Something Smells: Recent Caselaw Developments on Marijuana Odor and Warrantless Searches

The Fourth Amendment protects individuals from “unreasonable searches and seizures.” Although law enforcement generally must obtain a warrant to search an individual and his or her property, under certain limited circumstances, an officer may conduct a brief, warrantless search of an individual. This type of an investigation is called a Terry stop, named after the Supreme Court’s decision in Terry v. Ohio, 392 U.S. 1 (1968). To conduct a valid Terry stop, the officer must have “reasonable suspicion” that an individual is involved in criminal activity.    

Various factors come into play when determining whether an officer has reasonable suspicion to conduct a valid Terry stop. In the Eleventh Circuit, the smell of marijuana alone provides reasonable suspicion for further investigation. United States v. White, 593 F.3d 1199, 1203 (11th Cir. 2010); United States v. Roberts, 849 F. App’x 863, 865 (11th Cir. 2021). This means that if an officer smells marijuana on or near an individual, that officer can conduct a brief search of that person to investigate possible criminal activity.

With society’s views on marijuana evolving, particularly with respect to medical marijuana, a question exists on whether the smell of marijuana alone can still provide reasonable suspicion to conduct a Terry stop. After all, does the odor of an otherwise legal substance, like alcohol, alone provide reasonable suspicion for a Terry stop?

The Supreme Court of Pennsylvania recently held that the smell of marijuana alone does not provide an officer with reasonable suspicion to conduct a search. See Commonwealth v. Barr, 266 A.3d 25 (Pa. 2021). The Barr court based its holding largely on the state legislature’s enactment of the Medical Marijuana Act, which legalized the use of marijuana in limited circumstances. Similarly, the Supreme Court of Delaware recently held that the smell of marijuana alone does not provide probable cause to arrest a juvenile. See Juliano v. State, 260 A.3d 619 (Del. 2021). In its decision, the Juliano court discussed how its prior caselaw on the issue predated the State General Assembly’s decriminalization of an ounce or less of marijuana. These state supreme court decisions are two among other state-court decisions retreating from caselaw holding that the smell of marijuana alone can support a warrantless search. Rhode Island and Colorado have seen similar caselaw developments. 

In 2016, Florida voters approved an amendment to the state constitution that protects the use of medical marijuana in certain circumstances. Numerous cities and counties in Florida have approved ordinances decriminalizing marijuana. The Florida Supreme Court appears to not have taken up the issue of whether marijuana odor alone justifies a Terry stop. The Second District Court of Appeal has held that it does. See Owens v. State, 317 So. 3d 1218 (Fla. 2d DCA 2021) (Vilanti, J.).  

Under federal law, marijuana remains illegal under the Controlled Substances Act, 21 U.S.C. § 801 (CSA). So, at first blush, a clear distinction exists between federal and state jurisprudence on whether the smell of marijuana alone can justify a Terry stop. But Barr applied Terry, which is a decision analyzing the application of the United States Constitution. Further, at least one federal court noted that the smell of burnt marijuana is not enough to establish probable cause to believe that an individual is violating a civil offense of possessing a small amount of marijuana. See Walker v. Femino, 311 F. Supp. 3d 441, 453 n.12 (D. Mass. 2018) (Saylor, J.). That court also discussed how the smell of burnt marijuana can be one factor—not the only factor—to be considered in the reasonable-suspicion analysis. Another district court in Pennsylvania avoided the question of whether marijuana odor supported finding probable cause and found not credible an officer’s testimony that he could smell marijuana. See United States v. Bryant, No. 20-86, 2020 WL 6381386, at *9 (E.D. Penn. Oct. 20, 2020) (Kearney, J.).

Recent state caselaw developments show that marijuana odor alone is becoming insufficient to justify a Terry stop or another warrantless search. Federal caselaw lags behind state courts in this respect, presumably because marijuana remains illegal under federal law. But if every state decriminalizes marijuana at least in some circumstances, will federal courts continue to find marijuana odor alone sufficient to justify a Terry stop?

At what point, if ever, will the CSA’s scheduling of marijuana become irrelevant to whether an individual can be reasonably suspected of committing a crime when marijuana is legal under state law? After all, federal law criminalizes numerous obscure activities. See 19 Ridiculous Federal Criminal Laws and Regulations, FreedomWorks (Jan. 14, 2016), https://www.freedomworks.org/content/19-ridiculous-federal-criminal-laws-and-regulations. Should an obsolete, or soon-to-be obsolete, federal statute trump an individual’s constitutional rights? It is surely a matter of when—not if—a federal court rules that the smell of marijuana alone cannot justify a Terry stop.

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2021 Eleventh Circuit White-Collar Roundup

Welcome to the Suarez Law Firm’s first installment of its Eleventh Circuit White-Collar Roundup. With 2022 in full swing, the timing is perfect to show what is in store for the Suarez Law Firm’s blog this year.

One of the goals with these entries is to provide regular updates of noteworthy decisions from the U.S. Court of Appeals for the Eleventh Circuit, especially with respect to white-collar criminal law. We will also focus on areas related to white collar, including False Claims Act and qui tam litigation, antitrust, bankruptcy, and commercial litigation.

For our first installment of the White-Collar Roundup, we’ll provide an overview of Eleventh Circuit decisions released in 2021. Some of the more high-profile cases will have more discussion (I read all 185 pages of In re: Courtney Wild so you don’t have to!). Our goal is to release Roundups more frequently as decisions come out and to perhaps provide an annual Roundup with the cases discussed throughout the year.

Without further ado, here is the Suarez Law Firm’s 2021 Eleventh Circuit White Collar Roundup.

In re: Courtney Wild, 994 F.3d 1244 (11th Cir. 2021) (en banc).

Panel: William Pryor, Chief Judge, and Wilson, Martin, Jill Pryor, Newsom, Branch, Luck, Lagoa, Brasher, Tjoflat, and Hull, JJ.

Opinion author: Judge Newsom

Concurring opinions: Chief Judge William Pryor, Judge Newsom, and Judge Tjoflat

Dissenting opinions: Judge Branch and Judge Hull

This case is about a petition for writ of mandamus filed under the Crime Victims’ Rights Act (CVRA), 18 U.S.C. § 3771. Courtney Wild, the petitioner, was one of Jeffrey Epstein’s victims when she was younger. Wild alleged that the prosecutors violated the CVRA when they failed to confer with her before entering into a non-prosecution agreement (NPA) with Epstein in 2007. The issue for the Eleventh Circuit to decide was whether the CVRA provides petitioners the ability to seek relief in a civil action separate from an ongoing criminal proceeding.

The majority holds that the CVRA creates no private right of action to file a civil lawsuit unconnected to an ongoing criminal prosecution. To arrive at that conclusion, the majority focused on the text of the CVRA. The court looked first at § 3771(b), which discusses “any court proceeding,” and concluded that this subsection give responsibility to district for enforcing victims’ rights in the context of a pending proceeding.

Then the court looked at § 3771(d) and found several reasons for concluding that the CVRA provides no private right of action. First, the court discussed how subsection (d)(3) requires a petitioner to file a “motion for relief.” The court said that “motion” is “commonly understood to denote a request filed within the context of a preexisting judicial proceeding.” Next, the court analyzed subsection (d)(6) and found clear its language stating that “nothing in this chapter shall be construed to authorize a cause of action for damages.”

Further, the court found convincing language in subsection (d)(6) stating that “[n]othing in this chapter shall be construed to impair the prosecutorial discretion of the Attorney General or any officer under his direction.” The court concluded that Wild’s interpretation would impair the Attorney General’s prosecutorial discretion because, even without a criminal proceeding, the district court would have to decide whether the petitioner is a “victim” and whether an “offense” occurred. These inquiries would “exert enormous pressure on the government’s charging decisions.” The court also found that pre-charge judicial enforcement of CVRA rights would unduly impair prosecutorial discretion because the district court’s injunction would require the prosecutors to conduct their prosecution in a particular manner, namely by conferring with the alleged victim.   

Finally, the court looked at § 3771(f), which requires promulgations of regulations to administratively enforce victims’ rights under the CVRA. The CVRA prohibits judicial review of administrative decisions involving the CVRA. Thus, the court concluded that Congress’s “robust administrative-enforcement scheme” showed that Congress had no intention of allowing stand-alone civil suits under the CVRA.

Considering the CVRA’s statutory language, the court concluded that the CVRA provides no private right to victims to file civil actions outside the context of an ongoing criminal proceeding.

In a concurring opinion, Chief Judge Pryor addresses what he sees as “three fundamental errors” in the dissenting opinions. First, the Chief Judge sees the dissenting judges as urging the court to provide an advisory opinion on whether the CVRA grants right that attach before criminal proceedings begin that might be enforceable through non-judicial means. According to the Chief Judge, an opinion on this issue would be advisory because it “would have no bearing” on court’s conclusion that the CVRA provides no private right to victims to file civil actions outside the context of an ongoing criminal proceeding. Second, Chief Judge Pryor believes that the dissent opinions fail to read the CVRA’s text as a whole but instead read subsections in isolation. And third, the Chief Judge asserts that the dissenting opinions fail to fully appreciate the presumption against interpreting a statute to provide an implied right of action.

Judge Newsom also writes a brief concurrence in which he expresses the regret he feels in the court’s decision. But Judge Newsom emphasizes that he is simply fulfilling his role as in interpreting the CVRA as written—a duty that “requires a certain outcome-blindness.”

Judge Tjoflat also writes a concurrence. He writes separately to explain what he believes are the adverse effects to finding a pre-charge CVRA enforcement right. Judge Tjoflat looks at how such a right would work practically. Namely, the plaintiff-victim would file a civil complaint alleging that probable cause exists to charge the accused. The government would have to file an answer with a general denial to avoid divulging information that could jeopardize a federal investigation. But the plaintiff-victim’s discovery rights would then imperil the government’s desire to keep the investigation under wraps. Then, if the court concludes that the plaintiff-victim is correct, it will have to craft relief under the CVRA against the government. In contrast, Judge Tjoflat writes that the majority’s solution—filing a motion in a preexisting criminal proceeding—would not interfere with the government’s investigation.

Judge Tjoflat also addresses fairness concerns that would exist under the dissent’s litigation model under the CVRA. According to Judge Tjoflat, the accused would have to be joined in the plaintiff-victim’s freestanding CVRA civil lawsuit. This is because a separate CVRA lawsuit will necessarily require the court to determine whether probable cause exists to believe that the accused committee a federal crime—the same determination magistrate judges make at preliminary hearings under Federal Rule of Criminal Procedure 5.1, where the defendant’s presence is expected. And Judge Tjoflat concludes that an accused would be an indispensable party under Federal Rule of Civil Procedure 19(b) in a pre-charge CVRA action.

Next, Judge Tjoflat discusses his concerns about the accused in a standalone civil action. He points out first that the accused would have no Sixth Amendment right to counsel in a civil CVRA proceeding. According to Judge Tjoflat, the dissent’s model puts an accused’s rights at risk because he or she would not be protected by counsel under the Sixth Amendment.

Finally, Judge Tjoflat addresses what he sees as the main concern: separation of powers. According to Judge Tjoflat, the dissent’s model would inevitably result in the federal courts involving themselves in the prosecutorial decisions of the executive branch. For instance, situations might arise where the U.S. Attorney believes that no probable cause to charge an individual exists; but the district court could find otherwise in a standalone civil CVRA proceeding and influence the U.S. Attorney into charging an individual. Judge Tjoflat finds such encroachment as a breach of the separation of powers.

The first of two dissents is written by Judge Branch and joined by Judges Martin, Jill Pryor, and Hull. According to Judge Branch, the plain text of the CVRA gives crime victims the pre-charge right to confer with the government’s attorney and the right to be treated with fairness. Also, under Judge Branch’s reading of the CVRA, crime victims have a statutory private remedy of judicial enforcement of their CVRA rights by filing a motion in the district where the crime occurred.

Finally, Judge Hull writes her own dissent and addresses five areas. Like Judge Branch, Judge Hull takes issue with how the majority skips over the first issue briefed: whether victims’ statutory rights under the CVRA attach pre-charge. Judge Hull also explains why she agrees with Judge Branch that victims have a right under the CVRA to confer with prosecutors pre-charge. Judge Hull reads the victims’ right as a “narrow conferral right” that applied after the government signed the non-prosecution agreement with Epstein.

Judge Hull also discusses what she sees as a misapplication of precedent to the Wild case, particularly Alexander v. Sandoval, 532 U.S. 275 (2001). According to Judge Hull, the Eleventh Circuit reads Sandoval out of context to conclude that Congress creating an administrative scheme in the CVRA suggests that Congress intended to preclude private rights of action. But Judge Hull reads Sandoval to instruct the court to read the text and structure of the CVRA, which, according to Judge Hull, shows Congress’s intent to create a private right and remedy.

Judge Hull also considers an amicus brief from Senators Diane Feinstein, Jon Kyl, and Orrin Hatch—all of whom where senators when CVRA passed. Those senators urged the court to hold that CVRA’s plain text grants victims pre-charge rights.

Finally, Judge Hull discusses the far-reaching consequences of the majority’s holding. Judge Hull discusses how, in the context of white-collar cases, the government regularly negotiates with defense counsel before charges are filed. Judge Hull sees the majority’s holding as precluding any victim insight from those negotiations. And Judge Hull sees the majority’s holding as further exacerbating the disparity between wealthy defendants, who can afford experienced attorneys to negotiate with the government pre-charge, and defendants who cannot afford those attorneys. Judge Hull calls this a “two-tiered justice system.”  

A petition for writ of certiorari has been filed with the Supreme Court in this case.

United States v. Brown, 996 F.3d 1171 (11th Cir. 2021).

Panel: William Pryor, Chief Judge, and Wilson, Martin, Jordan, Rosenbaum, Newsom, Branch, Grant, Luck, Lagoa, and Brasher, JJ.

Opinion author: Chief Judge William Pryor

Concurring opinions: Judge Newsom and Judge Brasher

Dissenting opinions: Judge Wilson and Judge Rosenbaum

This case is about former Congresswoman Corrine Brown’s convictions for fraud, ethics, and tax offenses. During jury deliberations, one of the jurors informed the court that another juror—Juror Number 13—was discussing “higher beings” and other jurors were concerned. Reportedly, Juror No. 13 said during deliberations that a higher being—later referred to as the Holy Ghost—told him that Brown was not guilty on all charges.

The district judge conducted questioning of the reporting juror, who said that Juror No. 13 was not interfering with deliberations. Rather, the reporting jury was concerned about Juror No. 13’s ability to judge the case based on the evidence. The district judge then questioned Juror No. 13. During questioning, Juror No. 13 reaffirmed that he could based his decision on the law and evidence. Juror No. 13 clarified that he told the other jurors that, in considering all the information, he listened for the truth and he knows when truth is spoken. He also said that he prayed for and received guidance from “My Father in Heaven.” But Juror No. 13 explained that no conflict existed between his religious beliefs and his ability to judge the case by the law and evidence.

The district judge concluded that Juror No. 13’s statements about a higher power guiding his decision-making was an “improper religious intrusion into the deliberative process.” The judge found that the juror’s statements showed him injecting religious beliefs inconsistent with the court’s jury instructions. The judge replaced Juror No. 13 with an alternate and directed the jury to begin deliberations anew. The jury reached a verdict finding Brown guilty on 18 counts.

The issue for the Eleventh Circuit, sitting en banc, was whether the district court erred in dismissing Juror No. 13 after jury deliberations began.

Writing for the majority, Chief Judge Pryor begins the discussion with an overview of the history of an accused’s right to a unanimous jury verdict. The Chief Judge also discusses the standard for excusing a juror after deliberations begin: good cause under Federal Rule of Criminal Procedure 23(b)(3). The Chief Judge also discusses how, under Eleventh Circuit precedent, in close situations when the district court is discerning whether to excuse a juror because of impermissible nullification, the standard is that the district court should dismiss that juror only when no “substantial possibility” exists that the juror is basing his or her decision on the evidence.

The Chief Judge then proceeds to analyze whether a substantial possibility existed that Juror No. 13 was performing his proper duty as a juror (i.e., judging the case based on the evidence and law). The Chief Judge concluded that the juror’s statement did not amount to proof beyond a reasonable doubt that the juror could not decide the case based on the evidence and law. In answering the district judge’s questions, the juror expressed a clear understanding of his duties. The juror also discussed listening to the evidence and deciding which testimony was credible. Importantly, the juror never said he refused to consider the evidence or follow the law. As a result, the majority vacated Brown’s conviction and sentence and remanded the case for a new trial.

Judge Newsom writes a concurrence, which Judge Grant joins. Judge Newsom adds two points. First, according to Judge Newsom, the case is not about Juror No. 13’s statement about the Holy Ghost but about the entire record, a review of which shows that a substantial possibility exists that the jury was performing his duties properly. Second, Judge Newsom emphasizes that the case is about all jurors—not religious jurors.

Judge Brasher also writes a concurrence joined by Judge Branch. According to Judge Brasher, no cause existed for the district judge to question Juror No. 13. Instead, the judge could have reinstructed the jurors on performing their duty, asked the reporting juror whether deliberations continued, or ask Juror No. 13 if he was deliberating in good faith. But Judge Brasher finds that the district judge asking the juror about his statements at the beginning of deliberations was an abuse of discretion.

Judge Wilson writes the first dissent, which Judges Martin, Jordan, and Rosenbaum join. Judge Wilson focuses on the district judge’s unique ability to hear the jurors’ testimony and observe their expressions. Thus, based on the record before the court, Judge Wilson would have deferred to the district judge’s judgment. 

Judge Rosenbaum, joined by Judges Wilson and Martin, writes the second dissent. According to Judge Rosenbaum, the majority holds that a district judge has no power to dismiss a juror who says that the Holy Spirit told him a defendant is guilty on all charges even if the judge finds that the juror is not basing his judgment on the evidence. Judge Rosenbaum calls the majority’s decision “a skulking serpent” that dooms the Sixth Amendment right to a unanimous jury verdict when the jury returns a guilty verdict not unanimously based on the evidence.

Absolute Activist Value Master Fund Ltd. v. Devine, 998 F.3d 1258 (11th Cir. 2021).

Panel: Wilson, Grant, and Tjoflat, JJ.

Opinion Author: Judge Tjoflat

Dissenting Opinion: Judge Grant

This case deals with voluntary dismissals under Federal Rule of Civil Procedure 41. The plaintiffs sued Susan Devine under the federal and Florida RICO statutes for money laundering. Devine allegedly laundered money for her ex-husband’s penny-stock scheme, which he perpetuated against the plaintiffs. Those activities resulted in criminal investigations by Switzerland’s Attorney General and the U.S. Department of Justice. Shortly before filing the civil complaint against Devine in the Middle District of Florida, the plaintiffs filed a criminal complaint against her in Switzerland.

In the Middle District, the parties entered into a joint protective order that allowed parties to disclose confidential documents in response to requests for information from governmental criminal authorities. After engaging in extensive discovery, the plaintiffs voluntarily dismissed their case under Rule 41(a)(1)(A)(i). Afterward, Devine sought to amend the protective order so that she could use confidential documents to defend against Swiss and American investigations.

The Eleventh Circuit held that the plaintiffs’ Rule 41(a)(1) voluntary dismissal divested the district court of jurisdiction to modify the protective order. The court declined to extend a district court’s post-voluntary-dismissal jurisdiction beyond costs, attorney’s fees, contempt sanctions, Rule 11 sanctions, and motions to confirm arbitral awards.    

In her dissent, Judge Grant opined that motions to modify protective orders fall under the category of collateral matters over which a district court retains jurisdiction after voluntary dismissal. Judge Grant relied on a two-step test elaborated in Hyde v. Irish, 962 F.3d 1306 (11th Cir. 2020). Under Hyde, a district court retains jurisdiction over a matter if (1) exercising jurisdiction is constitutionally permissible and (2) the matter is practically important. Judge Grant would have found both steps satisfied because (1) motions to modify protective orders do not affect the merits of the underlying case and (2) modifying protective orders helps bring about an open discovery process and protects parties’ confidentiality. Judge Grant points out that the majority’s decision is inconsistent with decisions from the First, Second, Third, Tenth, and D.C. Circuits.

United States v. Roberson, 998 F.3d 1237 (11th Cir. 2021).

Panel: Wilson, Branch, JJ., and Judge Jane Restani sitting by designation from the U.S. Court of International Trade.

Opinion Author: Judge Restani

This is a case of alleged government corruption. Joel Gilbert, an attorney, and David Roberson, a lobbyist, were convicted of bribery under 18 U.S.C. § 666(a)(2) for payments made to Alabama Representative Oliver Robinson so he could undermine the Environmental Protection Agency’s efforts to clean up a site. The defendants raised three issues on appeal. First, they argued that the representative’s actions did not constitute “official acts;” thus they argued that an official act is required under § 666 just as it is for § 201 per McDonnell v. United States, 136 S. Ct. 2355 (2016). Second, the defendants argued that the district court erred in its jury instructions when it (1) included no language on the requirement of an “official act,” (2) included no language instructing that conviction required an “explicit corrupt agreement” and (3) instructed the jury on a “retainer theory”—which the defendants argued constructively amended the indictment. Third, the defendants argued that the district court erred when it failed to sever trials or grant a mistrial.

The Eleventh Circuit held first that § 666 has no “official act” requirement; thus the court distinguishes between § 666 and § 201. This holding is consistent with decisions from the Second and Sixth Circuits. And the court concluded that the jury had enough evidence to convict the defendants under § 666 because evidence showed that they approached and paid the representative with the intention of having him influence decisionmakers, the representative was an agent of the state, evidence showed that the defendants intended the representative to use his position to influence decisionmakers at the commissions deciding the clean up issue. Second, the Eleventh Circuit—consistent with its previous “official act” analysis—held that the district court did not have to instruct the jury on “official acts” or explicit agreements for a conviction of bribery under § 666. And the court found that the indictment included sufficient language to alert the defendants that the government would pursue a retainer theory of liability (under a retainer theory, the defendant can be found guilty of bribery if the evidence shows that the recipient knew that he was expected to influence decisionmakers as a result of the defendant’s payment). Third and finally, the Eleventh Circuit held that the district court did not abuse its discretion in not severing trials or granting a mistrial.

Notably, the National Association of Criminal Defense Lawyers (NACDL) filed an amicus brief on the issue of severing trials. Roberson, a lobbyist, argued that not severing trials prevented him from advancing an advice-of-counsel defense against Gilbert. NACDL argued that the court should be careful when requiring an attorney and his client jointly and that severance is the only way to avoid prejudice to the defendants. But the Eleventh Circuit found that the evidence Roberson could not enter was of little probative value when compared to the other evidence against him. So the Eleventh Circuit found that excluding that evidence was not prejudicial to Roberson’s ability to present a defense.

Don’t Look Media LLC v. Fly Victor Ltd., 999 F.3d 1284 (11th Cir. 2021).

Panel: Jilly Pryor, Newsom, and Marcus, J.J.

Opinion author: Judge Marcus

This is a civil RICO case. Don’t Look Media licensed its jet-booking website to Fly Victor  in exchange for Fly Victor’s agreement to invest in increasing website traffic and share booking revenues. When that didn’t happen, Don’t Look Media sued Fly Victor under for RICO violations of defrauding Don’t Look Media and laundering ill-gotten gains. At issue for the Eleventh Circuit was whether Don’t Look Media established personal jurisdiction over Fly Victor when Don’t Look Media served Fly Victor’s office in London but served no party in the United States. Also at issue was whether the forum selection clause, which provided for a forum in England, in the parties’ agreement was enforceable.

The court held first that Don’t Look Media could not establish personal jurisdiction under RICO’s nationwide service of process provision (18 U.S.C. § 1965) because Don’t Look Media didn’t serve any defendant within a United States judicial district. The court stated that § 1965(d) does not authorize service in a district outside the United States. Thus, Don’t Look Media’s service on the defendants’ London office did not establish personal jurisdiction.

Further, the court held that the forum selection clauses in the parties’ agreement “unambiguously require an English forum.” Rejecting Don’t Look Media’s arguments for finding those clauses unenforceable, the court held that the clauses applied to Don’t Look Media’s claims. So the Eleventh Circuit affirmed the district court’s order dismissing the case.

United States v. Anderson, 1 F.4th 1244 (11th Cir. 2021).

Panel: Wilson, Branch, and Julie Carnes, JJ.

Opinion author: Judge Julie Carnes

This case involves mail fraud, false statements, and money laundering. The defendant owned a shrimping business. He filed claims for expenses under the Continued Dumping and Subsidy Act (CDSOA), which compensates domestic shrimpers for losses incurred because of foreign producers dumping underpriced goods into the American market. But the defendant apparently submitted false claims in that he listed higher expense amount than he actually incurred. After a jury trial, the defendant was found guilty on all counts.

The defendant raised four issues on appeal. First, he argued that the district court erred when, after the defense rested its case, the court asked the defendant if he waived his right to testify. Second, the defendant argued that the district court abused its discretion when it declined to give a jury instruction stating that “shrimp is a raw material” and that a shrimp processor can make a claim under the CDSOA for the cost of shrimp bought from a shrimper.” Third, the defendant argued the district court erred under Federal Rule of Criminal Procedure 30(b) (which requires the district court to inform the parties before closing argument how it intends to rule on jury instructions) when the court amended a mail-fraud instruction after defense counsel gave her closing argument. Fourth, the defendant argued that the district court erred in giving a modified Allen charge.

The Eleventh Circuit affirmed the district court on all four issues. The court first concluded that the district court did not err in simply obtaining an on-the-record confirmation that the defendant waived his right to testify. The Eleventh Circuit contrasted the district court’s neutral inquiry to cases in which district courts improperly discussed and advised the defendant on his or her right to testify. The Eleventh Circuit next concluded that the district court did not abuse its discretion in declining to give the defendant’s proposed CDSOA instruction because no dispute existed over whether he could claim the cost of buying shrimp as an expense under CDSOA. Thus, the defendant’s proposed instruction “had no bearing” on the issues.

 The Eleventh Circuit also concluded that the district court did not err in amending the jury instructions on mail fraud because, before it had done so, the instructions provided the wrong explanation on the applicable law. The pre-closing argument instructions stated that the defendant could only be found guilty of mail fraud if he used U.S. Postal Service; the amended jury instructions correctly stated that the defendant could be found guilty if he used the U.S. Postal Service or a private or commercial interstate carrier, like UPS. And finally, the Eleventh Circuit concluded that the district court’s Allen charge largely tracked the Eleventh Circuit’s pattern instruction. As a result, the Eleventh Circuit affirmed the defendant’s convictions.

In re: Grand Jury Subpoena, 2 F.4th 1339 (11th Cir. 2021).

Panel: Jordan, Newsom, and Lagoa, JJ.

Opinion Author: Judge Lagoa

This case deals with the crime-fraud exception to attorney-client privilege. As a part of a grand-jury investigation, the government subpoenaed the documents from an attorney who represented the person, a former political candidate, on whom the investigation focused. The government sought financial disclosure forms the candidate’s campaign completed under Georgia state campaign law. At issue were numerous expenditures from the campaign’s that appeared to be personal expenditures, including a purchase for a vacation resort. The personal expenditures were not disclosed in the campaign’s financial disclosures. Thus, the government investigated the candidate for suspected wire fraud under 18 U.S.C. § 1343.

The candidate’s attorney gave legal advice to the campaign and advised it on how to complete the required financial disclosures. After the government subpoenaed him, the attorney notified the government that he intended to claim attorney-client privilege for communications with the candidate and campaign about the disclosure forms.

The Eleventh Circuit analyzed under a two-part test whether the district court abused its discretion in compelling the attorney to respond to the government’s subpoena. First, the court concluded that the government satisfied the “low hurdle” of establishing wire fraud because the government proffered evidence showing that money was donated for campaign purposes but used for personal purchases. Second, the court concluded that the government sufficiently showed that the attorney’s communications were related to the candidate’s wire fraud because the advice at issue occurred after the personal purchases, before the disclosures were filed, and the attorney had knowledge of the nature of the personal purchases (i.e., the wire-fraud scheme). As a result, the Eleventh Circuit affirmed the district court’s order compelling the attorney’s production of his communications with the candidate about the disclosures.

SmileDirectClub LLC v. Battle, 4 F.4th 1274 (11th Cir. 2021) (en banc).

Panel: William Pryor, Chief Judge, and Wilson, Martin, Jordan, Rosenbaum, Jill Pryor, Newsom, Branch, Grant, Luck, Lagoa, Brasher, and Tjoflat, JJ.

Opinion Author: Judge Jordan

Concurring Opinions: Chief Judge Pryor (joined by Judge Brasher) and Judge Tjoflat

This is an antitrust case. SmileDirect, a company providing orthodontic treatment at discounted rates, sued various defendants, including members of the Georgia Board of Dentistry, a state-organized entity. SmileDirect alleged that the Board violated the Sherman Act (15 U.S.C. § 1) when the Board amended a rule to require digital scans of teeth to be taken when a licensed dentist is physically present in the building (a rule which hampered SmileDirect’s business model). The Board members moved to dismiss the complaint based on state action immunity under Parker v. Brown, 317 U.S. 341 (1943). The district court denied the motion. So the issue for the Eleventh Circuit was whether a denial of Parker immunity could be appealed before final judgment.

The Parker rule holds that the Sherman Act does not reach state action. That rule was extended to private parties. But, unlike claims for qualified or absolute immunity (which provide immunity from suit), Parker provides immunity from liability—not suit. As a result, the Eleventh Circuit holds that an order denying a motion to dismiss under Parker is not immediately appealable. In so holding, the Eleventh Circuit aligns itself with similar holdings from Third, Fourth, Fifth, Sixth, Ninth, and Tenth Circuits.

In a concurring opinion, Chief Judge Pryor elaborates on why the court correctly overruled precedent based on Commuter Transportation Systems Inc. v. Hillsborough County Aviation Authority, 801 F.2d 1286 (11th Cir. 1986), which held that Parker provides immunity from suit—not just liability. Citing Justice Kavanaugh’s concurrence in Ramos v. Louisiana, 140 S. Ct. 1390 (2020),Chief Judge Pryor walks through three considerations for overruling precedent: (1) the wrongness of the precedent; (2) the negative consequences of the precedent; and (3) the extent to which precedent generated reliance interests. In the case of Commuter Transportation Systems, Chief Judge Pryor found each consideration weighed in favor of overruling precedent.

In a separate concurrence, Judge Tjoflat elaborates on why the court had to overrule Commuter Transportation Systems even though the district court made no express ruling on the Board members’ Parker defense. Judge Tjoflat explains that the issue of immunity from suit is deemed denied by the district court even if not expressly stated because the defendant is forced to proceed with litigation. Thus, if Parker provided immunity from suit, the Board members did not have to obtain an express ruling from the district court. As Judge Tjoflat states: “It is this implicit holding that stands in our way today notwithstanding the lack of an express ruling on Parker.” As a result, Judge Tjoflat concludes that overruling Commuter Transportation Systems was necessary.

In re: Sealed Search Warrant and Application for a Warrant by Telephone or Other Reliable Electronic Means, 11 F.4th  1235 (11th Cir. 2021) (per curiam).    

Panel: Martin, Rosenbaum, Luck, JJ.

Opinion author: Per Curiam

This case deals with whether the government’s use of a filter team to review materials claimed to be privileged violate the privilege holder’s rights. The government executed a warrant and obtained materials from a business’s in-house attorney’s office. The business owners claimed attorney-client and work-product privilege over some of the documents the government obtained.

The district court denied the business owners’ motion to prohibit anyone from the government from reviewing the documents. Instead, the district court entered a filter-team protocol. Under that protocol, the business owners would perform an initial review of privileged items and provide a privilege log to the government’s filter team. The filter team—composed of lawyers and staff from a U.S. Attorney’s Office different than the one investigating the business owners—would then review and have the chance to challenge any privilege claim by the business owners. The investigation and prosecution team would not be able to view any claimed privilege materials without the business owners’ and filter team’s consent or court order. But the filter team would be able to view all privileged material.

The Eleventh Circuit had to decide whether the district court abused its discretion in denying the business owner’s motion to preliminarily enjoin any federal prosecutor or agent (including the filter team) from viewing the privileged materials. The court concluded that the business owners failed to establish a substantial likelihood of success in proving that filter teams are per se unlawful or that the filter team the district court put in place violated their rights.

The court cited for support other circuits (Second, Third, Fourth, Fifth, Seventh, Eighth, Ninth, and Tenth) that have approved the use of government filter teams to review privilege claims. The court also found no caselaw support for the business owners’ argument that government agents should never review materials claimed to be privileged until a court rules on the issue. And the court found that the filter-team protocol the district court implemented differed from cases in which circuits found filter teams deficient, namely In re: Search Warrant Issued June 13, 2019, 942 F.3d 159 (4th Cir. 2019), because the business owners were the first to review the materials for privilege unlike other cases where the government made the initial privilege determination. As a result, the Eleventh Circuit affirmed the district court’s order denying the business owners’ motion to preliminary enjoin its filter-team protocol.

That concludes our first Eleventh Circuit White-Collar Roundup. Were there any decisions that stood out to you? Are there any notable decisions we left out that you feel warrant a mention or discussion? Let us know in the comments!

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Circuit Court Clarifies “Benefit of Doubt Rule” for Veterans

Last month in an appeal from the U.S. Court of Appeals from Veterans Claims (CAVC), the Federal Circuit clarified how the “benefit of the doubt rule” applies under 38 U.S.C. Section 5107(b). That rule states when an “approximate balance” of positive and negative evidence exists, the Secretary must give the benefit of the doubt to the claimant.

Interestingly, most of the opinion is decided by a panel consisting of Judges Dyk, Clevenger, and Prost. But one section of the opinion—Section II(B)—was decided by the court en banc. Judges Reyna, Newman, and O’Malley concurred-in-part and dissented-in-part from the en banc portion of the opinion.

The panel clarifies that, under Section 5107(b) and Ortiz v. Principi, 274 F.3d 1361 (Fed. Cir. 2001), the “benefit of the doubt rule” applies when the evidence is an “approximate balance” of positive and negative evidence in the veteran’s favor. In other words, the evidence is nearly equal between being in favor and against the veteran’s claim. This situation includes—but is not limited to—when the evidence is in equipoise (equally positive and negative). 

The en banc portion of the opinion departs from language in Ortiz indicating that the “benefit of the doubt rule” does not apply when the Board finds a preponderance of the evidence against the veteran’s claim. The court acknowledged that language resulted in confusion because the Supreme Court discusses “preponderance of the evidence” as being the same as evidence in equipoise.

Judge Reyna disagrees with the court’s decision to not overturn Ortiz entirely. Judge Reyna takes issue with the court replacing Ortiz’s “preponderance of the evidence” standard with a “persuasive evidence” standard, which applies when the factfinder is persuaded that the evidence leans in one party’s favor. According to Judge Reyna, this new standard is not contemplated by Section 5107(b). Judge Reyna also expresses concern that the VA will now be incentivized to not say when a claims decision is a close call. 

This divided opinion and the confusing language from Ortiz illustrate how the Federal Circuit might benefit from having a judge with experience practicing veterans law and before the CAVC.

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The Biden Administration and DOJ Target Crypto Currencies.

“Come Senators, Congressmen, please heed the call. Don’t stand in the doorway. Don’t block up the hall.” Bob Dylan, The Times They are A-Changing – 1964

Because crypto currencies and digital assets recorded on a blockchain, such as non-fungible tokens (NFTs), have gained a measure of general acceptance, there seems to be greater interest in regulating these types of digital assets. The Biden administration appears to be making crypto currency regulation one of its early targets with Deputy Attorney General, Lisa Monaco, announcing last week the formation of a new law enforcement team to investigate criminal cases involving crypto currencies.

While reasonable minds may differ, regulating the crypto currencies space should be done carefully and with great care. This emerging market provides great opportunity for innovation and for strengthening our ever-shrinking privacy.  In our view, the only two areas appropriate for regulation are stable coins and crypto currency exchanges.

For those unfamiliar with stable coins, these are crypto currencies whose value is tied to a fiat currency such as the U.S. dollar. Unlike Bitcoin and Ether whose value fluctuates depending on market forces, the value of stable coins is always tied to a fiat currency.  The concern with stable coins is whether there are in fact sufficient assets to back the coins. Currently there are no regulations dictating or enforcing the existence of backing assets. It seems to us this creates the potential for fraud and may present an unreasonable risk to investors.

It is difficult for us to understand why decentralized crypto currencies require regulation. Bitcoin has been around for more than a decade and is no more likely to be involved in criminal activity than cash. Other crypto currencies, such as Ether, were created to serve as in-house currencies for applications built on their blockchains.  This unregulated space has led to a wave of digital innovation such as the creation of smart contracts and NFTs, which provide proof of ownership of digital assets. We see no reason for the government to regulate this space.

Regardless of our opinion, it seems clear that greater scrutiny, regulation, and enforcement is coming. Lawyers and corporate compliance officers who work in digital financial exchanges and other related financial institutions that use crypto currencies need to strengthen their procedures to ensure compliance with money laundering laws and be alert for other criminal activity.

Eddie Suarez and Diego Pestana (Diego is somewhat new to the crypto space so he endorses these views only if they are right — LOL)

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“I Search for Tomorrow” — A Touch of Leonard Nimoy, 1969 The Department of Justice Sues Google

In a much-anticipated lawsuit, the Department of Justice filed suit against Google yesterday, alleging the company is violating antitrust laws.  Google has been the subject of bipartisan criticism for its alleged control of the Internet search market.

In a nutshell, the DOJ asserts that Google is illegally maintaining its dominant position in the Internet search market by paying companies like Apple billions of dollars to have its search engine set as the default search engine on its devices. Additionally, the DOJ is taking aim at Google’s Android operating system, which incorporates Google as the default search engine.

To prevail, the DOJ must prove that Google is dominant in Internet search searches, and that its deals with Apple and others stifle competition.  In recent congressional testimony and other public statements, Google has claimed that it is not dominant and that consumers can easily change the default search engine. Additionally, Google asserts that examining only general searches is, “myopic” and points out that nearly half of online shopping searches begin with Amazon and not Google.

This will be a closely watched case — as articulated by The New York Times in a recent article, “a victory for the government could remake one of America’s recognizable companies and the Internet economy it has defined since it was founded …”

You can read the DOJ’s complaint here:

Stay tuned.

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“And All the Hatred and Dirty Little Lies Been Written Off the Books and Into Decent Men’s Eyes” – Bruce Springsteen (Souls of the Departed)

Admittedly, it is a little early to be reaching conclusions about the appropriateness of bringing criminal charges against the two former leaders of a state-run veterans’ home in Massachusetts where 76 veterans died from Covid-19.  But this case — the first criminal case in the country stemming from a Covid-19 outbreak at a nursing home facility, appears to be part of an ongoing trend in our country to criminalize negligent or bad decision-making.

The criminal charges stem from a decision allegedly made by these two individuals, early in the pandemic, in March of 2020, to consolidate two dementia units into one. Apparently, this consolidation led to patients positive for the virus to be housed near non-infected patients, which led to significant spread and deadly results.

There is a lot that we don’t know. The lawyers representing the charged individuals have suggested that these charges are the result of an effort by state officials to scapegoat these two individuals who were placed in impossible situations. One of the lawyers was quoted in the Boston Globe as saying, “At all times, Mr. Walsh relied on the medical professionals to do what was best for the veterans given the tragic circumstances of a virus in a home with veterans in close quarters, severe staffing shortages, and the lack of outside help from state officials. The Attorney General should not be scapegoating Mr. Walsh, who was on the front lines trying his best to do whatever he could to help the Veterans of the Holyoke Soldiers Home, including asking for help from state officials and the National Guard, which arrived much too late.”

The sad truth is that periodically, reports surface alerting the public to lack of government funding of medical facilities for our veterans, which results in subpar and negligent medical treatment. That governmental negligence places the men and women charged with running these medical facilities in impossible situations. Inevitably, when tragedy strikes, the response of government officials is to blame the men and women who run the facilities without taking responsibility or acknowledging that, in large measure, it is the lack of adequate resources that resulted in the making of the tragic decision. In this instance, it appears that the state of Massachusetts has gone a step further by not only scapegoating these two individuals but attempting to turn them into convicted felons. It is worth noting that these two individuals are not crooks. They are people who appear to have distinguished careers grounded in service to the country. As pointed out by one of the lawyers, “Mr. Walsh has spent his entire life in the service of our country, first in active duty in the Marine Corps for 24 years and then serving other veterans as the Superintendent of the Holyoke Soldiers Home. He, like other nursing home administrators throughout the Commonwealth and nation, could not prevent the virus from coming to the Home or stop its spread once it arrived there.”

I will end as I began, with an acknowledgment that we don’t have all the facts, but we will continue to voice our concern and caution the public to be mindful that criminal sanctions are not intended to serve as punishment for all bad decisions. When people are hired to handle difficult jobs in challenging circumstances and with limited or inadequate resources, they are likely, from time to time, to make the wrong choice — that does not make them criminals.

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Stop Dragging My Car Around

We often find ourselves at odds with the Department of Justice but every now and then, we must tip your hat to them – especially when the target (pun intended) is a towing company and the victim a deployed member of the United States Armed Forces. Today, the Department issued a press release announcing it had reached a $20,000 settlement against Target Recovery Towing, Inc. (“Target”), a Tampa towing company, for unlawfully selling a vehicle belonging to a deployed service member. In addition to the monetary settlement, Target must adopt new policies and procedures, including reporting requirements, to ensure future violations do not occur.

The press release can be read here:

https://www.justice.gov/opa/pr/justice-department-obtains-20000-settlement-against-tampa-florida-towing-company-unlawfully

The Consent Order can be read here:

https://www.justice.gov/opa/press-release/file/1318856/download

Service members and their families who believe their rights have been violated should contact the nearest Armed Forces Legal Assistance Program Office. Office locations may be found at http://legalassistance.law.af.mil/.

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“Drones, They Got Ya Trapped, They Spot Your Home” Prophets of Rage, 2017

Imagine this scenario, on a beautiful afternoon, a large group of Second Amendment supporters (presumably wearing Hawaiian shirts) peacefully gather in the downtown area of a large city to stage a demonstration. The city’s mayor, concerned that some of the demonstrators might include white supremacists or members of violence-advocating, right-wing groups, orders the police department to deploy a surveillance drone equipped with facial recognition software and recording capabilities. The protest ends peacefully and the mayor later claims the drone was deployed as a precaution for law enforcement to track the path of the demonstrators in order to be responsive in the event of violence and that neither the face recognition nor recording capabilities of the drone were activated.

Are you comfortable with this scenario? Do you find the actions of the mayor and the police reasonable? I suspect your answer might depend on where you stand politically. As we have become more tribalized, it seems that our analysis of the use of technology in ways that invade our privacy and freedom of political expression is driven by whether we agree with the cause being advanced.

Let us take it look at a different scenario.

On a beautiful afternoon, a large group of racial justice reform advocates peacefully gather in the downtown area of a large city to stage a demonstration. The city’s mayor, concerned that some of the demonstrators might include communists, anarchists, and violent looters, orders the police department to deploy a surveillance drone equipped with facial recognition software and recording capabilities. The protest ends peacefully and the mayor later claims the drone was deployed as a precaution for law enforcement to track the path of the demonstrators in order to be responsive in the event of violence and that neither the face recognition nor recording capabilities of the drone were activated.

Do you view this differently? The answer should be, “no.” Both scenarios should be equally troubling, and we should advocate for the passing of laws that set standards for the use this type of invasive technology. There is simply no reason for drones with facial recognition capabilities to be deployed to monitor political protest. Our silence to the use of this type of technology will inevitably lead to the watering down of our right to political protest and expression.  

China is the poster child for the use of facial recognition software and hardware to deter political expression. In China, law enforcement drones equipped with facial recognition software were deployed this year, during the Covid-19 pandemic, to enforce compliance with quarantine and social distancing requirements. But the trend of increased use of this technology by law enforcement is not limited to China. The Department of Homeland Security deployed drones equipped with facial recognition capabilities, in Minneapolis to monitor protests in that city, in the aftermath of the George Floyd killing (although the agency asserted that the facial recognition capability was not used). Prior to 2014, only a handful of public safety agencies in the United States had drones. Five years later over 1,500 police departments now have drones. Despite this increase, virtually no regulation has been enacted to govern their use. This must change, if we are to protect our political freedoms and our privacy.

Privacy attorneys point to the Illinois model as an appropriate statutory model, balancing public safety and privacy concerns and encourage its framework for broader adoption. The Illinois Freedom from Drone Surveillance Act, passed in 2014, prevents a police department from gathering, “evidence images, sound data or other information” using a drone.  The act provides exceptions to this prohibition for emergency situations, such as terrorist attacks, or through judicially approved warrants.

It is time for our communities to demand the adoption of appropriate regulation. It is also time for our local news reporters to more actively track and report on the use of drones as police surveillance tools. A simple online search of media stories on the use of drones by law enforcement will yield very few stories but, in contrast, dozens of stories abound about the danger of unregulated use of drones by private citizens. This needs to change. States must develop appropriate statutory frameworks that balance the appropriate use of drones by law enforcement agency with the need to protect the privacy and political expression of citizens.

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The Florida Board of Bar Examiners – A Supreme Embarrassment

Law school graduates have earned an opportunity to work. In response to the Covid-19 crisis, the Florida Board of Bar Examiners postponed the exam once, in order to develop an online version. When the company contracted to develop the online exam was unable to perform in every other jurisdiction, the Board of Bar Examiners refused to critically examine those failures and develop a contingency plan. When the deans of Florida’s law schools wrote a joint letter suggesting an alternative proposal, they arrogantly refused to consider it.

So here we are, three days before the rescheduled examination, at 10:49 PM on a Sunday and the Board of Bar Examiners decides it is appropriate and reasonable to inform applicants that the exam will not go forward with no plans on how these young people should earn a living. These applicants have worked hard not only to earn their law degrees, but to prepare for the exam — they have earned the right to seek employment in the profession they have worked so hard to enter. Postponing the exam, at the last minute, with the promise of beginning the process of developing a “supervised practice program” is outrageous — such a program should have already been developed. It is difficult to fathom a more cavalier and arrogant attitude being displayed by the examiners.

The reality that the contracted company would be unable to develop an online version of the exam on a timely manner was apparent to everyone (except apparently the Florida Board of Bar Examiners). To fail to prepare for what was apparent to everyone and either allow for diploma privilege or an alternate means of examination, as proposed by the law school deans, is either grossly incompetent or evidence of a more nefarious motive. Either way, our law school graduates deserve better!

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Jury Trials in Criminal Cases Must Never Be “Virtual”

We will keep saying it until our courts come to their senses!!! Holding “virtual” jury trials, particularly in criminal cases, is a dangerous move that should not be countenanced. Let’s begin with the basics by reviewing the definition of the word, virtual. According to Dictionary.com, virtual means, “something that exists in essence but not in actuality.” In other words, it’s not real — it is something similar to a jury trial, but not really. When we are talking about depriving someone of their liberty, we must insist on the real thing.
While historians may argue its origin, we can safely say that since 1066 jury trials have been used as a means of protecting citizens from the power of the sovereign. People hahenry-hustava-j_Ch0mwBNds-unsplashve died for us to have this right and we should not give it up lightly.
We are not being hyperbolic when we suggest that having “virtual” jury trials for criminal cases will bring us closer to tyranny. People need to sit across from other people and make determinations regarding bias, motives, and overall credibility. This cannot be done effectively through a television screen. Additionally, there is something unique and essential to communicating with someone in person.
While we recognize that technology has a place in our justice system and can provide an effective tool to assist in the orderly dispensation of justice during a pandemic, to adopt the use of “virtual” trials in criminal cases, particularly when a defendant objects, is an exceedingly dangerous idea.
The Sixth Amendment to the United States Constitution establishes the right of a citizen accused of a crime to a public trial. Obviously, the founders of our republic had no way of envisioning technology such as we have today, but we are confident, given their vigilance and fear of a tyrannical government, that they would disapprove of a “virtual” public trial. Again, we are not being hyperbolic when we warn of the immense powers of the sovereign, and limiting the right to be tried by our peers, in person, is an affront to that basic right — juries are the last line of defense between the power of the government and the accused citizen. Jury trials in criminal cases must be done in person — period.
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