Which Laws Apply to Broker-Dealers? Federal Laws? State Laws? Both? General Principles Leading to an Answer

TAMAR FRANKEL

BU Law emerita professor Tamar Frankel explains the law of preemption as it pertains to broker-dealers and their investor clients. She predicts, among other things, that either the clients will demand that broker-dealers adhere to a fiduciary duty, or else that states will impose that duty on them.

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Mensah v. Owners Insurance Co.

Docket: 18-2240

Opinion Date: March 5, 2020

Judge: Per Curiam

Areas of Law: Civil Procedure, Insurance Law

This case arose when plaintiff fell from the trunk of the car that her friend was driving and sustained serious injuries. In a related case, the district court held a bench trial to apportion the fault between the friends involved in the accident. In this case, plaintiff filed suit to recover the portion of the judgment allocated to one of the friends, seeking underinsured motorist benefits for the friend's portion of the judgment. The district court granted Owners' motion for summary judgment. The Eighth Circuit held that removal was not proper under diversity jurisdiction where the parties conceded that the amount in controversy was statutorily insufficient. The court also held that there was no supplemental jurisdiction because this case was a separate action and not another claim in an underlying action over which the federal courts have jurisdiction. Accordingly, the court vacated and remanded to the district court with instructions to remand the case to state court.

Nelson Auto Center, Inc. v. Multimedia Holdings Corp.

Docket: 18-3254

Opinion Date: March 5, 2020

Judge: James B. Loken

Areas of Law: Communications Law

Nelson Auto filed suit against KARE 11, alleging that the news provider published false and defamatory statements regarding a criminal complaint filed by the State of Minnesota in Otter Tail County District Court charging Gerald Worner, Nelson Auto's former Fleet Manager, with five counts of theft by swindle. The Eighth Circuit affirmed the district court's grant of KARE 11's motion to dismiss, holding that the district court did not err by concluding that Nelson Auto is a public figure as a matter of Minnesota law. The court agreed with the district court that, given the absence of facts from which actual malice might reasonably be inferred, the allegations show nothing more than oversight on KARE 11's part, which does not constitute actual malice.

United States v. Warren

Dockets: 18-2981, 18-3019

Opinion Date: March 5, 2020

Judge: Roger Leland Wollman

Areas of Law: Criminal Law

The Eighth Circuit affirmed Defendants Pugh and Warren's convictions for drug related crimes and affirmed Pugh's sentence. The court held that the informant's testimony, together with the government's other evidence, was sufficient to support Pugh's convictions; the district court did not abuse its discretion in denying Pugh's proposed jury instruction; there was no error in admitting under Federal Rule of Evidence 404(b), a certified copy of Pugh's 2010 information and guilty plea on the Illinois attempted robbery in order to show knowledge and intent; Pugh's Rehaif challenge failed, because sufficient evidence existed such that a reasonable jury could find that Pugh knew of his prohibited status, and because Pugh cannot show a reasonable probability of a different outcome absent the instructional error; and defendant's prior conviction in Illinois for attempted robbery qualifies as a crime of violence for purposes of USSG 2K2.1(a)(4)(a). In regard to Warren's challenges, the court held that the district court did not abuse its discretion by admitting evidence of two prior convictions to prove knowledge and intent, and Warren's Rehaif challenge failed for the same reasons as Pugh's Rehaif claim.

Uzodinma v. Barr

Docket: 18-3437

Opinion Date: March 5, 2020

Judge: William Duane Benton

Areas of Law: Immigration Law

The Eighth Circuit denied a petition for review challenging the BIA's decision reversing the IJ's ruling that petitioner merited asylum because he had a well-founded fear of future persecution in Nigeria for his political opinions. The court held that, despite the harmless error of substituting its own findings about communicating his political opinions, substantial evidence supported the BIA's determination that petitioner was ineligible for asylum, because he failed to show that he faced a particularized threat of persecution. Furthermore, the BIA did not exceed its authority by requiring corroborating evidence for petitioner to meet his burden of proof. The court also held that petitioner could not show that the outcome of proceedings would have differed with notice and opportunity, and thus he failed to demonstrate prejudice from any procedural error.

Hiltner v. Owners Insurance Co.

Docket: 18-2624

Opinion Date: March 5, 2020

Judge: Per Curiam

Areas of Law: Insurance Law

Plaintiff filed suit against Owners, which had issued an insurance plan to her father, for underinsured motorist benefits. On Owner's first appeal, the Eighth Circuit held that the district court improperly applied a heightened duty of care to the driver of the vehicle as the designated driver. On remand, the district court stated that it was not applying a heightened standard and did not alter the fault allocation. After careful review, the court was not satisfied that the order on remand eliminated the legal error that this court identified in the original conclusions of law. Therefore, the court vacated and remanded for new findings and conclusions on the allocation of fault. The district judge is no longer in service in the district court and thus the chief judge of the district court should reassign this case for further proceedings.