UNITED STATES v. CULBERTSON

UNITED STATES of America, Plaintiff–Appellee, v. Todd Mitchell CULBERTSON, Defendant–Appellant.

No. 11–10917.

-- March 22, 2013

Before STEWART, Chief Judge, and GARZA and ELROD, Circuit Judges.

James Wesley Hendrix, Assistant U.S. Attorney, U.S. Attorney's Office, Northern District of Texas, Dallas, TX, for Plaintiff–Appellee.Jerry Van Beard, Esq., Assistant Federal Public Defender, Federal Public Defender's Office, Northern District of Texas, Dallas, TX, Christopher Allen Curtis, Assistant Federal Public Defender, Federal Public Defender's Office, Northern District of Texas, Fort Worth, TX, for Defendant–Appellant.

Defendant–Appellant Todd Mitchell Culbertson (“Culbertson”) appeals his revocation sentence because he contends that the district court impermissibly based the length of the sentence on the court's perception of his rehabilitative needs, in violation of Tapia v. United States, ––– U.S. ––––, 131 S.Ct. 2382, 180 L.Ed.2d 357 (2011). The district court sentenced Culbertson to 30 months imprisonment, followed by 113 days in a residential reentry program, which was above his advisory guideline range of 5 to 11 months imprisonment. We conclude that the district court based Culbertson's sentence on its perception of the defendant's rehabilitative needs. We therefore VACATE the sentence and REMAND for resentencing.

I. FACTUAL AND PROCEDURAL BACKGROUND

In January 2001, Culbertson pled guilty to possession with intent to distribute methamphetamine. The district court sentenced him to 87 months of imprisonment, followed by 5 years of supervised release. After his release from prison, Culbertson violated his conditions of supervised release by using and possessing methamphetamine on six separate occasions, using and possessing marijuana, and failing to complete his 120–day residential reentry program by failing to report after 7 days. At the revocation hearing on September 22, 2011, the recommended guideline range of imprisonment was 5 to 11 months. Defense counsel argued for a within-guidelines sentence, emphasizing that Culbertson had struggled with a drug problem intermittently but had been relatively successful while on supervised release for several years, and that his failure to report timely to the residential reentry program was justified. He concluded by stating that he would “object to anything above the guideline sentence as substantively and procedurally reasonable.” The district court found Culbertson in violation of his supervised release and revoked same.

Prior to imposing the sentence, the district court noted, “The United States Sentencing Commission policy statements contained in Chapter 7 of the guidelines manual regarding supervised release violations have been duly considered.” The district court then sentenced Culbertson outside the guideline range to 30 months of imprisonment, followed by the remaining 113 days of the residential reentry program that the court previously imposed. The district court further ordered that, upon release from imprisonment, Culbertson was to serve 15 months of additional supervised release, with the same terms and conditions as his prior term of supervision. The district court also ordered that the sentence would run consecutively to any sentence imposed in Culbertson's pending state court case. The district court concluded imposition of the sentence by stating, “While under supervision, Mr. Culbertson committed the violations of using and possessing methamphetamine and marijuana and failing to complete 120 days at the Volunteers of America. A sentence of 30 months and 113 days will serve as punishment and deterrence from further criminal activity. I have now stated the sentence.”

The district court then solicited the parties' objections to the sentence. Defense counsel objected to the “substantive and procedural reasonableness of the sentence,” and to the sentence running consecutively to any sentence imposed in the state court case. The district court overruled both objections without further comment.

The district court then told Culbertson:

Now, Mr. Culbertson, I am not angry at you, and I'm not ordering this sentence because I want to be punitive or to hurt you. What I'm trying to do here is give you a period of time where you can, once again, get clean and sober and stay clean and sober and come out after you serve your sentence and stop using drugs and stay on your meds.

I can see you're an intelligent guy. You're competent and you're capable, but, apparently, you have to stay on your meds to do that, and I'm told that when you're out, you don't really stay on your meds, and that causes a cycle of problems. So I want you to work on that while you're in the [Bureau of Prisons (“BOP”) ].

Then, after discussing with Culbertson whether he might benefit from the BOP's 500–hour drug program, the district court said, “I want you to be provided with housing, and I want you to be taken care of while you get yourself together and prepare yourself for reentry into society, and I've put you on 15 more months of supervised release so we can help you do that.” The district court added as explanation, “And so that we can also monitor you, because if you're not going to stop using drugs and stop being a threat to society, we'll have to keep sending you back.”

Defense counsel then asked the court why it was imposing a sentence in excess of the guideline range:

[DEFENSE COUNSEL]: Is there a need to triple the guidelines, Your Honor? I'm not being disrespectful to Your Honor. I'm just asking why so much time?

THE COURT: Because I think you need that time to get yourself stabilized. I think if we gave you within the guidelines, you would be there and then quickly out and be right back here.

Culbertson timely filed a notice of appeal.

II. DISCUSSION

A. Tapia v. United States

In Tapia v. United States, a unanimous Supreme Court held that a district court “may not impose or lengthen a prison sentence to enable an offender to complete a treatment program or otherwise to promote rehabilitation.” ––– U.S. ––––, ––––, 131 S.Ct. 2382, 2393, 180 L.Ed.2d 357 (2011). In so holding, the Court noted that 18 U.S.C. § 3582(a) “precludes sentencing courts from imposing or lengthening a prison term to promote an offender's rehabilitation.” Id. at 2391 (citing 18 U .S.C. § 3582(a)). The Court relied on the plain language of 18 U.S.C. § 3582(a), which provides that, when a sentencing court is determining whether to impose a term of imprisonment and the length of that term, it “shall consider the factors set forth in [18 U.S.C .] section 3553(a)1 to the extent that they are applicable, recognizing that imprisonment is not an appropriate means of promoting correction and rehabilitation.” 18 U.S.C. § 3582(a) (emphasis added). Interpreting this statutory language, the Court reasoned, “what Congress said was that when sentencing an offender to prison, the court shall consider all the purposes of punishment except rehabilitation—because imprisonment is not an appropriate means of pursuing that goal.” Tapia, 131 S.Ct. at 2389.

On the other hand, Tapia also stated that “[a] court commits no error by discussing the opportunities for rehabilitation within prison or the benefits of specific treatment or training programs.” Id. at 2392. “To the contrary, a court properly may address a person who is about to begin a prison term about these important matters” and “may urge the BOP to place an offender in a prison treatment program.” Id. Thus, Tapia recognized a distinction between imposing or lengthening a prison sentence based on rehabilitative needs and merely discussing opportunities for rehabilitation while in prison.

During the initial sentencing in Tapia, the district court stated, “The sentence has to be sufficient to provide needed correctional treatment, and here I think the needed correctional treatment is the 500 Hour Drug Program.” Id. at 2385, 2392. The district court again stated that the “ ‘number one’ thing ‘is the need to provide treatment. In other words, so [the defendant] is in long enough to get the 500 Hour Drug Program.’ “ Id. at 2392–93. The Supreme Court concluded: “These statements suggest that the [district] court may have calculated the length of Tapia's sentence to ensure that she receive certain rehabilitative services. And that a sentencing court may not do.” Id. at 2393. Importantly, Justice Sotomayor's concurring opinion in Tapia discussed at length the fact that the sentencing judge carefully weighed all of the § 3553(a) factors, not just the defendant's need for rehabilitation.2 Id. (Sotomayor, J., concurring).

On this record, the Supreme Court vacated and remanded the matter to the Ninth Circuit, holding that the district court may have lengthened the defendant's sentence impermissibly in order to make her eligible for the BOP's 500–hour drug treatment program.3 Tapia, 131 S.Ct. at 2392–93.

B. Post-Tapia

We have applied the Tapia rule to vacate initial sentences post-conviction where the district court explicitly relied on the defendant's need for rehabilitation in imposing or lengthening a sentence. See, e.g., United States v. Broussard, 669 F.3d 537, 555 (5th Cir.2012); United States v. Escalante–Reyes, 689 F.3d 415, 423–24 (5th Cir.2012) (en banc). Until our recent decision in United States v. Garza, however, it was an open question in this circuit whether Tapia applied to terms of imprisonment imposed upon the revocation of supervised release, as opposed to the original sentencing.4 See United States v. Garza, 706 F.3d 655, 657–59 (5th Cir.2013). In Garza, we held that “a sentencing court may not consider rehabilitative needs in imposing or lengthening any term of imprisonment,” including for revocations of supervised release. Id. at 659 (emphasis added). In so holding, we “join[ed] the uniform post-Tapia case law in our sister circuits,” including the First, Fourth, Eighth, Ninth, and Tenth Circuits.5 See id. at 657 & n. 5 (citations omitted).

Garza clarified that, while 18 U.S.C. § 3582(a) proscribes the consideration of a defendant's rehabilitative needs when imposing a sentence, “this does not mean · that a district court may make no reference to the rehabilitative opportunities available to a defendant.” Id. at 659 (citing Tapia, 131 S.Ct. at 2392 (stating that “[a] court commits no error by discussing the opportunities for rehabilitation within prison or the benefits of specific treatment or training programs”)). Garza noted that “[a] district court also may legitimately ‘urge the [Bureau of Prisons] to place an offender in a prison treatment program.’ “ Id. (second alteration in original) (quoting Tapia, 131 S.Ct. at 2392). “However, when the district court's concern for rehabilitative needs goes further—when the sentencing record discloses ‘that the court may have calculated the length of [the defendant's] sentence to ensure that she receive certain rehabilitative services'— § 3582(a) has been violated.” Id. at 659–60 (quoting Tapia, 131 S.Ct. at 2393). Garza further observed that “[o]ur limited precedent post-Tapia has described the distinction between legitimate commentary and inappropriate consideration as whether rehabilitation is a “secondary concern” or “additional justification” (permissible) as opposed to a “dominant factor” (impermissible) informing the district court's decision.” Id. at 660 (citing United States v. Receskey, 699 F.3d 807, 810, 812 (5th Cir.2012) (finding no Tapia error where the district court discussed the potential rehabilitation services available only after discussing its unrelated reasons for selecting the length of the defendant's sentence); Broussard, 669 F.3d at 545, 551–52 (finding Tapia error where the district court described the defendant as “need[ing] help badly” and “sick in the head,” and it emphasized “the need to incarcerate [the defendant] for the treatment that he needs”)).

The district court in Garza imposed a sentence of 24 months' imprisonment, where Garza's advisory guideline range was 3 to 9 months. Id. at 660–62. We concluded that the district court impermissibly relied on the defendant's rehabilitative needs, based on its statements that Garza “ ‘should be required [or] at least be given an opportunity to participate in that residential institution drug treatment program’ in order to ‘get [Garza] straightened out.’ “6 Id. at 660–61 (alterations in original). The district court stated that it would not give Garza enough time for a long term program “because I don't think he really needs that again. I think some of these shorter term programs ought to be enough for him· I'm hoping a 24 month term of imprisonment followed by a 24 month term of supervised release will be enough.” Id. at 661–62. Accordingly, we concluded that, although the court might have been inclined to impose some upward departure in light of Garza's conduct, “Garza's rehabilitative needs were the dominant factor in the court's mind.” Id. at 662. We therefore vacated the sentence and remanded for resentencing. Id. at 663.

C. Application of Tapia to Culbertson's Case

The Government argues that the district court did not violate Tapia because the court did not lengthen Culbertson's sentence based on rehabilitative needs. We disagree.

The district court expressly stated its reason for giving Culbertson three times the guidelines range:

[DEFENSE COUNSEL]: Is there a need to triple the guidelines, Your Honor? I'm not being disrespectful to Your Honor. I'm just asking why so much time?

THE COURT: Because I think you need that time to get yourself stabilized. I think if we gave you within the guidelines, you would be there and then quickly out and be right back here.

Additionally, the district court explained on several occasions that its purpose in imposing the sentence was to provide Culbertson with enough time for rehabilitation. After the district court imposed its sentence and defense counsel objected, the court stated, “I'm not ordering this sentence because I want to be punitive or to hurt you.” Rather, the district court stated, “What I'm trying to do here is give you a period of time where you can, once again, get clean and sober and stay clean and sober and come out after you serve your sentence and stop using drugs and stay on your meds.” While the district court expressly referenced the policy statements in Chapter Seven of the Sentencing Guidelines and stated that it was imposing a sentence “as punishment and deterrence from further criminal activity,”7 its other statements on the record evidence that a “dominant factor” in imposing the sentence was Culbertson's need for rehabilitation. See Garza, 706 F.3d at 662 (determining that “Garza's rehabilitative needs were the dominant factor in the court's mind”); cf. Receskey, 699 F.3d at 811 (concluding that the district court's “concern over rehabilitation may have been an ‘additional justification,’ but it was not a ‘dominant’ factor in the court's analysis”).

In these ways, this case is similar to Broussard, where we concluded that the district court erred in determining the defendant's sentence by relying on his need for treatment to address his sexual fantasies involving minors and his inclinations to engage in such sexual conduct. See Broussard, 669 F.3d at 552. Notably, the district court addressed all of the 18 U.S.C. § 3553(a) factors, but it also specifically made statements that Broussard “is sick in the head,” “needs help badly,” and “is in need of education pertaining to his problems and he needs medical care and treatment.” Id. at 544–45, 552. We held that the district court committed Tapia error in spite of the district court's consideration of the § 3553(a) factors:

We do not dispute that the district court considered other permissible factors in explaining its chosen sentence for Broussard; however, it is also quite apparent from the transcript of the sentencing that the district court imposed a sentence—a three hundred percent increase over the guidelines range—based on the court's belief that Broussard was “sick in the head” and in need of treatment.

Broussard, 669 F.3d at 555.

Accordingly, we reject the Government's argument that the district court here did not lengthen Culbertson's sentence based on his rehabilitative needs because it also referenced its reasons as “deterrence,” “punishment,” and the need to prevent Culbertson from being a “threat to society.” Justice Sotomayor's concurring opinion in Tapia further supports this conclusion: it demonstrates that the district court, tracking the § 3553(a) statutory factors, provided multiple reasons for Tapia's sentence, and the Supreme Court still vacated the sentence because the district court may have relied on the defendant's rehabilitative needs.8 Tapia, 131 S.Ct. at 2393. Evidently, in both Broussard and Tapia, the sentencing courts expressly considered the § 3553(a) factors at much greater length than the sentencing court here, but both we and the Supreme Court vacated the sentences and remanded for resentencing nonetheless. Again, when defense counsel specifically asked the district court why it was exceeding Culbertson's guideline range threefold, the court made its reasoning clear: “I think you need that time to get yourself stabilized.” Accordingly, the district court's words are the best evidence of why it did what it did, and they overshadow its passing reference to deterrence, punishment, and the threat Culbertson posed to society.

We also reject the Government's suggestion that a district court impermissibly relies on rehabilitative needs only when the court refers to a specific treatment program as its reason for the length of the sentence. While several cases, including Tapia, have involved a district court imposing a sentence of a specific length in part to make the defendant eligible for a certain program, we do not read Tapia as requiring this element. To the contrary, Tapia clearly held that a district court “may not impose or lengthen a prison sentence to enable an offender to complete a treatment program or otherwise to promote rehabilitation.” Tapia, 131 S.Ct. at 2393 (emphasis added). Thus, it is clear to us that the Tapia rule contemplates methods that “otherwise · promote rehabilitation” beyond facilitating eligibility for a specific treatment program. See id.

D. Plain–Error Review

Having concluded that the district court erred, we must determine whether that error is reversible. We agree with the Government that defense counsel's objection for “substantive and procedural unreasonableness” before the district court was ineffective to preserve the error alleged here. Thus, we review for plain error. Broussard, 669 F.3d at 553.

To demonstrate reversible plain error, Culbertson must show “(1) error (2) that is plain and (3) that affects his substantial rights.” Id. (citation omitted). “To be ‘plain,’ legal error must be ‘clear or obvious, rather than subject to reasonable dispute .’ “ Id. (citations omitted). “To affect the defendant's substantial rights, the defendant must demonstrate that the error affected the outcome of the district court proceedings.” Id. (citations omitted). Finally, under the fourth prong of plain-error review, “[w]e will exercise our discretion to correct plain error if it seriously affected the fairness, integrity, or public reputation of the judicial proceeding.” Id. (citation omitted). As we already have determined that the district court erred, we focus our analysis on the second, third, and fourth prongs.

As to the second prong, we conclude that the error was plain in light of our recent decision in Garza. See Escalante–Reyes, 689 F.3d at 423 (holding that, “where the law is unsettled at the time of trial but settled by the time of appeal, the ‘plainness' of the error should be judged by the law at the time of appeal”).

In the sentencing context, the third prong requires that the defendant demonstrate a “reasonable probability” that, but for the district court's error, he would have received a lesser sentence. United States v. Dickson, 632 F.3d 186, 191 (5th Cir.2011) (citation omitted). Here, the error clearly affected Culbertson's substantial rights, as the district court's emphasis on his rehabilitative needs affected the outcome of the sentencing. The district court gave Culbertson a sentence that was three times his guideline range and repeatedly referred to Culbertson's need for rehabilitation, including after defense counsel specifically questioned why the sentence exceeded the guideline range three-fold. These facts are similar to those in Escalante–Reyes, where, in response to the defense counsel's objection to the length of the sentence, “the district court mentioned only two things: Escalante–Reyes's quick return to the United States and that ‘[h]e has a problem with his anger management. He has things that need to be addressed.’ “ Escalante–Reyes, 689 F.3d at 423. Therefore, Culbertson's need for rehabilitation was “such a central part of the district court's explanation of [Culbertson's] sentence that ‘we cannot confidently say that the district court would have imposed the same sentence’ without it.” Id. at 424 (citation omitted).

As to the fourth prong, we recognized in Escalante–Reyes that we respect the sentencing court's discretion in making sentencing decisions, and “we do not view the fourth prong as automatic if the other three prongs are met.” Id. at 425. Further, the Supreme Court's recent decision in Henderson v. United States provides additional guidance for assessing claims of error under plain-error review. ––– U.S. ––––, –––– – ––––, 133 S.Ct. 1121, 1130–31, –––L.Ed.2d ––––, –––– – –––– (2013) (holding that the plainness of plain error is to be judged by the law at the time of appellate consideration, rather than at the time of trial). On appeal, the Government had expressed a concern about an expansive plain-error rule that would permit “too many claims of plain error,” and the Henderson Court emphasized the inherent “screening criteria” contained within the plain-error rule which helps to avoid any “ ‘plain error’ floodgates.” See id. at 1130. The Court noted that, when lower courts of appeals apply the other prongs of plain error—requiring the impairment of substantial rights and error that seriously affected the fairness, integrity, or public reputation of the judicial proceedings—the fact that a defendant failed to object “may well count against” the grant of relief under plain-error review. Id.

With these advisories in mind, we nonetheless conclude that the error in the instant case warrants reversal. For one, while we conclude that Culbertson's objection was insufficient to preserve the specific error alleged on appeal, he did object to a sentence three times higher than his guideline range. Moreover, this court already held in Escalante–Reyes that the plainness of any error should be judged by the time of appeal; thus, the Henderson decision only reifies, rather than supplants, our precedents. See Escalante–Reyes, 689 F.3d at 422–23. Accordingly, as in Escalante–Reyes, we are not satisfied here that there is other record evidence showing that Culbertson's sentence is “fair,” or that the “integrity or public reputation” of the judicial proceeding was protected despite the district court's erroneous consideration of Culbertson's need for rehabilitation in determining the length of his sentence. See id. at 425. Based on the sentencing record as a whole, we conclude that the district court's repeated emphasis on Culbertson's need for prison time “to get clean and sober” and “to get [himself] stabilized” affected the “fairness, integrity, or public reputation” of the sentencing proceeding. See id. at 425–26. Moreover, unlike Escalante–Reyes, who received a below-guidelines sentence and we nevertheless reversed his sentence, here, Culbertson's sentence was three times in excess of his advisory range. See id. at 425 (“While the district court gave a slightly-below Guidelines sentence, the circumstances show a probability that the court's mercy was, as Escalante–Reyes noted, “tempered” by the desire to have him receive anger management training.”). We therefore conclude that we should exercise our discretion to recognize this error. See id. at 426; Garza, 706 F.3d at 663 (reversing and remanding for resentencing after determining that the district court committed plain error under Tapia ).

III. CONCLUSION

Accordingly, the sentence is VACATED, and this matter is REMANDED to the district court for resentencing in a manner not inconsistent with this opinion.

FOOTNOTES

1.  These “ § 3553(a) factors” include:(1) the nature and circumstances of the offense and the history and characteristics of the defendant;(2) the need for the sentence imposed—(A) to reflect the seriousness of the offense, to promote respect for the law, and to provide just punishment for the offense;(B) to afford adequate deterrence to criminal conduct;(C) to protect the public from further crimes of the defendant; and(D) to provide the defendant with needed educational or vocational training, medical care, or other correctional treatment in the most effective manner;(3) the kinds of sentences available;(4) the kinds of sentence and the sentencing range established ·(5) any pertinent policy statement [of the U.S. Sentencing Commission] ·(6) the need to avoid unwarranted sentence disparities among defendants with similar records who have been found guilty of similar conduct; and(7) the need to provide restitution to any victims of the offense.18 U.S.C. § 3553(a).

2.  For example, Justice Sotomayor highlighted that the sentencing judge considered, inter alia:“[t]he nature and circumstances of the offense” · emphasiz[ing] that Tapia's criminal conduct “created a substantial risk of death or serious bodily injury” to the smuggled aliens· He noted his particular concern about Tapia's criminal conduct while released on bail, when she failed to appear and was found in an apartment with methamphetamine, a sawed-off shotgun, and stolen mail[.]Tapia, 131 S.Ct. at 2393 (Sotomayor, J., concurring) (internal citations omitted).

3.  The Court left “it to the Court of Appeals to consider the effect of Tapia's failure to object to the sentence when imposed.” Id. at 2393.

4.  Although we held in United States v. Breland that, despite Tapia, a district court could use rehabilitation concerns to determine a revocation sentence, the Supreme Court vacated and remanded that decision for resentencing. See United States v. Breland, 647 F.3d 284, 290 (5th Cir.2011) (“Breland I ”), vacated by Breland v. United States, –––U.S. ––––, 132 S.Ct. 1096, 181 L.Ed.2d 973 (2012). The Supreme Court vacated Breland I in light of the Solicitor General's brief, which acknowledged the Government's change of position agreeing with the defendant that Tapia applies in the revocation context. Breland, 132 S.Ct. at 1096. On remand, we noted that the Government agreed with the First and Ninth Circuits that district courts may not lengthen a revocation sentence based on rehabilitative needs. United States v. Breland, 463 F. App'x 376, 376–77 (5th Cir.2012) (per curiam) (unpublished) (“Breland II ”) (citing United States v. Molignaro, 649 F.3d 1, 5 (1st Cir.2011) (Souter, J. (ret.), sitting by desig.); United States v. Grant, 664 F.3d 276, 282 (9th Cir.2011)). Thus, we remanded to the district court for resentencing. Id. at 377.

5.  See Molignaro, 649 F.3d at 5; United States v. Bennett, 698 F.3d 194, 197 (4th Cir.2012); United States v. Taylor, 679 F.3d 1005, 1006 (8th Cir.2012); Grant, 664 F.3d at 282; United States v. Mendiola, 696 F.3d 1033, 1042 (10th Cir.2012).

6.  In a dissenting opinion, Judge Haynes agreed with the panel majority that Tapia applied to revocation sentences, but she disagreed with the conclusion that the district court in Garza committed Tapia error. See Garza, 706 F.3d at 663–64 (Haynes, J., dissenting).

7.  We also note that the district court may have relied on “punishment” improperly as a justification for the sentence in this case. See United States v. Miller, 634 F.3d 841, 843–44 (5th Cir.2011), cert. denied, ––– U.S. ––––, 132 S.Ct. 496, 181 L.Ed.2d 345 (2011) (holding that it is improper for a district court to rely on, inter alia, the need “to provide just punishment for the offense” in determining a revocation sentence where the relevant statute, 18 U.S .C. § 3583(e), omits this consideration). While Culbertson raises this issue in passing in his opening brief, he did not object to any potential error on this ground before the district court. Under plain-error review, we conclude that, while the district court plainly erred, this error did not affect Culbertson's substantial rights. See Broussard, 669 F.3d at 555 (noting that, to demonstrate reversible plain error, the defendant must show “(1) error (2) that is plain and (3) that affects his substantial rights”) (citations omitted). “To be ‘plain,’ legal error must be ‘clear or obvious, rather than subject to reasonable dispute.’ “ Id. (citations omitted). “To affect the defendant's substantial rights, the defendant must demonstrate that the error affected the outcome of the district court proceedings.” Id. (citations omitted). Here, the error was plain, given our Miller decision. See Miller, 634 F.3d at 843–44. However, the sentencing court only made passing reference to the need for “punishment” in sentencing Culbertson. Thus, we conclude that the court's mere mention of this impermissible factor did not affect Culbertson's substantial rights because the factor did not impact the district court proceedings.

8.  By contrast, Justice Sotomayor, who was joined by Justice Alito, expressed skepticism over the Court's finding that the district court may have lengthened the defendant's sentence based on the defendant's rehabilitative needs. Tapia, 131 S.Ct. at 2394. However, she concluded, “I cannot be certain that [the sentencing judge] did not lengthen Tapia's sentence to promote rehabilitation in violation of § 3582(a). I therefore agree with the Court's disposition of this case [vacating the sentence and remanding for resentencing] and join the Court's opinion in full.” Id. (emphasis added).

CARL E. STEWART, Chief Judge:

View the original article here

UNITED STATES v. JENKINS

UNITED STATES of America, Plaintiff–Appellee v. Erik D. JENKINS, a/k/a Erik Jenkins, Defendant–Appellant.

No. 11–51277.

-- March 20, 2013

Before KING, SOUTHWICK, and GRAVES, Circuit Judges.

Joseph H. Gay, Jr., Assistant U.S. Attorney, U.S. Attorney's Office, San Antonio, TX, for Plaintiff–Appellee.Judy Fulmer Madewell, Assistant Federal Public Defender, Donnat F. Coltharp, Assistant Federal Public Defender, Federal Public Defender's Office, San Antonio, TX, for Defendant–Appellant.

Defendant–Appellant Erik D. Jenkins (“Jenkins”) appeals his conviction and sentence for various offenses concerning child pornography. Jenkins argues that the district court erred in applying a two-level sentence enhancement pursuant to U.S.S.G. § 3A1 .1(b)(1). Jenkins also argues that his sentence of twenty years imprisonment is substantively unreasonable. For the following reasons, we AFFIRM the judgment of the district court.

BACKGROUND

Jenkins was charged with one count of receiving child pornography in violation of 18 U.S.C. § 2252(a)(2); two counts of distributing child pornography in violation of 18 U.S.C. § 2252(a)(2); two counts of possessing child pornography in violation of 18 U.S.C. § 2252(a)(4)(B); one count of receiving obscene material depicting sexual abuse of a child in violation of 18 U.S.C. § 1466A(a)(1); and one count of possessing obscene material depicting sexual abuse of a child in violation of 18 U.S.C. § 1466A(b)(1). These charges arose from Jenkins' use of his personal computer to upload and download images and videos through an internet peer-to-peer file sharing program. Jenkins pleaded guilty to all counts without the benefit of a plea agreement.

The presentence report (“PSR”) stated that thirty-six image files and 110 video files depicting child sexual exploitation were found on Jenkins' computer. The PSR described the images and videos as follows:

The images and videos were of prepubescent children, a majority between the ages of 7 and 10 and a small number of them were infants/toddlers. The images and videos reflected the penetration of an adult penis into a child's vagina or anus, which would cause considerable amount of pain and physical damage. A few of the children's vaginas were red, swollen, and obviously irritated. In a small number of images the children were bound, their hands and feet tied together or to a bed or a chair with their legs apart exposing their genitalia.

The PSR recommended a two-level specific offense enhancement pursuant to U.S.S.G. § 2G2.2(b)(2), which applies “[i]f the material involved a prepubescent minor or a minor who had not attained the age of 12 years.” The PSR noted that numerous videos and images downloaded and distributed by Jenkins depicted prepubescent minors or minors under the age of twelve. The PSR also recommended a four-level specific offense enhancement pursuant to U.S.S.G. § 2G2.2(b)(4), which applies “[i]f the offense involved material that portrays sadistic or masochistic conduct or other depictions of violence.” The PSR found this enhancement to be applicable because the majority of the videos and images found on Jenkins' computer “portrayed an erect, adult male penis penetrating the vagina or anus of a prepubescent child[,] inflicting pain on the child.” The PSR also recommended a two-level victim-related enhancement pursuant to U.S.S.G. § 3A1.1(b)(1), which applies “[i]f the defendant knew or should have known that a victim of the offense was a vulnerable victim.” The PSR noted that the children depicted in the videos and images “rang[ed] from being toddlers to early teenagers,” and explained that “several · images depict sexual abuse and exploitation of young and small children who are unable to resist or object to the abuse or exploit [sic], making them susceptible to abuse and exploitation and thus, vulnerable victims.” The PSR also recommended a two-level enhancement for distribution, a two-level enhancement for use of a computer, and a five-level enhancement because the offense involved more than 600 images.1 See U.S.S.G. §§ 2G2.2(b)(3)(F), 2G2.2(b)(6) & 2G2.2(b)(7)(D).

Jenkins objected to the section 3A1.1(b)(1) “vulnerable victim” enhancement. Jenkins argued that because any child pornography offense would seemingly involve a “vulnerable victim,” this factor is adequately addressed by the specific offense guideline. More specifically, Jenkins argued that the vulnerability of the victims in this case was accounted for by the “prepubescent minor” and “depictions of violence” enhancements. The government argued that the enhancements account for distinct harms, and maintained that this court had explicitly rejected a similar argument in the past. The district court “agree[d] with the Government based on Fifth Circuit precedent” and overruled Jenkins' objection.

Based on Jenkins' total offense level of 36 and criminal history category of IV, the Guidelines range of imprisonment was 262 to 327 months. However, because this range was above the statutory maximum of twenty years imprisonment, the statutory maximum sentence became the advisory Guidelines sentence. See U.S.S.G. § 5G1.1(a). Jenkins moved for a below-Guidelines sentence, arguing that the advisory Guidelines sentence was excessive for several reasons. The government moved for an above-Guidelines sentence of thirty years imprisonment,2 arguing that the advisory Guidelines sentence was inadequate for several reasons. The district court rejected both motions and sentenced Jenkins to 240 months imprisonment. Jenkins timely appealed.

DISCUSSION

I. Sentence Enhancement

On appeal, Jenkins argues that the district court erred in applying the section 3A1.1(b)(1) “vulnerable victim” enhancement “based on the age of the children portrayed in the child pornography” because the specific offense guideline already takes into account the ages of the children. Jenkins does not contend that the children were not in fact vulnerable, but rather that the district court erred in applying a section 3A1.1(b)(1) enhancement based on an age-related vulnerability. Jenkins also argues that although the children were especially vulnerable to the crime of production of child pornography, they were not especially vulnerable to the specific crimes he committed.

We “review the district court's interpretation of the guidelines de novo; we review a finding of unusual vulnerability for clear error and to determine whether the district court's conclusion was plausible in light of the record as a whole.” United States v. Robinson, 119 F.3d 1205, 1218 (5th Cir.1997). “[C]ommentary in the Guidelines Manual that interprets or explains a guideline is authoritative unless it violates the Constitution or a federal statute, or is inconsistent with, or a plainly erroneous reading of, that guideline.” Stinson v. United States, 508 U.S. 36, 38, 113 S.Ct. 1913, 123 L.Ed.2d 598 (1993).

“If the defendant knew or should have known that a victim of the offense was a vulnerable victim,” the offense level is increased by two. U.S.S.G. § 3A1.1(b)(1). The application notes define a “vulnerable victim” as a person “who is a victim of the offense of conviction,” along with any relevant conduct, and “who is unusually vulnerable due to age, physical or mental condition, or who is otherwise particularly susceptible to the criminal conduct.” U.S.S.G. § 3A1.1 cmt.2. The application notes also state that the “vulnerable victim” enhancement should not be applied “if the factor that makes the person a vulnerable victim is incorporated in the offense guideline. For example, if the offense guideline provides an enhancement for the age of the victim, [the enhancement] would not be applied unless the victim was unusually vulnerable for reasons unrelated to age.” Id.

Although the government and the district court seemingly believed that Jenkins' challenge was foreclosed by circuit precedent, we have had no occasion to consider application of the section 3A1.1(b)(1) enhancement in addition to the section 2G2.2(b)(2) enhancement. In United States v. Wright, 373 F.3d 935, 942–44 (9th Cir.2004), the Ninth Circuit held that a section 3A1.1(b)(1) “vulnerable victim” enhancement was appropriate, along with a section 2G2.2(b)(2) enhancement based on prepubescent/younger-than-twelve children, where the victims ranged in age from eleven months to four years. The Ninth Circuit explained that “the victims' vulnerability is not fully ‘incorporated’ in the victim–under–12 adjustment” because “[m]ost children under 12 are well beyond the infancy and toddler stages of childhood during which they are the most vulnerable.” Id. at 943. The Ninth Circuit further explained that “[t]hough the characteristics of being an infant or toddler tend to correlate with age, they can exist independently of age, and are not the same thing as merely not having ‘attained the age of twelve years,’ the criterion for the 4–level increase in” section 2G2.1(b)(2). Id.

Jenkins cites two cases from other circuits in which the courts, rejecting challenges to the application of the section 3A1.1(b)(1) enhancement, noted that the victim was vulnerable for reasons unrelated to age. United States v. Gawthrop, 310 F.3d 405, 412 (6th Cir.2002) (“[T]he granddaughter was unusually vulnerable, not because of her age since that factor had already been considered by the guidelines, but because of her familial relationship.”); United States v. Snyder, 189 F.3d 640, 649 (7th Cir.1999) (“[T]he district court premised the enhancement on Doe's history of molestation, a factor that is ‘unrelated to age.’ ”). Jenkins suggests that these statements show that “other circuits require something more than just the young age of the child as the vulnerability factor” when a section 2G2.1(b)(2) enhancement is also applied.

The example provided in the commentary to U.S.S.G. § 3A1.1 may be fairly read to state that if a specific offense guideline provides any enhancement based on the age of the victim, the “vulnerable victim” enhancement can never be applied to account for a vulnerability that is “related to age.” Jenkins appears to support such an interpretation. However, we reject such an interpretation as plainly illogical and unreasonable. For example, the specific offense guidelines for some crimes provide enhancements based on the young age of the victim but do not provide enhancements based on the old age of the victim. See, e.g., U.S.S.G. § 2A3.1. The commentary language would seemingly prohibit a court from applying the “vulnerable victim” enhancement where a victim of one of these crimes was especially vulnerable due to extreme old age. Such an outcome would be odd; although the vulnerability is certainly “related to age,” it is in no way accounted for by the specific offense guidelines and presents no risk of “double counting” the same vulnerability.

The same problem also occurs in more subtle ways. Consider an enhancement for a victim under the age of twelve: A person who is unable to walk is no doubt especially vulnerable to many crimes. Most children under the age of twelve are able to walk. Some children under twelve, infants, are unable to walk due to extreme young age. Other children under twelve may be unable to walk due to paralysis. We see no reason why a “vulnerable victim” enhancement based on inability to walk should be applied to paralyzed children but not to infants. Although an infant's inability to walk is “related to age,” it is not accounted for by the “victim under twelve” enhancement.

Accordingly, we do not ascribe undue significance to the example provided in the Guidelines commentary. Rather, we believe the inquiry should focus on whether “the factor that makes the person a vulnerable victim is incorporated in the offense guideline.” U.S.S .G. § 3A1.1 cmt. 2. In this case, we do not see any logical reason why a “victim under the age of twelve” enhancement should bar application of the “vulnerable victim” enhancement when the victim is especially vulnerable, even as compared to most children under twelve. We agree with the Ninth Circuit that in such a case, the victim's vulnerability is not fully incorporated into the offense guideline by the “under twelve” enhancement.

Jenkins also argues that although the young age of the victims may have made them especially vulnerable to production of child pornography because they were unable to resist, their young age does not make them especially vulnerable to the crimes for which he was convicted—receipt, distribution, and possession of child pornography. We have previously held that “the children depicted in child pornography may be considered to be the victims of the crime of receiving child pornography.” United States v. Norris, 159 F.3d 926, 929 (5th Cir.1998). In that case, we rejected the defendant's argument that “the [only] victimization of the children occurred at the time the pornographic images were produced,” stating:

Unfortunately, the “victimization” of the children involved does not end when the pornographer's camera is put away. The consumer, or end recipient, or pornographic materials may be considered to be causing the children depicted in those materials to suffer as a result of his actions in at least three ways.

Id. Here, it is clear that the children depicted were the victims of Jenkins' crime, and that at least some of these children were especially vulnerable to sexual abuse and exploitation. We agree with the Ninth Circuit that this is sufficient; there is no need to show that the particular vulnerabilities of the victims actually facilitated the commission of Jenkins' crimes. See United States v. Lynn, 636 F.3d 1127, 1138–39 (9th Cir.2011). We therefore conclude that the district court did not err in applying the section 3A1.1(b)(1) enhancement.

II. Substantive Reasonableness

Jenkins also argues that his within-Guidelines sentence of twenty years imprisonment is substantively unreasonable. The substantive reasonableness of a sentence is reviewed under an abuse-of-discretion standard. Gall v. United States, 552 U.S. 38, 51, 128 S.Ct. 586, 169 L.Ed.2d 445 (2007). “A discretionary sentence imposed within a properly calculated guidelines range is presumptively reasonable.” United States v. Campos–Maldonado, 531 F.3d 337, 338 (5th Cir.2008). “The presumption is rebutted only upon a showing that the sentence does not account for a factor that should receive significant weight, it gives significant weight to an irrelevant or improper factor, or it represents a clear error of judgment in balancing sentencing factors.” United States v. Cooks, 589 F.3d 173, 186 (5th Cir.2009). “[T]he sentencing judge is in a superior position to find facts and judge their import under § 3553(a) with respect to a particular defendant,” Campos–Maldonado, 531 F.3d at 339.

Jenkins first argues that his sentence is substantively unreasonable because the child pornography guideline, section 2G2.2, lacks an empirical basis and therefore fails to distinguish between the least culpable and the most culpable defendants. However, Jenkins recognizes that this argument is foreclosed by our precedent in United States v. Miller, 665 F.3d 114, 121 (5th Cir.2011), and raises the argument only to preserve the issue for Supreme Court review. Jenkins also argues that his culpability was mitigated by his personal characteristics and history, specifically his diagnosed behavioral and learning disorders as a child and his Army service in Iraq. As the transcript of the sentencing hearing demonstrates, Jenkins presented these facts to the district court for consideration. Despite these mitigating factors, the district judge noted that Jenkins “show[ed] a lot of characteristics that really concern[ed]” her. We find no reason to conclude that the district judge abused her discretion in applying and balancing the sentencing factors, and therefore hold that Jenkins has not shown his sentence to be substantively unreasonable.

CONCLUSION

For the reasons stated above, we AFFIRM the judgment of the district court.

FOOTNOTES

1.  In calculating the total number of images, each video is considered to contain seventy-five images. U.S.S.G. § 2G2.2 cmt. n. 4(B)(ii).

2.  Such a sentence could have been imposed using consecutive sentencing on one or more counts.

JAMES E. GRAVES, JR., Circuit Judge:

View the original article here

Mid-Continent Crude Oil Markets Continue to Adjust to Rapid Rise in Bakken Production (4/3/2013)

Released:  April 3, 2013
Next Release:  April 10, 2013

The differential between West Texas Intermediate (WTI) and North Dakota's Bakken crudes continues to fluctuate, reflecting both production growth and changes in oil transportation capacity. Bakken crude sold at a $25-per-barrel discount to WTI in early 2012 and rose to a $5-per-barrel premium last September, before again being discounted below WTI this winter. So far this year, the gap between Bakken and WTI prices has narrowed, and once again, the Bakken price has risen above the WTI price, albeit modestly (Figure 1).

West Texas Intermediate prices are determined at Cushing, Oklahoma; Bakken prices are those at Clearbrook, Minnesota, where the North Dakota pipeline network joins Enbridge's pipeline running southeast from western Canada. Because of the costs of transporting Bakken crude to Clearbrook, including the pipeline tariff, the price for Bakken at the wellhead will be less than the delivered price at Clearbrook.

The strong growth in Bakken production has frequently outpaced expansion of the local transportation infrastructure, leading to discounts for Bakken crude compared to benchmark WTI. Production in North Dakota, the primary source of Bakken crude, rose 243,000 barrels per day (bbl/d), or 58 percent, in 2012 to 663,000 bbl/d, placing North Dakota second only to Texas in oil production among all states. Meanwhile, pipeline capacity out of the region, which is also used to accommodate increased production of Canadian crude flowing through the region, was estimated at only 395,000 bbl/d in 2012.

Limited pipeline capacity has forced shippers of Bakken crude to use alternative transportation, such as railroads. According to the North Dakota Pipeline Authority, loading capacity at North Dakota rail terminals increased by 660,000 bbl/d between 2007 and the end of 2012, with an additional 355,000 bbl/d of capacity expected to come on line by the end of 2014.

Although transportation of crude oil by rail is generally more expensive than shipping by pipeline, rail-loading capacity has proven cheaper and quicker to build. In addition, the logistical flexibility of rail has enabled Bakken crude to reach refining areas not typically served by pipeline from the Bakken. Historically, crude oil production from the Northern Plains has been discounted against midcontinent crudes to account for the added costs of moving these crudes by pipeline to areas such as Cushing, Oklahoma, and the Gulf Coast (PAD District 3).

Investment in rail offloading capacity at East Coast refineries, such as Philadelphia Energy Solutions's Philadelphia complex, suggests that Bakken offers a cost-competitive alternative to Brent-linked crude imports despite the cost of transporting Bakken by rail from the Midwest. The landed cost of Nigerian crude, the leading source of East Coast imports for most of the past two decades, averaged about $117/bbl in 2012, making Bakken and other domestic crudes economical alternatives. Because of the closure of several East Coast refineries and the availability of cheaper domestic light crude, East Coast imports of Nigerian crude fell from 471,000 bbl/d in 2005 to 166,000 bbl/d in 2012.

For West Coast refineries, cost-competitive access to Bakken crude would allow the Bakken oil to displace more-expensive imports there, as well. West Coast imports, which come primarily from Saudi Arabia, Ecuador, and Iraq, have remained flat since 2006; however, Anacortes, Washington, began receiving unit-train shipments of Bakken in late 2012, potentially signaling new competition for West Coast oil imports.

As Bakken rail shipments reach the East and West coasts, pricing for Bakken crude oil is evolving. The ability to economically reach refineries on the East and West coasts expands the market for Bakken beyond the traditional Midwest and Gulf Coast refineries, which have experienced a glut of midcontinent crudes in recent years. By moving east and west, Bakken escapes the infrastructure constraints that have significantly affected the price of WTI. The Gulf Coast, where Brent-linked imports have already declined significantly, offers less opportunity for Bakken. As light-sweet imports continue to be displaced along the Gulf Coast, Bakken will increasingly compete with other domestic crudes, many of which have lower pipeline transportation costs to the Gulf Coast. As long as Bakken production and transportation capacity scramble to seek equilibrium, continued variation in the differential between Bakken and WTI prices is likely.

Gasoline and diesel fuel prices continue to decrease
The U.S. average retail price of regular gasoline decreased four cents from the previous week to $3.65 per gallon as of April 1, 2013, down 30 cents from last year at this time. The U.S. average price has declined 14 cents over the last five weeks. Prices were lower in all regions of the nation except the Rocky Mountains, where the price is $3.50 per gallon, up three cents from last week. The largest decrease came in the Midwest, where the price dropped six cents to $3.60 per gallon. The East and Gulf Coast prices are both lower by three cents, to $3.63 per gallon and $3.48 per gallon, respectively. Rounding out the regions, the West Coast price is $3.95 per gallon, a decline of two cents.

The national average diesel fuel price decreased one cent to $3.99 per gallon, 15 cents lower than last year at this time. The U.S. average price has decreased 17 cents over the last five weeks. Prices decreased in all regions of the nation except the West Coast, where the price increased two cents to $4.12 per gallon. The largest decrease came on the East Coast, where the price declined three cents to $4.03 per gallon. The Gulf Coast price is $3.92 per gallon, a drop of two cents. The Midwest and Rocky Mountain prices are both lower by a penny, to $3.97 per gallon and $3.92 per gallon, respectively.

Propane inventories decline
U.S. propane stocks fell 1.1 million barrels to end at 39.7 million barrels last week, and are 5.0 million barrels (11.3 percent) lower than the same period a year ago. Gulf Coast inventories dropped by 0.6 million barrels, and Midwest regional inventories declined by 0.4 million barrels. East Coast stocks dropped by 0.1 million barrels, while Rocky Mountain/West Coast inventories decreased slightly. Propylene non-fuel-use inventories represented 9.1 percent of total propane inventories.

Text from the previous editions of This Week In Petroleum is accessible through a link at the top right-hand corner of this page.

View the original article here

UNITED STATES v. COMPIAN TORRES

UNITED STATES of America, Plaintiff–Appellee, v. Osvaldo COMPIAN–TORRES, Defendant–Appellant.

No. 11–10921.

-- March 19, 2013

Before REAVLEY, PRADO, and ELROD, Circuit Judges.

Judson Jett Davis, Special Assistant U.S. Attorney, Brian W. McKay, Esq., Assistant U.S. Attorney, U.S. Attorney's Office, Dallas, TX, for Plaintiff–Appellee.Kevin Joel Page, Laura S. Haiper, Esq., Assistant Federal Public Defender, Federal Public Defender's Office, Dallas, TX, for Defendant–Appellant.

Defendant–Appellant Osvaldo Compian–Torres was convicted of illegally reentering the country. He appealed his conviction, and this Court affirmed. We granted a motion for rehearing and now affirm.

I

Osvaldo Compian–Torres (“Compian”) is a Mexican citizen who was removed from the United States in 1998 after admitting that he had entered the country illegally. He was apprehended again in 2000 and pleaded guilty to illegally reentering the country. After serving his sentence for the 2000 reentry, Compian was released into immigration custody and subsequently deported on November 7, 2003. The terms of his supervised release forbade him from illegally reentering the country. Those terms notwithstanding, Compian illegally returned to the United States shortly after his deportation. Compian was then arrested and charged with assault in Dallas on January 12, 2004. However, the charges were dropped and Compian was released days later. The police apparently did not suspect that he was illegally present.

Around June 21, 2004, a probation officer became aware of Compian's January 2004 arrest and filed a petition alleging that Compian had violated the terms of his supervised release by illegally reentering the country. A warrant was issued on June 23, 2004, but Compian was not arrested until two years later. On July 28, 2006, the district court revoked Compian's supervised release and sentenced him to a term of imprisonment. On September 9, 2006, the Bureau of Prisons released Compian from its custody. At no point were immigration officials notified about Compian's reentry, arrest, imprisonment, or release, though a copy of the release revocation petition found its way into Compian's alien file.

On May 11, 2010, Compian was arrested for assault again. At some point officials began to suspect that Compian was illegally present, and so he was transferred to the custody of immigration officials on August 20, 2010. Immigration officials determined that Compian had been previously removed in 2003 and that he had illegally reentered sometime thereafter. Accordingly, on October 6, 2010, Compian was indicted for violating 8 U.S.C. § 1326. The indictment alleged that Compian had been removed on November 7, 2003, that he was found on or about August 20, 2010, and that he had not received permission to reenter the country. Compian pleaded not guilty and proceeded to trial.

The government presented four witnesses. The first witness was Officer Aaron Nation, a deportation officer with Immigration and Customs Enforcement (“ICE”). He described the contents of Compian's alien file and discussed the procedure by which ICE is notified when suspected illegal aliens are in the custody of law enforcement. Usually, some other law enforcement agency suspects an individual is illegally present, at which point ICE is notified and the appropriate inquiries occur. Officer Nation further testified that ICE was not notified about Compian's arrest in 2004, nor his imprisonment and subsequent release, both of which occurred in 2006.

The government's second witness testified about his encounter with Compian, on August 20, 2010, after Compian was in ICE custody. The third witness testified to matching Compian's fingerprints to the fingerprints on Compian's 2003 warrant of removal. The government's last witness testified that there were no records indicating Compian had applied for or received permission to reenter the United States after he was removed on November 7, 2003.

After the government rested its case, Compian made a Rule 29 motion for a judgment of acquittal, which was denied. Compian did not present any witnesses and rested his case. The jury found Compian guilty and, on September 12, 2011, Compian was sentenced to 109 months' imprisonment. Compian then filed a timely appeal challenging the sufficiency of the evidence.

This Court issued an opinion affirming Compian's conviction on October 24, 2012. See United States v. Compian–Torres, No. 11–10921, 2012 WL 5246686, at *1 (5th Cir. Oct.24, 2012). In that opinion, the Court applied a plain error standard of review to Compian's claim because, while couched in terms of sufficiency, Compian's appeal presented a purely legal question that had not been preserved in the district court. Compian filed a petition for panel rehearing on November 7, 2012. In his petition, Compian argued that the Court had not applied the correct standard of review. We granted Compian's petition on November 28, 2012.

II

As this is a direct appeal from the final decision of a district court, this Court has jurisdiction pursuant to 28 U.S.C. § 1291.

III

The Court granted Compian's motion for rehearing to reconsider which standard of review is appropriate when, as here, a challenge to the sufficiency of the evidence masks a purely legal question. As explained below, we need not address this question because Compian's claim fails even under the de novo standard he advocates.

A

On appeal, this Court applies de novo review when a defendant preserves a challenge by making a motion for judgment of acquittal. United States v. Valentine, 401 F.3d 609, 615 (5th Cir.2005). Under that standard, we affirm if a rational trier of fact could have found the essential elements of the offense beyond a reasonable doubt. Id. When an issue is raised for the first time on appeal, however, we review for plain error. United States v. Treft, 447 F.3d 421, 424–25 (5th Cir.2006). To show plain error, a defendant must show that a forfeited error is clear or obvious, and that it affects his substantial rights. Puckett v. United States, 556 U.S. 129, 135, 129 S.Ct. 1423, 173 L.Ed.2d 266 (2009). If such a showing is made, the Court has the discretion to correct the error only if it seriously affects the fairness, integrity, or public reputation of judicial proceedings. Id.

In our initial opinion we applied plain error review to Compian's claim because it presented a purely legal question that had not been preserved in the district court. Compian–Torres, 2012 WL 5246686, at *1. We reached this conclusion based on the precedent set out in three cases: Treft, 447 F.3d at 424–25 & n. 4 (reviewing for plain error a legal determination raised for the first time on appeal when the defendant had dropped his original motion for acquittal earlier in the proceedings); United States v. Brace, 145 F.3d 247, 257–58 & n. 2 (5th Cir.1998) (en banc) (reviewing for plain error a new, unpreserved legal subissue within an otherwise preserved sufficiency claim); and United States v. Loney, 959 F.2d 1332, 1334 (5th Cir.1992) (reviewing for plain error when a preserved sufficiency claim in fact presents a purely legal claim).

Compian, in his motion for rehearing, cited three previously unmentioned cases in support of his assertion that de novo review should apply. See United States v. Williams, 602 F.3d 313, 315 (5th Cir.2010) (applying de novo review to a sufficiency claim that required determining what conduct constitutes an offense under the relevant statute); United States v. Cuellar, 478 F.3d 282, 287 (5th Cir.2007) (en banc) (reviewing de novo a sufficiency claim dependant on a question of legal interpretation), rev'd on other grounds, 553 U.S. 550, 128 S.Ct. 1994, 170 L.Ed.2d 942 (2008); United States v. Santos–Riviera, 183 F.3d 367, 369 (5th Cir.1999) (reviewing a challenge to the sufficiency of an indictment de novo when the appeal involved statutory interpretation). We granted Compian's petition in order to review our precedent within the context of this case. However, having reexamined Compian's case, this Court need not address which standard of review is appropriate because Compian's claim fails, even under the more generous de novo standard. As explained in more detail below, see infra Part III.B, Compian was “found” in 2010 when immigration authorities became aware of his physical presence; and a rational trier of fact could find Compian guilty beyond a reasonable doubt based on the evidence presented at trial.

B

Compian's appeal is phrased as a challenge to the sufficiency of the evidence, but it in fact presents a pure question of law. While Compian claims that there was insufficient evidence to convict him, this assertion entirely depends on a legal claim—namely, that he was “found” for purposes of 8 U.S.C. § 1326(a)(2) in 2004 and not in 2010, as the government claims. For the reasons that follow, Compian was “found” in 2010, and the evidence presented at trial was sufficient to allow a rational trier of fact to find Compian guilty beyond a reasonable doubt.

Section 1326(a) authorizes penalties for any previously deported alien who is thereafter “found” in the United States. 8 U.S.C. § 1326(a). In the Fifth Circuit, “a previously deported alien is ‘found in’ the United States when his physical presence is discovered and noted by the immigration authorities, and the knowledge of the illegality of his presence, through the exercise of diligence typical of law enforcement authorities, can reasonably be attributed to the immigration authorities.” United States v. Santana–Castellano, 74 F.3d 593, 598 (5th Cir.1996). Thus, in order to be found, (1) immigration authorities must have specifically discovered and noted the alien's physical presence, and (2) knowledge of the illegality of the alien's presence must be reasonably attributable to immigration authorities. A § 1326 offense “begins at the time the defendant illegally re-enters the country and does not become complete unless or until the defendant is found by the [ICE] in the United States.” United States v. Corro–Balbuena, 187 F.3d 483, 485 (5th Cir.1999). “[T]he five year statute of limitations under § 1326 begins to run at the time the alien is ‘found,’ barring circumstances that suggest that the [ICE] should have known of his presence earlier, such as when he reentered the United States through an official border checkpoint in the good faith belief that his entry was legal.” Santana–Castellano, 74 F.3d at 597.

Compian's position is that an alien is “found” under § 1326 whenever an agent of the federal government encounters an alien and knows or should have known that the alien's presence is unlawful. However, such a rule would constitute an unauthorized departure from this Circuit's precedent. See French v. Allstate Indem. Co., 637 F.3d 571, 589 (5th Cir.2011) (stating that one panel may not overturn another panel's decision absent an intervening change in law—such as a statutory amendment, a Supreme Court decision, or an en banc court). In order to be “found” under § 1326, an alien's physical presence must be discovered and noted by immigration authorities and the illegality of the alien's presence must be reasonably attributable to immigration authorities through the exercise of typical law enforcement diligence. Santana–Castellano, 74 F.3d at 598. The first step of our test requires that immigration authorities discover and note the presence of the alien, and Compian does not contest the fact that, after his 2003 removal, he did not encounter immigration officials again until 2010. Thus, under the plain language of our test, it cannot be said that Compian was “found” in 2004 when he was arrested by state police officers and alleged to be in violation of the terms of his supervised release by a federal probation officer. The fact that Compian's alien file contained a copy of the revocation of his supervised release does not alter this outcome because holding otherwise would create a requirement that ICE actively monitor all alien files at all times for any information suggesting an alien had returned to the United States.

Furthermore, even if this panel could depart from the language of our established precedent, Compian's position would require imputing knowledge to immigration authorities whenever an alien's presence is discovered and noted by another government agent—i.e., the first prong of the test. Compian has not put forth any case law that supports his desired outcome. The first case he cites, United States v. Gunera, 479 F.3d 373 (5th Cir.2007), dealt exclusively with the second prong of the § 1326 test and is thus inapposite. In Gunera, an unlawfully present alien applied for Temporary Protected Status (“TPS”) through the immigration authorities using his real name, date of birth, and place of birth, while omitting his previous conviction, prior deportation, and alien number. 479 F.3d at 375. Using the information provided, the immigration authorities were able to discover Gunera's prior conviction and deportation, but they waited over five years to arrest him. Id. The government claimed that Gunera had not been “found” until his arrest because the immigration authorities were not aware that Gunera's presence was illegal given that Gunera omitted critical information on his TPS application. Id. at 376. The Court rejected the government's position and held that “the immigration authorities can reasonably be attributed with actual knowledge that Gunera was present illegally in the U.S.” when his prior deportation for an aggravated felony was discovered. Id. Gunera thus dealt exclusively with the second prong of our § 1326 test; the case hinged on when immigration authorities—who had already discovered and noted Gunera's presence—should have known that Gunera's presence was unlawful. The first prong was not in dispute because Gunera submitted his application directly to immigration authorities, thereby providing them with the requisite discovery and notice of his physical presence.1 By contrast, Compian was arrested by state police and his supervised release was revoked by judicial officials. His physical presence was not discovered or noted by immigration authorities until he entered ICE custody in 2010, and the notice or actual knowledge of one United States government agency generally is not imputed to other agencies. United States v. Harms, 442 F.3d 367, 377 (5th Cir.2006).

Compian also cites United States v. Vargas–Garcia, 434 F.3d 345 (5th Cir.2005), in an attempt to expand the scope of our test from requiring discovery by “immigration authorities” to “the government” or just “authorities” more broadly. However, the selective quotations Compian relies upon are actually quotations from a Second Circuit case used in Vargas–Garcia merely to illustrate the circumstances under which an illegal reentry constitutes a continuing offense. See 434 F.3d at 349. In fact, when paraphrasing the Fifth Circuit's precedent on point, the court refers to “the relevant authorities,” further underscoring the specific importance of “immigration authorities” in our § 1326 jurisprudence. See id. Moreover, even after Vargas–Garcia, the Santana–Castellano test has been continually applied verbatim in the Fifth Circuit. See, e.g., United States v. Santos–Guevara, 406 F. App'x 874, 874 (5th Cir.2010) (per curiam) (unpublished); Gunera, 479 F.3d at 376; United States v. Alvarado–Santilano, 434 F.3d 794, 798 (5th Cir.2005).

Therefore, for an alien to be “found” under § 1326, immigration authorities must discover and note the alien's physical presence, and the illegality of the alien's presence must be known or reasonably attributable to immigration authorities. Ultimately, a rational trier of fact could find Compian guilty beyond a reasonable doubt based on the evidence presented at trial. The government presented witness testimony showing that Compian was taken into ICE custody in 2010, that Compian had previously been deported, and that Compian unlawfully reentered the United States sometime after his deportation. There was thus sufficient evidence to convict Compian.

IV

For the forgoing reasons, Compian's conviction is AFFIRMED.

FOOTNOTES

1.  Moreover, Gunera provided immigration authorities with his current physical address, further underscoring immigration authorities' awareness of his physical presence. See 479 F.3d at 375. The same cannot be said here.

PRADO, Circuit Judge:

View the original article here

IN RE: TWL CORPORATION

IN RE: TWL CORPORATION, Debtor Frank Teta, Appellant v. Michelle Chow, Appellee.

No. 12–40271.

-- March 29, 2013

Before KING, SOUTHWICK, and GRAVES, Circuit Judges.

John Mark Chevallier, Dallas, TX, for Debtor.Jack A. Raisner, Esq., Rene S. Roupinian, Outten & Golden, L.L.P., New York, NY, Jeff Philipp Prostok, Forshey & Prostok, L.L.P ., Fort Worth, TX, for Appellant.Mark Ian Agee, Esq., Dallas, TX, for Appellee.

TWL Corporation and its primary subsidiary, TWL Knowledge Group, Inc., filed for bankruptcy in 2008. Appellant Frank Teta, a former TWL employee, commenced a class action adversary proceeding within TWL's bankruptcy suit, alleging violations of the Worker Adjustment and Retraining Notification Act, 29 U.S.C. §§ 2101–2109. The bankruptcy court denied Teta's related motion for class certification and dismissed the adversary proceeding. The district court affirmed. Because the reasons for the bankruptcy court's order are unclear, we VACATE the orders below and REMAND to the district court to remand to the bankruptcy court for reconsideration in light of this opinion.

I. FACTUAL AND PROCEDURAL BACKGROUND

Prior to filing for bankruptcy, TWL Corporation and its primary subsidiary, TWL Knowledge Group, Inc. (collectively “TWL”), were in the business of providing workplace learning, training, and certification programs. Appellant Frank Teta served as a vice president of TWL. On September 8, 2008, TWL allegedly laid off the majority of its workforce, including Teta. On October 19, 2008, TWL filed a voluntary petition for bankruptcy under Chapter 11.1 The bar date for filing proofs of claim against TWL was February 19, 2009.

On November 4, 2008, Teta filed within TWL's bankruptcy case a complaint against TWL, thereby initiating the adversary proceeding underlying this appeal. In that complaint, Teta—who claims to be acting on behalf of himself and other terminated employees—alleges that TWL violated the Worker Adjustment and Retraining Notification Act (“WARN Act”), 29 U.S.C. §§ 2101–2109, by failing to give its employees sixty days written notice of their termination.2 Teta seeks to recover for himself and the class sixty days of wages and benefits under the Act. He asserts that such claims are entitled to be paid as administrative claims under 11 U.S.C. § 503(b)(1)(A) or, alternatively, as priority unsecured claims under § 507(a)(4) and (5). TWL moved to dismiss Teta's adversary complaint on February 9, 2009.

In addition to the aforementioned adversary complaint, Teta also filed, on February 18, 2009, a class proof of claim against TWL on behalf of all former TWL employees. The same day, Teta filed a motion seeking class certification3 and an order naming Teta as the lead plaintiff.4 On March 23, 2009, the bankruptcy court granted a motion filed by Teta to stay consideration of the class proof of claim until the court ruled on TWL's motion to dismiss the adversary proceeding. At the parties' request, the court abated the adversary proceeding until October 6, 2009. The hearing on the motion to dismiss and the request for class certification subsequently was continued several times because the parties informed the court that they did not wish to proceed with the adversary proceeding until the size of the estate was determined.

In the meantime, because TWL's reorganization efforts were unsuccessful, the court converted the bankruptcy case to Chapter 7 and appointed Appellee Michelle Chow (“Trustee”) as trustee of the estate. The last day to file proofs of claim in the converted case was December 10, 2010. Creditors ultimately filed 86 claims against the estate of TWL Corporation, and 107 claims against TWL Knowledge Group, Inc. According to the bankruptcy court's estimation, only 34 of those claims were filed by individuals, of which, fewer than 20 appeared to relate to unpaid wages, salaries, or commissions.

On March 23, 2011, the bankruptcy court denied Teta's motion for class certification and granted the Trustee's motion to dismiss the adversary proceeding.5 The district court affirmed the bankruptcy court's order in toto on February 13, 2012. Teta now appeals.

II. STANDARD OF REVIEW

We apply the same standard of review to the bankruptcy court's decision as applied by the district court. In re Amco Ins., 444 F.3d 690, 694 (5th Cir.2006). We thus review class certification decisions for abuse of discretion. In re Wilborn, 609 F.3d 748, 752 (5th Cir.2010). A bankruptcy court abuses its discretion when it applies an improper legal standard or rests its decision on findings of fact that are clearly erroneous. In re Babcock & Wilcox Co., 526 F.3d 824, 826 (5th Cir.2008). Whether the lower court applied the correct legal standard in reaching its decision on class certification is a legal question that we review de novo. Allison v. Citgo Petrol. Corp., 151 F.3d 402, 408 (5th Cir.1998).6

III. ANALYSIS

At the outset, we underscore the limited scope of this appeal. In particular, while Teta filed a class proof of claim against TWL, that matter is not currently before us, and we expressly decline to address the merits of that claim. Rather, this appeal concerns only the bankruptcy court's order denying Teta's class certification motion in his adversary proceeding, and its related dismissal of that proceeding. Teta submits that the bankruptcy court abused its discretion by applying an improper legal standard to the class certification question. To fully appreciate Teta's objections, a brief discussion of the bankruptcy court's order, and the federal bankruptcy rules implicated by it, is warranted.

A. The Bankruptcy Court's Order

In denying class certification, the bankruptcy court held that Teta did not satisfy Rule 23's numerosity and superiority requirements. With respect to numerosity, the court observed that “[e]ven if all 130 members of the putative class elected to pursue WARN Act claims—which seems unlikely given their lack of participation in the claims allowance process to date—that number certainly would be manageable.” This conclusion was informed by the court's finding that, although each putative plaintiff could have asserted WARN Act claims “simply by filling out a proof of claim form,” none had done so. Because the bar date for filing proofs of claim already had passed on two occasions, the court explained that “class certification would negate the bar date by permitting those who missed the deadline to interpose claims into [the] case without establishing · excusable neglect.” Moreover, the court expressed that “the expense of allowing [the] adversary proceeding to go forward so that Teta can offer certain creditors a third bite at the proverbial apple is a factor that weighs against class certification.” This fact seemed especially weighty to the court, given its conclusion that “[e]ven without considering Teta's WARN Act claims,” TWL's estate was “insufficient to pay all of [its] creditors in full.” Thus, the court held that “under the facts of this case, Teta has failed to establish the numerosity required to prosecute a class claim.”

As for superiority, the court explained that it was unconvinced “that a class action would be a ‘superior method’ of adjudication as required by Rule 23(b)(3).” The court stated that the “Bankruptcy Code already concentrates any WARN Act claims in [the bankruptcy court] by requiring former employees to seek allowance of such claims in order to share in any distribution from [TWL's] estate[ ].” Accordingly, the court concluded that “it would be a waste of [TWL's] limited assets to move forward with [the] adversary proceeding when Teta is the only individual who has asserted a timely WARN Act claim, and the claims process can more expeditiously move Teta's claims down a parallel track.”

Aside from these general references to the parallel proofs of claim process, the bankruptcy court did not offer an explanation for its decision to grant the Trustee's motion to dismiss Teta's adversary proceeding.

B. Applicable Bankruptcy Rules

The court issued its order against the backdrop of the procedural rules governing a bankruptcy case. Those rules provide that once a debtor files a bankruptcy petition, a creditor may file a “proof of claim” to establish a claim against the debtor. Fed. R. Bankr.P. 3002. If objected to, the proof of claim becomes a “contested matter.” Fed. R. Bankr.P. 9014 advisory committee's note (“Whenever there is an actual dispute, other than an adversary proceeding, · the litigation to resolve that dispute is a contested matter.”). An “adversary proceeding,” on the other hand, is a lawsuit filed within the bankruptcy case. See Fed. R. Bankr.P. 7001; see also 10 Collier on Bankruptcy ¶ 7001.01 (Alan N. Resnick & Henry J. Sommer eds., 16th ed. 2010) (“Adversary proceedings are separate lawsuits within the context of a particular bankruptcy case and have all the attributes of a lawsuit·”). Adversary proceedings are initiated with the filing of a complaint. Fed. R. Bankr.P. 7003; Fed.R.Civ.P. 3.

Pursuant to Rule 7023—which falls within Part VII of the Federal Bankruptcy Rules—Rule 23 of the Federal Rules of Civil Procedure “applies in adversary proceedings.”7 Fed. R. Bankr.P. 7023. Thus, “[i]n an appropriate situation, class adversary proceedings may be commenced in a bankruptcy case provided that the requirements of the various subdivisions of Rule 23 are satisfied.” 10 Collier on Bankruptcy ¶ 7023.01; see also In re Wilborn, 609 F.3d at 754 (“[C]lass action proceedings are expressly allowed in the Federal Bankruptcy Rules, which provide that the requirements for class actions under Federal Rule of Civil Procedure 23 apply in adversary proceedings.”).

Rule 23 does not necessarily apply, however, to a class proof of claim. First, our circuit has not addressed whether a class proof of claim even is permissible. Second, Rule 9014, which governs contested matters, provides that only certain procedural rules automatically apply when an objection is lodged to a proof of claim. See Fed. R. Bankr.P. 9014. Rule 7023 is not designated as one of these automatically applicable rules, but Rule 9014 does state that “[t]he court may at any stage in a particular matter direct that one or more of the other rules in Part VII shall apply.” Fed. R. Bankr.P. 9014 (emphasis added).

Given this discretion, Rule 23's operation in contested matters involves a two-step process. 10 Collier on Bankruptcy ¶ 7023.01. “First, the court must exercise its discretion [under Rule 9014] as to whether to apply Rule 23 to the contested proceeding.” Id. Second, if the court decides to apply Rule 23, it then must determine whether the Rule's requirements for class certification have been satisfied. Id. In considering whether to apply Rule 23 in the first instance:

the court will consider a variety of factors relating to the bankruptcy case. These include: (1) whether the class was certified pre-petition, (2) whether the members of the putative class received notice of the bar date, and (3) whether class certification will adversely affect the administration of the case, especially if the proposed litigation would cause undue delay.

Id. The court also may consider the benefits and costs of class litigation to the estate. In re Computer Learning Ctrs., Inc., 344 B.R. 79, 86 (Bankr.E.D.Va.2006).

There is thus a distinction between Rule 23's operation in an adversary proceeding and its operation in the claims process. In an adversary proceeding, Rule 23 is automatically applicable: “there is no need to seek its application as is required in the claims allowance process.” Id. at 92 n. 17. In contrast, although Rule 23 perhaps may be applicable within the proofs of claim process, under Rule 9014, the bankruptcy court has discretion whether to authorize its application to a proof of claim.

C. Class Certification

With this foundation in mind, we turn to Teta's challenge to the bankruptcy court's denial of class certification. In essence, Teta contends that instead of simply analyzing the class certification issue under Rule 23, the bankruptcy court improperly “based its decision to deny certification on a body of discretionary determinations under Rule 9014, none of which have any bearing on class certification in adversary proceedings.”

We agree with Teta that the bankruptcy court appears at times to have erroneously conflated rules applicable in an adversary proceeding with those applicable in a contested matter. Nevertheless, under de novo review, we reject Teta's ultimate contention that it is impermissible for a bankruptcy court addressing a class certification motion under Rule 23 to consider, among other relevant matters, factors related to the bankruptcy case. As we will discuss, however, in this instance, although the bankruptcy court adopted the proper legal standard in assessing Rule 23's superiority requirement, it failed to explain with sufficient particularity its rationale for denying class certification. Accordingly, we must remand for the court to enter the specific findings of fact and conclusions of law necessary to support the order it issues on remand. See Westwego Citizens for Better Gov't v. City of Westwego, 872 F.2d 1201, 1204 (5th Cir.1989).

1. Rule 23's Requirements

Rule 23 states that class actions may be maintained if:

(1) the class is so numerous that joinder of all members is impracticable; (2) there are questions of law or fact common to the class; (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class; and (4) the representative parties will fairly and adequately protect the interests of the class.

Fed.R.Civ.P. 23(a). Additionally, the suit must fit into one of the three categories set forth in Rule 23(b)—one of which, as relevant here, requires that the court “find[ ] that the questions of law or fact common to class members predominate over any questions affecting only individual members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy.” Fed.R.Civ.P. 23(b)(3). “By its terms [Rule 23] creates a categorical rule entitling a plaintiff whose suit meets the specified criteria to pursue his claim as a class action.” Shady Grove Orthopedic Assocs., P.A. v. Allstate Ins. Co., 559 U.S. 393, 130 S.Ct. 1431, 1437, 176 L.Ed.2d 311 (2010); see also id. at 1438 (rejecting defendant's assertion that a court has discretion whether to certify a class where the Rule's requirements are met).

In this case, the bankruptcy court concluded that Teta failed to satisfy the numerosity and superiority prongs of Rule 23. Because “a plaintiff's request for class certification must fail if any one of Rule 23's requirements is not met,” we address these requirements in turn. Vizena v. Union Pac. R.R. Co., 360 F.3d 496, 503 n. 1 (5th Cir.2004) (per curiam).

2. Numerosity

Under Rule 23(a)(1), a class action is proper where “the class is so numerous that joinder of all members is impracticable.” Fed.R.Civ.P. 23(a)(1). On this score, Teta argues that we previously have held that a putative class of 100 to 150 members “is within the range that generally satisfies the numerosity requirement.” Mullen v. Treasure Chest Casino, LLC, 186 F.3d 620, 624 (5th Cir.1999). Teta neglects, however, that we also explained in Mullen that “the number of members in a proposed class is not determinative of whether joinder is impracticable.” Id.

Indeed, leading commentators note that “there is no definite standard as to what size class satisfies Rule 23(a)(1).” 7A Charles Alan Wright et al., Federal Practice and Procedure § 1762 (3d ed.2005) (collecting cases in which numerosity was satisfied with as few as 25 putative class members, but not satisfied with as many as 350, and explaining that this inconsistency “graphically demonstrates that caution should be exercised in relying on a case as a precedent simply because it involves a class of a particular size”). For this reason, we have counseled that “courts must not focus on sheer numbers alone.” Pederson v. La. State Univ., 213 F.3d 858, 868 n. 11 (5th Cir.2000). Rather, assessing numerosity also entails consideration of “the geographical dispersion of the class, the ease with which class members may be identified, the nature of the action, and the size of each plaintiff's claim.” Zeidman v. J. Ray McDermott & Co., 651 F.2d 1030, 1038 (5th Cir. Unit A July 1981); see also William B. Rubenstein, 1 Newberg on Class Actions § 3:12 (5th ed.2012) (explaining that courts also consider “judicial economy arising from the avoidance of a multiplicity of actions”); accord Robidoux v. Celani, 987 F.2d 931, 936 (2d Cir.1993).

Here, the bankruptcy court recognized that the putative class contained 130 members. Nonetheless, for the reasons set forth in Part III.A, it found this number insufficient to satisfy Rule 23's numerosity requirement. Like Teta, we question whether some of the considerations cited by the court have any bearing on whether Teta satisfied Rule 23's numerosity requirement.8 We do note, however, that, given Zeidman's direction that a court addressing a class certification motion must consider the “nature of the action” at issue, 651 F.2d at 1038, we cannot accept his more general argument that bankruptcy-related factors have no role to play in a bankruptcy court's consideration of a class certification motion.

Here, for instance, the bankruptcy court expressly noted that “[e]ven if all 130 members of the putative class elected to pursue WARN Act claims—which seems unlikely given their lack of participation in the claims allowance process to date—that number certainly would be manageable.” While the putative members' lack of participation in the claims process does not appear to be relevant to Rule 23's numerosity analysis for reasons that will be discussed infra, the court's reference to the size of the class certainly is. Outside the bankruptcy context, a putative class with only 130 members already might present a close question as to numerosity, depending on the particular circumstances of the case. See Jaynes v. United States, 69 Fed.Cl. 450, 454–55 (Fed.Cl.2006) (finding that a class with as many as 258 putative members failed to satisfy numerosity because the class members all had worked in the same area and easily could be identified and located). Within the bankruptcy context, because “[i]t is not unusual for large numbers of claims to be filed, objected to and allowed or disallowed,” even larger putative classes may not be so numerous as to make joinder impracticable. In re Woodmoor Corp., 4 B.R. 186, 189 (Bankr.D.Colo.1980) (concluding that Rule 23's numerosity requirement was not satisfied where putative class consisted of approximately 900 members, because their proofs of claims, which were then pending before the court, could “be conveniently and expeditiously managed by following normal bankruptcy procedures”); see also In re First Magnus Fin. Corp., 403 B.R. 659, 663–64 (D.Ariz.2009) (affirming the dismissal of a WARN Act adversary proceeding with a putative class of over 5,000 members because “the normal bankruptcy claims procedure was adequate to handle the claims”).

As Teta correctly points out, however, it is not possible on the record before us to determine to what extent the court's numerosity ruling was influenced by these permissible factors, and to what extent it may have been influenced by factors that are irrelevant to whether joinder was impracticable. Thus, because we are unable to affirm the orders below on the bankruptcy court's numerosity analysis, we turn to its consideration of Rule 23's superiority requirement.

3. Superiority

Under Rule 23(b)(3), a court must find “that the questions of law or fact common to class members predominate over any questions affecting only individual members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy.” Fed.R.Civ.P. 23(b)(3).

The matters pertinent to these findings include:

(A) the class members' interests in individually controlling the prosecution or defense of separate actions; (B) the extent and nature of any litigation concerning the controversy already begun by or against class members; (C) the desirability or undesirability of concentrating the litigation of the claims in the particular forum; and (D) the likely difficulties in managing a class action.

Id. “[T]his list is not meant to be exhaustive and the court has discretion to consider whatever other factors it deems relevant to the determination.”9 7AA Charles Alan Wright et al., Federal Practice and Procedure § 1777 (3d ed.2005).

Here, for the reasons explained in Part III.A, the court held that it was unconvinced that “a class action would be a ‘superior’ method of adjudication as required by Rule 23(b)(3).” Again, Teta complains that the court's order evidences that the court erred by considering discretionary bankruptcy-related factors relevant under Rule 9014, but not relevant under Rule 7023 or, by incorporation, Rule 23. In advancing this argument, however, Teta unduly limits the factors a bankruptcy court must consider when analyzing Rule 23's superiority requirement.

In requiring a court to find “that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy,” Fed.R.Civ.P. 23(b)(3), Rule 23 necessarily suggests a comparative process, Hanlon v. Chrysler Corp., 150 F.3d 1011, 1023 (9th Cir.1998). This plain reading of the Rule is reinforced by an associated advisory committee's note, which states that the court “ought to assess the relative advantages of alternative procedures for handling the total controversy.” Fed.R.Civ.P. 23(b)(3) advisory committee's note to 1966 amendment. “As is the case with Rule 23(b)(3) generally, the superiority analysis is fact-specific and will vary depending on the circumstances of any given case.” Robertson v. Monsanto Co., 287 F. App'x 354, 361 (5th Cir.2008) (per curiam) (unpublished).

Within a bankruptcy case, a leading authority suggests that the superiority inquiry assumes added import: “Comparison should be made with respect to the requirements of treating the action as a class suit with the advantages and disadvantages that could result from prosecution of the claims by other means, especially in the bankruptcy context.” 10 Collier on Bankruptcy ¶ 7023.03[3]. For this reason, it is notable that certain bankruptcy-related factors—including “whether class certification will adversely affect the administration of the case”—are “relevant to, and have been considered in the determination of, whether the requirements of Rule 23 have been met.” Id. ¶ 7023.01. In Computer Learning Centers, for example, the court concluded that, in that case, a class action was not superior “to the ordinary operation of [the related] bankruptcy case.” 344 B.R. at 92 (addressing a class proof of claim).

In our view, a bankruptcy court should consider the cost to the debtor's estate of a class adversary proceeding simply because the expense of adjudicating the controversy via a class action depletes the debtor's assets, which in turn diminishes the funding available to creditors, including, possibly, the very claimants pursuing the class action.10 Such a consideration is particularly relevant in a case such as this, a Chapter 7 bankruptcy with insufficient assets to pay existing creditors. As a corollary, we also conclude that a bankruptcy court should consider the availability and ease of the proof of claim process when determining whether a class adversary proceeding is a superior method for fairly and efficiently adjudicating a controversy.11 A court's consideration of bankruptcy-related factors not only generally serves to inform its assessment of the comparative merits of one adjudication method over another, but in a case like this—where a comparable class proof of claim has been filed—assessing these factors also is perfectly in keeping with Rule 23's requirement that the court consider “the extent and nature of any litigation concerning the controversy already begun by or against class members .” Fed.R.Civ.P. 23(b)(3)(B). As the court here explained, it may well be the case in the bankruptcy context that “the claims process can more expeditiously move [a claimant's] claims down a parallel track.”

Our conclusion that a bankruptcy court assessing Rule 23's superiority prong may take into account certain bankruptcy-related factors is not to say, of course, that a class adversary proceeding never can be superior. As will be clear from the following discussion, the facts presented in each particular situation must be assessed on a case-by-case basis to determine whether the requirements of Rule 23 have been met. We simply say that, here, the bankruptcy court adopted the correct legal standard in assessing Rule 23's superiority prong.

4. Application of the Proper Legal Standard

Having determined that the bankruptcy court did not improperly consider bankruptcy-related factors in assessing Rule 23's superiority prong, we must now resolve whether, in this case, it abused its discretion in denying class certification. We begin with the premise that “superiority analysis requires an understanding of the relevant claims, defenses, facts, and substantive law presented in the case.” Maldonado v. Ochsner Clinic Found., 493 F.3d 521, 525 (5th Cir.2007) (internal quotation marks omitted). As noted, this class adversary proceeding concerns a claim pressed under the WARN Act. To prove a WARN Act claim, a plaintiff must demonstrate that: (1) the defendant was “an employer”; (2) the defendant ordered a “plant closing” or “mass layoff”; (3) the defendant failed to give to the plaintiff sixty days notice of the closing or layoff; and (4) the plaintiff is an “aggrieved” or “affected” employee.12 29 U.S.C. §§ 2102, 2104. If a plaintiff establishes these requirements, the employer may avoid liability by proving that it qualifies for the Act's “faltering company” exemption, or that the closing or layoff resulted from “unforeseen business circumstances” or a “natural disaster.” See 20 C.F.R. § 639.9.

Here, the bankruptcy court generally acknowledged these elements of, and defenses to, a WARN Act claim. However, it entered no findings or conclusions as to the relative complexity, in this case, of adjudicating the claims. There is no indication in the court's order, for instance, of whether the Trustee has or intends to assert any defenses, and, if so, whether those defenses are colorable. This is significant because if defenses are to be asserted, the need for attorneys both to assert the claims and to defend against them becomes greater and, in spite of the associated costs, may be important to the ability of the claimants to recover and of the debtor to defend.13 On the other hand, if the Trustee does not intend to assert any defenses, it may be the case that resolution of the claims would be relatively uncomplicated and inexpensive.14 Nevertheless, we simply have no insight into these and related matters, as the only explanation the court provided for its superiority holding was the conclusory declaration that “it would be a waste of [TWL's] limited assets to move forward with [the] adversary proceeding when Teta is the only individual who has asserted a timely WARN Act claim, and the claims process can more expeditiously move Teta's claims down a parallel track.”

With just this conclusory statement to rely on, “we are unable to determine · the thought processes of the court below.” Velasquez v. City of Abilene, 725 F.2d 1017, 1021 (5th Cir.1984). “When because of absence of findings of fact or conclusions of law, an appellate court cannot determine whether the record supports the [lower] court decision, it should remand the action for entry of findings of fact and conclusions of law.” Vizena, 360 F.3d at 503 (quoting Complaint of Ithaca Corp., 582 F.2d 3, 4 (5th Cir.1978)). Accordingly, we must vacate the orders below and remand for entry of these necessary findings and conclusions.

5. The Pending Class Proof of Claim

Although, as noted, we are unable on this record to affirm the bankruptcy court's order, Teta advances an additional argument urging us to reverse that is not necessarily dependent on the absent findings and conclusions. Specifically, Teta implies that by declining to reverse the court's denial of class certification in the adversary proceeding, we effectively foreclose any right the putative class members may have to recover under the WARN Act. In reaching this conclusion, Teta speculates that because the bankruptcy court denied class certification in the adversary proceeding, we may infer that it will do so again on remand, and that it will do the same in connection with the class proof of claim. Teta posits that denial of class certification in connection with the proof of claim is especially likely given the broader discretion the court has under Bankruptcy Rule 9014 to deny class certification in contested matters.

While Teta's arguments are not facially without force, we ultimately do not share his concern. First, with this opinion, we vacate the bankruptcy court's denial of class certification in the adversary proceeding. While we offer no view as to how the bankruptcy court should resolve that matter on remand, we cannot assume—as adoption of Teta's argument would require—that it necessarily will once again deny class certification in the adversary proceeding. Moreover, although we likewise take no position on the propriety of Teta's class proof of claim, we nevertheless are unwilling to conclude that the court necessarily will prevent that claim from moving forward. The bankruptcy court has yet to rule on that matter, and it would be improper for us to speculate about what the court might do in relation thereto.

Further, even assuming that the bankruptcy court again denies certification in the adversary proceeding, and also finds the class proof of claim impermissible, the rights of putative class members associated with that proof of claim seemingly would be protected by the reasoning underlying Crown, Cork & Seal Co. v. Parker, 462 U.S. 345, 103 S.Ct. 2392, 76 L.Ed.2d 628 (1983). There, the Supreme Court explained that “[t]he filing of a class action tolls the statute of limitations ‘as to all asserted members of the class.’ “ Id. at 350 (quoting Am. Pipe & Constr. Co. v. Utah, 414 U.S. 538, 554, 94 S.Ct. 756, 38 L.Ed.2d 713 (1974)). Applying this reasoning in the bankruptcy context, a sister circuit has explained that if a “bankruptcy court denies [a class certification] motion, it should then establish a reasonable time within which the individual putative class members are allowed to file individual proofs of claim.” Gentry v. Siegel, 668 F.3d 83, 91 (4th Cir.2012); see also In re Am. Reserve Corp., 840 F.2d 487, 493 (7th Cir.1988) (“If the bankruptcy judge denies the request to certify a class, then each creditor must file an individual proof of claim·”).

“Stated otherwise, by recognizing class actions, the Bankruptcy Rules also recognize that putative class representatives can keep the class action process alive until the court decides the issue.” Gentry, 668 F.3d at 90; see also Sheftelman v. Standard Metals Corp., 839 F.2d 1383, 1387 (10th Cir.1987) (per curiam) (leaving unresolved “the class action claims issue,” but requiring instead that notice be given to the putative class members, and that a new bar date be established to allow them to file individual proofs of claim); In re Entergy New Orleans, Inc., 353 B.R. 474, 483–84 (Bankr.E.D.La.2006) (discussing the complicated issues surrounding notice when a class proof of claim is denied after the bar date has passed, and when “most if not all of the putative class members are likely unaware that they have a potential claim,” but eventually resolving the case on other grounds). Thus, although the bankruptcy court appears repeatedly to fault the putative class members for not filing individual claims, Teta's class proof of claim—which was filed well prior to the bar date—was filed on their behalf, and therefore appears to preserve their claims pending resolution of the class certification issue.15

However, because Teta's class proof of claim currently is not before us, we need not resolve these matters. We raise them merely to explain our rationale for rejecting Teta's contention that, by declining to reverse the orders below, we effectively foreclose any right the putative class members may have to recovery. As is evident, to the extent the putative class members have viable WARN Act claims, they also appear to have multiple avenues by which they may press those claims. We leave to the bankruptcy court, in the first instance, the determination of how those claims should be addressed.

D. Dismissal of the Adversary Proceeding

As explained, the bankruptcy court also granted the Trustee's motion to dismiss Teta's adversary proceeding. Unfortunately, the court's findings and conclusions as to why it did so are even more bare than those associated with its treatment of Teta's class certification motion. In fact, the only line the court's ten-page order that even peripherally addresses the court's dismissal states: “Similar to In re First Magnus Financial Corp., · the [c]ourt believes it would be a waste of [TWL's] limited assets to move forward with this adversary proceeding when Teta is the only individual who has asserted a timely WARN Act claim, and the claims process can more expeditiously move Teta's claims down a parallel track.”

Although the bankruptcy court's order does not indicate on what basis the Trustee sought dismissal of Teta's adversary proceeding, the record is clear that the related motion was filed pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim.16 Nevertheless, nothing in the court's order offers insight into why it agreed that Teta's adversary complaint failed to state a claim for relief, or why dismissal otherwise was proper. Cf. In re Dewey & LeBoeuf LLP, No. 12–12321(MG), 487 B.R. 169, 2013 WL 556163, at *4 (Bankr.S.D.N.Y. Feb.13, 2013) (explaining that an adversary complaint seeking class WARN Act claims stated a claim for relief because “it assert[ed] that the Debtor terminated Plaintiff and other employees in the month before the bankruptcy filing, and it allege[d] that Debtor failed to comply with the WARN Acts' notice requirements”).

Moreover, the bankruptcy court's citation to First Magnus is less helpful than might at first might be apparent. In First Magnus, the court dismissed the adversary complaint pursuant to Rule 41(b) rather than Rule 12(b)(6). 403 B.R. at 663; see also Fed.R.Civ.P. 41(b) (“If the plaintiff fails to prosecute or to comply with these rules or a court order, a defendant may move to dismiss the action or any claim against it.”). There is thus no evidence to indicate that the First Magnus court believed the complaint there did not state a claim for relief, nor is there evidence here to suggest that Teta failed to prosecute his claim, or failed to comply with applicable rules or court orders.

Thus, we again are left without adequate findings of fact and conclusions of law by which we may determine whether the record supports the bankruptcy court's dismissal of Teta's adversary complaint. We therefore are compelled to vacate the orders below insofar as those orders granted the Trustee's motion to dismiss Teta's adversary proceeding. See Vizena, 360 F.3d at 503.

IV. CONCLUSION

Because the reasons for the bankruptcy court's order are unclear, we VACATE in toto the orders below and REMAND to the district court to remand to the bankruptcy court for reconsideration in light of this opinion. We express no view as to the outcome the bankruptcy court should reach on remand in reconsidering Teta's motion for class certification and the Trustee's motion to dismiss the adversary proceeding.

I would reverse the district court's affirmance of the bankruptcy court's denial of class certification and dismissal of this class adversary proceeding. Nevertheless, I concur in the judgment insofar as it requires the bankruptcy court to reconsider its holding.

In its Federal Rule of Civil Procedure 23 “numerosity” and “superiority” analyses,1 the bankruptcy court erred as a matter of law in applying bankruptcy-related factors such as the expense to the estate in litigating a class adversary proceeding.2 There is a distinction between: (a) the necessity of the district court's strict adherence to Rule 23's “specified criteria”3 in class adversary proceedings; and (b) the district court's discretionary ability to consider other factors under Federal Rule of Bankruptcy Procedure 9014 in contested matters, which include proofs of claim. The Eleventh Circuit has explained this distinction in simple terms: “Rule 23 may be invoked in two circumstances: in an adversary proceeding and in a contested matter. Pursuant to the terms of Bankruptcy Rule 7023, Rule 23 applies in any adversary proceeding. Also, under Bankruptcy Rule 9014, the bankruptcy judge may at his discretion apply Bankruptcy Rule 7023, and by extension Rule 23, in a contested matter.” In re Charter Co., 876 F.2d 866, 873 (11th Cir.1989).

Indeed, the Supreme Court has held that Rule 23 “says that if the prescribed preconditions [i.e. Rule 23's specified criteria] are satisfied ‘a class action may be maintained ’ (emphasis added)-not ‘a class action may be permitted.’ “ Shady Grove Orthopedic Assocs., 130 S.Ct. at 1438 (2010). The Court continued, “[c]ourts do not maintain actions; litigants do. The discretion suggested by Rule 23's ‘may’ is discretion residing in the plaintiff: He may bring his claim in a class action if he wishes .” Id. Here, even the Trustee appears to have acknowledged that the bankruptcy court lacks discretion to consider criteria unrelated to the enumerated Rule 23 factors in its class certification determination of this adversary proceeding:

Court: “In making the determination about whether or not to certify a class, are you saying that's not a pure Rule 23 analysis in a bankruptcy proceeding?”

Trustee: “In a lawsuit [i.e. bankruptcy adversary proceeding], it is a pure Rule 23 analysis.”

Oral Argument at 31:50.

As Judge King correctly recognizes, we are called to adjudicate the denial of class certification in the WARN Act adversary proceeding, not the WARN Act class proof of claim. Therefore, it is undisputed that this requires a pure Rule 23 analysis. Considering bankruptcy-related factors such as the expense to the estate in litigating a class adversary proceeding is a departure from a pure Rule 23 analysis because those factors fall outside of Rule 23's “specified criteria” of, inter alia, the four factors enumerated in Rule 23(b)(3)(A)-(D). The bankruptcy court thus erred as a matter of law.

I.

Following a pure Rule 23 analysis, I would reverse the bankruptcy court's denial of class certification. Because Judge King bases her holding on the Rule 23(b)(3) “superiority” analysis, I focus on that.4

Judge King's opinion explicitly addresses only one of the four enumerated Rule 23(b)(3) “superiority” factors: “the extent and nature of any litigation concerning the controversy already commenced by or against members of the class.” Fed.R.Civ.P. 23(b)(3)(B). This factor supports class certification. The related WARN Act class proof of claim was simply filed as a precautionary measure, and bankruptcy courts have held that the class adversary proceeding is a preferable way to adjudicate WARN Act claims, as opposed to the proof of claim process. See, e.g., In re Taylor Bean & Whitaker Mortg. Corp., 2010 WL 4025873, *3 (Bankr.M.D.Fla. Sept.27, 2010) (unpublished) ( “resolving the WARN Act claims collectively through a class action adversary proceeding will be more efficient than handling them in a piece-meal fashion through the claims process.”); In re First NLC Fin. Servs., LLC, 410 B.R. 726, 730 (Bankr.S.D.Fla.2008) (“if the class is certified, the Court finds that as between an adversary proceeding and the claims process, an adversary proceeding has the potential to provide a less protracted and more efficient litigation framework.”).

Lending further weight for class certification under this factor, the Bankruptcy Court for the Southern District of Texas has held that the “greatest indication that a class action [adversary proceeding] would be superior to other available methods of adjudication” is a “negative value suit.” In re Wilborn, 404 B.R. 841, 868 (Bankr.S.D.Tex.2009) (citations omitted), vacated on other grounds, 609 F.3d 748 (5th Cir.2010)5 ; see also In re Charter Co., 876 F.2d at 871 (“[T]he effort and cost of investigating and initiating a claim may be greater than many claimants' individual stake in the outcome, discouraging the prosecution of these claims absent a class action filing procedure.”); Collier on Bankruptcy ¶ 7023.03(3) (Alan N. Resnick & Henry J. Sommer eds., 16th ed.) (“It could be economically impossible for each class member to proceed on an individual basis.”). Since this is clearly a “negative value suit”—the cost to each worker to litigate his or her own WARN Act proof of claim would almost certainly outweigh the value of the claim6 —it only makes sense to pursue the claims as a class in an adversary proceeding.

Additionally, the Bankruptcy Court for the Southern District of Florida has explained why the class adversary proceeding is more efficient and fairer to putative WARN Act class members than the proof of claim process: “resolution of the WARN Act claims will be expedited and handled more efficiently in a class adversary proceeding because [it] will also require the Trustee to state any objections to claims that she may have more promptly than would be required in the normal claims objection process.” In re First NLC Fin. Services, LLC, 410 B.R. at 730. Even in a class proof of claim, which Judge King concedes may not even be available in this circuit, the trustee would still be able to delay consideration of the class proof of claim to the detriment of the putative WARN Act creditors,7 while a class adversary proceeding would require the trustee to consider the claim earlier.

Each of the other three enumerated Rule 23(b)(3) “superiority” factors also supports class certification of the adversary proceeding. The first factor, “the interest of members of the class in individually controlling the prosecution or defense of separate actions,” Fed.R.Civ.P. 23(b)(3)(A), favors class certification. No former employee other than Teta filed a WARN Act proof of claim, indicating that the interest of putative class members in individually controlling the case would be low. The second factor, discussed above, falls in favor of class certification. As for the third factor, “the desirability or undesirability of concentrating the litigation of the claims in the particular forum,” Fed.R.Civ.P. 23(b)(3)(C), no one disputes the propriety of concentrating the litigation of the claims in the bankruptcy court. And the fourth factor, “the difficulties likely to be encountered in the management of a class action,” Fed.R.Civ.P. 23(b)(3)(D), supports class certification because, as further discussed below, WARN Act claims are especially well-suited for class treatment. Gomez v. Am. Garment Finishers Corp., 200 F.R.D. 579, 584–85 (W.D.Tex.2000) (holding that there is no manageability problem related to the class in a WARN Act claim); see also Finnan v. L.F. Rothschild & Co., Inc., 726 F.Supp. 460, 465 (S.D.N.Y.1989) ( “The WARN Act seems particularly amenable to class litigation.”).

II.

Assuming arguendo that it is proper to consider the bankruptcy-related factors stated by Judge King in determining whether Rule 23(b)(3)'s “superiority” requirement is satisfied, those factors also weigh in favor of granting class certification of this adversary proceeding. Among the bankruptcy-related factors Judge King deems appropriate for consideration are: (1) the cost to the debtor's estate of a class adversary proceeding, and (2) class counsel's fee in a class adversary proceeding.

With respect to the cost to the debtor's estate, courts have recognized that treating WARN Act claims as a class adversary proceeding actually is the best way to preserves the estate's assets. In granting class certification of a WARN Act adversary proceeding, the Bankruptcy Court for the Northern District of Alabama wrote “it is in the best interests of the putative class members, judicial economy, and even [the debtor's estate] to an extent to adjudicate these matters in one single action.” In re Bill Heard Enters., Inc., 400 B.R. 795, 803 (Bankr.N.D.Ala.2009) (emphasis added). The court continued, “principles of judicial economy and preservation of the bankruptcy estate require this Court to select one of the adversary proceedings to resolve the WARN Act claims rather than allowing each of the actions involving the same claims to proceed.” Id. at 804 (citing In re Protected Vehicles, Inc., 397 B.R. 339, 346 (Bankr.S.C.2008)). Indeed, the expense of litigating multiple proofs of claim, not to mention the costs the Trustee has already incurred in fighting these relatively low-value WARN Act claims, appear to present more of a risk of unnecessarily depleting the estate's assets than anything else.

There is no need to remand the case for the bankruptcy court to enter its findings of fact and conclusions of law on the relative complexity of adjudicating the claims, including “whether the Trustee has or intends to assert any defenses.” The Trustee has already complicated the WARN Act class proof of claim, as demonstrated by the following three defenses she has asserted to the class proof of claim: (1) “class claims are not allowed in bankruptcy,” In re TWL Corp., Ch. 7 Case No. 08–42773, Brief in Support of Trustee's Objection to Teta's WARN Act Class Proof of Claim 3, Bankr.E.D. Tex. ECF No. 401; (2) even if class claims were allowed, Teta did not timely file for class treatment of the WARN Act claim, id. at 5–6; and (3) even if class claims were allowed, the WARN Act class claim should be disallowed for the very same reasons the bankruptcy court denied class certification of this adversary proceeding (numerosity and superiority), id. at 6–11. These defenses are material to the class certification analysis in this WARN Act adversary proceeding because they attest to the superiority of the class adversary proceeding over the proof of claims process.8

The Trustee's defenses will require attorneys to litigate the issues, especially since Judge King's opinion acknowledges that the class proof of claim may not even be an option. Workers cannot be expected to proceed pro se in the claims process and Teta's counsel, which has litigated roughly 100 WARN Act cases, states that individually-filed WARN Act claims are simply unheard of. Appellant's Reply Br. at 6; Oral Argument at 14:50. Indeed, as this case has demonstrated with only one individual WARN Act proof of claim filed, the average worker that has just lost his or her job does not read a bankruptcy court's notice to creditors and decide to file a WARN Act proof of claim. If he or she can decipher the language of the notice, she would then need to: (1) be familiar with the WARN Act, which is nowhere referenced in the notice; (2) know that she has a potential WARN Act claim and navigate the proof of claim form; and (3) be prepared to litigate the claim when her former employer's estate contests it. This may be a reasonable expectation of commercial creditors, but for an ordinary worker owed a few thousand dollars in back wages, it is a formidable task.

With respect to class counsel's fee in an adversary proceeding, the fee does not deplete the assets in the bankruptcy estate. The class counsel's fee derives from any funds awarded to class members, and is not awarded in addition to the damages that the estate pays to the class members. If anything, then, the only fees depleting the estate's assets are those charged by the Trustee and her attorneys.

III.

Class WARN Act filings in bankruptcy are not new, and while some courts have opted to adjudicate them through the bankruptcy claims process, just as many or more have found the class adversary proceeding a superior adjudication structure for the reasons articulated above. See 2 Employee and Union Member Guide to Labor Law § 10:14 (Labor and Employment Law Committee, National Lawyers Guild 2012) (surveying courts' recent treatment of WARN Act class filings; “WARN Act claims are very often handled by bankruptcy courts in adversary proceedings, though some courts have dismissed adversary proceedings in favor of adjudication through the bankruptcy claim allowance/disallowance process.”).

I would reverse the denial of class certification and dismissal of the adversary proceeding because, under a pure Rule 23 analysis or even applying bankruptcy-related factors, joinder would be impracticable and the class adversary proceeding would be the superior way to handle the putative plaintiffs' WARN Act claims. Nevertheless, I concur in the judgment insofar as it requires the bankruptcy court to reconsider its denial of class certification.

KING, Circuit Judge:

View the original article here