Justia U.S. 9th Circuit Court of Appeals Opinion Summaries

The Commissioner appeals the Tax Court's decision in these consolidated cases that SHI did not have deficiencies for the tax years under consideration and that SHLP and Vistancia had no adjustments to partnership items for their tax years which were under consideration. The tax court determined that the Taxpayers had used an accounting method that clearly reflected their income during the tax years under consideration. The court affirmed the tax court's decision that on the record before it, the Taxpayers used a permissible method of accounting and that method of accounting clearly reflected their income. The Tax Court determined that, as a matter of fact, the subject matter included the house, the lot, “the development . . . and its common improvements and amenities.” In this case, the Tax Court did not clearly err when it determined the subject matter of the Taxpayers’ home construction contracts; the Taxpayers’ application of the 95 percent test and the CCM logically flows from that determination. View "Shea Homes v. CIR" on Justia Law

After Manuel Diaz was shot by an Anaheim police officer, Diaz's estate and mother filed suit against the officer and the city, alleging federal civil rights violations. The jury returned the verdict in favor of defendants. The court concluded that the trial court erred in failing to bifurcate liability from compensatory damages where graphic and prejudicial evidence about the victim has little, and in large part no, relevance to the liability issue. Therefore, the court reversed and remanded to the district court with some guidance. First, the evidence of Diaz’s drug use and gang affiliation has marginal, if any, probative value as to damages, and none as to liability. On retrial, the district court should closely review this evidence under Federal Rules of Evidence 401 and 403, and should assure that such evidence is admitted only to the degree that the testimony is connected up with Ms. Huizar’s reaction to her son’s death. Second, if plaintiffs are willing to stipulate that Diaz was a gang member (which they claim they tried to do during trial), no expert testimony about gangs - such as gang activities, tattoos, or monikers - should be admitted. Third, while there is a “strong presumption that jurors follow instructions,” a limiting instruction may not sufficiently mitigate the prejudicial impact of evidence in all cases. And fourth, if the district court is going to sustain an objection and grant a motion to strike, merely saying “stricken” does not sufficiently inform the jury about the proper use of the evidence it just heard. Finally, the court concluded that the trial court did not err in ruling force was not excessive as a matter of law. View "Estate of Diaz v. City of Anaheim" on Justia Law

Hotels appealed the denial of their motion to preliminarily enjoin the City from enforcing the Citywide Hotel Worker Minimum Wage Ordinance. The district court denied Hotels’ motion for preliminary injunctive relief. The court concluded that the district court did not abuse its discretion by denying the Hotels’ motion for a preliminary injunction to stop enforcement of the City’s Wage Ordinance, because the Hotels failed to show a likelihood of success on the merits. The court has consistently held that minimum labor standards do not implicate Machinists preemption, and the Wage Ordinance is no different. Accordingly, the court affirmed the judgment. View "American Hotel and Lodging Ass'n v. City of Los Angeles" on Justia Law

Plaintiffs filed suit alleging facial constitutional challenges to California’s law prohibiting state-licensed mental health providers from engaging in sexual orientation change efforts (SOCE) with minor patients (Senate Bill 1172, Business and Professions Code sections 865, 865.1, and 865.2). The court rejected plaintiffs' claim that SB 1172 violates the Free Exercise and Establishment Clauses of the First Amendment and that SB 1172 violates the privacy rights of their minor clients. In this case, SB 1172 does not regulate conduct outside the scope of the counselor-client relationship, and thus the law does not excessively entangle the State with religion. The court further concluded that the evidence falls far short of demonstrating that the primary intended effect of SB 1172 was to inhibit religion. The court rejected plaintiffs' claims under the Religion Clauses and declined to apply strict scrutiny where the court held in Pickup v. Brown that SB 1172 survives rational basis review because “SB 1172 is rationally related to the legitimate government interest of protecting the well-being of minors.” Finally, plaintiffs' privacy claim is foreclosed (see Pickup v. Brown). Accordingly, the court affirmed the judgment. View "Welch v. Brown" on Justia Law

Plaintiff appealed the bankruptcy court's approval of a settlement agreement regarding a parcel of land in Berkeley, California, but failed to seek a stay of the sale order. The district court dismissed the appeal as moot. The court concluded that the bankruptcy court had the discretion to apply 11 U.S.C. 363 to the settlement involving a sale of the estate’s potential claims, and did not clearly err in determining that First-Citizens was a good faith purchaser of those claims. Therefore, under section 363(m), the court concluded that the sale may not be modified or set aside on appeal unless it was stayed pending appeal. Because plaintiff failed to seek a stay, the appeal is moot. The court did not reach plaintiff's challenges to the propriety of the sale of claims under section 363, as such an analysis would require the court to impermissibly reach the underlying merits of the settlement. View "Adeli v. Barclay" on Justia Law

Multiple plaintiffs filed different class actions against 23andMe relating to the company’s health claims. 23andMe, a direct-to-consumer provider of genetic testing service, claimed that its service could be used to help customers manage health risks, as well as prevent or mitigate diseases such as diabetes, heart disease, and breast cancer. The district court granted 23andMe's motion to compel all plaintiffs to arbitrate their claims. After reviewing the mandatory arbitration provision in the Terms of Service, the district court concluded that the arbitration provision at issue was enforceable. The court concluded that under principles established by recent California Supreme Court decisions, California’s common law rule of unconscionability does not provide a basis to revoke the arbitration agreement in the Terms of Service. In this case, the court concluded that plaintiffs failed to carry their burden of demonstrating the substantive unconscionability of the bilateral prevailing party clause; that the forum selection clause is unconscionable; that the intellectual property exemption is unconscionable under current California law; and that the unilateral modification provision renders the arbitration clause, set forth in a separate provision, unconscionable. Therefore, the arbitration agreement is valid, irrevocable, and enforceable. The court affirmed the judgment. View "Tompkins v. 23andMe, Inc." on Justia Law

Petitioner, a Mexican citizen, challenged the BIA's decision holding that his misdemeanor conviction for participating in cockfighting under 7 U.S.C. 2156(a)(1) is a categorical crime involving moral turpitude (CIMT). In Nunez v. Holder, the court held that non-fraudulent crimes of moral turpitude almost always involve an intent to harm someone, the actual infliction of harm upon someone, or an action that affects a protected class of victim. Because the IJ and BIA never discussed how the statute of conviction - cockfighting - involved a “protected class of victim,” the court remanded for the BIA to consider the issue in light of Nunez. While the court's case law does not explicitly require the BIA to apply this language in Nunez, the court noted that a remand is appropriate in this case because the crime at issue involving harm to chickens is, at first blush, outside the realm of CIMTs. View "Ortega-Lopez v. Lynch" on Justia Law

David Freeman and his cohort of investors, including William Del Biaggio, III, purchased the Nashville Predators, a National Hockey League (NHL) team in Nashville, Tennessee. As a result of the sale, the Predators became wholly owned and operated by Nashville Hockey Club Limited Partnership, LLC, which is in turn wholly owned by Predators Holdings, LLC (Holdings). Several months after the sale, Freeman learned that Del Biaggio never had the funds to support his guarantees and that the $25 million Del Biaggio already invested was in fact money he had embezzled from his clients. Del Biaggio filed for Chapter 11 bankruptcy which gave rise to the current proceeding. Freeman filed a general unsecured claim against Del Biaggio’s bankruptcy estate seeking damages of an undetermined amount arising from his fraud in the Holdings transaction. In response, the Liquidating Trust Committee of the Del Biaggio Liquidating Trust, the entity charged with prosecuting claims objections in Del Biaggio’s bankruptcy, filed a counterclaim against Freeman and sought summary judgment. The bankruptcy court granted the Committee’s motion for summary judgment, finding Freeman’s claim was subject to mandatory subordination under 11 U.S.C. 510(b). The court concluded that Freeman's claim is a damages claim, and the district court did not err in applying section 510(b) to his claim against Del Biaggio because his claim is one "arising from the purchase or sale" of Holdings. Furthermore, Freeman's claim is not limited to corporate debtors. The court rejected Freeman's remaining claims and affirmed the judgment. View "Liquidating Trust Comm. v. Freeman" on Justia Law

Plaintiffs Morris and McDaniel filed suit against Ernst & Young, alleging that the company misclassified Morris and similarly situated employees and denied overtime wages under the Fair Labor Standards Act (FLSA), 29 U.S.C. 201 et seq., and California laws. Ernst & Young subsequently moved to compel arbitration under the agreements signed by Morris and McDaniel. The district court ordered arbitration and dismissed the case. Morris and McDaniel argue that their employment agreements, where they signed a "concerted action waiver" with the company, violate federal labor laws and cannot be enforced. Plaintiffs claim that the “separate proceedings” clause in the agreement contravenes three federal statutes: the National Labor Relations Act (NLRA), 29 U.S.C. 151 et. seq., the Norris LaGuardia Act, 29 U.S.C. 101 et seq., and the FLSA. The court agreed with the Board's interpretation of section 7 and section 8 of the NLRA that an employer violates the NLRA when it requires employees covered by the Act, as a condition of their employment, to sign an agreement that precludes them from filing joint, class, or collective claims addressing their wages, hours, or other working conditions against the employer in any forum, arbitral or judicial. In this case, the terms of the concerted action waiver are unenforceable. The “separate proceedings” clause prevents concerted activity by employees in arbitration proceedings, and the requirement that employees only use arbitration prevents the initiation of concerted legal action anywhere else. The court also concluded that the Federal Arbitration Act, 9 U.S.C. 1 et seq., does not dictate a contrary result. Accordingly, the court vacated and remanded for the district court to determine whether the “separate proceedings” clause was severable from the contract. View "Morris v. Ernst & Young, LLP" on Justia Law

Petitioner, a Mexican citizen and transgender woman, was apprehended in South Carolina and removed under a Ninth Circuit in absentia removal order. After returning to the U.S. unlawfully, she was apprehended and a reinstated removal order, based on her previous in absentia removal order, was filed against her in North Carolina. At issue is whether the petition for review properly falls under the Ninth Circuit’s judicial authority. In this case, petitioner's in absentia removal order was issued by an IJ in the Ninth Circuit, but venue is ultimately proper in the Eleventh Circuit where the IJ completed proceedings that finalized petitioner's reinstated removal order. The court joined its sister circuits and held that 8 U.S.C. 1252(b)(2)’s venue provision is not jurisdictional. As a result, the court has subject matter jurisdiction over petitioner's claim even if venue is not proper here. Due to the unique circumstances of this case, the court will keep the petition in the Ninth Circuit in the interest of justice. Accordingly, the court remanded to the BIA for further proceedings. View "Bibiano v. Lynch" on Justia Law