PUBLISHABLE OPINIONS

1) SECURITIES: Rubke v. Capitol Bancorp. LTD, 07-15083 (9th Cir. Jan. 13, 2009). Rubke, as trustee of the 1986 Rubke Living Trust, and Ferguson, individually and on behalf of similarly situated minority shareholders of Napa Community Bank, appealed the district court's dismissal of their First Amended Complaint, which alleged that Capital Bancorp and its CEO and Chairman Joseph Reid violated Sec. 11 of the Securities Act of 1933 and Secs. 10(b) and 14(c) of the Securities and Exchange Act of 1934. They argued that the district court erred in dismissing their Sec. 11 claims for failure to meet the pleading standards of Fed. R. Civ. Proc. 9(b) and in dismissing their Secs. 10(b) and 14(e) claims for failure to meet the pleadings standards of the Private Securities Litigation Reform Act of 1995. The USCA ruled that the district court did not commit reversible error in either regard and affirmed the dismissal with prejudice. Rubke's First Amended Complaint failed to allege with the requisite particularity that Capitol and Reid made materially misleading statement and omissions in connection with the Exchange Offer in violation of Sec. 11 or Sec. 10(b) and 14(e). Beezer, Roth, and Bybee (author), Circuit Judges. J. Weixel of San Francisco, CA, for the plaintiffs-appellants; B. Ericson of San Francisco, CA, for the defendants-appellees. (Download the full text of this decision at www.ce9.uscourts.gov/)

2) SECURITIES Zucco Partners, LLC v. Digimarc Corp., 06-35758 (9th Cir. Jan. 12, 2009). Zucco Partners and other named plaintiffs (collectively "Zucco") on behalf of those who purchased publicly-traded securities of Digimarc Corporation between April 22, 2003 and July 28, 2004, appealed the district court's dismissal of their Second Amended Complaint, which alleged that Digimarc and two of its officers violated Secs. 10(b) and 20(a) of the Securities Exchange Act of 1934 and the regulations promulgated there-under, including Rule 10b-5. Zucco maintained that the district court erred in determining that its complaint failed to allege a strong inference of scienter as required by the Private Securities Litigation Reform Act ("PSLRA") because the district court applied a more stringent standard than required by Tellabs, Inc. v. Makor Issues & Rights, Ltd., 127 S.Ct. 2499 (2007). Although it previously evaluated the sufficiency of such claims under the PSLRA by the standards of In re Silicon Graphics, Inc. Securities Litigation, 183 F.3d 970 (9th Cir. 1999), and In re Daou Systems, Inc. Securities Litigation, 411 F.3d 1006 (9th Cir. 2005), the USCA had never fully explain how the Tellabs decision related to much of its analysis under these cases. The district court determined that, pursuant to Daou, the plaintiffs' complaint failed to allege scienter with the requisite particularity to survive dismissal under the PSLRA's heightened pleading standard. The USCA held that Tellabs did not materially alter the particularity requirements for scienter claims established in earlier Ninth Circuit opinions, but instead only added a "holistic" component to those requirements. The USCA thus affirmed the district court's dismissal of the complaint with prejudice and held that Zucco failed to adequately plead a strong inference of scienter. Zucco assumed that compiling a large quantity of otherwise questionable allegations would create a strong inference of scienter through the complaint's emergent properties. Although Tellabs instructs courts to view such compilations holistically, even such a comprehensive perspective of Zucco's complaint could not transform a series of inadequate allegations into a viable inference of scienter. T.G. Nelson, Hawkins, and Bybee (author), Circuit Judges. D. Rees of Portland, OR, for the plaintiffs-appellants; B. Ellis of Portland, OR, for the defendants-appellee. (Download the full text of this decision at www.ce9.uscourts.gov/)

3) ANTITRUST: Kaiser Foundation Health Plan, Inc. v. Abbott Laboratories, 06-55687 (9th Cir. Jan. 13, 2009). Kaiser Foundation Health Plan sued Abbott Laboratories and Geneva Pharmaceuticals for violations of the Sherman Antitrust Act and analogous provisions of California law. It brought a restraint-of-trade claim under Section One of the Sherman Act against both Abbott and Geneva, and a monopolization claim under Section Two against just Abbott. A multidistrict litigation federal district court in Florida allowed the Section One claim to go to trial but granted partial summary judgment to Kaiser on its restraint-of-trade claim, holding that an agreement between Abbott and Geneva was a per se violation of Section One. It granted summary judgment to Abbott on Kaiser's monopolization claim, holding that the Noerr-Pennington doctrine immunized Abbott's patent and litigation activity. The MDL court later transferred the entire lawsuit to a California district court where a jury returned a verdict against Kaiser. The USCA affirmed the judgment entered on the jury's verdict on Kaiser's Section One claim, but reversed summary judgment on Kaiser's Section Two claim and remanded. Kozinski, O'Scannlain, and W. Fletcher (author), Circuit Judges. D. Frederick of Washington, DC, for the appellant; P. Olszowka of Chicago, IL, for the appellees. (Download the full text of this decision at www.ce9.uscourts.gov/)

4) BANKRUPTCY: Blausey v. U.S. Trustee, 07-15955 (9th Cir. Jan. 23, 2009). The Blauseys appealed the bankruptcy court's dis-missal of their Chapter 7 bankruptcy petition. The bankruptcy court granted the Trustee's motion to dismiss pursuant to 11 USC Sec. 707(b)(2) of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 ("BAPCPA")-a provision that allows the Trus-tee to move for dismissal where a statutory means test demonstrates a presumption of abuse. The bankruptcy court held that the $4,000 per month in disability insurance benefits that Mrs. Blausey received from her private insurer should have been included in the Blaus-eys' current monthly income ("CMI") under the statutory means test. With the benefits included, the Blauseys' CMI was high enough to trigger the presumption of abuse. The Blauseys appealed directly to the USCA under 28 USC Sec. 158(d)(2), a BAPCPA provision authorizing a direct appeal from a bankruptcy court to a court of appeals. They argued that the bankruptcy court should have interpreted the word "income" as used in the definition of CMI, 11 USC Sec. 101(10A), based on the meaning of "gross income" under the Internal Revenue Code. They reasoned that because private disability insurance benefits are excluded from gross income, Mrs. Blausey's benefits must be excluded from CMI. The USCA affirming the bankruptcy court, holding that Mrs. Blausey's private disability insurance benefits were income that should have been included in CMI. Dissenting, Judge Gorsuch would dismiss this case for lack of jurisdiction. He thought that the Blauseys' argument that the USCA may entertain their appeal, even if it is ultimately rejected, would run afoul of Supreme Court directions about the respect due statutory limits on jurisdiction and exacerbated a circuit split. B. Fletcher, McKeown, and Gorsuch (dissenting), Circuit Judges. Per Curiam. D. Chandler of Santa Rosa, CA, for the debtors; S. Marcus of Washington, DC, for the trustee. ((Download the full text of this decision at www.ce9.uscourts.gov/)

5) TRUTH IN LENDING ACT / UNFAIR COMPETITION: Hauk v. JP Morgan Chase Bank, 06-56846 (9th Cir. Jan. 23, 2009). Hauk appealed the district court's grant of summary judgment for Chase Bank on his claims for violations of the Truth in Lending Act ("TILA"), California's Unfair Competition Law ("UCL"), Cal. Bus. & Prof. Code. Secs. 17200-17210, and California's False Adver-tising Law ("FAL"). The USCA upheld the district court's grant of summary judgment on Hauk's TILA claim but reversed and re-manded the district court's grant of summary judgment on Hauk's state law UCL and FAL claims, because a genuine issue of material fact remained with respect to those claims. Callahan and Ikuta, Circuit Judges, and Shubb (author), District Judge. M. Braun of Los Angeles, CA, for the plaintiff-appellant; S. Hufstedler of Los Angeles, CA, for the defendant-appellee. (Download the full text of this decision at www.ce9.uscourts.gov/)

6) CONTRACTS: Taco Bell Corp. v. TBWA Chiat/Day Inc., 07-56532 (9th Cir. Jan. 23, 2009). This case filed in the Central District of California followed a judgment issued against Taco Bell in the Western District of Michigan for breach by Taco Bell of an im-plied contract for using a third party's Chihuahua character in advertising developed by TBA Worldwide ("TBWA"). In its lawsuit, Taco Bell sought indemnification from TBWA on the ground that the liability it incurred in favor of the third party was cause by TBWA. The district court entered a summary judgment for TBWA. The USCA affirmed. The district court properly held that there was evidence only of Taco Bell's fault in its liability to the creators of the Chihuahua character from Wrench LLC, a Michigan corporation. As a result, no indemnification obligation from TBWA to Taco Bell arose. Pregerson, Pregerson, D.W. Nelson, and Thompson (author), Circuit Judges. R. Harris of Chicago, IL, for the appellants; P. Corcoran of New York, NY, for the appellee. (Download the full text of this decision at www.ce9.uscourts.gov/)

7) LABOR LAW: Moore-Thomas v. Alaska Airlines, 06-35923 (9th Cir. Jan. 27, 2009). Moore-Thomas ("Moore") appealed the district court's dismissal of her uncertified class action in which she alleged that Alaska Airlines willfully failed to pay her and other former employees all wages due upon termination, at the time and in the manner required by Oregon Revised Statutes Sec. 652.140. She argued that the district court erred by ruling that the Railway Labor Act ("RLA") completely pre-empted her state law claim, by denying her motion to remand, and by granting Alaska's motion to dismiss for lack of subject matter jurisdiction. Because the RLA did not completely pre-empt Moore's claim, the USCA reversed and remanded with instructions to vacate the judgment and remand the action to state court for lack of subject matter jurisdiction. Even assuming that Alaska's removal petition showed that the RLA provides a complete federal defense to Moore's state wage and hour claim, because the RLA is subject to ordinary rather than complete pre-emption, the complaint did not arise under federal law and was not removable. The district court erred in determining otherwise. Tashima and M.D. Smith (author), Circuit Judges, and Wu, District Judge. A.E. Bailey of Vancouver, WA, for the appellant; B. Baumgart of Portland, OR, for the appellee. (Download the full text of this decision at www.ce9.uscourts.gov/)

8) DISABILITY BENEFITS: Noland v. Heald College, 07-15679 (9th Cir. Jan. 13, 2009). After suffering injuries in a work-place fall, Nolan received long-term disability benefits from Metropolitan Life Insurance Company ("MetLife"). After paying benefits for two years, MetLife reviewed Nolan's file and found that he no longer qualified for benefits. He twice appealed that decision, but Met-Life denied both appeals in reliance upon the opinions of independent physicians. Nolan then filed this action under the Employee Retirement Income Security Act of 1974 ("ERISA"). The district court granted MetLife summary judgment, concluding that the abuse of discretion standard tempered with no skepticism applied, and that MetLife did not abuse its discretion in denying benefits. The USCA concluded that a district court must apply the traditional rules of summary judgment when examining evidence outside of the administrative record in an ERISA case, including the requirement that the evidence must be viewed in the light most favorable to the non-moving party. As the district court failed to apply the traditional rules of summary judgment in examining Nolan's evidence, the USCA reversed and remanded for further proceedings. Fernandez, T.G. Nelson (author), and Thomas, Circuit Judges. G. White of San Francisco, CA, for the appellant; R. Hull of San Francisco, CA, for the appellees. ((Download the full text of this decision at www.ce9.uscourts.gov/)

9) PENSION BENEFITS: Owens v. Automotive Machinists Pension Trust, 07-35253 (9th Cir. Jan. 12, 2009). For more than 30 years, Norma and Phillip Owens maintained a "quasi-marital" relationship. In 2004, they separated. On August 19, 2005, the Superior Court of King County, Washington, issued an order awarding Norma a 50% interest in the pension benefits being paid to Philip by the Automotive Machinist Pension Trust. The Trust declined to implement the order on the ground that it was not a valid Qualified Domestic Relations Order ("QDRO") under ERISA Sec. 1056. Specifically, the Trust argued that the order did not relate to "marital property rights" pursuant to 29 USC Sec. 1056(d)(3)(B)(ii)(I), and that Norma was not an "Alternate Payee" under 29 USC Sec. 1056(d)(3)(K) because she did not qualify as an "other dependent." The USCA agreed with the federal district court that because Norma and Phillip lived together in a quasi-marital relationship for more than 30 years, the order did in fact relate to "marital property rights," that Norma was an "Alternate Payee" under Sec. 1036(d)(3)(B)(i)(I), and that the order thus qualified as a valid QDRO. The USCA affirmed the district court's denial of the Trust's Motion for Reconsideration. Dissenting, Judge Noonan thought that the arbi-tration award and the state domestic relations order Norma secured created property interests in her that may well be secure by actions taken directly against Philip. The award and the state order have not created a right to direct payment by the trustee to the plan how-ever. Pregerson (author), Canby, and Noonan (dissenting), Circuit Judges. B. McKenzie and L. Coughran of Seattle, WA, for the ap-pellees; H. Reichenberg of City of Federal Way, WA, for the appellee. (Download the full text of this decision at www.ce9.uscourts.gov/)

10) FAIR CREDIT REPORTING: Gorman v. Wolpoff & Abramson, 06-17226 (9th Cir. Jan. 12, 2009). Gorman purchased a satellite TV system using a credit card, issued by MBNA American Bank. He was dissatisfied with the system and lodged a challenged with MBNA to dispute the charge. Unhappy with MBNA's response, Gorman instituted this lawsuit against MBNA, alleging violations of the Fair Credit Reporting Act ("FCRA"), and violations of Cal. Civ. Code Sec. 1785.25(a). The district court dismissed his California statutory claim and granted MBNA summary judgment on the other causes of action. The USCA affirmed in part and reversed in part. First, it noted that the FCRA was enacted "to ensure fair and accurate credit reporting, promote efficiency in the banking system, and protect consumer privacy." As a means to this end, the FCRA sought to make "consumer reporting agencies exercise their grave re-sponsibilities in assembling and evaluating consumers' credit, and disseminating information about consumers' credit with fairness, impartiality, and the respect for the consumer's right to privacy. 15 USC Sec. 1681(a)(4). In addition, to ensure that credit reports are accurate, the FCRA imposes some duties on the sources that provide credit information to consumer reporting agencies ("CRAs"), called "furnishers" in the statute. Section 1681s-2 sets forth responsibilities of furnishers of information to CRAs. The USCA followed the Fourth and Seventh Circuits and held that a furnisher's investigation pursuant to Sec. 1681s-2(b)(1)(A) may not be unreasonable. Paez and Berzon (author), Circuit Judges, and Baer, District Judge. J. Gorman of San Jose, CA, for the plaintiff-appellant; T. Narita of San Francisco, CA, for the defendants-appellees. (Download the full text of this decision at www.ce9.uscourts.gov/)

11) SUFFICIENCY OF SERVICE: Travelers Casualty and Surety Co. v. Brenneke, 06-36077 (9th Cir. Jan. 9, 2009). At issue here was the sufficiency of service under Fed. R. Civ. Proc. 4(e) by the placement of the summons and complaint within a defendant's proximity. The process server stated that he had experienced "significant difficulty" in serving Brenneke, as had other process servers. In the final attempt to serve him, the process server saw Brenneke standing behind a window next to the door watching him. He held the summons and complaint out towards the window, and announced in a loud voice "You are served." Brenneke then watched him place the documents on the doorstep. The process server then completed the proof of service form. Brenneke appealed from a summary judgment in favor of Travelers Casualty and Surety Company of America in the amount of $211,300. He maintained that the district court lacked jurisdiction over him because he was never properly served, and that it erred in finding that he had waived his right to challenge personal jurisdiction. He also claimed that Travelers presented insufficient evidence of damages for the court to have properly made any damage award. Rejecting these contentions, the USCA affirmed the district court's decision. Tashima and M.D. Smith, Circuit Judges, and Wu (author), District Judge. K. Stephens of Seattle, WA, for the appellant; J. Sokol of Portland, OR, for the appellee. (Download the full text of this decision at www.ce9.uscourts.gov/)

12) STANDING: Oregon v. Legal Services Corporation, 06-36012 (9th Cir. Jan. 8, 2009). The State of Oregon, appealed the district court's dismissal of its claims under Fed. R. Civ. Proc. 12(b)(6). Oregon brought suit against the Legal Services Corporation ("LSC") for an alleged violation of its rights under the Tenth Amendment to the U.S. Constitution. LSC had required the recipients of its funding to maintain legal, physical, and financial separation from organizations that engage in certain prohibited activities. Oregon main-tained that this restriction effectively thwarted its ability to regulate the practice of law in Oregon and to provide legal services to its citizens. The district court dismissed the suit on the basis that Oregon's allegations of injury were not recoverable. Oregon appealed. The USCA held that Oregon lacked standing. Oregon failed to allege generalized facts sufficient to show an actual injury for the purposes of establishing its standing in this case. Oregon was not directly affected by the allegedly unconstitutional LSC regulations, and was free to avoid any or all indirect effects of those regulations by simply increasing its own taxes to fund its desired policies. Oregon also failed to show a sufficient basis for bringing suit on behalf of its citizens. Oregon had not shown a cognizable interest apart from the interests of LSC recipients who are also citizens of Oregon. It was thus without standing to pursue its claim. The USCA thus vacated the district court's dismissal of this action on the merits and remanded with instructions that the action be dismissed for lack of subject matter jurisdiction. Tashima and M.D. Smith (author), Circuit Judges, and Wu, District Judge. H. Myers of Salem, OR, for the appellant; W. Freeman of Palo Alto, CA, for the appellee; P. Keisler of Washington, DC, for the intervenor.(Download the full text of this decision at www.ce9.uscourts.gov/)

13) FORUM SELECTION CLAUSES: Doe 1 v. AOL LLC, 07-15323 (9th Cir. Jan. 16, 2009). On July 31, 2006, AOL LLC (formerly America Online, Inc.) made publicly available the internet search records of more than 650,000 of its members. Those records contained personal, and sometimes embarrassing, information about the members. The plaintiffs, all members of AOL, brought an ac-tion in federal district court in California on behalf of themselves and a putative nationwide class of AOL members, alleging violations of federal electronic privacy law, 18 USC Sec. 2702(a). A subclass of AOL members who are California residents also alleged various violations of California law, including the California Consumers Legal Remedies Act. California Civil Code Sec. 1770. Under AOL's Member Agreement, all the plaintiffs had agreed to a forum selection clause designating the "courts of Virginia" as the fora for disputes between AOL and its members. The Member Agreement also contained a choice of law clause designating Virginia law as governing disputes. AOL moved to dismiss the action for improper venue pursuant to Fed. R. Civ. Proc. 12(b)(3), on the basis of the parties' forum selection clause. AOL maintained that the clause permits the plaintiffs to refile their consumer class action in state or federal court in Virginia. The plaintiffs maintained that the forum selection clause limits them to Virginia state court where a class action remedy would be unavailable to them; this, they argued, violates California public policy favoring consumer class actions and renders the forum selection clause unenforceable. The district court granted AOL's motion and dismissed the action without prejudice to the plaintiffs refilling it in a state or federal court in Virginia. The USCA held that the district court erred when it interpreted the forum selection clause to permit actions in either state or federal court in Virginia; the plain language of the clause-courts "of" Virginia-demonstrates that the parties chose only Virginia state courts for any disputes. In addition, the forum selection clause was unenforceable as to California resident plaintiffs being class action claims under California consumer law. The USCA thus reversed and remanded for further proceedings. Concurring, Judge Nelson noted that the Doe plaintiffs have alleged sufficient facts to invoke California's public policy. California courts have made clear that they will "refuse to defer to the selected forum if to do so would substantially diminish the rights of California residents in a way that violates our state's public policy." America Online, Inc. v. Superior Court of Alameda County (Mendoza), 108 Cal. Rptr. 2d 699, 707 (Cal. 2001). Judge Bea concurred in the court's judgment reversing the district court's dismissal order and remanded for further proceedings. However, he would remand to allow the plaintiffs an oppor-tunity to plead and prove facts to establish that California law and public policy apply to their actions and that California public policy thus is violated by enforcement of the AOL contractual forum selection clause. D.W. Nelson (concurring), Reinhardt, and Bea (concurring), Circuit Judges. Per Curiam. J. Tabacco of San Francisco, CA, for the plaintiffs-appellants; P. Carome of Washington, DC for the defendant-appellee. (Download the full text of this decision at www.ce9.uscourts.gov/)

14) NATIVE AMERICAN LAW / TRADEMARKS: Philip Morris v. King Mountain Tobacco, 06-36066 (9th Cir. Jan. 20, 2009). At issue here was whether there is colorable tribal court jurisdiction over a non-member's federal trademark and related state law claims against tribal defendants for alleged passing off of cigarettes on the Internet, on the reservation of another tribe, and elsewhere. Philip Morris USA manufactures and markets Marlboro cigarettes, one of the most recognized brands in the United States. King Mountain Tobacco Company, a tribal corporation on the Yakama Indian Reservation, along with Delbert L. Wheeler and Richard "Kip" Ramsey, company founders and members of the tribe (collectively "King Mountain"), sell King Mountain cigarettes in packaging that Philip Morris claims infringes and dilutes its trademarks and trade dress. Philip Morris sued King Mountain in federal court, alleging various federal and state law claims and seeking injunctive relief against King Mountain's continued sale of its products. King Mountain followed with an action for declaratory relief against Philip Morris in Yakama Tribal Court, which prompted Philip Morris to seek an injunction in federal court against the tribal proceedings. King Mountain asked the district court to stay its proceedings pending the Tribal Court's determination of its jurisdiction. The district court granted King Mountain's requested stay, concluding that there was a colorable claim to tribal court jurisdiction under the formulations found in Montana v. USA, 450 US 544 (1981), Strate v. A-1 Contractors, 520 US 438 (1997), and Nevada v. Hicks, 533 US 353. The USCA agreed that these cases provided the foundation for the Ninth Circuit's analysis, but disagreed that they point to a colorable claim of jurisdiction. Rather, the USCA concluded that the Tribal Court does not have colorable jurisdiction over non-member Philip Morris' federal and state claims for trademark infringement in the Internet and beyond the reservation. Judge Fletcher concurred in the judgment. He thought that under Montana, the tribal court clearly lacked jurisdiction over this suit, which arose out of off-reservation conduct by tribal members that allegedly violated non-tribal law and injured a non-tribal member. Brunetti, McKeown (author), and W. Fletcher (concurring), Circuit Judges. D. Collins of Los Angeles, CA, for the appellants; J.M. Keyes of Spokane, WA, for the appellees.(Download the full text of this decision at www.ce9.uscourts.gov/)

15) CIVIL RIGHTS: Brown v. California Dept. of Corrections, 07-55409 (9th Cir. Jan. 22, 2009). Brown challenged the district court's summary judgment premised in part on the appellees' immunity from Brown's claims under 42 USC Sec. 1983. Brown was released from prison pursuant to the USCA's prior grant of her habeas petition, holding that she was entitled to release from prison based on an oral plea agreement providing that, if she did not violate prison disciplinary rules, she would be released in seven and one-half years. She was imprisoned beyond that period however. After being released, she filed a lawsuit under Sec. 1983 against the prosecutors who appeared on behalf of the state an advocated her continued imprisonment at her parole hearings. Brown also sued the parole board members, the California Department of corrections, the California Board of Prison Terms, and the prison warden. The USCA affirmed the district court's entry of summary judgment in favor of all appellees. Because the prosecutors, parole board mem-bers, and state agencies were entitled to immunity from Brown's Sec. 1983 claims, and she failed to raise a genuine issue of material fact regarding the warden's liability, the district court properly granted summary judgment for all the appellees. Kozinski, Kleinfeld, and Rawlinson (author), Circuit Judges. R. Hamlish of Westlake Village, CA, for the appellant; J. Lehman and L. Sheet of Los Angeles, CA, for the appellees. (Download the full text of this decision at www.ce9.uscourts.gov/)

16) FIRST AMENDMENT / CONTRACTS: Gibson v. Office of the Attorney General, 07-56124 (9th Cir. Jan. 27, 2009). Plaintiffs Gibson and Goode-Parker work for the Office of the Attorney General of the State of California ("OAG") as a lawyer and a paralegal, respectively. In violation of OAG internal policy, Gibson represented Goode-Parker in a private legal malpractice case without first having obtained OAG permission. The OAG informed Gibson that she would be fired if she continued the private representation. Plaintiffs then filed this action against the OAG and certain individual decision-makers within the OAG, alleging a violation of their First Amendment rights and breach of contract. The USCA held that the district court properly dismissed the action under Fed. R. Civ. Proc. 12(b)(6) for failure to state a claim, but erred in awarding the defendants attorneys' fees. First, because there was no breach of any contractual agreement between the plaintiffs and defendants and because, even if there were, the plaintiffs failed to allege foresee-able damages, the plaintiffs failed to state a contract claim. Second, the district court, holding that the plaintiffs' action was "frivolous" or "meritless," awarded attorneys' fees to the defendant pursuant to 42 USC Sec. 1988. However, the USCA held that the district court erred in so characterizing the plaintiffs' claims. The heart of the plaintiffs' suit was their argument that the OAG's policy constitutes a prior restraint on speech. Although it agreed with the approach taken in Williams v. IRS, 919 F.2d 745 (D.C. Cir. 1990), the USCA found no similar Ninth Circuit precedent that could have signaled to the plaintiffs that they should not bring this claims at all. Because the plaintiffs raised a question that was not answered clearly by Ninth Circuit precedent, the USCA held that their claim was not frivolous and, thus, that the defendants were not entitled to attorneys' fees. Judge Clifton joined most of the majority opinion, but dissented as to the award of attorneys' fees issue: he shared the district court's view that the lawsuit was, in substantial part, frivolous. Graber (author) and Clifton (dissenting in part), Circuit Judges, and Reed, District Judge. P. Gibson in propria persona; S. Quinn of Sacramento, CA, for the appellees. (Download the full text of this decision at www.ce9.uscourts.gov/)

17) FIRST AMENDMENT: Eng v. Cooley, 07-56055 (9th Cir. Jan. 14, 2009). At issue here was whether the defendants were entitled in their individual capacities to qualified immunity in this Sec. 1983 First Amendment retaliation case. Resolving this question involved Eng's claim that he was retaliated against by the defendants for an interview given by his lawyer on his behalf to the press. Finding that it lacked jurisdiction to address whether Eng had third party standing to vindicate the constitutional rights of his lawyer, but that he may nevertheless claim a personal First Amendment interest in his lawyers' advocacy on his behalf, the USCA affirmed the district court's partial denial of qualified immunity. Cudahy, Pregerson, and Hawkins (author), Circuit Judges. J. Choi of Glendale, CA, for the appellants; D.J. Ritt of Pasadena, CA, for the appellee. (Download the full text of this decision at www.ce9.uscourts.gov/)

18) IMMIGRATION: Donchev v. Mukasey, 05-74709 (9th Cir. Jan. 16, 2009). Donchev entered the U.S. on March 1, 2003 at age 26 on a false Belgian passport he had purchased. He is Bulgarian, not Belgian. He was apprehended when ICE agents executed a search warrant on his sister's residence, where he lived. The search turned up numerous fraudulent immigration documents and about $40,000 cash. When the Department of Homeland Security initiated removal proceedings, Donchev applied for asylum, withholding of removal, and relief under the Convention Against Torture ("CAT") as a member as a member of a particular social group-the so-called "friends of the Roma," an organization that, he said, "fights for the rights of gypsies." Despite a favorable credibility finding, the Immigration Judge ("IJ") denied relief, concluding that Donchev failed to establish that he had been persecuted or had a well-founded fear of future persecution based on his membership in a particular social group-friends and supporters of the Roma. The IJ rejected Donchev's claim of past persecution on account of the arrest, because "each time he was arrested he was questioned about specific criminal conduct." The IJ found that the evidence did not show that Donchev would be persecuted based upon a protected ground, or that it was "more likely than not" that he would be subject to persecution if he returned to Bulgaria based a protected ground. As to his request for relief under the CAT, the IJ found that there was no "clear probability" that Donchev or his wife would be tortured on ac-count of the claimed protected ground by anyone connected with the Bulgarian government or anyone who the government would or could not control. The IJ thus denied Donchev's application for asylum, withholding of removal, and relief under the CAT. The Board of Immigration Appeals affirmed without opinion. The USCA denied Donchev's petition for review. It could not say that "any reasonable adjudicator would be compelled to conclude" that Donchev's friendship with Roma individuals and the Roma people made him part of a "particular social group." Dissenting, Judge Fletcher thought that Donchev's testimony and corroborating evidence compelled a finding of past persecution in Bulgaria. This, he said, shifted the burden to the government to rebut the presumption of a well-founded fear of future persecution by a preponderance of the evidence. Judge Fletcher would remand the case to the agency for an individualized analysis of how current country conditions affect the reasonableness of Donchev's fear of persecution should he be returned to Bulgaria. B. Fletcher (dissenting), Kleinfeld (author), and Gould, Circuit Judges. N. Marchi of Seattle, WA, for the petitioners; A. Biviano of Spokane, WA, for the respondent. (Download the full text of this decision at www.ce9.uscourts.gov/)

19) IMMIGRATION: Abebe v. Mukasey, 05-76201 (9th Cir. Jan. 5, 2009). Abebe became a lawful permanent resident in 1984. In 1992, he pled guilty to lewd and lascivious conduct upon a child. Cal. Penal Code Sec. 288(a). The INS commenced removal proceedings on the ground he was deportable as having committed an aggravated felony, 8 USC Sec. 1227(a)(2)(A)(iii) and sexual abuse of a minor, id. Sec. 1101(a)(43)(A). The IJ denied Abebe's asylum, withholding of removal and CAT claims, and found him ineligible for a discretionary waiver of deportation under former Immigration and Nationality Act Sec. 212(c), 8 USC Sec. 1182(c) (repealed 1996). On appeal to the BIA, Abebe argued that he was eligible for Sec. 212(c) relief. The BIA affirmed. The USCA denied Abebe's petition in part and dismissed in part. Under its plain language, Sec. 212(c) gives the AG discretion to grant lawful permanent residents relief from inadmissibility-not from deportation. The USCA could conceive of a rational reason Congress may have had in adopting this statutory scheme: It could have limited Sec. 212(c) relief to aliens seeking to enter the country from abroad in order to create an incentive for deportable aliens to leave the country. A deportable alien who wishes to obtain Sec. 212(c) relief will know that he can't obtain such relief so long as he remains in the United States. If he departs, however, he could become eligible for relief. By encouraging self-deportation, the government could save resources it otherwise would devote to arresting and deporting aliens. Saving scarce resources that would otherwise be paid for by taxpayers is a legitimate congressional objective. The USCA thus overruled the holding of Tapia-Acuna v. INS, 640 F.2d. 223 (9th Cir. 1981), that there is no rational basis for providing Sec. 212(c) relief from inadmissibility, but not deportation. The BIA didn't violate the petitioner's right to equal protection by finding him ineligible for Sec. 212(c) relief from deportation. Since the petitioner was not eligible for Sec. 212(c) relief, the BIA could not have committed an equal protection violation by denying him such relief. Judge Clifton, joined by judges Silverman and Gould, concurred in the result but did not join in most of the majority's decision because he thought it unnecessary and unwise to overrule Tapia-Acuna to reach that result. The original decision by the three-judge panel reached the same result simply by applying the court's existing precedent. Kozinski, Pregerson, Kleinfeld, Thomas (dissenting), Silverman, Gould, Tallman, Clifton (concurring), Callahan, Bea, and N.R. Smith, Circuit Judges. Per Curiam. R. Jobe of San Francisco, CA, for the petitioner; DAAG T. Dupree of Washington, DC, for the respondent. (Download the full text of this decision at www.ce9.uscourts.gov/)

20) IMMIGRATION: Diaz-Covarrubias v. Mukasey, 06-70447 (9th Cir. Jan. 9, 2009). The petitioner sought review of the BIA's refusal to "administratively close" her case. Because it could not discover a sufficiently meaningful standard against which to judge the BIA, the USCA held that it lacked jurisdiction to review the BIA's denial of the petitioner's request for administrative closure. It thus dismissed her petition. Callahan and Ikuta (author), Circuit Judges, and Shadur, District Judge. J. Artz of Norwalk, CA, for the peti-tioner; S. Maloney of Washington, DC, for the respondent. (Download the full text of this decision at www.ce9.uscourts.gov/)

21) IMMIGRATION: Mendez-Castro v. Mukasey, 06-70362 (9th Cir. Jan. 12, 2009). At issue here was whether the USCA had jurisdiction to review the BIA's application of its own precedent in determining whether the removal of two aliens would cause their children to suffer "exceptional and extremely unusual hardship." The petitioners conceded that the USCA lacked jurisdiction to reweigh the evidence underlying the Immigration Judges conclusion that removal would not cause their children to suffer an "exceptional and extremely unusual hardship." However, they maintained that their petition for review did not directly attack the merits of the IJ's hardship determination, but that it instead presented the question of law that the IJ's decision failed to apply the correct legal standard governing a hardship determination. The petitioners also maintained that the IJ's decision was factually inconsistent with prior agency precedent concerning a qualifying relative's special educational needs. However, the USCA found that because the IJ applied the correct legal standard, and because the USCA may not proceed further to examine its application of the facts of this case to the "excep-tional and extremely unusual hardship" standard, it had to conclude that the petitioners' claims were "so insubstantial and frivolous" as to preclude jurisdiction over them. The USCA found that it also lacked jurisdiction to address the petitioners' claim that the IJ's decision was factually inconsistent with prior agency hardship determinations. Kozinski, O'Scannlain (author), and W. Fletcher, Circuit Judges. H. Weissman of Los Angeles, CA, for the petitioners; W. Minick of Washington, DC, for the respondent. (Download the full text of this decision at www.ce9.uscourts.gov/)

22) IMMIGRATION: Anaya-Ortiz v. Mukasey, 03-74666 (9th Cir. Jan. 27, 2009). Anaya-Ortiz, a native and citizen of Mexico, pled guilty to a violation of California Penal Code Sec. 12021(a)(1) for the crime of "possession of a firearm by a felon" on March 21, 2001. He was sentenced to two years and eight months of imprisonment. The information under which he was charged stated that the predicate offense for the felon-in-possession violation was a prior conviction for "Driving Under the Influence & Causing Injury," a felony, in violation of California Vehicle Code Sec. 23153(b). On August 29, 2002, the former Immigration and Naturalization Service ("INS") placed Anaya-Ortiz in removal proceedings. It charged that he was removable under 8 USC Sec. 1227(a)(2)(A)(iii), which states that "any alien who is convicted of an aggravated felony at any time after admission is deportable." For purposes of immigration law, an "aggravated felony" is defined in 8 USC Sec. 1101(a)(43) and Sec. 1101(a)(43)(E)(ii) defines "aggravated felony" as including an offense described in the federal felon-in-possession statute, 18 USC Sec. 922(g)(1). The INS charged that Anaya-Ortiz's conviction of being a felon in possession of a firearm under California Penal Code Sec. 12021(a)(1) met the description of the federal felon-in-possession offense in Sec. 922(g)(1), and thus qualified as an aggravated felony under 8 USC Sec. 1101(a)(43)(E)(ii). The Immigration Judge ("IJ") agreed with the INS's position and found Anaya-Ortiz removable as charged. On the basis of Anaya-Ortiz's testimony regarding his drunk-driving conviction, the IJ held that he had been convicted of a "particularly serious crime" and was ineligible for withholding of removal under 8 USC Sec. 1231(b)(3)(B)(ii). The IJ also held that Anaya-Ortiz was ineligible for relief under the Convention Against Torture and ordered him removed from the United States. The Board of Immigration Appeals ("BIA") af-firmed the IJ's decision. Anaya-Ortiz then petitioned for review of the BIA decision dismissing his appeal and ordering him removed. The USCA denied the petition. It rejected Anaya-Ortiz's contention that he is not removable as an aggravated felon and that the BIA improperly determined that he had been convicted of a "particularly serious crime" based on his testimony at his removal hearing. Berzon and Ikuta (author), Circuit Judges, and Singleton, District Judge. G. Finn of Indio, CA, for the petitioner; J. Keeney of Washington, DC, for the respondent. (Download the full text of this decision at www.ce9.uscourts.gov/)

23) IMMIGRATION: Minasyan v. Mukasey, 06-73192 (9th Cir. Jan. 20, 2009). Minasyan arrived in the U.S. from Armenia on April 9, 2001. She applied for asylum on April 9, 2002. At issue was whether that application was timely. The BIA held that the critical year began the day Minasyan arrived and so ended on April 8, 2002, the day before she filed her application, leaving her out of luck by one day. The USCA disagreed. It found that 8 USC Sec. 1158(a)(2)(B) is clear that the "year" upon which Minasyan's asylum prospects depend began a day later than the BIA thought. That one day made Minasyan's asylum application timely. The USCA thus granted Minasyan's petition and remanded to the BIA for consideration of the merits of his asylum claim. Reinhardt, Miner, and Berzon (author), Circuit Judges. S. Sedaghat of Hollywood, CA, for the petitioners; P. Keisler of Washington, DC, for the respondent. (Download the full text of this decision at www.ce9.uscourts.gov/)

24) FORFEITURE / EVIDENCE: USA v. $40,955 in United States Currency, 07-55860 (9th Cir. Jan. 27, 2009). The Oceanside Police Department's Narcotics Unit searched the residence of Mohammad El Farra pursuant to a search warrant issued by the Superior Court of California for the County of San Diego. Mohammad El Farra is the adult son of Basel and Fatima El Farra, in whose house he lived at the time of the search. The search uncovered firearms, nearly one and a half pounds of marijuana, a digital scale, packaging materials and a heat sealer. Although the police conducted a cursory sweep of the entire house, their search focused on Mohammad's bedroom and bathroom, where all the incriminating evidence was found. After the search, the officers seized $40,955, most of which was found in a safe in Mohammad's bedroom closet. Mohammad told Narcotics Unit detective, Gregory Rainwater, that everything in the safe was his, and that most of the money was proceeds from his drug sales, which he conducted from his bedroom. This appeal arose from a civil complaint brought by the government for the forfeiture of the $40,955 as proceeds of marijuana sales. Appellants Basel, Fatima, and their daughter Rawia, all claimed interests in the forfeited currency and appealed the district court's denial of their motion to suppress evidence obtained in the search, admitting into evidence statements Mohammad made to the police, and denial of their motion to dismiss for spoliation of evidence. The district court's order holding that the appellants lacked standing to challenge the search warrant was reversed by the USCA as to Basel and Fatima, affirmed as to Rawia, and remanded to the district court for further proceedings consistent with the USCA's opinion. The district court rulings denying the appellants' Fifth Amendment and spoliation claims were affirmed. Graber and Clifton, Circuit Judges, and Trager (author), District Judge. M. McCabe of San Diego, CA, for the claimants; AUSA B. Smith of San Diego, CA, for the appellee.(Download the full text of this decision at www.ce9.uscourts.gov/)

25) EVIDENCE: USA v. Bond, 06-50628 (9th Cir. Jan. 20, 2009). Bond bought an inactive shell company that had previously been involved in providing electricity and formed PowerSource Corporation. He marketed the company as an electric service provider that would provide residential and commercial electricity throughout California. PowerSource divided California into 39 districts in which it would sell power. It planned to have each district financed by a partnership that would contribute capital in return for a percentage of PowerSource's profits from that district. PowerSource hired Power Capital Funding Group, ran by Ronald Johnson and James Miles, to sell the partnerships via telemarketing. The financing scheme was a scam. Numerous material misrepresentations and omissions were made to potential investors by the telemarketers and in the printed marketing materials. Bond was indicted for his role the PowerSource / Power Capital Funding Group investment scheme. A jury in the Central District of California convicted Bond on all mail and wire fraud counts, as well as for making a false statement under 18 USC Sec. 1001. At issue on the appeal was whether the government withheld Brady information from Bond. The USCA held that there was no concealment of information. There was no material favorable to Bond that the government failed to produce. Nor did the government selectively disclose items to mislead the defense. Instead, it provided Bond with the information needed to acquire all trial testimony, and provided him with the essential factual data to determine whether the witness' testimony might be helpful. The USCA declined to extend Benn v. Lambert, 283 F.3d 1040 (9th Cir. 2002), beyond cases in which the government had affirmatively misled the defendant by a selective disclosure of information. Here, Bond essentially argued that Johnson's testimony would have been favorable to him and that the government "suppressed" such evidence in violation of Brady by failing to call Johnson as a witness after indicating that it would. However, the USCA noted that litigants are not required to call every witness identified on their witness list. A witness list simply provides notice to the court and opposing counsel of witnesses who may be presented at trial. USA v. Schwartz, 857 F.2d 655, 659 (9th Cir. 1988). Whether a litigant actually calls any of the witnesses on its witness list is purely a matter of trial strategy. Brady does not, as a general matter, supplant the prosecutor's ability to make strategic choices during litigation. Morris v. Ylst, 447 F.3d 735, 742 (9th Cir. 2006). Rather, as stated in Morris, "the animating purpose of Brady is to preserve the fairness of criminal trials …. The Brady rule is not meant to displace the adversary system." Id. Bond could have simply subpoenaed Johnson on his own had he thought that desirable. Thompson, O'Scannlain (author), and Tallman, Circuit Judges. R. Hanson of Santa Anna, CA, for the appellant; P. Jasperse of Washington, DC, for the respondent. (Download the full text of this decision at www.ce9.uscourts.gov/)

26) EVIDENCE / CHILD PORNOGRAPHY: USA v. Heller, 07-30452 (9th Cir. Jan. 8, 2009). Heller appealed his conviction following a bench trial for receipt of child pornography, in violation of 18 USC Sec. 2252A(a)(2), and possession of child pornography, in violation of Sec. 52252A(a)(5)(B). His conviction arose from his activities while serving as a caretaker for a developmentally dis-abled man, J.W. The government alleged that J.W. downloaded child pornography at Heller's direction for their mutual viewing. Heller challenged the district court's pretrial rulings related to his suppression and in limine motions. He also faulted the district court's determination that his confession was voluntary. Finally, he maintained that the government presented insufficient evidence at trial to support his conviction. The USCA affirmed Heller's convictions. The evidence established that Heller directed J.W. to obtain the materials for Heller's viewing and that, once the files were downloaded and stored, Heller "exercised dominion and control" over them. USA v. Romm, 455 F.3d 990, 999 (9th Cir. 2006). This evidence viewed in the light most favorable to the government was sufficient to establish that Heller received and possessed the materials. The district court did not err in denying Heller's Rule 29 motion. Hawkins, McKeown (author), and Bybee, Circuit Judges. A. Gallagher of Helena, MT, for the appellant; AUSA K. Alme of Billings, MT, for the respondent. (Download the full text of this decision at www.ce9.uscourts.gov/)

27) SEARCH & SEIZURE: USA v. SDI Future Health, Inc., 07-10261 (9th Cir. Jan. 27, 2009). After a two-year investigation lead by the Internal Revenue Service ("IRS") with the participation of four other federal and Nevada state agencies, investigators concluded that SDI Future Health, Inc. ("SDI"), a California corporation, had engaged in a wide-ranging Medicare fraud. They also thought that both SDI and Kaplan, SDI's president and part-owner, had committed extensive tax fraud. Based on the information obtained during the investigation, IRS Agent Raftery applied for a warrant to search SDI's premises. The warrant relied on an affidavit sworn by Raftery, which contained information she had learned from three former employees and two business associates of SDI. It alleged that SDI, Kaplan, and Brunk, also an officer and part-owner of SDI, had participated in a conspiracy with physicians and cardiac diagnostic companies to defraud the Medicare program, the Federal Employees Health Benefit Program, and private healthcare insurance carriers by seeking payment for services that SDI never rendered. About three years after the search, a federal grand jury returned an indictment charging SDI, Kaplan, and Brunk with conspiracy to commit health care fraud and providing illegal kickback payments, as well as with health care fraud, illegal kickbacks, conspiracy to commit money laundering, and attempting to evade or defeat taxes. The indictment also included three counts of forfeiture for the proceeds of health care fraud and money laundering. The defendants moved to suppress evidence obtained from the search, arguing that the warrant was vague and overbroad in violation of the Fourth Amendment. A magistrate recommended that the motion be granted in part. The district court adopted the magistrate's factual findings, but entered an order granting the motion to suppress in full. It first held that Kaplan and Brunk had standing to challenge the search of SDI's business premises, because they had a significant ownership interest in SDI, exercised a high level of authority over SDI operations, including the authority to set and control policy regarding access to SDI's business records and computer systems. In addition, they maintained offices at SDI's corporate headquarters, were present during the search, and SDI maintained a level of security and confidential practices regarding its premises and records that one would reasonably expect of a health care provider. The district court held that items 7, 9-13, and 24 of the warrant were overbroad and lacked sufficient particularity because the warrant did not limit these general categories of business documents and financial records to the seizure of records relating to the criminal activity described in the affidavit, and because they lacked any time restrictions. Similarly, the district court noted that items 2, 4, 8, and 19, of the warrant were borderline in acceptability, but nevertheless violated the Fourth Amendment because some additional description could and should have been provided regarding these categories. Finally, the district court held that the "good faith exception" did not apply because the affidavit was not incorporated into the warrant. Without the affidavit, the agents' reliance on the warrant alone was not objectively reasonable, since it "did not contain any description of the alleged criminal activity relating to the listed categories of documents." The government then timely sought an interlocutory appeal of the district court's order. At issue on appeal was whether corporate executives may challenge a search of company premises not reserved for the executives' exclusive use. The government first argued that Kaplan and Brunk lacked standing to challenge the search and seizure of materials from SDI premises. The USCA held that, except in the case of a small, family-run business over which an individual exercises daily management and control, an individual challenging a search of workplace areas beyond his own internal office must generally show some personal connection to the places searched and the materials seized. The USCA said it specifically determines the strength of such personal connection with reference to the following factors: whether the item seized is personal property or otherwise kept in a private place separate from other work-related material; whether the defendant had custody or immediate control of the item when officers seized it; and whether the defendant took precautions on his own behalf to secure the place searched or things seized from any interference without his authorization. Absent such a personal connection or exclusive use, a defendant cannot establish standing for Fourth Amendment purposes to challenge the search of a workplace beyond his internal office. The district court relied on three facts in holding that Kaplan and Brunk had Fourth Amendment standing: their ownership of SDI, their management of SDI from offices in the building searched, and the security measures SDI took to secure its business records. But the USCA found these too broad and general to support the district court's conclusion. The security measures SDI took to ensure the privacy of its records were relevant only to the standing of the corporation itself. As for Kaplan and Brunk, their ownership and management do not necessarily show a legitimate expectation of privacy. Because neither claims to enjoy "exclusive use" of the places searched-that is the entire SDI office-they each must show a personal connection, along the lines set out in USA v. Anderson, 154 F.3d 1225, (10th Cir. 1998), to justify an expectation of privacy. Lacking precedent on what is admittedly a novel issue of law, the district court did not adequately develop the record. Thus, the district court's grant of the motion to suppress had to be reversed and the matter remanded for further fact-finding. O'Scannlain (author), Hawkins, and McKeown, Circuit Judges. R. Ellman of Las Vegas, NV, for the appellant; L. Etcheverry of Los Angeles, CA, for the appellees. (Download the full text of this decision at www.ce9.uscourts.gov/)

28) MONEY LAUNDERING: USA v. Awad, 06-50578 (9th Cir. Jan. 12, 2009). Dr. Awad was convicted of 24 counts of participating in a scheme to defraud Medicare under 18 USC Sec. 1347, plus four counts of money laundering involving the proceeds of health care fraud under 18 USC Sec. 1956(a)(1)(A). He alleged four errors: the omission of the word "willfully" from that portion of the indictment alleging violations of Sec. 1347; a multiplicitous indictment; jury instructions stating that the jury need not find that the de-fendant knew that his conduct was unlawful; and application of an enhancement under Guideline Sec. 2B1.1(b)(12)(A) (2005) for cre-ating a risk of serious bodily injury or death. The USCA affirmed. It noted that the sentencing enhancement for creating a risk of serious bodily injury or death may not be proper in every prosecution for health care fraud, which is designed to punish financial fraud, rather than to enforce standards of medical care. But, in this case, there was evidence that a consistent failure to supervise jeopardized patients. In light of the USCA's deferential standard review, it could not say that the district court clearly erred in finding that Awad's conduct posed a risk of serious bodily injury or death, even if it would not have made the same finding itself. The USCA thus rejected Awad's challenge to the enhancement. Graber (author) and Clifton, Circuit Judges, and Reed, District Judge. C. Sevilla of San Diego, CA, for the appellant; AUSA D. McCormick of Santa Ana, CA, for the appellee. (Download the full text of this decision at www.ce9.uscourts.gov/)

29) HONEST SERVICE WIRE FRAUD: USA v. Selby, 07-30183 (9th Cir. Jan. 15, 2009). Selby, a former official of the Bonneville Power Administration ("BPA") appealed her jury conviction for honest services wire fraud, in violation of 18 USC Sec. 1343; making false claims and statements, in violation of 18 USC Sec. 1001; and felony conflict of interest, in violation of 18 USC Sec. 208. Selby maintained that the district court erred by denying her motions for judgment of acquittal because the evidence was insufficient to con-vict. The USCA found that viewing the evidence in the light most favorable to the prosecution, a rational trier of fact could have found the essential elements of all three crimes beyond a reasonable doubt. Because the evidence established that Selby knowingly violated Sec. 208 and the related provisions of Title 18 with which she was charged, the USCA upheld her conviction. Tallman and Clifton, Circuit Judges, and Korman, District Judge. Per Curiam. P. Olson of Portland, OR, for the appellant; AUSA K. Zusman of Portland, OR, for the appellee. (Download the full text of this decision at www.ce9.uscourts.gov/)

30) SENTENCING / IMMIGRATION: USA v. Aguila-Montes De Oca, 05-50170 (9th Cir. Jan. 20, 2009). The appellant appealed the sentence imposed upon him for attempting to reenter the U.S. following deportation, in violation of 8 USC Sec. 1326. He challenged the district court's 16-level enhancement resulting from the court's determination that his prior conviction for first degree resi-dential burglary, in violation of Sec. 459 of the California Penal Code, constituted a crime of violence under Sec. 2L1.2(b)(1)(A) of the U.S. Sentencing Guidelines. The USCA found that, because Sec. 459 does not require that an entry in the burglary be "unlawful or unprivileged," the California statute lacked an element included in the generic definition of burglary of a dwelling incorporated into the Guidelines. Using a categorical approach, the two offenses did not "match." The modified categorical approach may not be applied to establish the missing element, and, as a result, the appellants' state conviction of first degree residential burglary is not a prior conviction of a crime of violence under Sec. 2L1.2(b)(1)(A). The district court thus improperly applied the 16-level enhancement. The USCA vacated the sentence and remanded for a new sentence. Dissenting, Judge Gould thought that the application of USA v. Navarro-Lopez, 503 F.2d 1063 (9th Cir. 2007) to the California burglary statute was inconsistent with the scope intended by the Supreme Court for its doctrine of modified categorical analysis, as outlined in Taylor v. USA, 495. Thompson (author), T.G. Nelson, and Gould (dissenting), Circuit Judges. V. Brunkow of San Diego, CA, for the appellant; AUSA S. Stone of San Diego, CA, for the appellee. (Download the full text of this decision at www.ce9.uscourts.gov/)

31) SENTENCING / IMMIGRATION: USA v. Gonzales-Zotelo, 08-50010 (9th Cir. Jan. 8, 2009). The government appealed the defendant's 30-month sentence following his conviction for being a deported alien found in the U.S. in violation of 8 USC Sec. 1326. The U.S. Attorney had not offered him a fast-track plea bargain due to his prior conviction for lewd and lascivious acts with a child. Still, the district court gave him the same sentence given earlier that day to a fast-track defendant with armed robbery priors, to promote "consistency." Because the district court erred when it imposed a lower sentence based solely on what it misperceived to be an unwarranted sentencing disparity, the USCA vacated the sentence and remanded for resentencing. The disparity in question was war-ranted and justified by Congress' approval of fast-track plea bargaining programs. The conclusion was not undermined by Kimbrough v. USA, 128 S.Ct. 558 (2007), which allows a judge to disagree with Guidelines sentencing policy, but not with congressional sentenc-ing policy. Silverman (author) and Bea, Circuit Judges, and Colon, District Judge. D. Curnow of San Diego, CA, for the appellants; S. Hubachek of San Diego, CA, for the appellee. (Download the full text of this decision at www.ce9.uscourts.gov/)

32) SENTENCING / TAX EVASION: USA v. Orlando, 07-50473 (9th Cir. Jan. 23, 2009). Orlando appealed his 40 month sentence and $30,000 fine following his guilty plea to one count of tax evasion. The USCA affirmed the sentence but amended the written judgment to reflect the $30,000 fine imposed at oral sentencing. The district court's written judgment had indicated a fine of $60,000. Where a discrepancy arises between the terms of an oral pronouncement of a sentence and the subsequent written judgment, the terms of the oral pronouncement control. USA v. Bergmann, 836 F.2d 1220 (9th Cir. 1988). The government conceded that $30,000 was the correct amount. Farris (author) and Wardlaw, Circuit Judges, and Schwarzer, District Judge. DFPD J. Libby of Los Angeles, CA, for the appellant; AUSA S. Brown of Los Angeles, CA, for the appellee.(Download the full text of this decision at www.ce9.uscourts.gov/)

33) SENTENCING: USA v. Esparza, 07-50293 (9th Cir. Jan. 20, 2009). Esparza posted child pornography online. The FBI executed a search warrant at his residence and discovered hundreds of such images. Esparza pleaded guilty to distribution of child pornography in violation of 18 USC Sec. 2252A(a)(2)(A). The district court imposed a prison sentence of 235 months and ordered lifetime supervised release with conditions. At issue on Esparza's appeal was Condition 5 of the terms of supervised release. Condition 5 provides: "The defendant shall participate in a psychological/psychiatric counseling and/or a sex offender treatment program, which may include impatient treatment, as approved and directed by the Probation Officer. The defendant shall abide by all rules, requirements, and conditions, of such program, including submission to risk assessment evaluation(s), and physiological testing, such as polygraph and Able testing, and shall take all prescribed medication." Esparza argued that the district court failed to make the requisite findings at sentencing to justify the requirement that he take all prescribed medication and the requirement of physiological testing. He also asserted that the potential for impatient treatment involved an improper delegation of judicial authority. The USCA affirmed in part, vacated in part, and remanded. Graber and Clifton, Circuit Judges, and Trager, District Judge. Per Curiam. DFPD J. Locklin of Los Angeles, CA, for the appellant; AUSA R. Stacy of Riverside, CA, for the appellee. (Download the full text of this decision at www.ce9.uscourts.gov/)

34) SENTENCING: USA v. McCaleb, 06-50387 (9th Cir. Jan. 13, 2009). McCaleb challenged his drug-related convictions and sentence to life imprisonment, asserting that the district court improperly instructed the jury, abused its discretion by admitting certain expert-witness testimony, and relied on prior convictions that were not found true by a jury beyond a reasonable doubt in enhancing his sentence to life imprisonment. Because the district court did not plainly err in its jury instructions, or abuse its discretion by admitting the expert-witness testimony, or improperly rely on unproven prior convictions at sentencing, the USCA affirmed. Bright (author) Trott, and Hawkins, Circuit Judges. V. Wefald of Pasadena, CA, for the appellant; AUSA C. Ewell of Los Angeles, CA, for the appellee. (Download the full text of this decision at www.ce9.uscourts.gov/)

35) RESTITUTION: USA v. Kaczynski, 06-10514 (9th Cir. Jan. 9, 2009). Kaczynski, known best as the "Unabomber," was arrested in 1996 and charged with numerous counts involving the transportation or mailing of explosives with the intent to kill, resulting in the death of three people and injuries to nine others. He pled guilty and was sentenced to four consecutive life sentences plus 30 years imprisonment. He was also ordered to pay $15,026,000 in restitution to four named victims. When investigating Kaczynski's crimes, agents searched his Montana cabin and seized some of his property as evidence. The seized property included papers, books, his writ-ings, guns, bomb-making materials, and instructions on making bombs using store-bought items. Kaczynski filed a motion requesting the return of any property that had not been sold within a reasonable period of time. The magistrate recommended that the government sell any marketable property to pay restitution and return all other items to Kaczynski. However, the district court denied Kaczynski's motion because the judgment lien gave the government a superior ownership interest in the property. It also ruled that Kaczynski's property was "worthless," as it had to be valued prior to "his criminal celebrity status" to prevent him from profiting from his crimes. Kaczynski argued that the restitution lien statute, 18 USC Sec. 3613, was facially unconstitutional and violates the First Amendment; that the Plan violated the First Amendment as applied by impinging his freedom of expression and restricting information from the public; and that it impermissibly allowed credit bids from the victim and allowed destruction of "bomb-making materials" instead of returning them to his designee. The USCA affirmed. Schroeder, Canby, and Hawkins (author), Circuit Judges. T. Kaczynski pro se; AUSA A. Martel of Sacramento, CA, for the appellee. (Download the full text of this decision at www.ce9.uscourts.gov/)

1) BANKRUPTCY: In re Kavoussi, 07-56688 (9th Cir. Jan. 6, 2009) (unpublished). Kavoussi, et al., defendants in a bankruptcy court adversary proceeding, appealed from an order of the district court affirming bankruptcy court orders and a judgment holding them liable for the value of assets found to have been fraudulently transferred to them by the debtors. The USCA affirmed, adopting the reasoning of the district court relating to the issues on appeal. The USCA elaborated on certain arguments on appeal that were not addressed by the district court. The argument that the Trustee lacked standing to prosecute the claim amounted to no more than a quib-ble over form, it said, and did not justify dismissal of the claim or reversal of the judgment. The Trustee had standing under 11 USC Sec. 544 to prosecute a fraudulent transfer claim. Whether an amendment was filed to revise the complaint to cite that statute or to assert the claim in the name of the Trustee did not alter the reality that the case was prosecuted as if the complaint had been so amended. That was clearly understood by all parties. The appellants raised no timely objection and suffered no prejudice. The burden of proof to establish the value of assets transferred is on the fraudulent transferee, if the assets are entirely under its control and unavailable to the trustee. Gough v. Titus (In re Christian & Porter Aluminum Co.), 584 F.2 326, 339 (9th Cir. 1978). The relevant time period for valuing the fraudulently transferred assets is when they are first pledged as collateral for the inter-family loans. See Cal. Civ. Code Secs. 3439.01(i), 3439.08(c). Summary judgment was appropriate in this case because the appellants failed to submit sufficient admissible evidence to bear their burden and thus failed to establish a genuine issue of material fact. The attack on the specific judgment against Key and Iran Kavoussi was unpersuasive. The $1,403,000 judgment did not provide the appellee with a double-recovery because the $1,403,000 did not include stock for which Howard Kavoussi was ordered to pay. Graber and Clifton, Circuit Judges, and Shea, District Judge. (Download the full text of this decision at www.ce9.uscourts.gov/)

2) BANKRUPTCY: In re Stephen Law, 07-56237 (9th Cir. Jan. 14, 2009) (unpublished). Law, a Chapter 7 debtor, appealed pro se from the Bankruptcy Appellate Panel's judgment affirming the bankruptcy court's order dismissing his claim as barred by the doctrine of res judicata. Reviewing the BAP's decision de novo, the USCA affirmed. The BAP properly ruled that the bankruptcy court did not err when it granted summary judgment because Law was precluded from relitigating claims and issues resolved by a final judgment on the merits in a prior action involving the same parties. Headwater Inc. v. U.S. Forest Service, 399 F.3d 1047, 1051 (9th Cir. 2005) (explaining the doctrine of res judicata); Poonja v. Alleghany Props (In re Los Gatos Lodge, Inc.), 278 F.3d 890, 894 (9th Cir. 2002) ("the bankruptcy court's allowance or disallowance of a proof of claim is a final judgment."). The BAP did not abuse its discretion by denying Law's motion to reconsider because Law did not present newly discovered evidence, an intervening change in the law, or clear error by the court. 389 Orange Street Partners v. Arnold, 179 F.3d 656, 665 (9th Cir. 1999). Wallace, Trott, and Rymer, Circuit Judges. (Download the full text of this decision at www.ce9.uscourts.gov/)

3) BANKRUPTCY: In re Stephen Law, 07-56239 (9th Cir. Jan. 14, 2009) (unpublished). Law, a Chapter 7 debtor, and Lin, a citizen of China and purported lien holder, appealed a BAP judgment affirming bankruptcy court orders approving a compromise agreement and authorizing a distribution of real estate sale proceeds. Reviewing the BAP's decision de novo, the USCA affirmed. The BAP properly upheld the bankruptcy court order approving the compromise agreement between the trustee and the judgment creditor, because the agreement was in the best interest of the creditors, interest holders, and the estate. The BAP properly affirmed the order authorizing the trustee to distribute the property sale proceeds because it was conditioned on a judicial determination of Lin's purported interest. 11 USC Sec. 363(e) (The court shall prohibit or condition use, sale, or lease or property as is necessary to provide adequate protection to an entity's interest in such property.) Goodwin, Wallace, and Rymer, Circuit Judges. (Download the full text of this decision at www.ce9.uscourts.gov/)

4) BANKRUPTCY / SANCTIONS: In re Gootnick Family Trust, 07-16173 (9th Cir. Jan. 14, 2009) (unpublished). Non-party attorney Ng appealed pro se from a district court judgment affirming bankruptcy court orders sanctioning him, and its imposition of ad-ditional sanctions on appeal. Reviewing the sanctions for abuse of discretion, the USCA held that the bankruptcy court's determination that Ng acted in bad faith by filing the underlying bankruptcy petition for the sole purpose of obstructing a related civil case was not clear error. The bankruptcy court did not abuse its discretion in sanctioning Ng. Miller v. Cardinale (In re DeVille), 361 F.3d 539 (9th Cir. 2004) (concluding that a bankruptcy court has inherent power to sanction an attorney who, in bad faith, file a bankruptcy-related notice to delay a state court trial). The district court also did not abuse its discretion in imposing additional sanctions against Ng after finding that his appeal was frivolous and taken in bad faith. The appeal unnecessarily and unreasonably multiplied proceedings and lacked any legal or factual basis. Hedges v. Resolution Trust Corp., 32 3d 1360 (9th Cir. 1994) (per curiam) (explaining that a district court reviewing a bankruptcy court's sanctions order has power to sanction under Rule 9011); Eisen v. Curry (In re Eisen), 14 F.3d 469 (9th Cir. 1994) (per curiam) (noting that 28 USC Sec. 1927 authorizes sanctions against counsel when an appeal is found to be in bad faith because it multiplied proceedings "unreasonably and vexatiously"). Ng's motion to vacate or set aside all attorneys' fee awards was denied because the bankruptcy and district courts considered the proper factors in determining the awards. Masalosalo by Masalosalo v. Stonewall Ins. Co., 718 F.2d 955, 957 (9th Cir. 1983) (concluding that the district court did not abuse is discretion in assessing an attorneys' fee award when the record showed that the court considered the relevant factors). The USCA next granted the Gootnicks' request for fees and costs on appeal. Ng put forth repetitive, confusing, and irrelevant arguments, including tax fraud accusations and bad faith personal attacks on his adversaries and the judges. He repeated arguments that were clearly rejected by the courts below, and made numerous requests for rehearing, to set aside judgments, for an initial en banc hearing, and to vacate or set aside the attorneys' fee awards. See Fed. Election Comm'n v. Toledano, 317 F.3d 939, 953 (9th Cir. 2002) (stating that the USCA has inherent power to order the appellant to pay appellee's attorneys' fees on appeal as a sanction for bad faith conduct and abuse of the judicial process); In re Eisen, 14 F.3d at 471 (concluding that sanctions are appropriate when the result of an appeal is obvious, the arguments of error are wholly without merit, and a party's appeals of bad faith findings multiply proceedings unreasonably and vexatiously). The USCA directed the Gootnicks to file a statement of costs and fees pursuant to 9th Cir. R. 39-1.1, 1.6 and said the Trustee may do likewise. It left the determination of the amount of sanctions to the Appellate Commissioner. Goodwin, Wallace, and Rymer, Circuit Judges. (Download the full text of this decision at www.ce9.uscourts.gov/)

5) ENVIRONMENTAL LAW: Swan View Coalition v. Barbouletos, 07-35065 (9th Cir. Jan. 6, 2009) (unpublished). The plaintiffs (collectively "Swan View") appealed the district court's grant of summary judgment for the agency defendants. At issue was the application of the National Forest Management Act ("NFMA") to the travel-management actions taken pursuant to the Moose Post-Fire Project in the Flathead National Forest. Swan View maintained that the Moose Post-Fire Project's allowance of increased motorized vehicle use on lands in grizzly bear territory conflicted with the Flathead Forest Plan's directive that the Forest Service "favor" the needs of the grizzly bear when their habitat and other land use values compete. Reviewing the matter de novo, the USCA noted that the Interagency Grizzly Bear Guidelines, which are incorporated into the Flathead Forest Plan, require that in Management Situation 1 habitats, the Forest Service's "management decisions will favor the needs of the grizzly bear when grizzly habitat and other land use values compete." In addition, the Guidelines state that "land uses which affect grizzlies and/or their habitat will be made compatible with grizzly needs or such uses will be disallowed or eliminated." The Forest Plan defines "competitive use" to encompass all factors that "lead eventually to increased negative impact of human activity on grizzly populations." The district court recognized that whether the Forest Service's travel-management actions were arbitrary and capricious depended upon whether the agency complied with the Flathead Forest Plan's mandate that, in Management Situation 1 habitats, the needs of grizzly bears take precedence when "other land use values compete," with the burden on Swan View to establish that the agency actions did not adequately take this requirement into account. The district court erred, however, in applying a standard of its own making to resolve the question; it held that "so long as the competing uses do not pose a demonstrable and significant biological threat to the grizzly bears or their habitat," the needs of the grizzly bears and the other uses do not "compete" for purposes of the Forest Plan. This definition of "competing uses" did not appear in either the Forest Service's Final Environmental Impact Statement ("FEIS") or its Record of Decision ("ROD"). Indeed, the Forest Service did not adopt any standard in either the FEIS or the ROD for evaluating when land uses "compete" within the meaning of the Forest Plan, or even acknowledge the requirement. The USCA thus concluded that the district court's grant of summary judgment to the agency defendants on this point was in error. As the Service did not adequately consider a factor relevant to its compliance with the Forest Plan, its decision could not stand. The USCA thus vacated the district court's decision so that the district court could issue an appropriate order, including remanding this case to the Forest Service so that the Service could establish and apply a standard for evaluating when land use values "compete" with grizzle bears' needs within the meaning of the Forest Plan. See Native Ecosystems Council v. U.S. Forest Service, 418 F.3d 953, 962-64 (9th Cir. 2005) (holding that the Forest Service's EIS failed to show that the proposed project complied with the applicable Forest Plan requirements, and remanding to the Forest Service to fix the error). The district court should direct the Forest Service to apply its standard to both the decision to reopen the disputed portions of Road 316 and the decision to leave intact ten culverts in otherwise decommissioned roads. With respect to both decision, the record could support a finding of competing uses, depending on the stand the forest Service adopts and apples. Berzon and Callahan, Circuit Judges, and Wright, District Judge. (Download the full text of this decision at www.ce9.uscourts.gov/)

6) PROPERTY: Emmert Industrial Corporation v. City of Milwaukie, Oregon, 06-35866 (9th Cir. Jan. 7, 2009) (unpublished). Emmert Industrial Corporation appealed an order of the district court granting summary judgment to the City of Milwaukie, Oregon. Emmert filed an action against the City under 42 USC Sec. 1983, alleging that the City's proposal to halt demolition of an Emmert property in exchange for a litigation waiver amounted to an "unconstitutional condition" that deprived Emmert of its First Amendment right to access the courts. Emmert's claim stemmed from its acquisition of a run-down house that was the subject of nuisance abatement proceedings. Emmert intended to move the house to a new location to stave off demolition, but was unable to obtain the necessary permits. After the matter dragged on for several months without resolution, the City decided to proceed with the demolition. But, in a final effort to save the house, the City proposed a "Final Agreement" to Emmert. That agreement conditionally approved a permit to relocate the house and held demolition in abeyance-so long as Emmert met strict performance requirements. It also required Emmert to waive all claims against the City related to the house. Emmert objected to several provisions, the parties never reached a definitive agreement, and the City demolished the house. In granting the City's motion for summary judgment, the district court concluded that the proposed agreement did not amount to an unconstitutional condition." Reviewing the grant of summary judgment de novo, the USCA noted that the record established that the litigation waiver was not a but-for deal-breaker. Emmert objected to several provisions of the proposed agreement, and each was independently fatal to the settlement. Thus, the waiver was not the actual or proximate cause of Emmert's injury. Emmert could not show the causation element required in a Sec. 1983 action. Harper v. Los Angeles, 533 F.3d 1010, 1026 (9th Cir. 2008). Assuming arguendo that Emmert could show causation, the litigation waiver did not amount to an unconstitutional condition. The government may condition the grant of a discretionary benefit "if the condition is rationally related to the benefit conferred." USA v. Geophysical Corp., 732 F.2d 693, 700 (9th Cir. 1983). When the condition is imposed as part of a settlement agreement, the USCA looks for a close nexus-a tight fit-between the specific interest the government seeks to advance in the dispute and the specific right waived. Davies v. Grossmont Union High Sch. Dist., 930 F.2d 1390, 1399 (9th Cir. 1991); see also Dolan v. City of Tigard, 512 US 374, 385-86 (1994). Here, the City had a legitimate interest in settling a dispute over a run-down house that had dragged on for years. The condition the government imposed-a litigation waiver-directly advanced this interest by ensuring the dispute would come to a quick end. The benefit Emmert was to receive-a comprehensive settlement-was also closely connected to the litigation waiver and the City's need for resolution. Moreover, it is not at all unusual or impermissible for the government to seek a litigation waiver as part of a settlement agreement of a pending dispute or a potential lawsuit. Tashima and M. Smith, Circuit Judges, and Wu, District Judge. (Download the full text of this decision at www.ce9.uscourts.gov/)

7) PROFESSIONAL LIABILITY INSURANCE: Charles Dunn Company v. Tudor Insurance Company, 07-56525 (9th Cir. Jan. 14, 2009) (unpublished). Charles Dunn Company, Inc. ("CDCI") brought this action after Tudor Insurance Company declined coverage under a "claims made and reported" professional liability policy for an action brought by the DuLaurence Trust against CDCI for "flipping" real estate. CDCI alleged claims for breach of contract and breach of the implied covenant of good faith and fair dealing. The district court granted summary judgment and CDCI timely appealed. The USCA affirmed. Viewing the facts in the light most fa-vorable to CDCI, the USCA first had to determine whether a genuine issue of material fact existed and whether the district court ap-plied the law correctly. No disputed issues of fact existed. Because federal jurisdiction is based on diversity of citizenship, the USCA applied California law. Burns v. Int'l Ins. Co., 929 F.2d 1422, 1424 (9th Cir. 1991). On October 21, 2005, counsel for the DuLaurence Trust by mail and fax sent a letter to CDCI. The letter charged CDCI with fraudulent misconduct and breach of fiduciary duty and sought payment to the Trust of lost profits, interest, and other expenses. Enclosed with the letter was a "draft of a complaint we intend to file," which alleged breach of fiduciary duty, fraud, negligent misrepresentation, and failure to exercise reasonable skill and care by CDCI and its agents and sought $1 million in general damages, pre-judgment interest, punitive damages, and costs. It asked for a re-sponse by November 2. On November 7, 2005, the Trust filed the complaint enclosed in its October 21 letter in state court. The USCA noted that the polices at issue did not define "claim," but that under California law a claim is "a demand for something as a right, or as due. A claim requires more than an inquiry requesting an explanation or the lodging of a grievance without a demand for compensa-tion, but less than the institution of a formal lawsuit. The word "claim" imports the assertion of a liability to the party making it to do some service or pay a sum of money." Hill v. Physicians & Surgeons Exch., 225 Cal. App. 3d 1, 5-6 (1990). The October 21 letter is a claim because the DuLaurence Trust asserted its intent to file a lawsuit unless a monetary payment was made, backed up by the en-closed draft complaint seeking damages. See id; Williamson & Vollmer Eng'g, Inc .v. Sequoia Ins. Company, 64 Cal. App. 3d 261, 269-70 (1976) (letter holding the insured responsible for correcting an error and stating that the insured would be back-charged for all corrective work constituted a "claim"). Because the DuLaurence Trust claim was "first made" to CDCI on October 21, 2005, CDCI was required to report the claim to Tudor during the 2004-2005 policy period. CDCI failed to do so and did not report the claim until February 9, 2006, during the 2005-2006 police period. Tudor properly declined coverage for the claim. The USCA thus found that it did not need to reach the other declination grounds. CDCI's argument that the "policy period" is four years because it includes the re-newal policy periods failed. The renewal of an insurance policy constitutes a separate and distinct contract for the period of time cov-ered by the renewal and is not a continuous contact "unless there is clear and unambiguous language showing the parties intended to enter into one continuous contact." A.B.S. Clothing Collection, Inc. v. Home Ins. Co., 34 Cal. App. 4th 1470, 1476-78 (1995); Karen Kane Inc. v. Reliance Ins. Co., 202 F.3d 1180, 1183 (9th Cir. 2000) (finding "A.B.S. to be a persuasive statement of California law"). The 2004-2005 policy period did not include the 2005-2006 policy period because each policy was a separate and distinct contract. See A.B.S., 34 Cal. App. 4th at 1476-78. Tudor issued separate policy documents for each renewal policy and each renewal policy identified a separate policy period. CDCI's alternative argument that reporting outside the policy period was equitably excused under Root v. American Equity Specialty Insurance Co., 130 Cal. App. 4th 926 (2005), also fails. In Root, the insured received a telephone call in the nature of "hearsay regarding a potential claim" two business days before the expiration of the policy period. Id. at 930. Upon re-ceiving reliable information about the claim two days after the policy expired, he "immediately" notified the insurer. Id. at 931. In con-trast, CDCI had nine business days after receiving the October 21 letter before the 2004-2005 policy expired in which to report the DuLaurence Trust claim to Tudor. It did not report the claim until some three and a half months after the October 21 letter and three months after the DuLaurence Trust filed suit. Finally, Tudor cannot be found to have breached the implied covenant of good faith and fair dealing in declining coverage as no coverage was due to CDCI, which is a prerequisite for a bad faith claim. Amadeo v. Principal Mut. Life Ins. Co., 290 F.3d 1152, 1158 (9th Cir. 2002); Waller v. Truck Ins. Exch., Inc., 11 Cal. 4th 1, 35-36 (1995). ("It is clear that if there is no potential for coverage and, hence, no duty to defend under the terms of the policy, there can be no action for breach of the implied covenant of good faith and fair dealing because the covenant is based on the contractual relationship between the insured and the insurer."). Farris and Wardlaw, Circuit Judges, and Schwarzer, District Judge.(Download the full text of this decision at www.ce9.uscourts.gov/)

8) DISABILITY BENEFITS: Kniespeck v. UNUM Life Insurance Co. of America, 07-15094 (9th Cir. Jan. 14, 2009) (unpub-lished). UNUM Life Insurance Company of America ("UNUM") appealed a district court's judgment in favor of Kniespeck who had brought this action under 28 USC Sec. 1132(a) to recover benefits he alleged were wrongfully denied him under a group long-term disability policy ("the Policy") issued by UNUM. On appeal, UNUM argued that the district court erred in construing the Policy to require no proof of disability when the insured seeks partial disability benefits. The USCA agreed. Although the language of the Policy was not a model of clarity, the district court's interpretation of "partial disability" conflicted with other plan's provisions. Reading the term "disability" to mean a condition distinct from "partial disability" creates numerous internal inconsistencies in the Policy. The USCA thus construed "disability" to include "partial disability," such that the Policy's proof of claim requirement applied to Kniespeck's claim of partial disability. Upon request from UNUM, Kniespeck had to provide proof of continuing disability and care of a physician. Because he failed to provide such proof after multiple requests, UNUM was entitled to discontinue its payment of disability benefits. Section IV of the Policy requires Kniespeck to provide "proof" in order for UNUM to continue to pay benefits. Although the Policy had ambiguities and the USCA construed them against UNUM, the requirement of proof was unambiguous, and the USCA said it could not "torture or twist the language" to reach a different result. Babikan v. Paul Revere Life Ins. Co., 63 F.3d 837 (9th Cir. 1995). Section VI, titled "General Policy Provisions," defines proof to include (1) the date the disability started; (2) the cause of the disability; and (3) how serious the disability is. Kniespeck had to submit that information in 1998 when UNUM requested it. The USCA noted that it was undisputed that Kniespeck never offered proof of continuing disability to support his claim of partial disability. Specifically, he never offered proof that because of "the injury or sickness that caused the [total] disability" he was "unable to perform all the material duties of his regular occupation on a full-time basis." In 2000, he allegedly submitted a form from a chiropractor, not a medical doctor. That form stated that he was "permanently [illegible word] disable (sic)." It did not state the extent of the disability or that it made him "unable to perform all the material duties of his regular occupation of a full-time basis." The vocational evaluation report by Pride Industries was from February 1997, while UNUM was still paying total disability and before Kniespeck claimed a disability. It says that he was totally disabled, but it was by a vocational evaluator, not a physician, and did not state that the disability was "because of injury" or was a "result from the injury … that cause the [total] disability." After phase one of the bench trial, three physicians provided opinions that Kniespeck was not disabled. The USCA said that even if it assumed that UNUM waived the 31-day time limit for receipt of proof, it was incumbent on Kniespeck to provide proof that he had a continuing disability in order to collect benefits for partial disability. The Policy did not presume continuing disability after any total disability, but instead required proof of partial disability as a condition of obtaining benefits for partial disability, and Kniespeck did not provide proof. Thus, as a matter of law, Kniespeck was not entitled to any past or future benefits under the Policy. Noonan, Kleinfeld, and Ikuta, Circuit Judges.(Download the full text of this decision at www.ce9.uscourts.gov/)

9) IRS SUMMONSES: Zdun v. Henderson, 07-35465 (9th Cir. Jan. 15, 2009) (unpublished). Terry Zdun, Carol Zdun, and Dentex, P.C. appealed pro se from a district court's judgment dismissing their petition to quash summonses issued by Internal Revenue Service Agent Henderson. The USCA affirmed in part and dismissed in part. The district court properly dismissed the action based on the government's prima facie showing that the summonses were issued in good faith. See Stewart v. USA, 511 F.3d 1251, 1254 (9th Cir. 2008) (describing requirements for enforcing summons and concluding that the government met its burden by introducing a sworn declara-tion from the revenue agent who issued the summons). The district court also correctly determined that Henderson was not a proper defendant. Adams v. Johnson, 355 F.3d 1179, 1185-86 (9th Cir. 2004) (holding that Bivens relief is unavailable against IRS auditors for conducting tax assessments and collections); Gilbert v. Da Grossa, 756 F.2d 1455, 1458 (9th Cir. 1985) (stating that a suit against an IRS employee for actions taking in his official capacity is a suit against the United States). The appeal by Dentex was dismissed because a corporation may not appear pro se. Rowland v. California Men's Colony, 506 US 194, 201-02 (1993) (It has been the law for the better part of two centuries that a corporation may appear in the federal courts only through licensed counsel.). Wallace, Trott, and Rymer, Circuit Judges. (Download the full text of this decision at www.ce9.uscourts.gov/)

10) OCCUPATIONAL LIBERTY: SOC, Inc. v. Las Vegas Metropolitan Police Department, 07-16159 (9th Cir. Jan. 22, 2009) (unpublished). SOC appealed the district court's judgment on the pleadings in favor of Las Vegas Metropolitan Police Department ("LVMPD"), and the Fed. R. Civ. Proc. 12(b)(6) dismissal in favor of County of Clark, Nevada. The USCA held that the district court incorrectly held that corporations do not have the right to bring a 42 USC Sec. 1983 claims for deprivation of occupational liberty. A corporation has rights under the Fourteenth Amendment and may bring Sec. 1983 claims when its rights are violated. Cal. Diversified Promotions, Inc. v. Musick, 505 F.2d 278 (9th Cir. 1974). In addition, Wedges / Ledges of Cal. v. City of Phoenix, 24 F.3d 56 (9th Cir. 1994), held that corporations "as legal person, also can assert a right to pursue an occupation." Id. at 65 n. 4. The district court's conclusion to the contrary was error. Although SOC has a substantive due process right to pursue an occupation, the district court did not err in granting judgment on the pleadings. In order to establish a substantive due process claim for denial of a right to pursue an occupation, SOC was required to allege that it was unable to pursue it occupation in the relevant business, and, second, that this inability was due to actions that substantively were "clearly arbitrary and unreasonable, having no substantial relation to the public health, safety, morals, or general welfare." Wedges / Ledges, 24 F.3d at 65 (citing FDIC v. Henderson, 940 F.2d 465, 474 (9th Cir. 1991)). SOC did not allege that it was unable to pursue its occupation or even a substantial interference with the right to pursue its occupation that would rise to the level of a constitutional deprivation. Conn v. Gabbert, 526 US 286, 292 (1999). The USCA noted that the Circuit has recognized, under certain circumstances, a theory for constitutional deprivation of business goodwill that might not require the same quantum of business interference as required for the claim involved in this case. See Soranno's Gasco, Inc. v. Morgan, 874 F.2d 1310, 1318 (9th Cir. 1989) (holding that where state law treats goodwill as property, business goodwill is a property interest entitled to protection and that the owner cannot be deprived of it without due process). However, SOC did not allege a constitutional deprivation of business goodwill under Soranno's Gasco. Moreover, while the officers' alleged conduct was shocking to the conscience with regards to the threats made to the SOC employee, SOC lacked standing to challenge that conduct here. Singleton v. Wulff, 824 US 106, 113-16 (1976). For these reasons, the USCA held that the complaint failed to state a claim upon which relief could be granted under the theory asserted, and that the entry of the judgment on the pleadings and dismissal under Rule 12(b)(6) were proper. A party may amend its complaint with leave of court, and leave of court should be freely given when justice required. The USCA said it applies this policy liberally. Theme Promotions v. New America Marketing FSI, 546 F.3d 991, 1010 (9th Cir. 2008). A district court does not abuse its discretion to deny leave to amend where the district court reasonably concludes that further amendment would be futile. Allwaste v. Hecht, 65 F3d 1523, 1530 (9th Cir. 1995). In the instant case, amendment may not have been futile because the complaint would have been proper if SOC had alleged the requisite level of interference or possibly proceeded under a different theory. SOC did not seek leave to amend on that basis, however, but only sought leave to amend to add individual plaintiffs. SOC did so in response to the district court's erroneous conclusion that SOC did not have a cause of action in its own behalf for deprivation of its due process right to pursue an occupation. The court responded to the request by ruling that it would not allow such an amendment, but would require SOC to bring a new action. On appeal, SOC clarified that, although it believes that it sufficiently pled a cause of action, and that any deficiencies could have been cured by amendment, it does not seek a remand to file a new motion for leave to amend its complaint, but will proceed with a new action if it deems it necessary. The USCA thus considered the appeal from failure to grant leave to amend withdrawn. Finally, the district court abused its discretion in awarding attorney's fees to LVMPD. "A prevailing defendant may recover an attorney's fee only where the suit was vexatious, frivolous, or brought to harass or embarrass the defendant." Hensley v. Eckerhart, 461 US 424, 429 n.2 (1983). The district court improperly found that SOC lacked the right to bring its lawsuit, and thus incorrectly determined that SOC's claims were frivolous. Although the USCA agreed that the cause of action as alleged did not constitute a claim upon which relief could be granted, the claim was not frivolous. SOC's cause of action has been recognized by the Ninth Circuit and SOC likely could have amended its complaint to conform to pleading requirements. Corporations have Fourteenth Amendment rights; they may bring Sec. 1983 claims; an employee was allegedly harassed, and there is case law recognizing that the target of an investigation had standing to challenge outrageous conduct to a third-party. The lawsuit was thus not frivolous, and the district court abused its discretion in awarding attorney's fees. The USCA reversed and vacated the attorney fee award. Thomas and Paez, Circuit Judges, and Ezra, District Judge. (Download the full text of this decision at www.ce9.uscourts.gov/)

11) SENTENCING: USA v. Bond, 06-50628 (9th Cir. Jan. 20, 2009) (unpublished). Bond argued that his 16-level sentencing en-hancement under Guideline Sec. 2B1.1 for an amount of loss between $1.0 and $2.5 million violated USA v. Booker, 543 US 220 (2005), because the district court, rather than the jury, made the factual finding regarding the amount of loss. However, contrary to his assertion, "district courts are free to make factual determinations not made by the jury and may base their ultimate decisions regarding the length of a convicted criminal's sentence on those determinations." USA v. Staten, 466 F.3d 708, 719 (9th Cir. 2006). The USCA held that the record provided sufficient evidence to support the trial judge's findings. Bond also argued that the district court erred in requiring him to pay restitution due to his financial condition. However, under the Mandatory Victims Restitution Act ("MVRA"), the imposition of restitution is mandatory, "without regard to a defendant's economic situation." See USA v. Dubose, 146 F.3d 1141, 1143 (9th Cir. 1998); and, 18 USC Sec. 3664(f)(1)(A). The case relied upon by Bond stating the contrary, USC v. Ramilo, 986 F.2d 333 (9th Cir. 1993), was decided prior to the MVRA's passage. Thompson, O'Scannlain, and Tallman, Circuit Judges. (Download the full text of this decision at www.ce9.uscourts.gov/)

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