Which Laws Apply to Broker-Dealers? Federal Laws? State Laws? Both? General Principles Leading to an Answer

TAMAR FRANKEL

BU Law emerita professor Tamar Frankel explains the law of preemption as it pertains to broker-dealers and their investor clients. She predicts, among other things, that either the clients will demand that broker-dealers adhere to a fiduciary duty, or else that states will impose that duty on them.

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Mirlis v. Greer

Court: US Court of Appeals for the Second Circuit

Docket: 17-4023

Opinion Date: March 3, 2020

Judge: Susan Laura Carney

Areas of Law: Civil Procedure

In a case involving the sexual abuse of a minor by his religious leader, the Second Circuit reversed a post-trial ruling by the district court granting in part the request of Lawrence Dressler, a non‐party, for release of the video recording of the deposition of Aviad Hack, also a non‐party witness. Hack testified that he was a victim of sexual abuse by defendant and that he became aware of plaintiff's sexual abuse by defendant when he was an adult and plaintiff was a minor. The district court ruled that portions of the deposition video were judicial documents subject to a strong presumption of public access and that Hack's privacy interest in the deposition video was insufficient to rebut the presumption. The court held, however, that the district court erred by failing to take into account Dressler's motives in obtaining, and likely course of action with, the video recording. Dressler had written voluminously on his blog about the trial, disparaged both Hack and defendant, and sought to copy the video so that he could post it publicly on his internet blog. The court also held that the district court accorded insufficient weight to Hack's privacy interests as a minor victim. In this case, the district court undervalued the intense intrusion on Hack's privacy interests that the internet publication of the video excerpts would effect.

Campbell v. McCarthy

Court: US Court of Appeals for the Fourth Circuit

Docket: 18-1890

Opinion Date: March 5, 2020

Judge: Robert Bruce King

Areas of Law: Civil Procedure, Military Law

Plaintiff, a civilian employee of the Army Corps of Engineers, filed suit challenging the Army's decision to suspend him from his employment pending review of his security clearance. The district court awarded summary judgment to the Army on claims under Title VII of the Civil Rights Act and Age Discrimination in Employment Act. The Fourth Circuit vacated the district court's judgment and dismissed the action in light of the Supreme Court's decision in Department of the Navy v. Egan, 484 U.S. 518 (1988). The court held that review of any of plaintiff's claims requires review of the suspension of his security clearance — a review that necessarily goes to the very heart of the protection of classified information — and thus Egan deprived the district court of subject matter jurisdiction to review each of the claims. Therefore, the district court erred by failing to dismiss these claims outright for lack of subject matter jurisdiction.

Fidrych v. Marriott International, Inc.

Court: US Court of Appeals for the Fourth Circuit

Docket: 18-2030

Opinion Date: March 2, 2020

Judge: Traxler

Areas of Law: Civil Procedure, Personal Injury

Plaintiff and his wife filed suit against Marriott after he was injured in an affiliated hotel in Milan, Italy. After Marriott failed to timely answer, the district court entered an entry of default. Five days after receiving notice of default, Marriott filed a motion to set aside the default, challenging the district court's personal jurisdiction over Marriott. The district court then set aside the default and subsequently granted Marriott's motion to dismiss based on lack of personal jurisdiction. The Fourth Circuit affirmed the district court's dismissal for lack of personal jurisdiction, holding that Marriott's contacts with South Carolina were not sufficient to render it "at home" in South Carolina, and thus the requirements for the exercise of contact-based general jurisdiction were not satisfied. Furthermore, the district court properly concluded that Marriott did not consent to the exercise of general jurisdiction when it obtained a Certificate of Authority to conduct business in the state. Finally, the court held that Marriott's case-related contacts with South Carolina were too tenuous and too insubstantial to constitutionally permit the exercise of specific jurisdiction over Marriott. However, the court vacated the district court's denial of sanctions, remanding the issue for reconsideration.

Adams v. Baker

Court: US Court of Appeals for the Sixth Circuit

Docket: 18-5819

Opinion Date: March 2, 2020

Judge: Per Curiam

Areas of Law: Civil Procedure

Tennessee inmate Adams filed a pro se lawsuit under 42 U.S.C. 1983, claiming that Baker retaliated against him for his informal grievances about unfair workplace procedures in violation of his First Amendment rights. On January 17, 2018, the district court denied Adams’ request for a preliminary injunction. Adams filed this interlocutory appeal. The Sixth Circuit dismissed the appeal as moot. While Adams’ appeal was pending, he took his case to trial and won. On August 15, 2019, the district court entered a final judgment, making his appellate request for a preliminary injunction moot. The point of a preliminary injunction is to maintain “the status quo” until the resolution of the case “on its merits.” A final decision on the merits extinguishes a preliminary injunction. Even if the court agreed with Adams on the merits of his interlocutory appeal, it could not provide “effectual relief” because any preliminary injunction would immediately “dissolve.”

United States v. $39,000.00 in U.S. Currency

Court: US Court of Appeals for the Sixth Circuit

Docket: 19-3747

Opinion Date: February 28, 2020

Judge: Donald

Areas of Law: Civil Procedure, Constitutional Law

During a screening of Wells’ luggage, TSA officials discovered bundles of U.S. currency totaling $39,000.00. The government filed a forfeiture action. Wells filed a verified claim asserting that he is “the sole and absolute owner of the monies ... unlawfully removed from [his] exclusive possession and control.” Wells filed an answer to the forfeiture complaint, denying the government’s allegations on the grounds “that the answer could very well tend to, or actually, violate Claimant’s Fifth Amendment rights.” Pursuant to the Federal Rules of Civil Procedure’s Supplemental Rules for Admiralty or Maritime Claims and Civil Forfeiture Actions, the government served “special interrogatories” to Wells seeking information testing his assertion of ownership. In response to each interrogatory, Wells stated, “Claimant refuses to answer this interrogatory as he is asserting his Fifth Amendment right against self-incrimination.” The government then moved for summary judgment, citing Wells’ failure to respond to discovery requests aimed at determining the legitimacy of his alleged ownership interests. The district court granted the government summary judgment, finding that Wells failed to establish standing. The Sixth Circuit affirmed. A blanket assertion of the Fifth Amendment privilege does not excuse a claimant’s burden of establishing standing at the summary judgment stage, nor can a claimant use the privilege “to make one’s assertions of ownership impervious to attack.”

Wellfount, Corp. v. Hennis Care Centre of Bolivar, Inc.

Court: US Court of Appeals for the Sixth Circuit

Docket: 19-3777

Opinion Date: March 3, 2020

Judge: Gibbons

Areas of Law: Civil Procedure

Wellfount, with its principal place of business in Indiana, contracted to provide services to Hennis nursing homes in Ohio. When the relationship soured, Wellfount sued Hennis in Indiana state court. Before Hennis filed a responsive pleading, Wellfount voluntarily dismissed its suit when Hennis questioned whether Indiana was a proper venue. The dismissal was without prejudice. Wellfount refiled in federal court. Hennis argued improper venue, based on a forum selection clause in the parties’ contract. Before Hennis filed a response, Wellfount moved for voluntary dismissal without prejudice under Federal Rule of Civil Procedure 41(a)(2). Wellfount indicated that it planned to refile in Ohio state court. Hennis moved to convert Wellfount’s motion into a self-effectuating notice of dismissal under Rule 41(a)(1). Hennis argued that no court order was necessary for Wellfount to dismiss its case because Hennis had yet to serve an answer or motion for summary judgment. Wellfount opposed Hennis’s motion; it sought a Rule 41(a)(2) court-ordered dismissal to avoid the claim-preclusive effect of Rule 41(a)(1)(B). The district court granted Wellfount’s motion, dismissing the case without prejudice. The Sixth Circuit affirmed; neither Rule 41(a)'s text nor the purpose of the Rule 41(a)(1)(B) two-dismissal clause indicate that a plaintiff is barred from seeking a court-ordered Rule 41(a)(2) dismissal if it is eligible to file a Rule 41(a)(1) notice of dismissal. The court rejected Hennis’s argument that allowing court-ordered dismissals at the earliest stages of a lawsuit will nullify the two-dismissal rule.

Bauer v. Koester

Court: US Court of Appeals for the Seventh Circuit

Docket: 19-1786

Opinion Date: March 4, 2020

Judge: Per Curiam

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

Donald and Lauretta Bauer purchased land from Donald’s parents and executed promissory notes and a mortgage. When Donald’s parents died, their interest in the notes transferred to Donald's siblings, who sought foreclosure. A state court entered a foreclosure judgment and a deficiency judgment. No judicial sale occurred. The Bauers tried to redeem the property by satisfying the judgment. The foreclosure plaintiffs issued citations to discover assets and sought additional interest. The state court found that the Bauers owed an additional $33,782.96 in interest. The Bauers paid; the plaintiffs filed a satisfaction of judgment. The Bauers then sued, alleging tampering with evidence and abuse of process by seeking to extort money through the issuance of citations to discover assets. The state appellate court upheld the dismissal of the case. The Bauers filed a federal suit, 42 U.S.C. 1983, alleging that the defendants, including the state-court judge, conspired to introduce a forged document into evidence during the foreclosure trial and that the judge and the clerk allowed the plaintiffs to issue baseless citations to discover assets. The district court dismissed the case under the Rooker-Feldman doctrine, which precludes federal district-court jurisdiction “over cases brought by state-court losers challenging state-court judgments rendered before the district court proceedings commenced.” The Seventh Circuit affirmed, rejecting the Bauers’ argument that they did not seek to set aside the state court’s order or judgment but only mean to challenge the “collection practices” of the defendants and their collusion. Any finding in favor of the Bauers would require the federal court to contradict the state court’s orders.

Mensah v. Owners Insurance Co.

Court: US Court of Appeals for the Eighth Circuit

Docket: 18-2240

Opinion Date: March 5, 2020

Judge: Per Curiam

Areas of Law: Civil Procedure, Insurance Law

This case arose when plaintiff fell from the trunk of the car that her friend was driving and sustained serious injuries. In a related case, the district court held a bench trial to apportion the fault between the friends involved in the accident. In this case, plaintiff filed suit to recover the portion of the judgment allocated to one of the friends, seeking underinsured motorist benefits for the friend's portion of the judgment. The district court granted Owners' motion for summary judgment. The Eighth Circuit held that removal was not proper under diversity jurisdiction where the parties conceded that the amount in controversy was statutorily insufficient. The court also held that there was no supplemental jurisdiction because this case was a separate action and not another claim in an underlying action over which the federal courts have jurisdiction. Accordingly, the court vacated and remanded to the district court with instructions to remand the case to state court.

High Country Conservation v. United States Forest Service

Court: US Court of Appeals for the Tenth Circuit

Docket: 18-1374

Opinion Date: March 2, 2020

Judge: Carlos F. Lucero

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

The Colorado Roadless Rule, which the Forest Service adopted in 2012, prohibits road construction in designated areas but included an exception for the North Fork Coal Mining Area (the “North Fork Exception”). In prior litigation, a district court concluded agency decisions violated the National Environmental Policy Act (“NEPA”) and the Administrative Procedure Act (“APA”), and vacated the North Fork Exception. Following these decisions, the Forest Service prepared a Supplemental Final Environmental Impact Statement (“North Fork SFEIS”) and readopted the Exception, Roadless Area Conservation. Mountain Coal Company, LLC, submitted lease modification requests in connection with coal leases in the area. In response, the Forest Service and the Bureau of Land Management (“BLM”) issued a Supplemental Final Environmental Impact Statement (“Leasing SFEIS”) and approved the requests. In the lawsuit that followed, a coalition of environmental organizations alleged the agencies violated NEPA and the APA by unreasonably eliminating alternatives from detailed study in the North Fork SFEIS and the Leasing SFEIS. The district court rejected these challenges. After review, the Tenth Circuit Court of Appeals reversed as to the North Fork SFEIS, holding that the Forest Service violated NEPA by failing to study in detail the “Pilot Knob Alternative” proposed by plaintiffs. Accordingly, the matter was remanded to the district court with instructions to vacate the North Fork Exception. With respect to the Leasing SFEIS, the Tenth Circuit held NEPA did not require consideration of the “Methane Flaring Alternative” proposed by plaintiffs.

Noreja v. Commissioner, SSA

Court: US Court of Appeals for the Tenth Circuit

Docket: 18-1383

Opinion Date: March 5, 2020

Judge: Mary Beck Briscoe

Areas of Law: Civil Procedure, Government & Administrative Law, Personal Injury, Public Benefits

Arthur Noreja appeals the denial of his claim for disability benefits. Noreja filed his disability claim in March 2012. In July 2013, following a hearing, an ALJ issued a detailed written order – exceeding 13 pages with single spacing – in which she denied Noreja’s claim. The ALJ found Noreja had several severe impairments, including “arthritis of the left upper extremity and right lower extremity,” “cognitive disorder,” and “headaches.” Nevertheless, the ALJ determined that these impairments (or a combination of the impairments) did not warrant relief. The ALJ found that Noreja had the residual functional capacity (“RFC”) to do “medium” work, subject to various limitations, and that there were “jobs that exist in significant numbers in the national economy” which Noreja could perform. The Appeals Council disagreed with the ALJ’s assessment, and remanded with direction for further proceedings. Once more, however, the ALJ determined that Noreja did not have “an impairment or combination of impairments” that warranted relief, reiterated that Noreja had the RFC to do "medium" work, subject to various limitations, and that there were jobs in existence "in significant numbers" which Noreja could perform. The ALJ did not obtain a new consultative mental examination before issuing her May 2016 decision, but she procured additional evidence regarding Noreja’s impairments. On appeal of the second ALJ decision, Noreja alleged the ALJ failed to follow an instruction in the Appeals Council's remand order. The Tenth Circuit held: (1) it had jurisdiction to determine whether an alleged ALJ violation of an Appeals Council order warranted reversal; but (2) the Court's “usual” review standards remained in force, meaning that the alleged violation was material only if it showed the ALJ meaningfully failed to apply the correct legal standards, or the denial of benefits was unsupported by substantial evidence; and (3) applying those standards here, the ALJ’s denial of Noreja’s application had to be affirmed.

Sargeant v. Hall

Court: US Court of Appeals for the Eleventh Circuit

Docket: 18-15205

Opinion Date: March 2, 2020

Judge: Jordan

Areas of Law: Civil Procedure

Federal Rule of Civil Procedure 41(d) does not apply when a plaintiff, after dismissing the first federal action, files a subsequent action in state court. In this case, after voluntarily dismissing his federal action, plaintiff filed a second action in state court against defendant based on or including the same claim. The Eleventh Circuit held that the district court correctly determined that defendant was not entitled to costs under Rule 41(d) because plaintiff filed the second action against him in state court.

Estate of Richard Rosenthal v. JRHBW Realty, Inc., d/b/a RealtySouth

Court: Supreme Court of Alabama

Docket: 1180718

Opinion Date: February 28, 2020

Judge: Mendheim

Areas of Law: Civil Procedure, Contracts, Real Estate & Property Law

Mark Rosenthal ("Mark"), as personal representative of the estate of Richard Rosenthal, deceased ("Richard"), appealed the grant of summary judgment entered in favor of JRHBW Realty, Inc., d/b/a RealtySouth ("RealtySouth"), and Charles Valekis on Richard's claims alleging breach of contract and negligence/wantonness. In early June 2013, Richard retained RealtySouth through its agent Valekis to assist him in locating a new house to purchase. Valekis told Richard about an unlisted property that Valekis believed would meet Richard's needs. Richard testified that he told Valekis that he would not buy the home without having a structural engineer examine it. Richard testified that, based on Valekis's representation that he had had a structural engineer inspect the home and on Valekis's representation that Garland Caudle, a home inspector (but not a structural engineer) had not found any structural issues, he placed an offer on the home. Richard closed on the home on July 19, 2013, and he moved into the home soon thereafter. After he had lived in the home for several months, Richard concluded that the home was too small and that he needed a larger home. He again engaged the services of Valekis and RealtySouth to sell the home. After the home was placed on the real-estate market, Richard began to notice problems with it. Valekis subsequently informed Richard that numerous potential buyers were concerned with the condition of the home. Ultimately, Richard had the home inspected by a foundation-repair contractor, and that contractor recommended that Richard hire a structural engineer. The structural engineer determined the home was experiencing significant structural distress and estimated that fixing the issues would cost over $100,000. In 2015, Richard sued RealtySouth, Valekis, Caudle, Foundations Unlimited of Alabama, and the Coopers (the previous owners of the house). The Alabama Supreme Court concluded Mark's allegation of a breach of contract by Valekis apart from the agency agreement was without merit. As the circuit court concluded, the agency agreement "contains language that RealtySouth and Valekis did not assume any responsibility to inspect the property or retain building experts to inspect the property," so the Court concluded the agency agreement did not provide a basis for Richard's breach-of-contract claim. Accordingly, the circuit court correctly entered a summary judgment in favor of RealtySouth and Valekis with respect to any alleged breach of contract.

Ex parte Drury Hotels Company, LLC.

Court: Supreme Court of Alabama

Docket: 1181010

Opinion Date: February 28, 2020

Judge: Tommy Bryan

Areas of Law: Civil Procedure, Labor & Employment Law, Personal Injury

Drury Hotels Company, LLC ("Drury"), petitioned the Alabama Supreme Court for a writ of mandamus to direct the Montgomery Circuit Court to dismiss Maritza Diaz's tort claims against Drury. Diaz worked as a housekeeper at Drury's hotel in Montgomery. In her complaint, Diaz alleged that she was working at the hotel when she was attacked by an unknown assailant. Diaz alleged that the assailant "sexually assaulted and robbed [her] by placing a knife to her throat, threatening to harm [her], attempting to force [her to] have sexual intercourse and taking approximately $200 in property from [her]." Diaz further claimed that the assault caused her serious bodily injuries, emotional distress, and mental anguish. In December 2018, Diaz sued Drury, alleging claims of negligence and wantonness based on allegations that Drury had failed to provide a secure workplace. Diaz also alleged a claim of negligence based on the theory of premises liability, and she alleged claims against fictitiously named parties. As an alternative to her tort claims, Diaz also alleged a claim for workers' compensation benefits under the Act if her injuries are in fact covered under the Act. Given the procedural posture of this case and the arguments presented, the Supreme Court concluded Drury did not establish a clear legal right to mandamus relief. Thus, Drury's petition for a writ of mandamus was denied. The Court made no conclusion regarding whether Drury could ultimately be entitled to immunity under the exclusive-remedy provisions of the Act.

Ex parte LED Corporations, Inc.

Court: Supreme Court of Alabama

Docket: 1180629

Opinion Date: February 28, 2020

Judge: Stewart

Areas of Law: Business Law, Civil Procedure, Contracts

LED Corporations, Inc. ("LED"), and Anthony Florence petitioned the Alabama Supreme Court for a writ of mandamus to direct the Etowah Circuit Court ("the trial court") to vacate its order denying their motions to dismiss for lack of personal jurisdiction an action filed against them by SDM Electric, LLC ("SDM"), and to enter an order dismissing the case against them. SDM is an Alabama corporation that served as an electrical subcontractor for a construction project at a high school in Calhoun County, Alabama. LED is a Florida corporation owned by Florence, its sole shareholder. In 2017, SDM contacted LED to solicit a bid for lighting fixtures for use in the construction project. SDM executed and delivered to LED a purchase order for lighting fixtures; SDM paid LED the balance of the purchase order. The fixtures were never shipped, and, in late 2018, SDM sued LED and Florence (among others), for breach of contract, fraudulent misrepresentation and conversion. The Alabama Supreme Court affirmed the trial court, concluding SDM satisfied its burden in opposition to LED's and Florence's motions to dismiss by showing that LED and Florence has sufficient contacts with Alabama to support the exercise of specific personal jurisdiction and that the exercise of jurisdiction over them "complies with traditional notions of fair play and substantial justice."

Conservatorship of E.B.

Court: California Courts of Appeal

Docket: A157280(First Appellate District)

Opinion Date: February 28, 2020

Judge: Henry E. Needham, Jr.

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

E.B. has been diagnosed with schizophrenia. The Contra Costa County public guardian sought the appointment of a conservator. The court denied E.B.’s objection to compelled testimony. At a trial, E.B. was called as one of three witnesses. He appealed from an order appointing the Public Guardian as his conservator and determining that his current placement in a mental health rehabilitation facility was the least restrictive and most appropriate placement. (Welf. & Inst. Code 5350, 5358(c)(1)). E.B. argued that he had a right to refuse to testify under the equal protection clause, because that right has been statutorily granted in proceedings to extend the commitment of persons found not guilty by reason of insanity, and he is entitled to the same protection. The court of appeal affirmed. LPS conservatees are similarly situated with NGI’s and with individuals subject to other involuntary civil commitments for purposes of the right against compelled testimony but the error was harmless. Even if the jurors had not observed E.B.’s demeanor on the stand, they would have known his diagnosis; that he was on three medications for his mental illness, one of which required white blood cell count monitoring; that he had been recently hospitalized for his mental illness; that when living on his own he had engaged in aberrant behavior; and that he resisted treatment and had limited insight into his mental health condition.

Lincoln Unified School Dist. v. Superior Court

Court: California Courts of Appeal

Docket: C088857(Third Appellate District)

Opinion Date: March 3, 2020

Judge: Renner

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

This proceeding stemmed from a minor’s collapse during football try-outs at Lincoln High School in Stockton in 2017. Respondent Shynelle Jones presented a timely claim on behalf of her son, Jayden, to the Lincoln Unified School District under the Government Claims Act. About four months later, Jones submitted an application to the school district for leave to present a late claim on her own behalf based on her allegedly newfound realization of the severity of her son’s injuries, their impact on her own life, and her right to file her own claim. She declared that up until that point she had been able to attend to her own interests. After the application was denied, Jones filed a petition for relief from the claim presentation requirement in the superior court based on the same facts. At the hearing on her petition, her counsel, Kenneth Meleyco, presented a new explanation for the delay in submitting Jones’s claim: the day after Jones presented a claim on her son’s behalf, she retained Meleyco on her own behalf, and an error in the handling of Meleyco’s dictated memo within his office prevented the earlier preparation of Jones’s claim. The superior court granted Jones’s petition, despite noting “legitimate concerns regarding [her] credibility” because it “determined based on the directives provided in case law, to provide relief from technical rules, that [Jones] has met her burden of proof to demonstrate that her neglect was excusable.” The Court of Appeal found this ruling was an abuse of the trial court’s discretion. "[T]he general policy favoring trial on the merits cannot justify the approval of a petition that is not credible and that does not demonstrate a right to relief by a preponderance of the evidence." The Court issued a writ of mandate compelling the superior court to vacate its order and enter a new order denying Jones relief from the claim presentation requirement.

Matson v. S.B.S. Trust Deed Network

Court: California Courts of Appeal

Docket: D074442(Fourth Appellate District)

Opinion Date: March 5, 2020

Judge: Patricia D. Benke

Areas of Law: Civil Procedure, Contracts, Real Estate & Property Law

Plaintiffs Matthew Matson and Matson SDRE Group, LLC purchased a deed of trust at a nonjudicial foreclosure sale. S.B.S. Trust Deed Network (SBS) was the trustee and Bank of Southern California, N.A. (BSC) was the beneficiary of the deed of trust. Matson, relying on a software application called PropertyRadar, believed that the deed of trust was in first position on the property. He purchased the deed of trust for $502,000 at the foreclosure auction, then learned that the lien was in second position, with a much lower fair market value than the price paid. Plaintiffs filed a first amended complaint against defendants for rescission of the sale and declaratory relief, relying on Matson's unilateral mistake of fact and the unconscionable price he paid for the deed of trust. The parties filed cross-motions for summary judgment. The court granted summary judgment for defendants. Plaintiffs appealed, but finding no reversible error, the Court of Appeal affirmed the judgment.

Moofly Productions, LLC v. Favila

Court: California Courts of Appeal

Docket: B294828(Second Appellate District)

Opinion Date: March 4, 2020

Judge: Frances Rothschild

Areas of Law: Business Law, Civil Procedure

The Court of Appeal affirmed the superior court's judgment in favor of the Estate, in a lawsuit brought by Moofly for actions the Estate took when attempting to collect on a judgment in a previous, related case. The Estate filed a cross-complaint, accusing Moofly and its owner of fraudulent transfers and other causes of action. The court held that Moofly was not entitled to a jury trial because the Estate's cause of action for fraudulent transfer was essentially one in equity and the relief sought depended upon the application of equitable doctrines; Moofly received adequate notice of the Estate's motion for terminating sanctions; there were sufficient grounds to justify the imposition of terminating sanctions; the superior court did not exceed its jurisdiction by awarding the return of derivative copyrighted materials; even assuming that the Estate's claim fell within the subject matter of copyright, the rights the Estate asserted are not equivalent to copyright; and there was no error in including Moofly's owner as a party liable for the judgment.

Siry Investment, LP v. Farkhondehpour

Court: California Courts of Appeal

Docket: B277750(Second Appellate District)

Opinion Date: March 3, 2020

Judge: Brian M. Hoffstadt

Areas of Law: Civil Procedure, Legal Ethics

This appeal arose from challenges to a $7 million default judgment entered after the trial court issued terminating sanctions. The Court of Appeal affirmed the entry of terminating sanctions, modifying the judgment to eliminate the awards of treble damages and attorney fees. The court held that a trial court is not foreclosed from issuing terminating sanctions just because the underlying discovery encompasses only a subset of the issues in the case; a party against whom a default has been entered may file a motion for new trial attacking the default judgment as containing errors in law; and Penal Code section 496, subdivision (c) only authorizes an award of treble damages or attorney fees when the underlying conduct involves trafficking in stolen goods and thus the court parted ways with Switzer v. Wood, (2019) 35 Cal.App.5th 116.

Gale v. City & County of Denver

Court: Colorado Supreme Court

Citation: 2020 CO 17

Opinion Date: March 2, 2020

Judge: Gabriel

Areas of Law: Civil Procedure, Civil Rights

The Tenth Circuit Court of Appeals certified a question of Colorado law to the state Supreme Court. Plaintiff Franklin Gale was terminated from his job as a deputy sheriff with the Denver Sheriff’s Department. At the time of his termination, he was serving as chief of the Downtown Detention Center, and the Denver Department of Safety had concluded that he had violated several internal regulations and certain Career Service Rules. Gale sought review of his termination before the Denver Career Service Board. After a hearing officer and then the full Board affirmed Gale’s termination, he filed a C.R.C.P. 106(a)(4) claim for judicial review in the Denver District Court, naming the City and County of Denver (the “City”), among others, as defendants. In addition, Gale filed a separate action pursuant to 42 U.S.C. section 1983 against the City, among others, in the United States District Court for the District of Colorado (the “federal action”). In the federal action, Gale sought money damages for the City’s alleged violations of his First Amendment rights to free speech and free association. The Denver District Court ultimately affirmed the Career Service Board’s order upholding Gale’s termination, and the City thereafter sought and obtained leave to amend its answer in the federal action to assert a defense of claim preclusion. The City then moved for summary judgment in the federal action based on this defense. As asked by the federal appeals court, the issue presented questioned whether Colorado crafted an exception to the doctrine of res judicata such that a prior action under Colorado Rule of Civil Procedure 106(a)(4) could not preclude 42 U.S.C. 1983 claims brought in federal court, even through such claims could have been brought in the prior state action. The Supreme Court answered the question "no."

Dept. of Public Safety v. Ragsdale

Court: Supreme Court of Georgia

Docket: S19G0422

Opinion Date: February 28, 2020

Judge: Ellington

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

Matthew Ragsdale filed this personal injury action against the Georgia Department of Public Safety (“DPS”) after he was injured during an October 31, 2014 motor vehicle accident that occurred when Ross Singleton, the driver of another vehicle, fled from law enforcement. Ragsdale sent an ante litem notice to the Department of Administrative Services (“DOAS”) on December 3, 2014. The notice provided on that date failed to include all the information required by OCGA 50-21-26 (a) (5). Ragsdale filed suit, but dismissed this initial filing based on the deficiency of his first ante litem notice. Thereafter, in March 2017, Ragsdale sent a second ante litem notice to DOAS. Ragsdale then renewed the action, and [DPS] filed its motion to dismiss the appeal, contending that the March 2017 ante litem notice was untimely. In response, Ragsdale argued that because he was the victim of Singleton’s crime, the time for filing the ante litem notice had been tolled “from the date of the commission of the alleged crime or the act giving rise to such action in tort until the prosecution of such crime or act has become final or otherwise terminated” pursuant to OCGA 9-3-99. The trial court agreed and denied the motion to dismiss in a single-sentence order, citing Ragsdale's arguments in response to the motion to dismiss. The Court of Appeals affirmed the denial of DPS’s motion to dismiss, following cases in which that court had previously “determined that limitation period tolling statutes apply to the period for filing ante litem notice as well as for filing suit.” The Georgia Supreme Court found the Georgia Tort Claims Act's ante litem notice period was not subject to tolling under OCGA 9-3-99.

Parham v. Stewart

Court: Supreme Court of Georgia

Docket: S19A1498

Opinion Date: February 28, 2020

Judge: Harold D. Melton

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

This case stemmed from a challenge to the results of the March 2018 special election for the mayor of the City of Blythe, Georgia, wherein Appellee Phillip Stewart defeated Appellant Cynthia Parham by a margin of four votes. Appellant filed a petition contesting the election results, alleging that illegal votes had been cast in the mayoral election. After a bench trial, the court concluded that Appellant had failed to show that enough illegal votes had been cast to change or place in doubt the result of the election. Appellant filed a notice of appeal to the Georgia Supreme Court and, finding no reversible error, the Supreme Court affirmed the trial court.

Neal v. Baltimore City Board of School Commissioners

Court: Maryland Court of Appeals

Docket: 21/19

Opinion Date: February 28, 2020

Judge: Getty

Areas of Law: Civil Procedure, Education Law, Labor & Employment Law, Personal Injury

In this appeal concerning whether a school board was liable for a judgment against its employee when the board was dismissed from the case prior to trial the Court of Appeals held that, under Md. Cts. & Jud. Proc. 5-518, even if a board is entitled to substantive dismissal from a case the plaintiffs are required to maintain the board as a party or request that the board be brought back into the case to indemnify an employee. As a matter of trial strategy in a case against the Baltimore City Board of School Commissioners, counsel for Plaintiffs decided to not appeal the dismissal, via summary judgment, of the Board from the case and to avoid joinder of the Board under after the conclusion of the trial. After the trial, Plaintiffs filed motions to enforce the judgments, arguing that the Board was obligated to satisfy the judgments pursuant to section 5-518. The circuit court granted Plaintiffs' motions. The court of special appeals reversed. The Court of Appeals affirmed, holding that, in order to force a county school board to indemnify a judgment against a county board employee, the mandatory joinder requirement under section 5-518 requires that a county board be joined as a party throughout the entire litigation.

Pinner v. Pinner

Court: Maryland Court of Appeals

Docket: 16/19

Opinion Date: March 3, 2020

Judge: Booth

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

The Court of Appeals affirmed the judgment of the court of special appeals reversing the circuit court's decision determining that it had personal jurisdiction over Defendant and entering a judgment in favor of Plaintiff, holding that the factors weighed against the constitutional reasonableness of causing Defendant to defend this suit in Maryland. This case was filed by Defendant's stepson, who was a North Carolina resident, against Defendant, who was also a North Carolina resident. Plaintiff ultimately obtained a default judgment against Defendant in the amount of $99,856.84. The court of special appeals reversed the circuit court's decision with respect to the finding of personal jurisdiction. The Court of Appeals affirmed, holding that Defendant's act of filing a sole lawsuit through counsel did not rise to the level of a "persistent course of conduct" to justify the assertion of personal jurisdiction over her in this matter.

Wolfe v. Delta Discount Drugs, Inc.

Court: Supreme Court of Mississippi

Citation: 2019-CA-00160-SCT

Opinion Date: March 5, 2020

Judge: Chamberlin

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

In May, 2015, Spencer Wolfe was being treated for high blood pressure and was prescribed two milligrams of hydralazine two times a day. Some time between May 20, 2015, and May 27, 2015, Wolfe had this prescription filled at Delta Discount Drugs. Delta, however, allegedly mis-filled Wolfe’s prescription with twenty-five milligram tablets of hydroxyzine, rather than the prescribed two milligram tablets of hydralazine. Less than a month later, on June 19, 2015, Wolfe was hospitalized after he had blacked out while driving. The issue this case presented for the Mississippi Supreme Court's review was whether a claim asserted against a pharmacy for allegedly mis-filling a prescription was subject to the two-year professional-malpractice statute of limitations in Mississippi Code Section 15-1-36 or the three-year catch-all statute of limitations in Mississippi Code Section 15-1-49. The Circuit Court ruled that Section 15-1-36 applied to Wolfe’s claims against Delta Discount Drugs and granted Delta’s motion to dismiss with prejudice because Wolfe’s claims were filed beyond the two-year statute of limitations found in Section 15-1- 36. Aggrieved, Wolfe has timely appealed to this Court. After review, and finding no reversible error in that decision, the Supreme Court affirmed.

Lanham v. BNSF Railway Co.

Court: Nebraska Supreme Court

Citation: 305 Neb. 124

Opinion Date: February 28, 2020

Judge: Michael G. Heavican

Areas of Law: Civil Procedure, Personal Injury

The Supreme Court reversed the order of the district court overruling BNSF Railway Company's motion to dismiss for lack of jurisdiction this negligence action brought under the Federal Employers' Liability Act (FELA), 45 U.S.C. 51 through 60, holding that the district court erred in determining that it could exercise personal jurisdiction over BNSF for claim that were unrelated to BNSF's instate activity. Plaintiff was seriously injured while working for BNSF on a section of train tracks near Houston, Texas. Plaintiff filed a complaint in the district court under FELA, alleging that his injuries were a result of BNSF's negligence. BNSF filed a motion to dismiss the complaint, arguing that the district court lacked jurisdiction because BNSF was not "at home" in Nebraska and because Plaintiff's injuries had occurred in Texas. The district court overruled the motion to dismiss, finding that BNSF consented to personal jurisdiction by registering to do business in Nebraska. The Supreme Court reversed, holding that BNSF was not "at home" in Nebraska for purposes of general jurisdiction and that treating BNSF's registration to do business in Nebraska as implied consent to personal jurisdiction would exceed the due process limits set forth in prior cases.

Cardiorentis AG v. Iqvia Ltd.

Court: North Carolina Supreme Court

Docket: 168A19

Opinion Date: February 28, 2020

Judge: Conrad

Areas of Law: Civil Procedure, Contracts, Drugs & Biotech

In this action asserting claims for breach of contract and fraud the Supreme Court granted Defendants' motion to stay proceedings under N.C. Gen. Stat. 1-75.12 on forum non conveniens grounds and denied as moot all other requested relief, holding that the balance of all relevant factors showed it would be more convenient for the parties to litigate these claims in England. Plaintiff, a Swiss biopharmaceutical company, sued an English contract research organization and its North Carolina-based parent, asserting claims for, inter alia, breach of contract and fraud. Defendants filed, among other pre-answer motions, a motion seeking to stay the proceedings under section 1-72.12. The Supreme Court granted Defendants' motion to stay and denied as moot all other requested relief, holding that, after considering the convenience of witnesses, ease of access to sources of proof, applicable law, and local interest factors, this case should be stayed on forum non conveniens grounds because Defendants showed that a substantial injustice would result if this case were to proceed in North Carolina and that England was a convenient, reasonable, and fair place of trial.

State ex rel. Franks v. Ohio Adult Parole Authority

Court: Supreme Court of Ohio

Citation: 2020-Ohio-711

Opinion Date: March 4, 2020

Judge: Per Curiam

Areas of Law: Civil Procedure, Criminal Law

The Supreme Court affirmed the decision of the court of appeals denying Appellant's motion for relief from a judgment dismissing his mandamus action against the Ohio Adult Parole Authority and the Bureau of Sentence Computation (collectively, the APA), holding that the court of appeals properly denied Appellant's motion for relief from judgment. In his complaint for a writ of mandamus Appellant, an inmate, alleged that he should have been eligible for parole in 2019 but that the APA had his first hearing scheduled for 2024. The court of appeals dismissed the complaint after adopting the recommendation of the magistrate. Appellant then filed a motion for relief from judgment. The court of appeals denied the motion, ruling that Appellant was barred from asserting that the court of appeals committed any error in adopting the magistrate's decision. The Supreme Court affirmed, holding that Appellant's propositions of law were either waived or without merit.

C.O. Homes, LLC v. Cleveland

Court: Oregon Supreme Court

Docket: S066504

Opinion Date: March 5, 2020

Judge: Martha Lee Walters

Areas of Law: Civil Procedure, Landlord - Tenant

In this forcible entry and detainer (FED) action to recover possession of a residential dwelling unit, the issue presented for the Oregon Supreme Court's consideration was whether the trial court erred in allowing landlord’s motion to amend its complaint, pursuant to ORCP 23, after the parties attended a first-appearance hearing and tenant filed her answer. In its original complaint, landlord alleged that it was entitled to possession based on a 72-hour notice - which, under ORS 90.394, could be given for nonpayment of rent - and attached that notice to its complaint. Two days before trial, landlord sought leave to amend its complaint to attach a different notice, a 30-day notice, which, under ORS 90.392, could be given “for cause,” including a material violation of the rental agreement. The Supreme Court determined the proposed amendment substantially changed landlord’s claim for relief and prejudiced tenant, and that the trial court abused its discretion in allowing it. It therefore reversed both the contrary decisions of the Court of Appeals and the trial court.