Final Chapter In The Case Of The Missing Double Eagle Coins

by: Peter J. Gallagher (@pjsgallagher) (LinkedIn)

One of the more interesting cases I have written about is Langbord v. U.S. Dept. of Treasury, which I described in a June 2015 post as follows:

It's not every day that you find a case that starts with Depression-era monetary policy, ends with a relatively obscure federal statute, and in between tells the tale of the alleged theft of a coin considered to be "the most valuable ounce of gold in the world." Did I mention that the case also involves both Presidents Roosevelt, King Farouk of Egypt and the Sept. 11, 2001, terrorist attacks? A case recently decided by the U.S. Court of Appeals for the Third Circuit, Langbord v. U.S. Dept. of Treasury, has all of this and more.

Langbord involved the 1933 Double Eagle gold coin. It is a $20 gold piece that was designed by famed artist Augustus Saint-Gaudens after he was commissioned by President Theodore Roosevelt to help beautify American coinage. Almost a half million Double Eagles were minted, but none were ever officially released into circulation. Shortly after they were minted, newly-elected President Franklin D. Roosevelt, seeking to stem a run on the banks, issued Executive Order 6102, which made it illegal to "hoard" large amounts of gold. Accordingly, the U.S. Mint was ordered to stop issuing gold coins and to melt down any gold coins in its possession, including the Double Eagle. As part of this process, two Double Eagles were sent to the Smithsonian Institution for posterity, but the rest were supposed to have been melted down.

As you might have guessed, not all of the remaining coins were melted down. According to the government, approximately 20 of them ended up in the hands of a coin dealer who worked with a corrupt cashier at the US Mint to smuggle them out before they could be melted down. Over the years, it was alleged, he sold several of these coins. But, after his death, his family found 10 of them in his safety deposit box and offered to return them to the government. They requested the same terms as the government had agreed to several years earlier with a different individual who came into possession of another one of the coins. The government originally seized that coin after luring the dealer into a sting conducted at the Waldorf Astoria in New York City, but later, after the dealer sued, agreed to sell the coin at auction and split the proceeds with him. At auction, it sold for almost $7.6 million, more than twice the world record for any coin sold at auction at the time. Plaintiffs in Langbord were looking for the same arrangement for their coins. The government agreed in principle but asked to authenticate the coins first. Plaintiffs agreed and sent the coins to the government for authentication. However, after authenticating them, the government refused to return them, arguing that they were stolen and were rightfully the property of the U.S. government.

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In New Jersey, You Can Now Disapprove A Real Estate Contract By Email Or Fax (But Not Telegram)

by: Peter J. Gallagher (@pjsgallagher) (LinkedIn)

Anyone who has bought or sold real estate in New Jersey is familiar with "attorney review." When you buy or sell a house, you sign a contract that is almost always prepared by a broker. The contract must contain a standard provision stating that the buyer and seller have the right to have an attorney review the contract. This "attorney review" period lasts three days. The contract becomes legally binding if, at the end of that three-day period, neither the buyer's nor the seller's attorney disapproves of the contract. If either side disapproves, their attorney must notify the other side's broker by certified mail, telegram, or personal service. In Conley v. Guerrero, a case that seems to be a case study in the concept of raising form over substance, the New Jersey Supreme Court updated this requirement to allow the notice of disapproval to also be sent by fax or email. (Those of you still using telegrams may be out of luck, however, because this no longer appears to be an appropriate method of service for the notice of disapproval.)

In Conley, plaintiffs signed a form contract to purchase a condominium unit from sellers. It contained the standard "attorney review" provision. After signing the contract, but during the attorney review period, sellers received competing offers to purchase the property and eventually entered into a new contract to sell it to a new buyer for a higher price. Sellers' attorney sent a disapproval of plaintiffs' contract to both plaintiffs' counsel and the broker (who was a duel agent represented both plaintiffs and seller) during the attorney-review period. He sent the notice via email, which plaintiffs' counsel and the agent acknowledged receiving within the attorney review period. Nonetheless, plaintiffs claimed that the sellers were bound by the contract and had to sell to his clients because the disapproval was not sent in the proscribed manner — by certified mail, telegram, or hand delivery.

Plaintiffs sued, seeking specific performance. Both sides moved for summary judgment. The Chancery Division granted defendants' motion and dismissed the complaint. The Chancery Division held that, while seller did not comply with the method-of-delivery requirements set forth in the contract, this breach was only "minor" because plaintiffs' counsel acknowledged receiving the notice within the attorney review period. Therefore, the Chancery Division held that the "underlying justification for the attorney review clause" — to protect parties against being bound by broker-prepared contracts without the opportunity to review them with their attorneys — was accomplished.

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“Here’s the mail it never fails . . . :” Judge Posner Criticizes “Rhetorical Envelopes” In Which Judicial Opinions Are “Delivered To The Reader”

by: Peter J. Gallagher (@pjsgallagher) (LinkedIn)

[Apologies for the Blue's Clues reference in the title to this post.]

In his concurring opinion in a recent Seventh Circuit decision — United States v. Dessart — Judge Posner agreed with the majority's conclusions, but wrote separately to express his "reservations about some of the verbal formulas in the majority opinion." He did not "criticize the majority for reciting them" because, as he noted, they are "common, orthodox, even canonical." But he did criticize the "verbal formulas" themselves as being "inessential and in some respects erroneous" and thus, he urged, "ripe for rexamination."

What were the "verbal formulas" that Judge Posner was so keen to criticize? Just some of the legal standards that we see recited in opinions every day. For example, the commonly-used "abuse of discretion" standard, of which Judge Posner appears not to be a big fan. In his concurring opinion, Judge Posner noted that the majority defined this standard as including "among other missteps, 'material errors of law.'" This apparently did not jibe with Judge Posner's understanding of discretion and its abuse, as he explained:

Of course, material errors of law are potentially very serious, but what has that to do with discretion or its abuse? Common as the term "abuse of discretion" is in opinions dealing with appeals from district court decisions, I find it opaque. If the appellate court is persuaded that the trial court erred in a way that makes the trial court's decision unacceptable, it reverses. What has discretion to do with it? And "abuse" seems altogether too strong a term to describe what may be no more than a disagreement between equally competent judges – the trial judge and the appellate judges – that the appellate judges happen to be empowered to resolve as they see fit.

Similarly, he challenged the majority's similarly well-settled statement that an appellate court, when reviewing a trial court's decision to issue a search warrant, must afford that decision "great deference." (Among the issues in the Dessart case was whether a search warrant was supported by probable cause.) Judge Posner acknowledged that the standard comes from a Supreme Court decisions holding that "[a] magistrate's determination of probable cause should be paid great deference by reviewing courts," but questioned it nonetheless. First, he questioned why "great" deference should be afforded to such decisions since "warrants [are] usually issued by the most junior judicial officers – and often police or prosecutors can shop among magistrates for one who is certain or almost certain to respond affirmatively to a request to issue a warrant." Second, Judge Posner noted that "[n]othing in the [Fourth] amendment requires warrants – ever," therefore it was not fair, in Judge Posner's opinion, to conclude, as is often concluded, that the Constitution expresses a preference for searches conducted pursuant to warrants or to afford great deference to a trial court's decision to issue one.

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When Was The Last Time You Sent A Letter Via Telegram?

I have never sent a telegram and would not know how to send one even if I wanted to. But, if you are so inclined, there is a somewhat quirky provision of New Jersey real estate law that would allow you to dust off your telegram machine and send one. This provision was the subject of a recent Appellate Division decision, Conley v. Guerrero, that attracted significant attention from the real estate community and may end up before the New Jersey Supreme Court.

Anyone who has bought or sold real estate in New Jersey is familiar with "attorney review." When you buy or sell a house, you sign a contract that is almost always prepared by a broker. The contract must contain a standard provision stating that the buyer and seller have the right to have an attorney review the contract. This "attorney review" period lasts three days. The contract becomes legally binding if, at the end of that three-day period, neither the buyer's nor the seller's attorney disapproves of the contract. If either side disapproves, their attorney must notify the other side's broker by "certified mail, telegram or by delivering it personally." The attorney must also notify the other attorney (or the party itself if they are not represented), but the law does not specify the manner in which this notice must be delivered. (Stay tuned for more on this later!)

In Conley, plaintiffs signed a form contract to purchase a condominium unit from sellers. It contained the standard "attorney review" provision. After signing the contract, but during the attorney review period, sellers received competing offers to purchase the property and eventually entered into a new contract to sell it to a new buyer for a higher price. Sellers' attorney therefore sent a disapproval of plaintiffs' contract to both plaintiffs' counsel and the broker (who was a duel agent represented both plaintiffs and seller). He sent the notice of disapproval via email, which plaintiffs' counsel and the agent acknowledged receiving within the attorney review period. Nonetheless, plaintiffs argued that the notice was ineffective because it was not sent in the proscribed manner — by certified mail, telegram, or hand delivery.

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Update: Third Circuit Grants Government’s Request For En Banc Review In Double Eagle Dispute

I have written before about Roy Langbord v. U.S. Dept. of Treasury, a lawsuit over ten old, rare, and valuable "Double Eagle" coins. Very long story, short — plaintiffs gave the coins to the government for authentication, the Government claimed they were stolen and refused to return them, plaintiffs sued to get them back. A divided panel ruled in favor of plaintiffs and ordered the coins returned. The Government sought en banc review of this decision and, on July 28, 2015, this request was granted. As a result, the panel's decision has been vacated and this already fascinating case continues to roll on. Stay tuned.