Roundup: 5th, 6th, 9th and 11th Circuits

Stored Communications Act doesn’t protect cell phone contents; CEO who caused company bankruptcy needs longer prison sentence; Customer can sue for emotional distress over uneaten contaminated food; Externs not employees under FLSA

5th Circuit
Louisiana, Mississippi, Texas

Stored Communications Act doesn’t protect cell phone contents

In the 5th Circuit, personal texts aren’t so personal anymore. On Dec. 12, 2012, in Garcia v. City of Laredo, the court decided that the Stored Communications Act (SCA) did not protect an employee whose boss fired her on the basis of the contents of her cell phone. 

The plaintiff, Fannie Garcia, was a police dispatcher for Laredo, Texas. For reasons unspecified in the decision, in 2008, a police officer’s wife took Garcia’s phone from her unlocked locker and showed photos, texts and a video to Garcia’s managers.

These contents revealed that Garcia had violated some police department rules, also unspecified, and her managers fired her. Garcia sued, and only her SCA claim remained on appeal. The SCA prohibits unauthorized access to a facility, and the 5th Circuit found that a cell phone does not qualify as a “facility.” The company providing the service is protected, but the individual is not, the court wrote, affirming the district court’s ruling against Garcia.  

 

6th Circuit 
Kentucky, Michigan, Ohio, Tennessee

CEO who caused company bankruptcy needs longer prison sentence

Seven days is not enough prison time for a CEO who drove his company into bankruptcy, the 6th Circuit decided on Feb. 15 in U.S. v. Peppel

In 2010, Michael Peppel, former CEO of MCSi Inc., pleaded guilty to money laundering, conspiracy to commit fraud and false certification of a financial report. The fraud led to MCSi’s 2003 bankruptcy and the loss of 1,300 jobs. The government recommended that U.S. District Judge Sandra Beckwith sentence Peppel to between 97 and 121 months in prison. Instead, she gave him seven days in prison and three years of supervised release, saying she felt he’d been punished enough by the struggles he’d endured since being indicted, including working for an online pharmacy to support his family.

The 6th Circuit unanimously found that Beckwith should not have relied on “unremarkable aspects” of Peppel’s life to reduce his sentence by “99.9975%” and ruled that she must resentence Peppel.

 

9th Circuit 
Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon, Washington

Customer can sue for emotional distress over uneaten contaminated food

Can a phlegm-covered burger cause you emotional distress if you never eat it? That’s the philosophical question the 9th Circuit addressed in Bylsma v. Burger King Corp. Sheriff’s deputy Ed Bylsma suspected something was amiss when the Burger King employee who handed him his burger wouldn’t make eye contact. Sure enough, there was glob of phlegm on it. Bylsma sued Burger King for product liability, negligence and vicarious liability, claiming “ongoing emotional trauma.”

The district court said the Washington Product Liability Act prevented Bylsma from suing for emotional distress damages if he hadn’t actually eaten the contaminated food, but the 9th Circuit found that the law was vague and asked the Washington Supreme Court for guidance.

The state Supreme Court ruled in favor of Bylsma, writing “food consumption is a personal matter.” With that in mind, the 9th Circuit found on Feb. 12 that Bylsma could proceed with his suit at the district court level.

 

11th Circuit
Alabama, Florida, Georgia

Externs not employees under FLSA

Externs in MedVance Institute’s Medical Billing and Coding Specialist program do not count as employees under the Fair Labor Standards Act and therefore aren’t entitled to minimum wage or overtime, the 11th Circuit ruled in Kaplan v. Code Blue Billing & Coding Inc. 

The plaintiffs, who were externs, argued that they didn’t meet the Department of Labor’s six-factor test for unpaid interns because their employers received economic benefits from the tasks they performed. 

A district court granted summary judgment in favor of the defendants, and in its Jan. 22 decision, the 11th Circuit affirmed the ruling. The court reasoned that because the externs received training and academic credit, the defendants “received little if any economic benefit from Plaintiffs’ work.” The court added that the plaintiffs met all six qualifications of the test.

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