The most important opinions from the second quarter of 2017.
APA & Mandamus – Savannah River Site – Nuclear Fuel Removal
South Carolina v. United States (Lawyers Weekly No. 002-092-17, 37 pp.) (J. Michelle Childs, J.) 1:16-cv-00391; D.S.C.
Holding: Although traditional mandamus jurisprudence gives courts discretion as to whether to grant relief, 5 U.S.C. § 706(1) of the Administrative Procedure Act does not: “The reviewing court shall … compel agency action unlawfully withheld or unreasonably delayed.”
The plaintiff-state is entitled to an order compelling the defendant Secretary of Energy, consistent with the National Environmental Policy Act (NEPA) and other applicable laws, to remove one metric ton of defense plutonium from South Carolina for storage or disposal elsewhere. The state is not entitled to an injunction prohibiting defendants from moving more plutonium into South Carolina.
Nuclear Fuel Facility – Failure to Meet Deadlines – Statutory Remedies
South Carolina v. United States (Lawyers Weekly No. 002-087-16, 68 pp.) (J. Michelle Childs, J.) 1:16-cv-00391; D.S.C.
Holding: The court reads 50 U.S.C. § 2566 as urged by the state: if the U.S. Department of Energy (DOE) fails to meet deadlines for converting defense plutonium into mixed-oxide fuel at the Savannah River Site (SRS), then the DOE must both remove certain amounts of plutonium from the SRS and pay the state $1,000,000 per day, up to $100,000,000 a year until the requisite amount of fuel is removed or production objectives are met.
The court denies defendants’ motion to dismiss the state’s second cause of action but grants the motion as to the state’s first cause of action.
Trade Secrets Misappropriation – Civil Practice – Preliminary Injunction – Contract Covenants
T&S Brass & Bronze Works, Inc. v. Slanina (Lawyers Weekly No. 002-131-17, 33 pp.) (Mary Geiger Lewis, J.) 6:16-cv-03687; D.S.C.
Holding: Plaintiffs are suing defendant Basinger individually while the arbitration clause that Basinger seeks to enforce is in a distributorship agreement between plaintiff EnviroPure Systems, LLC, and Basinger’s company, Advantagreen. Since plaintiffs allege that “Basinger did business as ‘Advantagreen’” and refer to defendant “Basinger/Advantagreen” throughout the complaint, according to plaintiffs’ own allegations, Advantagreen and Basinger are one and the same. Therefore, Basinger can enforce the arbitration clause in the agreement between EnviroPure and Advantagreen.
Plaintiffs’ motion for a preliminary injunction is granted. Basinger’s motion to compel arbitration is granted.
Affirmative Defenses – Twombly/Iqbal Inapplicable – Untimely Motion to Strike – Judgment on the Pleadings
Cohen v. SunTrust Mortgage, Inc. (Lawyers Weekly No. 002-113-17, 7 pp.) (Cameron McGowan Currie, J.) 3:16-cv-02513; D.S.C.
Holding: Even if plaintiff’s motion to strike defendant’s affirmative defenses had been timely filed, the court would deny the motion. The court joins the recent trend in finding that the pleading standards of Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007), and Ashcroft v. Iqbal, 556 U.S. 662 (2009), do not apply to affirmative defenses.
Plaintiff’s motion for judgment on the pleadings is granted in part and denied in part.
Removal – Diversity – Fraudulent Joinder Claim – Insurance Adjuster
Aung v. GEICO (Lawyers Weekly No. 002-153-17, 8 pp.) (Patrick Michael Duffy, J.) 9:17-cv-00856; D.S.C.
Holding: Under South Carolina law (1) generally, employees may be held personally liable for torts they commit in the scope of their employment, even if the employer is also liable by virtue of respondeat superior, and (2) no South Carolina case clearly carves out an exception to that rule for in-house insurance adjusters (Charleston Dry Cleaners & Laundry, Inc. v. Zurich Am. Ins. Co., 586 S.E.2d 586 (S.C. 2003), involved an independent adjuster). Defendants have not met their enormous burden of showing there is no glimmer of hope that plaintiff could prove her negligence claim against defendant Cogdill, an insurance adjuster who lives in South Carolina. Since diversity of citizenship is not complete, this court lacks subject matter jurisdiction.
The court grants plaintiff’s motion to remand to state court.
Service of Process – UPS Mailbox – Contract – Piercing the Corporate Veil – Attorneys’ Communication
Rational Spirits, LLC v. Rattleback, LLC (Lawyers Weekly No. 002-098-17, 10 pp.) (Patrick Michael Duffy, J.) 2:16-cv-03406; D.S.C.
Holding: Even though plaintiff’s process server mentioned the wrong mailbox number in his service affidavit after delivering defendant Sanders’ summons and complaint to the UPS store where Sanders rented a mailbox, since plaintiff’s process server handed the summons and complaint to a UPS employee, such service of process fell within the broad authorization that Sanders had given UPS to accept service for him.
The court denies Sanders’ motion to dismiss under Rule 12(b)(5), FRCP. The court denies plaintiff’s request for default judgment as a sanction against Sanders. The court denies defendants’ motion to dismiss plaintiff’s breach of contract claim and grants the motion as to plaintiff’s misrepresentation, constructive fraud, and civil conspiracy claims; however, the court grants plaintiff leave to amend its complaint.
Wikimedia Challenge to NSA’s ‘Upstream’ Revived
Wikimedia Foundation v. National Security Agency (Lawyers Weekly No. 001-115-17, 46 pp.) (Diaz, J.) No. 15-2560, May 23, 2017; USDC at Baltimore, Md. (Ellis, J.) 4th Cir.
Holding: A split 4th Circuit panel vacates dismissal of plaintiff Wikimedia Foundation’s lawsuit challenging defendant National Security Agency’s “Upstream” electronic surveillance program; contrary to the district court’s conclusion, Wikimedia’s allegations are not speculative and are sufficient to survive a facial challenge to standing.
Administrative – Licenses & Permits – Number of Liquor Licenses
Retail Services & Systems, Inc. v. South Carolina Department of Revenue (Lawyers Weekly No. 010-020-17, 20 pp.) (Jean Hoefer Toal, Acting Justice) (Donald Beatty, C.J. & Costa Pleicones, Acting Justice, concurring in the result only without separate opinion) (John Kittredge, J., dissenting) Appealed from Aiken County Circuit Court (Doyet Early III, J.) S.C. S. Ct.
Holding: Respondents’ only justification for the three-liquor license restriction on corporations is that the restriction supports small businesses; without any other supportable police power justification, economic protectionism for a certain class of retailers is not a constitutionally sound basis for regulating liquor sales. S.C. Code Ann. §§ 61-2-10 and -20 are unconstitutional because they exceed the scope of the General Assembly’s police powers.
We reverse the circuit court’s grant of summary judgment for respondents.
FDCPA – Civil Practice – Statute of Limitations – Arbitration – Car Loan & Repossession
Soberanis v. City Title Loan, LLC (Lawyers Weekly No. 002-120-17, 15 pp.) (Richard Mark Gergel, J.) 2:16-cv-04034; D.S.C.
Holding: Plaintiff alleges that defendant City Title Loan, LLC, insisted on enforcement of the mandatory arbitration clause in the parties’ promissory note but then, after plaintiff filed an arbitration action, refused to participate, causing the arbitration association to refuse to administer the arbitration. Assuming these allegations are true, it would be inequitable to allow defendants now to argue that this action was untimely filed.
The court grants defendants’ motion to dismiss plaintiff’s unfair trade practices claim in part. Otherwise, the motion is denied.
Settlement with Principal – Covenant Not to Execute – Agent’s Liability – Tort/Negligence – Auto Accident
Benjamin v. Shaw (Lawyers Weekly No. 002-124-17, 9 pp.) (R. Bryan Harwell, J.) 4:15-cv-05110; D.S.C.
Holding: Even though plaintiff has settled with the parties who employed the defendant-driver and who owned the truck involved in the accident that injured plaintiff, the covenant not to execute explicitly states that it does not affect plaintiff’s right to seek recovery from others; moreover, there is no evidence that plaintiff has been fully compensated. Therefore, the defendant-driver is not entitled to summary judgment on the ground of satisfaction.
The court denies defendant’s motion for summary judgment.
Severance – County Administrator – Disqualified Votes – Quorum – Null & Void
Anderson County v. Preston (Lawyers Weekly No. 011-037-17, 28 pp.) (H. Bruce Williams, J.) (Few, A.J., not participating) Appealed from Anderson County Circuit Court (Roger Couch, J.) S.C. App.
Holding: Since the circuit court determined that four of seven county council members were disqualified from voting on the defendant-county administrator’s severance agreement, that agreement is null and void.
We reverse the circuit court’s decision to uphold the agreement, and we remand for further proceedings. However, we affirm the circuit court’s finding that defendant Preston owed no fiduciary duty to inform the council of improper votes and that his conduct did not constitute fraud, constructive fraud, or negligent misrepresentation. The circuit court also properly declined to apply the single tainted vote rule. We also reverse the circuit court’s findings that (1) the county had unclean hands, (2) the county had an adequate remedy at law, and (3) the county breached the terms of the severance agreement by bringing the instant action.
Voluntary Payment Doctrine – Full Knowledge Requirement – Implied Covenant of Good Faith & Fair Dealing
In & Out Welders, Inc. v. Sunbelt Rentals, Inc. (Lawyers Weekly No. 002-141-17, 7 pp.) (Mary Geiger Lewis, J.) 7:16-cv-04021; D.S.C.
Holding: Plaintiff alleges that, in connection with equipment rentals, defendant overcharged it and other customers via surcharges for pickup and delivery costs and for refueling, which defendant’s standard contract says is “designed to cover [defendant’s] direct and indirect costs of refueling the Equipment.” It is true that money voluntarily paid with full knowledge of all material facts and without any fraud, duress, or extortion cannot be recovered, although there was no legal obligation to make such payment; however, the voluntary payment doctrine is an affirmative defense, and the complaint fails to show whether plaintiff had full knowledge of defendant’s alleged wrongful conduct.
The court denies defendant’s motion to dismiss.
Attorneys – Ineffective Assistance Claim – Failures to Object – No Prejudice – Victim Impact – Rehearing Petitions
Stone v. State (Lawyers Weekly No. 010-019-17, 34 pp.) (John Few, J.) (Kaye Hearn, J., concurring in the result only without separate opinion) (Costa Pleicones, Acting Justice, dissenting) Appealed from Sumter County (Michael Nettles, PCR Judge) S.C. S. Ct. on petitions for rehearing.
Holding: Trial counsel should have objected to several parts of the state’s victim-impact evidence, especially the widow’s testimony about her suicide attempt. However, even if the objections had been made and sustained, petitioner has not shown that they would have changed the outcome of this case.
We affirm the post-conviction relief (PCR) court’s denial of petitioner’s application for PCR from his second capital sentencing proceeding.
Defendant shot and killed a deputy sheriff. Defense counsel argued that the deputy surprised defendant and that defendant shot him by accident.
College Trustee’s RICO Conviction Reversed
U.S. v. Pinson (Lawyers Weekly No. 001-137-17, 40 pp.) (Per Curiam) No. 15-4311, June 19, 2017; USDC at Columbia, S.C. (Norton, J.) 4th Cir.
Holding: The 4th Circuit reverses RICO conspiracy and government program theft convictions for defendant, a former member of the South Carolina State University board of trustees who was engaged in fraud involving multiple private business ventures, but affirms his convictions for honest services fraud, mail and wire fraud, money laundering and making false statements to federal agencies.
Constitutional – Confrontation Clause – Hearsay Evidence – Controlled Drug Buy
State v. Davis (Lawyers Weekly No. 011-023-17, 16 pp.) (H. Bruce Williams, J.) Appealed from Greenville County Circuit Court (Letitia Verdin, J.) S.C. App.
Holding: Since the state’s confidential informant (CI) didn’t testify, the trial court should not have allowed a South Carolina Law Enforcement Division agent to testify about what the CI did while the CI was out of the agent’s sight and hearing. However, given the co-conspirators’ testimony, the error was harmless.
We affirm defendant’s conviction of conspiracy to traffic 100 grams or more but less than 200 grams of methamphetamine.
Constitutional – Confrontation Right — 911 Call – Burglary – Trespass Letter
State v. Thompson (Lawyers Weekly No. 011-039-17, 12 pp.) (Lee, A.J.) Appealed from Lancaster County Circuit Court (Brian Gibbons, J.) S.C. App.
Holding: Even though the 911 caller did not testify at trial, her statements on the 911 call were made to obtain police assistance, and questions asked during the call were to elicit more information to enable police to assist her. Defendant’s right to confront the witnesses against him was not violated.
We affirm defendant’s conviction of first-degree burglary and third-degree assault and battery.
Delayed Trial as Adult for Juvenile Offense
U.S. v. Lopez (Lawyers Weekly No. 001-138-17, 29 pp.) (Harris, J.) No. 15-4573, June 19, 2017; USDC at Greenbelt, Md. (Grimm, J.) 4th Cir.
Holding: A defendant who was 17 years old when he and another young man robbed a brothel, raping one victim and killing another, was properly tried as an adult when he was charged six years later after DNA testing identified him as a suspect; the 4th Circuit affirms defendant’ conviction under the Hobbs Act, 18 U.S.C. § 1951(a), the federal robbery statute.
Incompetency – Involuntary Commitment – Intellectual Disability – Late Onset
State v. Linkhorn (Ex parte South Carolina Department of Disabilities & Special Needs) (Lawyers Weekly No. 010-028-17, 8 pp.) (Donald Beatty, C.J.) Appealed from Lexington County Circuit Court (J. Michael Baxley, J.) S.C. S. Ct. Substituted opinion.
Holding: Since defendant’s numerous cognitive and intellectual deficits did not manifest until he was 23 years old, after he attempted to hang himself, he may not be involuntarily committed to the Department of Disabilities and Special Needs.
We reverse the circuit court’s order (1) requiring DDSN to take custody of defendant and house him in a secure facility until the probate court determines whether he is intellectually disabled and (2) prohibiting DDSN from refusing involuntary commitment of similarly situated individuals.
Juvenile – CSC – Sex Offender Registry – Electronic Monitor
In re Justin B. (Lawyers Weekly No. 010-027-17, 10 pp.) (John Few, J.) (Donald Beatty, C.J. & Kaye Hearn, J., concurring in the result only without separate opinion) Appealed from Spartanburg County Family Court (Phillip Sinclair, J.) S.C. S. Ct.
Holding: The U.S. Supreme Court held in Roper v. Simmons, 543 U.S. 551 (2005), that the execution of juveniles is unconstitutional. This does not affect our determination that it is constitutional to require a juvenile sex offender to register and wear a monitor for life. The registry and monitoring rationally relate to the Legislature’s purpose of protecting the public and assisting law enforcement.
The court upholds the constitutionality of the requirement that the juvenile offender register as a sex offender and wear an electronic monitor, both for life.
Murder – Death Penalty – Constitutional – Confrontation Right – First Impression – Witness’s Mental Health Records – Intellectual Disability
State v. Blackwell (Lawyers Weekly No. 010-034-17, 46 pp.) (Donald Beatty, C.J.) (John Few, J., concurring) (Costa Pleicones, Acting Justice, dissenting) Appealed from Spartanburg County Circuit Court (Roger Couch, J.) S.C. S. Ct.
Holding: Even though the trial court followed a flawed procedure in excluding a prosecution witness’s mental health records, since the records were neither material nor exculpatory, and since defense counsel was able to thoroughly cross-examine the witness and attack her credibility, the trial court’s decision not to review the records in camera was harmless error.
We affirm defendant’s conviction of murder and the sentence of death.
No Johnson Challenge to Sentencing Guidelines
U.S. v. Mack (Lawyers Weekly No. 001-098-17, 10 pp.) (Niemeyer, J.) No. 15-4684, May 1, 2017; USDC at Greensboro, N.C. (Eagles, J.) 4th Cir.
Holding: A defendant convicted of possessing a stolen firearm knowing it was stolen loses his challenge to his 70-month sentence based on his claim that Johnson v. U.S.’s invalidation of the residual clause in the Armed Career Criminal Act meant the residual clause in USSG § 4B1.2(a)(2), applied to him, likewise is invalid; the U.S. Supreme Court decided in Beckles v. U.S. that the federal sentencing guidelines are not subject to due process vagueness challenges, the 4th Circuit says.
Prior Drug Crime Evidence Was Error
U.S. v. Hall (Lawyers Weekly No. 001-124-17, 72 pp.) (Wynn, J.) No. 15-4720, June 1, 2017; USDC at Columbia, S.C. (Anderson, J.) 4th Cir.
Holding: A 4th Circuit panel splits over admission of evidence of defendant’s prior drug crimes in a case in which the government could not prove defendant’s connection to a locked room in the house witnesses said he owned, that contained six kilograms of marijuana and two weapons; the panel reverses, vacates and remands defendant’s conviction for possession with intent to distribute.
Residual Clause Still Good for ‘Career Offender’
U.S. v. Riley (Lawyers Weekly No. 001-103-17, 6 pp.) (Wilkinson, J.) No. 15-4317, May 9, 2017; USDC at Baltimore, Md. (Quarles, J.) 4th Cir.
Holding: The 4th Circuit rejects a bid for resentencing on drug charges from a defendant designated as a career offender for a Maryland robbery with a dangerous weapon; the court concludes this offense was a crime of violence under the residual clause of the career offender guideline in effect when defendant was sentenced.
Stand Your Ground – Drive-By Shooting – Victim in Trailing Car
State v. Scott (Lawyers Weekly No. 011-030-17, 11 pp.) (Aphrodite Konduros, J.) (Stephanie McDonald, J., concurring in the result) Appealed from Richland County Circuit Court (Maité Murphy, J.) S.C. App.
Holding: An SUV followed defendant’s daughter home from a club and drove by defendant’s house. After a shot was fired from the SUV, defendant went into his driveway and fired a gun, striking and killing the driver of a Honda that had been following the SUV. Defendant is immune from prosecution under the Stand Your Ground law.
We affirm the circuit court’s finding of immunity.
Successor Bank Wins Restitution for Loan Lie
U.S. v. Ritchie (Lawyers Weekly No. 001-119-17, 35 pp.) (Diaz, J.) No. 16-4036, May 30, 2017; USDC at Baltimore, Md. (Bennett, J.) 4th Cir.
Holding: A defendant convicted of making a false statement in 2005 on a HUD-1 form about a $1.1 million cash payment he was making to obtain a real estate loan from Countrywide Bank must pay restitution for the loan balance remaining when a successor bank, Bank of America, sold the property in 2015, says the 4th Circuit; but a dissenting judge would join other circuits and hold defendant liable for a lesser amount.
Traffic Stop Not Unduly Extended
U.S. v. Hill (Lawyers Weekly No. 001-081-17, 15 pp.) (Keenan, J.) No. 15-4639, March 30, 2017; USDC at Richmond, Va. (Payne, J.) 4th Cir.
Holding: A traffic stop that began with observations that a driver was speeding slightly and had crossed a double-yellow line, and ended about 20 minutes later when a passenger acknowledged that he had a gun, was not unduly extended in violation of Rodriguez v. U.S., says a 4th Circuit panel majority.
Two Charges Violated Double Jeopardy
U.S. v. Jones (Lawyers Weekly No. 001-122-17, 17 pp.) (Thacker, J.) No. 15-4763, June 1, 2017; USDC at Lynchburg, Va. (Moon, J.) 4th Cir.
Holding: A defendant who pleaded guilty to a drug conspiracy count in the Eastern District of Virginia cannot be prosecuted in the Western District for a drug conspiracy involving the same two people from the first conspiracy conviction, the 4th Circuit says; in considering successive conspiracy prosecutions, the court must look at the characteristics of the conspiracy – substantive violation, personnel, location, time span and nature and scope – to apply the double jeopardy bar.
Court Upholds Injunction Against Travel Order
Int’l Refugee Assistance Project v. Trump (Lawyers Weekly No. 001-120-17, 205 pp.) (Gregory, J.) No. 17-1351, May 25, 2017; USDC at Greenbelt, Md. (Chuang, J.) 4th Cir.
Holding: The 4th Circuit upholds the district court’s imposition of a nationwide preliminary injunction against enforcement of Section 2(c) of Executive Order 2 issued by President Trump as in the interests of national security, imposing a 90-day halt to immigration from six countries – Iran, Libya, Somalia, Sudan, Syria and Yemen.
First-Offender Drug Plea Was ‘Conviction’
Jaquez v. Sessions (Lawyers Weekly No. 001-131-17, 12 pp.) (Gregory, J.) No. 16-1147, June 8, 2017; On Petition for Review; 4th Cir.
Holding: Petitioner’s 2005 criminal proceedings under a first-offender statute for cocaine possession, Va. Code § 18.2-251, constituted a “conviction” as defined in 8 U.S.C. § 1101(a)(48)(A), making petitioner, a Mexican citizen, ineligible for cancellation of removal; the 4th Circuit denies his petition for review of the BIA order.
Auto – UM – Prejudgment Interest – Bad Faith Claim – Tyger River
Tucker v. Peerless Insurance Co. (Lawyers Weekly No. 002-081-17, 17 pp.) (Bruce Howe Hendricks, J.) 4:13-cv-01809; D.S.C.
Holding: Even though the uninsured motorist (UM) coverage in the parties’ insurance policy does not specifically provide for prejudgment interest, and even though UM statute makes no mention of the right to recover prejudgment interest, since the policy limit was a sum certain at the time it was originally demanded by plaintiff, prejudgment interest is potentially recoverable should plaintiff prove his breach of contract claim.
Plaintiff’s motion to amend his complaint is granted. Defendant’s motion to dismiss is denied.
Bad Faith Win Reversed in Flood Insurance Claim
Woodson v. Allstate Ins. Co. (Lawyers Weekly No. 001-105-17, 20 pp.) (Niemeyer, J.) No. 16-1935, May 3, 2017; USDC at Elizabeth City, N.C. (Boyle, J.) 4th Cir.
Holding: In a dispute over denial of homeowners’ claim under a National Flood Insurance Program for damage by Hurricane Irene to the foundation of their waterfront home, the 4th Circuit reverses the district court’s award of $700,194 in treble damages and $63,963 in attorney’s’ fees for Allstate’s breach of contract and bad-faith handling of the claim; plaintiffs’ timely filing of their suit in state court did not toll the NFIP statute, and their claims are time-barred.
CGL – Construction Inspection – Negligently Conducted – Professional Services Exclusion
State Farm Fire & Casualty Co. v. Morningstar Consultants, Inc. (Lawyers Weekly No. 002-143-17, 11 pp.) (Mary Geiger Lewis, J.) 6:16-cv-01685; D.S.C.
Holding: The insurance that plaintiff issued to defendant excluded coverage for “bodily injury, property damage or personal injury due to rendering or failure to render any professional services or treatments. This includes … supervisory or inspection services….” This exclusion bars coverage for defendant in underlying lawsuits that accuse defendant of negligence in its rendering or failing to provide inspections of certain building units.
The court grants plaintiff’s motion for summary judgment.
Homeowners – Duty to Defend – Hazing Lawsuit – Intentional Torts & Negligence Allegations
Allstate Insurance Co. v. Ingraham (Lawyers Weekly No. 002-086-17, 40 pp.) (Bruce Howe Hendricks, J.) 7:15-cv-03212; D.S.C.
Holding: Even though many of the allegations in the underlying hazing complaint involved intentional conduct, since the UVa upperclassmen who allegedly ordered a first-year swim team member to drink copious amounts of milk and prune juice did not necessarily intend to make the first-year vomit, the plaintiff-insurer had a duty to defend the defendant-upperclassman.
The court denies the plaintiff-insurer’s motion for summary judgment, grants defendants’ motion for partial summary judgment, and denies without prejudice defendants’ motion to compel discovery.
Patent Infringement – Counterclaims – Preemption – False Statements – Affirmative Defenses – Pleading Standard
Hand Held Products, Inc. v. Code Corp. (Lawyers Weekly No. 002-157-17, 12 pp.) (Richard Mark Gergel, J.) 2:17-cv-00167; D.S.C.
Holding: Defendant’s state-law injurious falsehood and tortious interference counterclaims are not preempted by the Patent Act because defendant alleges that plaintiff went beyond informing defendant’s customers about potential infringement and warning them about possible litigation and added that plaintiff would “bury” defendant and put it “out of business.” Plaintiff’s alleged conduct exceeds the scope of preemption laid out in Globetrotter Software, Inc. v. Elan Computer Grp. Inc., 362 F.3d 1367 (Fed. Cir. 2004).
Labor & Employment
ADA – Eleventh Amendment Immunity – Federal Funding
Squires v. South Carolina Department of Health & Environmental Control (Lawyers Weekly No. 002-082-17, 10 pp.) (R. Bryan Harwell, J.) 4:16-cv-02414; D.S.C.
Holding: Even though 42 U.S.C. § 2000d-7(a)(1) abrogates Eleventh Amendment immunity for states that receive federal financial assistance and violate several listed statutes “or the provisions of any other Federal statute prohibiting discrimination,” the statute does not abrogate states’ Eleventh Amendment immunity for claims brought under Title I of the Americans with Disabilities Act.
The court grants defendant’s motion to dismiss.
Labor & Employment
Company Could Change Retiree Health Benefits
Barton v. Constellium Rolled Products-Ravenswood LLC (Lawyers Weekly No. 001-113-17, 16 pp.) (Motz, J.) No. 16-1103, May 11, 2017; USDC at Charleston, W.Va. (Goodwin, J.) 4th Cir.
Holding: The 4th Circuit upholds a district court decision denying a class of retirees’ challenge to their former employer’s unilateral alteration of their retiree health benefits; the governing collective bargaining agreement does not provide for vested retiree health benefits.
Labor & Employment
FLSA – Minimum Wage & Overtime – Satellite TV Installers – § 207(i) Exemption – First Impression
Alston v. DIRECTV, Inc. (Lawyers Weekly No. 002-147-17, 51 pp.) (J. Michelle Childs, J.) 3:14-cv-04093; D.S.C.
Holding: The FLSA provides an exemption from 29 U.S.C. § 207(a)’s overtime wage requirement for qualifying employers that employ the employee in “a retail or service establishment.” Defendants have failed to prove that plaintiffs – technicians who installed and repaired satellite television service systems – worked in a retail or service “establishment,” though defendant DIRECTV may be a retail “enterprise.”
Prior to the summary judgment hearing, the court denies defendants’ summary judgment motion in part.
Labor & Employment
Public Employees – Administrative Remedies – Exhaustion Requirement – Form over Substance
Chapman v. South Carolina Department of Social Services (Lawyers Weekly No. 011-029-17, 7 pp.) (Paul Short Jr., J.) App0ealed from the Administrative Law Court (Carolyn Matthews, ALJ) S.C. App.
Holding: After his client was fired, a lawyer’s letter satisfied the statutory and regulatory requirements for initiating a grievance, despite the fact that the employer’s HR manual required that the same information come to them via a certain form.
We reverse the Administrative Law Court’s rejection of appellant’s grievance for failure to exhaust administrative remedies.
Labor & Employment
Religious Faith Supported Hand Scanner Bias Claim
U.S. EEOC v. Consol Energy Inc. (Lawyers Weekly No. 001-133-17, 34 pp.) (Harris, J.) No. 16-1230, June 12, 2017; USDC at Clarksburg, W.Va. (Stamp, J.) 4th Cir.
Holding: A mining company discriminated in violation of Title VII against plaintiff, an evangelical Christian who had a religious objection to using a biometric hand scanner, when it refused to accommodate his beliefs, despite offering alternatives to the hand scanner to employees with hand injuries; the 4th Circuit affirms judgment for plaintiff, who involuntarily retired after 37 years as a coal miner, upholding awards of $150,000 in compensatory damages and $436,860.74 in front and back pay and lost benefits.
Labor & Employment
SCWPA – Statute of Limitations – Contract – Independent Contractors or Employees – Chargebacks & Holdbacks – Home Security Systems
Sill v. AVSX Technologies, LLC (Lawyers Weekly No. 002-091-16, 13 pp.) (Margaret Seymour, S.J.) 3:16-cv-00555; D.S.C.
Holding: There appears to be no jurisprudence holding that a failure to pay a salesperson’s “holdbacks” constitutes a continuing violation under the South Carolina Wage Payment Act; however, courts interpreting the Fair Labor Standards Act’s similar statute of limitations have found that each failure to pay proper wages begins a new limitations period. The court holds that each week or month when defendant failed to pay plaintiffs their holdbacks created a new cause of action. Since plaintiffs filed their complaint on Dec. 23, 2015, any sums due to plaintiffs before Dec. 23, 2012, falls outside the statute of limitations.
The court grants summary judgment for defendant as to any claim that accrued before Dec. 23, 2012; otherwise, defendant’s motion is denied. The parties’ cross-motions in limine are denied.
Prisons & Jails
Civil Detainee Challenges Confinement Conditions
Matherly v. Andrews (Lawyers Weekly No. 001-134-17, 35 pp.) (Diaz, J.) No. 16-6473, June 8, 2017; USDC at Raleigh, N.C. (Britt, J.) 4th Cir.
Holding: A plaintiff committed to FCI Butner as a “sexually dangerous person” under the Adam Walsh Act loses his suit contending that he is subjected to many of the same conditions of confinement as criminal detainees in federal custody at Butner.
Prisons & Jails
Failure to Exhaust Is Affirmative Defense
Custis v. Davis, Warden (Lawyers Weekly No. 001-079-17, 10 pp.) (Gregory, J.) No. 15-7533, March 23, 2017; USDC at Norfolk, Va. (Davis, J.) 4th Cir.
Holding: The 4th Circuit reverses dismissal of a suit filed by an inmate who was assigned to a lower bunk because of missing toes on his right foot, and who fell and suffered injuries while climbing the ladder to the upper bunk he was given; the district court improperly sua sponte examined plaintiff’s administrative exhaustion requirement.
Prisons & Jails
No Qualified Immunity for Prisoner Retaliation Claim
Booker v. S.C. Dep’t of Corrections (Lawyers Weekly No. 001-102-17, 36 pp.) (Gregory, J.) No. 15-7679, April 28, 2017; USDC at Charleston, S.C. (Lewis, J.) 4th Cir.
Holding: The 4th Circuit reinstates plaintiff prisoner’s First Amendment claim against defendant correctional officials who allegedly retaliated against him by filing an “Incident Report” after he complained that the mailroom supervisor had opened his confidential legal mail; the district court erred in holding defendants had qualified immunity.
Adverse Possession – Abandonment – Incorrect Tax Records – Tax Sale Challenge
Taylor v. Heirs of William Taylor (Lawyers Weekly No. 011-027-17, 14 pp.) (Paula Thomas, J.) Appealed from Beaufort County (Marvin Dukes III, Master-in-Equity) S.C. App.
Holding: For at least the period between 1956 and 1972, appellants and their family adversely possessed the parcel in question on Warsaw Island. Even if they abandoned the property after 1972 – and the evidence shows they did not – they had already gained title to the property, so they could not lose title by abandoning the property. Furthermore, appellants can challenge a tax sale more than two years after it occurred because – due to an inexplicable tax map switch of parcel numbers – appellants did not receive notice of the sale.
We reverse the master-in-equity’s judgment for respondents.
Easements – Improvements – Civil Practice – Statute of Limitations – Oil Spill
Lewis v. Kinder Morgan Energy Partners, L.P. (Lawyers Weekly No. 002-130-17, 12 pp.) (Henry Herlong Jr., S.J.) 8:15-cv-04792; D.S.C.
Holding: Where defendants own an easement across plaintiffs’ farm as well as the improvement – an oil pipeline – thereon, S.C. Code Ann. § 15-3-670(A) prevents defendants from taking advantage of S.C. Code Ann. § 15-3-640’s statute of repose, which applies to improvements to real property, generally by parties who do not own the real property that has been improved.
Defendants’ motion for partial summary judgment is denied.
Mortgages – Foreclosure – Civil Practice – Jury Trial Demand – Clerk’s Referral
South Carolina Community Bank v. Salon Proz, LLC (Lawyers Weekly No. 011-028-17, 7 pp.) (Stephanie McDonald, J.) Appealed from Richland County (Joseph Strickland, Master-in-Equity) S.C. App.
Holding: Although Rule 53(b), SCRCP, says that, in a foreclosure action, “some or all of the causes of action … may be referred to a master … by order of … the clerk of court,” the clerk does not retain this power to refer a case when a party has already made a valid jury demand.
We reverse the master-in-equity’s denial of defendant’s motion to transfer the case to the jury docket.
Timeshares – Administrative – Agency Decisions – Certified Questions
Fullbright v. Spinnaker Resorts, Inc. (Lawyers Weekly No. 010-032-17, 16 pp.) (John Kittredge, J.) On certification from the U.S. District Court for the District of South Carolina.
Holding: In response to certified questions, the court holds that, despite the Real Estate Commission’s authority over timeshares, a purchaser or lessee still has the right to bring a private action to enforce the Vacation Time Sharing Plans Act (the Timeshare Act); furthermore, a determination by the Real Estate Commission (REC) of a violation of the Timeshare Act is not a condition precedent to a purchaser bringing a private action to enforce the Timeshare Act. Finally, the REC’s determinations as to whether the Timeshare Act was violated are entitled to the same deference as that accorded to other agency rulings.
Assumption of Duty – Train Engineer – Traffic Ticket – Defense
McPherson v. CSX Transportation, Inc. (Lawyers Weekly No. 002-104-17, 15 pp.) (Bruce Howe Hendricks, J.) 4:16-cv-02725; D.S.C.
Holding: The North Charleston police cited plaintiff for obstructing a highway while plaintiff was operating one of defendant’s trains. Although plaintiff alleges that various contracts and defendant’s internal policies and procedures required defendant to defend the citation and prohibited plaintiff from doing so, plaintiff’s allegations fail to establish that defendant owed any duty to plaintiff in defending his citation.
Defendant’s motion to dismiss is granted.
Breach of Fiduciary Duty – Agency – Bank’s Future Employee – Real Property
Gibson v. Ameris Bank (Lawyers Weekly No. 011-035-17, 9 pp.) (James Lockemy, C.J.) (Aphrodite Konduros, J., concurring in the result only without separate opinion) Appealed from Berkeley County (Robert Watson, Master-in-Equity) S.C. App.
Holding: Even though an employee of appellant Ameris Bank sent an email which expressed concerns that Ameris had mismanaged respondents’ loan and had potentially aided their real estate and financial advisor in siphoning off loan proceeds, since that email was sent more than a year after respondents fired the advisor, there is no evidence that Ameris knew about or knowingly participated in the advisor’s breach of fiduciary duty.
We reverse the master-in-equity’s award of $2,913,866 in compensatory and punitive damages to respondents.
Breach of Fiduciary Duty Claim – Contract – Declaratory Judgment – Intellectual Property – Labor & Employment
Wired Fox Technologies, Inc. v. Estep (Lawyers Weekly No. 002-105-17, 41 pp.) (Bruce Howe Hendricks, J.) 6:15-cv-00331; D.S.C.
Holding: Plaintiff alleges that defendant Estep was plaintiff’s independent contractor. Putting aside the undisputed fact that the independent contractor agreement was never signed by either party, defendants convincingly argue that, if a traditional employer/employee agreement alone is not sufficient to give rise to a fiduciary duty, an independent contractor relationship can hardly be sufficient on that score.
The court grants summary judgment for defendants as to plaintiff’s claims. The court grants defendant Estep’s motion for partial summary judgment on his counterclaims.
Civil Rights – DUI Arrest – Lack of Probable Cause – Partially Fabricated Tip
Watson v. Adams (Lawyers Weekly No. 002-088-16, 37 pp.) (Bruce Howe Hendricks, J.) 4:12-cv-03437; D.S.C.
Holding: Where a tip received by a state trooper indicated that a car in a Bojangles parking lot kept “backing up and going forward and backing up and going forward” and [had] been out there for a long time,” the only foreseeable criminal activity that an officer could reasonably suspect was drunk driving. However, the police officer who followed plaintiff’s decedent’s car from the parking lot to his home observed nothing to corroborate this suspicion, so the officer’s traffic stop was unlawful.
The court grants summary judgment to defendant South Carolina Department of Public Safety (SCDPS) on plaintiff’s claims for supervisory liability under § 1983, malicious prosecution, and abuse of process; the court denies SCDPS’ motion for summary judgment on plaintiff’s claims of false imprisonment, false arrest, and grossly negligent supervisor. The defendant-police officer and the defendant-police chief are not entitled to summary judgment on plaintiff’s § 1983 claims of unlawful seizure and unlawful arrest. The police chief and the defendant-town are entitled to summary judgment on plaintiff’s § 1983 claim for supervisory liability. The court grants summary judgment for the town on plaintiff’s claims of malicious prosecution, abuse of process, and grossly negligent supervision; the town’s motion is denied as to plaintiff’s claims of false imprisonment and false arrest. The defendant-state trooper is entitled to summary judgment on plaintiff’s claims of malicious prosecution and civil conspiracy but not on plaintiff’s claims of false imprisonment, false arrest, abuse of process and his § 1983 claims of unlawful seizure and unlawful arrest.
Contribution Among Joint Tortfeasors Act – First Impression – Unnamed Tortfeasor – Plaintiff Chooses Rule
Smith v. Tiffany (Lawyers Weekly No. 010-026-17, 23 pp.) (John Kittredge, J.) (Costa Pleicones, Acting Justice, dissenting) Appealed from Saluda County Circuit Court (R. Lawton McIntosh, J.) S.C. S. Ct.
Holding: Once plaintiff settled with one of the alleged tortfeasors in an auto accident, that tortfeasor was immune from suit (pursuant to a covenant not to execute), and the named defendants could not add him as a defendant or a third-party defendant.
We affirm the circuit court’s grant of Corbett Mizzell’s motion for summary judgment.
False Claims Act – Kickback Schemes – Fraud – Medical Testing
United States ex rel. Lutz v. Berkeley Heartlab, Inc. (Lawyers Weekly No. 002-099-17, 13 pp.) (Richard Mark Gergel, J.) 9:14-cv-00230; D.S.C.
Holding: The plaintiff-relator’s complaint (1) alleges that defendant BlueWave Healthcare Consultants, Inc., and two lab companies had agreements that required the lab companies to agree not to charge patients for co-payments or deductibles; (2) alleges that BlueWave leveraged the labs’ no-balance billing practice to induce physician referrals by highlighting the practice in written pamphlets it gave to physicians; (3) identifies physicians and practices who were induced by BlueWave’s promise of co-payment and deductible waivers to refer all of their patients to BlueWave’s laboratory clients; (4) indicates that BlueWave used co-payment and deductible waivers to induce physicians to refer business in exchange for kickbacks; (5) alleges that the labs billed Medicare for patients so referred; and (6) alleges that the labs paid BlueWave commissions in excess of $218 million in connection with those referrals. The complaint alleges the fraudulent scheme in enough detail to give BlueWave adequate notice to prepare a defense for trial.
The court grants BlueWave’s motion to dismiss the relator’s amended complaint with regard to (1) claims that were previously dismissed under the first-to-file bar and (2) the reverse false claims under 31 U.S.C. § 3729(a)(1)(G). The motion is denied as to the Speakers Bureau kickback scheme, (2) the waiver of co-payments/deductibles kickback scheme, (3) claims under 31 U.S.C. § 3729(a)(1)(B) (making or using false records or statements material to payment or approval of false claims), and (4) claims under 31 U.S.C. § 3729(a)(1)(C) (conspiracy to commit False Claims Act violations).
Fraudulent Conveyance – Contractor vs. Lender – Government Grant – Tortious Interference with Contract – Insufficient Showing
McDonald v. Nixon Energy Solutions (Lawyers Weekly No. 002-132-17, 18 pp.) (R. Bryan Harwell, J.) 4:14-cv-02589; D.S.C.
Holding: Even if the defendant-lender should have filed a “Notice of Assignment” when a construction project owner assigned to the lender the owner’s right to receive federal grant money, the Notice of Assignment is designed to protect the U.S. government and does not affect the rights of or between private contracting parties, such as the lender and the defendant-contractor in the crossclaim at issue.
The court grants summary judgment for the lender as to the contractor’s crossclaims. The court also grants summary judgment for plaintiff as to the contractor’s similar counterclaims against plaintiff.
FTCA – Firearms Sale – Background Check – Dylan Roof
Sanders v. United States (Lawyers Weekly No. 002-096-17, 14 pp.) (Richard Mark Gergel, J.) 2:16-cv-02356; D.S.C.
Holding: An FBI error in conducting a criminal background check resulted in Dylan Roof being allowed to purchase the handgun that he used two months later to murder nine parishioners and to attempt to murder three others at Mother Emanuel AME Church in Charleston. The government asserts the discretionary function exception to the Federal Tort Claims Act’s waiver of sovereign immunity; however, whether the FBI examiner should have acted differently under the circumstances is a disputed jurisdictional fact, as is the challenge to the FBI’s maintenance of the National Instant Criminal Background Check System. The court will not decide disputed facts without a complete record developed through appropriate discovery.
The court grants plaintiffs’ motion for jurisdictional discovery. Defendant’s motion to dismiss is denied without prejudice as to the discretionary function exception and as to whether plaintiffs’ claims are not actionable under state-law theories of negligent creation of risk and negligence per se. Defendant’s motion is denied with prejudice as to the misrepresentation exception to the FTCA’s waiver of sovereign immunity.
Medical Malpractice – FTCA – Pre-Suit Filing Requirements – Applicability – Statute of Limitations – Prostate Cancer Diagnosis
Grant v. United States (Lawyers Weekly No. 002-145-17, 22 pp.) (Cameron McGowan Currie, S.J.) 3:17-cv-00377; D.S.C.
Holding: S.C. Code Ann. § 15-79-125’s pre-suit requirements for medical malpractice actions at least partially duplicate the administrative claim requirements of the Federal Tort Claims Act; furthermore, such proceedings would also presumably be under control of the state court as there is no corresponding proceeding available in this court. The court is aware of no decision dismissing an FTCA claim for medical malpractice for failing to comply with § 15-79-125’s pre-suit requirements (as opposed to an obligation to file an expert affidavit with the complaint, which plaintiff did in this case). Plaintiff could not reasonably have predicted the U.S. government would not only consent to state-court jurisdiction for S.C. Code Ann. § 15-79-125’s pre-suit requirements, but also insist that they are a prerequisite to suit.
The government’s motion to dismiss or, in the alternative, for summary judgment is denied. The court seeks additional input from the government as to several issues.
Ordinary Negligence Allegations – Medical Malpractice – No Expert – Third-Person Claim
Delaney v. United States (Lawyers Weekly No. 002-142-17, 14 pp.) (David Norton, J.) 9:14-cv-03421; D.S.C.
Holding: Although plaintiff frames her complaint as one sounding in ordinary negligence, her claim is actually one for medical malpractice by caregivers who allowed an unstable patient to escape. The patient got into an unattended fire truck and drove it at high speed, colliding with several cars and striking and killing plaintiff’s decedent, a pedestrian. Since plaintiff has not produced expert testimony to show that defendant breached an established duty of care, plaintiff’s claim fails.
The court grants defendant’s motion for summary judgment.
Product Liability – Homeowners Insurance – Subrogation – Punitive Damages – First Impression – Joinder – Dryer Fires
Allstate Insurance Co. v. Electrolux Home Products, Inc. (Lawyers Weekly No. 002-139-17, 12 pp.) (R. Bryan Harwell, J.) 4:16-cv-03666; D.S.C.
Holding: The court predicts that the South Carolina Supreme Court would hold that punitive damages are not available to insurance companies who sue the manufacturer of an allegedly defective dryer that led to fires in the homes of the insurance companies’ insureds.
The court grants defendant’s motion to dismiss plaintiffs’ claim for punitive damages. The court denies defendant’s motion to sever plaintiffs’ claims.
Strict Liability – Crashworthiness – Certified Questions – Intoxicated Plaintiff – Comparative Negligence – Public Policy
Donze v. General Motors, LLC (Lawyers Weekly No. 010-031-17, 16 pp.) (Kaye Hearn, J.) (John Kittredge, J., concurring in the result) On certification from the U.S. District Court for the District of South Carolina.
Holding: In answer to certified questions from a federal district court judge, we hold that the defense of comparative negligence does not apply in crashworthiness cases, and that South Carolina’s public policy does not bar a plaintiff, allegedly intoxicated at the time of the accident, from bringing a crashworthiness claim against the vehicle manufacturer.
Trip & Fall – Stacked Sandbags – 2015 Flood – Store Entrance
Fish v. CVS Pharmacy, Inc. (Lawyers Weekly No. 002-100-17, 8 pp.) (Cameron McGowan Currie, S.J.) 3:16-cv-00099; D.S.C.
Holding: Unsure as to whether the flooding was over in early October 2015, the defendant-merchant kept sandbags stacked up on either side of its front door, and, as the plaintiff-customer exited the store (she had seen the bags on the far side of the door as she entered but not those on the near side), plaintiff tripped and fell over the sandbags on the near side of the door. There is evidence from which a jury could find either that the risk posed by the sandbags was not open and obvious to a customer leaving the store or that defendant was on notice of a risk of harm despite the obviousness.
Defendant’s motion for summary judgment is denied.
Workplace Injury – Third-Party Tortfeasor – Empty Chair Defense – Jury Instructions – Workers’ Compensation – Certified Questions
Machin v. Carus Corp. (Lawyers Weekly No. 010-025-17, 19 pp.) (John Kittredge, J.) (Costa Pleicones, Acting Justice, dissenting) On certification from the U.S. District court for the District of South Carolina. S.C. S. Ct.
Holding: In answer to certified questions, the court holds that, when a plaintiff seeks recovery from someone other than his employer for an on-the-job injury, (1) the jury may hear an explanation of why the employer is not part of the action, (2) the defendant may argue the empty chair defense and suggest that the plaintiff’s employer is the wrongdoer, and (3) the court may instruct the jury that an employer’s legal responsibility has been determined by another forum. However, the court may not allow the jury to apportion fault against the non-party employer by placing the employer’s name on the verdict form.
Wrongful Death – Strict Liability – Manufacturing Defect – ‘Commissioning’ – Airplane Manufacturing – Undeployed Slider
Priester v. Futuramic Tool & Engineering Co. (Lawyers Weekly No. 002-101-17, 27 pp.) (David Norton, J.) 2:14-cv-01108; D.S.C.
Holding: An elevated work platform was delivered to the Boeing manufacturing facility in North Charleston in an incomplete condition; plaintiff may be able to prove a manufacturing defect against both the initial manufacturer and the company that did the commissioning work on the platform after it was delivered.
The court grants partial summary judgment for defendants Futuramic Tool & Engineering Co., SAR Automation, L.P., and Capital Welding, Inc. as to the issues of failure to warn and design defect. However, the motions are denied as to plaintiff’s strict liability claim based on manufacturing defect.
Causation – Ankle Injury – Stocking Merchandise – Idiopathic Exception
Foran v. Murphy USA (Lawyers Weekly No. 011-038-17, 7 pp.) (Stephanie McDonald, J.) Appealed from the Workers’ Compensation Commission. S.C. App.
Holding: Even though the claimant had undergone ankle surgery nine years before she hurt the same ankle at work, since the claimant was performing a work task when she suffered an injury by accident arising out of and in the course of her employment, the Appellate Panel of the Workers’ Compensation Commission committed an error of law in failing to strictly construe the idiopathic exception to coverage.
We reverse the Commission’s denial of compensation.
Change of Condition – Endogenous Depression – Res Judicata – Statute of Limitations
Wilson v. Charleston County School District (Lawyers Weekly No. 011-022-17, 14 pp.) (Stephanie McDonald, J.) Appealed from Charleston County Circuit Court (J. C. Nicholson Jr., J.) S.C. App.
Holding: Although claimant had experienced some depression in the past, since she did not suffer from endogenous depression until after her work injury and subsequent back surgery, res judicata did not bar her change of condition claim.
Furthermore, even though claimant did not seek a hearing on her change of condition claim until more than a year after the last compensation payment, she timely filed a Form 50 Notice of Claim alleging a change of condition in that her back injury was affecting her mental health. Therefore, her change of condition claim was not time-barred.
We reverse the circuit court’s order affirming the decision of the Appellate Panel of the Workers’ Compensation Commission. We remand to the Appellate Panel for consideration of claimant’s change of condition claim.
Compensation Rate – Average Weekly Wage – Nightclub Dancer
Lewis v. L.B. Dynasty, Inc. (Lawyers Weekly No. 010-022-17, 4 pp.) (Kaye Hearn, J.) (Costa Pleicones, Acting Justice, concurring in the result only without separate opinion) Appealed from the Workers’ Compensation Commission. On writ of certiorari to the Court of Appeals. S.C. S. Ct.
Holding: The Workers’ Compensation Commission summarily concluded that claimant – a nightclub dancer who was shot at work – was entitled to an award of $75 per week, without indicating what total it assigned to her average weekly wage or how it reached that figure; moreover, the commission’s finding that claimant had presented “no evidence whatsoever” as to the amount of money she earned is plainly wrong. Therefore, the commission’s order is not supported by substantial evidence.
Reversed and remanded for a de novo hearing.