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Roundup: 1st, 2nd, 4th and 7th Circuits

Defamation suit restored against sugar documentary; Conviction of former N.Y. Senate majority leader thrown out; Employer can’t fire woman for violating unevenly enforced policy; Chicago cannot tax Internet ticket reseller

1st Circuit: Defamation suit restored against sugar documentary

On Nov. 23, 2011, the 1st Circuit called for further proceedings in Felipe Vicini Lluberes and Juan Vicini Lluberes v. Uncommon Productions, LLC, et al., a dispute over the allegedly defamatory nature of the 2007 documentary “The Price of Sugar.” The film focuses on the mistreatment of laborers on sugar plantations in the Dominican Republic, and mentions the Vicini brothers—senior executives at a company that owns such plantations—by name.

The Vicinis sued the filmmakers in 2007. A district court granted summary judgment in favor of the filmmakers, saying the Vicinis were public figures who failed to prove actual malice.

The 1st Circuit upheld the public-figure decision, but vacated and remanded the rest of the judgment, as well as the district court’s denial of the defendants’ motion seeking production of several documents, including an annotated script that was withheld on the grounds of attorney-client privilege. The 1st Circuit claimed that the script’s annotator served more as a fact-checker than as legal counsel, that the filmmakers never intended to keep the script confidential and that the actual malice issue should be re-examined if documents are disclosed.


2nd Circuit: Conviction of former N.Y. Senate majority leader thrown out  

The 2nd Circuit vacated a district court’s conviction of former New York State Senate Majority Leader Joseph Bruno on Nov. 16, 2011, in United States v. Joseph L. Bruno due to a 2010 Supreme Court decision that created a conflicting precedent. Bruno was convicted in 2009 of honest services mail fraud for failing to disclose conflicts of interest caused by accepting payments from parties seeking to do business with the state.

While Bruno’s appeal was pending, the Supreme Court ruled in its case against former Enron CEO Jeffrey Skilling that the honest services statute only criminalizes bribes and kickbacks. But even though the case against Bruno was based on his failure to disclose conflicts of interest, the 2nd Circuit felt that the evidence also could be used to show the acceptance of bribes and kickbacks.

The 2nd Circuit dismissed both the conviction and the indictment, with the understanding that the government intends to prosecute Bruno again, using the same evidence, under the standard announced in Skilling v. United States.    


4th Circuit: Employer can’t fire woman for violating unevenly enforced policy

The 4th Circuit decided in National Labor Relations Board (NLRB) v. White Oak Manor on Oct. 28, 2011, that a woman who wore a hat to work and took pictures of her fellow employees was unfairly terminated because the company policy prohibiting her actions was irregularly enforced, and she engaged in protected concerted activity under the National Labor Relations Act (NLRA) by trying to get the company to fairly enforce its policies.

Nichole Wright-Gore started wearing a hat to work after receiving a bad haircut. It was against company dress code, and some days she was asked to remove it, but not on others. She began taking pictures of other employees violating the dress code, and talking to other people about the policy’s unequal enforcement. Wright-Gore’s employer, White Oak, fired her for taking pictures of people without permission, even though employees often posted pictures of one another on office bulletin boards. After her termination, Wright-Gore submitted a complaint to the NLRB.

An administrative law judge ruled in favor of the NLRB, saying that White Oak violated the NLRA by terminating Wright-Gore. The 4th Circuit upheld the decision, ruling that photo- documentation of dress code violations and discussion of it with other employees was protected concerted activity.


7th Circuit: Chicago cannot tax Internet ticket reseller

On Nov. 23, 2011, the 7th Circuit ruled that Illinois law does not permit the city of Chicago to impose a tax on tickets for events in the city resold on online auction site StubHub!.

In City of Chicago v. StubHub!, Inc., the city argued that Chicago ordinances require sales agents to collect and remit amusement taxes, and that responsibility falls to Internet resellers as well. The tax would be applied to the difference between the original and the resale prices. StubHub! countered that it is permitted to disregard municipal taxes under Illinois state law.

After the district court dismissed the case, the 7th Circuit agreed to hear the appeal and sought the advice of the Illinois Supreme Court. The Supreme Court said the authority to collect taxes lies only with the state. Chicago asked the court to delay its decision while it sought a rehearing from the Illinois Supreme Court, but the 7th Circuit denied its request and upheld the district court’s dismissal of the case, writing, “The request strikes us as pointless stalling.”

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