Case Highlights
2004-2005 Term
Following are case highlights for the topic areas of Securities Law and Sentencing. To access other case highlights for the 2004-2005 Term or other terms, or to return to the main Case Highlights page, use the Topic Area menu to the right.
SECURITIES LAW
SECURITIES LAW
Dura Pharmaceuticals Inc. et al. v. Broudo et al.
Docket No. 03-932
Reversed: The Ninth Circuit
Argued: January 12, 2005
Decided: April 19, 2005
For Case Analysis: See ABA Preview 225
For the purpose of proving that a defendant's actions caused a plaintiff's economic loss in a securities fraud case, is it sufficient for a plaintiff to show that the purchase price of a security was inflated on the date of purchase, as a result of the defendant's misrepresentation?
No. An inflated purchase price will not by itself constitute or proximately cause the relevant economic loss needed to allege and prove the "loss causation" element of securities fraud.
From the opinion by Justice Breyer (for a unanimous Court):
Given the tangle of factors affecting price, the most logic alone permits us to say is that the higher purchase price will sometimes play a role in bringing about a future loss. It may prove to be a necessary condition of any such loss, and in that sense one might say that the inflated purchase price suggests that the misrepresentation (using language the Ninth Circuit used) "touches upon" a later economic loss. But, even if that is so, it is insufficient. To "touch upon" a loss is not to cause a loss, and it is the latter that the law requires…. The statutory provision at issue here… makes clear Congress' intent to permit private securities fraud actions for recovery where, but only where, plaintiffs adequately allege and prove the traditional elements of causation and loss. By way of contrast, the Ninth Circuit's approach would allow recovery where a misrepresentation leads to an inflated purchase price but nonetheless does not proximately cause any economic loss.
SENTENCING
SENTENCING
Johnson v. United States
Docket No. 03-9685
Affirmed: The Eleventh Circuit
Argued: January 18, 2005
Decided: April 4, 2005
For Case Analysis: See ABA Preview 244
When a federal prisoner files a collateral attack on his federal sentence on the basis that a state conviction used to enhance that sentence has since been vacated, does the one-year limitations period under the federal Antiterrorism and Effective Death Penalty Act (AEDPA) §2255(4) run from the date on which the petitioner receives notice of the order vacating the state conviction?
Yes. The Court decided that the statute of limitations for filing an attack on a federal sentence under AEDPA begins to run on the date that a petitioner receives notice of the order vacating the prior state conviction, provided that the prisoner has sought vacation of the sentence in the state court with due diligence.
From the opinion by Justice Souter (joined by Chief Justice Rehnquist, and Justices O'Connor, Thomas, and Breyer):
This case presents the distinct issue, of how soon a prisoner, successful in his state proceeding, must challenge the federal sentence under §2255. The resolution turns on understanding what "facts" affecting an enhanced sentence could most sensibly fall within that term as used in the fourth paragraph of the §2255 limitation provision, under which the one year runs from "the date on which the facts supporting the claim or claims presented could have been discovered through the exercise of due diligence."… We think… that notice of the order vacating the predicate conviction is the event that starts the one year running. That leaves us with the question of how to implement the statutory mandate that a petitioner act with due diligence in discovering the crucial fact of the vacatur order that he himself seeks. The answer is that diligence can be shown by prompt action on the part of the petitioner as soon as he is in a position to realize that he has an interest in challenging the prior conviction with its potential to enhance the later sentence… Johnson fell far short of reasonable diligence in challenging the state conviction. Since there is every reason to believe that prompt action would have produced a state vacatur order well over a year before he filed his §2255 petition, the fourth paragraph of the §2255 limitation period is unavailable…
Dissenting: Justice Kennedy (joined by Justices Stevens, Scalia, and Ginsburg)
SENTENCING
Shepard v. United States
Docket No. 03-9168
Reversed: The First Circuit
Argued: November 8, 2004
Decided: March 7, 2005
For Case Analysis: See ABA Preview 76
Can a sentencing court look to police reports or complaint applications to determine whether a guilty plea in an earlier case supported a conviction for "generic burglary," for the purpose of determining whether the minimum sentence under the Armed Career Criminal Act (ACCA) can be imposed?
No. The Court decided that, consistent with its decision in Taylor v. United States, 495 U.S. 575 (1990), a later court determining the character of an admitted burglary is generally limited to examining the statutory definition, charging document, written plea agreement, transcript of plea colloquy, and any explicit factual finding by the trial judge to which the defendant assented.
From the opinion by Justice Souter (joined in full by Justices Stevens, Scalia, and Ginsburg; and by Justice Thomas except as to part III):
[T]he Armed Career Criminal Act (ACCA), mandates a minimum 15-year prison sentence for anyone possessing a firearm after three prior convictions for serious drug offenses or violent felonies. The Act makes burglary a violent felony only if committed in a building or enclosed space ("generic burglary"), not in a boat or motor vehicle. … The question here is whether a sentencing court can look to police reports or complaint applications to determine whether an earlier guilty plea necessarily admitted, and supported a conviction for, generic burglary. We hold that it may not, and that a later court determining the character of an admitted burglary is generally limited to examining the statutory definition, charging document, written plea agreement, transcript of plea colloquy, and any explicit factual finding by the trial judge to which the defendant assented.
Concurring in part and concurring in the judgment: Justice Thomas
Dissenting: Justice O'Connor (joined by Justices Kennedy and Breyer)
Taking no part: Chief Justice Rehnquist
SENTENCING
United States v. Booker
and
United States v. Fanfan
Docket Nos. 04-104 and 04-105
Affirmed: The Seventh Circuit in No. 04-104
Vacated: The District Court in No. 04-105
Argued: October 4, 2004
Decided: January 12, 2005
For Case Analysis: N/A
Are the sections of the Sentencing Reform Act of 1984 that have the effect of making the Federal Sentencing Guidelines mandatory incompatible with the constitutional jury trial requirement, and therefore must they be severed and excised from the Reform Act of 1984?
Yes. The Sixth Amendment as construed in Blakely v. Washington, 124 S. Ct. 2531 (2004), applies to the Federal Sentencing Guidelines.
From the opinion by Justice Stevens delivering the opinion of the Court in part (joined by Justices Scalia, Souter, Thomas, and Ginsburg):
If the Guidelines as currently written could be read as merely advisory provisions that recommended, rather than required, the selection of particular sentences in response to differing sets of facts, their use would not implicate the Sixth Amendment. We have never doubted the authority of a judge to exercise broad discretion in imposing a sentence within a statutory range. … Indeed, everyone agrees that the constitutional issues presented by these cases would have been avoided entirely if Congress had omitted from the [Sentencing Reform Act of 1984] the provisions that make the Guidelines binding on district judges …
The opinion of the Court in part: Justice Breyer (joined by Chief Justice Rehnquist and Justices O'Connor, Kennedy, and Ginsburg)
Dissenting in part: Justice Stevens (joined by Justice Souter, and by Justice Scalia except for Part iii and footnote 17)
Dissenting in part: Justice Scalia
Dissenting in part: Justice Thomas
Dissenting in part: Justice Breyer (joined by Chief Justice Rehnquist and Justices O'Connor and Kennedy)
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