Latest 25 Cases This Week: Cavello Bay Reinsurance Ltd. v. Stein (2d Cir.), Razmzan v. United States (2d Cir.), Goodman v. Z. Diggs (4th Cir.)

Impeaching a Former President Is Plainly Constitutional

NEIL H. BUCHANAN

UF Levin College of Law professor and economist Neil H. Buchanan argues that the text of the Constitution makes clear that Congress has the power to impeach and convict Donald Trump, even though he is no longer President. Buchanan describes the unambiguous textual support for this conclusion, which Buchanan (and others) argue is also amply supported by the Constitution’s purpose, structure, and other interpretive approaches.

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Cavello Bay Reinsurance Ltd. v. Stein

Court: US Court of Appeals for the Second Circuit

Docket: 20-1371

Opinion Date: January 25, 2021

Judge: Dennis G. Jacobs

Areas of Law: Civil Procedure, Securities Law

The Second Circuit affirmed the district court's dismissal of Cavello Bay's claims of securities fraud for failure to plead a domestic application of the law. The court assumed without deciding that the transaction was "domestic," and agreed with the district court that Cavello Bay's claims are predominantly foreign under Parkcentral Global HUB Ltd. v. Porsche Automobile Holdings SE, 763 F.3d 198 (2d Cir. 2014). In this case, the claims are based on a private agreement for a private offering between a Bermudan investor (Cavello Bay) and a Bermudan issuer (Spencer Capital); Cavello Bay purchased restricted shares in Spencer Capital in a private offering; and the shares reflect only an interest in Spencer Capital, and they are listed on no U.S. exchange and are not otherwise traded in the United States. The court explained that it is not enough for Cavello Bay to allege that Spencer Capital made a misstatement from New York (through defendant); planned to use the funds to invest in U.S. insurance services; had its principal place of business and CEO and directors in New York; and was managed by a U.S. company. The court concluded that the contacts that matter are those that relate to the purchase and sale of securities.

Razmzan v. United States

Court: US Court of Appeals for the Second Circuit

Docket: 19-227

Opinion Date: January 26, 2021

Judge: Menashi

Areas of Law: Civil Procedure, Medical Malpractice

After defendant was sued for medical malpractice in state court, he removed the case to federal court and moved to substitute the United States as defendant. Defendant claimed that the alleged malpractice occurred within the scope of his employment at a federally deemed community health center, entitling him to immunity and the substitution of the United States as the defendant under the Federally Supported Health Centers Assistance Act (FSHCAA). The district court concluded that some of the alleged malpractice occurred outside the scope of defendant's employment because he had billed for some of his services privately, in contravention of the Federal Tort Claims Act Health Center Policy Manual. Therefore, the district court concluded that defendant was not covered by the FSHCAA implementing regulation. The district court denied substitution of the United States as to that conduct, remanding the case in part to state court. The government argues that the Second Circuit lacks jurisdiction to entertain this appeal because defendant appealed from an unreviewable remand order. The Second Circuit held that, pursuant to 28 U.S.C. 1447(d), remand orders are unreviewable except in cases that were originally removed under 28 U.S.C. 1442 or 1443. The court concluded that, because defendant removed this case under section 1442, the court is not barred from reviewing the district court's remand order. On the merits, the court concluded that defendant was acting within the scope of his employment under the relevant law—New York law—for the acts for which he billed privately. Therefore, the FTCA Manual is not entitled to deference to the extent that it provides otherwise. Accordingly, the court reversed and remanded for further proceedings.

Goodman v. Z. Diggs

Court: US Court of Appeals for the Fourth Circuit

Docket: 18-7315

Opinion Date: January 28, 2021

Judge: James Andrew Wynn, Jr.

Areas of Law: Civil Procedure

The Fourth Circuit joined the Seventh, Eighth, and Ninth Circuits in holding that an amended complaint does not divest an earlier verified complaint of its evidentiary value as an affidavit at the summary judgment stage. In this case, the court concluded that the district court erred in granting summary judgment to law enforcement officers without considering plaintiff's verified complaints and abused its discretion in granting summary judgment before resolving plaintiff's repeated discovery requests. On remand, the district court should determine what, if any, additional discovery is appropriate. The district court should then consider afresh the officers' summary judgment motion on the full record, including plaintiff's verified complaints.

Anderson v. Weinert Enterprises Inc.

Court: US Court of Appeals for the Seventh Circuit

Docket: 20-1030

Opinion Date: January 28, 2021

Judge: Scudder

Areas of Law: Civil Procedure, Class Action, Labor & Employment Law

Weinert roofing employees could drive directly to job sites around Green Bay or could carpool from the shop using a company truck. For carpool employees, Weinert paid travel time at time-and-a-half the minimum wage and did not count travel time toward an employee’s 40-hour workweek. Weinert paid more than minimum wage for job-site work; job-site overtime pay was higher than travel time pay. Anderson, a Weinert seasonal employee, filed a collective action under the Fair Labor Standards Act, 29 U.S.C. 216(b), and Wisconsin law. Three other employees joined the action. Anderson converted the collective action into an individual FLSA action, which settled. Anderson then sought class certification (FRCP 23) for the state claims. Anderson identified 37 former or current Weinert employees to include in the class and requested the inclusion of employees Weinert expected to hire in 2019. The Seventh Circuit affirmed the denial of class certification. Employees to be hired in a future period cannot be included in the class. Anderson failed to show that joinder of the 37 employees in a single lawsuit (with multiple named plaintiffs) would be impracticable, as required by Rule 23(a). Anderson did not identify any difficulty in locating or contacting potential class members; the class lacked the geographical spread that might render joinder impracticable. Prevailing under the Act allows a plaintiff to recover attorneys’ fees and costs, offsetting some of the disincentive created by the small damages available. The numerosity requirement focuses on whether joinder would be impracticable, not whether each potential class member could bring a separate lawsuit.

Brooks v. Mentor Worldwide

Court: US Court of Appeals for the Tenth Circuit

Docket: 19-3240

Opinion Date: January 26, 2021

Judge: Carson

Areas of Law: Civil Procedure, Health Law, Products Liability

Plaintiffs Amber Brooks and Jamie Gale brought tort claims based on injuries they sustained when their breast implants began to deteriorate. The district court found they failed to state a claim upon which relief could be granted, and dismissed their complaint with prejudice. Plaintiffs appealed, arguing that though Congress heavily regulated the production and use of medical devices, there was a narrow preemption by which plaintiffs could plead their claim arising from the failure of that medical device. They also alleged the district court abused its discretion by denying their motion for leave to amend their complaint. The Tenth Circuit agreed with the district court that federal law preempted all of plaintiffs' claims, and any any state-law claims were insufficiently pled. With respect to the trial court's dismissal of plaintiffs' complaint with prejudice, the Tenth Circuit determined plaintiffs elected to "stand by their 'primary position,' and took no available avenue to amend their complaint. Therefore, the Tenth Circuit declined to grant their request now, and found the trial court did not abuse its discretion in denying Plaintiffs' request for leave to amend.

Mayotte v. U.S. Bank

Court: US Court of Appeals for the Tenth Circuit

Docket: 20-1027

Opinion Date: January 22, 2021

Judge: Robert Edwin Bacharach

Areas of Law: Banking, Civil Procedure, Consumer Law

The overarching issue here presented for the Tenth Circuit's review centered on whether the economic-loss rule prevented use of tort remedies for a lender’s failure to carry out its promises. The claims grew out of Plaintiff-appellant Mary Mayotte’s mortgage with U.S. Bank, which used Wells Fargo to service the loan. Mayotte sought modification of the loan and alleged that Wells Fargo had agreed to modify her loan if she withheld three payments. Based on this alleged understanding, Mayotte withheld three payments. But Wells Fargo denied agreeing to modify the loan, and U.S. Bank eventually foreclosed. The foreclosure spurred Mayotte to sue U.S. Bank and Wells Fargo, asserting statutory claims (violation of the Colorado Consumer Protection Act), tort claims (negligence, negligent supervision, and negligent hiring), and a claim for a declaratory judgment. The district court granted summary judgment to U.S. Bank and Wells Fargo, relying in part on the economic-loss rule and Mayotte’s failure to present evidence of compensatory damages. The district court ultimately entered judgment in favor of defendants-lenders, rejecting Mayotte's effort to recover tort remedies for wrongful conduct consisting solely of alleged contractual breaches. To this, the Tenth Circuit agreed with the district court and affirmed judgment.

Sundel v. United States

Court: US Court of Appeals for the District of Columbia Circuit

Docket: 19-1234

Opinion Date: January 26, 2021

Judge: Walker

Areas of Law: Civil Procedure, Military Law

Petitioner, a defense attorney with no client, petitioned to reverse a procedural ruling excluding the public from a classified hearing in an appeal filed by other attorneys who, like plaintiff, have no client. Because most proceedings for Guantanamo Bay detainees are open to the public, the attorney's desire to watch the hearing would not normally have been a problem. However, because this particular hearing concerned classified information, the military judge closed it. The DC Circuit noted that the attorney may or may not have prudential standing, but the court need not address the issue because the court can dismiss the case based on lack of subject matter jurisdiction. In this case, the attorney ultimately appeals the military judge's decision to close the hearing. The court explained that the attorney does not appeal a conviction, an actual final judgment, but rather a decision. Finally, the court rejected the attorney's argument under the collateral order doctrine.

Butler v. Parks

Court: Supreme Court of Alabama

Docket: 1190043

Opinion Date: January 22, 2021

Judge: Mitchell

Areas of Law: Civil Procedure, Government & Administrative Law

Two attorneys filed a complaint to recover fees they billed in the course of representing indigent defendants in criminal cases, and sought to certify several classes of plaintiffs. Specifically, they asserted that State officials improperly refused to pay bills for fees that exceeded statutory payment caps. The trial court entered a class-certification order, and the State officials appealed. Because State immunity barred the attorneys' request for retrospective monetary relief, and because the attorneys lacked standing to bring a constitutional challenge on behalf of indigent defendants, the Alabama Supreme Court reversed and remanded.

Ex parte Harbor Freight Tools USA, Inc.

Court: Supreme Court of Alabama

Docket: 1190969

Opinion Date: January 22, 2021

Judge: Mendheim

Areas of Law: Civil Procedure, Personal Injury

Harbor Freight Tools USA, Inc. ("Harbor Freight"), petitioned the Alabama Supreme Court for a writ of mandamus to direct the Lowndes Circuit Court to vacate its order granting a motion to compel discovery in an action Thomas and Juanita Webster ("the Websters") brought against Harbor Freight and others and to enter a protective order involving the requested discovery. The Websters previously hired Randall "Bubba" Wills and Jason Little to construct and install an elevator system in their house. In November 2016, Wills repaired the elevator system. To complete the repairs, Wills purchased from Harbor Freight a "Haul Master" 4,000-pound lifting block. According to Harbor Freight, its instruction manual for the lifting block expressly stated that the lifting block should not be used to transport people in an elevator system. Despite a posted warning, Wills tested the elevator system and rode in the elevator basket with Thomas Webster after Wills had installed the lifting block and completed the repairs. In December 2016, the Websters, along with their son Robbie, were riding in the elevator basket when it fell. To the extent that Harbor Freight sought mandamus relief on the grounds that the trial court's July 16, 2020, order granting the Websters' motion to compel failed to limit discovery, the Supreme Court determined the petition for mandamus relief was premature because Harbor Freight failed to seek a protective order raising the need for those limitations on discovery after the trial court entered the order granting the Websters' motion to compel. To the extent that Harbor Freight sought mandamus relief based on the trial court's implicit denial of its motion to adopt its proposed protective order, the Court determined Harbor Freight failed to demonstrate that any information that might be disclosed by providing the requested documents warrants the protections outlined in the proposed protective order. Accordingly, Harbor Freight's petition was denied.

Ex parte McCoy, Scott, and Henderson.

Court: Supreme Court of Alabama

Docket: 1190403

Opinion Date: January 22, 2021

Judge: Mitchell

Areas of Law: Civil Procedure, Personal Injury

James Olvey was killed when his vehicle was struck head on by a vehicle driven by Donald Wright II, who was driving the wrong way on Interstate 65 ("I-65") while attempting to flee the police. James Griffin, the personal representative of Olvey's estate, sued Wright, the City of Trafford ("Trafford"), the City of Warrior ("Warrior"), and other named and fictitiously named parties, alleging that they shared responsibility for Olvey's death. Over a year later, Griffin amended his complaint to substitute Trafford police officer Dylan McCoy and Warrior police officers Stephen Scott and James Henderson ("the defendant officers") for fictitiously named defendants. The defendant officers moved to enter a judgment in their favor, arguing that the amended complaint was untimely and thus barred by the applicable statute of limitations. The trial court denied their motion, and the defendant officers petitioned the Alabama Supreme Court for mandamus relief. After review of the trial court record, the Supreme Court determined Griffin had ample opportunity to discover the identities of the defendant officers before filing suit - and did not follow through. Therefore, he was not able to avoid the bar of the statute of limitations, and the defendant officers were entitled to the writ of mandamus.

Ex parte Michael Brown.

Court: Supreme Court of Alabama

Docket: 1190962

Opinion Date: January 22, 2021

Judge: Sellers

Areas of Law: Civil Procedure, Personal Injury

Michael Brown petitioned the Alabama Supreme Court for a writ of mandamus to direct the Lee Circuit Court to dismiss, pursuant to Rule 12(b)(6), Ala. R. Civ. P., the complaint filed against him by Christopher Beamon. Brown claimed the complaint should have been dismissed on the basis that the claims asserted in the complaint were barred by the applicable statute of limitations and that the doctrine of equitable tolling was inapplicable to suspend the running of the limitations period. IN 2017, pedestrian Beamon was injured when he was struck by a vehicle driven by Brown; the accident occurred in Auburn. In 2019, Beamon filed a complaint in the United States District Court for the Middle District of Alabama, naming as defendants Brown and Geico Casualty Company. In that complaint, Beamon asserted state-law claims and purported to invoke the federal court's diversity jurisdiction. Despite alleging diversity jurisdiction, the complaint stated that both Beamon and Brown were citizens of Alabama. Brown answered the complaint, asserting as a defense lack of subject-matter jurisdiction. In his motion to dismiss, Brown asserted the federal court lacked subject-matter jurisdiction over the complaint because complete diversity of citizenship was lacking between him an Beamon. Beamon moved to amend his complaint, asserting Brown was a citizen of Georgia, or alternatively, if the evidence was insufficient to support diversity jurisdiction, the court allow equitable tolling of the statute of limitations, which would allow him to refile his claims in a state court. On November 22, 2019, while the federal case was pending, but after the two-year limitations period had run, Beamon filed a second complaint, this time in the Lee Circuit Court, asserting the same claims against Brown as he had asserted in the federal court. The federal court dismissed the complaint without prejudice. The Alabama Supreme Court determined Brown did not establish a clear legal right to dismissal of the complaint filed at circuit court. "This case does not come within the exception to the general rule that a petition for the writ of mandamus is not the appropriate means by which to seek review of the merits of an order denying a motion to dismiss."

Nix v. Myers

Court: Supreme Court of Alabama

Docket: 1170224

Opinion Date: January 22, 2021

Judge: Stewart

Areas of Law: Civil Procedure, Personal Injury

Anthony Nix, a police officer for the City of Haleyville ("the City"), and the City appealed a judgment entered on a jury verdict in favor of John Myers. Myers filed suit asserting claims of negligence, wantonness, and negligence per se against Officer Nix and, based on the doctrine of respondeat superior, the City. Myers also asserted that the City had negligently and/or wantonly hired, trained, and supervised Officer Nix. The Alabama Supreme Court determined the trial court reversibly erred by providing the trial court to provide to the jury a copy of the statutes upon which the jury had been charged. Accordingly, Officer Nix and the City were entitled to a reversal of the judgment and a new trial.

Atlas Construction Supply v. Swinerton Builders

Court: California Courts of Appeal

Docket: D076426(Fourth Appellate District)

Opinion Date: January 26, 2021

Judge: Judith McConnell

Areas of Law: Civil Procedure, Construction Law, Personal Injury

A construction worker was killed when concrete formwork toppled over at a worksite. Plaintiffs, the worker's surviving family members, brought a wrongful death action against the general contractor, Swinerton Builders, and formwork supplier, Atlas Construction Supply, Inc. Atlas cross-complained against Swinerton for equitable indemnity, contribution and declaratory relief. The trial court entered summary judgment in favor of Swinerton as to the wrongful death complaint. Swinerton, in lieu of seeking entry of judgment on the summary judgment order, settled with plaintiffs, wherein plaintiffs agreed to dismiss their case against Swinerton, and Swinerton waived its costs. Apparently under a shared belief that the good faith settlement determination barred Atlas' cross-complaint against Swinerton, Atlas and Swinerton stipulated to the dismissal of Atlas' cross-complaint against Swinerton. Atlas appealed the summary judgment order, the good faith settlement determination, and dismissal of its cross-complaint. Atlas argued that the trial court erred in ruling Atlas lacked standing to oppose Swinerton's motion for summary judgment. Furthermore, Atlas argued if the trial court had considered its opposition brief, the court could have reasonably denied Swinerton's motion, and Swinerton would have never settled the wrongful death complaint, never made the good faith settlement determination, and Swinerton and Atlas would never have stipulated to the dismissal of Atlas' cross-complaint. After review, the Court of Appeal determined Atlas was not aggrieved by the trial court's exoneration of Swinerton in the wrongful death action. Therefore, Atlas lacked standing to appeal the summary judgment order. With respect to the good faith settlement and dismissal of the cross-complaint, the Court determined Atlas waived its challenge by failing to make substantive legal arguments specific to those orders. Therefore, the appeal was dismissed as to the summary judgment motion, and judgment was affirmed as to all other orders.

Marriage of Carlisle

Court: California Courts of Appeal

Docket: C084891(Third Appellate District)

Opinion Date: January 28, 2021

Judge: Murray

Areas of Law: Civil Procedure, Family Law

In April 2015, during marriage dissolution proceedings, plaintiff filed a request for a domestic violence restraining order (DVRO) against defendant, her then-husband. The trial court granted a two-year DVRO. Defendant appealed. While that appeal remained pending, a little more than a month before the original DVRO was set to expire, plaintiff filed a request to renew the DVRO. After a hearing, the trial court granted plaintiff’s request, renewing the DVRO for five years. In an unpublished opinion, the Court of Appeal affirmed the issuance of the original DVRO. Defendant, an attorney appearing in propria persona, appealed the grant of the renewed DVRO, asserting that: (1) the trial court lacked jurisdiction to renew the DVRO while the appeal from the granting of the original DVRO remained pending; (2) the trial court erred in rendering its decision without reading the pleadings; (3) the trial court erred in excluding the witnesses and exhibits he offered; (4) the trial court erred in rendering its decision without considering the case law in the pleadings; (5) the trial court did not afford him sufficient time to present his defense; and, (6) in effect, substantial evidence did not support renewal of the DVRO. Finding no reversible error, the Court of Appeal affirmed the renewed DVRO.

Midway Venture LLC v. County of San Diego

Court: California Courts of Appeal

Docket: D078375(Fourth Appellate District)

Opinion Date: January 22, 2021

Judge: Guerrero

Areas of Law: Business Law, Civil Procedure, Constitutional Law, Government & Administrative Law

At issue in this appeal was a preliminary injunction prohibiting the County of San Diego, its public health officer Wilma Wooten, the California Department of Public Health (CDPH), and Governor Gavin Newsom from enforcing COVID-19-related public health restrictions against any business offering restaurant service in San Diego County, subject to safety protocols. Two San Diego businesses that offer live nude adult filed suit claiming the State and County restrictions on live entertainment violated their First Amendment right to freedom of expression. The State and County eventually loosened their restrictions on live entertainment, but as the COVID-19 pandemic worsened, they imposed new restrictions on restaurants. These new restaurant restrictions severely curtailed the adult entertainment businesses’ operations. But these new restrictions were unrelated to live entertainment or the First Amendment. Despite the narrow scope of the issues presented, the trial court granted expansive relief when it issued the injunction challenged here. "It is a fundamental aspect of procedural due process that, before relief can be granted against a party, the party must have notice of such relief and an opportunity to be heard." The Court of Appeal determined that because restaurant restrictions were never part of the adult entertainment businesses’ claims, the State and County had no notice or opportunity to address them. The trial court therefore erred by enjoining the State and County from enforcing COVID-19-related public health restrictions on restaurants. Because the procedure used by the trial court was improper, the trial court’s actions left the Court of Appeal unable to address the substance of this challenge to restaurant restrictions.

Searles v. Archangel

Court: California Courts of Appeal

Docket: B296011(Second Appellate District)

Opinion Date: January 22, 2021

Judge: Dennis M. Perluss

Areas of Law: Civil Procedure

After the superior court dismissed plaintiff's petition for a civil harassment restraining order when she was unable to personally serve defendant with a copy of the petition and notice of hearing as required by Code of Civil Procedure section 527.6, subdivision (m), plaintiff appealed and argued that the superior court erred in denying her motion to waive traditional service and allow her to serve defendant through social media. Although the Court of Appeal acknowledged the practical merit to plaintiff's request, the court concluded that the superior court properly concluded it was obligated to follow Code of Civil Procedure section 527.6's express requirement for personal service. The court explained that current law requires personal service of the petition, temporary restraining order, and notice of hearing in civil harassment restraining order cases and does not permit the court to approve alternative methods of service; section 413.30 does not authorize alternative methods of service in civil harassment restraining order cases; and requiring personal service of the notice of hearing did not violate plaintiff's due process rights. Accordingly, the court affirmed the superior court's order of dismissal.

Mike & Jim Kruse P'ship v. Cotten

Court: Colorado Supreme Court

Citation: 2021 CO 6

Opinion Date: January 25, 2021

Judge: William W. Hood, III

Areas of Law: Civil Procedure, Government & Administrative Law, Zoning, Planning & Land Use

The water court that issued the decision at the heart of this appeal conducted a four-day trial with thousands of pages of exhibits and testimony of experts to decide the meaning of a decree finalized in April 1933. The court "seized" upon a 1936 photograph to declare the decree ambiguous. To cure the ambiguity, the court consulted additional evidence extrinsic to the original proceedings. Ultimately, the court found the water was decreed to a ditch at issue in the appeal. The parties challenged the water court's reliance on the 1936 photograph and extrinsic evidence. After review of the water court's order, the Colorado Supreme Court reversed, finding that there existed a conflict in Colorado case law as to which materials a court could rely on to decide whether a decree of water rights was ambiguous. "While future litigation may require us to reconcile these cases . . . [e]ach method leads to the same result here: The creek water at issue is not decreed to the ditch." Since the photograph was extrinsic to the proceedings that birthed the decree, the water court erred by relying on it to characterize the decree as ambiguous. "Under any of the three interpretive approaches, evidence extrinsic to the underlying proceedings is admissible only after a finding of ambiguity, not to create the ambiguity."

LCT Capital, LLC v. NGL Energy Partners LP

Court: Delaware Supreme Court

Docket: 565 568, 2019

Opinion Date: January 28, 2021

Judge: Montgomery-Reeves

Areas of Law: Business Law, Civil Procedure, Contracts

In 2014, appellant-cross-appellee LCT Capital, LLC (“LCT”) helped appellee- cross-appellants NGL Energy Partners, LP and NGL Energy Holdings LLC (collectively, “NGL”) acquire TransMontaigne, a refined petroleum products distributor. LCT played a valuable role in the transaction: bringing the sale to NGL’s attention, helping NGL to understand opaque but profitable aspects of TransMontaigne’s business, and enabling NGL to submit its winning bid outside of an auction process. The transaction generated $500 million in value for NGL, more than double the $200 million price that NGL paid to acquire TransMontaigne. LCT’s CEO Mike Krimbill represented on several occasions that LCT would receive an unusually large investment banking fee, but the parties failed to reach an agreement on all of the material terms. After negotiations broke down completely, LCT filed suit seeking compensation for its work under several theories, including quantum meruit and common law fraud. The jury verdict sheet had two separate lines for damages awards: one for the quantum meruit claim and another for the fraud claim. The jury found NGL liable for both counts, awarded LCT an amount of quantum meruit damages equal to a standard investment banking fee, and awarded LCT a much larger amount of fraud damages approximately equal to the unusually large fee that Krimbill proposed. The Superior Court set aside the jury's awards and ordered a new trial on damages. The court set aside the fraud award on the basis that the jury impermissibly awarded LCT benefit-of-the-bargain damages in the absence of an enforceable contract. The court set aside the quantum meruit award on the basis that providing the jury with multiple damages lines for a unitary theory of damages was confusing and may have caused the jury to spread a single award between the quantum meruit and fraud claims. Both sides appealed. The Delaware Supreme Court found LCT was not entitled to benefit-of-the-bargain damages, and that the Superior Court did not abuse its discretion by ordering a new trial on quantum meruit damages. Nonetheless, the Supreme Court also held the Superior Court abused its discretion by ordering a new trial on fraud damages because LCT did not assert any independent damages to support its fraud claim. Accordingly, the Court affirmed in part and reversed in part the Superior Court’s judgment.

Morris v. Spectra Energy Partners

Court: Delaware Supreme Court

Docket: 489, 2019

Opinion Date: January 22, 2021

Judge: Seitz

Areas of Law: Business Law, Civil Procedure, Class Action, Securities Law

After a $3.3 billion “roll up” of minority-held units involving a merger between Enbridge, Inc. and Spectra Energy Partners L.P. (“SEP”), Paul Morris, a former SEP minority unitholder, lost standing to litigate an alleged $661 million derivative suit on behalf of SEP against its general partner, Spectra Energy Partners (DE) GP, LP (“SEP GP”). Morris repeated the derivative claim dismissal by filing a new class action complaint that alleged the Enbridge/SEP merger exchange ratio was unfair because SEP GP agreed to a merger that did not reflect the material value of his derivative claims. The Court of Chancery granted SEP GP’s motion to dismiss the new complaint for lack of standing. The court held that, to have standing to bring a post-merger claim, Morris had to allege a viable and material derivative claim that the buyer would not assert and provided no value for in the merger. Focusing on the materiality requirement, the court first discounted the $661 million recovery to $112 million to reflect the public unitholders’ beneficial interest in the derivative litigation recovery. The court then discounted the $112 million further to $28 million to reflect what the court estimated was a one in four chance of success in the litigation. After the discounting, the $28 million, less than 1% of the merger consideration, was immaterial to a $3.3 billion merger. On appeal, Morris argued the trial court should not have dismissed the plaintiff’s direct claims for lack of standing. After its review, the Delaware Supreme Court agreed with Morris finding that, on a motion to dismiss for lack of standing, he sufficiently pled a direct claim attacking the fairness of the merger itself for SEP GP’s failure to secure value for his pending derivative claims. The Court of Chancery’s judgment was reversed and the matter remanded for further proceedings.

Bedke v. Ellsworth

Court: Idaho Supreme Court - Civil

Docket: 48268

Opinion Date: January 26, 2021

Judge: Stegner

Areas of Law: Civil Procedure, Government & Administrative Law

This appeal stemmed from a dispute between the presiding officers of the Idaho Legislature and the Idaho State Treasurer. The Speaker of the Idaho House of Representatives and the President Pro Tempore of the Idaho State Sentate sought to evict Treasurer Julie Ellsworth from her current office on the first floor of the Idaho State Capitol building pursuant to Idaho Code section 67-1602(3). The office of the State Treasurer was historically located in the southeast quadrant of the Capitol Building. However, plaintiffs cited the need for more legislative space to evict the Treasurer from that historic office. The Treasurer refused to vacate, relying on a purported agreement base between the Governor and the 2007 leadership of the Idaho Legislature. Finding that the political question doctrine did not preclude it from reaching the merits of this dispute, the Idaho Supreme Court concluded Idaho Code section 67-1602(3) unambiguously authorized the presiding officers to determine the use and allocate the space within the first floor of the Capitol. The district court's denial of the Treasurer's motion to dismiss was affirmed; summary judgment in favor of the House and Senate were also affirmed.

New Jersey Transit Corporation v. Certain Underwriters at Lloyd's of London

Court: Supreme Court of New Jersey

Docket: a-72-73-19

Opinion Date: January 27, 2021

Judge: Per Curiam

Areas of Law: Civil Procedure, Government & Administrative Law, Insurance Law

This appeal involved an insurance coverage dispute arising out of water damage caused by Superstorm Sandy to properties owned by plaintiff New Jersey Transit Corporation (NJ Transit). At the time Sandy struck in October 2012, NJ Transit carried a $400 million multi-layered property insurance policy program through eleven insurers. When NJ Transit sought coverage for the water damage to its properties brought about by the storm, certain of its insurers invoked the $100 million flood sublimit in NJ Transit’s policies and declined to provide coverage up to the policy limit. NJ Transit filed an action seeking a declaratory judgment against those insurers. The trial court found that the $100 million flood sublimit did not apply to NJ Transit’s claims; it also found that the insurers had not submitted sufficient evidence to support their claims for reformation of the policies. The court accordingly entered summary judgment in favor of NJ Transit and denied the insurers’ motions for summary judgment. The Appellate Division affirmed. Finding no reversible error in the Appellate Division's judgment, the New Jersey Supreme Court affirmed.

Claude C. Arnold Non-Operated Royalty Interest Properties v. Cabot Oil & Gas Corp.

Court: Oklahoma Supreme Court

Citation: 2021 OK 4

Opinion Date: January 26, 2021

Judge: Noma Gurich

Areas of Law: Civil Procedure, Energy, Oil & Gas Law, Real Estate & Property Law

The dispute in this case centered on two oil-and-gas-producing formations known as the Chester and the Marmaton, located in Beaver County, Oklahoma. In 1973, Arnold Petroleum, Inc., the predecessor in interest to plaintiffs (collectively, "Arnold") obtained six oil-and-gas leases covering land in Beaver County. Over the course of 1973 and 1974, Arnold Petroleum assigned its leases to Dyco Petroleum Corporation, expressly reserving an overriding royalty interest in any oil and gas produced under the leases. Dyco assigned the leases to Harold Courson, the predecessor in interest of defendant Cabot Oil & Gas Corporation. This assignment, too, was expressly subject to Arnold's overriding royalty interest. Two wells drilled in the Chester formation produced "mostly gas with some oil" continuously since the mid-1970s, and at no point since then did Arnold ever stop receiving payments on its overriding royalty interest in those producing wells. In 1984, Courson obtained several new leases from the mineral owners who had granted the 1973 leases. The 1984 leases purported to cover the same rights as the original 1973 leases, but were silent as to any particular geologic formation or zone. Arnold did not become aware of the 1984 leases until 1999 when it and other royalty holders received a letter from Courson explaining he had recompleted a well in the Chester formation that had originally been drilled into the separate Lower Chester formation by Natural Gas Anadarko, Inc. (NGA). In the 1999 conversation, a Courson employee told the Arnold landman the 1984 leases covered only "deep rights" or "lower depths" that had expired under the 1973 leases. This assertion would exclude the Marmaton. For the next 13 years, the matter of the Marmaton formation would remain dormant. Courson assigned his leases to Cabot in August 2011, and Cabot drilled and completed several horizontal wells in the Marmaton. Cabot rejected Arnold's request for payment, and Arnold sued in October 2012, seeking damages for nonpayment of royalties. Cabot argued Arnold's claims were barred because the applicable statute of limitations began to run with the filing of the new leases in 1984, which event (in Cabot's view) should have put Arnold on notice of an adverse claim to the Marmaton. The issue presented for the Oklahoma Supreme Court's review was whether plaintiffs waited too long in asserting their right to payment of the overriding royalty interest. The Court of Civil Appeals reversed the trial court's judgment in favor of plaintiffs on those grounds. The Supreme Court disagreed: this litigation could not have arisen until defendant first developed the disputed formation in 2012, and then refused plaintiffs' request for payment of royalties from that production. "Nothing preceding that sequence of events could reasonably have foreclosed plaintiffs' ability to press their claim for the payments to which they were entitled under valid mineral leases."

Cooke v. Karlseng

Court: Supreme Court of Texas

Docket: 19-0829

Opinion Date: January 22, 2021

Judge: Per Curiam

Areas of Law: Business Law, Civil Procedure

The Supreme Court reversed the judgment of the court of appeals holding that the trial court lacked jurisdiction over claims of a limited partner for harm done to the partnership because he lacked standing to bring the claims individually, holding that the appeal should be reconsidered in light of Pike v. Texas EMC Management, LLC, 610 S.W.3d 763 (Tex. 2020). Plaintiff formed multiple real estate-related partnerships and then sued his partners, later adding the partnerships as plaintiffs. Defendants filed a plea to the jurisdiction, asserting that Plaintiff individually lacked standing to bring claims against the individual individuals because the claims belonged to the partnerships. The trial court denied the plea. The court of appeals reversed and dismissed Plaintiff's individual claims for lack of jurisdiction, concluding that Defendant lacked standing to assert his original individual claims and that the doctrine of relation back could not create jurisdiction where none existed. The Supreme Court reversed, holding that the court of appeals' holding regarding standing was in direct conflict with Pike.

Leishman v. Ogden Murphy Wallace, PLLC

Court: Washington Supreme Court

Docket: 97734-8

Opinion Date: January 28, 2021

Judge: Montoya-Lewis

Areas of Law: Civil Procedure, Constitutional Law, Government & Administrative Law, Labor & Employment Law

Roger Leishman, an openly gay man, began employment with the Washington Attorney General’s office (AGO) as chief legal advisor to Western Washington University in 2015. Shortly after starting work, Leishman began exhibiting serious trichotillomania, anxiety, and other symptoms he disclosed to his employer. He would later be diagnosed with post-traumatic stress disorder, which was also disclosed to his employer. In January 2016, Leishman learned he did not receive a raise given to other assistant attorney generals, due to complaints his supervisor made about his conduct at work. Leishman contended his supervisor’s complaints were based on homophobic beliefs. Leishman made a formal request for reasonable accommodation of his disability, which the AGO denied. Leishman drafted a discrimination complaint. In response, the supervisor denied making the comments, accused Leishman of faking his disability, and refused to support his then-pending accommodation request. The AGO retained Ogden Murphy Wallace, PLLC (OMW) to conduct an independent investigation into Leishman’s discrimination complaint and his supervisor’s allegations. The OMW report concluded Leishman did not establish discrimination against him based on sexual orientation, and his conduct during a meeting with his supervisor violated expected standards of conduct for his position. The AGO thereafter terminated Leishman’s employment effective June, 2016. Leishman filed suit against the AGO. The parties reached a settlement agreement in which Leishman agreed to release his claims against the State and its officers. However, he also sued OMW, alleging the firm was not acting as the AGO’s agent, and his claims against the OMW were not barred by the settlement. The trial court granted OMW’s motion for judgment on the pleadings; the Court of Appeal reversed. The Washington Supreme Court reversed the appellate court, and reinstated the trial court’s judgment.

Mancini v. City Of Tacoma

Court: Washington Supreme Court

Docket: 97583-3

Opinion Date: January 28, 2021

Judge: Sheryl Gordon McCloud

Areas of Law: Civil Procedure, Civil Rights, Personal Injury

Executing a search warrant, in 2011, eight Tacoma police officers broke open an apartment door with a battering ram. They expected for find Matthew Longstrom, a drug dealer. Instead, they awakened Petitioner Kathleen Mancini, a nurse who had been sleeping after working the night shift. Police nevertheless handcuffed Mancini and took her, without shoes and wearing only a nightgown, outside while they searched. Mancini sued these police for negligence in the performance of their duties. A jury found the police breached a duty of reasonable care they owed to Mancini when executing the search warrant. The Washington Supreme Court found substantial evidence supported the jury’s verdict. The Supreme Court reversed the Court of Appeals that held to the contrary (granting the officers sovereign immunity) and reinstated the jury’s verdict.