Latest 4 Cases: Grice v. United States District Court for the Central District of California (Arbitration & Mediation), In re: Pena (Bankruptcy), ...

Trump Swings His Wrecking Ball at Social Security

NEIL H. BUCHANAN

Neil H. Buchanan—UF law professor and economist—dispels some common misunderstandings about the future of Social Security but explains why President Trump’s recent comments are cause for concern. Buchanan explains why, contrary to claims by reporters and politicians, Social Security is not at the brink of insolvency, but points out that if Trump were to permanently eliminate payroll taxes, that would doom the program on which tens of millions of retirees depend.

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Grice v. United States District Court for the Central District of California

Docket: 20-70780

Opinion Date: September 4, 2020

Judge: Consuelo Maria Callahan

Areas of Law: Arbitration & Mediation, Transportation Law

Uber’s smartphone application connects riders needing transportation with available local drivers. Rideshare fares are charged automatically via the Uber App, with Uber withholding a percentage as a “service fee.” Grice, an Alabama Uber driver, has used the Uber App since 2016 to provide rideshare services to and from Huntsville International Airport and Birmingham-Shuttlesworth International Airport. Uber had agreements with these airports to allow Uber drivers to pick up arriving passengers. Grice, in the course of his work, never crosses state lines. Grice filed a putative class action lawsuit, alleging that Uber failed to safeguard drivers’ and riders’ personal information and mishandled a data security breach in which that information was stolen by online hackers. Uber moved to compel arbitration, citing the Technology Services Agreement that Grice and other drivers signed, requiring arbitration of “any disputes . . . arising out of or related to [the driver’s] relationship” with Uber and prohibiting arbitration “on a class, collective action, or representative basis.” Grice responded that he drives passengers who are engaged in interstate travel to and from airports and qualified for the Federal Arbitration Act, 9 U.S.C. 1 exemption for workers engaged in foreign or interstate commerce. The district court compelled arbitration. The Ninth Circuit denied a petition for a writ of mandamus seeking to vacate the order The district court’s decision was not clearly erroneous as a matter of law, as required for granting a writ of mandamus.

In re: Pena

Docket: 19-60029

Opinion Date: September 4, 2020

Judge: Bumatay

Areas of Law: Bankruptcy

Pena filed for Chapter 11 bankruptcy in 2012, then owning 30 parcels of real estate. After Pena used cash collateral in an unauthorized manner, the bankruptcy court converted his case to a Chapter 7 bankruptcy and appointed a trustee, who managed Pena’s California rental properties. The trustee tendered the rents as cash collateral to the security holders of the respective security interests. The security holders did not accept the funds. In 2014, the trustee abandoned the rental parcels as part of her administration of the bankruptcy estate; her unsuccessful efforts to distribute the rents ended in 2016. She deposited $52,000 in unclaimed funds in the bankruptcy court registry and closed Pena’s bankruptcy case, listing the unclaimed funds (and their rightful owners) in her final account. Pena did not object to the court’s decree approving the trustee’s actions. In 2018, Pena unsuccessfully sought to recover the funds without reopening the bankruptcy. The bankruptcy court noted that when the bankruptcy closed, Pena still had $411,000 in unpaid, unsecured debt. The Bankruptcy Appellate Panel affirmed. The Ninth Circuit affirmed, finding that Pena had prudential standing and was a “person aggrieved” and that the absence of an opposing party, due to the trustee’s dismissal did not prevent it from exercising jurisdiction. The trustee did not abandon the rents by abandoning the properties from which they were collected; the funds remained the property of the bankruptcy estate and did not constitute an estate surplus.

United States v. Asuncion

Docket: 18-30130

Opinion Date: September 4, 2020

Judge: Chhabria

Areas of Law: Criminal Law

In 2017, Asuncion was convicted of possession with intent to distribute 50 grams or more of methamphetamine, 21 U.S.C. 841(a) and (b)(1)(A)(viii). His record included three possession convictions in Washington state court in 2000 and 2004 and one distribution conviction in federal court in 2007. Under the federal drug laws, these prior convictions would trigger mandatory minimum sentences if the convictions were for “felony drug offenses,” 21 U.S.C. 802(44) The district court found that all four convictions counted as prior felony drug offenses. The prior federal conviction had resulted in a sentence longer than one year. The prior state convictions had each resulted in sentences of one year or less, but the Washington statute under which Asuncion was convicted set a maximum penalty of five years. The mandatory minimum sentence for defendants who had previously been convicted of two or more felony drug offenses was life in prison, and the district court sentenced Asuncion accordingly. The Ninth Circuit affirmed, agreeing that the state convictions constituted offenses “punishable by imprisonment for a term exceeding one year.” Section 401 of the First Step Act, 21 U.S.C. 841, which scaled back the mandatory minimum penalties for repeat drug offenders—does not apply to defendants who were sentenced before its enactment.

Nanouk v. United States

Docket: 19-35116

Opinion Date: September 4, 2020

Judge: Paul Jeffrey Watford

Areas of Law: Environmental Law, Native American Law, Personal Injury, Real Estate & Property Law, Zoning, Planning & Land Use

Nanouk uses her 160-acre Alaska Native allotment for traditional subsistence activities. In the 1980s, Nanouk built a small cabin, which she and her family reached by using a trail that runs from the main road through the U.S. Air Force North River Radio Relay Station, which closed in 1978. In 1981, the General Accounting Office criticized the Air Force’s failure to maintain shuttered sites, including North River, which contained hazardous chemicals. The Air Force and the Army Corps of Engineers began remediation, removing 500 gallons of transformer oil containing PCBs and PCB-contaminated soil. Surveys taken in 1987 and 1989 revealed that 6,700 cubic yards of contaminated soil remained. The Air Force and the Corps released a new plan in 2001; clean-up resumed. The trail that Nanouk used ran through a “hot spot” where PCB-contaminated soil was picked up by her vehicles. Nanouk did not learn about the PCBs on her property until 2003 when she reported a strong chemical odor. The Air Force then undertook extensive environmental remediation at the Station and Nanouk’s allotment. Nanouk sued, alleging trespass and nuisance. She and several family members have experienced serious health problems. The Ninth Circuit vacated the dismissal of her suit. The Federal Tort Claims Act's discretionary exception barred claims predicated on two of the acts she challenged as negligent--the government’s alleged failure to supervise contractors during the Station’s operation, and its abandonment of the property between the 1978 closure and 1990. The government did not establish that the exception barred the claims relating to the failure to identify and remediate the hot spot in a timely manner after 1990.