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Opinions: 4th U.S. Circuit Court of Appeals – 6/13/11

Civil Procedure


BOTTOM LINE: Action brought by West Virginia Attorney General pursuant to consumer protection statutes, alleging that defendant pharmacy allegedly overcharged consumers for generic drugs, was not a “class action” subject to removal under the Class Action Fairness Act.

CASE: West Virginia ex rel. McGraw v. CVS Pharmacy, Incorporated, No. 11-1251 (decided May 20, 2011) (Judges NIEMEYER, Davis & Gilman). RecordFax No. 11-0520-60, 27 pages.

FACTS: The State of West Virginia, by its Attorney General, commenced an action in state court against CVS Pharmacy, Inc., and five other pharmacies, alleging that the defendants sold generic drugs to West Virginia consumers without passing along to the consumers the cost savings of generic drugs over brand name equivalents, in violation of two West Virginia laws, West Virginia Code §30–5–12b (the Pharmacy Act) and West Virginia Code §§46A–6–104 and 46A–7–111 (the West Virginia Consumer Credit and Protection Act or WVCCPA).

CVS removed the action from state court to the district court under the Class Action Fairness Act of 2005 (CAFA), arguing that the action was a disguised class action and was therefore subject to removal under CAFA.

On the State’s motion, the district court ordered that the action be remanded to state court, holding that the action was not a class action under CAFA, but rather a “classic parens patriae action” intended to vindicate the State’s quasi-sovereign interests and the individual interests of its citizens.

CVS appealed to the 4th Circuit, which affirmed the district court’s decision.

LAW: CAFA authorizes the removal of any civil action which is a class action satisfying certain requirements. CAFA defines “class action” to mean any civil action filed under Federal Rule of Civil Procedure 23 or similar State statute or rule of judicial procedure authorizing an action to be brought by or more representative persons as a class action. §1332(d)(1).

Here, West Virginia’s action would be removable only if it were filed under a “similar State statute or rule of judicial procedure” authorizing an action to be brought by one or more representative persons as a class action. 28 U.S.C. §1332(d)(1)(B).

A state statute or rule is “similar” to Federal Rule of Civil Procedure 23 if it closely resembles Rule 23 or is like Rule 23 in substance or in essentials. See Merriam–Webster’s Collegiate Dictionary, 1161 (11th ed.2007). Moreover, as CAFA requires, the state statute or rule must resemble or be like Rule 23 by “authorizing an action to be brought by 1 or more representative persons as a class action.” 28 U.S.C. §1332(d)(1)(B). Thus, Congress undoubtedly intended to define “class action” in terms of its similarity and close resemblance to Rule 23. At its essence, Rule 23 provides that “one or more members of a class may sue or be sued as representative parties on behalf of all members only if” the criteria for numerosity, commonality, typicality, and adequacy of representation are satisfied. Fed.R.Civ.P. 23(a).

In this case, the Attorney General filed a statutorily authorized action on the State’s behalf, asserting claims arising exclusively under state consumer protection statutes. The West Virginia statutes on which the Attorney General relied for his claims contained virtually none of the essential requirements for a Rule 23 class action. The Attorney General was not designated as a member of the class whose claim would be typical of the claims of class members, but instead was authorized to file suit independently of any consumer complaints, as the legal representative of the State. Moreover, neither the Pharmacy Act nor the WVCCPA contains any numerosity, commonality, or typicality requirements, all of which are essential to a class action. Finally, these Acts authorized the Attorney General to proceed without providing notice to overcharged consumers, which would also be essential in a Rule 23 class action seeking monetary damages. See Phillips Petroleum Co. v. Shutts, 472 U.S. 797, 812 (1985).

Thus, in representing the citizens, the State acted more in the capacity of trustee representing beneficiaries or a lawyer representing clients, neither of which is the type of representation essential to the representational aspect of a class action. Because the action was not brought under Federal Rule of Civil Procedure 23 or a similar State statute or rule of judicial procedure authorizing an action to be brought by one or more representative persons as a class action, the district court did not err in remanding the case to the circuit court.

Accordingly, the judgment of the district court was affirmed.

Criminal Procedure

Search & seizure

BOTTOM LINE: Where evidence offered in affidavit in support of search warrant was so deficient as to preclude reasonable belief in existence of probable cause, the good faith exception to the Fourth Amendment exclusionary rule did not apply.

CASE: United States v. Doyle, No. 09-4603 (decided May 23, 2011) (Judges Duncan, WYNN & Berger). RecordFax No. 11-0523-60, 26 pages.

FACTS: On Jan. 9, 2004, Captain Charles Scott of the Lee County, Virginia Sheriff’s Department executed a search warrant at the home of defendant Robert Doyle, Jr. Doyle’s computer was seized and a forensic examination of its hard drive revealed images of child pornography. A federal grand jury indicted Doyle on separate counts of receipt and possession of child pornography.

On Aug. 9, 2007, Doyle filed a motion to suppress the fruits of the search of his home. Doyle asserted that the search warrant was issued without probable cause. Specifically, Doyle argued that any information supporting a finding of probable cause was too “stale” to justify reliance thereon. On Sept. 9, 2007, Doyle filed a supplement to the motion, arguing that “an insufficient factual basis as to the underlying alleged criminal conduct and reliability of the informant(s) was set forth within the Affidavit or otherwise represented to the state Magistrate to support a finding of probable cause.”

After hearing testimony regarding the warrant application, the federal magistrate recommended granting Doyle’s motion to suppress. Notwithstanding the magistrate’s recommendation, on Jan. 2, 2008, the district court entered an order denying Doyle’s motion to suppress, on the basis that the officer conducting the search acted in objective good faith. The matter proceeded to trial, and Doyle was convicted on all five counts.

Doyle appealed to the 4th Circuit, which reversed the district court’s decision.

LAW: Ordinarily, when a search violates the Fourth Amendment, the fruits thereof are inadmissible under the exclusionary rule, a judicially created remedy designed to safeguard Fourth Amendment rights generally through its deterrent effect. See United States v. Calandra, 414 U.S. 338, 348 (1974). However, because this deterrence objective is not achieved through the suppression of evidence obtained by an officer acting with “objective good faith” within the scope of a search warrant issued by a magistrate, the Supreme Court has established a good faith exception to the exclusionary rule under which evidence obtained pursuant to a search warrant issued by a neutral magistrate need not be excluded if the officer’s reliance on the warrant was “objectively reasonable.” United States v. Perez, 393 F.3d 457, 461 (4th Cir.2004).

Usually, a warrant issued by a magistrate suffices to establish that a law enforcement officer has acted in good faith in conducting the search. remedy. United States v. Leon, 468 U.S. 897, 922–23 (1984). However, there are certain circumstances in which the Leon good faith exception will not apply, such as where the warrant is so facially deficient (i.e., in failing to particularize the place to be searched or the things to be seized) that the executing officers cannot reasonably presume it to be valid. United States v. DeQuasie, 373 F.3d 509, 519–20.

In this case, the application for a warrant to search Doyle’s private residence for evidence of child pornography failed to indicate that the pictures allegedly possessed by Doyle were in fact pornographic and provided no indication as to when the pictures were allegedly possessed. An objectively reasonable officer would not rely on a warrant application so devoid of necessary information.

Because reliance on the warrant was not objectively reasonable, the good faith exception recognized in Leon was inapplicable, and exclusion of the evidence obtained from the search was an appropriate remedy. Thus, the district court erred in denying Doyle’s motion to suppress.

Accordingly, the district court’s order denying the motion to suppress was reversed.