Legal Opinions - U.S. 4th Circuit Court of Appeals: June 30, 2008

Daily Record, The (Baltimore), Jun 30, 2008

4th Circuit Court of Appeals

Criminal Law

Probable cause for a search warrant

BOTTOM LINE: District court properly found warrant was properly issued where police officer's omissions in warrant affidavit were not material to finding of probable cause.

CASE: U.S. v. Gary, US4th No. 06-4597 (filed June 16, 2008) (Judges O'CONNOR (retired, sitting by designation), Williams & Hamilton).

COUNSEL: Craig Stover Cooley, Richmond, VA, for Appellant. Richard Daniel Cooke, Assistant United States Attorney, Office of the United States Attorney, Richmond, VA, for Appellee.

FACTS: In 2005, a Richmond, Virginia police officer investigated a tip from an informant that an individual named "Melvin" was selling illegal narcotics from 601 Northside Avenue. The officer searched trash located behind that address, finding plastic bags containing cocaine residue and packaging materials.

In a subsequent warrant affidavit, the officer did not disclose that at least three additional trash cans marked with 601 were in the alley behind Northside Avenue. The affidavit also erroneously stated that the search too place in 2004, rather than in 2005.

The warrant was subsequently issued, however, and the search executed upon the home of Melvin Gary revealed the presence of narcotics and resulted in his arrest.

Following his indictment in federal district court, Gary moved to suppress the evidence and void the warrant.

The district court denied the motion.

Gary appealed to the 4th Circuit, which affirmed.

LAW: Because the officer's omissions were not material to the finding of probable cause, the district court correctly held that the warrant was not invalid under Franks v. Delaware, 438 U.S. 154 (1978).

The court's determination of probable cause rested on the contraband the officer observed in the trash cans, rather than the erroneous date stated in the warrant. Based on that discovery, the court had probable cause to believe there was narcotics activity at the address. The error as to the date was so minor that it was not caught by the police, the court, or counsel on either side, and did not render the warrant entirely deficient. See United States v. Angle, 230 F.3d 113, 118 (4th Cir. 2000).

Even if the easily-overlooked typographical error would have rendered the warrant deficient, the warrant would nevertheless have been valid under the good-faith exception of United States v. Leon, 468 U.S. 897, 913 (1984).

Securities

Statutory and constitutional standing

BOTTOM LINE: Cashed-out former employees who maintained accounts in [section]401(k) defined contribution retirement plans, and who, upon leaving their employment, obtained full distribution of the vested benefits, had statutory and constitutional standing to assert ERISA claims.

CASE: Wangberger v. Janus Capital Group, Inc., US4th Nos. 06- 2003, 06-2176, 06-2177 (decided June 16, 2008) (Judges NIEMEYER, Shedd & Brinkema (sitting by designation)).

COUNSEL: Samuel K. Rosen, Harwood & Feffer, LLP, New York, NY, for Appellants. Mark Andrew Perry, Gibson, Dunn & Crutcher, LLP, Washington, for Appellees.

FACTS: Former employees, each of whom purported to represent a class of others similarly situated, maintained accounts in [section]401(k) defined contribution retirement plans sponsored by their employers, and, upon leaving employment, voluntarily sought and obtained full distribution of the vested benefits in their respective accounts.

They commenced actions under under [section][section]502(a)(2) and 409(a) of ERISA, which permit a derivative action by a retirement plan participant on behalf of the plan, against the fiduciaries of their respective retirement plans (the fiduciaries), for breach of fiduciary duties to the plans based on the knowing investment in mutual funds that allowed investors to practice market timing, an abusive form of arbitrage activity that favored the market timers and harmed long-term investors in the funds, such as the employees.

The fiduciaries filed motions to dismiss the employees' claims, challenging their standing to assert the claims under both ERISA and Article III of the Constitution. The district court granted their motions, finding that the employees did not fall within the class of individuals authorized to sue under ERISA [section]502(a)(2) because, having cashed-out of the plans, they were no longer seeking "benefits," as required to have statutory authority to sue, but rather money damages.

The employees appealed to the 4th Circuit, which reversed and remanded.

LAW: ERISA [section]502(a)(2) provides that "a participant" may bring a civil action against fiduciaries for breaches of their duties as articulated in ERISA [section]409(a). See 29 U.S.C. [section]1132(a)(2). Section 409(a) provides that any person who is a fiduciary with respect to a plan who breaches any of the responsibilities, obligations, or duties imposed upon fiduciaries "shall be personally liable to make good to such plan any losses to the plan resulting from each such breach, and to restore to such plan any profits of such fiduciary which have been made through use of assets of the plan by the fiduciary, and shall be subject to such other equitable or remedial relief as the court may deem appropriate, including removal of such fiduciary." 29 U.S.C. [section]1109(a).