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Government Enforcement Exposed - "The GEE"
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13 Jul 2018 Well, That Didn’t Take Long – and With No Fanfare, Decades of Administrative Law Are Upended

Perhaps the administration had this one in the can already. On Tuesday, less than three weeks after the U.S. Supreme Court decided Lucia, President Trump signed an executive order essentially applying the Supreme Court’s rationale in Lucia to the hiring of all administrative law judges (ALJs) in the federal government. Entitled, “Executive Order Excepting Administrative Law Judges from the Competitive Service,” the order creates a new exception from the federal government’s typical civil service hiring process for seemingly all ALJs, or at least those that perform adjudicative functions in regulatory enforcement proceedings. And, perhaps most importantly, tucked into the very end of the order, the order seemingly applies the same exception to removal of ALJs, thus apparently eliminating the requirement that ALJs only be removed…

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09 Jul 2018 Supreme Court Decides Lucia – But the Saga Continues

After almost two years (and six blog posts), we have reached the conclusion of the SEC v. Lucia saga. Except we haven’t.  The U.S. Supreme Court decided Lucia on June 21, 2018. However, just as Marvel movies now are simply prequels to the next action movie, the fractured collection of opinions in Lucia is simply a cliffhanger that sets the stage for sequel cases in future Terms.   Justice Kagan authored the six-Justice majority opinion and was joined by the Chief, and Justices Kennedy, Thomas, Alito, and Gorsuch. Justice Thomas, joined by Justice Gorsuch, concurred separately, offering their own expansive take on the Appointments Clause. Justice Breyer concurred in part and dissented in part. Justices Sotomayor and Ginsburg joined in the dissenting portion of Justice…

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02 Jan 2018 Supreme Court Addresses Cell Phone Privacy in Carpenter v. United States

  On November 29, 2017, the United States Supreme Court heard oral arguments in the case of Timothy Carpenter v. United States.  During argument, a majority of the justices appeared ready to place new limits on the ability of investigators to track the location of cell phone users.   Carpenter was convicted of masterminding a series of armed robberies (ironically, stealing new smart phones) in Ohio and Michigan.  Officials investigating the case sought records from cell phone providers for 16 different phone numbers, including Carpenter’s.  In so doing, they relied upon the Stored Communication Act (18 U.S.C. 2703).  This 1986 law allows phone companies to disclose records when the government can establish “specific and articulate facts showing that there are reasonable grounds to believe” the…

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24 Jan 2017 The SEC’s Appointments Clause Dilemma

  The U.S. Securities and Exchange Commission (SEC) has an Appointments Clause problem. Actually, it has two. Currently, the Commission’s ability to make decisions is limited in two ways: (1) as of last Friday, there are now only two sitting Commissioners, including no SEC Chairperson, rather than the full complement of five; and (2) a recent federal appellate court decision declaring the SEC’s process of hiring administrative law judges (ALJs) unconstitutional, thus casting doubt on the many activities those judges perform. Until these can be resolved, the agency’s ability to function generally, and in particular its ability to act as an enforcement agency, may be compromised.   The Appointments Clause of the Constitution states:   [The President] shall nominate, and by and with the Advice and…

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07 Dec 2016 U.S. Supreme Court Decides Salman, Reaffirms Broader View of Insider Trading

  Just like that, the Newman/Salman insider trading saga has come to a close. For now, at least. These cases have generated a good bit of ink on this blog. Yesterday, the U.S. Supreme Court unanimously decided United States v. Salman, affirming Salman’s conviction for insider trading, just two months after oral argument. The opinion, authored by Justice Samuel Alito, was not much of a surprise in what it decided, but was somewhat more interesting in what it did not address.   The Court concluded that Salman lay in the “heartland” of its prior prohibition in Dirks v. SEC. In Dirks, the Court said that a tipper breaches his or her fiduciary duty (and therefore commits insider trading) when the tipper either receives something of…

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19 Jul 2016 Did the Supreme Court Pave the Way for Court-Sanctioned Mass Hacking?

  In late April of this year, the U.S. Supreme Court adopted an amendment to Federal Rule of Criminal Procedure 41(b) that would allow judges to issue warrants permitting the FBI to access computers located outside the court’s jurisdiction. As many technology and privacy groups point out, this proposed change could have a remarkable effect on a judge’s ability to issue warrants, not to mention the severe impact on data privacy rights.   Deadline Looms for Congress to Act   Currently, Rule 41(b) only allows a court to issue search and seizure warrants for property located within the issuing court’s district. As proposed, the amendment would allow courts to issue warrants authorizing the FBI to remotely access and seize electronic media stored outside its district if:…

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12 Jul 2016 Prison Sentence for Responsible Corporate Actors Upheld

  On July 6, 2016, the U.S. Court of Appeals for the Eighth Circuit, by a 2-1 vote, held that corporate executives Austin “Jack” DeCoster, 81, and his son Peter DeCoster, 51, could be sentenced to terms of imprisonment for their failure to prevent or remedy violations of the federal food-safety laws pursuant to the Responsible Corporate Officer or “Park” Doctrine. The DeCosters were each sentenced to three months in prison and $100,000 fines following their guilty pleas to misdemeanor violations of 21 U.S.C. § 331(a) as “responsible corporate officers” of Quality Egg, LLC, under the Food Drug & Cosmetic Act (FDCA). In their appeal of the District Court’s sentencing order, the DeCosters argued their prison sentences were unconstitutional and, alternatively, that their sentences were…

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17 Jun 2016 Supreme Court Preserves Implied Certification Theory in Closely Watched False Claims Act Case

In the much-anticipated ruling on Universal Health Services Inc. v. United States ex rel. Escobar, the United States Supreme Court today held that False Claims Act liability can be predicated on an implied certification theory of liability.  (For the factual background and procedural history of the case, see our earlier blog post about the court’s grant of certiorari.) The court also clarified the materiality threshold that must be satisfied to pursue actionable claims under this theory, finding that materiality can be established with or without express language in the regulations that it is a condition of payment.   In upholding the theory of implied certification, the court addressed the situation under which a misleading omission could render a claim false or fraudulent, stating that when…

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18 Jul 2014 Corporations and Unreasonable Searches and Seizures: Does the Supreme Court’s Decision in Riley v. California Signal the Rebirth of the 4th Amendment in White Collar Cases?

There has been much attention paid to the Supreme Court’s recent decision in Riley v. California, Nos. 13-132 and 13-212 (June 25, 2014), and justifiably so. It was notable because it was a 9-0 decision in a criminal case – a rare occurrence in the Supreme Court’s history, especially for this deeply-divided Court. But it was also an important, landmark ruling for the Fourth Amendment and its protections against unreasonable searches and seizures.   In its narrowest interpretation, the Supreme Court’s decision in Riley rejected the argument made by law enforcement that cell phones could be searched without a valid warrant if they were seized at the time of arrest. The Supreme Court has repeatedly recognized that there are appropriate exceptions to the Fourth Amendment’s…

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29 Mar 2014 Case to Watch – Chadbourne & Parke LLP v. Troice – Has the Supreme Court undermined the misappropriation theory of insider trading?

  In the recent decision by the United States Supreme Court, Chadbourne & Parke LLP v. Troice, the dissent suggested that the Supreme Court may have unwittingly undermined the misappropriation theory of insider trading liability. In that case, the Supreme Court, analyzing the Securities Litigation Uniform Standards Act of 1998, held that “[a] fraudulent misrepresentation or omission is not made ‘in connection with’” a security “unless it is material to a decision by one or more individuals (other than the fraudster) to buy or sell” the security. Under misappropriation theory, however, the fraudster’s omission plays no role in the decision by another individual to buy or sell a security. Consequently, Troice may vitiate misappropriation theory.   The opinion is available here.   BT GEEMore Posts…

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