Court: United States Court of Appeals for the Ninth Circuit

Filed: 2026-09-23

Docket: 5:19-cv-02337-

The ninth-circuit reversed the district court’s grant of summary judgment for the federal government in Lionel Cannon’s motion under Federal Rule of Criminal Procedure 41(g) seeking the return of $218,000 in cash seized by FBI agents but subsequently stolen by Special Agent Scott Bowman. The court held that sovereign immunity does not bar a Rule 41(g) claim when the government has lost seized cash but later recovers funds traceable to those specific proceeds through criminal forfeiture proceedings against the thief. Relying on the fungible nature of money, the panel determined that recovering the value of the stolen currency constitutes the “return” of property rather than a claim for money damages, distinguishing this scenario from cases where lost or destroyed property cannot be recovered at all. Under this standard, once the government recovers traceable funds, it bears the burden of demonstrating a legitimate reason to retain them. The court found that the government failed to meet this burden because it conceded it had not initiated forfeiture proceedings for the stolen amount due to the statute of limitations and offered no evidence that Cannon lacked lawful possession of the intermingled funds, despite Cannon providing specific documentation regarding lawful sources such as employment income and car sales. Consequently, the case is remanded to the district court for further proceedings to determine the exact amount of recovered funds traceable to Cannon’s safe and to adjudicate his entitlement to their return.

Do It For The Case Law is a news reporting service. Nothing in this episode constitutes legal advice.

Court: United States Court of Appeals for the First Circuit

Filed: 2026-09-23

The First Circuit affirmed the district court’s order classifying a $8.5 billion proof of claim filed by the PREPA bondholders’ trustee against the Commonwealth of Puerto Rico as a “Section 510(b) Subordinated Claim” under the Commonwealth’s Title III restructuring plan, thereby excluding the claim from any distribution to general unsecured creditors. The court held that 11 U.S.C. § 510(b), which mandates the subordination of claims for damages arising from the purchase or sale of a security, applies to the trustee’s claim because the Commonwealth allegedly impaired statutory and constitutional protections that served as a material inducement for investors to purchase the PREPA revenue bonds. Rejecting the bondholders’ argument that § 510(b) is limited to misconduct occurring at the exact moment of the securities transaction, the court applied a causal nexus standard consistent with other federal circuits, concluding that the claim sought damages arising from the purchase because the alleged post-transaction impairment targeted rights specifically granted to induce that purchase. The court further rejected the bondholders’ alternative arguments that the canon of constitutional avoidance required a narrower reading of the statute and that the claim should only be subordinated to claims senior or equal to the bonds rather than fully subordinated, noting the latter issue was waived for failure to raise it in the district court. As a practical consequence, the bondholders’ claim receives no recovery under the Commonwealth Plan’s Class 64 classification, which provides zero distribution to subordinated claims, while general unsecured creditors (Class 58) will recover approximately twenty percent of their claims rather than the reduced five percent they would have received had the $8.5 billion claim been classified as a general unsecured claim.

Do It For The Case Law is a news reporting service. Nothing in this episode constitutes legal advice.

Court: United States Court of Appeals for the Tenth Circuit

Filed: 2026-09-23

Docket: 5:23-CV-03180-JWL)

The tenth-circuit affirmed the district court’s denial of James Laughrey’s habeas corpus petition under 28 U.S.C. § 2241, which challenged his military general court-martial convictions on the grounds that he was a retired soldier and thus outside the jurisdiction of the military courts. The court first determined that the appeal was not moot despite Laughrey’s release from confinement because he faces collateral consequences, including the loss of retirement pay, veterans’ benefits, firearm rights, voting rights, and mandatory sex offender registration. Regarding the merits, the court applied a two-part analysis. First, Laughrey’s claim that Army Regulation 27-10 required Judge Advocate General approval for referring charges against retired soldiers was deemed unexhausted because it was not raised in military courts and did not fall within the narrow exception for constitutional challenges to jurisdiction over civilians; consequently, the claim was waived. Second, Laughrey’s alternative constitutional challenge—that the “Make Rules Clause” of Article I does not authorize court-martial jurisdiction over retired servicemembers—was reviewed de novo but rejected based on controlling precedent. Citing *Wilson v. Curtis*, 150 F.4th 1359 (10th Cir. 2025), and 10 U.S.C. § 802(a)(4), the court held that retired servicemembers retain military status due to obligations such as obeying orders, potential recall, rank maintenance, and pay receipt, thereby remaining within the definition of “land and naval Forces.” As a result, the court-martial possessed proper jurisdiction over Laughrey, and his petition was denied.

Do It For The Case Law is a news reporting service. Nothing in this episode constitutes legal advice.

Court: United States Court of Appeals for the Tenth Circuit

Filed: 2026-09-23

Docket: 6:23-CV-01040-HLT)

The tenth-circuit affirmed the district court’s order denying Swepson’s third post-judgment motion to alter or amend the judgment and awarding costs to her former employer. The court held that the district court did not abuse its discretion in denying the motion under Federal Rules of Civil Procedure 59(e) and 60(b), as Swepson merely reasserted arguments previously rejected by the district court and this court, which are barred from relitigation under the doctrine of law of the case. Regarding the award of costs under Rule 54(d), the court found no abuse of discretion because Swepson failed to explain why the district court’s decision was wrong, effectively waiving her challenges regarding the nature of the expenses and her in forma pauperis status. Consequently, the judgment stands, and Swepson remains liable for the awarded costs while being precluded from further duplicative filings on these issues.

Do It For The Case Law is a news reporting service. Nothing in this episode constitutes legal advice.

Court: United States Court of Appeals for the First Circuit

Filed: 2026-09-21

The First Circuit affirmed Gustavo Kinrys’s conviction and sentence for health insurance fraud, rejecting his challenges to the district court’s calculation of intended loss for sentencing enhancements and the amount of restitution ordered. Regarding the sentencing enhancement, the court applied the *Alphas* burden-shifting framework under U.S.S.G. § 2B1.1, which permits a sentencing court to use the face value of billed amounts as prima facie evidence of intended loss in fraud cases rife with deception. The burden then shifts to the defendant to rebut this presumption by proffering evidence that they subjectively intended to receive a lesser amount. Although Kinrys argued that his status as an “in-network” provider meant he only intended to receive the lower contract reimbursement rates, the appellate court found no clear error in the district court’s factual determination that Kinrys intended to “scoop” as much as possible up to the billed amounts. This conclusion was supported by evidence that Kinrys filed civil suits seeking damages based on full billed charges rather than contract rates and that he retained payments exceeding contract amounts when insurers paid them. On the issue of restitution under the Mandatory Victims Restitution Act, 18 U.S.C. § 3663A(c)(1)(A)(ii), the court affirmed the order requiring Kinrys to pay over $6.5 million to victims. Kinrys argued that this amount should be offset by claims for legitimate services he rendered but was never paid for, contending that failing to do so would confer a windfall on the insurers. The court rejected this argument, holding that a criminal restitution hearing is not the proper venue to resolve distinct, contested civil billing disputes or to determine whether Kinrys is entitled to payment for unpaid claims. Such issues must be resolved through separate civil litigation or administrative processes with the insurers, rather than by offsetting the restitution order in the criminal sentencing proceeding. As a result, the district court’s judgment imposing the prison term and restitution order stands without modification.

Do It For The Case Law is a news reporting service. Nothing in this episode constitutes legal advice.

Court: United States Court of Appeals for the Eleventh Circuit

Filed: 2026-09-22

Docket: 6:24-cr-00137-CEM-RMN-8

The eleventh-circuit granted counsel’s motion to withdraw from representing the defendant-appellant in this direct criminal appeal and affirmed the conviction and sentence. The court applied the standard established in *Anders v. California*, conducting an independent review of the entire record to determine if any arguable issues of merit existed. Finding no such issues, the court concluded that counsel’s assessment was correct and proceeded to affirm the judgment without oral argument.

Do It For The Case Law is a news reporting service. Nothing in this episode constitutes legal advice.