appealed a district court's denial of his motion to strike and its entry of summary judgment in favor of Defendant-Appellee Horizon Blue Cross Blue Shield of New Jersey (Horizon BCBSNJ). Plaintiff sought coverage for his son A.S.'s residential treatment costs from his employer's ERISA benefits insurer. Horizon's delegated plan administrator originally denied the claim. Having exhausted his administrative appeals, Plaintiff filed suit in district court challenging the denial of benefits. The parties filed cross-motions for summary judgment, but Horizon also filed a declaration that included the terms of Horizon's delegation of authority to the plan administrator to administer mental health claims in a Vendor Services Agreement. Plaintiff moved to strike that declaration as procedurally barred. The district court denied the motion and granted Horizon summary judgment, finding that neither Horizon nor its plan administrator acted in an arbitrary or capricious manner in denying the contested claim. Upon review, the Tenth Circuit found substantial evidence in the record that A.S. did not meet the criteria for residential treatment benefits under the plan, and as such, the plan administrator did not act in an arbitrary or capricious manner in denying Plaintiff's claim. The Court affirmed the district court's judgment.

Plaintiffs Edward Klen, Diverse Construction, Stephen Klen and Holstein Self-Service Storage, LLC brought a civil rights lawsuit against the City of Loveland Colorado and various City employees alleging "a plethora" of constitutional violations involving: the defendants' alleged imposition of deliberate delays and unreasonable requirements for Plaintiffs' building permit; solicitation of illegal and extortionate fees for the permit; use of perjury in criminal ordinance violation proceedings; retaliation for plaintiffs' exercise of their First Amendment rights; forgery of Plaintiffs' permit application to facilitate a wrongful prosecution; and trespassing by a building inspector. The district court granted summary judgment in favor of the Defendants on Plaintiffs' federal claims and declined to exercise supplemental jurisdiction over their state-law claims. Plaintiffs appealed the grant of summary judgment. Upon review, the Tenth Circuit could not agree with the district court's conclusion that there was no causal connection between an alleged affidavit used to support Plaintiffs' claim that they were being selectively prosecuted and the outcome of that prosecution. "It is not possible to determine on this record whether, absent the affidavit, the state municipal court would have dismissed the prosecution against Ed Klen, obviating the need for a no contest plea to avoid the possibility of a trial and even of jail time for the offenses. We therefore reverse summary judgment as to this claim." The court affirmed the district court in all other respects.

Plaintiff-Appellant Thomas Richardson appealed a district court's order that affirmed the Commissioner of Social Security's denial of his application for Childhood Disability Benefits. Plaintiff filed two applications: one for Childhood Disability Benefits as a Disabled Adult Child and another for Supplemental Security Income benefits. Plaintiff was diagnosed with Asperger's Disorder; the examining physician opined that Plaintiff had a "fairly severe disability" such that he probably would not be able to find a job or remain employed. Both of Plaintiff's applications were initially denied. The ALJ found no evidence that Plaintiff was under a disability beginning before his twenty-second birthday, and that his impairment did not prevent him from performing unskilled work. The Commissioner affirmed the ALJ. After the Appeals Council denied review, Plaintiff filed an action in district court seeking reversal of the Commissioner’s decision denying his claim. The district court affirmed the Commissioner’s decision, and Plaintiff filed a timely appeal. On appeal, the Commissioner initially asserted that the ALJ’s findings were largely consistent with the examining physician's findings. However, upon review, the Tenth Circuit concluded that the ALJ made no such findings: the ALJ did not mention the physician's opinion "much less evaluate whether it was supported by the record." The Court remanded the case back to the ALJ to perform a proper evaluation of the physician's opinion.

Cody Laboratories, Inc. and Lannett Co., Inc. (collectively, "Cody") appealed a district court's dismissal of their action for declaratory judgment against the Food and Drug Administration (FDA). Cody has been manufacturing and distributing morphine sulfate since 2005. At the time Cody filed its complaint, the company had not received FDA approval for its morphine sulfate product. Cody contends that the product falls under the "grandfather clause" of the Food, Drug, and Cosmetic Act (FDCA). The FDA claims that the grandfather clause is exceedingly narrow and applies only to drugs that have been marketed in essentially identical form since 1938. The FDA sent Cody a warning letter in March 2009 stating that Cody's manufacture and distribution of morphine sulfate was in violation of the FDCA. Meanwhile, in August 2009, Roxane Laboratories, Inc., Cody's main competitor, submitted a New Drug Application ("NDA") for its own morphine sulfate product. Following its policy of granting expedited review of an NDA if no approved alternative drug exists, the FDA quickly reviewed and approved Roxane's NDA in January 2010. Cody submitted an NDA for its product the following month. The company's requests for expedited review were denied. Cody brought suit claiming the FDA acted arbitrarily, capriciously and contrary to law in violation of the Administrative Procedure Act by: (1) improperly determining that Cody's product was a "new drug" and thus not entitled to grandfathered status under the FDCA; and (2) treating Cody disparately from Roxane in processing the companies' respective NDAs. The court subsequently dismissed Cody's complaint for lack of jurisdiction, holding that the FDA had yet to complete "final agency action" under section 704 of the APA. Upon review of the record, the Tenth Circuit concluded that one of Cody's claims was mooted by post-judgment events and that Cody failed to exhaust available administrative remedies with respect to its remaining claim. The Court affirmed the district court's dismissal for lack of jurisdiction on the grandfathering claim, and dismissed Cody's disparate treatment claim as moot.

This appeal arose from a suit filed by the United States that asked the district court to reduce certain of Defendant-Appellant Jack Wilson’s tax liabilities to judgment, to set aside a fraudulent transfer of real property from Wilson to Defendant Joey Lee Dobbs-Wilson, and to enforce the government’s new liens, as well as one preexisting tax lien, against the real property by ordering a sale. Wilson appealed the district court’s order granting summary judgment to the United States. Wilson argued in his response to the government’s motion for summary judgment and in his cross-motion for summary judgment that Ms. Dobbs-Wilson was not his nominee when he transferred the property to her in 1998 and, as a result, a 1997 lien became invalid when the government mistakenly released it in 2003, after he no longer owned the property. Assuming the validity of Wilson's argument, and after supplemental briefing on the matter, the Tenth Circuit concluded that Wilson failed to demonstrate any injury to him that the Court could redress. Having determined that the Court lacked jurisdiction over his appeal, the case was dismissed.

Plaintiffs, a group of inmates in the custody of the Kansas Department of Corrections (KDOC), sued Defendant Roger Werholtz, Secretary of KDOC (the Secretary), under 42 U.S.C. 1983 and state law. They challenged two policies in the KDOC's Internal Management Policy and Procedure (IMPP), which requires money obtained by the inmate to be saved for use upon release from prison. "Plaintiffs' imprecise amended complaint appeared to contend" that these policies: (1) violated their private-property rights without due process, in violation of the Fifth and Fourteenth Amendments; (2) were unconstitutionally vague; (3) violated the federal and Kansas constitutional prohibitions on cruel and unusual punishment; and (4) imposed punishment in violation of the "principles of ex post facto." Contending that Plaintiffs had failed to state a claim and had failed to exhaust their administrative remedies, the Secretary filed a motion to dismiss or, in the alternative, to grant summary judgment. The district court granted the motion to dismiss, ruling that the compulsory-savings plans did not violate Plaintiffs' rights. Plaintiffs appealed. Upon careful consideration of the Plaintiffs' appellate brief, the Tenth Circuit concluded that their argument failed on multiple levels to allege the violation of any constitutional right or a basis on which the Court could grant any relief. Accordingly, the Court affirmed the district court's dismissal.

Plaintiffs-Appellants Ark Initiative, Alex Forsythe, and Paul Smith appealed a district court's judgment in favor of the Defendants-Appellees, the U.S. Forest Service and its Chief. The district court upheld the Defendants' acceptance of a 2003 Master Development Plan (MDP), as well as a National Environmental Policy Act (NEPA) analysis, and decisions concerning a 2006 Snowmass Ski Improvements Project. On appeal, Plaintiffs argued that the Defendants violated NEPA by approving the project without examining certain cumulative effects-- namely, effects on water resources, endangered fish, forest habitats, and "other resources." Defendants countered that Plaintiffs failed to exhaust their claims, and that the NEPA does not require a federal agency to examine the cumulative effects of its proposed action with those of an unrelated proposal where the proposed action will not affect the resource concerns pressed by the Plaintiffs. Upon review, the Tenth Circuit concluded Plaintiffs failed to exhaust their administrative remedies, and affirmed the district court's judgment.

State prisoner Plaintiff Michael Milligan appealed a district court's sua sponte dismissal of his Section 1983 complaint against various Colorado prison officials who were allegedly involved in decisions affecting Plaintiff's prison employment. Plaintiff alleged he worked for the prison's maintenance department plumbing crew for months without incident. In the fall of 2010 however, Plaintiff's "gate pass" was pulled, preventing him from accessing areas in which the maintenance department was located. Plaintiff was allegedly told that inmates assigned to work in these areas were reevaluated for their potential escape risk following the escape of another inmate. After he filed a grievance regarding his designation as a potential escape risk, the facility job board allegedly took his job away and placed him in vocational janitorial school. In his complaint, Plaintiff raised an equal protection claim based on the pulling of his gate pass as well as a retaliation claim based on the loss of his job in the maintenance department. The district court found that Plaintiff could not state an arguable claim that his civil rights were violated. Upon review, the Tenth Circuit held that the district court erred in dismissing Plaintiff's complaint: "We are not persuaded, however, that amendment would necessarily be futile or that this claim was based on an indisputably meritless legal theory." The Court reversed the district court's order of dismissal and remanded the case for further proceedings.

Plaintiff Lacauna Adams, on behalf of her minor son D.J.W., appeared pro se seeking review of a district court’s judgment that affirmed the Social Security Commissioner’s denial of D.J.W.’s application for Supplemental Security Income (SSI) benefits. In late 2006, Plaintiff filed an application for SSI benefits for her son who was five years old at that time. In it, she alleged he became disabled in 2004 due to asthma. The agency denied the application initially and on reconsideration. Although neither side raised the issue, the Tenth Circuit concluded that Plaintiff could proceed pro se on behalf of her minor child to challenge in federal court the administrative denial of SSI benefits, but the Court affirmed the Commissioner’s denial of those benefits.