Restricting Content Without Restricting Content: Is Springfield’s Anti-Panhandling Ordinance Truly “Content-Neutral?”

Author: Collin L. Ryan, Associate Member, University of Cincinnati Law Review

Springfield, Illinois enacted an ordinance that prohibits panhandling within the city’s downtown historical district—an area that comprises “less than 2% of the City’s area but contain[s] its principal shopping, entertainment, and governmental areas, including the Statehouse and many state-government buildings.”[1] “The ordinance defines panhandling, in pertinent part, as [a]ny solicitation made in person . . . in which a person requests an immediate donation of money or other gratuity.”[2] The ordinance does, however, permit the use of signs with written requests for donations, as well as requests for donations at a later time.[3]

Plaintiffs, the recipients of citations for violating the ordinance, sought a preliminary injunction to prevent enforcement of the ordinance.[4] When considering whether to grant or deny a preliminary injunction, a court must consider, among other factors, whether plaintiffs are “likely to succeed on the merits.”[5] Here, the question of the plaintiffs’ “likely success on the merits” hinged upon the distinction between content-neutral and content-based restrictions on free speech.

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Are Magistrate Judges’ “Additional Duties” Stinking Up the Courtroom?

Author: Chris Gant, Associate Member, University of Cincinnati Law Review

On July 14, 2014, the Seventh Circuit in United States v. Harden held that the Federal Magistrates Act (FMA) does not permit magistrate judges to accept guilty pleas, even if both the prosecution and defense consent.[1] The decision severely limits a district court’s ability to manage its caseload and conduct business efficiently. Thankfully, this view on the Federal Magistrates Act is not universal: there is an emerging circuit split regarding whether a federal magistrate judge may accept a guilty plea to which all parties consent. The FMA contains a catch all provision that states, “[a] magistrate judge may be assigned such additional duties as are not inconsistent with the Constitution and laws of the United States.”[2] The split arises out of the Supreme Court’s decision in Peretz v. United States and how to interpret the “additional duties” provision of the statute. In Peretz, the Court allowed a magistrate judge to conduct voir dire because both the prosecutor and defense counsel consented. Furthermore, the Court created a test for whether a magistrate judge has jurisdiction to conduct voir dire under the FMA. After Peretz, appellate courts have largely disagreed over what duties can fall under the “additional duties” of the FMA. The Seventh Circuit has held that the acceptance of guilty pleas is “too important” to fall under this provision. In so doing, it disagreed with the Fourth Circuit, which had previously held that the acceptance of guilty pleas is comparable to other duties that magistrates are undoubtedly able to perform.[3] In light of both decisions, it is evident that the Fourth Circuit correctly interpreted the FMA and Peretz because the general language in the statute proves that Congress intended to give federal judges leeway to experiment with possible improvements in the efficiency of the judicial process.[4] Furthermore, the Seventh Circuit’s ruling allows defendants to enter a plea but then revoke it with no consequences, which in turn leads to judicial waste.

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True Threats and the First Amendment: Objective vs. Subjective Standards of Intent to Be Revisited in Elonis v. United States

Author: Rebecca Dussich, Associate Member, University of Cincinnati Law Review

Last month, the Supreme Court heard oral arguments in an appeal of the Third Circuit’s decision in United States v. Elonis.[1] Anthony D. Elonis was convicted under 18 U.S.C. § 875(c), a federal statute that prohibits making “any threat to injure the person of another” via the internet.[2] Elonis does not dispute that he posted Facebook status messages regarding his desire to kill his wife, detonate bombs in the presence of law enforcement, and shoot up a local elementary school (among other threats).[3] Rather, he disputes that these were intended as threats, stating that he was merely “expressing frustration.”[4] At trial, the jury was instructed to apply an objective standard and construe the threats as they would be perceived by a “reasonable person,” not according to the standard requested by Elonis, which would have asked the jurors to look at the subjective intent of the speaker.[5] After the Third Circuit affirmed Elonis’ conviction, the Supreme Court granted certiorari on the issue of whether an objective or subjective standard is required by the statute under which Elonis was charged and, if the former, whether such a standard is constitutionally permissible as part of any “true threat” statute that regulates pure speech.[6]

In being asked to clarify this matter, the Court has an opportunity to extend protection for victims of stalking, harassment, and violence often associated with these crimes by permitting the objective standard of intent applied by the Third Circuit. Alternatively, if the Court finds that the First Amendment requires a subjective intent standard with respect to these laws, this ruling could further insulate the perpetrators of such crimes from prosecution by making conviction more difficult than the actual statute and principles of justice require. These divergent possibilities have garnered the attention of free speech activists and victims’ rights advocates alike, both of whom are concerned by a potential change in the law. But their concerns are likely unnecessary. Although it is possible that the Court will dramatically change the way lower courts review “true threat” statutes, it is more likely that the standard will stay exactly the same.

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Filing Time-Barred Claims in Bankruptcy Subjects Creditors to FDCPA Sanctions in the Eleventh Circuit (and Maybe the Seventh)

Author: A.J. Webb, Articles Editor, University of Cincinnati Law Review

Another clash between the Fair Debt Collection Practices Act[1] and the Bankruptcy Code[2] is on the horizon. A recent decision by the Eleventh Circuit Court of Appeals might lead to additional liabilities against creditors seeking to collect on debts from consumers who file for bankruptcy. In July, the Eleventh Circuit held that debt collectors are barred from filing proofs of claims in bankruptcy when those claims are based on unenforceable consumer debts under state law.[3] This issue is likely to be addressed by the Seventh Circuit Court of Appeals in a separate proceeding currently underway in the District Court of the Southern District of Indiana.[4] In order to fulfill the policy aims of the FDCPA and protect consumer debtors from abusive and deceptive debt collection practices, the Seventh Circuit should follow suit and adopt the holding of the Eleventh Circuit.

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Phone Frustration: FTC Files Suit against AT&T for Deliberately Slowing Phone Speeds of “Unlimited” Plan Users

Author: Ashley Clever, Contributing Member, University of Cincinnati Law Review

Frustration with technology often causes one to wonder if there is an electronic conspiracy raging war against technology users. Usually these thoughts are ridiculous, fabricated only by an overly-unreliable copy machine that seems to always jam minutes before an important deadline or by an iPhone that works perfectly until the day the newest version is released and then mysteriously begins to freeze, making the owner want to upgrade. But some worries about an elaborate electronic conspiracy might actually be well-founded, and the Federal Trade Commission (FTC) recently filed a complaint against AT&T Mobility Company (AT&T) for reducing the data speeds of users who had an “unlimited” phone plan.[1]

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Halting Progress: Michigan’s Ban on Direct-to-Consumer Auto Sales

Author: Jon Kelly, Associate Member, University of Cincinnati Law Review

The cost of filling up at the gas station is an unsavory ritual for most drivers. So it should be no surprise that the concept of the electric car has been resuscitated over the last decade. However, electric cars have seen limited success in the U.S. auto market due to the underdeveloped state of the technology. Tesla is one company seemingly poised to turn the tide on electric car sales, and its newest model would likely be a viable competitor with gasoline powered cars. Tesla has adopted a “direct to consumer” sales model, as opposed to the traditional franchise-dealership model employed by other car companies. Michigan is the most recent state to pass a bill (H.B. 5606) prohibiting car sales under the “direct to consumer” model. However, H.B. 5606 enforces a business model that does not work for electric cars. Michigan should repeal H.B. 5606 and allow Tesla at least some access to Michigan. H.B. 5606 creates an unwarranted barrier to entry in the automotive market and threatens to limit consumer access to competitive products and innovative technology.

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Gaming the System: Are Ponzi Schemers Receiving Proper Criminal Sentences?

Author: Collin L. Ryan, Associate Member, University of Cincinnati Law Review

Ponzi schemes have existed for many years and their internal structure is well understood. Schemers solicit funds from individuals as “investments,” but keep the money themselves and pay “returns” to those investors from additional funds that are received from other new investors.[1] Consequently, the “returns” paid out attract more new investors to invest in the scheme, whose funds are then used to pay out more false “returns” to current investors, thus perpetuating the scheme. The fundamental component of this scheme is the pay out of fake returns. Without these payouts, the scheme would not attract new investors and would not grow and continue to profit the schemer.

Should the sheer act of paying out false “returns” to investors—an essential element of the scheme itself—allow operators of a Ponzi scheme to receive shortened lengths of criminal sentences? While some circuits do not allow fraudulent returns to mitigate sentencing lengths, the Sixth Circuit Court of Appeals recently held that, for purposes of calculating the range of criminal sentencing, the money paid back to a Ponzi scheme’s investors as “returns” on their investments offsets the victims’ total loss from fraud, and thus automatically lessens the length of criminal sentencing.[2]

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Religious Discrimination? No Actual Knowledge, No Problem

Author: Brynn Stylinski, Associate Member, University of Cincinnati Law Review

Title VII has prohibited religious discrimination and required accommodation of religious needs in the workplace since 1964. Last year, in EEOC v. Abercrombie and Fitch Stores, Inc., the Tenth Circuit ruled that an employer that denied a Muslim woman employment on the basis of her religious appearance was not liable for religious discrimination under Title VII.[1] However, this ruling is incongruous with Title VII’s purpose as a part of the Civil Rights Act of 1964 and the Tenth Circuit actually misapplied the law at issue. The Tenth Circuit’s ruling encourages employers to act with willful blindness and allows employers to discriminate on the basis of religion. The Supreme Court has granted certiorari in the case, and in order to preserve the integrity of Title VII, should overturn the Tenth Circuit’s ruling and clarify the standard of review to be applied in religious discrimination cases.

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Confusion in Lock-Up: Irrevocable Agreements and Section 11 Claims

Author: Dan Stroh, Associate Member, University of Cincinnati Law Review

On October 6, 2014, the Supreme Court denied a writ of certiorari in Moores v. Hildes, which involved the interpretation of § 11 of the Securities Act of 1933.[1] Section 11 protects investors by requiring disclosures regarding the purchase of securities and imposing liability on actors responsible for misstatements or errors in information regarding the securities.[2] By holding directors and other company leaders responsible for the accuracy of required statements, § 11 aims to instill confidence in securities investors. Generally, the Act does not require an investor to show he relied on misleading information in a company’s registration statements to impose liability on those responsible for the accuracy of the information.[3] However, the Eleventh and Ninth Circuits are split as to whether a plaintiff must show reliance on a misleading registration statement when the registration statement was issued after the shareholder entered a binding lock-up contract in a merger. By choosing not to review Moores v. Hildes, the Supreme Court refused to address the issue of reliance when an investor utilizes § 11 to enforce accountability for this type of error. Because § 11 is one of the few remaining areas of securities law where injured investors turn for protection from misstatements affecting the value of their investments,[4] the Supreme Court’s failure to affirm the ruling in Hildes will result in continued confusion, lack of protection for investors, and disparate rulings that vary by jurisdiction.

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Tax Characterization of FCA Settlements: First Circuit Says, “No Agreement? No Problem.”

Author: Matt Huffman, Associate Member, University of Cincinnati Law Review

On August 13, 2014, the First Circuit addressed an issue of first impression in Fresinius Medical Care Holdings, Inc. v. United States,[1] holding that a court may consider factors beyond a tax characterization agreement when determining the deductibility[2] of a settlement payment under the False Claims Act (FCA).[3] In so holding, the court rejected the government’s argument that the Ninth Circuit had appropriately adjudicated this issue in Talley Industries, Inc. v. Commissioner[4] and that the only pertinent inquiry in determining the deductibility of an FCA settlement payment is whether a tax characterization agreement exists between the government and the settling parties. The court explained its disagreement with the Ninth Circuit: “[i]f Talley stands for the proposition asserted by the government, then Talley is incorrectly decided and does not deserve our allegiance.”[5] In its decision, the First Circuit correctly parted from Talley and determined that the economic realities of a settlement agreement should be considered in the absence of a tax characterization agreement. Nonetheless, in adopting this test, the First Circuit should have gone further to hold that economic realities should not be ignored even in the presence of such an agreement. Considering that FCA settlements often involve hundreds of millions of dollars, the First Circuit’s decision will have significant tax consequences for companies settling FCA suits in the future.

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