• CRIMINAL

USA v. William Gurka, US Court of Appeals For the First Circuit (Decided on 12.05.2010)

Withdrawal of guilt plea - Interpretation - "Possession in furtherance" of - Appellant admitted purchase of the guns for cocaine and cash - Pleaded guilty for six counts - Sixth Count charged him with knowing possession of a firearm in furtherance of a drug trafficking crime, in violation of 18 U.S.C. § 924(c)(1)(A) - Earlier SC had decided Watson v. United States holding that receiving a firearm in a trade for guns did not constitute "use" of the weapon within the ordinary meaning of the word, and so did not fall within that language of § 924(c)(1)(A) - Defendant moved to vacate his guilty plea as to Count Six urging Watson had a direct impact on the viability of the charge - District Court denied - Hence present Appeal - Whether defendant who exchanges drugs for guns "possesses" the guns "in furtherance" of a drug trafficking crime within the meaning of said section? - 18 U.S.C. § 924(c)(1)(A)

Held, as originally enacted, § 924(c)(1)(A) applied only to a defendant who "used or carried a firearm" "during and in relation to any... drug trafficking crime. Congress added the "possession in furtherance" prong to the text in 1998, shortly after the Supreme Court ruled that mere possession of a gun in the vicinity of a drug transaction did not constitute "use" under § 924(c)(1)(A), Had Congress intended possession alone to trigger liability under § 924(c)(1), it easily could have so provided.

The Court had earlier held that § 924(c)(1)(A)'s "use" provision applied to a defendant who bartered a firearm for drugs. (Smith v. United States). Watson clarified that the term "use" did not extend to the opposite situation, in which a defendant exchanged drugs for guns. Watson noted Congress's amendment to add the "possession in furtherance" prong of the statute, but explicitly did not address the amended statute's application to such exchanges.

For purposes of 18 U.S.C. § 924(c)(1)(A), "we have understood 'in furtherance of' to demand showing a sufficient nexus between the firearm and the drug crime such that the firearm advances or promotes the drug crime." On the facts to which Defendant pled guilty, there was an ample nexus between his possession of the Bryco semi-automatic pistol and the drug trafficking crime charged in Count Six. Appeal dismissed.

• INDIRECT TAX

Worldwide Equip., Inc. v. United States, U.S. 6th Circuit Court of Appeals (Decided on 17.05.2010)

Federal Retail Excise Tax - Special Design Test - Applicability of - Assessee, heavy truck dealer and authorized distributor served coal-mining industry - Required to collect FRET on sale of certain trucks - Filed suit for refund - In counterclaim by Government, excise taxes due were demanded along with summary judgment on matter - District Court decided in Defendant's favour - Hence present Appeal - Whether the District Court failed to properly apply the summary judgment standard? - Whether the court applied an incorrect legal standard when analyzing the "special design" test? - 26 U.S.C. § 4051; 26. C.F.R. § 48.4061

Held, summary judgment is properly granted "if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law. IRS tax-liability determinations are presumed correct, and the taxpayer must prove by a preponderance of the evidence that it is entitled to a tax refund.

The Court concluded that District Court erroneously considered evidence of presumed use instead of focusing on the objective design of the vehicle. The District Court noted the proper standard - an ex ante analysis that examines a vehicle's primary design, noting that the test for taxability under § 4061(a)(1) is primary design, not primary use, under both the old and new Treasury. However, after citing the proper standard, the court considered evidence of highway use and intended use. The Court's inquiry should have been limited to the pre-sale intent and objective design of the vehicle itself. In addition, the District Court credited only the Government's interpretation of the evidence. Rather than focusing on whether a question of material fact existed, the court improperly credited only IRS expert Pigman's affidavit. Thus taxes claimed to be due for the period from 1999 to early 2003 was vacated and remanded. Appeal by Assessee allowed.

• INTELLECTUAL PROPERTY RIGHTS

Anne Bryant, Ellen Bernfeld, Gloryvision, Ltd. v. Media Right Productions, Inc, US Court of Appeals

Copyright - Appellants filed a complaint against Appellees in the Southern District of New York, alleging direct and contributory copyright infringement, and seeking statutory damages. The Court finding the infringement willful awarded one statutory damage award for each album infringed instead of than one statutory damage award for each of the songs on the albums, the Court thus awarded a total of only $2400 in damages and also denied the attorneys fees. Whether the Court erred in refusing to grant a separate statutory damage and in determining the amount of damage?

Held, Copyright Act allows only one award of statutory damages for any "work" infringed,17 U.S.C. § 504(c)(1) states that "all the parts of a compilation... constitute one work ". The plain language of the Copyright Act limits the copyright holders' statutory damage award to one for each Album.