Justia U.S. 8th Circuit Court of Appeals Opinion Summaries

Clark filmed himself touching and attempting to penetrate the vagina and anus of a seven-year-old girl with his penis. The child reported Clark's conduct and Clark ultimately pleaded guilty to producing child pornography, 18 U.S.C. 2251(a) and (b). The presentence investigation report recommended a two-level sentencing enhancement under U.S.S.G. 2G2.1(b)(2)(A) because the offense involved "sexual contact” and recommended a four-level enhancement under U.S.S.G. 2G2.1(b)(4) because the offense involved "material that portrays sadistic or masochistic conduct." Clark objected, asserting impermissible double counting. The district court disagreed, however, finding that "[u]nlike the enhancement for sadistic or violent conduct, the 'sexual contact' enhancement does not require penetration, nor even attempted penetration." The Guidelines' range for Clark's crime was 360 months to life imprisonment. The district court sentenced Clark to only 276 months' imprisonment, stating that the sentence was "about the offense, [the] victim and [his] prior history." The Eighth Circuit affirmed. View "United States v. Clark" on Justia Law

Argonaut sued Audrain County Joint Communications (ACJC) alleging ACJC's negligence in monitoring a security alarm panel caused or contributed to damages arising out of the burglary and fire of a grocery store insured by Argonaut. Public employees at the ACJC call center monitored a private security company's alarm panels. The panels were defective. ACJC argued that it was entitled to sovereign immunity as a Missouri state entity, and to statutory immunity as a 911 call center. The district court denied summary judgment after finding ACJC had waived its sovereign and statutory immunity by purchasing insurance. The Eighth Circuit dismissed part of an interlocutory appeal for lack of jurisdiction, but otherwise affirmed. Missouri Revised Statutes Section 537.600 generally preserves "sovereign or governmental tort immunity as existed at common law" and specifically refers to "the immunity of [a] public entity from liability and suit." Section 190.307, however, does not create a substantive right to be free from the burdens of litigation. There was no clear error in the district court's determination under section 537.600 that ACJC did not prove the existence of a pre-existing agreement between itself and the insurer to include the sovereign immunity endorsement with the original policy. View "Argonaut Great Cent. Ins. Co. v. Audrain Cnty. Joint Commc'ns." on Justia Law

In 2007, while on probation for 2005 theft offenses, Clark illegally used a credit account. North Dakota revoked Clark's probation, and he received a sentence of five years for the 2005 offenses. Clark entered into a plea agreement on the new offense, to avoid being sentenced as a habitual offender. He was sentenced to four years' imprisonment, consecutive to his other sentence. Clark signed a judgment for the 2007 offense, stating that he entered a plea of guilty, but never actually entered a plea of guilty. Clark unsuccessfully appealed to the North Dakota Supreme Court arguing that he was sentenced without actually entering a plea in the trial court. A federal court granted habeas relief. Clark was then convicted on the 2007 charge. With an enhancement for being a habitual offender, he was sentenced to eight years (consecutive to his other sentence). The North Dakota Supreme Court rejected Clark's appeal. In federal habeas proceedings, the court dismissed claims that had been raised only in Clark's pro se state court brief as procedurally defaulted. The Eighth Circuit affirmed. A federal habeas court cannot reach an otherwise unpreserved and procedurally defaulted claim merely because a reviewing state court analyzed that claim for plain error. View "Clark v. Bertsch" on Justia Law

Based on an incident between Fire Cloud, an Indian, and his friend’s girlfriend, that occurred in his home on Indian land, Fire Cloud was charged with aggravated sexual abuse by force (Count I) and attempted aggravated sexual abuse, 18 U.S.C. 2241(a). He requested the district court instruct the jury regarding a lesser-included offense, abusive sexual contact, with respect to Count I, 18 U.S.C. 2244(a)(1). On Count I, the jury found him guilty of the lesser-included offense of abusive sexual contact. On Count II, the jury found him guilty of attempted aggravated sexual abuse. The Eighth Circuit affirmed, finding that the evidence taken in the light most favorable to the verdict and reasonable inferences drawn from that evidence demonstrate that a reasonable jury could have found Fire Cloud guilty for both offense. View "United States v. Fire Cloud" on Justia Law

A “viatical” or “life settlement” permits an insured to sell his life insurance policy. Federal tax and some state laws have been amended to accommodate the practice. In 2006, an agent persuaded Close, age 74, to apply for a $5 million life insurance policy. As submitted to PHL, his application falsely stated Close’s net worth and income, and failed to disclose his conviction for receiving illegal kickbacks. Under the agent’s guidance, Close falsely stated his net worth to obtain a two-year, $300,225 premium financing loan from CFC, a PHL-approved funding source. The policy was pledged as collateral; Close personally guaranteed 25 percent of the loan, believing that the policy would be worth $1.3 million in two-years, when it became “incontestable” under Minn. Stat. 61A.03.1(c) and that he would be able to sell it for $500,000. PHL conducted minimal investigation and received premiums of $272,025; CFC received $14,200 in fees; and the agent and a CFC employee split substantial commissions. In 2009, BNC explained Close’s options for repayment: refinancing, selling, or relinquishing the policy to the lender. The secondary market had crashed. Close surrendered the policy. When Close died in 2011, investigation revealed the fraudulent misrepresentations, but rescission was foreclosed by the incontestability statute. PHL sought a declaratory judgment that the policy was void as contrary to public policy for lack of an insurable interest. The district court agreed. The Eighth Circuit reversed, stating that permitting insurers to resist paying based on evidence that an insured used premium financing and planned to sell, is “not a result the Supreme Court of Minnesota would find acceptable in exercising its ‘delicate and undefined power’ to declare a contract void. View "PHL Variable Ins. Co. v. Bank of Utah" on Justia Law

Bloomington, Minnesota police received a complaint from a hotel manager who suspected prostitution was occurring in a room registered to Chappell. After seeing scantily clad young women staying in the room and many daily male visitors, the manager identified one of her hotel rooms in a personal advertisement on Craigslist. Detectives identified similar advertisements, on the erotic services and adult sections of Craigslist and the website Backpage. The police interviewed the hotel staff and began surveillance. They saw three young women exit Chappell’s vehicle and enter the hotel. A detective recognized two of them from photographs in the illicit advertisements. After searching the vehicle, officers seized $5,738 in cash, false identification for Chappell, the credit card used to pay for the hotel room, and a “trick note” containing the aliases of prostitutes, dollar amounts, and customer names and contact information of their customers. Chappell was convicted of sex trafficking an underage female, 18 U.S.C. 1591 based on his recruitment and prostitution of a 17-year-old student. After a remand, on a superseding indictment, he was convicted of sex trafficking two underage females; possessing and producing child pornography; and various prostitution transportation charges. The district court rejected his claim of vindictive prosecution. The Eighth Circuit affirmed. View "United States v. Chappell" on Justia Law

In 2001, St. Jude hired Tormey to sell cardiac-related medical devices. Tormey entered into several agreements, providing Tormey’s initial sales quota would be zero due to a noncompete agreement; that St. Jude would hire a technical support specialist (TSS) to assist Tormey; and that St. Jude could terminate Tormey if he failed to meet sales quotas. St. Jude made a $650,000 interest-free loan; Tormey executed a promissory note. Around the time he began selling for St. Jude’s, Tormey’s wife was diagnosed with terminal lung cancer. Tormey informed St. Jude of his wife’s condition. He began inquiring about when St. Jude would hire a TSS and negotiated sales quotas accordingly. Tormey rejected the TSS assigned in October 2003. Tormey’s wife’s condition worsened in November; Tormey thereafter did not meet quotas. She died in May, 2004. Two weeks later, St. Jude, terminated the agreements. Tormey claimed that he accepted St. Jude’s proposal that if Tormey waived any actions against St. Jude, it would waive repayment of the $650,000 and presumed his obligations had been discharged. There are no written documents and St. Jude denies any such agreement. The district court rejected Tormey’s counterclaims alleging fraud and, after a jury was unable to reach a verdict, entered judgment for St. Jude on the note, finding that it did not first commit a material breach. The Eighth Circuit affirmed. View "St. Jude Med. S.C., Inc. v. Tormey" on Justia Law

Smith, labeled as a “snitch,” was attacked by other inmates in the Varner Unit of the Arkansas Department of Correction. He was removed from the Unit and placed in protective custody. Smith alleges that correctional officer Johnson later returned him to the general population in the Varner Unit, without Smith’s consent and in violation of departmental policies. According to Smith, the next day another inmate severely beat him with his fist and a lock, causing scarring, a lost tooth, migraines, blurred vision, sensory losses, dizzy spells, and psychological symptoms. After the attack, Smith claims that Johnson and other officers punished him using “major disciplinary policies.” Smith unsuccessfully pursued grievances and filed a pro se claim with the State Claims Commission. The Commission dismissed Smith’s claim for failure to prove any negligence by the Department of Correction. Smith next filed suit under 42 U.S.C. 1983, alleging “deliberate indifference for [his] safety” and cruel and unusual punishment. The district court dismissed, ruling if the Claims Commission had jurisdiction over Smith’s constitutional claim, the action was barred by claim preclusion; if the Commission did not have jurisdiction over that claim, issue preclusion barred Smith’s claim. The Eighth Circuit reversed, finding that neither doctrine barred the suit. View "Smith v. Johnson" on Justia Law

Petters purported to purchase and resell electronics. His operations were a Ponzi scheme. In 2005, Petters purchased Polaroid and become Chairman of Polaroid’s board of directors. Polaroid continued to engage in legitimate business. Petters took several million dollars from Polaroid. In 2007-2008, Petters’s companies, including Polaroid, experienced major financial difficulty. Ritchie made short term loans of more than $150 million, with annual interest rates of 80 to 362.1%. Polaroid was not a signatory, although some proceeds were used to repay a Polaroid debt. When the loans were past due, Ritchie demanded collateral. Petters executed a Trademark Security Agreement (TSA) giving Ritchie liens on Polaroid trademarks. Polaroid’s CEO objected to the TSA as impeding Polaroid’s ability to raise needed capital. The TSA did allow Polaroid to grant first-priority trademark liens to secure $75 million in working capital. After the FBI raid, which resulted in Petters’s convictions for mail fraud, wire fraud, and money laundering, and sentence of 50 years in prison, Ritchie accelerated all of the loans. Polaroid filed for bankruptcy and challenged the TSA as an actual fraudulent transfer under federal and Minnesota bankruptcy law, citing the “Ponzi scheme presumption.” The bankruptcy court presumed Petters executed the liens with fraudulent intent, found Ritchie had not received them in good faith and for value, and granted summary judgment. The district court upheld the admission of expert testimony and application of the Ponzi scheme presumption. The Eighth Circuit affirmed. View "Ritchie Capital Mgmt., LLC v. Stoebner" on Justia Law

Chilel, born in 1986, in Guatemala, was threatened and stabbed in the arm when he refused to join a gang in 2008. He informed the police, but he did not seek medical treatment. Chilel waited several months before entering the U.S. in 2009. In 2010, Chilel was taken into Immigration and Customs Enforcement agency custody, charged with providing false information and having forged identification. He applied for asylum, withholding of removal, and protection under the Convention Against Torture. Chilel testified about his altercation with the gang, conceding that he did not know the result of the police investigation. He testified that he had received a letter from his sister describing a feud near his hometown. His mother told him “everything was bad” and that he should stay in the United States. The IJ denied the application for asylum as time-barred and not satisfying a statutory exception to the one-year limitation and denied withholding of removal and CAT relief on the merits. The BIA affirmed: Chilel failed to demonstrate changed circumstances under 8 U.S.C. 1158(a)(2)(D); failed to establish his membership in a distinct social group for purposes of withholding of removal; and did not establish the Guatemalan government harmed him for purposes of the CAT. The Eighth Circuit denied review. View "Chilel v. Holder" on Justia Law