Federal Law & Legal System – Page 127 – Marquette University Law School Faculty Blog

Eighth Circuit Reinstates ERISA Case Against Wal-Mart Involving Iqbal Plausibility Standard

Post author:Paul M. Secunda
Post published:November 30, 2009
Post category:Federal Civil Litigation Labor & Employment Law

A number of my ERISA friends have sent me the case of Braden v. Wal-Mart Stores, No. 08-3798 (8th Cir. Nov. 25, 2009). The case involves a class action dispute, alleging breach of fiduciary issues in the way that Wal-Mart managed its profit sharing and 401(k) retirement plans:

The gravamen of the complaint is that appellees failed adequately to evaluate the investment options included in the Plan. It alleges that the process by which the mutual funds were selected was tainted by appellees’ failure to consider trustee Merrill Lynch’s interest in including funds that shared their fees with the trustee. The result of these failures, according to Braden, is that some or all of the investment options included in the Plan charge excessive fees. He estimates that these fees have unnecessarily cost the Plan some $60 million over the past six years and will continue to waste approximately $20 million per year . . . .

Braden alleges extensive facts in support of these claims. He claims that Wal-
Mart’s retirement plan is relatively large and that plans of such size have substantial bargaining power in the highly competitive 401(k) marketplace. As a result, plans such as Wal-Mart’s can obtain institutional shares of mutual funds, which, Braden claims, are significantly cheaper than the retail shares generally offered to individual investors. Nonetheless, he alleges that the Plan only offers retail class shares to participants. Braden also avers that seven of the ten funds charge 12b-1 fees, which he alleges are used to benefit the fund companies but not Plan participants.

The case is significant because the Plan has over one million participants and nearly $10 billion in assets.

Seventh Circuit Criminal Case of the Week: More on Other Bad Acts Evidence

Post author:Michael M. O'Hear
Post published:November 27, 2009
Post category:Criminal Law & Process Evidence Federal Criminal Law & Process Seventh Circuit

seventh-circuit5 The Seventh Circuit had only one new opinion in a criminal case this week, and it is not one in which the court broke new legal ground. In United States v. Harris (No. 07-4017) (Williams, J.), the court affirmed the defendant’s convictions for drug trafficking and unlawful gun possession. The defendant raised various evidentiary objections on appeal, including a challenge to the use of other bad acts evidence against him. Specifically, the government introduced evidence of prior drug sales perpetrated by Harris in order to show that he intended to distribute the drugs he was charged with possessing.

Litigation over other bad acts seems a routine feature of appeals in drug-trafficking cases. As I suggested in this earlier post, it strikes me that the Seventh Circuit has pretty well interpreted the Rule 404(b) restrictions on evidence of other bad acts out of existence, at least in drug cases. Although not as broadly worded as some other opinions, nothing in Harris seems inconsistent with the view that drug defendants are unlikely to find success with their Rule 404(b) arguments on appeal.

Federalism and Criminal Law

Post author:Michael M. O'Hear
Post published:November 27, 2009
Post category:Criminal Law & Process Federal Sentencing Federalism U.S. Supreme Court

This is the fourth in a series of posts reviewing last term’s criminal cases in the United States Supreme Court and previewing the new term.

Habeas corpus presents the classic federalism problem in criminal law: how can federal courts overturn flawed state-court judgments while maintaining due respect for state sovereignty and the autonomy of state criminal-justice systems? But federalism issues can also appear in criminal cases that originate in federal court. In its new term, the Supreme Court has at least two such cases.

First, in United States v. Johnson, the Court will consider whether a battery conviction in Florida state court counts as a violent crime for purposes of the Armed Career Criminal Act, a federal sentencing statute. (I have posted several times about ACCA in the past year, most recently here.) Although “battery” normally evokes images of serious violent crime, Florida law defines battery so that it includes any nonconsensual touching, regardless of risk of injury. For that reason, the Florida Supreme Court has already ruled that battery is not a violent crime for state-law purposes. Thus, in Johnson, the United States Supreme Court is confronted with a question of whether it should defer to state-court characterizations of state crimes for purposes of implementing a federal statute.

Second, in United States v. Weyrauch, the Court must decide whether a state official can be convicted of honest-services fraud based on a conflict of interest that did not violate state law. (This is one of three new cases in which the Court will consider various dimensions of the federal crime of honest-services fraud.)