Dhamian Blue has been recognized in the 2020 Edition of North Carolina Super Lawyers. Super Lawyers is a rating service of outstanding lawyers who have attained a high degree of peer recognition and professional achievement. According to the publication, “[t]he objective is to create a credible, comprehensive and diverse listing of outstanding attorneys that can be used as a resource for attorneys and consumers searching for legal counsel.” Lawyers cannot nominate themselves, and must limit their nominations to others who practice in the same state. Additionally, only five percent of the total lawyers in North Carolina are selected for inclusion in Super Lawyers.
Mr. Blue’s practice focuses on complex commercial litigation, white collar criminal defense, and serious personal injury cases.
Blue LLP partner Dhamian Blue has been recognized by Business North Carolina as one of the state’s “Legal Elite.” Legal Elite is a listing of the state’s top lawyers in business-related categories. Honorees are selected by their peers in the bar, and voters are not allowed to vote for themselves. Mr. Blue focuses his practice on commercial litigation and white collar criminal defense.
J.C. White Law Group PLLC and Blue LLP have filed a class action lawsuit in the U.S. District Court for the Middle District of North Carolina on behalf of property owners who lost their homes and properties to a bid-rigging scheme in violation of Section 1 of the Sherman Act. The complaint alleges that group calling itself “The Estates” and its members, who operate through multiple LLCs, engaged in an illegal conspiracy to coordinate their bids at public foreclosures across the state of North Carolinas. The defendants are The Estates, LLC, The Estates (UT), LLC, Timbra of North Carolina, LLC, Versa Properties, LLC, Maldives, LLC, Tonya Newell and Carolyn Souther.
The complaint alleges:
The Estates is a membership organization (or group of membership organizations) that has engaged, and continues to engage, in a bid-rigging scheme in violation of Section 1 of the Sherman Antitrust Act (the “Sherman Act”). Persons, either individually or through companies that they create, become members of the Estates. As members, they gain access to a database of properties facing foreclosure in North Carolina. Members are required to enter into an agreement that only one member may bid on any given property at any particular foreclosure sale and that no member may out-bid another. The Estates notes that this is in part to avoid “negotiating away potential income.” The Estates is paid a “finders fee” for every property that a member bids on at a foreclosure sale, and bids are placed on the members’ behalf by the Estates.
The Plaintiffs, and other similarly situated homeowners and property owners, lost their homes and properties through the Estates’ illegal bidding practices.
For more information about Williams, et al. vs. The Estates, et al., or if you believe you have been impacted by this scheme, please contact Blue LLP partner Dhamian Blue.
Heirs’ property (or heir property) generally refers to land that has been passed down informally from generation-to-generation. In most cases, it involves landowners who died without a will and the rule of law determines the heirs.
Supreme Court Declares Federal Gun Law Unconstitutionally Vague, Preserving Blue 4th Circuit Victory
In a 5-4 decision in United States v. Davis, the Supreme Court held that 18 U.S.C. 924(c)(3)(B) is unconstitutionally vague. That statute imposes a consecutive, mandatory minimum sentence for a defendant who is convicted of possessing a firearm in furtherance of a crime of violence. Relying on recent precedent invalidating similar provisions in the Armed Career Criminal Act and 18 U.S.C. 16(b), the Court declared what is known as the “residual” definition of a crime of violence — one that “by its nature, involves a substantial risk that physical force against the person or property of another may be used in the course of committing the offense” — to be unconstitutionally vague.
We have previously written about the technical features of the residual clause that make it unconstitutional here and here. But in the majority opinion, Justice Gorsuch also reaffirms from the outset the proper roles of the courts and Congress in prohibiting certain conduct under federal law:
In our constitutional order, a vague law is no law at all.Only the people’s elected representatives in Congress have the power to write new federal criminal laws. And when Congress exercises that power, it has to write statutesthat give ordinary people fair warning about what the law demands of them. Vague laws transgress both of those constitutional requirements. They hand off the legisla-ture’s responsibility for defining criminal behavior to unelected prosecutors and judges, and they leave people with no sure way to know what consequences will attachto their conduct. When Congress passes a vague law, the role of courts under our Constitution is not to fashion a new, clearer law to take its place, but to treat the law as a nullity and invite Congress to try again.
The Supreme Court took up Davis because the lower appellate courts had issued conflicting opinions regarding the residual clause’s constitutionality. One of the last appellate courts to do so was the Fourth Circuit in United States v. Simms, a case briefed and argued by Blue LLP partner Dhamian Blue. In Simms, issued on January 24, 2019, the Fourth Circuit, sitting en banc, also held that 924(c)(3)(B) was unconstitutionally vague, and now, Davis affirms the Fourth’s Circuit’s analysis.
For more information about Simms, Davis, and how the might impact a prior or pending federal prosecution, please contact Blue LLP partner Dhamian Blue.
Blue LLP partners Dhamian Blue and Dan Blue III recently attended the Duke Law Bolch Judicial Institute’s invitation-only Distinguished Lawyers conference, held in Arlington, Virginia from June 20-21, 2019. As stated on its website, “[t]he Bolch Judicial Institute’s mission is to study and advance rule-of-law principles, judicial independence, and law reform through technology and innovation.”
The conference, titled Evaluating 2015 Rule 26 Discovery-Proportionality Amendments and Botch-Duke Guidelines and Best Practices, focused on (1) evaluating the effect of the 2015 amendments to the Federal Rules of Civil Procedure, and (2) recommending any revisions or additions to the Bolch Institute’s Rule 26 Guidelines and Best Practices. A critical focus of the conference was how to keep discovery costs reasonable while also ensuring fairness in the federal civil judicial system. The conference also highlighted the use of technology, including Technology Assisted Review, in the efficient administration of complex commercial litigation such as antitrust, consumer, and wage and hour class actions.
Ten federal judges and approximately 75-100 practitioners from across the country attended the conference.
In Gamble v. United States, No. 17-646, the Supreme Court upheld the separate sovereignty exception to the double-jeopardy rule, allowing both the federal and state governments to prosecute the exact same offense conduct.
The petitioner in Gamble was convicted and sentenced in Alabama state court to 10 years imprisonment (all but 1 year suspended) for the possession of a firearm by a felon. Apparently determining that Gamble’s sentence was too lenient, the federal government later prosecuted him for the same offense under federal law, resulting in almost 3 more years in prison.
In a 7-2 opinion, the Supreme Court reaffirmed its longstanding reasoning that the federal government and each state are separate sovereigns that can punish the same crime twice without violating the 5th Amendment’s double jeopardy clause.
Given the 170 year history of the separate sovereignty exception, repeated and failed attempts to reverse it, and the solid 7-2 majority reaffirming it, there is no longer any question as to whether successive prosecutions for the same offense by state and federal governments is constitutional.
Glancy Prongay & Murray LLP and Blue LLP File Securities Class Action on Behalf of Pyxus International, Inc. (PYX) Investors
Glancy Prongay & Murray LLP and Blue LLP have filed a class action lawsuit in the United States District Court for the Eastern District of North Carolina, captioned Jones v. Pyxus International, Inc. et al., No. 5:19-cv-234, on behalf of persons and entities that purchased or otherwise acquired Pyxus International, Inc. (NYSE: PYX) securities between June 7, 2018 and November 8, 2018, inclusive (the “Class Period”).
The lawsuit alleges the following (reprinted from https://www.glancylaw.com/cases-application/case-information/pyxus-international-inc/):
On November 8, 2018, Pyxus disclosed that sales declined approximately 12% year-over-year due to the timing of shipments and the larger crop last year in South America.
On this news, the Company’s share price fell $7.01, or nearly 28%, to close at $18.26 on November 8, 2018, on unusually heavy trading volume.
On November 9, 2018, the SEC announced that the Company had settled charges that it had materially misstated financial statements with the Commission from at least 2011 through the second quarter of 2015 due to improper and insufficient accounting, processes, and control activities for inventory, deferred crop costs, and revenue transactions in Africa.
On this news, the Company’s share price fell $2.88, or nearly 16%, to close at $15.38 on November 9, 2018, on unusually heavy trading volume.
The complaint filed in this class action alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors: (1) that the Company was experiencing longer shipping cycles; (2) that, as a result, the Company’s financial results would be materially affected; (3) that the Company lacked adequate internal control over financial reporting; (4) that the Company’s accounting policies were reasonably likely to lead to regulatory scrutiny; and (5) that, as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.
Most people intuitively know what fraud is. The simplest legal definition is that it is the intentional misrepresentation of a material fact. The common law and several state and federal statutes and regulations prohibit fraud in a number of commercial settings, but when it comes to registered securities, Securities and Exchange Commission Rule 10b-5 is frequently invoked to hold a corporation (and its officers) accountable for fraudulent statements.
Rule 10b-5 makes it unlawful to (a) employ any device, scheme, or artifice to defraud,” (b) “make any untrue statement of a material fact,” or (c) “engage in any act, practice, or course of business” that “operates . . . as a fraud or deceit” in connection with the purchase or sale of securities.
But what happens when someone repeats a fraudulent statement in the sale of securities, knowing the statement to be false, although that person is not the “maker,” ie, the originator of the statement? The Supreme Court recently answered this question in Lorenzo v. SEC, No. 17-1077. In that case, Francis Lorenzo, while he was the director of investment banking at an SEC-registered brokerage firm, sent two e-mails to prospective investors. Lorenzo’s boss supplied the content of the e-mails, which described an opportunity to invest in a company with “confirmed assets” of $10 million. Lorenzo knew, however, that the company had recently disclosed that the assets were worth less than $400,000.
Although the SEC found that Lorenzo had violated Rule 10b-5 (and Section 10b of the Securities Act) by sending false and misleading statements to investors with the intent to defraud, the U.S. Court of Appeals for the District of Columbia Circuit held that he could not be held liable as a “maker” of the fraudulent statement under the Supreme Court’s 2011 decision in Janus Capital Group, Inc.v. First Derivative Traders, 564 U.S. 135. The Circuit Court did, however, sustain the Commissions findings of violations with respect to subsections (a) and (c).
In Janus, the Supreme Court held that to be a “maker” of a fraudulent statement under Rule 10b-5(b), one must have “ultimate authority over the statement, including its content and whether and how to communicate it.” This meant that an investment advisor who had merely participated in the drafting of a false statement that was made by another could not be held liable in a private action.
In a 6-2 opinion, the Court concluded that the “dissemination of false or misleading statements with intent to defraud[,]” regardless of the “maker” of those statements, can fall within the scope of Rule 10b-5 and the relevant statutes. By sending the e-mails, which he knew contained false information about the company’s value, Lorenzo “employ[ed]” a “device,” “scheme,” and “artifice” to defraud. By the same conduct, he “engage[d] in a[n] act, practice, or course of business” that “operate[d] . . . as a fraud or deceit” under the Rule. Whether he was the “maker” of the statements did not mater under the Rule, read as a whole.
Technical nuances and aspects of the opinion aside, the Court’s analysis makes sense. As the majority notes, “Congress intended to root out all manner of fraud in the securities industry[,]” and anyone who knowingly disseminates a false statement in the sale of securities is subject to civil liability, and in the most egregious cases, criminal prosecution under other provisions.
Newly-sentenced defendants (and many attorneys for that matter) often wonder whether to appeal a conviction and sentence, despite having agreed to an appeal waiver during the plea bargaining process. Regardless of any particular defendant’s prospects of prevailing on appeal, the U.S. Supreme Court recently made clear that trial counsel’s failure to timely file a notice of appeal pursuant to his or her client’s instructions is deficient, prejudices the client, and therefore deprives the client of his constitutionally-guaranteed right to effective assistance of counsel.
In Garza v. Idaho, the defendant signed two plea agreements to resolve state criminal charges. Each plea agreement contained an appeal waiver, which in this case was a clause stating that the defendant “waive[d] his right to appeal.” Shortly after the sentencing hearing, the defendant told his lawyer that he wanted to file an appeal. The lawyer, however, did not file a notice of appeal, and told his client that “an appeal was problematic because he waived his right to appeal.” The appeal window closed with no notice having been filed on the client’s behalf.
Four months after the sentencing hearing, the defendant sought post-conviction relief in Idaho state court. He argued that his trial counsel was ineffective because he did not file the notices of appeal on his behalf. The Idaho trial court, Court of Appeals, and state Supreme Court all concluded that the defendant did not demonstrate that his trial counsel’s performance was deficient and that he was prejudiced as a result. In affirming the lower courts’ decision, the Idaho Supreme Court concluded that the presumption of prejudice, previously recognized by the U.S. Supreme Court in Roe v. Flores Ortega, does not apply when a defendant has agreed to an appeal waiver.
The U.S. Supreme Court disagreed. It held that the defendant was, in fact, prejudiced because “prejudice is presumed” when trial counsel’s “constitutionally deficient performance deprives a defendant of an appeal that he otherwise would have taken.” The Court further explained that the presumption of prejudice is not diminished just because a particular defendant has poor prospects on appeal or fewer possible claims than some other appellants.
Garza’s takeaway is simple and straightforward. Appeal waivers – even those that seem to foreclose all possibility of success on appeal – should not discourage a defendant or his counsel from timely giving notice of appeal if the defendant so requests. Criminal law is constantly evolving, and appealable issues that might appear to fall within the scope of a waiver at first glance might not be subject to dismissal. For example, while federal prosecutors will almost always pursue dismissal of an appeal that raises issues that are squarely within the scope of a valid appeal waiver, Garza re-confirms that prosecutors have discretion as to whether to seek the enforcement of the waiver. Additionally, matters concerning the constitutionality of a statute (and whether a criminal offense has been committed at all) arguably are never subject to waiver.
That said, Garza also does not mean that trial counsel should always indiscriminately give notice of appeal prior to a full discussion with the client. For example, in some cases, an ill-considered appeal might undermine a defendant’s ability to pursue a sentence reduction through a Rule 35 motion. When a defendant expressly declines to pursue an appeal, the best practice is to adequately inform him of his appellate rights and then secure written confirmation that he elects not to appeal. Alternatively, if a defendant is not certain, trial counsel should give notice of appeal to preserve the defendant’s appellate rights.