Weekly Case Digests – June 1, 2020 – June 5, 2020

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7^th Circuit Digests

7^th Circuit Court of Appeals

Case Name: United States of America v. Anthony Howell

Case No.: 18-3157

Officials: BRENNAN, SCUDDER, and ST. EVE, Circuit Judges.

Focus: Unlawful-stop Claim – Suppression of Evidence

On an afternoon in December 2012, the Chicago Police Department received an anonymous 911 call reporting a Hispanic man in a black sweater and black hat, carrying a bag, and climbing under a warehouse fence. Officers arrived and found someone who matched the description, but after stopping and frisking him, determined he was not engaged in any crime. The initial suspect then pointed the officers to someone else nearby who was crossing the street and walking toward the police. This man, Anthony Howell, was white and wearing a black jacket and dark hat. When an officer approached to ask what was going on, Howell did not answer, looked panicked, and put his hands in his pockets. The officer reacted by patting down Howell and found a gun in his jacket. A federal gun charge followed, and Howell moved to suppress the gun as the fruit of an unconstitutional stop-and-frisk. The district court denied the motion, Howell proceeded to trial, and a jury found him guilty.

Howell now appeals from the denial of the suppression motion. In evaluating his position, we also confront a question about the proper scope of the record on review. The question is whether we limit our review to the pretrial record or expand our look to consider the arresting officer’s trial testimony as well. The answer matters because the facts in the pretrial record differed in a material way from those that emerged at trial, where the arresting officer testified that he decided to proceed with the pat down only after Howell ignored a directive to remove his hands from his pockets. In the end, we limit ourselves to the pretrial record, for that is the only source of facts the district court considered in denying Howell’s motion. Viewing that record as a whole, we conclude that police lacked reasonable suspicion to frisk Howell. We therefore reverse the denial of his suppression motion and vacate his conviction for possessing that gun.

Our reversal is only partial, however, because Howell was also convicted on a second gun charge. Three months after the December 2012 stop-and-frisk, police executed a warrant to search Howell’s apartment, where they found more guns and ammunition. There was ample evidence for the jury to find that Howell possessed the guns in his apartment, so we affirm his conviction for this separate offense.

Affirmed

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7^th Circuit Court of Appeals

Case Name: Christine Bryant v. Compass Group USA, Inc.,

Case No.: 20-1443

Officials: WOOD, Chief Judge, and RIPPLE and ROVNER, Circuit Judges.

Focus: Statutory Interpretation – Illinois’ Biometric Information Privacy Act

Section 15(b) of Illinois’s Biometric Information Privacy Act (BIPA), 740 ILCS 14 (2008), regulates the collection, use, and retention of a person’s biometric identifiers or information. It requires collectors of this material to obtain the written informed consent of any person whose data is acquired. This regime is designed to protect consumers against the threat of irreparable privacy harms, identity theft, and other economic injuries arising from the increasing use of biometric identifiers and information by private entities. As a matter of state law, anyone “aggrieved” by a violation of the disclosure and informed consent obligations is entitled to bring a private action against the alleged offender. The question now before us is whether, for federal-court purposes, such a person has suffered the kind of injury-in-fact that supports Article III standing. We conclude that a failure to follow section 15(b) of the law leads to an invasion of personal rights that is both concrete and particularized. See Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016). We therefore reverse the district court’s order remanding this case to state court and remand for further proceedings.

Reversed and remanded

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7^th Circuit Court of Appeals

Case Name: Access Living of Metropolitan Chicago, et al., v. Uber Technologies, Inc., et al.,

Case No.: 19-2116

Officials: EASTERBROOK, ROVNER, and SCUDDER, Circuit Judges.

Focus: ADA Violation

Whether the Americans with Disabilities Act’s public accommodation provisions apply to ridesharing companies like Uber is unsettled. The lawsuit underlying this appeal presents that question and the many complexities that come with considering Uber’s business model and the discrimination proscribed by the ADA. Before us are antecedent questions about whether certain plaintiffs—a disability rights advocacy organization called Access Living as well as an individual named Rahnee Patrick—have alleged injuries sufficient to show Article III standing and to state causes of action under § 12188(a)(1) of Title III of the ADA. The district court answered no for both plaintiffs. We affirm.

Affirmed

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7^th Circuit Court of Appeals

Case Name: H.A.L. NY Holdings, LLC, v. Joseph Michael Guinan, Jr.,

Case No.: 19-1942

Officials: ROVNER, HAMILTON, and SCUDDER, Circuit Judges.

Focus: Sanctions – Res Judicata

Plaintiff H.A.L. NY Holdings, LLC is in the business of trading securities. It set up a brokerage account with Advantage Futures, LLC in Chicago. H.A.L.’s trading losses led Advantage to issue margin calls, which H.A.L. failed to meet. Advantage then liquidated H.A.L.’s account, leaving a negative balance of more than $75,000. When H.A.L. failed to pay, Advantage sued in federal court in Chicago. H.A.L. responded with an offer of judgment under Federal Rule of Civil Procedure 68 for the entire amount in dispute, plus attorney fees and costs. Advantage accepted and judgment was entered.

One might expect that to have been the end of the story. But H.A.L. did not actually pay the judgment it had offered. Instead, H.A.L. filed this new lawsuit against the CEO of Advantage claiming damages of more than $25 million arising from the same transactions. The Advantage CEO invoked the defense of res judicata based on the prior judgment. The district court agreed and dismissed this case. H.A.L. has appealed.

We affirm. Several features of this appeal also convince us that this is one of those unusual cases where we should impose sanctions under Federal Rule of Appellate Procedure 38. H.A.L. admits that its solitary argument to the district court was wrong and offers in its place an entirely new argument on appeal. Both are meritless. And after telling the district court that state law is irrelevant, H.A.L. now insists that if we do not reverse, only certification to the state supreme court can resolve this case. This appeal is an exercise in unacceptable gamesmanship, without a reasonable and good-faith basis. Hence the Rule 38 sanctions.

Affirmed

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7^th Circuit Court of Appeals

Case Name: Acheron Medical Supply, LLC, v. Cook Medical Inc., et al.,

Case No.: 19-2315; 19-2410

Officials: FLAUM, MANION, and KANNE, Circuit Judges.

Focus: Breach of Contract

This set of cross-appeals arises from a distribution agreement that each party asserts the other breached. The district court concluded the plaintiff breached the agreement and the defendant did not, but it also held the plaintiff was not liable for its breach. Neither party was content with the outcome. We conclude the district court reached the correct result, and we affirm.

Affirmed

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7^th Circuit Court of Appeals

Case Name: United States of America v. Roberta Draheim, et al.,

Case No.: 19-1262; 19-1911

Officials: BAUER, FLAUM, and KANNE, Circuit Judges.

Focus: Sentencing Guidelines – Supervised Release

Roberta “Mama Bear” Draheim was a drug dealer in northern Wisconsin. Draheim’s meth conspiracy was her proverbial cub. Between 2016 and 2018, she over‐ saw the shipment of nearly forty packages of multi‐pound quantities of methamphetamine from sources in California to La Crosse, Wisconsin. During this time, Draheim supervised at least eleven associates in her trafficking organization, including defendant Tom Lewis. Caught up in the conspiracy, both eventually pleaded guilty to certain narcotics offenses.

At sentencing, Draheim faced a mandatory‐minimum sentence of ten years. She argued she qualified for “safety‐valve relief,” which would have authorized the district court to sentence her below the mandatory minimum. The court over‐ruled Draheim’s objection because she was the leader of her enterprise. Lewis contended that the court should only sentence him based on his conviction, not any other “relevant conduct.” The court overruled his objection too.

Lewis and Draheim now appeal their sentences, maintaining that the district court’s safety‐valve and relevant‐conduct decisions are wrong. We affirm the court’s judgment in Draheim’s case but vacate its judgment as to Lewis and remand for resentencing.

Affirmed in part. Vacated and remanded in part.

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7^th Circuit Court of Appeals

Case Name: Albert Kirkman v. Scott Thompson

Case No.: 19-1904

Officials: BAUER, EASTERBROOK, and HAMILTON, Circuit Judges.

Focus: Evidentiary Hearing – Recanted Testimony

Albert Kirkman (“Kirkman”) was arrested and charged with the murders of two men and attempted murder of a third, Willie Johnson (“Johnson”). At trial, Johnson testified that Kirkman and his accomplice were the shooters. Kirkman was convicted and appealed his sentence. Fifteen years later, Johnson recanted his testimony and Kirkman was convicted and appealed his sentence. The Illinois Circuit Court (“circuit court”) held an evidentiary hearing and found Johnson’s recanted testimony not credible. The Illinois Appellate Court affirmed. Kirkman then filed an action with the Northern District of Illinois, which denied his petition for habeas corpus relief and for the following reasons, we affirm.

Affirmed

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7^th Circuit Court of Appeals

Case Name: United States of America v. Shon L. Gibson

Case No.: 19-1402

Officials: BAUER, ROVNER, and SYKES, Circuit Judges.

Focus: Unlawful-stop Claim – Suppression of Evidence

On December 14, 2016, Shon L. Gibson (“Gibson”), was arrested and charged with possessing with intent to distribute methamphetamine and being a felon in possession of a firearm. Gibson pleaded guilty but reserved his right to appeal the order denying his motion to suppress evidence seized from his home pursuant to a search warrant.

On appeal, Gibson argues the indictment should be dismissed or the evidence suppressed because the evidence seized was the direct result of an illegal stop, search, and arrest. Since we find the evidence was not obtained as a result of violations of the Fourth Amendment, we affirm.

Affirmed

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7^th Circuit Court of Appeals

Case Name: Timothy B. Fredrickson v. Dusty Terrill

Case No.: 19-3201

Officials: KANNE, ROVNER, and HAMILTON, Circuit Judges.

Focus: Habeas Corpus

Timothy Fredrickson, then awaiting his criminal trial, petitioned for a writ of habeas corpus, 28 U.S.C. § 2241, seeking release on bail. The district court denied the petition, determining that challenges to pretrial detention must be brought under the Bail Reform Act of 1984, 18 U.S.C. § 3142, rather than a habeas proceeding. We affirm.

Affirmed

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WI Court of Appeals Digests

WI Court of Appeals – District III

Case Name: State of Wisconsin v. David William Krumm

Case No.: 2019AP243-CR

Officials: HRUZ, J.

Focus: Probable Cause – Suppression of Evidence

David Krumm appeals a judgment, entered upon his no-contest plea, convicting him of second-offense operating a motor vehicle with a prohibited alcohol concentration (PAC). Krumm argues the circuit court erred by denying his motion to suppress evidence obtained during a traffic stop, specifically contending that the law enforcement officer lacked probable cause to request that he submit to a preliminary breath test (PBT). We affirm.

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WI Court of Appeals – District I

Case Name: Kathy Schwab, n/k/a Siech v. Paul Schwab

Case No.: 2019AP1200

Officials: Brash, P.J., Blanchard and Dugan, JJ.

Focus: Time-barred – Marital Property Agreement

Paul Schwab appeals an order of the trial court that permitted the enforcement of a provision in a marital property agreement with his former wife, Kathy Schwab (n/k/a Siech), included in their divorce judgment entered in 1992. Siech filed a contempt motion seeking to enforce that particular provision—the division of Schwab’s military pension—in 2017. Schwab argued that Siech’s motion was barred by the time limits set forth in WIS. STAT. § 893.40 (2017-18), which generally precludes “action upon a judgment or decree of a court” after twenty years.

However, the trial court found that because obligations under a marital property agreement often extend beyond twenty years, it had the equitable authority to carry out the order of the marital settlement agreement. Therefore, under those circumstances, it held that the contempt action brought by Siech was not time-barred, and allowed for the pension division provision to be enforced.

We disagree. We find no legal support for not applying WIS. STAT. § 893.40 to this—or any other—family law judgment, other than an exception specifically enacted by the legislature with regard to child and family support. See WIS. STAT. § 893.415. We therefore reverse.

Recommended for Publication

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WI Court of Appeals – District II

Case Name: Country Visions Cooperative v. Archer-Daniels-Midland Company, et al.

Case No.: 2018AP960

Officials: Neubauer, C.J., Gundrum and Davis, JJ.

Focus: Right of First Refusal – Fair Market Value

A right of first refusal (ROFR) is an agreement in which an owner of property (typically real estate) conveys a right to another party to match any offer made for the property. If the ROFR holder matches the offer, any sale must be to the holder. See MS Real Estate Holdings, LLC v. Donald P. Fox Family Trust, 2015 WI 49, ¶24, 362 Wis. 2d 258, 864 N.W.2d 83 (an ROFR “is a contractual right to be first in line should the opportunity to purchase or lease a property arise”).

Ordinarily, exercise of such a right is straightforward—the property owner receives an offer from a prospective buyer which it wishes to accept and communicates that offer to the ROFR holder, who then has a certain period of time to match it. Whether and how the right applies becomes more involved, however, when the property owner wishes to sell the property as part of a larger parcel or, as in this case, as part of a sale of multiple parcels in a single transaction. In these circumstances, Wisconsin precedent requires that the transaction be scrutinized to determine what portion of the purchase price is properly allocable to the property subject to the ROFR. Wilber Lime Prods., Inc. v. Ahrndt, 2003 WI App 259, ¶¶11-14, 268 Wis. 2d 650, 673 N.W.2d 339. That allocated portion becomes the price at which the ROFR may then be exercised as part of a specific performance remedy. Id., ¶¶12-13. Wilber Lime holds that in the event of a dispute on this point, the exercise price should be determined based on the subject property’s actual “fair market value” (as opposed to a more formulaic, pro rata approach adopted in some jurisdictions, based on the percentage of acreage the subject parcel bears to the whole). Id., ¶¶8-14.

The proper application and breadth of that holding is at the heart of this appeal. Here we must apply Wilber Lime to a case involving some complicating twists, starting with the fact that the property owner, Archer-Daniels-Midland Company (ADM), and the offer single $25 million “package deal” for that parcel, three other parcels, and accompanying business assets. We say “purportedly” because the ROFR holder, Country Visions Cooperative (Country Visions), alleged at trial, and the trial court agreed, that the claimed standalone nature of this sale was a sham—that in reality ADM and United agreed to an artificially inflated “standalone” price of $20 million for the property after learning of, and in order to defeat, Country Visions’ ROFR, while tying this sham sale to a collective sale of the other three parcels and all business assets at an artificially deflated price of $5 million. or, United Cooperative (United), (collectively, Defendants), purportedly carved out the sale of the subject parcel into a separate, standalone transaction after Defendants had initially negotiated a single $25 million “package deal” for that parcel, three other parcels, and accompanying business assets. We say “purportedly” because the ROFR holder, Country Visions Cooperative (Country Visions), alleged at trial, and the trial court agreed, that the claimed standalone nature of this sale was a sham—that in reality ADM and United agreed to an artificially inflated “standalone” price of $20 million for the property after learning of, and in order to defeat, Country Visions’ ROFR, while tying this sham sale to a collective sale of the other three parcels and all business assets at an artificially deflated price of $5 million.

Application of Wilber Lime’s specific performance remedy leads to a second twist. Unwinding the sham $20 million sale required a judicial determination as to the appropriate price at which the ROFR could be exercised. In this case, that meant considering evidence that the buyer was uniquely situated to put the property to a specific use, and therefore incentivized to pay more than “fair market value” as measured by traditional appraisal methods. In other words, Defendants argued (while still denying there was any sham sale in the first place) that in a bona fide standalone transaction United would have paid considerably more than the property’s “appraised” value. That is because United would be able to create an income stream with this parcel that few if any other buyers, including Country Visions, could duplicate. The trial court accepted this argument, resulting in a judicially determined price of $16.6 million, coupled with a new fifteen-day offer period for Country Visions to match it (currently stayed pending this appeal). That price was lower than the $20 million offer price that the trial court found was a sham, but higher than the price generated by appraisal methods chiefly designed to measure fair market value in the absence of an actual buyer.

Application of Wilber Lime’s specific performance remedy leads to a second twist. Unwinding the sham $20 million sale required a judicial determination as to the appropriate price at which the ROFR could be exercised. In this case, that meant considering evidence that the buyer was uniquely situated to put the property to a specific use, and therefore incentivized to pay more than “fair market value” as measured by traditional appraisal methods. In other words, Defendants argued (while still denying there was any sham sale in the first place) that in a bona fide standalone transaction United would have paid considerably more than the property’s “appraised” value. That is because United would be able to create an income stream with this parcel that few if any other buyers, including Country Visions, could duplicate. The trial court accepted this argument, resulting in a judicially determined price of $16.6 million, coupled with a new fifteen-day offer period for Country Visions to match it (currently stayed pending this appeal). That price was lower than the $20 million offer price that the trial court found was a sham, but higher than the price generated by appraisal methods chiefly designed to measure fair market value in the absence of an actual buyer.

Both sides appeal these findings, along with other rulings we will address in the course of this decision. With one exception that may or may not prove significant, we affirm the trial court. We find that the trial court did not err in finding the purported standalone $20 million sale a sham. Nor did the court err in fashioning a specific performance remedy that considered United’s heightened economic incentives, to arrive at a price that best approximated the offer United would have made in a true standalone sale. We cannot, however, fully accept the exercise price found by the trial court. This is because it is not clear from the trial court’s decision, or from the testimony and other evidence in this record, that the exercise price reflected only the value of the real estate that is the subject of Country Visions’ ROFR or whether it also included non-real estate-related business assets that were not part of the real property to which the ROFR is limited.

Remand is thus necessary to ensure that the ROFR exercise price is based on an “apples-to-apples” comparison. That is, the trial court should determine whether the price at which it decided Country Visions can exercise its ROFR is based only on the value of the real property and, if it is not, what portion of that price is properly allocable to the real property. Further fact-finding may impact the trial court’s denial of compensatory damages as well, since that denial was tied to its decision on the exercise price.

Recommended for Publication

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WI Court of Appeals – District II

Case Name: State of Wisconsin v. Leroy E. Johnson

Case No.: 2018AP1853-CR; 2018AP18

Officials: Neubauer, C.J., Reilly, P.J., and Davis, J.

Focus: Court Error – Admittance of Evidence

In these consolidated cases, Leroy E. Johnson appeals from judgments convicting him of numerous crimes. He contends that the circuit court erred by (1) denying his motion to suppress his statement to police; (2) denying his request to admit evidence of a victim’s prior sexual conduct; and (3) admitting evidence that he kept a room in his house for viewing sexually explicit materials. We reject Johnson’s arguments and affirm.

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WI Court of Appeals – District II

Case Name: Town of Waterford v. Christopher Pye

Case No.: 2019AP737

Officials: NEUBAUER, C.J.

Focus: OWI – Equitable Tolling

Christopher Pye appeals from an order equitably tolling the two-year statute of limitations for the offense of an operating a motor vehicle while intoxicated (OWI) (first offense), WIS. STAT. § 346.63(1)(a). Because the two-year statute of limitations had expired, rendering the municipal court without jurisdiction, we reverse the order and remand the cause.

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WI Court of Appeals – District IV

Case Name: State of Wisconsin v. Peter J. Weyker

Case No.: 2019AP1140

Officials: Fitzpatrick, P.J., Kloppenburg and Nashold, JJ.

Focus: Ineffective Assistance of Counsel

In 2009, a jury convicted Peter J. Weyker of eight counts involving the sexual assault of his then fifteen-year-old daughter in July 2008 and the taking or attempted taking of videos showing nudity of four teenagers in June and July 2008. Weyker makes six arguments in this appeal: (1) Weyker’s trial counsel provided ineffective assistance when he failed to appear on the morning of the first scheduled trial date; (2) a 2013 change in the Wisconsin State Crime Laboratory DNA Manual regarding the reporting of DNA quantities below a certain threshold is newly discovered evidence requiring a new trial on the sexual assault charges; (3) a 2013 article reporting on the possibility of speculum contamination of DNA samples is newly discovered evidence requiring a new trial on the sexual assault charges; (4) alternatively, if the speculum contamination article is not newly discovered evidence, then trial counsel provided ineffective assistance for failing to argue possible speculum contamination at trial and the prosecutor violated Weyker’s due process rights by making a false closing argument that did not acknowledge possible speculum contamination; (5) Weyker’s prior appellate counsel provided ineffective assistance for failing to raise ineffective assistance of trial counsel based on trial counsel’s failure to appear on the first scheduled trial date and to argue possible speculum contamination; and (6) Weyker is entitled to a new trial on the sexual assault charges in the interest of justice. For the reasons stated below, we reject Weyker’s arguments and affirm.

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WI Court of Appeals – District IV

Case Name: Rebecca S. Leitner v. Labor and Industry Review Commission, et al.

Case No.: 2019AP1196

Officials: Kloppenburg, Graham and Nashold, JJ.

Focus: LIRC – Unemployment Benefits

Rebecca Leitner appeals the circuit court’s order upholding a decision by the Labor and Industry Review Commission that denied Leitner immediate unemployment benefits. Leitner voluntarily terminated her employment but contends that she is eligible for the benefits because she satisfied statutory exceptions that allow immediate benefits even when an employee voluntarily terminates employment. We affirm.

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WI Court of Appeals – District IV

Case Name: State of Wisconsin v. Gary R. Schumacher

Case No.: 2019AP1261-CR

Officials: KLOPPENBURG, J.

Focus: OWI – Ineffective Assistance of Counsel

Gary Schumacher was convicted, upon a jury verdict, of operating a motor vehicle with a prohibited alcohol content (OWI- PAC) in connection with an accident between Schumacher and another motor vehicle. Schumacher filed a motion for postconviction relief, alleging that his trial counsel was ineffective for failing to adequately cross-examine the State’s expert witness who had calculated Schumacher’s blood alcohol content (BAC) at the time of the accident, approximately two hours before Schumacher’s blood was drawn. The circuit court held a Machner hearing and denied the motion, ruling that Schumacher had failed to meet his burden of showing either that trial counsel performed deficiently or that counsel’s performance prejudiced Schumacher. Schumacher appeals. I conclude that Schumacher’s ineffective assistance claim fails because he has not met his burden to show deficient performance. Therefore, I affirm.

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Supreme Court Digests

United States Supreme Court

Case Name: United States v. Evelyn Sineneng-Smith

Case No.: 19-67

Focus: 1^st Amendment Violation – Abuse of Discretion

This case concerns 8 U. S. C. §1324, which makes it a federal felony to “encourag[e] or induc[e] an alien to come to, enter, or reside in the United States, knowing or in reckless disregard of the fact that such coming to, entry, or residence is or will be in violation of law.” §1324(a)(1)(A)(iv). The crime carries an enhanced penalty if “done for the purpose of commercial advantage or private financial gain.” §1324(a)(1)(B)(i). Respondent Evelyn Sineneng-Smith operated an immigration consulting firm in San Jose, California. She was indicted for multiple violations of §1324(a)(1)(A)(iv) and (B)(i). Her clients, most of them from the Philippines, worked without authorization in the home health care industry in the United States. Between 2001 and 2008, Sineneng-Smith assisted her clients in applying for a “labor certification” that once allowed certain aliens to adjust their status to that of lawful permanent resident permitted to live and work in the United States. §1255(i)(1)(B)(ii).

There was a hindrance to the efficacy of Sineneng-Smith’s advice and assistance. To qualify for the labor certification dispensation she promoted to her clients, an alien had to be in the United States on December 21, 2000, and apply for certification before April 30, 2001. §1255(i)(1)(C). Sineneng-Smith knew her clients did not meet the application-filing deadline; hence, their applications could not put them on a path to lawful residence. Nevertheless, she charged each client $5,900 to file an application with the Department of Labor and another $900 to file with the U. S. Citizenship and Immigration Services. For her services in this regard, she collected more than $3.3 million from her unwitting clients.

In the District Court, Sineneng-Smith urged unsuccessfully, inter alia, that the above-cited provisions, properly construed, did not cover her conduct, and if they did, they violated the Petition and Free Speech Clauses of the First Amendment as applied. See Motion to Dismiss in No. 10– cr–414 (ND Cal.), pp. 7–13, 20–25; Motion for Judgt. of Acquittal in No. 10–cr–414 (ND Cal.), pp. 14–19, 20–25. She was convicted on two counts under §1324(a)(1)(A)(iv) and (B)(i), and on other counts (filing false tax returns and mail fraud) she does not now contest. Throughout the District Court proceedings and on appeal, she was represented by competent counsel.

On appeal from the §1324 convictions to the Ninth Circuit, both on brief and at oral argument, Sineneng- Smith essentially repeated the arguments she earlier presented to the District Court. See Brief for Appellant in No. 15–10614 (CA9), pp. 11–28. The case was then moved by the appeals panel onto a different track. Instead of adjudicating the case presented by the parties, the appeals court named three amici and invited them to brief and argue issues framed by the panel, including a question Sineneng-Smith herself never raised earlier: “[W]hether the statute of conviction is overbroad . . . under the First Amendment.” App. 122–124. In the ensuing do over of the appeal, counsel for the parties were assigned a secondary role. The Ninth Circuit ultimately concluded, in accord with the invited amici’s arguments, that §1324(a)(1)(A)(iv) is unconstitutionally overbroad. 910 F. 3d 461, 485 (2018). The Government petitioned for our review because the judgment of the Court of Appeals invalidated a federal statute. Pet. for Cert. 24. We granted the petition. 588 U. S. ___ (2019).

As developed more completely hereinafter, we now hold that the appeals panel departed so drastically from the principle of party presentation as to constitute an abuse of discretion. We therefore vacate the Ninth Circuit’s judgment and remand the case for an adjudication of the appeal attuned to the case shaped by the parties rather than the case designed by the appeals panel.

Vacated and remanded

Dissenting:

Concurring: THOMAS, J., filed a concurring opinion.

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United States Supreme Court

Case Name: Bridget Anne Kelly v. United States

Case No.: 18-1059

Focus: Statutory Interpretation – Property Fraud

For four days in September 2013, traffic ground to a halt in Fort Lee, New Jersey. The cause was an unannounced realignment of 12 toll lanes leading to the George Washington Bridge, an entryway into Manhattan administered by the Port Authority of New York and New Jersey. For decades, three of those access lanes had been reserved during morning rush hour for commuters coming from the streets of Fort Lee. But on these four days—with predictable consequences—only a single lane was set aside. The public officials who ordered that change claimed they were reducing the number of dedicated lanes to conduct a traffic study. In fact, they did so for a political reason—to punish the mayor of Fort Lee for refusing to support the New Jersey Governor’s reelection bid.

Exposure of their behavior led to the criminal convictions we review here. The Government charged the responsible officials under the federal statutes prohibiting wire fraud and fraud on a federally funded program or entity. See 18 U. S. C. §§1343, 666(a)(1)(A). Both those laws target fraudulent schemes for obtaining property. See §1343 (barring fraudulent schemes “for obtaining money or property”); §666(a)(1)(A) (making it a crime to “obtain[] by fraud . . . property”). The jury convicted the defendants, and the lower courts upheld the verdicts.

The question presented is whether the defendants committed property fraud. The evidence the jury heard no doubt shows wrongdoing—deception, corruption, abuse of power. But the federal fraud statutes at issue do not criminalize all such conduct. Under settled precedent, the officials could violate those laws only if an object of their dishonesty was to obtain the Port Authority’s money or property. The Government contends it was, because the officials sought both to “commandeer” the Bridge’s access lanes and to divert the wage labor of the Port Authority employees used in that effort. Tr. of Oral Arg. 58. We disagree. The realignment of the toll lanes was an exercise of regulatory power—something this Court has already held fails to meet the statutes’ property requirement. And the employees’ labor was just the incidental cost of that regulation, rather than itself an object of the officials’ scheme. We therefore reverse the convictions.

Reversed and remanded

Dissenting:

Concurring:

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