Valpo Law Blog

Analysis of current legal issues and cases in the Seventh Circuit Court of Appeals

Author: Kevin Hansen (page 1 of 16)

Faking Mental Incompetence: Not the Smartest Idea

Scales of Justice 01By: Alex Steciuch
J.D. Candidate, 2015

Trying to fake your way out of a criminal conviction is risky to begin with and now it’s punishable within the Seventh Circuit with an added charge of obstruction of justice.

In 2002 Anthony Wilbourn was convicted of robbing a bank in South Bend, Indiana. The court enhanced his sentence for obstruction of justice due Wilbourn’s attempt to delay his trial by faking mental incompetence. This enhancement raised the applicable sentencing guidelines for his base crime to a higher level. At his initial arrest, Wilbourn tried to mimic catatonia and made false statements to authorities. He told them he didn’t know what year it was, what a bank was, and that he didn’t know how to tell time or read. Wilbourn’s claim to mental incompetency was determined very quickly to false after a psychological evaluation. Thereafter, Wilbourn quickly regained his mental competency and ability to read and communicate with his lawyer—handily, just in time for his trial.

But should the court punish people who fail to succeed with a claim of incompetency to stand trial? Wilbourn asked this question on appeal. He argued that if a court can enhance the for obstruction the sentences of those who are found competent, after requesting a competency hearing, lawyers will be afraid to raise the issue at all. Wilbourn’s policy point expresses a serious concern. After all, what lawyer would risk the frustration of the court and additional charges for the client by requesting a competency hearing, if there were a real risk of heavy consequences for doing so?

The Supreme Court has long held that it violates a mentally incompetent defendant’s due process rights to be forced to stand trial. Some people cannot adequately defend a criminal charge, due to their mental condition. These defendants are often not able to understand the charges against them or adequately assist their lawyers to defend them. Such an unfortunate defendant would never be able to have a fair trial, and an injustice would be done, if those who should have their mental competency examined forgo the opportunity, due to fear of enhanced punishment. But, for Judge Posner, trial judges should be given more credit than to impose an enhancement arbitrarily. Just because judges have the ability to find that a defendant is obstructing justice by wrongfully claiming incompetency does not mean that enhancements will automatically follow. Like many considerations at the trial level, the determination of whether an enhancement is justified or not will turn on the facts of the case, and. If that determination is wrong, it can be dealt with on appeal. That may be cold comfort to many defense lawyers, for few decisions within the discretion of the trial court are reversed on appeal. Criminal defense lawyers in the Seventh Circuit must now factor the possibility of an enhancement into their trial strategy in every case where competency is a close question.

But, Wilburn’s was not a close case. There was no doubt that he was faking, and not at all well. It appears from the record that the deception was comically bad. Just consider his pretense that he didn’t know what courts and police officers were, despite being a career criminal. With the Seventh Circuit’s affirmation of the lower court’s decision the circuit joins several other Court of Appeals in concluding that obstruction of justice occurs when a defendant exaggerates or fakes their symptoms at a competency hearing. In affirming the trial court, Judge Posner has concluded that the benefits of potential enhancements outweigh any chilling effect on the rights of defendants to claim the status.

“Nonsense” Not Enough for Murder Conviction

Dixie Highway in Markham, near where the events of the original case occurred.

Dixie Highway in Markham, near where the events of the original case occurred.

On March 23, the Seventh Circuit granted prisoner Lawrence Owen’s habeas corpus appeal of his murder conviction, giving the government 120 days to either retry the case or release him. The case stands out as a rare example of a federal appeals court actually granting a habeas petition.

The decision came more than a decade after the original conviction, and after multiple unsuccessful appeals in state and federal court.

Judge Richard Posner wrote for the three-judge panel. He did not mince words, referring to the trial judge’s stated rationale for the conviction as “nonsense.”

The events of the case took place in the Chicago suburb of Markham in 1999, when a young man named Ramon Nelson was knocked off his bike and killed by a blow from a baseball bat. At his death, Nelson was riding away from Mackie’s Lounge and Liquor Store, which then stood at the corner of 159th and Dixie Highway, near the boundary between Markham and Harvey. The police found that Nelson had 40 baggies of crack cocaine, packaged for sale.

Someone had murdered him. But who?

In the opinion, Judge Posner recited the entirety of the evidence against Owens at trial:

Maurice Johnnie identified Owens as the murderer from a photo array of six persons and from a lineup—although Owens was the only person in the line-up who also was in the photo array, thereby diminishing the probative value of the second identification. The other eyewitness, William Evans, identified Owens as the murderer from the same photo array and a lineup. But at the trial, though Owens was present in the courtroom, Evans twice pointed to a photo of someone else in the photo array as being Owens.

Nothing else linked Owens to the crime. Still, Judge Posner agreed with the other courts that had rejected Owens’ appeals that even this inconsistent eyewitness testimony could have been enough to find Owens guilty beyond reasonable doubt.

The problem, though, was that the trial judge actually said why he was finding Owens guilty, and it had nothing to do with any of the evidence that was introduced. At the end of the closing arguments, the trial judge described the “real issue” as that “Larry Owens knew [Nelson] was a drug dealer. Larry Owens wanted to knock him off. I think the State’s evidence has proved that fact.”

But in fact, the State had introduced no evidence on that point at all.

The Illinois Court of Appeals had previously examined this problem, but decided the judge’s statement was harmless error, since it related only to Owens’ motive and not identification. But as Judge Posner concluded, “[g]iven that the entire case pivoted on two shaky eyewitness identifications, Owens might well have been acquitted had the judge not mistakenly believed that Owens had known Nelson to be a drug dealer and killed him because of it.”

Thus, the error was not harmless, and Owens’ petition was granted.

The lack of coverage of the original case is striking. A search of the online archives of the Chicago Tribune, Sun-Times and even the local Southtown Star turns up not a single story about the murder or the ensuing trial.

Then as now, it seems, some lives are cheaper than others. And not only in the South Suburbs.

By: Samuel Henderson
Valparaiso University Law School
J.D. Candidate, 2016

Foxxxy Ladyz Scores Split Decision Against Village of Dix

OLYMPUS DIGITAL CAMERAOn March 10, the Seventh Circuit Court of Appeals issued its ruling in Foxxxy Ladyz Adult World v. Village of Dix, which pits a small conservative town in Illinois against a strip club. Judge Flaum wrote for the three-judge panel.

The Village of Dix is a town of less than 500 people, straddling Interstate 57 in southern Illinois. The Village is not merely a conservative place; it is that increasingly rare phenomenon even in the rural Midwest: a “dry town,” where the sale of alcohol is strictly prohibited. (Fans of irony will note that Dix is also the hometown of the founder of NORML.)

To say the least, a dry town is not a welcoming place for adult entertainment, let alone an establishment like Foxxxy Ladyz, which is BYOB and offers fully nude dancing. One remarkable thing about this case, then, is that the strip club seems to have been operating in the Village of Dix for several years before the village board took action. (The village enacted a series of ordinances targeting the strip club in 2010, but did not serve Foxxxy with a cease and desist notice until 2013.)

That delay might have been at least in part due to a factor that also weighed in the Seventh Circuit’s decision: the strip club was located on the opposite side of I-57 from the residential areas of the town. Perhaps, for a time, out of sight was out of mind. But that distance also led the Seventh Circuit to question whether Foxxxy was really imposing the kind of harm needed to justify the town’s ordinance.

When the town finally did take action in 2013, Foxxxy sued in the Southern District of Illinois under 42 USC §1983, arguing that its constitutional rights had been violated. In the district court and also on appeal, the core issue was whether the town’s ordinance against nude dancing violated the First Amendment.

The district court dismissed the suit under Rule 12(b)(6), ruling that was sufficient for Dix’s ordinance to be modeled on ones that had been approved elsewhere. The Seventh Circuit reversed, allowing the suit to live to fight another day in the Southern District.

In reaching its decision, the Seventh Circuit sorted through a long series of fractured plurality opinions on this question from the Supreme Court. Under these opinions, nude dancing is symbolic expressive conduct. As a result, any governmental restriction on nude dancing is subject to “intermediate scrutiny”: the restriction must further an important government interest, and must be substantially related to that interest.

Turning to the situation in Dix, the Seventh Circuit looked closely at two of its own previous rulings on this issue from 2009, in which it ruled that a municipality trying to impose these kinds of restrictions on adult entertainment must “demonstrate a reasonable connection between the cited evidentiary basis for its regulation and the specific facts and circumstances on the ground.”

The mere fact that such ordinances had been upheld in other towns was not enough. Rather, Dix will have to show that the ordinance would serve a legitimate interest in its case as well.

Judge Flaum emphasized that the town might well prevail in the end. But at this stage of the case, he wrote, the village “has not pointed to sufficient secondary effects evidence to permit disposing of plaintiffs’ claim altogether.”

Foxxxy had also brought suit against the town’s new ordinance against BYOB establishments. But since merely preserving the town’s dry status was enough to provide a rational basis for the ordinance, Foxxxy lost on that one. At least according to the Seventh Circuit, bringing your own beer is not an expressive activity.

This case shows some of the oddities that arise in constitutional law. Surely, like almost any town that wants to prevent adult entertainment within its borders, Dix isn’t really concerned about impacts like increased crime or littering. Even if research showed conclusively that the strip club’s net impact was zero, the town would still want it gone. But it can’t win in court unless it does a good enough job of pretending that those secondary effects were the real reason for its ordinance.

What do you think? Should nude dancing be protected as speech? And if nude dancing is speech, should municipalities be required—or allowed—to twist themselves around in moves worthy of an exotic dancer so that they can restrict it?

By: Samuel Henderson
Valparaiso University Law School
J.D. Candidate, 2016

Coffee, Tea, or Plea?

“It is hard to see how someone so deficient in the defense of his own interests could be an effective advocate for the interests of clients.” Circuit Judge Easterbrook

By: Jonathan Joseph, MBA, CPA
J.D. Candidate, 2016

Jurisdiction refers to a court’s legal authority to render judgments and decisions. In a recent case before the Seventh Circuit Court of Appeals, the Court had the challenge of determining whether a district judge had the authority to render the judgment upon which the plaintiff’s appeal was based. Vernon T. Jones v. Association of Flight Attendants-CWA sheds light on the importance of following the jurisdiction’s defined legal authority in order to determine whether an appeal can be heard.

Vernon T. Jones, a fifteen-year veteran flight attendant, was fired for misconduct by United Airlines in 2010. Jones subsequently sued his former union, the Association of Flight Attendants on the basis of racial animus and settled that suit with a plea agreement heard by a magistrate judge. Under the plea agreement, the union agreed to file a grievance with the System Board of Adjustment on Jones’ behalf and Jones agreed to dismiss his lawsuit with prejudice. Both parties signed a stipulation of dismissal under Federal Rule of Civil Procedure 41(a)(1)(A)(ii) in June 2013.

Two weeks later, Jones filed a pro se submission with the District Court requesting new counsel and the return of his lawsuit to the district court for further action. This submission was disposed of by the magistrate judge in a minute order stating that “the suit already had been dismissed with prejudice and terminate.” Jones subsequently filed a second submission requesting that his lawsuit be reinstated, despite the fact that he acknowledged that the union was pursuing his grievance according to the terms of the plea agreement. The magistrate judge disposed of this submission in another minute order, “explaining that the court had not retained jurisdiction to enforce the settlement.” This triggered a third submission from Jones, who filed a “motion to establish court’s jurisdiction.” The same magistrate judge ruled that “the court could not exercise jurisdiction over a case that had been dismissed with prejudice” and Jones appealed that decision.

Did the district judge have subject-matter jurisdiction to address Jones’ three submissions after rendering final judgment in the civil case between Jones and the Association of Flight Attendants? If the appeal was based on the original case, sufficient time had passed so that Federal Rule of Civil Procedure 60(b) would be the only source of authority for action. In its decision, the appellate court found that the Court did not perceive the filing to be a Rule 60(b) filing. Jones would have a case under contract law if there was a disagreement over the terms of his plea agreement settlement. That would create a new case; one in which the magistrate judge would have no jurisdiction unless assigned by a district judge. The magistrate’s error had consequences for the original ruling that was under appeal, because the appellate court had no jurisdiction to review it. The appellate ruling included the opinion that a district judge determine whether the federal claim “provides supplemental jurisdiction over Jones’s state-law claim for breach of the settlement contract” under 28 U.S.C. § 1367. This case illustrates the need to determine proper jurisdiction before rendering legal judgment to prevent its ultimate dismissal on jurisdictional grounds.

How Much Evidence is Some? Pro Se Prisoner Prevails in Seventh Circuit


The Westville Correctional Facility in winter.

On February 19, in the case of Austin v. Pazera, the Seventh Circuit ruled in favor of an Indiana prisoner’s appeal against a prison disciplinary proceeding for smuggling contraband. Judge Richard Posner wrote for the three-judge panel.

Prison discipline requires only “some” evidence to survive a habeas corpus review, but the Seventh Circuit held that even that low bar had not been met in this case.

Plaintiff Austin was a jailhouse lawyer, filing his appeal without benefit of legal counsel. Jailhouse lawyers face formidable obstacles in the courts, but fate smiled upon this pro se plaintiff.

At the time of the incident, Austin was an inmate at the Westville Correctional Facility, a sprawling complex just a few miles from Valparaiso. He and four other prisoners were on a work detail cleaning the Gary Parole Office. He was assigned to renovate the crawlspace, but he only worked in the crawlspace for one day, and the other prisoners also had access to the space and worked there. Some time after the work was done, an officer found contraband tobacco in the crawlspace.

Of the prisoners on the work detail, only Austin was disciplined. He lost 60 days of good-behavior time, and was reclassified so that it would be harder for him to earn such time in the future.

Austin appealed the prison board’s decision to the Northern District of Indiana on constitutional grounds, arguing that there was insufficient evidence to link him to the contraband.

But while evidence of Austin’s guilt might be scanty, the district court deemed it to still be “some” evidence, and thus sufficient to bar his appeal.

In reaching its conclusion, the district court leaned heavily on the doctrine of “constructive possession.” Constructive possession is used to charge people with “possessing” things that were within their knowledge and control, but not actually in their hands (such as drugs stashed in a person’s car). The court claimed that the lack of evidence of Austin’s actual possession of the contraband was irrelevant.

In the Seventh Circuit opinion, the Posnerian penchant for mathematical analysis was on full display:

If it’s assumed that any of the five could have placed the tobacco in the crawl space, then, as we know nothing about the other four, we could conclude only that Austin had a 20 percent probability of being the culprit. The district court deemed this sufficient evidence of his guilt to place the disciplinary sanctions imposed on him beyond judicial authority to reverse. Yet it seems odd, to say the least, that someone should be punished when there is an 80 percent probability that he is innocent.

As for constructive possession, Judge Posner observed that there was no evidence that Austin had either knowledge or control of the contraband. He had been near where the contraband was later found, but so had others. As the court observed, that is not enough: “proximity is not possession.”

By the same token, he might have added, no evidence is not “some evidence.”

The district court had cited precedent from other Seventh Circuit and Supreme Court cases upholding prison disciplinary boards in similar cases, but as Judge Posner noted, in those cases every member of a group of inmates had been punished for an infraction.

In contrast, in this case only Austin was punished, yet there was nothing in the record to explain why he had been singled out.

But this last bit of reasoning leaves us to wonder whether the outcome might have been different if the prison had disciplined all of the inmates on the work detail–even though there would still have been only a 20% chance that any one of them was guilty.

Would that have been a better outcome?


By: Samuel Henderson
Valparaiso University Law School
J.D. Candidate, 2016

Thou Shalt Discriminate: Indiana Proposes a Potential “License to Discriminate” Bill

By: Paul Nicolosi
Valparaiso University Law School
J.D. Candidate, 2015

The issue of religious freedom has been a hotly contested and sensitive issue ever since the days of our country’s founding. It’s about to become even more hotly debated in the Hoosier State as the Indiana General Assembly has proposed Senate Bill 568 and Senate Bill 101, which proponents have stated are intended to protect businesses and individuals with deeply-held religious beliefs. These bills would prohibit state and local governments from substantially burdening a person’s ability to exercise their religion unless the government can show that it has a compelling interest and that the action is the least-restrictive means of achieving that interest.

These proposed bills are based on a federal law called the Religious Freedom Restoration Act (RFRA) which prohibits federal laws from interfering with personal religious beliefs. The bill was passed in 1993 with near unanimous support and signed into law by President Bill Clinton. Nineteen states already have adopted similar laws.

These bills have arisen in the wake of the controversial Burwell v. Hobby Lobby decision from this past summer. Hobby Lobby extended the federal RFRA’s religious freedom provisions to closely-held businesses whose owners object to providing forms of birth control on religious grounds. Furthermore, the number of these bills has risen with the numerous gay rights victories that have been achieved ever since the U.S. v. Windsor and Hollingsworth v. Perry decisions in June 2013, which struck down DOMA and legalized same-sex marriage in California, respectively. Since that historic moment almost two years ago, the number of gay marriage states has increased from thirteen to thirty-seven, and many state and local non-discrimination laws on the basis of sexual orientation and/or gender identity have been passed. It is these laws that have led to an avalanche of proposed “religious freedom” laws in various statehouses, especially considering how the gay community and its supporters have flexed their political and legal muscles lately. Gay couples have sued Christian photographers, florists, and bakers for their refusal to provide goods and services for same-sex weddings; the owners argue that providing such services would be contrary to their faiths. Also, some County clerks and judges have resigned in more conservative or conservative-leaning states where same-sex marriage has become a legal reality.

Supporters of the proposed Indiana bills and the other state laws contend that such laws are necessary in order to protect those with profound religious beliefs from being forced to provide goods and services to homosexual individuals. Opponents of the RFRA-like laws claim that such laws are nothing more than a license to discriminate, would create a de facto legal animus against GLBT Hoosiers, and may even undermine county or municipal non-discrimination laws that have been put in place, such as the one in Indianapolis that prohibits anti-GLBT discrimination in employment and public accommodation. Critics of the bills, however, claim that both sides are overhyping the law and the topic itself. They point to the fact that just because one has a religious objection to something doesn’t mean that that perspective will prevail. Courts will have to determine if a law is sufficiently justified by a compelling interest and provides the least restrictive means of achieving that interest.

With the United States Supreme Court poised to issue a final decision on the marriage issue, religious freedom bills being discussed, and non-discrimination laws being proposed in statehouses and localities around the country, the gay rights versus religious freedom debate is far from over. Who will prevail? Will the Court find any compromise position or is this issue “all-or-nothing-at-all”?

Offensive Calculations


Source: Wikipedia

By: Jonathan Joseph, MBA, CPA
Valparaiso University School of Law
J.D. Candidate, 2016

Sometimes the law becomes a numbers game. In US v. Frederic S. Haywood, a former Chicago loan officer, full name, appealed his conviction for orchestrating a $1.6M mortgage fraud scheme of 65 separate properties. He was sentenced to twelve years in prison. Haywood’s illegal actions included supervising a group of co-conspirators to recruit nominees who were paid to prepare and file fraudulent mortgage documents for properties in which they had no intention of residing in.

The appeal was based on Haywood’s contention that the government had miscalculated the total amount defrauded and that the district court improperly applied a 4-level, aggravating-role adjustment under United States Sentencing Guide (“U.S.S.G.”) § 3B1.1(a). Ironically, if anyone on Haywood’s legal team had used a calculator to check their computations, the grounds for his appeal would have disappeared.

During proffer sessions in 2007 (prior to federal charges being filed in 2008 and Haywood’s subsequent conviction in 2012), Haywood disclosed some of his illegal activities, which he alleged, should have been protected by U.S.S.G. § 1B1.8. A review of the interviews conducted by federal agents revealed that, although Haywood admitted to creating false documents to support phony mortgage applications, he denied the other criminal activities that he was subsequently charged with and convicted. Haywood’s plea agreement, in which he admitted to a single charge of wire fraud, contains a list of 65 properties whose mortgages totaled $1,447,270. The “Offense Level Calculation” of the same plea agreements reveals that a 16-level increase would apply under U.S.S.G. § 2B1.1(b)(1)(I) “because the loss amount of $1,447,270 exceeds $1,000,000 but is less than $2,500,000.” The probation officer recommended an imprisonment range of “151 to 188 months, based on a total offense level of 29 and a criminal history category of VI.” That offense level includes the 16-level increase under § 2B1.1(b)(1)(I) for a loss between $1 million and $2.5 million and a 4-level increase under U.S.S.G. § 3B1.1(a), which applies to “an organizer or leader of a criminal activity that involved five or more participants or was otherwise extensive.”

On appeal, Haywood claimed that his 2007 proffer should have excluded $486,000 from the total loss of $1,447,270, because he had discussed three specific properties with investigators. If $486,000 were subtracted from $1,447,720, the total loss would fall beneath the threshold that was used by the probation officer in his calculations. Exhibit A of Haywood’s plea agreement, however, describes five addresses, not three, and the total losses for these five properties total $423,750, not $486,000. As Haywood’s new attorney asserted, subtracting $423,750 from the total loss of $1,447,270 left a revised loss of $1,023,520, which remained above the probation officer’s offense level calculation and thus making his argument futile.

Haywood further argued that, although he recruited “bird dogs” to find people with good credit who were willing to sign fraudulent mortgage documents, he was not an organizer or leader of criminal activity involving five or more members. As he was the last of six defendants to be sentenced for the same incident, the judge added correctly and upheld the original conviction suggested by the probation officer.

Patent Exhaustion Runs Out of Gas in Federal Circuit


Approximately one-sixth of all active US patents, including the ones in this case, are smartphone-related.

By: Samuel Henderson
Valparaiso University Law School
Patent Translator and J.D. Candidate, 2016

On February 10th, the Federal Circuit issued its opinion in Helferich Patent Licensing v. New York Times. The Court reversed a 2013 ruling from the Northern District of Illinois that had used the doctrine of patent exhaustion to throw out this controversial smartphone patent infringement suit.

The patents in question, which cover methods of sending text alerts that contain a hyperlink to additional content, will live to fight another day as the case now returns to the Northern District.

The core question in the case boils down to this: if I have separate patents on sending and receiving a certain kind of text message, and I give you a license for receiving those messages, can I still sue the person who sends a message to you?

The district court said no, but the Federal Circuit said yes.

The defendants in the case, led by the New York Times, are a number of prominent national companies that have SMS notification services or apps that send users links to breaking news and updates.

The plaintiff was Helferich Patent Licensing of Chicago. Nearly all makers of cell phones in the United States have purchased licenses from it.

The Federal Circuit’s Judge Richard Taranto wrote for the three-judge panel. (Unlike most federal cases in our region, patent cases go to the Federal Circuit on appeal, rather than the Seventh Circuit.)

The case turned on the question of patent exhaustion. Under the exhaustion doctrine, having once licensed a use of the invention in a product, the patentee can’t sue a subsequent purchaser of that product for infringing the patent. So, as both parties agreed, Helferich couldn’t sue the people using Helferich-licensed smart phones to receive text messages.

But the actual situation in this case was a bit more complex. One set of claims in the Helferich patents (the “handset claims”) covers cell phones that are designed to receive text messages that contain URLs and convert them into links. Another set (the “content claims”) covers the preparation and transmission of text messages that contain the appropriate URLs. Helferich licensed the handset claims to the handset makers, but did not license the content claims.

Despite that distinction, the trial court had ruled that Helferich’s content claims described an invention that was necessary for the devices covered by the handset claims to function properly, and therefore Helferich could not sue for infringement. Helferich had exhausted its rights, the trial court ruled, by licensing the handset claims.

Reversing the trial court, Judge Taranto wrote that not only were the content claims a distinct invention, but patent exhaustion could not apply because—unlike all previous cases in which the courts had found exhaustion—it was not the buyers or users of the handsets who were accused of infringing the content claims. Rather, the defendants were separate third parties who weren’t even using the handsets themselves.

The defendants had argued that the content claims all “required” a handset (in order for the message to be received), but the New York Times could send out text alerts even if nobody on its staff had a handset.

Although patent law is mostly a creature of statute, the doctrine of patent exhaustion is entirely judge-made. As a result, the court was able to indulge in a bit more historical inquiry than usual, reviewing more than 150 years of precedent on the exhaustion doctrine.

In particular, Judge Taranto drew an analogy to a noted 19th century case, Aiken v. Manchester Print Works, that involved two related patents, one on a knitting machine and one on a needle for that machine. In that case, the court held that selling a license to the machine did not exhaust the patent on the needle. The customer could repair the needle that came with the machine, but making a new one would be infringement. Although only a trial court case, Aiken was later cited approvingly by the Supreme Court.

This case, as Judge Taranto noted, was even less friendly to the defendants than Aiken: “[H]ere, it is not even the owner of X but someone else who is using Y, to the indirect benefit of X’s owner.” Without an unprecedented expansion of the exhaustion doctrine, an indirect benefit to the user of one invention could not possibly exhaust the plaintiff’s claims against a different user of a different invention.

This case is a significant win for patent owners. In 2013, the district court decision in this case provoked considerable consternation because it seemed to indicate that patentees could not license different claims separately – that the courts might read a license of one set of claims as barring suits on any related claims, even from entirely different patents against different infringers. The Federal Circuit’s decision restores certainty on that score.

But for Helferich itself, even if the case survives the likely Supreme Court review, the victory may prove Pyrrhic. After the Supreme Court lowered the boom on software patents last year in Alice v. CLS Bank, it is difficult to see how the content claims can survive a proper review for subject-matter eligibility.

And in fact, the New York Times has reportedly filed for reexamination of six of the seven patents at issue in this case.

Thus, the ultimate fate of the Helferich patents will likely be decided not in the Supreme Court or the district court, but in the humble halls of the Patent and Trademark Office.

You can view the docket and selected briefs from Helferich v. New York Times here.

You Can’t Polish A Turd In Wisconsin

Pouring_Liquid_GoldBy: Alex Steciuch
Valparaiso University Law School
J.D. Candidate, 2015
Cow manure and septage might be considered “liquid gold” for farmers by a Wisconsin Appellate Court, but according to the Wisconsin Supreme Court, these materials are nothing but common contaminants and pollutants. That spells bad news for Wisconsin farmers but good news for insurance companies.

The Wisconsin Supreme Court concluded last month that a reasonable insured person, would understand that under the terms of the insurance policy taken in their plain and ordinary meaning would understand that manure or septage are pollutants and contaminants under a pollution exclusion clause when it seeps into well water and taints the water. This differed from a lower court’s opinion that a “reasonable insured farmer” wouldn’t think of manure or septage as a pollutant due to its beneficial properties for farming.

The issue arose from two separate but similar instances. The first set of plaintiffs, the Preislers hired a septic company to apply septage, a combination mix of human urine, waste and chemicals, to their pastures. The second set of plaintiffs, Robert and Jane Falk, spread liquid cow manure to their fields. Lawsuits were brought over tainted wells and the plaintiffs in both suits discovered that their insurance companies were not required to pay for the tainted wells under a pollution/waste exclusion clause in their respective insurance policies, a determination that the Wisconsin Supreme Court agreed with.

These two decisions in Wisconsin can have large impacts across the board for farmers and for insurance companies. For insurance companies, the decisions settle a confusing contradictory conflict in the lower courts where one appellate court held that manure isn’t waste or a contaminant in the hands of a farmer due to its use as a fertilizer while another one in an unpublished opinion held that septage used in a similar purpose was a contaminant. Additionally, the exclusion of contaminants in the current insurance policies allows insurance companies to get out of paying for expensive contamination clean up while also providing the opportunity to create a new insurance policy they can sell specifically to farmers for fertilization contamination cleanup.

For farmers though the rulings are costly in both a legal and a business sense. The Wisconsin Appellate courts were right to call manure “liquid gold” for farmers because it is an essential part of any farming operation. Without it, crop yields would decrease and farmers would lose income. Now, without protection from insurance companies, farmers are also on their own to defend against claims of contamination from their fertilizer use. This puts farmers in a precarious position. They could either cut back on fertilizer use and produce less or continue using the same amount of fertilizer and risk being open to lawsuits from which their insurance will provide no protection. It is a lose-lose situation for the farmer.

None of this should discount the fact that people should be responsible for their actions. The facts clearly show that well water was contaminated through the use of fertilizer and septage. However, the Falks and the Preislers believed that they were covered by their insurance, not thinking that one of their greatest tools, fertilizer, was excluded from coverage, as a reasonable farmer would. Unfortunately for them though, the Wisconsin Supreme Court believes that a reasonable person would understand that coverage is excluded for fertilizer, and this is bad news for the reasonable farmer.

Common Core No More

By: Alex Salvi
Valparaiso University Law School
J.D. Candidate, 2016

Last March, Indiana paved the way for other states by becoming the first state to divorce itself from the national uniform educational standards known as Common Core.

The 1965 Elementary and Secondary Education Act prohibits the federal government from intervening in school curriculum development. However, Indiana independently adopted the Common Core in 2010 along with 45 other states with the aim to create consistent national benchmarks for all students, regardless of their home state. “We want to ensure our students are held to the highest academic standard, and we believe the CCSS will position Indiana children well—nationally and internationally.” Superintendent of Public Instruction Dr. Tony Bennett said in 2010. “While these common standards will serve as guidelines for success, it will be up to our outstanding educators to decide how best to deliver instruction to make sure our students receive an academically rigorous and globally competitive education.

Once Indiana adopted Common Core, they essentially designed the curriculum to give teachers the freedom to create their own methods for instruction and to select the resources best tailored to their lessons. Most of the confusion—and the disapproval–regarding the federal government’s role in Common Core stemmed from President Obama’s Race to the Top Initiative. It gave $4 billion in federal grants to the top 19 states that demonstrated a commitment to education reform and innovation by using the Common Core standards developed at the federal level. Indiana was ranked 23rd on this list and did not receive any Initiative money, despite its adoption of the Common Core; perhaps this was due to the state’s perversion of the Common Core standard that was originally developed federally. While most of the states receiving grants under President Obama’s Initiative were liberal-leaning, the traditionally conservative U.S. Chamber of Commerce supported the Initiative. The intention of the Initiative’s selective funding was to act as a regulatory scheme to make sure funds were being given to states that would apply them properly.

Indiana is attempting to shift to a more state-specific standard and to promote an entirely different model for K through 12 education. The legislature passed a bill putting Common Core implementation on “pause” pending a proper review of the standards, the costs, and more. “I have long believed that education is a state and local function and we must always work to ensure that our students are being taught to the highest academic standards and that our curriculum is developed by Hoosiers, for Hoosiers,” said Governor Pence in May when he signed the legislation. The state has also reportedly stopped participating in the national testing regime—at least for now.

There is a strong disfavor among Republicans when it comes to the idea of the federal government getting involved in education; however, according to the Constitution the state does have this right. The Indiana legislature is expressing its preference that the state should take control of the education system instead of the federal government through incentives like the Initiative—especially regarding soft values allegedly associated with the Common Core. Indiana legislators have made it clear that they believe the tactic of rejecting nationalized education standards is the first step toward shifting students away from public education to private and charter schools via voucher programs. Governor Pence plans to turn Indiana’s school choice initiative into the most extensive in the nation. Since 2011, when the program was launched, Indiana students using vouchers has risen to nearly 5% of the total school population.

If successfully implemented, the new education system could have an impact beyond Indiana. Governor Pence is likely a 2016 presidential hopeful, and his sudden interest in education is a primary area of focus going into his campaign. In fact, Indiana State Senator Delph submitted legislation that would allow a lawmaker—or sitting governor, such as Pence—to seek re-election to state and federal office at the same time. “I think it’s good for the state of Indiana to have a sitting governor in the national conversation and because of that I think it’s in our interest to make the obstacles and roadblocks for Pence as minimal as possible,” Delph said.

Governor Pence lines up on the other side of the political-spectrum as President Obama or potential 2016 candidate Hillary Clinton. In order to win the far right voters in the primary, Pence will do his best to combat the so called “socialist policies implemented under the Obama administration. Whether it be sharing medicare or sharing toys in kindergarten, we can be certain President Obama will face critics from GOP members attempting to dissolve his policies. It will be interesting to see how the American people side on these issues, and how the shift away from Common Core works and—more importantly—whether voters nationally will come vouch for Pence’s voucher plan in the 2016 primary elections.

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