Horse-Racing Track Operators' Challenge to State Constitution, Plus ERISA & Privacy Act Claims

Beaven v. U.S. Dep't of Justice, 08-5297, involved a Federal Tort Claims Act and Privacy Act case brought by staff members at the Federal Bureau of Prisons (BOP) claiming that defendants allowed an employee roster containing plaintiffs' sensitive personal information to be disclosed to improper persons, including prison inmates and other BOP staff.

In affirming in part, the court held that the district court did not clearly err in finding that the agency's "inadvertent" final act was willful within the meaning of 5 U.S.C. section 522a(g)(4) because a court may consider the entire course of conduct that resulted in the Privacy Act violation in making its required finding under section 552a(g)(4).  Also, the district court did not abuse its discretion in imposing a non-rebuttable adverse evidentiary inference of disclosure as a sanction for the defendants' destruction of relevant evidence with the knowledge that the evidence would be necessary for known potential claims.  Further, the district court did not commit clear error in its alternative finding that the plaintiffs did prove disclosure by a preponderance of the evidence.  However, the court reversed in part as, although the district court was correct in finding that "future protective measures" damages are unavailable, but the district court erred in denying the plaintiffs' "lost time" damages on the ground that their failure to assert valid FTCA claims precluded them from recovering damages for their valid Privacy Act claims.

Brown v. Owens Corning Inv. Review Comm., 09-3692, involved former Owens Corning (OC) employees' class action lawsuit against the fiduciaries of their retirement plans pursuant to the Employee Retirement Income Security Act (ERISA), claiming that the fiduciaries failed to protect plan participants by not divesting the plans of the OC stock before the shares became virtually worthless when the company filed for bankruptcy.

In affirming the district court's holding that the plaintiffs' claims against the fiduciaries were time-barred, the court held that because the plaintiffs did not file their first complaint until September 2006, their claims against the OC defendants are time-barred as their knowledge, that they had been harmed because their investments in OC stocks had lost almost all value, and that someone was acting to manage those investments, was sufficient to trigger the three-year statute of limitations period.  Also, the district court did not err in denying plaintiffs' motion to amend because their allegations are not sufficient to invoke the fraud-or-concealment exceptions for ERISA's statute of limitations. Equitable tolling is not appropriate in this case as, one of the named plaintiffs in this action did not lack notice of her right to file suit under ERISA, and plaintiffs' claims against the trustee of the plan are barred by ERISA's three-year statute of limitations as they had actual knowledge of the relevant facts regarding the trustee's alleged breach by October 2003 but did not file suit until December 2006.

Northville Downs v. Granholm, 09-1370, concerned a challenge to the district court's grant of judgment on the pleadings to defendants In a 42 U.S.C. section 1983 suit brought by operators of horse-racing tracks, claiming that article IV, section 41 of the Michigan Constitution, as amended by voter referendum on gambling violates their federal constitutional rights under the First Amendment, Equal Protection Clause, and Commerce Clause.  In affirming the judgment, the court held that Proposal 1 is rationally related to Michigan's legitimate interests in regulating gambling and promoting economic revitalization.  Further, whatever burden Proposal 1 places on racetracks, it is not a burden on interstate commerce for Dormant Commerce Clause purposes, and Clover Leaf undermines plaintiffs' position in this case because Proposal 1 "evenhandedly" regulates Michigan's gaming market and the plaintiffs have not shown that in-state firms would gain from such regulation at the expense of out-of-state simulcast providers.

Related Resources:

• Full text of Beaven v. U.S. Dep't of Justice, 08-5297
• Full text of Brown v. Owens Corning Inv. Review Comm., 09-3692
• Full text of Northville Downs v. Granholm, 09-1370