By Ashlyn Campbell and Clara Geoghegan
The 10th Circuit Court of Appeals returns for its first week of oral arguments in 2023.
From Jan. 17-20, the appeals court will hear 59 cases out of seven federal courts asking a range of questions.
Some of the highlights for the January docket include a case around compelled arbitration in Employee Retirement Income Security Act disputes, an attempt to revive a class action complaint against a poultry company that found itself embroiled in federal antitrust charges and an appeal that asks if the statute criminalizing reentry to the U.S. was passed with discriminatory intent.
Compelled Arbitration, Effective Vindication and ERISA
On Jan. 17, 10th Circuit Judges Robert Bacharach, Mary Briscoe and Michael Murphy will hear an appeal of a class action suit concerning alleged ERISA violations and breach of fiduciary duties related to the sale of Envision, a company that operates radiology and diagnostic centers in Colorado and three other states, to an employee stock ownership plan.
Harrison v. Envision Management Holding, Inc. Board of Directors, et al. was filed by Robert Harrison, a former employee of Envision, and alleges the top executives of Envision created ESOP — a retirement plan for Envision employees — for the purpose of purchasing all of their private Envision stock.
Harrison claimed the defendants picked the trustee, Argent Trust Company, so they could maintain control over the company rather than represent employees’ interests. Harrison claimed he and other employees participating in the ESOP weren’t given the chance to negotiate the price of the stock and only learned about the ESOP deal after it was completed. The lawsuit also alleges the defendants paid an inflated price for the stock under the ESOP. Harrison argued the defendants’ actions caused him and other ESOP participants to suffer significant losses to their retirement savings.
U.S. District Court Judge Regina Rodriguez with the U.S. District Court for the District of Colorado denied a motion from the defendants to compel arbitration. Her order applied the effective vindication exception and found the arbitration provision in the ESOP conflicts with ERISA.
Now on appeal to the 10th Circuit, the defendants say the lower court erred when it denied their motion to compel arbitration, arguing both ERISA and the Federal Arbitration Act require courts to enforce the applicable plan provision, which in this case would compel arbitration. The defendants are asking the 10th Circuit to reverse the lower court’s decision.
The case has drawn several amicus briefs, including from the U.S. Chamber of Commerce, supporting Envision, and from the U.S. Labor Secretary, supporting Harrison.
The U.S. Chamber of Commerce’s amicus brief asks the 10th Circuit to reverse the lower court’s decision, arguing the district court unnecessarily placed ERISA “on a collision course” with the FAA. The brief argues the district court’s decision, if it were to stand, would deprive businesses and claimants of the benefits of arbitration and would embolden employees to pursue wasteful and unnecessary class-action lawsuits. The ESOP Association also filed an amicus brief in favor of Envision.
The U.S. Labor Secretary, on the other hand, argues the district court correctly refused to compel arbitration because the agreement precluded Harrison from seeking the relief ERISA allows. Public Justice, a nonprofit legal advocacy organization, also filed an amicus brief in support of Harrison.
Chickens, Class Action and Conspiracy
Also on Jan. 17, 10th Circuit Judges Harris Hartz, David Ebel and Scott Matheson will hear arguments to revive a dismissed class-action case against Greeley-based poultry company Pilgrim’s Pride Corporation and several of its former executives.
The case, Hogan v. Pilgrim’s Pride, was filed by George Fuller and others in 2016 on behalf of a proposed class of investors.
The lawsuit alleged that for multiple years, Pilgrim’s Pride worked with others in the poultry industry to manipulate the market price of broiler chickens which resulted in inflated securities values. The suit claims the company published multiple statements attributing the successes to Pilgrim’s Pride’s business practices. Fuller claims that in 2016, following a class action lawsuit filed in Illinois and multiple news stories about alleged price-fixing in the industry, the stock values for Pilgrims Pride fell and left investors like him on the hook for losses. The suit raised claims under the Securities and Exchange Act and asked a Colorado federal court to certify a class of investors who bought stock in Pilgrim’s Pride between 2014 and 2016.
Federal Judge R. Brooke Jackson of the U.S. District Court for the District of Colorado dismissed the lawsuit in 2018 explaining the facts presented to him weren’t enough to support Fuller’s claims but that he might have a case if he could find more evidence.
The class action suit was re-filed in the summer of 2020 after the U.S. Department of Justice announced the first indictments in a large antitrust criminal case against poultry industry executives, including at Pilgrim’s Pride, which accused the company of collaborating to fix prices in the industry. Relying on the grand jury indictment as a new fact in the case, Fuller asserted many of the same claims from his 2016 lawsuit.
Jackson once again dismissed the lawsuit in April 2021, this time with prejudice, finding Fuller’s latest lawsuit was filed too late, more than five years after he initially purchased stock in 2015. Jackson denied a motion to alter the judgment several months later and rejected arguments that the period should be based on “continuing fraud” or the Rule 15(c) “relation back” exception.
Now on appeal to the 10th Circuit, Fuller argues the district court erred in dismissing both complaints and is asking the appeals court to reinstate his case.
Constitutionality of Illegal Reentry
A case out of the U.S. District Court for the Western District of Oklahoma asks the 10th Circuit to weigh in on the constitutionality of a common charge in immigration law — illegal reentry. The case, U.S. v. Amador-Bonilla, will be argued Jan. 20 in front of 10th Circuit Judges Nancy Moritz, Stephanie Seymour and Allison Eid.
Jose Amador-Bonilla and a long list of amicus organizations, including Colorado-based Rocky Mountain Immigrant Advocacy Network, are asking the federal appeals court to rule that Congress acted with racially discriminatory intent when it passed a portion of federal law that criminalizes reentry to the U.S. by someone who was previously removed for not having citizenship.
In 2021, a federal grand jury in Oklahoma indicted Amador-Bonilla on one count of “illegal reentry after removal from the United States.” Amador-Bonilla, who was born in Nicaragua and raised in Guatemala, came to the U.S. at age 15 for work, and prior to his most recent indictment, was convicted twice of illegal reentry and deported. When he was apprehended in Oklahoma, Amador-Bonilla was serving a 36-month supervised release sentence and prosecutors recommended he be placed in custody.
After the indictment, Amador-Bonilla asked the presiding court to dismiss the case. He asked the court to adopt a similar approach to a 2021 ruling by a federal judge based out of Nevada.
In her ruling in U.S. v. Carrillo-Lopez, Judge Miranda Du found the law criminalizing illegal reentry violated the equal protection clause. The ruling found that the law both disproportionately impacts Hispanic and Latino people and had discriminatory intent, citing historical evidence of eugenics and racist terms used in the 1952 Immigration and Nationality Act, which was also called the “Wetback Bill” at the time.
Amador-Bonilla presented similar evidence and argued the historic events that led to the passage of the 1929 Undesirable Aliens Act and testimony from lawmakers at the time showed Congress was racially biased in passing the law.
Federal Judge Robin Cauthron declined to dismiss the indictment. She agreed with prosecutors that the court should review the law under a rational basis and further found that even if it applied standards from the U.S. Supreme Court’s 1977 ruling in Village of Arlington Heights v. Metropolitan Housing Development Corp, which requires a law must have discriminatory intent as well as impact to violate the equal protection clause, Amador-Bonilla didn’t establish an equal protection violation since he didn’t show the 1952 law was passed with discriminatory intent.
Amador-Bonilla entered a guilty plea and appealed to the 10th Circuit.
On appeal, Amador-Bonilla argues that the lower court applied the wrong standard of review to his equal protection challenge. He argues the court shouldn’t have reduced the criminal statute to a pure “immigration matter” and instead should’ve applied the Arlington Heights analysis since he alleged racial discrimination to a criminal law, not just to an immigration policy.
The appeal also argues Amador-Bonilla presented enough evidence to support his claims that the 1952 law didn’t remove the discriminatory intent from the original 1929 law. Amador-Bonilla asks the 10th Circuit to reverse his convictions and sentences connected to illegal reentry.
More than 40 parties joined the case as amicus curiae including a number of legal scholars, immigration advocacy organizations, human rights organizations and public defender’s offices. The majority of amici are asking the 10th Circuit to rule in favor of Amador-Bonilla and declare illegal reentry an unconstitutional criminal charge.