Latest 27 Cases This Week: Donahue v. Federal National Mortgage Ass'n (1st Cir.), Navy Federal Credit Union v. LTD Financial Services, LP (4th ...

Democracy Is on the Ballot: One Party Defends It, The Other Would Let It Die

AUSTIN SARAT

Austin Sarat—Associate Provost, Associate Dean of the Faculty, and William Nelson Cromwell Professor of Jurisprudence and Political Science at Amherst College—explains why the 2020 Democratic National Convention was unlike any other political gathering in American history for reasons beyond its virtual platform. Sarat argues that the future of American democracy lies in the balance, and when we vote in November, it will be up to us whether democracy lives or dies.

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Donahue v. Federal National Mortgage Ass'n

Court: US Court of Appeals for the First Circuit

Docket: 19-1618

Opinion Date: August 14, 2020

Judge: David J. Barron

Areas of Law: Civil Procedure

The First Circuit dismissed Appellant's appeal from a grant of summary judgment to Ocwen Loan Servicing, LLC in her suit in the District of Massachusetts against Ocwen and the Government National Mortgage Association (GNMA) for lack of appellate jurisdiction, holding that this court lacked jurisdiction under the circumstances of this case. In her notice of appeal, Appellant sought review of only the grant of summary judgment to Ocwen on Count III of her complaint. The First Circuit issued an order to show cause stating that the orders appealed from did not appear to be final or appealable on an interlocutory basis and that the Court did not appear to have jurisdiction absent certification pursuant to Fed. R. Civ. P. 54(b). Thereafter, Appellant filed a notice of voluntary dismissal of her claims against GNMA, but the district court did not enter any further orders or judgments, and Appellant did not file a new notice of appeal. Appellant then filed a response to the show cause order. The First Circuit dismissed the appeal for lack of jurisdiction, holding that Appellant filed the notice of appeal before the decision below was final and did not correct her mistake.

Navy Federal Credit Union v. LTD Financial Services, LP

Court: US Court of Appeals for the Fourth Circuit

Docket: 19-1341

Opinion Date: August 20, 2020

Judge: Richardson

Areas of Law: Civil Procedure, Contracts

In this action arising from a contract dispute between the parties, Navy Federal Credit Union filed suit in federal district court against Advantage Assets, asserting only state law claims and invoking diversity jurisdiction. For establishing diversity jurisdiction, Congress provides that, pursuant to 28 U.S.C. 1332(c)(1), a corporation "shall be deemed a citizen of every State and foreign state by which it has been incorporated and of the State or foreign state where it has its principal place of business." The Fourth Circuit held that Navy Federal, a federally chartered credit union, is a citizen of its principal place of business, Virginia. The court explained that 28 U.S.C. 1332(c)(1)'s text, structure, and context support Navy Federal's contention that a corporation shall be deemed a citizen of the state or foreign state where it has its principal place of business. In this case, section 1332(c)(1) requires the court to interpret and to give effect to the second clause of the statute even when the first clause does not specify a citizenship; the district court's and defendants' understanding of "and" conflicts with circuit precedent; and this approach to section 1332(c)(2) is supported by the Supreme Court's holding in Bankers Trust Co. v. Texas & Pacific Railway Co., 241 U.S. 295 (1916).

North Carolina State Conference of the NAACP v. Berger

Court: US Court of Appeals for the Fourth Circuit

Docket: 19-2273

Opinion Date: August 14, 2020

Judge: Quattlebaum

Areas of Law: Civil Procedure, Civil Rights, Constitutional Law, Election Law, Government & Administrative Law

The Fourth Circuit vacated the district court's order denying Proposed Intervenors' renewed motion to intervene in an action brought by the NAACP challenging the validity of Senate Bill 824. S.B. 824 established, inter alia, photographic voter identification requirements for elections in North Carolina. After determining that it has jurisdiction under 28 U.S.C. 1291, the court held that the Proposed Intervenors have Article III standing to intervene for the purposes of intervention before the district court based on N.C. Gen Stat. 1-72.2 and Supreme Court precedent. The court rejected the arguments of the NAACP and the State Defendants that section 1-72.2 infringes on the powers of the Executive Branch in violation of the North Carolina Constitution's separation of powers provisions. In regard to intervention as a matter of right, the court held that the district court erred in determining that the Proposed Intervenors lacked a sufficient interest in the S.B. 824 litigation without careful consideration of section 1-72.2(a). Therefore, the court remanded for the district court to more fully consider the North Carolina statute in the analysis of the Proposed Intervenors' interest in the litigation. Because the Proposed Intervenors may have interests which may be practically impaired if not permitted to intervene in the action before the district court, the court remanded as to this issue as well. The court further stated that, although it was appropriate for the district court to apply the Westinghouse presumption since the Proposed Intervenors and the State Defendants appear to seek the same ultimate objective, the district court erred in demanding that the Proposed Intervenors overcome that presumption by the heightened standard of a "strong showing." In regard to permissive intervention, the court held that the district court failed to address sections 1-72.2(a) and (b) and 120-32.6. Given the import of those statutes, the court remanded for consideration of the permissive intervention request.

Defense Distributed v. Grewal

Court: US Court of Appeals for the Fifth Circuit

Docket: 19-50723

Opinion Date: August 19, 2020

Judge: Edith Hollan Jones

Areas of Law: Civil Procedure, Civil Rights, Constitutional Law

Plaintiffs filed suit challenging the efforts of New Jersey's Attorney General and others to thwart plaintiffs' distribution of materials related to the 3D printing of firearms, alleging infringement of plaintiffs' First Amendment rights and state law claims. The district court granted the Attorney General's motion to dismiss for lack of personal jurisdiction, relying on Stroman Realty, Inc. v. Wercinski, 513 F.3d 476 (5th Cir. 2008). The Fifth Circuit held that the Attorney General has established sufficient minimum contacts with Texas to subject him to the jurisdiction of Texas' courts. The court held that Stroman is distinguishable from this case in at least two key respects: first, many of plaintiffs' claims are based on the Attorney General's cease-and-desist letter; and second, the Attorney General's assertion of legal authority is much broader than the public official in Stroman. Furthermore, the Attorney General failed to timely raise arguments regarding whether judgment in plaintiffs favor would offend traditional notions of fair play and substantial justice. The court applied the principles discussed in Wien Air Alaska, Inc. v. Brandt, 195 F.3d 208 (5th Cir. 1999), and Calder v. Jones, 465 U.S. 783, 104 S. Ct. 1482 (1984), and held that jurisdiction over the Attorney General is proper. Accordingly, the court reversed and remanded for further proceedings.

Doe v. University of Kentucky

Court: US Court of Appeals for the Sixth Circuit

Docket: 19-5126

Opinion Date: August 19, 2020

Judge: Donald

Areas of Law: Civil Procedure, Civil Rights, Education Law

Although not technically enrolled at the University of Kentucky, Doe hoped to attend the University and was enrolled at a Kentucky community college that allows its students to transfer credits to the University and enroll in the University through a simpler application process. Doe lived in the University’s residence halls, paid fees directly to the University for housing, board, the student government association, student activities, access to the student center, a student health plan, technology, access to the recreation center, and student affairs. Doe alleges that a student enrolled at the University raped her on October 2, 2014. She reported the rape to the University’s police department. Over the course of 30 months, the University held four disciplinary hearings. The alleged perpetrator was found responsible for the rape at the first three hearings. The University’s appeal board overturned the decisions based on procedural deficiencies. At the fourth hearing, the alleged perpetrator was found not responsible. Doe dropped out of her classes and sued, asserting that the University’s deliberate indifference to her alleged sexual assault violated Title IX, 20 U.S.C.1681. The Sixth Circuit reversed the dismissal of the claims. Doe has sufficiently shown that there remain genuine disputes as to whether the University denied her the benefit of an “education program or activity,” and has standing.

Epic Systems Corp. v. Tata Consultancy Services Ltd.

Court: US Court of Appeals for the Seventh Circuit

Dockets: 19-1613, 19-1528

Opinion Date: August 20, 2020

Judge: KANNE

Areas of Law: Business Law, Civil Procedure, Intellectual Property, Internet Law

Without permission from Epic, TCS downloaded thousands of documents containing Epic’s confidential information and trade secrets. TCS used some of the information to create a “comparative analysis”—a spreadsheet comparing TCS’s health-record software (Med Mantra) to Epic’s software. TCS’s internal communications show that TCS used this spreadsheet in an attempt to enter the U.S. health-record-software market, steal Epic’s client, and address key gaps in TCS’s own Med Mantra software. Epic sued. A jury ruled in Epic’s favor on all claims, including multiple Wisconsin tort claims. The jury then awarded Epic $140 million in compensatory damages, for the benefit TCS received from using the comparative-analysis spreadsheet; $100 million for the benefit TCS received from using Epic’s other confidential information; and $700 million in punitive damages for TCS’s conduct. The district court upheld the $140 million compensatory award and vacated the $100 million award. It reduced the punitive damages award to $280 million, reflecting Wisconsin’s statutory punitive-damages cap. The Seventh Circuit remanded. There is sufficient evidence for the jury’s $140 million verdict based on TCS’s use of the comparative analysis, but not for the $100 million verdict for uses of “other information.” The jury could punish TCS by imposing punitive damages, but the $280 million punitive damages award is constitutionally excessive.

Semmerling v. Bormann

Court: US Court of Appeals for the Seventh Circuit

Docket: 19-3211

Opinion Date: August 18, 2020

Judge: Brennan

Areas of Law: Civil Procedure, Government & Administrative Law

Semmerling worked as a contractor for the U.S. Military Commissions Defense Organization as part of the legal team for a person charged as an al-Qaeda enemy combatant. Semmerling, who is gay, disclosed his sexuality to the lead attorney of that team. Semmerling alleges that, despite promising secrecy, that attorney disclosed his sexuality to the client and told the client that Semmerling was infatuated with the client and was pursuing that interest. Semmerling sued the lead attorney for state-law torts of defamation, negligence, and intentional infliction of emotional distress, and he sued the government under the Federal Tort Claims Act, 28 U.S.C. 2674, for negligence and intentional infliction of emotional distress. The district court dismissed the suit. The Seventh Circuit denied the government’s motion for summary affirmance while acknowledging that Semmerling’s brief is substantively deficient in multiple ways. The court noted that the other defendant filed a brief. Sparse briefing alone is not a reason to enter a merits judgment, and this case does not rise to the level of “incomprehensible or completely insubstantial.” Semmerling may, within seven days, seek leave to strike his opening brief and to file a brief that complies with Rule 28.

United States v. UCB, Inc.

Court: US Court of Appeals for the Seventh Circuit

Docket: 19-2273

Opinion Date: August 17, 2020

Judge: HAMILTON

Areas of Law: Civil Procedure, Government & Administrative Law, Government Contracts, Health Law

The False Claims Act, 31 U.S.C. 3729–3733, authorizes relators to file qui tam suits on behalf of the U.S. government. If such an action is successful, the relator receives part of the recovery. The Act prohibits presenting to a federal healthcare program a claim for payment that violates the Anti-Kickback Statute, 42 U.S.C. 1320a-7b(b), Venari formed 11 daughter companies, each for the purpose of prosecuting a separate qui tam action, alleging essentially identical violations of the False Claims Act by pharmaceutical companies. CIMZNHCA, a Venari company, filed suit alleging illegal kickbacks to physicians for prescribing Cimzia to treat Crohn’s disease in patients who received federal healthcare benefits. The government did not exercise its right “to intervene and proceed” as the plaintiff but moved to dismiss the action, representing that it had investigated the Venari claims and found them to lack merit. The court denied that motion, finding the government’s general evaluation of the Venari claims insufficient as to CIMZNHCA and that the decision to dismiss was “arbitrary and capricious.” The Seventh Circuit reversed with instructions to dismiss, construing the government’s motion as a motion to both intervene and dismiss. By treating the government as seeking to intervene, a court can apply Federal Rule of Civil Procedure 41, which provides: “The Government may dismiss the action” without the relator’s consent if the relator receives notice and opportunity to be heard.

AMA Multimedia, LLC v. Wanat

Court: US Court of Appeals for the Ninth Circuit

Docket: 18-15051

Opinion Date: August 17, 2020

Judge: Ryan D. Nelson

Areas of Law: Civil Procedure, Internet Law

The Ninth Circuit affirmed the district court's dismissal for lack of personal jurisdiction of an action alleging copyright infringement, trademark infringement, and unfair competition. Plaintiff AMA is a Nevada limited liability company that produces and distributes "adult entertainment over the Internet." Defendant is a citizen and resident of Poland, who operated ePorner, an adult video website, through MW Media, a Polish civil law partnership. The panel agreed with the district court that AMA has not met its burden of showing that defendant is subject to personal jurisdiction in the United States under Federal Rule of Civil Procedure 4(k)(2) (the long-arm statute). In this case, defendant lacks the requisite minimum contacts with the United States where the United States was not the focal point of the website and of the harm suffered. The panel also held that the district court did not abuse its discretion by denying AMA certain jurisdictional discovery and declined to consider arguments about changes in European law for the first time on appeal that bear on AMA's entitlement to additional jurisdictional discovery.

Sonner v. Premier Nutrition Corp.

Court: US Court of Appeals for the Ninth Circuit

Docket: 18-15890

Opinion Date: August 20, 2020

Judge: Bridget S. Bade

Areas of Law: Civil Procedure, Consumer Law

The Ninth Circuit issued (a) an order amending its opinion filed on June 17, 2020, denying the petition for rehearing, and denying on behalf of the court the petition for rehearing en banc; and (b) an amended opinion affirming on different grounds the district court's dismissal of plaintiff's claims for restitution. In this case, plaintiff voluntarily dismissed her sole state law damages claim and chose to proceed with only state law equitable claims for restitution and injunctive relief. Plaintiff did so in an attempt to try the class action as a bench trial rather than to a jury. Pursuant to Erie Railroad Co. v. Tompkins, 304 U.S. 64 (1938), and Guaranty Trust Co. of New York v. York, 326 U.S. 99 (1945), the panel held that federal courts must apply equitable principles derived from federal common law to claims for equitable restitution under California's Unfair Competition Law (UCL) and Consumers Legal Remedies Act (CLRA). The panel explained that state law cannot circumscribe a federal court's equitable powers even when state law affords the rule of decision. The panel held that the district court did not abuse its discretion in denying plaintiff leave to amend her complaint for a third time to reallege the CLRA damages claim. In this case, plaintiff failed to demonstrate that she lacked an adequate legal remedy.

Compania De Inversiones v. Grupo Cementos de Chihuahua

Court: US Court of Appeals for the Tenth Circuit

Docket: 19-1151

Opinion Date: August 17, 2020

Judge: Mary Beck Briscoe

Areas of Law: Arbitration & Mediation, Business Law, Civil Procedure, Contracts, International Law

The parties to this appeal were a Bolivian company, Compania de Inversiones Mercantiles S.A. (“CIMSA”), and Mexican companies known as Grupo Cementos de Chihuahua, S.A.B. de C.V. and GCC Latinoamerica, S.A. de C.V. (collectively “GCC”). Plaintiff-appellant CIMSA brought a district court action pursuant to the Federal Arbitration Act to confirm a foreign arbitral award issued in Bolivia against Defendant-appellee GCC. The underlying dispute stemmed from an agreement under which CIMSA and GCC arranged to give each other a right of first refusal if either party decided to sell its shares in a Bolivian cement company known as Sociedad Boliviana de Cemento, S.A. (“SOBOCE”). GCC sold its SOBOCE shares to a third party after taking the position that CIMSA failed to properly exercise its right of first refusal. In 2011, CIMSA initiated an arbitration proceeding in Bolivia. The arbitration tribunal determined that GCC violated the contract and the parties’ expectations. GCC then initiated Bolivian and Mexican court actions to challenge the arbitration tribunal’s decisions. A Bolivian trial judge rejected GCC’s challenge to the arbitration tribunal’s decision on the merits. A Bolivian appellate court reversed and remanded. During the pendency of the remand proceedings, Bolivia’s highest court reversed the appellate court and affirmed the original trial judge. But as a result of the simultaneous remand proceedings, the high court also issued arguably contradictory orders suggesting the second trial judge’s ruling on the merits remained in effect. GCC filed a separate Bolivian court action challenging the arbitration tribunal’s damages award. That case made its way to Bolivia’s highest court too, which reversed an intermediate appellate court’s nullification of the award and remanded for further proceedings. Invoking the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, CIMSA filed a confirmation action in the United States District Court for the District of Colorado. After encountering difficulties with conventional service of process in Mexico under the Hague Convention on Service Abroad of Judicial and Extrajudicial Documents, CIMSA sought and received permission from the district court to serve GCC through its American counsel pursuant to Federal Rule of Civil Procedure 4(f)(3). The district court then rejected GCC’s challenges to personal jurisdiction, holding (among other things) that: (1) it was appropriate to aggregate GCC’s contacts with the United States; (2) CIMSA’s injury arose out of GCC’s contacts; (3) exercising jurisdiction was consistent with fair play and substantial justice; and (4) alternative service was proper. The district court rejected GCC's defenses to CIMSA's claim under the New York Convention. Before the Tenth Circuit Court of Appeals, the Court affirmed the district court: the district court properly determined that CIMSA’s injury arose out of or related to GCC’s nationwide contacts. "The district court correctly decided that exercising personal jurisdiction over GCC comported with fair play and substantial justice because CIMSA established minimum contacts and GCC did not make a compelling case to the contrary." The Court also affirmed the district court's confirmation of the arbitration tribunal's decisions.

Doe v. School District Number 1

Court: US Court of Appeals for the Tenth Circuit

Docket: 19-1293

Opinion Date: August 17, 2020

Judge: Harris L. Hartz

Areas of Law: Civil Procedure, Civil Rights, Education Law, Government & Administrative Law, Personal Injury

Jane Doe appealed the dismissal of her Title IX claim against School District No. 1, Denver, Colorado (the District or DPS) for failure to state a claim. According to the complaint, a group of students began sexually harassing Ms. Doe after she was sexually assaulted by another student in March of her freshman year at East High School (EHS). She alleged that despite her numerous reports of the harassment to school personnel, as well as reports from teachers and a counselor, the school administration never investigated her complaints and little if anything was done to prevent the harassment from continuing. She stopped attending regularly scheduled classes about 14 months after the assault, and she transferred to a different school after completing her sophomore year. The Tenth Circuit reversed and remanded, finding Ms. Doe's complaint contained sufficient allegations to support an inference of deliberate indifference.

Hickey v. Brennan

Court: US Court of Appeals for the Tenth Circuit

Docket: 19-1317

Opinion Date: August 14, 2020

Judge: Ebel

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

Plaintiff Lynda Hickey, a former employee of the United States Postal Service (“USPS”), filed a discrimination complaint against Defendant Megan Brennan, the Postmaster General of the USPS, in her official capacity. Defendant moved for summary judgment on the basis that Hickey had not properly exhausted her administrative remedies because she did not contact an Equal Employment Office (“EEO”) counselor within forty-five days after her employment was terminated. The magistrate judge, exercising full jurisdiction with the consent of both parties, granted Defendant’s motion for summary judgment. Finding that Hickey indeed, failed to initiate contact with an EEO counselor within forty-five days after the effective date of her termination as required by 29 C.F.R. 1614.105(a), the Tenth Circuit affirmed. Furthermore, the Court found Hickey did not show either that Defendant should have been equitably estopped from raising her lack of timeliness as an affirmative defense or that she was entitled to an extension of time for initiating contact with the EEO.

Sinclair Wyoming v. Infrassure

Court: US Court of Appeals for the Tenth Circuit

Docket: 19-8018

Opinion Date: August 17, 2020

Judge: Timothy M. Tymkovich

Areas of Law: Civil Procedure, Energy, Oil & Gas Law, Insurance Law

In 2013, a fire caused the Sinclair Wyoming Refining Company to restrict operations for several months. It filed a claim with its eighteen insurers, including Infrassure, Ltd., which collectively provided Sinclair coverage for business interruption losses under an all-risk insurance policy. In 2015, after twenty months of claim adjustment, Sinclair and the other seventeen insurers settled the claim. But Infrassure did not agree with the settlement value and eventually exercised its right under the policy to have Sinclair’s covered loss calculated by a panel of three appraisers. The panel valued the loss at $60,365,508, with Infrassure liable for $4,527,413. Infrassure, still unsatisfied, sought to invalidate the award in district court, arguing that the appraisers relied improperly on the settlement amount rather than independently valuing the loss. The district court rejected this theory and confirmed the award, holding Infrassure failed to show any actionable misconduct on behalf of the appraisers. After review, the Tenth Circuit agreed the record revealed nothing warranting setting aside the appraisal award, and therefore affirmed.

In re: Hillary Clinton

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

Docket: 20-5056

Opinion Date: August 14, 2020

Judge: Wilkins

Areas of Law: Civil Procedure, Government & Administrative Law

Petitioners, former Secretary of State Hillary Rodham Clinton and Secretary Clinton's former Chief of Staff, Cheryl Mills, sought mandamus relief preventing the district court's order granting Judicial Watch's request to depose each petitioner on a limited set of topics. The petition for writ of mandamus arose from a Freedom of Information Act case brought by Judicial Watch against the U.S. Department of State. The DC Circuit held that, although Secretary Clinton meets all three requirements for mandamus relief, Ms. Mills does not. In this case, Ms. Mills could appeal either a civil or a criminal contempt adjudication and thus, unlike Secretary Clinton, she does have available an "adequate means to attain the relief" and as such her petition fails at prong one. In regard to the second prong, the court held that petitioners have demonstrated a "clear and indisputable" right to issuance of the writ where the district court clearly abused its discretion by failing to meet its obligations under Federal Rule of Civil Procedure 26, by improperly engaging in a Federal Records Act-like inquiry in this FOIA case, and by ordering further discovery without addressing this court's recent precedent potentially foreclosing any rationale for said discovery. Finally, in regard to the third prong, the court held that the totality of circumstances merits granting the writ. Accordingly, the court granted the petition for mandamus as to Secretary Clinton, denied it as to Ms. Mills and dismissed Ms. Mills' petition for lack of jurisdiction, and remanded the case for further proceedings.

In re: Sealed Case

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

Docket: 19-1216

Opinion Date: August 20, 2020

Judge: Patricia Ann Millett

Areas of Law: Civil Procedure, Energy, Oil & Gas Law, Environmental Law, Government & Administrative Law

The DC Circuit denied the Refinery's motion to proceed under a pseudonym. The court weighed the markedly thin showing of potential injury by the Refinery against the substantial public interest in transparency and openness in cases involving the government's administration of an important statutory and regulatory scheme, holding that the Refinery has not overcome the customary and constitutionally-impeded presumption of openness in judicial proceedings. In this case, the Refinery has failed to demonstrate that requiring it to proceed in its own name will risk the disclosure of sensitive and highly personal information; the Refinery itself faces no risk of physical or mental harm; and the Refinery has chosen to sue a government agency regarding the operation of a statutory program and, in particular, applications for special exemptions from the law's obligations. The court held that none of the factors commonly involved in analyzing a request to proceed anonymously weigh in the Refinery's favor. Furthermore, the Refinery's additional arguments add nothing to its side of the scale either.

Security People, Inc. v. Iancu

Court: US Court of Appeals for the Federal Circuit

Docket: 19-2118

Opinion Date: August 20, 2020

Judge: Todd Michael Hughes

Areas of Law: Civil Procedure, Intellectual Property, Patents

Security obtained the 180 patent in 2003. After being sued for patent infringement, Security’s competitor sought review of certain claims of the patent in 2015. The Patent Trial and Appeal Board instituted an inter partes review (IPR) and found the sole instituted claim unpatentable. The Federal Circuit summarily affirmed. The Supreme Court then denied a petition for certiorari, which did not raise any constitutional arguments. Security then sought a declaratory judgment that the retroactive application of an IPR proceeding to cancel claims of its patent violated its due process rights. The district court dismissed the suit for lack of subject matter jurisdiction. The America Invents Act, 35 U.S.C. 319, 141(c), provides for “broad Federal Circuit review” of the Board’s final written decisions and allows for review “only” in the Federal Circuit. The court concluded Congress intended to preclude district court review of Board decisions under the Administrative Procedures Act (APA). The Federal Circuit affirmed. Congress foreclosed the possibility of collateral APA review of IPR decisions by district courts. Security cannot bring an APA challenge when the statutory scheme separately establishes an adequate judicial remedy for its constitutional challenge. The APA authorizes judicial review of final agency actions only if there is no other adequate remedy.

Felisilda v. FCA US LLC

Court: California Courts of Appeal

Docket: C086043(Third Appellate District)

Opinion Date: August 17, 2020

Judge: Andrea Lynn Hoch

Areas of Law: Arbitration & Mediation, Civil Procedure, Consumer Law, Contracts, Products Liability

After encountering problems with their used 2011 Dodge Grand Caravan, plaintiffs Dina C. and Pastor O. Felisilda brought an action against Elk Grove Auto Group, Inc., doing business as Elk Grove Dodge Chrysler Jeep (Elk Grove Dodge) and the manufacturer, FCA US LLC (FCA) for violation of the Song-Beverly Consumer Warranty Act. Relying on the retail installment sales contract signed by the Felisildas, Elk Grove Dodge moved to compel arbitration. FCA filed a notice of nonopposition to the motion to compel. The trial court ordered the Felisildas to arbitrate their claim against both Elk Grove Dodge and FCA. In response, the Felisildas dismissed Elk Grove Dodge. The matter was submitted to arbitration, and the arbitrator found in favor of FCA. The trial court confirmed the arbitrator’s decision. The Felisildas appealed, contending: (1) the trial court lacked jurisdiction to compel them to arbitrate their claim against FCA for lack of notice that the motion to compel included FCA; and (2) the trial court lacked discretion to order the Felisildas to arbitrate their claim against FCA because FCA was a nonsignatory to the sales contract. After review, the Court of Appeal concluded the Felisildas forfeited their claim regarding lack of notice by arguing against FCA’s participation in arbitration. Furthermore, the Court concluded the trial court correctly determined the Felisildas’ claim against FCA was encompassed by the arbitration provision in the sales contract.

Hanna v. Little League Baseball

Court: California Courts of Appeal

Docket: E070995(Fourth Appellate District)

Opinion Date: August 18, 2020

Judge: Menetrez

Areas of Law: Antitrust & Trade Regulation, Civil Procedure, Entertainment & Sports Law

Plaintiff Michael Hanna was declared to be a vexatious litigant under several subparts of the California Code of Civil Procedure section 391(b). As a result, and the trial court's determination that Hanna was not reasonably likely to succeed on the merits of this action, Hanna was ordered to furnish a $100,000 security bond. The trial court also imposed a prefiling restriction on Hanna in future litigation, requiring Hanna to seek permission from the presiding justice or presiding judge of the court if he brought a civil action as a pro se litigant. The underlying dispute arose from a 2017 complaint Hanna filed against Little League Baseball, Inc., alleging trade libel and unfair and fraudulent business practices. Hanna alleged he was the president of a youth sports organization known as Team Hemet Baseball and Softball (Team Hemet), and in that capacity, he “executed an agreement” with Little League “for the individual '. . . right to conduct a baseball and softball program under the name “Little League”’” for one year. In July 2017, Little League “purportedly” placed Team Hemet on a regional hold, which “prevent[ed] any operations by [Team Hemet] until satisfied.” Hanna alleged that Little League “ha[d] improperly obtained money from [Hanna], and continue[d] to improperly obtain money from the general public.” The trial court dismissed the trade libel claim on demurrer. Little League moved for an order finding Hanna to be a vexatious litigant and requiring him to furnish security, and requested the court judicially notice 14 different civil actions filed from 2009 through 2018 involving Hanna as a pro se plaintiff and a defendant. Hanna challenged the vexatious litigant determination and the determination that he was not likely to succeed on the merits of the action. Hanna further contends that the trial court lacked authority to rule on discovery motions and to impose discovery sanctions after the filing of the motion under section 391.1 to declare Hanna a vexatious litigant and to have him furnish security. The Court of Appeal affirmed the prefiling restriction placed on Hanna’s filing of future actions as a pro se litigant. In the published portion of its opinion, the Court agreed the trial court was without authority to rule on the discovery motions or to impose sanctions. "Under the plain language of section 391.6, all further proceedings in the action should have been stayed once the vexatious litigant motion under section 391.1 was filed." The Court therefore reversed the orders imposing discovery sanctions. Judgment was affirmed in all other respects.

In re Internet Lending Cases

Court: California Courts of Appeal

Docket: A156573(First Appellate District)

Opinion Date: August 17, 2020

Judge: Jackson

Areas of Law: Civil Procedure, Consumer Law, Native American Law

Rosas filed a representative action based on alleged participation in illegal internet payday loan practices. Defendant AMG is a wholly-owned tribal corporation of Miami Tribe, a federally recognized Indigenous American tribe. Rosas previously challenged a court order granting AMG's motion to quash service of summons for lack of jurisdiction based on tribal sovereign immunity. On remand, the court granted AMG’s motion to dismiss for lack of personal jurisdiction on the basis of tribal sovereign immunity. The court accepted AMG’s argument that the arm-of-the-tribe test should be applied to the current facts relating to its ownership and control rather than the facts that existed when the complaint was filed. The court credited AMG’s new, undisputed evidence concerning significant changes made to AMG’s structure and governance since the prior court ruling—changes that removed the nontribal actors from positions of authority and control and ended its involvement in the business of financial lending. The court of appeal affirmed. The court did not exceed the scope of the remand. When a court determines that a tribal entity is entitled to immunity from suit, the court lacks the authority, absent the tribe’s consent or federal authorization, to bring the tribal entity before the court for any purpose, including for the purpose of sanctioning misconduct.

Martis Camp Community Assn. v. County of Placer

Court: California Courts of Appeal

Docket: C087759(Third Appellate District)

Opinion Date: August 17, 2020

Judge: Krause

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

In a consolidated appeal, defendant County of Placer decided to partially abandon public easement rights in Mill Site Road, a road that connected two adjacent residential subdivisions: Martis Camp (previously known as Siller Ranch) and the Retreat at Northstar (the Retreat). As originally planned, the connection between Martis Camp and the Retreat was intended for emergency access and public transit vehicles only. When the developments were approved in 2005, the environmental documents assumed there would be no private vehicle trips between Martis Camp and the Retreat or the Northstar community beyond; Martis Camp residents wishing to drive to Northstar-at-Tahoe (Northstar) would use State Route (SR) 267. However, sometime in or around 2010, residents of Martis Camp began using the emergency/transit connection as a shortcut to Northstar. In 2014, after efforts to have county officials stop Martis Camp residents from using the emergency access road failed, the Retreat owners filed an application requesting that the County Board of Supervisors (the Board) abandon the public’s right to use Mill Site Road. In 2015, the Board approved a partial abandonment, thereby restricting use of Mill Site Road to Retreat property owners and emergency and transit vehicles, consistent with what was described and analyzed in the prior planning documents. Then lawsuits followed. Plaintiffs, the Martis Camp Community Association (MCCA) and three individual Martis Camp property owners, appealed the denial of their petitions for writ of mandate challenging the County’s abandonment of Mill Site Road, as well as the dismissal (on demurrer) of the Martis Camp Homeowners’ inverse condemnation claim. After review, the Court of Appeal affirmed the portion of the judgment and order concluding that the County did not violate the Brown Act or the statutory requirements for abandonment of a public road, and affirmed the dismissal of the Martis Camp Homeowners’ inverse condemnation claim, but reversed and remanded as to plaintiffs’ California Environmental Quality Act (CEQA) claim.

T.A.W. Performance, LLC v. Brembo, S.P.A.

Court: California Courts of Appeal

Dockets: A157400(First Appellate District) , A157841(First Appellate District)

Opinion Date: August 17, 2020

Judge: Petrou

Areas of Law: Civil Procedure, Contracts

In 2014, Brembo, an Italian joint-stock corporation, headquartered in Italy, and TAW, a California LLC with its principal office in North Carolina, entered into an “Exclusive Distribution Agreement” covering brake systems manufactured by Brembo. The parties consented “to the exclusive jurisdiction of the state and federal courts of the State of New York.” In 2016, Brembo sent a termination notice to TAW in North Carolina. TAW filed suit in New York federal court but voluntarily dismissed its lawsuit. Brembo filed a New York state lawsuit seeking damages for TAW’s alleged failure to pay for products shipped to TAW in North Carolina. TAW filed a counterclaim seeking damages based on Brembo’s alleged failure to enforce the agreement’s exclusivity provisions and its termination of the agreement without explanation. While Brembo’s New York lawsuit was pending, TAW filed this California lawsuit, alleging wrongful termination of the agreement. The court of appeal affirmed the trial court in granting Brembo’s motion to quash service of the summons for lack of personal jurisdiction. Brembo’s contacts with the U.S. were already directed away from California before the parties entered into the agreement. The agreement’s choice of law and forum selection clauses reinforce that Brembo did not have fair warning and could not have reasonably anticipated being brought into a California court to defend against TAW’s lawsuit.

Sierra v. DSCYF

Court: Delaware Supreme Court

Docket: 354 355, 2019

Opinion Date: August 17, 2020

Judge: Seitz

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

Mother and Father appealed a Family Court order terminating their parental rights to Giselle, who was four months old when the Family Court first ordered her removed from the parents’ care. The court found Giselle was at risk of chronic and life threatening abuse based on the previous unexplained serious injuries to her older sibling. The Family Court also found Mother and Father failed to plan for Giselle’s physical needs and her mental and emotional health and development. Mother and Father challenged the sufficiency of the evidence supporting the termination of parental rights and raised a number of constitutional arguments on appeal. Finding the arguments lacked merit, the Delaware Supreme Court affirmed the Family Court’s judgment.

Duncan v. Long

Court: Idaho Supreme Court - Civil

Docket: 46930

Opinion Date: August 17, 2020

Judge: Bevan

Areas of Law: Civil Procedure, Landlord - Tenant, Personal Injury, Real Estate & Property Law

Appellant Sky Duncan’s daughter, K.R., attended a daycare Anna McCowin ran out of a residence she leased from Respondent Scott Long. In 2014, McCowin left K.R. unattended in the backyard, which allowed K.R. to allegedly escape through a broken gate to a nearby canal where she drowned. Duncan sued McCowin and Long for negligence. Long moved for summary judgment, arguing that he did not owe Duncan or her daughter a duty to repair the broken gate. The district court granted Long’s motion for summary judgment after declining to extend premises liability to an injury that occurred on property adjacent to Long’s property. Duncan filed a motion for reconsideration, which the district court denied. After review, the Idaho Supreme Court found the district court correctly held that Long did not owe K.R. a duty of care to protect against an injury that occurred on adjacent property. Therefore, the Court affirmed the district court's grant of summary judgment in Long's favor.

Global Textile Alliance, Inc. v. TDI Worldwide, LLC

Court: North Carolina Supreme Court

Docket: 279A19

Opinion Date: August 14, 2020

Judge: Paul M. Newby

Areas of Law: Business Law, Civil Procedure

The Supreme Court affirmed the decision of the Business Court in this action brought by Global Textile Alliance, Inc. (GTA) alleging that Defendants engaged in several improper acts during the formation and operation of Dolven Enterprises, Inc., holding that the Business Court did not abuse its discretion either by ordering production of the relevant communications or by conducting a limited review of those communications. When it was discovered that GTA had withheld confidential correspondence between GTA and its outside counsel and Haspeslagh conveying legal advice regarding the matters giving rise to the instant litigation Defendant filed a motion to compel GTA to produce the communications. Defendant argued that GTA waived the attorney-client privilege by including Stefaan Haspeslagh on communications with GTA's counsel. The Business Court granted the motion to compel. The Supreme Court affirmed, holding that the Business Court (1) did not abuse its discretion by determining that communications involving Haspeslagh were not privileged under the attorney-client privilege; (2) did not err in determining that communications involving Haspeslagh were not protected under the work-product doctrine; and (3) did not err by not conducting an exhaustive in camera review of all communications involving Haspeslagh.

Burnett v. Pagliacci Pizza, Inc.

Court: Washington Supreme Court

Docket: 97429-2

Opinion Date: August 20, 2020

Judge: Barbara Madsen

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

Pagliacci Pizza hired Steven Burnett as a delivery driver. Steven Burnett attended a mandatory new employee orientation at a local Pagliacci Pizza. During the orientation, Pagliacci gave Burnett multiple forms and told him to sign them so that he could start working. One of the forms that Burnett signed was a one-page “Employee Relationship Agreement” (ERA). The ERA mentioned nothing about arbitration of disputes. Pagliacci’s “Mandatory Arbitration Policy” (MAP) was printed in Pagliacci’s employee handbook, “Little Book of Answers,” a 23-page booklet in which Pagliacci’s MAP appeared on page 18. The MAP was not listed in the handbook’s table of contents, and page 18 fell within the “Mutual Fairness Benefits” section. Burnett was given a copy of Little Book of Answers during his orientation and told to read it at home. Consistent with that instruction, the ERA contained a section entitled “Rules and Policies.” Delivery drivers like Burnett filed a class action alleging wage and hour claims against Pagliacci Pizza. At issue on interlocutory review was whether the trial court sustainably denied the employer’s motion to compel arbitration. The Court of Appeals affirmed, determining that the mandatory arbitration policy contained in the employee handbook, which was provided to the named plaintiff after he signed the employment relationship agreement, was procedurally and substantively unconscionable and, thus, unenforceable. The Washington Supreme Court held that the MAP at issue in this case was indeed unenforceable because no arbitration agreement was formed when the employee signed the employment agreement when he had no notice of the arbitration provision contained in the employee handbook. The Court also held that in light of the noted circumstances, even if an arbitration contract existed, it was procedurally unconscionable and unenforceable. Furthermore, the Court held the same arbitration provision was substantively unconscionable because its one-sided terms and limitation provisions would bar any claim by the terminated employee here, an overly harsh result. Accordingly, the trial court’s order denying the employer’s motion to compel arbitration was affirmed and the matter remanded for further proceedings.

In re Welfare of D.E.

Court: Washington Supreme Court

Docket: 98043-8

Opinion Date: August 20, 2020

Judge: G. Helen Whitener

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

In 2018, the Washington Department of Children, Youth and Families (Department) moved to terminate J.J.'s parental rights to her three children. After closing arguments, the trial court orally ruled that the Department had not met its burden to prove by clear, cogent, and convincing evidence that the Department had offered all necessary services or that there was no reasonable likelihood of J.J. correcting her parental deficiencies in the near future. But instead of dismissing the termination petition, the trial court continued the trial without entering any findings of fact or conclusions of law. Two months later, the trial court heard more evidence and then terminated J.J.’s parental rights to all three of her children. J.J. appealed, arguing that the trial court violated her right to due process when it continued the trial after finding that the Department had not met its burden of proof. The Court of Appeals affirmed the termination. The Washington Supreme Court reversed the Court of Appeals and dismissed the termination petition, holding the trial court indeed violated J.J.’s right to due process when it continued the trial after finding the Department had not met its burden of proof.