Short Circuit: A Roundup of Recent Federal Court Decisions

Litigation financing, campaign financing, and salmagundi.

Please enjoy the latest edition of Short Circuit, a weekly feature from the Institute for Justice.

IJ's own Diana Simpson was on NPR discussing Chicago's vehicle impound system, which imposes tens of millions of dollars in fines and fees annually and is insanely unfair to residents, afflicting the innocent as well as the guilty and the poor most of all. Click here to listen.

• Fan of the Libertarian Party dies, leaves the party a surprise gift of $235k. Uh oh! Campaign finance law imposes limits on contributions to political parties. Libertarian Party: The limits exist to prevent quid pro quo corruption, and we can't repay a favor to a dead guy. D.C. Circuit (en banc): Yeah, but it's conceivable that a donor might strike a corrupt bargain with a campaign before they die, so the limit is fine. Dissent: This is the First Amendment; you need real evidence, not just speculation.
• Federal law authorizes retired law enforcement officers to carry concealed firearms all over the country (subject to some conditions), overriding state and local laws to the contrary. D.C.: Retired corrections officers don't count, as they didn't have the power to arrest anyone. D.C. Circuit: They do and did.
• Friends, please enjoy this vocab quiz from Judge Selya of the First Circuit: Perfervid, salmagundi, immurement, plaint, ossature, praxis, and tenebrous. Plus, a scrutable idiom: "nose-on-the-face plain."
• Lawful permanent resident, a hairdresser from the Bronx, is jailed for several months awaiting deportation hearing, during which time she experiences severe mental health breakdown. She prevails at her hearing; Orange County, N.Y. officials release her in sub-zero temperatures without her medication or any way of obtaining more (or even knowing what medication she needed). Second Circuit: She's plausibly alleged officials failed to provide adequate discharge planning in violation of the Fourteenth Amendment. The suit should not have been dismissed.
• The Trump Administration failed to adequately explain its reasons for rescinding DACA, an Obama administration program delaying deportation for immigrants who came to the U.S. illegally as children. Which violated the Administrative Procedure Act. So says the Fourth Circuit (over a dissent).
• Man buys gift for friends on Amazon—a headlamp. It's defective; it burns down his friends' Montgomery County, Md. home. Must Amazon pay the friends' insurer? The Fourth Circuit says no; under state law, Amazon is not a "seller" as it never took title to the lamp. Concurrence: Which is about the only thing Amazon didn't do; it warehoused the lamp, took payment for it, and assumed the risk of credit card fraud, among things. Maryland legislators and judges might want to look into this.
• Litigation financing, heartbreak, and recusal collide in this Texas-sized debacle. A litigation financing company has a stake in 21 lawsuits being litigated by a Mexican law firm. But one of the law firm's owners is embroiled in a divorce in Texas, and his interest in the law firm is part of the marital estate. So the litigation financing company intervenes in the divorce proceeding to protect its investment in the law firm and to collect debts owing to the firm. But the lawyer the company hires to collect the soon-to-be-divorced lawyer's debts turns out to also be law partners with the divorce court judge. Which—when uncovered—explodes the litigation financing company's efforts to recover its investment and leaves it having wasted $2 mil in attorney fees. Yikes! But that's just the beginning. The litigation financing company then sues the lawyer for malpractice. No, not the lawyer getting the divorce. The other one; the one it originally hired to recover its investment but who had the business relationship with the judge. And in response to the company's suit, the lawyer commits what the Fifth Circuit later describes as a "litany of litigatory misbehavior." Which leads to the district court's striking the lawyers' pleadings, entering a default judgment in favor of the litigation financing company, and awarding nearly $3 mil in damages. Fifth Circuit: The default judgment shall stand, but the district court needs to recalculate the damages award.
• Man allegedly violates his probation; his probation officer gets a Houston County, Tenn. judicial commissioner to revoke it. He goes to jail for several months. But wait! A state court judge rules that Tennessee judicial commissioners, who can issue search and arrest warrants, do not have the authority to issue probation revocation warrants. Can the man sue the commissioner? The Sixth Circuit says no. Judicial immunity.
• Since 2014, Bel-Nor, Mo. resident has displayed a "Black Lives Matter" sign in his front yard; since 2016, he has also displayed two (now-outdated) political signs. City: Under our ordinance, you're allowed one "sign" and one "flag"—which we've defined to mean a piece of fabric that is a "symbol of a government or institution"—and none of your signs are a flag. Eighth Circuit: The city's different treatment of "signs" and "flags" is content based. A banner with an Army logo would qualify as a "flag," but one with a Cardinals logo wouldn't. That makes the ordinance likely invalid under the First Amendment, so the resident gets a preliminary injunction while the case proceeds.
• Man is sent to prison for 145 years on strength of his eighth grade stepdaughter's testimony that he abused her. She recants, but a state court determines the recantation was not credible, and the Colorado Supreme Court declines to order a new trial. Tenth Circuit: His claim that the trial court relied on false testimony (in violation of due process) doesn't work since the allegedly false testimony was from a private citizen and he can't show the gov't knew it was false.
• Gorilla Gym infringes Gorilla Playsets' trademark, as both use a similar size and type of gorilla for their children's playground equipment, says the Eleventh Circuit. But the district court was monkeying around when it ordered the infringer to pay its profits for continuing to use the trademark after being sued. After all, it was, at the time, a legal trademark that no judge had ruled against.
• And in en banc news, the Ninth Circuit has asked the Montana Supreme Court for its view on whether dinosaur fossils are owned by the owner of the land on which they're found or instead by them that own the rights to mine minerals under that land.
• And in further en banc news, the Seventh Circuit will not reconsider its decision applying the "doctrine of consular nonreviewability." Come for the initial decision (a U.S. citizen cannot challenge a consular official's decision to deny his Yemeni wife and children a visa because it isn't clear that the ability to live in America with one's spouse is a protected constitutional right (and, even if it were, the decision was legit)), stay for the fiery back and forth between the dissental and concurrence regarding the denial of rehearing. (Judicial abdication! Rights of citizenship! Bad faith of immigration officials!)

It was a good week for the First Amendment. In North Dakota, a federal judge issued a temporary restraining order barring the city of Mandan from imposing thousands of dollars in fines on the owners of the Lonesome Dove saloon (for now). The owners' crime? Commissioning a painted mural on the side of their building that features a sunset over a landscape with mountains and cowboys and the words "Lonesome Dove," which the city deemed an unlawful commercial message. Click here to learn more. In Savannah, Ga. a federal judge ruled that the city's tour guide licensing law, which, among other things, had imposed a 100-question test filled with picayune trivia on would-be guides, violated the First Amendment. "Today's ruling vindicates a simple principle," says IJ Senior Attorney Robert McNamara. "In this country, we rely on people to decide whom they want to listen to. We do not rely on government to decide who will get to speak." Click here for more.