Latest 29 Cases This Week: PDX North Inc v. Commissioner New Jersey Department of Labor and Workforce Development (3d Cir.), M.D. v. Abbott (5th ...

He Said/She Said, Save Our Sons, and the Stories that Stick: Part Two of a Two-Part Series of Columns

SHERRY F. COLB

In this second in a series of columns on the U.S. Department of Education’s recent push toward a higher burden of proof in determinations of sexual harassment or assault under Title IX, Cornell Law professor Sherry F. Colb suggests that gendered narratives play a role in people’s willingness to regard an acquaintance rape case as “he said/she said.” Colb describes several examples in which people prefer a story that confirms a pre-existing bias over truth based on evidence.

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PDX North Inc v. Commissioner New Jersey Department of Labor and Workforce Development

Court: US Court of Appeals for the Third Circuit

Docket: 19-2968

Opinion Date: October 22, 2020

Judge: Scirica

Areas of Law: Civil Procedure, Government & Administrative Law

PDX is a last-mile shipper of wholesale auto parts in New Jersey and other states. Depending on the volume and timing of its customers’ shipping needs, PDX hires “independent owner-operators” on an “as-needed” basis. PDX long classified these drivers as independent contractors. In 2012, after completing an audit of PDX for 2006-2009, the New Jersey Department of Labor and Workforce Development determined that PDX had misclassified its drivers, finding they were employees, not independent contractors. The Department reached the same conclusion in two subsequent audits and sought payment of unemployment compensation taxes PDX filed suit, contending New Jersey’s statutory scheme for classifying workers was preempted by the Federal Aviation Administration Authorization Act of 1994 and was unconstitutional under the Interstate Commerce Clause. An action before the New Jersey Office of Administrative Law (OAL) was stayed at PDX’s request. SLS, also a last-mile shipper, was audited by the Department and was allowed to intervene in the lawsuit. The Department’s audit against SLS remains pending. The trial court dismissed the entire case as barred by the Younger abstention doctrine. The Third Circuit held that the trial court correctly dismissed PDX, but erred in dismissing SLS. PDX’s OAL action is an ongoing judicial proceeding in which New Jersey has a strong interest and PDX may raise any constitutional claims while SLS is not subject to an ongoing state judicial proceeding.

M.D. v. Abbott

Court: US Court of Appeals for the Fifth Circuit

Docket: 19-41015

Opinion Date: October 16, 2020

Judge: James C. Ho

Areas of Law: Civil Procedure, Government & Administrative Law

Plaintiffs, a certified class of minor children in the permanent managing conservatorship (PMC) of the Texas Department of Family Protective Services, filed 42 U.S.C. 1983 claims alleging that the Texas foster-care system violated their substantive due process right to be free from an unreasonable risk of harm. The district court issued a wide-ranging permanent injunction imposing sweeping changes on the Texas foster-care system. The Fifth Circuit vacated and remanded the injunction to the district court for modification; the district court made additional modifications to the injunction; and the state appealed again. The Fifth Circuit then instructed the district court to begin implementing, without further changes, the modified injunction with the alterations the court made. On remand, however, the district court expanded the injunction again by enjoining the state from moving any PMC child from their current placement as a result of enforcement of the court's requirement for 24-hour awake-night supervision unless application is made to the court prior to the proposed discharge. The Fifth Circuit reversed and held that it is black-letter law that a district court must comply with a mandate issued by an appellate court. The Fifth Circuit remanded to the district court to begin implementing, without further changes, the modified injunction with the alterations the court has made.

Smith v. Toyota Motor Corp.

Court: US Court of Appeals for the Fifth Circuit

Docket: 19-60938

Opinion Date: October 20, 2020

Judge: Stephen Andrew Higginson

Areas of Law: Civil Procedure

The Fifth Circuit affirmed the district court's dismissal without prejudice for lack of subject matter jurisdiction of plaintiff's pro se complaint against Toyota and Diversity, alleging claims under 42 U.S.C. 1983 and Mississippi state law. In this case, the amended complaint alleged that plaintiff and Diversity are citizens of the same state. Therefore, the district court was correct in holding that there is no diversity jurisdiction and thus no subject matter jurisdiction. The court stated that plaintiff's altering of the jurisdictional facts she alleges on appeal—omitting any mention of Diversity's citizenship in her appellate brief and alleging only that Diversity is "located" in Indiana in her appellate reply brief—does not alter the court's decision. Even assuming the altered jurisdictional facts are true, plaintiff has not met her burden of establishing complete diversity of the parties.

California v. United States Environmental Protection Agency

Court: US Court of Appeals for the Ninth Circuit

Docket: 19-17480

Opinion Date: October 22, 2020

Judge: Patrick J. Bumatay

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

The U.S. EPA promulgated new landfill emissions guidelines in 2016. Each state was required to submit a plan for implementing the new guidelines. The EPA was to approve or disapprove each state plan. For states that failed to submit a plan, the EPA had to promulgate a federal plan that would govern implementation in those states. The deadline for EPA issue the federal plan was set by regulation for November 2017. The EPA missed the deadline. Several states sued to force EPA to promulgate its federal plan. EPA responded to the suit and also began the rulemaking process to extend its regulatory deadline. While that rulemaking was underway, the district court entered an injunction requiring EPA to promulgate the federal plan within six months (November 2019). Months later, the EPA finalized the rulemaking process, extending its regulatory deadline by two years to August 2021. The district court declined to modify the injunction. The Ninth Circuit reversed. The district court abused its discretion in denying the EPA’s request for relief because the new regulations constituted a change in law, and removed the legal basis for the court’s deadline. A shift in the legal landscape that removed the basis for an order warranted modification of the injunction. The court rejected an argument that courts must look beyond the new regulations and conduct a broad, fact-specific inquiry into whether modification prevented inequity.

Speidell v. United States

Court: US Court of Appeals for the Tenth Circuit

Docket: 19-1214

Opinion Date: October 20, 2020

Judge: Mary Beck Briscoe

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

The Appellants objected to the IRS’s attempts to collect and audit information about their marijuana-related business practices, arguing: (1) the IRS investigation was quasi-criminal, exceeded the Agency’s authority, and was being conducted for an illegitimate purpose; (2) even if the investigation had a legitimate purpose, the information sought was irrelevant; and (3) the investigation was in bad faith and constituted an abuse of process because (a) the IRS may share the information collected with federal law enforcement agents, (b) the IRS summonses are overly broad and require the creation of new reports, (c) the dispensaries had a reasonable expectation of privacy in the data they tender to state regulatory authorities, and (d) those state authorities could not provide the requested information without violating Colorado law. The Appellants further contended the district court applied the wrong standard of review when it denied motions to quash and granted motions to enforce the summonses. Relying on the reasoning outlined in Standing Akimbo, LLC v. United States, 955 F.3d 1146, 1150–69 (10th Cir. 2020), the Tenth Circuit rejected Appellants' arguments and affirmed the district court's rulings in favor of the IRS.

Tufts v. Hay

Court: US Court of Appeals for the Eleventh Circuit

Dockets: 19-11496, 19-11603

Opinion Date: October 20, 2020

Judge: Martin

Areas of Law: Bankruptcy, Civil Procedure, Legal Ethics

This case arose out of a dispute between two sets of lawyers who provided legal work for a mutual client. Thomas Tufts and the Tufts Law Firm, PLLC appealed the district court's order granting a motion to dismiss on grounds of subject matter jurisdiction. Edward Hay and Pitts, Hay & Hugenschmidt, P.A. also filed a second motion to dismiss Tufts's action against them on the additional ground that the district court lacked personal jurisdiction over them. After the district court found personal jurisdiction, Hay and his firm cross appealed. The Eleventh Circuit held that the district court erred by dismissing the action for lack of subject matter jurisdiction under the Barton Doctrine. In this case, Tufts counsel initiated their action against Hay—court-approved counsel—and Tufts did not obtain leave of the bankruptcy court before doing so. The court held that the Barton doctrine has no application when jurisdiction over a matter no longer exists in the bankruptcy court. Thus, the bankruptcy court was properly vested with jurisdiction to consider this action if it could conceivably have an effect on the client's bankruptcy estate. Here, the action could not conceivably have an effect on the client's bankruptcy estate and thus the Barton doctrine does not apply. The court also held that the district court properly exercised personal jurisdiction over Hay. The court reversed the district court's ruling on subject matter jurisdiction and remanded.

United States v. Clark

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

Docket: 19-3040

Opinion Date: October 16, 2020

Judge: Laurence Hirsch Silberman

Areas of Law: Civil Procedure, Criminal Law

On April 22, 2019, the district court denied petitioner's first three claims for habeas relief, but reserved his 18 U.S.C. 924(c) claim for later resolution because, at the time, United States v. Davis, 139 S. Ct. 2319, 2324 (2019), had not been decided. The district judge explained that his opinion resolves three of petitioner's claims but leaves the 28 U.S.C. 2255 motion open until the court is able to resolve petitioner's fourth claim. In order for petitioner to appeal the final order in a section 2255 habeas case, section 2253(c)(1) requires him to obtain a certificate of appealability. Petitioner moved for a certificate of appealability a week after the district court issued its order and the district judge granted the certificate solely on petitioner's recantation claim without commenting on the finality of the underlying order— which, of course, left one claim pending. The DC Circuit dismissed the appeal for lack of subject matter jurisdiction, holding that the district court's judgment was not final. The court rejected petitioner's claims under Gillespie v. United States Steel Corp., 379 U.S. 148 (1964), which he claims "opens the door a little bit" and allows ostensibly nonfinal orders to be regarded as "practically" final. The court also concluded that Federal Rule of Civil Procedure 54(b) and Federal Rule of Criminal Procedure 33 do not facilitate jurisdiction here.

Am. Chemistry Council v. Off. of Environ. Health Hazard Assessment

Court: California Courts of Appeal

Docket: C079078(Third Appellate District)

Opinion Date: October 19, 2020

Judge: Murray

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

Proposition 65 was enacted by the voters to protect the people of California and its water supply from harmful chemicals. Proposition 65 required the Governor to publish, at least annually, a list of chemicals known to the state to cause cancer or reproductive toxicity. Proposition 65 added Health and Safety Code section 25249.8, which provided the listing obligations and sets forth four independent “listing mechanisms” by which a chemical could be listed, including the “state’s qualified expert” listing mechanism and the “authoritative body” listing mechanism. At issue in this case was whether the decision by the Office of Environmental Health Hazard Assessment (OEHHA) to list Bisphenol A (BPA) as a chemical known to cause reproductive toxicity under Proposition 65, was an abuse of discretion. BPA is used primarily to coat food and beverage packaging and containers. The American Chemistry Council (ACC) commenced this action seeking to enjoin OEHHA from listing BPA. In an amended complaint, ACC sought a peremptory writ of mandate directing OEHHA not to list BPA. The trial court denied the requested relief. ACC appealed, asserting that OEHHA abused its discretion in: (1) refusing to consider the arguments against listing BPA; (2) concluding that the National Toxicology Program (NTP) formally identified BPA as a reproductive toxicant in the monograph; and (3) determining that NTP concluded that studies in experimental animals indicated that there was sufficient data to establish that an association between adverse reproductive effects in humans and BPA is “biologically plausible” within the meaning of that term as it was used in OEHHA’s own regulation. The Court of Appeal found OEHHA’s position as to biological plausibility was based on, among other things, the presumption that chemicals that cause harm in experimental animals will also cause similar harm in humans in the absence of evidence to the contrary. The Court concluded OEHHA did not abuse its discretion in listing BPA based on the monograph. Therefore, the Court concluded the trial court did not abuse its discretion in denying ACC the relief requested in the amended complaint.

Kramer v. Traditional Escrow

Court: California Courts of Appeal

Docket: G058522(Fourth Appellate District)

Opinion Date: October 20, 2020

Judge: Moore

Areas of Law: Civil Procedure, Labor & Employment Law

Plaintiff Michelle Kramer filed a wage and hour lawsuit against her employer, defendants Traditional Escrow, Inc. (Traditional), and its alleged alter ego, Annette Scherrer-Cosner. A few months after defendants answered the initial complaint, their counsel withdrew, and defendants subsequently chose not to participate in this case. Plaintiff continued to serve defendants with all case documents, including an amended complaint, at their address of record. But, in violation of the California Rules of Court, defendants changed their mailing address without giving notice to plaintiff or the trial court. As a result, they did not receive any of the documents that plaintiff served on them after their counsel withdrew. Eventually, default and default judgment were entered against them due to their failure to answer the amended complaint. Defendants moved to set aside the default and vacate the judgment, arguing they were entitled to equitable relief because they had been prevented from responding to the amended complaint due to extrinsic fraud and extrinsic mistake. The trial court granted the motion, finding that defendants were unaware the complaint had been amended. It also found that after filing the amended complaint, plaintiff’s counsel misrepresented to Cosner’s divorce attorney, who was unaffiliated with this matter, that defendants were in default and could not file an answer. Plaintiff appealed the trial court’s ruling, arguing equitable relief was unwarranted. To this, the Court of Appeal agreed: "Defendants cannot deliberately neglect this lawsuit and go off-grid, so to speak, and then complain that they lacked notice of the proceedings." The trial court's order was reversed and the matter remanded for further proceedings.

Lowry v. Port San Luis Harbor District

Court: California Courts of Appeal

Docket: B300072(Second Appellate District)

Opinion Date: October 22, 2020

Judge: Tangeman

Areas of Law: Civil Procedure

After plaintiff missed the statutory deadline to file a claim against a public entity, he applied to submit a late claim. Then plaintiff filed his complaint the same day, not waiting for the public entity to respond to his application. The Court of Appeal held that the Government Claims Act, Gov. Code, 810, is not satisfied by filing a complaint before rejection of a claim. In this case, plaintiff filed suit against the District for injuries he suffered while attempting to board one of the District's boats. The court held that section 946.6, which allows a petition to seek relief from the failure to comply with the claim requirement after denial of an application for leave to present a claim, did not apply here. Furthermore, the complaint plaintiff filed the same day was premature. In this case, the lawsuit is precluded because it was not preceded by rejection of a claim, and plaintiff's noncompliance with the Act cannot be cured by amending the complaint to allege he complied. Finally, the court held that there was no abuse of discretion in awarding costs.

Malott v. Summerland Sanitary District

Court: California Courts of Appeal

Docket: B298730(Second Appellate District)

Opinion Date: October 19, 2020

Judge: Arthur Gilbert

Areas of Law: Civil Procedure

Plaintiff filed an administrative mandamus petition challenging wastewater disposal fees under Proposition 218. The trial court dismissed the petition based on failure to exhaust administrative remedies. The Court of Appeal held that plaintiff should have been given leave to rename her petition, which was, in essence, a complaint for declaratory relief. In this case, the trial court erred by preventing plaintiff from presenting evidence from an expert to support her claims. Therefore, plaintiff may proceed in her action against the sanitary district to allege that rates charged residential customers are disproportionate and unlawful.

Paul Blanco's Good Car Co. Auto Group v. Superior Court

Court: California Courts of Appeal

Docket: A159623(First Appellate District)

Opinion Date: October 21, 2020

Judge: Needham

Areas of Law: Civil Procedure, Government & Administrative Law

The state filed an unverified complaint against the entities and one of their principals, asserting unfair practices and false advertising. The defendants filed an unverified “Answer” with a general denial of the complaint’s allegations and affirmative defenses. The judge struck the answer as to the entities because they failed to verify the answer as required by Code of Civil Procedure section 446 and asserted only a general denial in contravention of section 431.30(d). The court concluded that section 446(a)'s exception to the verification requirement was coextensive with the Fifth Amendment privilege against self-incrimination and a corporation may not invoke that privilege. In response to a “show cause order” following the defendants’ petition for extraordinary writ relief, the court issued an order noting that the case had been reassigned. After a hearing, a new judge vacated the previous order. The court of appeal agreed that the exception applies to corporations and that the defendants could file a general denial under section 431.30(d), which requires a defendant to answer each material allegation of a verified complaint with specific admissions or denials, but allows a defendant to file a general denial if the complaint is not verified. There is no reason for deeming the state’s complaint verified. The court also noted that an order to show cause, unlike an alternative writ, does not invite the trial court to change the challenged order and that superior court judges generally may not overturn the order of another judge unless the other judge is unavailable.

Crippen & Lawrence Investment Co., Inc. v. A Tract of Land Being Known as 444 Lemon Street, et. al.

Court: Supreme Court of Georgia

Docket: S19G1645

Opinion Date: October 19, 2020

Judge: Keith R. Blackwell

Areas of Law: Civil Procedure, Real Estate & Property Law, Trusts & Estates

When Lillie Mae Bedford died in 1997, she left a residential property in Marietta, Georgia by testamentary devise to her daughter, Jennifer Hood. Although the Bedford estate never made and delivered a deed to Hood to perfect a conveyance of legal title, Hood lived on the property for some time after the death of her mother, and she paid the taxes associated with it. But beginning in 2009, the taxes on the property were unpaid, and in 2013, the property was sold to Crippen & Lawrence Investment Co., Inc. at a tax sale. More than 12 months later, Crippen took steps to foreclose the statutory right of redemption, and Crippen gave Hood notice of foreclosure. Once the redemption period expired, Crippen petitioned for quiet title. Hood did not respond to the petition, but the Bedford estate appeared and moved to dismiss, asserting the estate was entitled to notice of the foreclosure, and had not been served with such notice. Crippen responded that the estate was not entitled to notice because the executor by his conduct had assented to the devise of the property, which by operation of law passed title to Hood notwithstanding that the estate had made and delivered no deed, and that the estate, therefore, no longer had any interest in the property. A special master of the trial court determined the estate was entitled to notice and dismissed the quiet title petition. Crippen appealed, but the Court of Appeals affirmed. Upon further appeal, the Georgia Supreme Court reversed the appellate court: "assent may be presumed from legatee’s possession of the property. ... Although Crippen would not have standing to move a probate court to prospectively compel the executor of the Bedford estate to give assent that has been so far withheld, Crippen has standing in this quiet title proceeding to establish that the executor previously assented to the devise to Hood under the old Probate Code."

Johns, et al. v. Suzuki Motor of America, Inc., et al.

Court: Supreme Court of Georgia

Docket: S19G1478

Opinion Date: October 19, 2020

Judge: David E. Nahmias

Areas of Law: Civil Procedure, Personal Injury, Products Liability

Adrien Johns was seriously injured in August 2013 when the front brake on his Suzuki motorcycle failed suddenly. He sued the designer and manufacturer of the motorcycle, Suzuki Motor Corporation, and its wholly-owned subsidiary and American distributor, Suzuki Motor of America, Inc. (collectively, “Suzuki”), asserting a claim of strict products liability based on a design defect and two negligence claims (breach of a continuing duty to warn and negligent recall). Adrien’s wife, Gwen Johns, also sued Suzuki, alleging loss of consortium. At trial, the Johnses presented evidence showing that the brake failure of Adrien’s motorcycle was caused by a defect in the design of the front master brake cylinder that created a corrosive condition, which resulted in a “leak path” that misdirected the flow of brake fluid and caused the total brake failure. About two months after Adrien’s accident, Suzuki issued a recall notice warning about a safety defect in the front brake master cylinder. Suzuki had notice of the issue, including reports of similar accidents, for a significant amount of time before Adrien’s accident. Adrien admitted, that contrary to the instructions in the owner’s manual to replace the brake fluid every two years, he had not changed the fluid during the eight years he had owned the motorcycle. The jury found in favor of the Johnses on all claims. Because the damages after apportionment were less than the Johnses’ pretrial demand of $10 million, the trial court rejected the Johnses’ request for pre-judgment interest under OCGA 51-12-14 (a). The Johnses cross-appealed, arguing that because their claim was based on strict products liability, the trial court erred in reducing the damages awards based on OCGA 51-12-33 (a), and therefore also erred in failing to award them pre-judgment interest. The Georgia Supreme Court granted certiorari review to decide whether OCGA 51-12-33 (a) applied to a strict products liability claim under OCGA 51-1-11. The Court of Appeals held that strict products liability claims were subject to such apportionment. To this, the Supreme Court agreed and affirmed.

Dlouhy v. Kootenai Hospital District

Court: Idaho Supreme Court - Civil

Docket: 47165

Opinion Date: October 19, 2020

Judge: Roger S. Burdick

Areas of Law: Civil Procedure, Medical Malpractice, Personal Injury

Debra Dlouhy, Dustin Dlouhy, individually and as Personal Representative of the Estate of Duane Dlouhy (“the Dlouhys”) appealed a district court order granting summary judgment in favor of Kootenai Health. The district court granted summary judgment on the Dlouhys’ medical malpractice action after determining that the Dlouhys had failed to provide adequate foundation showing that their expert witnesses had actual knowledge of the community standard of care. In May 2015, Duane Dlouhy went to the emergency department because of rectal bleeding. After a CT scan, "no obvious mass" was noted on his records, but that "dark red blood" was present. The radiologist charted that a “neoplasm cannot be excluded.” Mr. Dlouhy was discharged from the hospital and went home, but returned several hours later after the rectal bleeding began again. A colonoscopy was performed, but no complete view of the rectum could be obtained. Mr. Dlouhy was discharged again. He would have follow-up appointments in June and September, 2015, and in January 2016. By August, he had been diagnosed with state IV colorectal cancer. After review of the trial court record, the Idaho Supreme Court determined the district court erred in granting Kootenai Health’s motion for summary judgment on the grounds that the Dlouhys failed to provide sufficient expert testimony as to the community standard of care. The Dlouhys argued that “for board-certified physicians, there is a national standard of care.” They argued that Mr. Dlouhy's original emergency physician was subject to the national standard of care that applied to board-certified gastroenterologists, and that their out-of-area expert had actual knowledge of the applicable national standard because he held the same board certification as the local physician. The Supreme Court concluded the expert familiarized himself sufficiently in the community standard of care for board-certified gastroenterologists such that his testimony should not have been excluded. The district court’s order granting summary judgment was reversed in part, the final judgment dismissing the Dlouhys’ medical malpractice claim was vacated, and the case remanded for further proceedings.

Goral v. Dart

Court: Supreme Court of Illinois

Citation: 2020 IL 125085

Opinion Date: October 22, 2020

Judge: Neville

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

Cook County Sheriff Dart instituted disciplinary proceedings against several Sheriff’s officers (plaintiffs) by filing charges with the Cook County Sheriff’s Merit Board under Counties Code, 55 ILCS 5/3-7011. The plaintiffs filed motions with the Board to dismiss the charges. While the administrative proceedings were pending, the plaintiffs filed suit, seeking declaratory, injunctive, and monetary relief against the Sheriff, Cook County, the Board, and the Cook County Board of Commissioners, asserting that the Board was not legally constituted because several of its members were appointed to or served terms that did not comply with the Code section 3-7002 requirements. The Illinois Supreme Court reversed the dismissal of the suit for failure to exhaust administrative remedies. Because the plaintiffs challenged the authority of the Board to address the charges, the “authority” exception to the exhaustion requirement applied. The circuit court can adjudicate the requests for back pay and other claims, which do not fall within the particular expertise of the Board. The plaintiffs raised the issue before the Board, which refused to hear them until after the disciplinary proceedings were complete. Given that the Board had not taken any substantive action regarding the disciplinary charges before the filing of the lawsuit, the “de facto officer doctrine” does not apply.

Bickel v. Bickel

Court: North Dakota Supreme Court

Citation: 2020 ND 212

Opinion Date: October 21, 2020

Judge: Lisa K. Fair McEvers

Areas of Law: Civil Procedure, Family Law

Sabrina Bickel appealed a second amended judgment modifying Matthew Bickel’s child support obligation, order for amended judgment, and order on her motion to compel discovery. She argued the district court erred by miscalculating child support, incorrectly setting the commencement date for the modification of child support, and failing to award her attorney’s fees. After review, the North Dakota Supreme Court determined the district court did not "show its math" with respect to calculating the child support obligation. The matter was remanded for further proceedings.

Bismarck Financial Group, et al. v. Caldwell

Court: North Dakota Supreme Court

Citation: 2020 ND 207

Opinion Date: October 21, 2020

Judge: Lisa K. Fair McEvers

Areas of Law: Business Law, Civil Procedure

Bismarck Financial Group, LLC, and its individual members (together “BFG”) appeal from an order granting James Caldwell’s Rule 12(b)(6) motion to dismiss their complaint. According to BFG’s complaint, Bismarck Financial Group, LLC, was formed in 2009 as a limited liability company. After Caldwell became a member, the parties executed various governing documents, including an operating agreement. While Caldwell was a member, the company entered into a 10-year office lease. The company also had one salaried employee. In 2019, Caldwell informed the other members he was dissociating from the company. BFG subsequently brought this lawsuit requesting a declaration that Caldwell’s dissociation was wrongful and damages in excess of $137,879.55 based on Caldwell’s pro rata share of the company’s debt obligations, employee salary, office overhead, and other expenses. Caldwell moved to dismiss for failure to state a claim upon which relief could be granted. Caldwell argued that he could not be held personally liable for company expenses and obligations under principles of corporate law. Caldwell also asserted BFG had not incurred any damages caused by his dissociation because, according to the terms of the operating agreement, the members have no obligation to contribute capital to cover company expenditures. The district court granted Caldwell’s motion. The court assumed Caldwell wrongfully dissociated from the company, but concluded BFG had not pleaded a cognizable claim for damages because Caldwell could not be held liable for future company expenses and obligations. Finding only that the district court erred in dismissing BFG's complaint as a matter of law in its entirety, the North Dakota Supreme Court reversed in part, "BFG’s allegation that Caldwell’s withdrawal caused additional, currently-unidentifiable damages, if proven, is sufficient to support recovery against Caldwell." The Court affirmed in all other respects, and remanded for further proceedings.

G & D Enterprises v. Liebelt

Court: North Dakota Supreme Court

Citation: 2020 ND 213

Opinion Date: October 21, 2020

Judge: Jerod E. Tufte

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

G&D Enterprises (“G&D”) appealed the dismissal of its claims against against Merrilynn Liebelt. G&D and Liebelt owned adjacent properties in the City of Beulah, North Dakota. In the summer of 2015, G&D discovered a private water line while digging on its property, puncturing the line. The water line crossed a portion of G&D’s property and supplied water to Liebelt’s residence on her property. Before either G&D or Liebelt owned their respective property, both properties had been one lot. The existence of the water line was not recorded, and neither party had actual knowledge of the water line before G&D discovered it. It was undisputed that there was no express easement of record for the water line. In November 2017, G&D filed a summons and complaint at district court, asserting claims against Liebelt for private nuisance and civil trespass and seeking damages and injunctive relief. Liebelt answered, denying the allegations and asserting G&D was not entitled to any damages, injunctive relief, or recovery. In March 2019, Liebelt moved the district court for summary judgment on all claims. The North Dakota Supreme Court concluded the court erred in granting summary judgment because the court misapplied the law, and genuine issues of material fact existed on G&D’s claims for nuisance and trespass, and the court erred in dismissing G&D’s request for injunctive relief.

Hall v. Hall, et al.

Court: North Dakota Supreme Court

Citation: 2020 ND 205

Opinion Date: October 21, 2020

Judge: Lisa K. Fair McEvers

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

Robert Hall appealed a judgment entered in favor of the defendants Estate of John Hall, Deborah Hall, and Leslie Hall Butzer ("Hall defendants") in this action to quiet title to a non-participating royalty interest (NPRI) in certain real property. The North Dakota Supreme Court concluded the district court did not abuse its discretion in vacating a default judgment against John Hall. However, because res judicata did not bar Robert Hall’s claims, the court erred in granting summary judgment to the Hall defendants. The matter was therefore affirmed in part, reversed in part, and remanded for further proceedings.

Hoffarth v. Hoffarth

Court: North Dakota Supreme Court

Citation: 2020 ND 218

Opinion Date: October 21, 2020

Judge: Lisa K. Fair McEvers

Areas of Law: Civil Procedure, Family Law

Jeremy Hoffarth appealed an order denying his motion for relief from a divorce judgment and his subsequent motion to reconsider. The North Dakota Supreme Court concluded the appeal of his motion for relief from the judgment was untimely. The Court therefore affirmed the order denying his motion to reconsider because the district court did not abuse its discretion.

RFM-TREI Jefferson Apartments v. Stark County Board of Comm'rs

Court: North Dakota Supreme Court

Citation: 2020 ND 204

Opinion Date: October 21, 2020

Judge: Jerod E. Tufte

Areas of Law: Civil Procedure, Government & Administrative Law, Real Estate & Property Law, Tax Law

RFM-TREI Jefferson Apartments, LLC; RFM-TREI Lincoln Apartments, LLC; Dickinson Homestay, LLC; and Lodgepros Dickinson, LLC (together “the Taxpayers”) appealed district court judgments affirming the Stark County Board of Commissioners’ (“the Board”) denials of their applications for tax abatements or refunds. The Taxpayers collectively owned two apartment complexes and two hotels located in the City of Dickinson. The Taxpayers filed applications for abatement or refund of their 2016 property taxes. The Taxpayers’ opinions of value for each property differed from the City’s valuations by a range of roughly $1.8 million to $20.3 million. After holding a hearing, the City recommended the Board deny each application. The Board indeed denied the abatement applications in four separate written decisions. Using the same language in each, the Board concluded the assessor’s valuations were not “in error, invalid, inequitable, unjust, or arrived at in an arbitrary, capricious, or unreasonable manner.” The decisions also explained the Board did not believe the Taxpayers provided “sufficient enough information relating to the subject properties, or the local market for competing properties, to lead us to the same value conclusions requested by the applicant.” The district court affirmed each denial in separate, written orders and judgments. After review, the North Dakota Supreme Court concluded the Board acted arbitrarily and unreasonably in adopting assessments exceeding the true and full value of the property. The Court reversed the district court judgments and the Board’s decisions denying the Taxpayers’ abatement applications. The matters were remanded for a new hearing to determine the “true and full value” of the properties and reconsideration of the abatement applications.

Titan Machinery v. Kluver

Court: North Dakota Supreme Court

Citation: 2020 ND 225

Opinion Date: October 21, 2020

Areas of Law: Business Law, Civil Procedure

Shawn Kluver and Little Knife Disposal, LLC, appeal from a district court judgment ordering them to pay $140,042.83 to Titan Machinery, Inc., and $100,731.62 to Renewable Resources, LLC. In 2016, Kluver was the general manager of Renewable Resources, which was in the business of oilfield waste disposal. “At Kluver’s request and direction,” Renewable Resources leased a Case excavator and other equipment from Titan. The rental agreement for the Case excavator showed an estimated return date of June 28, 2016. Kluver also executed a credit application and personal guaranty with Titan to ensure Renewable Resources’ payment obligations under the rental agreement. Renewable Resources made all payments under the rental agreement from June 21, 2016, to December 6, 2016. No additional rental payments were made. In February 2017, while still employed by Renewable Resources, Kluver executed the operating agreement of Little Knife Disposal, LLC, as its sole member. Little Knife was also in the business of oilfield waste disposal. After Renewable Resources failed to make rental payments, Titan retrieved the Case excavator in October 2017. The excavator was damaged during the lease, and the excavator’s bucket was missing. In November 2017, Titan sued Renewable Resources for damaging the equipment and failing to pay the balance due under the rental agreement. In January 2018, Renewable Resources filed a third-party complaint against Kluver and Little Knife, claiming they wrongfully used the equipment leased from Titan and did not reimburse Renewable Resources. Renewable Resources requested that Kluver and Little Knife indemnify Renewable Resources for their use of the equipment. In October 2018, Titan obtained a $140,042.83 money judgment against Renewable Resources. In January 2019, Titan sued Kluver, claiming that under the personal guaranty he was liable for Renewable Resources’ debt to Titan. Kluver denied Titan’s allegations and brought a third-party complaint against Renewable Resources, asserting Renewable Resources should indemnify him for any amounts he was required to pay to Titan. Kluver and Little Knife argued the district court erred in finding they benefited from the equipment leased by Renewable Resources. They claimed there was no evidence they received a benefit from the Case excavator leased by Renewable Resources and the court erred in ordering them to indemnify Renewable Resources. Finding no reversible error in the district court's judgment, the North Dakota Supreme Court affirmed the order in favor of Titan Machinery and Renewable Resources.

WSI v. Tolman

Court: North Dakota Supreme Court

Citation: 2020 ND 223

Opinion Date: October 21, 2020

Judge: Gerald W. VandeWalle

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

Workforce Safety and Insurance (“WSI”) appealed a district court judgment affirming an administrative law judge’s (“ALJ”) order that affirmed WSI’s April 2018 order awarding permanent impairment benefits to Jason Tolman and that reversed WSI’s July 2018 order denying benefits for his depression and anxiety conditions. In September 2014, Tolman was injured when he was driving a tanker truck and involved in a single vehicle roll-over accident. WSI accepted his claim for benefits. In April 2018, WSI issued an order awarding Tolman $4,905 in permanent impairment benefits based on a determination that he had sustained a 16 percent impairment of the whole body. In July 2018, WSI issued an order denying benefits in connection with his depression and anxiety, deciding these conditions were not caused by his physical injury and existed before the work injury. Tolman requested an administrative hearing on the orders, and a hearing was held before an independent ALJ in April 2019. The North Dakota Supreme Court concluded the ALJ erred in applying N.D.C.C. 65-01-02(10)(a)(6) and concluding Tolman established his depression and anxiety conditions were compensable. The Court affirmed that part of the ALJ’s order affirming WSI’s April 2018 order; but reversed that part of the ALJ’s order reversing WSI’s July 2018 order, and reinstated WSI’s July 2018 order.

White Star Petroleum v. MUFG Union Bank

Court: Oklahoma Supreme Court

Citation: 2020 OK 89

Opinion Date: October 20, 2020

Judge: Rowe

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

The United States Bankruptcy Court for the Western District of Oklahoma certified two questions of state law to the Oklahoma Supreme Court. White Star Petroleum, LLC, along with its wholly-owned subsidiary, White Star Petroleum II, LLC were engaged in the business of exploring, acquiring, drilling, and producing oil and natural gas, either as an operator or non-operating working interest owner of various leaseholds across Oklahoma. In 2019, several of White Star's unpaid vendors filed an involuntary bankruptcy petition against White Star. White Star and its affiliates filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code. During the bankruptcy proceedings, 78 unpaid vendors filed adversary proceedings seeking adjudication of statutory lien claims under 42 O.S. 144 against White Star's interests in various wells and establishment of trust fund claims under 42 O.S. 144.2. These proceedings were stayed when White Star initiated two adversary proceedings of its own. The first sought adjudication of the priority, validity, and value of approximately 2,000 mechanic's and materialman's liens ("M&M liens") asserted by the 78 unpaid vendors over various interests held by White Star. The second sought an order of the Bankruptcy Court directing several first purchasers of oil and gas to turn over to White Star approximately 2 million dollars, which were being held in suspense after the purchasers received statutory lien notices from the M&M lien claimants. The Bankruptcy Court certified the questions to the Oklahoma Supreme Court to aid in the resolution of these two adversary proceedings. The federal court asked: (1) were the "trust funds" created by Title 42 O.S. 144.2 limited to obligations due non-operator joint working interest owners, or did such funds include payments due holders of mechanic's and materialmen's liens arising under and perfected by Title 42 O.S. 144?; and (2) did the Oil and Gas Owners' Lien Act of 2010, grant an operator and non-operator working interest owners a lien in proceeds from purchasers of oil and gas which is prior and superior to any claim of the holder of a mechanic's and materialmen's lien asserted under Title 42 O.S. 144? The Supreme Court found that answering both questions would have been dispositive of issues pending in the underlying bankruptcy proceedings and that there was then no controlling law on the subject matter of either question. The Court answered both questions in the negative: funds which must be held in trust for payment of lienable claims pursuant to 42 O.S. 144.2 were not exclusively limited to joint-interest billing payments received by operators for services rendered by the lienholders; the Oil and Gas Owners' Lien Act did not grant operators and non-operating working interest owners a lien in proceeds from the sale of oil and gas which is prior and superior to any claim of the holder of a mechanic's and materialman's lien asserted under 42 O.S. 144.

Chernaik v. Brown

Court: Oregon Supreme Court

Docket: S066564

Opinion Date: October 22, 2020

Judge: Nakamoto

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

Plaintiffs, two young Oregonians, concerned about the effects of climate change and their guardians, filed suit against the Governor and the State of Oregon (collectively, the State), contending the State was required to act as a trustee under the public trust doctrine to protect various natural resources in Oregon from substantial impairment due to greenhouse gas emissions and resultant climate change and ocean acidification. Among other things, plaintiffs asked the circuit court to specify the natural resources protected by the public trust doctrine and to declare that the State had a fiduciary duty, which it breached, to prevent substantial impairment of those resources caused by emissions of greenhouse gases. Plaintiffs also asked for an injunction ordering the State to: (1) prepare an annual accounting of Oregon’s carbon dioxide emissions; and (2) implement a carbon reduction plan protecting the natural resources, which the court would supervise to ensure enforcement. The circuit court granted the State’s motion for summary judgment and denied plaintiffs’ motion for partial summary judgment, concluding the public trust doctrine did not encompass most of the natural resources that plaintiffs identified, and did not require the State to take the protective measures that plaintiffs sought. In 2015, the circuit court entered a general judgment dismissing the action, and the Court of Appeals vacated the judgment and remanded for the circuit court to enter a judgment, consistent the Court of Appeals opinion, declaring the parties’ rights. Plaintiffs appealed, arguing that as a matter of common law, the public trust doctrine was not fixed and, that it must evolve to address the undisputed circumstances presented, namely, that climate change was damaging Oregon’s natural resources. They argued the doctrine was not limited to the natural resources that the circuit court identified and, the doctrine should cover other natural resources beyond those that have been traditionally protected. The Oregon Supreme Court held the public trust doctrine currently encompassed navigable waters and the submerged and submersible lands underlying those waters. "Although the public trust is capable of expanding to include more natural resources, we do not extend the doctrine to encompass other natural resources at this time." The Supreme Court also declined to adopt plaintiffs’ position that, under the doctrine, the State had the same fiduciary duties that a trustee of a common-law private trust would have, such as a duty to prevent substantial impairment of trust resources. Accordingly, the Court affirmed the Court of Appeals, which vacated the judgment of the circuit court. The matter was remanded the circuit court to enter a judgment consistent with Supreme Court's judgment.

Hammons v. Ethicon, Inc., et al

Court: Supreme Court of Pennsylvania

Docket: 7 EAP 2019

Opinion Date: October 21, 2020

Judge: Max Baer

Areas of Law: Civil Procedure, Personal Injury, Products Liability

Appellee-Plaintiff Patricia Hammons (“Hammons”) was an Indiana resident who suffered significant injuries following the May 2009 implantation in Indiana of Appellant-Defendant Ethicon, Inc.’s Prolift Kit, a medical device used to treat “medical conditions in the female pelvis, primarily pelvic organ prolapse and/or stress urinary incontinence.” She received treatment in Indiana and Kentucky. All parties agreed the mesh was the only aspect of the Prolift Kit produced in Pennsylvania. Ethicon contracted with Secant Medical, Inc., a Bucks County manufacturer, to weave the mesh according to Ethicon’s specifications from Ethicon’s proprietary polypropylene filament. Hammons filed a complaint in the Philadelphia Court of Common Pleas against Ethicon, Johnson & Johnson, Gynecare, and Secant, asserting various claims related to the implanted device. Ethicon was a wholly-owned subsidiary of co-defendant Johnson & Johnson, both of which were headquartered and incorporated in New Jersey (jointly “Ethicon”). After initially being removed to federal court based on Ethicon’s claim of diversity jurisdiction, the case was eventually remanded to the Pennsylvania court, where it was transferred to the Complex Litigation Center Pelvic Mesh Mass Tort Program. Relevant to Hammons’ claim, Plaintiffs alleged that Ethicon “designed, manufactured, packaged, labeled, marketed, sold, and distributed” the Prolift Kit. Plaintiffs named Secant as a defendant, claiming that it “designed, tested, inspected, wove, knitted, cut, treated, packaged, manufactured, marketed, and/or sold a mesh made from polypropylene and/or other synthetically derived filaments that was the actual mesh utilized” in Ethicon’s Prolift Kits. This case presented a challenge to the exercise of specific personal jurisdiction in Pennsylvania over New Jersey corporate defendants, to a case filed by an Indiana resident. After reviewing recent decisions from the United States Supreme Court revising its personal jurisdiction jurisprudence, the Pennsylvania Supreme Court concluded that the imposition of personal jurisdiction in this case met the relevant constitutional and statutory requirements, and affirmed the Superior Court.

Blake v. Petrie

Court: Vermont Supreme Court

Citation: 2020 VT 92

Opinion Date: October 16, 2020

Judge: Eaton

Areas of Law: Civil Procedure, Family Law

Damon Petrie appealed the family division’s denial of his motion to dismiss his ex-wife, Angela Blake’s, attempt to enforce a judgment she obtained in their divorce action. Petrie claimed enforcement of the judgment was barred by the applicable statute of limitations because the judgment was not renewed within the required time. In denying the motion, the family division found Blake had complied with the family division rules for enforcement proceedings and with 12 V.S.A. 506. It then granted Petrie’s motion for interlocutory appeal to the Vermont Supreme Court. The Supreme Court agreed that Petrie’s motion to dismiss should have been granted and therefore reversed and entered judgment in his favor.

Scheffler v. Harrington

Court: Vermont Supreme Court

Citation: 2020 VT 93

Opinion Date: October 16, 2020

Judge: Carroll

Areas of Law: Civil Procedure, Family Law

Defendant Raymond Harrington appealed the issuance of a relief-from-abuse order requiring him to have no contact with and stay a hundred feet away from plaintiff Melissa Scheffler (his sister), her residence, and their mother’s home. The trial court issued the order because it concluded that defendant stalked plaintiff, within the meaning of 12 V.S.A. 5131, by driving by her home on multiple occasions and honking his horn, which the court found constituted surveillance. On appeal, defendant argued his actions did not amount to surveillance because surveillance requires “an intent to engage in a close watch or observation.” To this, the Supreme Court agreed and reversed, because, based on the trial court’s findings, there was no evidence defendant was closely watching or observing plaintiff.