1) COPYRIGHT LAW: Twentieth Century Fox Film Corp. v. Entertainment Distributing Corp., 03-57052 (9th Cir. Nov. 18, 2005). The subject of this copyright battle was Gen. Dwight D. Eisenhower's account of World War II, Crusade in Europe. Dastar Corporation appealed the district court's judgment in favor of Twentieth Century Fox Film Corporation, SFM Entertainment LLC, and New Line Home Video, Inc. (collectively "Twentieth Century Fox"), finding that Dastar infringed protected copyrights on the book, and the court's subsequent award of attorneys' fees and costs to Twentieth Century Fox. The USCA affirmed. To the extent necessary, the USCA reaffirmed the well-established law of this Circuit: an independent contractor creates a work-for-hire when it was made at the instance and expense of the commissioning party. In addition, the USCA found the factual record more than sufficient to conclude that Eisenhower's creation of the book was induced by Doubleday, and that Doubleday had sufficient supervisory powers over Eisenhower's authorship, a point that Dastar did not contest. Moreover, there was little doubt that the book was authored at Doubleday's expense. Doubleday took on all the financial risk of the book's success, agreeing to pay Eisenhower a lump sum for writing it, instead of negotiating a royalty deal. The USCA thus upheld the district court's conclusion that, because Eisenhower would not have authored or publish the book without Doubleday's convincing, and because there is no question that Doubleday carried the financial load of preparing the book, it was in fact created at the instance and expense of the commissioning party. Where it determines that a work has been produced at the instance and expense of another party, the USCA said it indulges the legal presumption that it is a work-for-hire-that the copyright lies ab initio with the commissioning party. The USCA concluded that this presumption had not been rebutted, and, in particular, it was not convinced that the tax treatment of the publishing deal indicated on whether or not Doubleday and Eisenhower intended the work to be a work-for-hire. Dissenting, Judge Nelson did not agree that Eisenhower and Doubleday intended the book to be a "work-for-hire" under the 1909 Copyright Act. Given the state of copyright law at the time Eisenhower and Doubleday entered their agreement, Judge Nelson did not believe that the parties intended the work to be "for hire" as that term was then understood. Moreover, the agreement, the tax treatment that Eisenhower received for the manuscript, and the evidence in the record that several publishers were offered the opportunity to compete for the right to publish the manuscript pointed to one conclusion only: that Eisenhower sold Doubleday a product, not his services. Thus, Judge Nelson would conclude that the book was not written as a work-for-hire and thus would reversed the district court's judgment in favor of Doubleday. Farris, D.W. Nelson (dissenting), and Tallman (author), Circuit Judges. D. Gerber of Oxnard, CA, for the defendant-counter-claimant-appellant; J. Hacker of Washington, DC, for the plaintiffs-counter-defendants-appellees. (Download the full text of this decision at www.cc9.uscourts.gov/)

2) BANKRUPTCY: In re Thomas, 03-57164 (9th Cir. Nov. 18, 2005). The Chapter 7 trustee appealed a decision of the Bankruptcy Appellate Panel reversing the bankruptcy court's determination that the debtor, Thomas, fraudulently transferred a condominium to his mother before filing for bankruptcy. The USCA held that the BAP erroneously excluded from its review the relevant findings underpinning the bankruptcy court's judgment. It thus vacated and remanded so that the BAP could review the bankruptcy court's judgment based upon the full record. Graber and W. Fletcher, Circuit Judges, and Fogel (author), District Judge. A. Friedman of Los Angeles, CA, for the appellant; A. Smyth of Los Angeles, CA, for the appellee. (Download the full text of this decision at www.cc9.uscourts.gov/)

3) BANKRUPTCY: In re Rains, 03-16538 (9th Cir. Nov. 8, 2005). These consolidated appeals arose from the bankruptcy court's ap-proval of, and subsequent enforcement of, a settlement agreement resolving adversary proceedings brought by the trustee-appellee and a creditor against the debtor-appellant. Because the USCA concluded that the settlement agreement was valid and that enforcement of the agreement was proper, it affirmed the district court's decision upholding the approval of the settlement agreement. Although the district court erred in ruling that the appeal of the judgment enforcing the settlement was untimely, the USCA affirmed the entry of judgment for the trustee. Wallace, Rawlinson (author), and Bybee, Circuit Judges. G. Hollister of Sacramento, CA, for the debtor-appellant; G. Hughes of Roseville, CA, for the trustee-appellee. (Download the full text of this decision at www.cc9.uscourts.gov/)

4) ENVIRONMENTAL LAW: Native Ecosystems Council v. U.S. Forest Service, 04-35274 (9th Cir. Nov. 7, 2005). Native Ecosystems Council appealed the district court's grant of summary judgment to the Forest Service in connection with the Service's approval of the Jimtown Vegetation Project in the Helena National Forest. To lower the fire potential, the Project involves thinning, prescribed burning, and weed management on 1,500 acres in a part of the Forest prone to high intensity fires. Native Ecosystems claimed that the Service violated the National Environmental Protection Act by preparing an Environmental Assessment instead of an Eenvironmental Impact Statement and by considering only the proposed Project and "no action." Native Ecosystems also claimed that the Service violated the National Forest Management Act because the Project threatens the forest-wide viability of the northern goshawk. The USCA affirmed. B. Fletcher, McKeown (author), and Gould, Circuit Judges. T. Woodbury of Missoula, MT, for the plaintiff; E. Peterson of Washington, DC, for the defendants. (Download the full text of this decision at www.cc9.uscourts.gov/)

5) EMPLOYMENT DISCRIMINATION: Hardage v. CBS Broadcasting, Inc., 03-35906 (9th Cir. Nov. 1, 2005). The district court entered summary judgment dismissing Hardage's sexual harassment and retaliation claims against CBS Broadcasting, Viacom Television Stations, and Viacom Broadcasting of Seattle (collectively "CBS"), pursuant to Title VII of the 1964 Civil Rights Act and the Washington Law Against Discrimination ("WLAD"). The court held that CBS was entitled to assert an affirmative defense to liability based on Burlington Industries v. Ellerth, 524 US 742 (1998), and denied Hardage's motion for partial summary judgment on that issue. It also declined to exercise supplemental jurisdiciton over Hardage's WLAD claims against Sparks (the alleged harasser) and dismissed those claims without prejudice. The USCA affirmed. Hardage failed to establish a material factual dispute as to whether he was constructively discharged, and did not allege another "tangible employment action." He also failed to establish a material factual dispute regarding any of the elements of CBS's affirmative defense. The USCA held that the district court properly entered summary judgment for CBS and denied partial summary judgment for Hardage on his sexual harassment claim. Finally, Hardage maintained that Sparks retaliated by making "snide remarks" and threats, such as "your number's up" and "don't forget who got you where you are." However, the USCA noted that the Circuit has held that "only non-trivial employment actions that would deter reasonable employees from complaining about Title VII violations will constitute actionable retaliation." Moreover, even if Sparks' remarks collectively created a hostile work environment that constituted retaliation, such harassment is actionable only if it is sufficiently severe or pervasive to alter the conditions of the victim's employment and create an abusive working environment. Considering the totality of the circumstances, the USCA held that Sparks' comments were insufficiently severe to support a retaliation claims. Dissenting in part, Judge Paez agreed that the district court properly granted summary judgment on Hardage's constructive discharge and retaliation claims, and that Hardage did not raise a triable issue of fact as to whether he suffered a tangible employment action. However, he did not agree that CBS established as a matter of law that the Faragher/Ellerth defense to vicarious liability for Sparks' sexual harassment. In reaching its conclusion, Judge Paez thought the majority had departed from well-settled case law requiring an employer to conduct an investigation and take prompt corrective action once it is on notice of alleged harassment. Because a reasonable jury could find CBS vicariously liable for sexual harassment, Judge Paez would reverse the grant of summary judgment and remand for a trial. Wallace (author), Silverman, and Paez (dissenting in part), Circuit Judges. C. Kilbreath of Seattle, WA, for the plaintiff-appellant; H. Korrell of Seattle, WA, for the defendants-appellees. (Download the full text of this decision at www.cc9.uscourts.gov/)

6) WATER LAW: USA v. Truckee-Carson Irrigation District, 04-16032 (9th Cir. Nov. 21, 2005). The Pyramid Lake Paiute Tribe of Indians sought to apply some of its Truckee River water rights to in-steam use rather than irrigation. The district court held that the Tribe was entitled to change the use of the water rights, but was not entitled to apply the transportation loss portion of the rights. The USCA affirmed. Under the Orr Ditch Decree, if a new use entails no transportation loss, the water allocated to transportation loss for irrigation use may not be transferred to that new use. Schroeder, Hawkins, and W. Fletcher (author), Circuit Judges. S. MacFarlane of Sacramento, CA, for the plaintiff; R. Pelcyger of Louisville, CO, for the petitioner. (Download the full text of this decision at www.cc9.uscourts.gov/)

7) SEX EDUCATION: Fields v. Palmdale School District, 03-56499 (9th Cir. Nov. 2, 2005) Parents of schoolchildren in Palmdale, California, brought this action upon learning that their children had been questioned in the public elementary school about sexual topics such as the frequency of "thinking about having sex" and "thinking about touching other peoples' private parts." The questioning was part of a survey the School District conducted regarding psychological barriers to learning. The parents maintained that this questioning violated their right to privacy and to control the upbringing of their children by introducing them to matters of and relating to sex. The district court dismissed the federal causes of action for failure to state a claim upon which relief could be granted and dismissed the state claims without prejudice to their right to refile in state court. The USCA affirmed, holding that there is no fundamental right of parents to be the exclusive provider of information regarding sexual mattes to their children, either independent of their right to direct the upbringing and education of their children or encompassed by it. The USCA also held that parents have no due process or privacy right to override the determinations of public schools as to the information to which their children will be exposed while enrolled as students. Finally, the USCA held that the defendants; actions were rationally related to a legitimate state purpose. Lay, Reinhardt (author), and Thomas, Circuit Judges. E. Gunderson of Manhattan Beach, CA, for the plaintiffs; D. Walsh of Encino, CA, for the defendants.(Download the full text of this decision at www.cc9.uscourts.gov/)

8) VOTING RIGHTS ACT: Padilla v. Lever, 03-56259 (9th Cir. Nov. 23, 2005). The plaintiffs, residents and registered voters in the Santa Ana Unified School District ("SAUSD") whose primary language is Spanish, appealed the district court's dismissal of their lawsuit, filed pursuant to the Voting Rights Act of 1965. The plaintiffs' suit sought declaratory and injunctive relief against the Orange County elections officials charged with overseeing the recall election process in the SAUSD because the officials failed to ensure that petitions in the recall of School Board Member Lopez were provided in Spanish as well as English. The USCA reversed. It noted that the purpose of the bilingual provisions of the Act, 42 USC Sec. 1973aa-1a, is to end the language disability of some citizens to full participation in the electoral process; and to this end, the Act requires information relating to the electoral process to be brought to their attention in both English and the minority language. Holding that these bilingual provisions do not apply to recall petitions would deny minority language speakers the right to fully participate in the electoral process by depriving them of the ability to consider the written arguments for and against a particular recall target. Dissenting, Judge Canby could not agree with the outcome reached by the majority. He thought the Ninth Circuit should join the Tenth and Eleventh Circuits in holding that Sec. 1973aa-1a does not apply to recall (or in their cases initiative) petitions. Pregerson (author) and Canby (dissenting), Circuit Judges, and Reed, District Judge. T. Saenz of Los Angeles, CA, for the plaintiffs-appellants; W. Phillips of Santa Ana, CA, for the defendants-appellees. (Download the full text of this decision at www.cc9.uscourts.gov/)

9) COMMUNITY CARETAKING DOCTRINE: Miranda v. City of Cornelius, 04-35940 (9th Cir. Nov. 17, 2005). This appeal addressed a constitutional challenge to the impoundment of a vehicle from the owners' driveway after a police officer observed the husband teaching his unlicensed wife how to drive. The plaintiffs maintained that the impoundment was an unreasonable seizure under the Fourth Amendment because it conflicted with the principles of the community caretaking doctrine. They appealed the district court's grant of summary judgment for the defendant City and the towing company. The USCA affirmed in part and reversed and remanded in part. It noted that, generally, the community caretaking doctrine allows the police to impound where necessary to ensure that the location of operation of vehicles does not jeopardize the public safety. Under the special circumstances of this case, the USCA held that the impoundment was an unreasonable seizure because the police have no duty to protect a vehicle parked on the owners' property and there was no reason to believe that the impoundment would prevent any threat to public safety from its unlawful operation beyond the brief period during which the car was impounded. The USCA added that, on remand, the district court may consider whether the defendants can offer evidence of a legitimate government purpose for the impoundment sufficient to render the seizure reasonable and to permit a deprivation of the property without prior notice and hearing. Finally, on the issue of post-deprivation due process, the USCA affirmed the district court's summary judgment in favor of the defendants. Fisher, Gould (author), and Bea, Circuit Judges. S. Latin of Portland, OR, for the plaintiffs-appellants; G. Warren of Salem, OR, for the defendants-appellees. (Download the full text of this decision at www.cc9.uscourts.gov/)

10) DISABILITY BENEFITS: Bayliss v. Barnhart, 04-35634 (9th Cir. Nov. 2, 2005). Bayliss appealed the district court's affirmance of the Social Security Commissioner's denial of her application for disability insurance benefits and supplemental security income benefits pursuant to Titles II and XVI of the Social Security Act. The ALJ found that Bayliss retained the capacity to perform a wide range of light work, and thus was not disabled within the meaning of the Act. The Appeals Council declined review, and the district court affirmed. The USCA also affirmed. The ALJ, with support in the record, properly found the evidence adequate to make a determination regarding Bayliss's disability. Fisher, Gould (author), and Bea, Circuit Judges. D. Lowry of Portland, OR, for the plaintiff-appellant; J. Dantonio of Seattle, WA, for the defendant-appellee. (Download the full text of this decision at www.cc9.uscourts.gov/)

11) IMMIGRATION: Carbonell v. INS, 03-56809 (9th Cir. Nov. 18, 2005). Carbonell appealed the district court's denial of his petition for attorneys' fees and costs under the Equal Access to Justice Act. He maintained that the qualified as a "prevailing party" under EAJA because he obtained a court order incorporating a voluntary stipulation which awarded him a substantial portion of the relief he sought. The USCA concluded that the court order materially altered the relationship between Carbonell and the government and that this alteration was judicially sanctioned. It thus held that Carbonell was a prevailing party and remanded the case to the district court for further proceedings. Lay, Reinhardt (author), and Thomas, Circuit Judges. P. Afrasiabi of Los Angeles, CA, for the appellants' AUSA F. Travieso of Los Angeles, CA, for the appellees. (Download the full text of this decision at www.cc9.uscourts.gov/)

12) IMMIGRATION: Quan v. Gonzales, 03-70630 (9th Cir. Nov. 7, 2005). The petitioner and her husband are natives and citizens of China. She petitioned for review of a BIA decision affirming an immigration judge's denial of her application for asylum. The USCA granted the petition for review, and then vacated and remanded. It found that a reasonable fact-finder would be compelled to conclude that the petitioner has shown sufficient evidence of past persecution as well as a well-founded fear of future persecution. Judge O'Scannlain dissented. He thought the majority had substituted its independent analysis of the record for that of the Immigration Judge, and, in so doing, had exceeded its authority and intruded upon the proper role of the fact finder. Because he thought that the IJ's findings deserved greater deference than the majority accorded them, Judge O'Scannlain dissented from the decision to grant the petition. O'Scannlain (dissenting) and Wardlaw, Circuit Judges, and Whaley (author), Circuit Judges. D. Ingraham of Alhambra, CA, for the petitioner; AAG P. Keisler of Washington, DC, for the respondent. (Download the full text of this decision at www.cc9.uscourts.gov/)

13) IMMIGRATION: Ramadan v. Gonzales, 03-74351 (9th Cir. Nov. 2, 2005). On a matter of first impression in the Ninth Circuit, the USCA addressed the effect of the recently passed REAL ID Act, Pub. L. No. 109-13 Sec. 106(a) (2005), on its jurisdiction to review an agency decision under 8 USC Sec. 1158(a)(2). The IJ determined that the petitioner was ineligible to apply for asylum because the asy-lum application was not filed within one year after the last entry into the United States (the "one-year bar") and that there were no "changed circumstances" that materially affected the petitioner's eligibility for asylum. The USCA concluded that such a determination is essentially factual, and not a "question of law" within the meaning of the REAL ID Act. The USCA thus lacked jurisdiction to review any claim regarding the petitioner's asylum application, and denied the petition as it pertained to withholding of removal. Pregerson, Hawkins (author), and Thomas, Circuit Judges. A. Lawrence of San Francisco, CA, for the petitioner; C. McIntyre of Washington, DC, for the respondent. (Download the full text of this decision at www.cc9.uscourts.gov/)

14) IMMIGRATION: Barroso v. Gonzales, 03-72552 (9th Cir. Nov. 18, 2005). Barroso petitioned for review of a BIA order denying his motion to reconsider its previous denial of his appeal. His motion to the BIA alleged ineffective assistance of counsel and the denial of his right to counsel of his choice. The BIA denied the ineffective assistance claim, but did not address the denial of counsel claim. In addition, the BIA denied Barroso relief because he had failed to depart within his voluntary departure period. The USCA held that where an alien files a timely motion to reconsider before his voluntary departure period has expired, his voluntary departure period is automatically tolled while he is awaiting a decision from the BIA on his motion. The USCA also held that the BIA abused its discretion in failing to address Barroso's denial of counsel claim. The USCA thus remanded to the BIA for a determination of whether Barroso was denied his statutory right to counsel of his choice. Lay, Reinhardt (author), and Thomas, Circuit Judges. R. Figueroa of Long Beach, CA, for the petitioner; AAG P. Keisler of Washington, DC, for the respondent. (Download the full text of this decision at www.cc9.uscourts.gov/)

15) IMMIGRATION: Notash v. Gonzales, 03-72116 (9th Cir. Nov. 2, 2005). Notash, a native and citizen of Iran, petitioned for review of a BIA decision, affirming without opinion, an IJ decision that Notash's conviction for attempted entry of goods by means of a false statement, in violation of 18 USC Sec. 542, constituted a crime of moral turpitude. The IJ thus found Notash removable, but granted voluntary departure. The USCA granted the petition. Notash's conviction was not an offense involving moral turpitude because the record did not disclose under which paragraph of Sec. 542 he had been was convicted, and a conviction might have been obtain under the second paragraph without proof of evil intent or intent to defraud. The conviction thus does not categorically qualify as a crime involving moral turpitude. Noonan, Tashima (author), and Callahan, Circuit Judges. D. Kraeger of Phoenix, AZ, for the petitioner; R. Byrd of Washington, DC, for the respondent. (Download the full text of this decision at www.cc9.uscourts.gov/)

16) IMMIGRATION: USA v. Lombera-Valdovinos, 04-50390 (9th Cir. Nov. 30, 2005). At issue here was whether it is possible to convict a previously deported alien for attempted illegal reentry under 8 USC Sec. 1326 when he crosses the border with the intent only to be imprisoned. The USCA concluded that it is not, because attempted illegal reentry is a specific intent crime that requires proof of intent to enter the country free from official restraint. The government, operating under a misconception about the meaning of "official restraint," failed to introduce evidence to support a finding of such intent. Dissenting, Judge Rymer thought the majority answered the wrong question. The question was whether the alien had the specific intent, that is, purpose or conscious desire to "reenter" the United States. As the defendant said his only purpose in trying to enter the country was to go to jail, in his view, he could not have intended to "reenter" the country free of official restraint. B. Fletcher, Rymer (dissenting), and Fisher (author), Circuit Judges. T. Scott of San Diego, CA, for the defendant-appellant; AUSA I Ciobana of San Diego, CA, for the plaintiff. (Download the full text of this decision at www.cc9.uscourts.gov/)

17) WRIT OF MANDAMUS: Clemens v. U.S. District Court, 05-75631 (9th Cir. Nov. 7, 2005). Clemens was charged with making threats with intent to extort, assault, murder, or inflict harm upon three federal district court judges from the Central District of California. His threats were made in connection with pro se suits he filed in the same District. His trial was set for November 8, 2005 before District Judge Otero in the Central District. Clemens petitioned for a writ of mandamus from the denial of his motion to disqualify all district court judges in the Central District from presiding over his criminal trial. The USCA denied the petition. It concluded that despite threats to themselves and their colleagues, judges throughout the country continue to administer the law fairly and professionally. It would not presume otherwise and noted that it must be especially careful not to allow threats of violence to succeed in altering the normal curse of litigation. To do otherwise would be destructive of the independence of the judiciary. T.G. Nelson, Thomas, and Tallman, Circuit Judges. S. Charlick of San Diego, CA, for the petitioner; AUSA R. Keenan of Santa Ana, CA, for the real party in interest United States. (Download the full text of this decision at www.cc9.uscourts.gov/)

18) EVIDENCE: USA v. Norris, 03-10437 (9th Cir. Nov. 10, 2005). Norris was convicted of aggravated sexual abuse. The USCA found that he was not in custody for Miranda purposes and that his confession had been properly admitted. The district court correctly al-lowed the government to introduce evidence of Norris' prior act of child molestation. Moreover, there was sufficient corroborating evidence to admit his confession as to count three. However, as there was insufficient evidence of the corpus delicti of the act charged in count two, the USCA reversed the conviction on that count. Wallace, Rawlinson (author), and Bybee, Circuit Judges. FPD F. Kay of Tucson, AZ, for the defendant; AUSA N. Leonardo of Tucson, AZ, for the plaintiff. (Download the full text of this decision at www.cc9.uscourts.gov/)

19) SEARCH & SEIZURE: USA v. Ruiz, 04-30516 (9th Cir. Nov. 7, 2005). Ruiz pled guilty to being a felon in possession of a firearm. Pursuant to his conditional plea agreement, he challenged the district court's denial of his motion to suppress evidence found in a trailer home. He argued that the district court erred in determining that a resident of the home, Boswell, had the authority to consent to the warrantless search of a gun case found in the home, that the search of the gun case could not be justified under the exigent circumstances or single purpose container exceptions, and that all evidence obtained as a result of the allegedly illegal search was inadmissible. The USCA affirmed, holding that Boswell had apparent authority to consent to search of the gun case. Fisher, Gould (author), and Bea, Circuit Judges. M. McHenry of Portland, OR, for the defendant; AUSA S. Peifer of Portland, OR, for the plaintiff. (Download the full text of this decision at www.cc9.uscourts.gov/)

20) PRETRIAL DETAINEES: USA v. Howard, 03-50524 (9th Cir. Nov. 15, 2005). On this interlocutory appeal, the defendants chal-lenged a requirement that pretrial detainees making their first appearance before a magistrate wear leg shackles. The policy was imple-mented by the U.S. Marshals Service for the Central District of California after consultation with the magistrates. In each of these 15 cases on appeal, a magistrate denied the Federal Public Defender's motion for the defendant to appear without shackles at the initial appearance. The district court reviewed these rulings in a consolidated appeal. Citing general safety concerns, it affirmed the shackling decisions. The record contained no documentation of specific problems that led up to the enactment of the shackling policy. Because it is undisputed that the policy effectuates a diminution of the liberty of pretrial detainees and distracts from the dignity and decorum of a critical stage of a criminal prosecution, the USCA concluded that the policy required adequate justification of it necessity. It thus vacated the district court's order upholding the policy, but it did not preclude the reinstatement of a similar policy upon a reasoned determination that the policy is justified on the basis of past experience or present circumstances in the Central District. Dissenting, Judge Clifton agreed with the majority that the record was thin regarding the benefits and detriments of the policy, but added that his view of the law would require a much stronger showing to set aside the policy than has been made by the defendants. The justification for the policy-to improve court security-was evident, while there was essentially nothing in the record of any negative impacts from the practice when there is no jury present to be influenced, as there is not during the initial court appearance. Judge Clifton thought that at a time when concern for court security is understandably and properly high, the USCA should accept the judgment of the district court-and the collective judgments of the judicial officers most affected, the magistrates of the Central District. Schroeder (author), Gould, and Clifton (dissenting), Circuit Judges. D. McLane of Pasadena, CA, for the defendants; AUSA W. Crowfoot of Los Angeles, CA, for the plaintiff. (Download the full text of this decision at www.cc9.uscourts.gov/)

21) SENTENCING: USA v. Schneider, 03-30527 (9th Cir. Nov. 18, 2005). Schneider appealed his ten-month prison sentence entered after his conviction for theft of government money and Social Security fraud. The USCA remanded to the district court for proceedings consistent with USA v. Ameline, 409 F.3d 1073 (9th Cir. 2005) (en banc). The sentencing court had adjusted upward the Sentencing Guidelines range by six levels upon determining that the amount of loss exceeded $30,000, but was less than $70,000. The jury had made no finding regarding the amount of loss beyond $1,000. Under Ameline, when, as here, the record is insufficiently clear to conduct a complete plain error analysis, a limited remand is appropriate to ascertain whether the sentence imposed would have been materially different had the district court known that the Guidelines are advisory. The USCA thus remanded to the district court with instructions that the court follow Ameline. Concurring, Judge Ferguson agreed that a remand in light of Ameline was proper, but thought that was insufficient to reverse the injustice that occurred at sentencing to the former U.S. Marine who suffers from a mental illness that first surfaced while on active duty. Judge Ferguson thus sought to underscore how the District Court misapprehended its departure authority and misapplied Guideline Sec. 5K2.13, which warrants resentencing. Ferguson (concurring), Trott (author), and Kleinfeld, Circuit Judges. DFPD S. Sady of Portland, OR, for the defendant-appellant; AUSA K. Bickers of Portland, OR, for the plaintiff-appellee. (Download the full text of this decision at www.cc9.uscourts.gov/)

22) SENTENCING: USA v. Velasquez-Reyes, 04-30292 (9th Cir. Nov. 8, 2005). The defendant appealed from an order sentencing him to 48 months of imprisonment on the ground that the district court erred in imposing a 16-level enhancement to his sentence based on a prior conviction for second degree arson under Washington law. He maintained that second degree arson is not a crime of violence under Sentencing Guideline Sec. 2L1.2(b)(1)(A)(ii). The USCA affirmed the imposition of the 16-level enhancement upon concluding that second degree arson under Washington law is categorically a crime of violence. But, as the defendant was sentenced under the mandatory provision of the Guidelines, the USCA remanded in accordance with USA v. Ameline, 409 F.3d 1073 (9th Cir. 2005) (en banc). Schroeder, Alarcon (author), and Leavy, Circuit Judges. A. Walstrom of Yakima, WA, for the defendant-appellant; AUSA J. Hagarty of Yakima, WA, for the plaintiff-appellee. (Download the full text of this decision at www.cc9.uscourts.gov/)

23) SENTENCING: USA v. Labrada-Bustamante, 04-30082 (9th Cir. Nov. 10, 2005). The defendants were convicted by a jury of conspiracy to distribute a controlled substance, methamphetamine, in violation of 21 USC Sec. 846. After determining that the quantity of the drug involved in the proposed sale was five pounds, the court sentenced defendants Labrada and Duarte to 151-month terms of imprisonment, and defendant Baranda to a 87-months. The USCA affirmed the convictions, but vacated the sentences, and remanded for resentencing. The district court had correctly denied Labrada and Duarte's motion to suppress as both had knowingly and intelligently waived their Miranda rights and the waivers were voluntary. There was sufficient evidence for a rational jury to find, beyond a reasonable doubt, that Labrada intended to distribute 50 grams or more of the drug. Labrada did not receive ineffective assistance of counsel, as the court accepted and considered counsel's oral objections. Because the district court's clear indication that it felt constrained by the Guidelines, and because the district court impermissibly permitted Baranda to collaterally attack his 1997 conviction, the USCA vacated the sentence imposed so that the defendants could be resentenced under the now-advisory Guidelines. Gould, Tallman, and Rawlinson (author), Circuit Judges. N. Marchi and J. Egan of Kennewick, WA, for the appellants; AUSA K. Bolton of Yakima, WA, for the appellee. (Download the full text of this decision at www.cc9.uscourts.gov/)

24) SENTENCING: USA v. Delaney, 04-50128 (9th Cir. Nov. 7, 2005). Delaney robbed a bank in Anaheim Hills, California, for which he was convicted of bank robbery. The Probation Office's Presentence Report recommended that Delaney be sentenced as a "career of-fender" under Sentencing Guideline Sec. 4B1.1(a) because 1) he was at least 18 years old at the time he committed the robbery; 2) the robbery conviction constituted a crime of violence; and 3) he had two prior convictions for crimes of violence. The district court adopted the Presentence Report's conclusion that Delaney was a career offender because he had two prior felony convictions for crimes of violence, one for bank robbery and one for possession of a short-barreled shotgun in violation of California Penal Code Sec. 12020(a). However, Delaney maintained that his conviction for possession of the shotgun was not a "crime of violence" for purposes of Sec. 4B1.1. Using the "categorical approach," the USCA found that the California statute under which Delaney was convicted criminalizes possession of any short-barreled shotgun. But, because Delaney was sentenced under the then-mandatory Sentencing Guidelines, and it is not clear from the record whether the sentence imposed would have been materially different had the district court known that the Guidelines were advisory, the USCA remanded the case to the sentencing court to answer that question. Hug, Pregerson (author), Clifton, Circuit Judges. B. Gluck of Los Angeles, CA, for the defendants; AUSA M. Umhofer of Los Angeles, CA, for the plain-tiff. (Download the full text of this decision at www.cc9.uscourts.gov/)

25) DEATH PENALTY / RIGHT TO COUNSEL: Daniels v. Woodford, 02-99002 (9th Cir. Nov. 2, 2005). Daniels was convicted of two counts of first-degree murder for the shooting deaths of police officers Dennis Doty and Phil Trust. He had shot and killed the officers when they attempted to take him into custody following the denial of his appeal on an earlier robbery conviction. He was sentenced to death in 1984. The USCA found that Daniels was denied his Sixth Amendment right to counsel at both the guilt and penalty phases of his trial. It thus reversed the district court's denial of Daniels' petition as to the guilt phase of his trial, and affirmed as to the penalty. B. Fletcher, Pregerson (author), and Ferguson, Circuit Judges. J. Philipsborn of San Francisco, CA, for the petitioner; DAG W. Robinson of San Diego, CA, for the respondent. (Download the full text of this decision at www.cc9.uscourts.gov/)

26) ADMINISTRATIVE SEGREGATION: Lira v. Herrera, 02-16325 (9th Cir. Nov. 1, 2005). Lira was placed in administrative segregation for several years, and later in a Special Housing Unit because prison officials determined that the was affiliated with a prison gang and posed a threat to prison safety. Lira claimed that his treatment violated due process. The district court granted his joint motion for summary judgment on the ground that the sole remaining cause of action encompassed both a fully exhausted claim and some unexhausted claims. On appeal, Lira maintained that his complaint presented "a constellation" of due process violations for his validation as a gang associate and placement and retention in the segregation unit. Given that the district court considered his case under the misapprehension that dismissal of the entire action was mandated if the complaint was partially defective, the USCA remanded for further proceedings, instructing that if the district judge again determines that Lira's due process claim consists of intertwined exhausted and unexhausted claims, the proper course of action is 1) to allow Lira to amend his complaint so that it refers to only his fully exhausted 1996 grievance, and 2) to consider, on the merits, whether Lira states a viable due process claim on the basis of his fully exhausted 1996 grievance. Reinhardt, Thompson, and Berzon (author), Circuit Judges. D. Winthrop of San Francisco, CA, for the plaintiff; AAG R. Anderson of San Francisco, CA, for the defendants. (Download the full text of this decision at www.cc9.uscourts.gov/)

27) HABEAS CORPUS: Rosas v. Nielsen, 04-16039 (9th Cir. Nov. 4, 2005). Rosa's habeas petition alleged that he was improperly denied parole and denied due process and effective assistance of counsel at sentencing. The district court denied the petition and declined to issue a certificate of appealability. The USCA affirmed the denial of the petition with respect to Rosas' first ground for relief, and dismissed with respect to the second ground for lack of jurisdiction. B. Fletcher, Gibson, and Berzon, Circuit Judges. Per Curiam. M. Rosas of pre se; DAG C. Picciano of Sacramento, CA, for the respondent. (Download the full text of this decision at www.cc9.uscourts.gov/)

28) HABEAS CORPUS: Chaker v. Crogan, 03-56885 (9th Cir. Nov. 3, 2005). Chaker appealed the district court's denial of his habeas petition. He had been convicted by a jury for filing a knowingly false complaint of police misconduct in violation of California Penal Code Sec. 148.6(a)(1). He alleged that Sec. 148.6 violates the First Amendment. A formal complaint of police misconduct triggers a mandatory investigation by the employing agency. Within the limited context of that investigation, Sec. 148.6 criminalizes knowingly false speech critical of officer conduct, but leaves unregulated knowingly false speech supportive of officer conduct. Because the statute impermissibly discriminates on the basis of a speaker's viewpoint in violation of the First Amendment, the USCA reversed the district court and granted the petition. Hug, Pregerson (author), and Berzon, Circuit Judges. W. Pyle of Berkeley, CA, for the petitioner; DDA K. Rand of San Diego, CA, for the respondents. (Download the full text of this decision at www.cc9.uscourts.gov/)

MEMORANDA
Unpublished decisions may not be cited to or by the courts of this circuit except when
relevant under the Doctrine of Law of the Case, Res Judicata, or Collateral Estoppel.
Rule 36-3

1) TAXATION / TAX ASSESSMENTS: Tyler. Westly, 04-17049 (9th Cir. Nov. 16, 2005) (unpublished). Wallace, Leavy, and Berzon, Circuit Judges.

Tyler appealed pro se the district court's order dismissing for lack of subject matter jurisdiction his action alleging that certain provision of California's income tax system are unconstitutional. The USCA affirmed.

Tyler's amended complaint alleged that California's prohibition against a married person filing as an unmarried individual or as a head of household, results in an unconstitutional taking of property through higher tax payments. However, the Tax Injunction Act ("TIA") narrowly restricts federal jurisdiction over state tax issues. The USCA was unpersuaded by Tyler's contention that declaratory or injunctive relief by a federal court would not operate to reduce the flow of California's tax revenue. The district court thus properly concluded that Tyler's claim was barred by the TIC. The district court also properly concluded that it lacked jurisdiction to consider Tyler's claims regarding Cal. Rev. & Tax. Code. Sec. 19133. The USCA said it was unpersuaded by Tyler's contention that the payments he alleged he was required to make pursuant to this statute were anything other than deficiencies in state taxes. Moreover, Tyler sought to challenge the determination of a final assessed amount which, if successful, would have the effect of reducing the flow of California's tax revenue. Hibbs v. Winn, 542 US 88 (2004), makes plain that the TIA bars precisely this type of federal challenge to the assessment of a state tax.

2) TAXATION: Dirks v. CIR, 04-75347 (9th Cir. Nov. 16, 2005) (unpublished). Wallace, Leavy, and Berzon, Circuit Judges.
Dirks appealed pro se the tax court's judgment after trial sustaining the statutory notice of deficiency issued against him by the Commissioner of Internal Revenue for his failure to pay taxes on an IRA distribution. The USCA affirmed. It was undisputed that Dirks failed to reinvest his IRA funds within the 60 day period imposed by 26 USC Sec. 408(d)(3)(A)(i) The tax court correctly concluded that Dirks, an attorney, could not rely on the doctrine of substantial performance because he knew of the express statutory deadline. The tax court did not abuse its discretion by excluding evidence that Dirks tried to introduce in violation of a pre-trial order. Nor was the USCA persuaded by Dirks' argument that new evidence recovered for his own files justified his untimely motions to vacate and reconsider.

3) BANKRUPTCY: In re Thomas, 04-55303 (9th Cir. Nov. 23, 2005) (unpublished). B. Fletcher, Silverman, and Paez, Circuit Judges.
Thomas appealed a Bankruptcy Appellate Panel ("BAP") order dismissing her prior consolidated appeal as moot pursuant to 11 USC Sec. 363(m), which bars reversing on appeal sales of bankruptcy estate property to good-faith purchasers. The USCA affirmed. Thomas did not obtain a stay pending appeal of the bankruptcy court order authorizing Chapter 7 trustee Jerry Namba to sell Thomas's real property to Robert Woolf. Consequently, her only avenue for unwinding that sale under Sec. 363(m) was to establish that Wolf is not a good-faith purchaser. The USCA agreed with the BAP that the bankruptcy court's finding that Wolf was a good-faith purchaser was not clearly erroneous. Thomas first challenged Woolf's good faith because of a "conflict of interest" arising from the same real estate broker, Coldwell Banker, representing both Woolf and Namba. However, as the BAP pointed out, California expressly permits such dual agency arrangements upon disclosure to the buyer and seller. As Thomas acknowledged, negotiating documents provided notice to both Namba and Woolf that Coldwell Banker served as a dual agent. The evidence supported the bankruptcy court's finding that Coldwell Banker's dual agency was permissible under California law. Thomas also challenged Woolf's good faith based on the personal relationship between Woolf and his real estate agent, William Capp. As BAP found, however, there was no evidence of a business relationship between Woolf and Capp, and the bankruptcy court's finding that the Woolf-Capp relationship was a "nonissue" was not clearly erroneous. Thomas further argued that Coldwell Banker's conflict of interest and its failure to disclose the Woolf-Capp relationship to the bankruptcy court should be imputed to Woolf, but as already noted, there was no wrongdoing to impute. Thomas also argued that Woolf's failure to attend a deposition and his refusal to produce certain documents renders the bankruptcy court's finding of good faith clearly erroneous. Woolf had bona fide reasons for not attending the deposition. Moreover, Thomas did not move to compel her discovery requests. Under the circumstances, Woolf's failure to provide her with her discovery requests did not preclude a finding that Woolf was a good-faith purchaser nor does it establish that she was denied due process. In summary, Thomas did not establish that Woolf engaged in "fraud, collusion between the purchaser and other bidders or the trustee, or an attempt to take grossly unfair advantage of other bidders." In re Ewell, 958 F.2d 276, 281 (9th Cir. 1992). The bankruptcy court's finding that he was a good-faith purchaser was not clearly erroneous. Consequently, 11 USC Sec. 363(m) rendered moot all of Thomas's challenges to the sale order.

4) BANKRUPTCY: In re At Home Corporation, 03-17085 (9th Cir. Nov. 23, 2005) (unpublished). Noonan, Rymer, and Gould, Circuit Judges.

The appellants, minority shareholders of At Home Corporation, filed shareholder suits in state court against At Home and its controlling shareholders, AT&T Corporation, Cox Communications, and Comcast Corporation. The minority shareholders challenged the transaction entered into on March 28, 2000 whereby AT&T consolidated its control over At Home by buying out the interests of Cox and Comcast. After At Home filed for Chapter 11 bankruptcy appellee Bondholders' Liquidating Trust, who represented some of At Home's creditors, asked the bankruptcy court to enjoin the prosecution of these state court actions because the suits were derivative claims that belonged to the estate of At Home. After allowing the appellants an opportunity to amend their complaint to remove the derivative claims, the bankruptcy court ruled that the appellants' proposed amended complaint still contained precluded derivative claims and, alternatively, that any remaining direct claims were enjoined because they would interfere with the Bondholders' Liquidating Trust's pending derivative suit on behalf of the estate against the controlling shareholders. The district court affirmed the bankruptcy court's order.

The USCA affirmed, holding that the appellants had not alleged a valid direct claim. The bankruptcy estate of At Home included "all legal or equitable interests of the debtor in property as of the commencement of the case." 11 USC Sec. 541(a)(1). A bankruptcy court may enjoin a derivative claim brought by shareholders because the claims is the property of the bankrupt estate. 11 USC Sec. 362(a)(3). Because At Home is a Delaware corporation, the scope of the debtor's property is determined by Delaware law. The determination of whether a claim is direct or derivative under Delaware law depends on the following factors: "Who suffered the alleged harm-the corporation or the suing stockholders individually-and who would receive the benefit of the recovery or other remedy?" Tooley v. Donaldson, Lufkin & Jenrette, Inc., 845 A.2d 1031, 1035 (Del. 2004). "The stockholder's claimed direct injury must be independent of any alleged injury to the corporation." Id. The existence of a fiduciary relationship between the majority and minority shareholders does not excuse the need for independent and direct harm to the minority shareholders. In re Tri-Star Pictures, 634 A.2d 319, 330 (Del. 1993). The appellants' proposed complaint asserted three alleged wrongs from the March 2000 transaction: The exchange by AT&T of 50 million shares of Series A stock for 50 million shares of Series B stock, the payment of a control premium for the release of control by Cox and Comcast, and misleading disclosures in the proxy statement before the shareholder vote approving the corporate amendment from the transaction. The USCA concluded that these actions did not directly harm any rights held independently by the minority shareholders.

The appellants also could not show a direct impairment of their rights as shareholders from AT&T's exchanges of Series A common stock for Series B stock, which increased AT&T's total voting power over At Home from 55% to 74%. The appellants did not allege that this exchange decreased the cash value of their shares independently of any overall decrease of At Home's stock price. Also, a valid direct claim for voting dilution would require that the controlling shareholders' actions wrongfully stripped the minority of some voting power that the minority had before the transaction. Even before the share exchange, AT&T could approve the corporate amendments from the March 2000 transaction by voting its own shares without any additional outside votes because AT&T had the required majority of voting power for both the Series B shares and for all outstanding common stock. The minority shareholders could not exercise any influential voting power before the March 2000 transaction, and, thus, their voting power was already "diluted to the point of virtual oblivion." Id. at 332. In addition, the entitlement to a control premium would require a shift of control from the public shareholders to a majority shareholder or a cohesive group of controlling shareholders. In the March 2000 transaction, Cox and Comcast agreed to release their veto authority over any action taken by At Home's board of directors. In return, AT&T granted a "put" option to Cox and Comcast in which AT&T agreed to purchase all of their At Home stock at a specified price above market value. Cox and Comcast could also purchase parts of At Home's delivery system and could terminate early their exclusive relationship with At Home. While the transaction involved a release of power by Cox and Comcast, the appellants did not exercise any privileges of control over At Home before the transaction to entitle them to a share of the premium given to Cox and Comcast. Because AT&T, Cox, and Comcast allegedly manipulated the corporate governance procedures of At Home to complete this transaction, any damage to the minority shareholders from this manipulation flows through the harm done to the At Home corporation and is properly considered to be a derivative harm. Finally, any misleading disclosures that wrongfully persuaded the minority shareholders to vote in favor of the March 2000 transaction did not, by themselves, create grounds for a direct claim. "Damages will be available only in circumstances where disclosure violations are concomitant with deprivations to stockholders' economic interests or impairment of their voting rights." Loudon v. Archer-Daniels-Midland Co., 700 A.2d 135, 146-147 (Del. 1997). The minority shareholders were not deprived of any economic interests or voting rights independent of the corporation's rights.

Any harm to the minority shareholders from the March 2000 transaction resulted from the injury imposed on At Home itself from the collective control and manipulation of AT&T, Cox, and Comcast. Thus, the appellants' proposed complaint did not state a valid direct claim and was properly enjoined by the bankruptcy court.

5) BANKRUPTCY: In re Pos Systems, Inc., 04-15206 (9th Cir. Nov. 18, 2005) (unpublished). Noonan, Rymer, and Gould, Circuit Judges.

Mason, the trustee for the estate of Pos Systems appealed the district court's decision affirming the bankruptcy court's judgment in an adversarial action he brought against Mirpad LLC, Douglas Allred, Dave Allred, and Douglas Allred, Co. (collectively, "Mirpad"). The USCA affirmed. Assuming, without deciding, that Foundation Development Corp. v. Loehmann's Inc., 788 P.2d 1189, 163 Ariz. 438 (Ariz. 1990), applied, Pos's breach was material. While Pos had been a long-term tenant with a no-default record, and forfeiture is undoubtedly a harsh result, Pos told Mirpad in April 2000 that it had cash-flow problems and could not pay the April rent; it did not pay the rent by its customary due date; it was given the contractually-prescribed notice of default; it did not offer to provide a definite date or plan for payment of the rent due and arrearage; the financials it provided showed $427,000 in aged payables as of April 10 with $169,000 over 90 days past due; and it manifested no intent to pay until after the lock-out, even though, as it turns out, it had money on hand to do so. In these circumstances, the USCA could not say that Pos's breach was trivial. This being the case, it followed that none of Mason's remaining claims had merit.

6) BANKRUPTCY: In re Lahijani., 04-55253 (9th Cir. Nov. 21, 2005) (unpublished). Bright, B. Fletcher, and Silverman, Circuit Judges.

Whereas a district court may review both interlocutory and final orders of the bankruptcy court, the circuit courts have jurisdiction to hear only "final decisions, judgments, orders, and decrees" entered by a district court' or a bankruptcy appellate panel." 28 USC Sec. 158(a), (d). The USCA dismissed the instant appeal without prejudice for lack of jurisdiction because the district court's decision, which affirmed the bankruptcy court's order granting in part appellee's motion to dismiss, is not a final order. Although the finality rules in bankrptcy are more "flexible" than those under 28 USC Sec. 1291, the USCA previously dismissed for lack of jurisdiction an appeal from a bankrptcy court order that dismissed one count of a four-count counterclaim. In re King City Transit Mix, Inc., 738 F.2d 1065, 1066 (9th Cir. 1984) ("In this case even the unique nature of a bankrptcy proceeding does not warrant a departure from final order jurisprudence developed in the context of 28 USC Sec. 1291.") The USCA similarly dismissed the instant appeal, which also arose from a bankruptcy court decision denying one of four overlapping claims. Moreover, the parties have failed to explain how their rights would be "seriously affected" if the USCA did not hear this appeal. In re Stone, 6 F.3d 581, 583 n.1 (9th Cir. 1993) (noting that, under Ninth Circuit precedent, finality may exist in the bankruptcy context where an order "resolves and seriously affects substantive rights"). Indeed, the appellants conceded that their Sec. 523(a) claims operate as an alternative to their revocation of discharge claim-if they are successful on any one of their Sec. 523(a) claims, they could recover all the relief they seek, which would render the dismissed revocation claim moot. As it lacked jurisdiction to hear the instant appeal, the appellee's Request for Judicial Notice was denied moot.

7) CREDIT CARDS / FAIR CREDIT REPORTING: Deaton v. Chevy Chase Bank, 03-16440 (9th Cir. Nov. 28, 2005) (unpublished). Beezer, Graber, and Bybee, Circuit Judges.

Deaton appealed the denial of her motion for judgment as a matter of law. Judgment was entered against Deaton after a jury found that Deaton failed to file her action within the time permitted by the Fair Credit Reporting Act. Deaton also appealed the grant of summary judgment for Chevy Chase Bank and its successor BankOne (collectively "the Banks") dismissing her unfair and deceptive trade practices claim under the Hawaii Revised Statute Sec. 480-2 as time-barred.

The USCA reversed and remanded. As an initial matter, the Banks argued that the jury verdict was correct because Deaton failed to file her claims within one year of the original billing error as required for claims under the Fair Credit Billing Act. Deaton brought her claims pursuant to the Fair Credit Reporting Act, not the Fair Credit Billing Act. The Banks provide no authority for applying the statute of limitations of the Fair Credit Billing Act to Deaton's Fair Credit Reporting Act claims, and the USCA declined to create such a rule. Deaton alleged that the Banks violated Sec. 1681s-2(b) of the Fair Credit Reporting Act by failing to investigate erroneous charges placed on her credit card. For these claims to be timely, Deaton must have filed her complaint within two years from the date on which the liability arose. 15 USC Sec. 1681p (2002). The Banks' duty to investigate under the Fair Credit Reporting Act is triggered when, after the consumer notifies the credit reporting agency of the dispute, the credit reporting agency notifies the Banks. The Banks' liability could not have arisen until they were notified and their duties under the act were triggered. Deaton notified the Credit Bureau of the Pacific ("CBP") of the dispute on or about August 13, 1999; Deaton notified Equifax and TransUnion of the dispute on or about January 27, 2002. These dates are the earliest dates on which the Banks' duty to act could have been triggered and are the earliest dates on which the two years statute of limitations for failing to comply with that duty could have begun to run. Deaton filed her initial complaint for the Banks' failure to investigate following her report to CBP on May 25, 2001 and supplemented her complaint to include the Banks' failure to investigate following her reports to Equifax and TransUnion on July 9, 2002. Deaton's claims were timely.

The Banks also argued that Deaton cannot prevail on the merits because they never received notice sufficient to trigger their duties under the Fair Credit Reporting Act. The jury did not reach the merits because it found Deaton's claims were time-barred. The USCA thus held that the case had to be remanded to the district court for a determination on the merits.

Deaton argued that the Banks violated Hawaii Revised Statute Sec. 480-2(a) by erroneously charging her credit card account. The limitations period for this claim is four years after the cause of action accrues; however, "a continuing violation is deemed to accrue at any time during the period of the violation." Haw. Rev. Stat. Sec. 480-24(a). The Banks allegedly committed the error in January of 1994; Deaton amended her complaint to include the claim under Sec. 480-2 on July 9, 2002. Deaton argued that she nonetheless brought the claim within the statute of limitations because the Banks' failure to correct the error and continued attempts to collect on the charge constitute a "continuing violation." Hawaii has not extended the continuing violation doctrine to include the activities Deaton alleged. The USCA held that the district court correctly ruled that her claims under Hawaii Revised Statute Sec. 480-2 were time-barred.

8) ANTITRUST: State of Texas v. Oracle Corp., 04-15531 (9th Cir. Nov. 23, 2005) (unpublished). Goodwin, O'Scannlain, and Tallman, Circuit Judges.

The appellant challenged the district court's grant of a protective order in an antitrust suit between two other parties, Oracle Corporation and the U.S. Department of Justice. The appellant maintained that the protective order improperly allowed Oracle's in-house counsel access to its highly-confidential documents. Those documents were used by the DOJ in the course of preparation for litigation and were thus subject to production pursuant to the Federal Rules of Civil Procedure. Because the underlying litigation is over, DOJ had decided not to appeal, Oracle's outside counsel has promised to refrain from disclosing the documents, and the documents were discoverable, the parties lack a legally cognizable interest in the outcome of this litigation. Thus the appeal is moot. Moreover, even if the district court's protective order was insufficient, Fidelity Employer Services Company's harm is not likely to be repeated, nor would it typically evade review. The USCA thus dismissed for lack of jurisdiction.

9) FALSE CLAIMS ACT: USA v. Applera Corporation, 03-57229 (9th Cir. Nov. 21, 2005) (unpublished). Hall, O'Scannlain, and Paez, Circuit Judges.

MJ Research appealed the district court's judgment dismissing for lack of jurisdiciton its qui tam action against the defendants. In determining under Fed. R. Civ. P. 12(b)(1) that its lacked jurisdiciton, the district court found that MJ Research was not an original source under 31 USC Sec. 3730(e)(4)(B) of the False Claims Act.

The USCA affirmed. The public disclosure bar of the False Claims Act applies whenever a complaint is based upon allegations or transactions of fraud disclosed in the news media. 31 USC Sec. 3730(e)(4)(A). As long as the material elements of the fraud allegation are disclosed before the complaint is filed, the jurisdictional bar applies. Here, as even the plaintiff conceded before the district court, the information on which it relied was publicly disclosed before it filed its qui tam action. The False Claims Act provides an exception to the public disclosure jurisdictional bar for an "original source" of the fraud allegation. 31 USC Sec. 3730(e)(4)(A). An "original source" is a relator who has "direct and independent knowledge" of the information forming the basis for the complaint and who voluntarily provides that information to the government. Here, it is undisputed that MJ's knowledge was independent of the public disclosure, and MJ's voluntary disclosure to the federal government prior to filing its complaint is not in dispute. The Ninth Circuit has framed the inquiry for "direct" knowledge as: "the relator must show that he had firsthand knowledge of the alleged fraud, and that he obtained this knowledge through is 'own labor unmediated by anything else.'" USA v. Alcan Elec. & Eng'g, Inc., 197 F.3d 1014, 1020 (9th Cir. 1999). "A person who learns secondhand of the allegations of fraud does not have 'direct knowledge' within the meaning of [the FCA]." USA ex rel Devlin v. California, 84 F.3d 358, 362 (9th Cir. 1996). The district court did not clearly err in concluding that MJ did not possess direct knowledge of the alleged fraud. Despite MJ's extensive investigative efforts, its knowledge was either obtained from publicly available patent materials, journal articles, and grand applications, or derived second hand from Dr. Henry Huang's research notes and grant files. As the district court determined, MJ's knowledge was neither "unmediated" nor witnessed with its "own eyes." See Wang v. FMC Corp., 975 F.2d 1412, 1417 (9th Cir. 1992). MJ Research did not have direct knowledge of the alleged fraud at issue here and thus is not an "original source."

10) ENVIRONMENTAL LIABILITIES: Maionchi v. Union Pacific Corp., 04-15579 (9th Cir. Nov. 23, 2005) (unpublished). Goodwin, O'Scannlain, and Tallman, Circuit Judges.

The appellants, former partners and sole shareholders of Solvent Service Company, challenged the district court's award of summary judgment in favor of Union Pacific. The district court found that the Merger Agreement under which the former partners' company was sold to Union Pacific did not allocate responsibility for environmental liabilities arising our of property formerly occupied by the business.
The USCA reversed and remanded. The district court improperly looked beyond the plain language of the Merger Agreement to determine that the parties did not intend to cover liabilities arising our of the Industrial Avenue property. "Under California law, the mutual intention of the parties at the time the contract is formed governs interpretation of the contract." Milenbach v. CIR, 318 F.3d 924, 936 (9th Cir. 2003). "Such intent is to be inferred, if possible, solely from the written provisions of the contract." Id. The Parol Evidence Rule bars courts from using extrinsic evidence to rewrite the terms of the contract where the language used is not reasonably susceptible to such an interpretation. Casa Herrera, Inc. v. Beydoun, 83 P.3d 497, 502-503 (Cal. 2004). The Merger Agreement's indemnity provisions contain terms which specify the party responsible for Shareholder Environmental Liabilities (SELs) at any given time. Because the express terms are comprehensive with regard to allocating liability for SELs, the extent of Union Pacific's duty to indemnify the former partners should be determined solely by the unambiguous provisions of the Merger Agreement. Moreover, the parties' risk allocation system in Sec. 3.17 of the Merger Agreement applies to both the partnership's and the corporation's environmental liabilities for property currently or formerly occupied by the business. Use of the phrase "including any predecessor of successor of the Company, whatever its legal form" can only refer to the former partnership. Union Pacific thus promised to indemnify the former partners against all SELs, unless the former partners committed knowing and intentional or willful misrepresentation or breach. Union Pacific did not make that assertion, so the Merger Agreement provides the exclusive means of allocating residual and long-term environmental risk between the parties. Finally, based on the clear language of the Merger Agreement, the indemnity provision as it binds Union Pacific had not expired and must continue-indefinitely. Accordingly, Union Pacific was not discharged from its obligation to indemnify the former partners against the liabilities arising out of the contamination at the Industrial Avenue site. The language of the Merger Agreement was not susceptible to multiple meanings and the district court improperly admitted extrinsic evidence to alter its terms. Thus, the district court's grant of summary judgment for Union Pacific was improper and the USCA reversed. Damage and the terms of the declaratory relief should be determined on remand.

11) ENVIRONMENTAL LAW: Columbia Snake River Irrigators Association v. Gutierrez, 04-35669 (9th Cir. Nov. 18, 2005) (unpublished). Kleinfeld and Graber, Circuit Judges, and Moskowitz, District Judge.

Columbia Snake River Irrigators Association sued the Secretary of Commerce, National Oceanic and Atmospheric Administration ("NOAA") Fisheries, and the Regional Director of NOAA Fisheries, challenging a 2000 biological opinion ("BiOp") related to the Federal Columbia River Power System. Earlier, the National Wildlife Federation ("NWF") had sued the same defendants challenging the same 2000 BiOp. On this appeal, the plaintiff disputes three ruling of the district court, and the USCA dismissed for lack of jurisdiction.
First, the district court stayed the plaintiff's action until the defendants issued a revised BiOp in accordance with the court's remand in the NWF case. In 2004 the defendants issued a replacement document, the 2004 BiOp. Upon its issuance the stay order expired by its own terms. Therefore, the plaintiff's appeal of the stay order was moot; now that the stay has ended, no further relief is possible on that issue. Article III requires a live controversy at every state of litigation.

Second, the district court also denied the plaintiff's motion to consolidate this case with the NWF case. The plaintiff's appeal of that issue was also moot. In 2005 the plaintiffs filed a new action-not involved in this appeal-challenging the 2004 BiOp. That action had been consolidated with the NWF litigation in the district court. Because the only extant BiOp is the 2004 BiOp, and because the plaintiff's action to challenge it has been consolidated pursuant to the plaintiff's request, no further relief was available.

Third, the district court refused (through a different judge who heard the motion) to disqualify Judge Redden from presiding over this case. The denial of a disqualification motion is an interlocutory order and thus is not appealable. Thomassen v. USA, 835 F.2d 727, 732 n.3 (9th Cir. 1987).

Finally, in the alternative, the plaintiff asked the USCA to issue a writ of mandamus under 28 USC Sec. 1651 to require Judge Redden's disqualification. Applying the factors from Bauman v. U.S. District Court, 557 F.2d 650, 650-55 (9th Cir. 1977), the USCA denied the plaintiff's alternative request. At least three of the Bauman factors counted strongly against mandamus relief. The first factor (no alternative means for review) was not met because the plaintiff will have an opportunity, on direct appeal of its second action, to challenge the court's ruling in the context of the case involving the 2004 BiOp. The third factor (clear error as a matter of law) is not met because opinions formed by a judge on the basis of the proceedings themselves are not improper bias, and the record does not clearly demonstrate "a deep-seated favoritism or antagonism that would have fair judgment impossible." Liteky v. USA, 510 US 540, 555 (1994). The fifth factor (new, important issue of first impression) is not met because the procedures and standards for disqualification on account of judicial bias are well-established.

12) BANKING LAW: De La Fuente v. FDIC, 04-71027 (9th Cir. Nov. 29, 2005) (unpublished). Fernandez and Berzon, Circuit Judges, and Panner, District Judge.

Roque De La Fuente II was removed from his position as a bank director and permanently banned from the banking industry by the Federal Deposit Insurance Corporation pursuant to Sec. 8(e) of the Federal Deposit Insurance Act. The FDIC determined that De La Fuente violated Regulation O, 12 CFR Sec. 215.1-13, and Sec. 23A of the Federal Reserve Act, and engaged in transactions involving unsafe and unsound banking practices. On an earlier petition for review, the USCA upheld most of the regulatory violations, reversed the statutory violations, and remanded to the FDIC to decide, in light of the remaining violations, whether a life-time ban was justified. On remand, the FDIC reimposed the sanction. The USCA then concluded that the FDIC's decision was neither arbitrary nor capricious and it was not an abuse of discretion. The USCA thus denied the petition for review.

The USCA noted that the Circuit's prior decision established that De La Fuente violated Regulation O and engaged in two loan-related transactions that constituted unsafe and unsound banking practices. Although De La Fuente "does not contend the violations themselves can be reversed," he claims the FDIC on remand ignored his arguments that some of the loans at issue were profitable, that none put the bank at risk, and the bank suffered no loss on the loan related transactions. He maintained that the FDIC should have considered these arguments and concluded that he lacked the requisite "culpability" for purposes of imposing the permanent ban. The USCA did not agree with De La Fuente that the FDIC failed to consider his arguments. The FDIC stated that "each of the … arguments offered by [De La Fuente] in favor of mitigation is … unpersuasive and can be dismissed summarily." For example, the FDIC addressed De La Fuente's claim that he received "only minimal benefits as a result of the violations." It noted that "regardless of how much or how little he personally profited [De La Fuente], by placing himself above the law, created an environment where he was in the advantageous but improper position of having ready funds at his disposal for himself and his related entitles." The FDIC also reviewed De La Fuente's claim that "many of the transactions in question … ultimately … benefited the bank." The FDIC reasoned that De La Fuente's claim "is unpersuasive for purposes of this analysis because … the fact that he was able to obtain loans to his related interests without regard to regulatory limitations was enough." Finally, the FDIC rejected De La Fuente's claims that he committed "merely minor technical infractions" by noting that his conduct was deliberate and threatened the Bank and its depositors. Clearly, the FDIC did not ignore De La Fuente's arguments.

The USCA also did not agree with De La Fuente that the FDIC abused its discretion by reimposing the permanent ban. First, as it previously noted, "De La Fuente's actions evidenced personal dishonesty," he "acted untruthfully, and in violation of his fiduciary duty," and "his conduct constitutes willful and continuing disregard for the safety and soundness of FIB."

De La Fuente v. FDIC, 332 F.3d 1208, 1223 (9th Cir. 2003). Although the court remanded, it also said that it could not help but note that De La Fuente's use of FIB as his personal piggy bank was in shocking disregard of sound banking practices and the law to detriment of depositors, shareholders, and the public. Id. at 1226-27. Second, the FDIC carefully reconsidered De La Fuente's actions and concluded that "his conduct was deliberate and unremitting." The FDIC believed that in view of De La Fuente's continuing misconduct and, in particular, his purposeful dishonest, De La Fuente must be permanently barred from the banking industry. The FDIC reasoned that declining to issue an order of prohibition or limiting it in any manner weakened the FDIC's ability to protect the public interest by lessening the deterrent effect of its enforcement powers. The USCA did not disagree with this reasoning and thus concluded that FDIC's decision to impose a permanent ban pursuant to it authority under Sec. 8(e) was not an abuse of discretion.

13) SECURITIES LAW: SEC v. The Rose Fund, 04-17321 (9th Cir. Nov. 16, 2005) (unpublished). Wallace, Leavy, and Berzon, Circuit Judges.

Nelson appealed pro se the district court's order and final judgment: 1) granting summary judgment in favor of the SEC in the SEC's action alleging fraud in the offer and sale of unregistered securities, 2) issuing a permanent injunction enjoining Nelson from committing future violations of the federal securities laws, 3) requiring Nelson to disgorge $93,987.22, and 4) imposing a $10,000 civil penalty.
The USCA affirmed. It rejected Nelson's contention that the district court abused its discretion by striking his declaration filed in opposition to the SEC's summary judgment motion. The USCA also rejected Nelson's contention that he was entitled to a jury trial on the issue of disgorgement. In addition, the district court did not abuse its discretion in ordering Nelson to disgorge monies he claimed were used to pay business expenses. The amount of the disgorgement represented "a reasonable approximation of the profits causally connected to the violation," and the purpose to which those monies was put is irrelevant. Nelson's claims that the disgorgement order constituted cruel and unusual punishment failed because disgorgement is not "punishment" within the meaning of the Eighth Amendment. The USCA rejected Nelson's claim that the district court's pre-trial order freezing his assets prevented him from hiring a lawyer and thus made a fair trial impossible. Although Nelson initially joined one of his co-defendants in a motion to modify that order, he later withdrew his request for modification and did not renew it. Nelson's contention that the district judge was impermissibly biased against him failed because he never filed a motion to recuse pursuant to 28 USC Sec. 144. Even if the bias issue were properly before the USCA, none of the reasons cited by Nelson, whether considered individually or collectively, supported a finding of bias. Finally, Nelson's assertions that the SEC's attorneys engaged in misconduct, used forged documents to prosecute him, and presented a false accounting to the district court was not supported in the record.

14) FORECLOSURE SALES: G.E. Capital Mortgage Services, Inc. v. Maldonado, 04-15564 (9th Cir. Nov. 21, 2005) (unpublished). Noonan, Rymer, and Gould, Circuit Judges.

G.E. Capital Mortgage Services appealed the district court's grant of summary judgment in favor of the defendant Cal-Western Reconveyance Corporation in its civil action alleging improper distribution of surplus funds following a non-judicial foreclosure sale of property. G.E. also appealed the district court's sua sponte grant of summary judgment in favor of defendants Gabriel and Juanita Maldonado for breach of contract. The USCA affirmed the district court's grant of summary judgment in favor of Cal-Western, and re-versed the sua sponte grant of summary judgment in favor of the Maldonados.

The Maldonados' property was encumbered by two deeds of trust and an IRS tax lien. The senior deed was executed in favor of the United Savings Bank, and the junior deed in favor of Becker Mortgage, of which Travelers Mortgage Services, and subsequently G.E., were successor in interest. The Maldonados defaulted on the United Savings loan and the property became subject to a non-judicial foreclosure sale, pursuant to the power of sale contained in the first deed of trust. Cal-Western handled the default and foreclosure on behalf of United Savings. Prior to the foreclosure sale, Cal-Western obtained a Trustee's Sale Guarantee ("TSG") which assured the priority of the recorded interest in the Maldonados' property. The TSG listed Travelers, not G.E., as the beneficiary under the second deed of trust. Cal-Western subsequently received notice that a Substitution of Trustee was recorded under the Travelers' deed of trust, identifying a substitute trustee for "G.E. Capital, f/k/a Travelers." The Substitution of Trustee did not specify a new address for the beneficiary, and Cal-Western only had actual knowledge of Travelers' address. The foreclosure sale was conducted on December 9, 1998, resulting in a surplus of $141,504. Relying on the TSG, Cal-Western sent the notice of surplus funds to Travelers, the IRS, and the Maldonados. The Maldonados and the IRS each made timely claims to the surplus funds, while G.E. failed to submit a timely claim. On June 7, 1999 the IRS sent a notice of levy on the Maldonados' property for $123,364 to Cal-Western. Cal-Western honored the IRS levy and paid out the remaining surplus funds to the Maldonados and itself and its counsel, for statutory fees and reimbursement of expenses. G.E. argued that Cal-Western failed to comply with its statutory duties in disbursing the surplus funds and wrongfully complied with the IRS levy.

The district court found, and the parties did not dispute, that Cal-Western had no duty to send notice of surplus funds to G.E. The USCA agreed with the district court and held that there was no failure to give proper notice of surplus funds. With certain exceptions not applicable here, any person in possession of or obligated with respect to property or rights to property subject to levy upon which levy has been made, must surrender the property or rights to the Secretary of the Treasury. 26 USCA Sec. 6332(a) (West Supp. 1995). A person who fails to surrender the property subject to levy upon demand of the Secretary, "shall be liable in his own person and estate to the United States in a sum equal to the value of the property or rights not so surrendered, … together with costs and interest on such sum …," and shall also be liable for a penalty equal to 50% of that amount. 26 USCA Sec. 6332(d). Additionally, those who comply with the levy are generally "discharged from any obligation or liability to the delinquent taxpayer and any other person with respect to such property or rights to property arising from such surrender or payment." 26 USCA Sec. 6332(e); 26 CFR Sec. 301.6332-1(c). The USCA held that Cal-Western was required to honor the levy and that the levy trumped any obligation of Cal-Western to distribute funds to G.E. It also found Cal-Western immune from liability under Sec. 6332(e). G.E.'s remaining contentions with respect to Cal-Western lacked merit.

A sua sponte entry of summary judgment is proper only if "there is no genuine dispute respecting a material fact essential to the proof" of the prevailing party's case and the litigant against whom judgment is entered is "given reasonable notice that the sufficiency of his or her claim will be in issue." O'Keefe v. Van Boening, 82 F.3d 322 (9th Cir. 1996). Upon review of the record, the USCA concluded that the district court did not provide G.E. with sufficient notice that the sufficiency of its claims against the Maldonados would be in issue, or give it a full and fair opportunity to ventilate the issues in the case. Accordingly, the USCA reversed the district court's grant of summary judgment in favor of the Maldonados without prejudice to renewed consideration once G.E. had been afforded adequate notice that the sufficiency of its claims will be at issue and has been given an opportunity to respond. For the reasons stated, the USCA affirmed the district court's grant of summary judgment in favor of Cal-Western. It reversed the grant of summary judgment in favor of the Maldonados. And, it denied G.E.'s Motion Requesting Judicial Notice of Legislative History of California Statutes and also Cal-Western's Motion to Strike.

15) TRADEMARKS / INSURANCE: Peterson Tractor Company v. The Travelers Indemnity Company of Illinois, 04-15541 (9th Cir. Nov. 23, 2005) (unpublished). O'Scannlain, Thomas, and Tallman, Circuit Judges.

Both Peterson Tractor Company and Travelers Indemnity Company of Illinois appealed the judgment of the district court. The USCA affirmed in part and reversed in part.

The district court correctly held that Travelers had a duty to defend Peterson in an action brought against it by Kelly Tractor Company. Kelly's claims against Peterson clearly stated an advertising injury triggering Travelers' duty to defend under California law. Kelly alleged that Peterson used the trademarks of Industria Meccenica Trivelle, to which Kelly had an exclusive license in the western hemisphere, without authorization. This claim stated an advertising injury, either as a misappropriation of Peterson's advertising ideas, or as an infringement of title. Because Kelly's complaint stated an injury potentially covered by Peterson's insurance contract, Travelers breached its duty to defend when it refused to defend Peterson. Gray v. Zurich Ins. Co., 419 P.2d 168, 175 (Cal. 1966). Where an insurer wrongfully refuses to defend an action against its insured, the insurer is liable for the total amount of the attorneys' fees unless the insurer produces "undeniable evidence" that it is not liable for all of the fees. Hogan v. Midland Nat'l Ins. Co., 476 P.2d 825, 831 (Cal. 1970). The district court properly held Travelers liable for the entire $81,886.57 because it has not produced "undeniable evidence" that it is not responsible. The district court also properly confined Peterson's breach of contract damages to expenses incurred in defending the suit. When an insurer breaches it duty to defend, the insured may recover as contract damages the funds it expended defending itself, and also any damages that proximately resulted from the insurer's breach of the insurance contract. It does not follow that but for Travelers' failure to defend the case, Peterson would have received a more favorable settlement. The fact that Peterson may have saved Travelers litigation expenses by settling did not transform Peterson's claim for indemnity into a claim for contract damages. The district court thus correctly held that Peterson was not entitled to recover its settlement payment on the basis of a consequential damage theory.

The district court erred when it placed the burden of proof on Peterson, and not Travelers, to allocate the settlement with Kelly between covered and uncovered claims. An insurer must indemnify the insured against judgments based on claims covered by the insurance policy. In a mixed cause of action, where it is unclear whether a judgment was based on covered or uncovered claims, the insurer is liable for the entire judgment. Similarly, when an insurer breaches it duty to defend and the insured demonstrates that at least one claim in a mixed cause of action is covered, the insured does not have to allocate between claims. Rather, the insurer "can still present any defenses not inconsistent with the judgment against the insured." Id. at 832. Hogan did not resolve the question of whether its holding applied with equal force to settlements, nor has any subsequent California Supreme Court case. When sitting in diversity on a case raising a state law issue of first impression, the USCA must use its best judgment to predict how the highest state court would resolve the issue. Burlington Ins. Co. v. Oceanic Design & Const., Inc., 383 F.3d 940, 944 (9th Cir. 2004). The USCA thought that the California Supreme Court would apply the logic of Gray and Hogan to settlements, and not confine it to judgments. Hogan noted that it would "cast an impossible burden" on the insured to be required "to show the extent of the loss caused by the insurer's breach." Hogan, 476 P.2d at 833. On the other hand, Hogan also noted that an insurer was entitled to assert a defense that some or all of the judgment might not be covered by the policy. Id. at 832. The import of these statements is that the burden rests on the insured initially to show that at least a portion of the settlement involved compensation for damages attributable to claims that were covered by the insurance policy. Once the insured has satisfied that burden, the burden of proof shifts to the insurer to show that portion of the settlement is attributable to covered claims. Because the district court placed the burden of allocation on the insured, rather than the insurer, the USCA reversed the judgment in part, and remanded for a re-allocation of the settlement. Costs were awarded to Peterson Tractor Company.

16) TRADEMARKS: Omaha Steaks International, Inc. v. Pathak, 04-56890 (9th Cir. Nov. 16, 2005) (unpublished). Wallace, Leavy, and Berzon, Circuit Judges.

Pathak appealed pro se from the district court's default judgment against him, for failure to comply with a contempt order, in a trademark action brought by Omaha Steaks International. The USCA affirmed. The district court issued a preliminary injunction against Pathak, which Pathak ignored. The district court then found Pathak in contempt and awarded monetary sanctions. Pathak neither paid the sanctions nor adhered to the injunction. The district court placed Pathak in default as a further contempt sanction and subsequently entered a default judgment against Pathak. Pathak appealed. His opening brief and reply brief failed to raise any contentions relating to the district court's contempt order or entry of default judgment. Pathak thus waived his opportunity to challenge the district court's decisions and the USCA declined to consider his contentions. The USCA denied as moot Pathak's motion to amend his opening brief, construed as a request for judicial notice.

17) TRADE SECRETS: Lam Research Corporation v. Deshmukh, 05-35230 (9th Cir. Nov. 29, 2005) (unpublished). Reinhardt, W. Fletcher, and Bybee, Circuit Judges.

Deshmukh sought to vacate a preliminary injunction enjoining him from working for Applied Materials, his new employer in certain capacities. Lam Research, Deshmukh's former employer, insisted that an injunction is necessary to protect it against Deshmukh's inevitable misappropriation of trade secrets in violation of Washington's Trade Secrets Act. R.C.W. Sec. 19.108, et seq. Lam's case turned on an "inevitable disclosure" theory. In its decision dismissing Lam's first complaint, the district court observed that Lam "alleged no actual misappropriation and no act of threatened misappropriation." Because the complaint rested entirely on the inevitable disclosure theory, and because Lam pleaded no facts in support of this theory, the complaint had to be dismissed. Lam then filed an amended complaint in which it alleged facts to support its inevitable disclosure claim. The district court found these allegations sufficient and granted Lam's motion for a preliminary injunction. Deshmukh first argued that the district court lacked jurisdiction under 28 USC Sec. 1332 for want of diversity between the parties. Lam is a California corporation, and, although Deshmukh lived in Washington while working for Lam, Deshmukh insisted that he had established California citizenship by the time the case commenced. A plaintiff fears the burden of proof to establish that jurisdiciton exists at the time of filing. However, when a defendant contests jurisdiciton based on an alleged change of domicile, a presumption arises in favor of the old domicile, and the defendant bears the burden to rebut this presumption. Id. Deshmukh had not done so here. In order to acquire a new domicile, a person must 1) take up residence in a different state with 2) the intent to remain there permanently. Twice after Lam filed its complaint, Deshmukh signed documents in which he acknowledged that he remained a Washington citizen. Given that he must rebut the presumption in favor of Washington citizenship, these acknowledgments made it impossible for Deshmukh to establish that he intended to relinquish his Washington domicile by the date this case began.

Deshmukh also argued that the district court erroneously applied Washington law. Washington law may embrace the inevitable disclosure doctrine. California law unambiguously does not. To decide a choice of law dispute in a trade secrets misappropriation case, Washington follows the "most significant relationship" rule of the Restatement (Second) of the Conflict of Laws. Section 145 of the Restatement recommends that courts apply the following factors to determine the applicable law: a) the place where the injury occurred; b) the place where the conduct causing the injury occurred; c) the domicile, residence, nationality, place of incorporation and place of business of the parties: and, d) the place where the relationship, if any, between the parties is centered. Three of the four factors favor application of California law. Although it has an office in Washington, Lam would feel an injury caused by Deshmukh at its headquarters in California. When a trade secrets case involves the wrongful use of lawfully-acquired trade secrets, the injury-causing conduct occurs where the defendant makes use of the secret. Because Deshmukh now works in California, if he discloses trade secrets, the injury-causing conduct would occur in California. Lam is a California corporation, and Deshmukh is now a California citizen. Arguably, the place of the parties' relationship centered around Washington, where Deshmukh lived while working for Lam. But only on "rare occasions" is this factor given significant weight in the choice of law calculus. The "protection of justified expectations," another factor Washington courts add into the choice of law mix, also favors California law. One day before Lam filed suit in Washington, its counsel sent Deshmukh a letter warning him that the "California Civil Code and California Penal Code … contain limitations on your use of Lam's trade secrets," and discussing the sorts of consequences Deshmukh would fact under California law if he violates these limitations. This letter indicated Lam's expectation that California law would apply, and nothing in the record suggested otherwise.

The USCA concluded that the district court erred in choosing Washington law to apply to this dispute. Because California law applies, and because California does not recognize the inevitable disclosure doctrine, the preliminary injunction, which is premised on a valid inevitable disclosure cause of action, must be vacated. At oral argument Lam's counsel insisted that Lam would have a valid cause of action under California law for threatened misappropriation of trade secrets. However, the district court made clear in its decision dismissing Lam's first complaint that Lam's claims rested entirely on the inevitable disclosure theory. Lam's amended complaint alleged no facts to suggest otherwise, and nowhere in its brief did Lam argue that it has a valid cause of action under California law. Thus, without the inevitable disclosure doctrine, Lam has no claim. Accordingly, Lam's complaint had to be dismissed.

18) DUE PROCESS / PROPERTY: Makdessian v. City of Mountain View, 03-17325 (9th Cir. Nov. 1, 2005) (unpublished). B. Fletcher, Gibson, and Berzon, Circuit Judges.

Harut and Sossy Makdessian appealed the district court's order granting summary judgment in favor of the City of Mountain View, California, on the Makdessians' action under 42 USC Sec. 1983. The Makdessians alleged that the City violated their constitutional rights to procedural due process by sending their appeal of a conditional use permit modification decision back to the City Zoning Administrator rather than to a hearing before the City Council. The district court found that the denial of a hearing before the City Council did not rise to the level of a due process violation, as the Makdessians were not deprived of a property right. The USCA affirmed.

The Makdessians leased property in an area zoned for residential use from Thomas Sinkiewicz in early 2001. They received a conditional use permit from the City in April, which allowed them to operate an automobile repair shop on their property. In response to complaints from neighbors about the business, the City sent the Makdessians a letter in June 2001 advising them to correct all violations of the municipal code and of the conditions of their permit. Complaints from the neighbors continued, and the City scheduled a public permit revocation hearing, which was held on October 10, 2001. The Zoning Administrator modified the permit and imposed more restrictive conditions on the business. The Makdessians appealed this decision to the City Council and continued to operate under the conditions of the original permit. While the appeal was pending, Sinkiewicz informed the City that the Makdessians would be vacating the premises as of January 31, 2002, and requested that the appeal be referred to the Zoning Administrator rather than heard by the City Council. As a result, the Zoning Administrator held another hearing on January 23, 2002, which was attended by one of the Makdessians with an attorney. That hearing resulted in a somewhat different set of modifications to the original permit. The Makdessians did not challenge these new conditions, nor the City Council's referral of their appeal to the Zoning Administrator. They then vacated the property.

A successful action under Sec. 1983 requires that the conduct complaint of be committed under color of state law and that the conduct work a denial of rights secured by the Constitution or laws of the United States. Although the first requirement was met in this case, the Makdessians failed to show a denial of their constitutional rights to procedural due process. Where state law contains detailed provisions for the suspension and revocation of a conditional use permit, the holder of the permit has a sufficient claim of entitlement to trigger the constitutional requirements of due process if the holder is denied the permit. Assuming the Makdessians had such a property interest in their conditional use permit, they were not deprived of that interest. The Makdessians operated their business under the terms of the original permit until the January hearing. Thereafter, they could have operated under the new terms or appealed those terms to the City Council. Instead they chose to vacate the premises. Even if the modifications to the conditional use permits in January amounted to a deprivation of a property interest, the Makdessians received all the process they were due under the Constitution. The Due Process Clause generally requires notice and an opportunity that some kind of hearing before the deprivation of a significant property interest. The exact procedures required depends upon the nature of the interest at stake and the government function involved. When a zoning board decides to revoke a permit, due process requires notice to the person holding the permit, a hearing, proper reasons for the revocation, and some form of judicial review. The Makdessians had notice of and attended two public hearings before the Zoning Administrator concerning the modifications to their conditional use permit. At both hearings, the Makdessians were represented by counsel, and the Administrator issued written findings. Although the City may have violated the municipal ordinance when it referred the Makdessians' first appeal back to the Zoning Administrator, that error was insufficient to constitute a violation of procedural due process in light of the other proceedings available to the Makdessians. A state provides adequate procedural due process when it offers reasonable remedies to rectify a legal error by a local zoning board. The Makdessians had the options of appealing the January decision to the City Council or seeking a writ of mandate in the Superior Court. They chose not to pursue either option. For all of the above reason, the Makdessians were not denied procedural due process. The USCA thus affirmed the district court's judgment.

19) IMMIGRATION: Ali v. Gonzales, 04-70126 (9th Cir. Nov. 16, 2005) (unpublished). Wallace, Leavy, and Berzon, Circuit Judges.
Ali, a native and citizen of Pakistan, petitioned for review of the Board of Immigration Appeals' decision dismissing her appeal from an immigration judge's order pretermitting her application for adjustment of status on the ground that it lacked jurisdiction pursuant to 8 CFR Sec. 245.1(c)(8). The USCA granted the petition for review. It was undisputed that Ali was an arriving alien who was proscribed from applying to adjust her status. This regulation is invalid because it conflicts with the statute. See Bona v. Gonzales, 425 F.3d 663 (9th Cir. 2005) ("We … hold that 8 CFR Sec. 245.1(c)(8) is invalid.) Because Ali "was improperly precluded from applying for adjustment of status during her removal proceedings," id., the USCA granted the petition for review and remanded for proceedings consistent with its disposition.