CGC Holding Company, LLC v Broad and Cassel

GHC sued several entities and Broad a law firm that represented some of those entities under RICO in a class action alleging fraud through taking advance fees with loan applications with the intent of never lending money. The district court certified the class and the panel affirmed. It held that because the entities were headed by a man with multiple convictions for similar kinds of fraud and a fair inference can be made that no rational actor would have made the application or given the fees if it knew of the entities intent to never loan money, the commonality requirement is met and, given the other criteria were met, certification was proper. The panel rejected the district court’s reliance on the fraud on the market theory as this case does not involve securities fraud with publicly traded corporations and the theory is not appropriate in RICO actions given the need for proximate causation proof. The panel declined to rule on whether RICO applies to the entities here which are Canadian holding this is merits question and thus review is not available at this stage of the litigation. Noting that GHC confessed lack of jurisdictional as to broad, those claims were dismissed without prejudice.

United States v Sabillon-Umana

At sentencing, the district court decided on a sentence and asked for a presentence guidelines calculation to support that sentence and accepted an incorrect view of its power to depart downward. The panel reversed and remanded for resentencing. It held that federals sentencing procedure is for fact-finding, consultation of guidelines and then sentencing. Here, the process was inverted (and a mathematical error was committed) and thus the sentence cannot be affirmed. As to the limitation on power issue, the panel held that under plain error review, relief was warranted here as there is significant possibility that Sabillon-Umana could receive several years less than at his initial sentencing and thus relief was appropriate.

United States v Brinson

Brinson appealed his convictions on multiple counts arising from operating an underage prostitution ring. The panel affirmed. It rejected his evidentiary arguments holding expert testimony was appropriate as underage prostitution rings use specialized jargon outside the knowledge of the average juror; the statements of an officer explaining why he was at a hotel room with the underage prostitute either were not hearsay as not offered for their truth or were not testimonial given the coconspirator did not intend her statements arranging the meeting to be used in court; that Brinson was connected sufficiently to the Facebook posts and text message to make them party opponent statements; that a document certifying debit card statements were not testimonial under circuit precedent; and that Brinson’s renting the room and being identified as the driver of an SUV in the parking lot during the encounter were sufficient to create probable cause and thus the motion to suppress was correctly denied. It also held that evidence Brinson brought eh underage girl to the hotel, accepted payment from another man for sex with the underage girl, used the Internet to recruit prostitutes and solicit clients and instructing a witness to ignore a subpoena combined to support all the convictions.