The VLW Blog

When a liquor license is granted, the bar or restaurant agrees to let ABC agents come on the premises to inspect for violations.

But apparently something else was going on June 2, 2004, when a police narcotics task force in Manassas Park invaded the Rack ‘N’ Roll Billiard Club with over 50 officers.

According to the civil rights lawsuit filed by the bar owner, David M. Ruttenberg, heavily armed SWAT teams, in full tactical gear, ordered patrons and employees up against the wall to be searched. Only six or seven of the law enforcement personnel were agents of the Virginia Alcohol Beverage Control Board, he claimed.

In his complaint, Ruttenberg says that after a search that lasted one or two hours, the team discovered only one ABC violation: Ruttenberg kept two bottles of unchilled Mexican beer that should have been labeled as “samples.” A homeless man employed by Ruttenberg and working as a police informant, who allegedly had participated in on-site drug transactions orchestrated by local police, was the only person arrested.

The scale and scope of this police exercise is at issue in an unpublished case released yesterday from the 4th U.S. Circuit Court of Appeals.

In a 40-page per curiam opinion in Ruttenberg v. Jones, the appellate court reversed Senior U.S. District Judge T.S. Ellis’s dismissal of Ruttenberg’s claim challenging the reasonableness of the administrative search, saying “we simply do not know enough about the circumstances surrounding the search and its execution to determine whether the inspection was reasonably conducted” or whether the defendants were eligible for qualified immunity.

By Deborah Elkins

The Gambler got it right: you got to know when to fold ’em.

A Vienna employment lawyer unfortunately got it wrong when he pursued a worthless contract case past the point of patience for the defendant former employer. A federal court has ordered the lawyer to pay $26,057 to the company he sued for “unreasonably and vexatiously” multiplying legal proceedings.

Ruby Salvin had sold insurance policies on a commission basis as an independent contractor for American National Insurance Company. Her written contract stated either party could terminate the relationship with 30 days’ written notice.

When ANICO terminated Salvin, she sued for breach of contract, tortious interference and fraud, claiming the company altered her sales records to decrease the money it still owed her. A Norfolk federal judge dismissed the tort claims outright.

According to the unpublished June 10 opinion in Salvin v. American Nat’l Ins. Co., ANICO’s deposition of Salvin “made clear her remaining breach of contract claim lacked merit.” When ANICO’s lawyer approached Salvin’s lawyer, Thomas Hennessy, Hennessy refused to voluntarily dismiss the contract claim.

Hennessy then filed an opposition to ANICO’s motion for summary judgment that raised an alternative theory based on allegations not included in Salvin’s original complaint, complete with a new affidavit from Salvin that contradicted her deposition testimony.

After it won summary judgment, ANICO sought attorney’s fees against Hennessy under 28 U.S.C. § 1927, which penalizes any lawyer “who so multiplies the proceedings in any case unreasonably and vexatiously …”

U.S. District Judge Jerome B. Friedman said Hennessy should have taken the advice and dismissed the suit. But Friedman said Hennessy only had to pay for ANICO’s fees after Salvin’s deposition made it clear she had no case.

In upholding the fee award in its per curiam opinion, the 4th Circuit said the record supported a finding Hennessy acted in bad faith, even assuming the more stringent subjective standard applied.

By Deborah Elkins

An in-house lawyer’s warning that he represented the company, not its employees or CEO, meant the CEO could not use the attorney-client privilege to keep the lawyer from testifying before a federal grand jury.

In an unpublished decision June 11 in U.S. v. Investment Properties of America LLC, the 4th U.S. Circuit Court of Appeals upheld denial of a motion to quash by Richmond U.S. District Judge Robert Payne.

A federal grand jury issued the subpoena in August 2007 to Eric Perkins, the former chief legal officer for commercial real estate company Investment Properties of America LLC, as part of an investigation of the misuse of funds by the LLC and its CEO, Edward H. Okun. With support from outside counsel, IPA’s legal staff had begun its own investigation of alleged improper loans in October 2006, and Perkins prepared a series of memoranda for the corporation in which he repeatedly referred to himself as “in-house counsel” and recommended actions IPA should take going forward.

In a Nov. 21, 2006, memo, Perkins stated he was “obligated to advise the company that continuing this course of conduct will likely result in both civil and criminal liability,” and that, as in-house counsel, he “represent[ed] the company as opposed to its sole owner, officers, managers, or individual employees.”

Okun nevertheless asserted that Perkins represented him personally and could not talk to the grand jury. The district court didn’t buy Okun’s claim that he believed Perkins was his personal lawyer. Even if Okun had that subjective belief, Payne said, it was not reasonable.

Nor could Okun muzzle Perkins with assertion of a “common interest” privilege, the 4th Circuit panel said. The record showed that Okun likely refused to cooperate with Perkins’ internal investigation, and Okun could not show any ongoing legal enterprise or strategy.

By Deborah Elkins

Challenging the government is not working out very well for Robert Steinburg. In 2005, he was tossed out of a Chesterfield County Planning Commission meeting and charged with disorderly conduct after a heated exchange with a commission member. His civil rights suit against the commission was tossed out by federal district Judge Robert Payne last year. Now, the 4th U.S. Circuit Court of Appeals has upheld Judge Payne’s decision. The Richmond Times Dispatch has the story here, the 4th Circuit’s opinion is here.

Virginia Attorney General Bob McDonnell says that he will appeal the 2-to-1 ruling by a 4th U.S. Court of Appeals panel that Virginia’s ban on so-called “partial-birth” abortions is unconstitutional. According to the report from the Daily Press (via AP), McDonnell will ask for review by the full appeals court on Monday.

On a second look, the 4th US Circuit Court of Appeals again turns thumbs down on Virginia’s law banning “partial birth abortions.” The Washington Post has the AP story.

The full US Senate has confirmed the nomination of Virginia Supreme Court Justice  Steven Agee to the 4th US Circuit Court of Appeals. Senate Judiciary Chair Patrick Leahy (D-Vt.) has this news release. The Roanoke Times has additional perspective.

The Washington Post reports that the U.S. Supreme Court has removed its bar to Virginia’s planned execution of Danville murderer Christopher Emmett. The move sharpens the focus on the 4th Circuit, which is considering Emmett’s challenge to the method of execution.

The U.S. Senate Judiciary Committee yesterday unanimously reported to the full Senate the nomination of Virginia Supreme Court Justice Steven Agee to the 4th U.S. Circuit Court of Appeals. Chairman Patrick Leahy (D-Vt.) proclaimed, “The Senate is now poised to confirm Agee before the Memorial Day recess, breaking through years of delay….”

Leahy did not stop there. Possibly feeling the heat from recent, mostly-partisan criticism about delays in consideration of President Bush’s nominees, Leahy went on at length in a news release and statement to explain his view of the long and contentious federal bench battles, harking back to the days when North Carolina Senator Jesse Helms blocked President Clinton’s 4th Circuit nominees.

“The efforts and years wasted on President Bush’s controversial nominations followed in the wake of the Republican Senate majority’s refusal to consider any of President Clinton’s Fourth Circuit nominees,” Leahy said.

It’s a banner week for Newport News lawyer Len Bennett. He’s on the winning side in two federal decisions interpreting the Fair Credit Reporting Act. The big news is the 4th Circuit’s opinion in Saunders v. Branch Banking and Trust Company of Virginia, where the court affirms an award of $80,000 in punitive damages even though the jury declined to award any actual damages. The Times-Dispatch notes the decision here.

In the other FCRA decision this week, Richmond federal district Judge Henry Hudson ruled that the limitations clock starts over every time that a consumer disputes a credit report and the report is not properly handled by a creditor.