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Case Summaries

Contracts

[05/15] Kindred Nursing Centers, L.P. v. Clark
In a consolidated action brought by two family members holding powers of attorney for two decedents against a nursing home, alleging the substandard care had caused their deaths, the Kentucky Supreme Court's decision, that the arbitration agreements between the plaintiffs and the nursing home were invalid because neither power of attorney specifically entitled the representative to enter into an arbitration agreement, is reversed where the Kentucky Supreme Court's clear-statement rule violates the Federal Arbitration Act by singling out arbitration agreements for disfavored treatment.

[05/15] Kindred Nursing Centers, L.P. v. Clark
In a consolidated action brought by two family members holding powers of attorney for two decedents against a nursing home, alleging the substandard care had caused their deaths, the Kentucky Supreme Court's decision, that the arbitration agreements between the plaintiffs and the nursing home were invalid because neither power of attorney specifically entitled the representative to enter into an arbitration agreement, is reversed where the Kentucky Supreme Court's clear-statement rule violates the Federal Arbitration Act by singling out arbitration agreements for disfavored treatment.

[05/12] Krechuniak v. Noorzoy
In appeal challenging an order enforcing an agreement between two siblings settling litigation concerning the failed development of a residential parcel in Pebble Beach, the trial court's judgment is affirmed where: 1) the Brother has forfeited his fact-based contention; and 2) whether a contract provision is an illegal penalty or an enforceable liquidated damage clause is a question to be determined by the trial court and, on review, appellate deference to the trial court's factual findings is required unless the facts are undisputed and susceptible of only one reasonable conclusion.

[05/10] Dillon v. BMO Harris Bank, N.A.
In a case involving the enforceability of an arbitration agreement included in the terms of a 'payday loan' obtained over the internet, alleging that defendant violated the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. section 1961 et seq., when defendant used its role within a network of financial institutions 'to conduct and participate in the collection of unlawful payday loans', the district court's judgment that the arbitration agreement was unenforceable under Hayes v. Delbert Services Corp., 811 F.3d 666 (4th Cir. 2016), and denial of defendant's motion to compel arbitration under the Federal Arbitration Act (FAA), is affirmed where the arbitration agreement between plaintiff and the lender is unenforceable.

[05/10] Pyskaty v. Wide World of Cars, LLC
In an action arising out of plaintiff's purchased of a purportedly defective 'certified pre?owned' BMW from auto dealer-defendant, alleging violations of the Magnuson?Moss Warranty--Federal Trade Commission Act (MMWA), 15 U.S.C. section 2301 et seq., and New York State law, the district court's dismissal of the amended complaint -- on grounds that the value of plaintiff's MMWA claims did not amount to $50,000 and that she could neither amend her complaint to add a claim for punitive damages under the MMWA, nor rely on the value of her state?law claims, to meet the jurisdictional threshold -- is reversed where the value of plaintiff's MMWA claims, as pled, exceeds $50,000.

[05/08] Dukes Bridge LLC v. Beinhocker
In an action for breach of contract, which was signed as one element of a transaction to raise capital for defendant's flailing business and income for himself, the district court's grant of summary judgment to defendant is reversed where the terms of the Non-Contravention Agreement are entitled to apply on the facts of this case, without nullification by the Loan Agreement's non-recourse clause.

[05/04] G & W Warren's, Inc. v. Dabney
In a case concerning the scope of a guaranty given to secure a buyer's obligations under a master agreement and various subsidiary agreements involving the purchase and sale of a motorcycle dealership and the circumstances under which the liability of the guarantor, by virtue of subsequent actions by the seller, may be exonerated, the trial court's judgment is reversed where the court erred in concluding that defendant was liable under the Guaranty for Assignee's obligations under the covenant not to compete and two consulting agreements.

[04/25] Balfour Beatty Infrastructure, Inc. v. Mayor and City Council of Baltimore
In a construction company's suit against a city for breach of contract, alleging that the city unlawfully assessed liquidated damages against the company for failure to complete a construction project on time, the district court?s dismissal for lack of subject matter jurisdiction is affirmed where plaintiff is not excused from the normal requirement of administrative exhaustion under Maryland law.

[04/24] City of L.A. v. AECOM Servs., Inc.
In third-party claims brought by the City of Los Angeles for breach of contract and contribution against contractors that allegedly breached their contractual duty to perform services in compliance with federal disability regulations in the design and construction of a bus facility, the district court's dismissal of the City's claims is reversed where: 1) Title II of the Americans with Disabilities Act and section 504 of the Rehabilitation Act did not preempt the City's state-law claims because the ADA expressly disavows preemptive federal occupation of the disability-rights field; and 2) conflict preemption also did not preclude the City's claims.

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Corporation & Enterprise Law

[04/25] F5 Capital v. Pappas
In a a shareholder derivative action on behalf of a company, alleging that individual members of the company's board and affiliated entities improperly exploited their control of the corporation in entering into three separate self-dealing transactions, the district court's dismissal of the complaint, concluding that the dilution claim was properly derivative under Delaware law and that plaintiff failed to plead demand futility under Fed. R. Civ. P. Rule 23.1(b)(3)(B), as to any of the claims, is affirmed where: 1) plaintiff's dilution claim was properly derivative, not direct; 2) the district court had subject matter jurisdiction to adjudicate the non-class, derivative claims; and 3) plaintiff did not allege facts sufficient to excuse it from making a pre-suit demand.

[04/12] Applied Medical Corporation v. Thomas
In a corporate governance action, arising from plaintiff corporation's suit over the exercise of its right to repurchase shares of its stock, given to defendant under a stock incentive plan for outside directors on its board, the trial court's grant of summary judgment to defendant is: 1) reversed because plaintiff's conversion claim could be based on either ownership or the right to possession at the time of conversion; and 2) affirmed because plaintiff's fraud claims were not timely under either the discovery rule or relation back doctrine, and thus barred by the statute of limitations.

[04/06] Stein v. AXIS Ins. Co.
In an action against two insurance companies, brought by a plaintiff-insured who was denied coverage under a D&O policy because he was convicted of securities fraud, the trial court's judgment sustaining defendants' demurrer and dismissing the complaint is: 1) affirmed in part where the AXIS demurrer was properly sustained because AXIS was a stranger to the HCC policy and owed no duties connected with it; but 2) reversed in part where the HCC demurrer was improperly sustained because when a policy expressly provides coverage for litigation expenses on appeal, an exclusion requiring repayment to the insurer upon a 'final determination' of the insured's culpability applies only after the insured's direct appeals have been exhausted.

[03/28] Charney v. Standard General
In a suit brought by the former CEO of American Apparel whose employment was terminated following an investigation into allegations that he engaged in various types of misconduct, alleging several causes of action rooted in plaintiff's claim that the press release announcing his termination contained false and defamatory information about him, the trial court's grant of defendant's order granting an anti-SLAPP motion, Code Civ. Proc. section 425.16, is affirmed where plainitiff did not satisfy his burden of showing there was a minimal chance his claims would succeed at trial.

[03/24] Tract No. 7260 Assn. v. Parker
In an action brought by a member of a nonprofit mutual benefit corporation to inspect the corporation's membership list, and other books and records, the trial court's denial of the plaintiff's petition for writ of mandate to compel inspection, on grounds that the member sought the inspection for an improper purpose, unrelated to his interest as a member of the corporation, and findings that the corporation did not timely challenge the request for the membership list as required by statute, and therefore ordered the list disclosed, is affirmed in part and reversed in part where: 1) substantial evidence supports the trial court?s finding that the member sought the information for an improper purpose; and 2) the corporation's challenge to disclosing the membership list was not barred by statute.

[03/20] Sheley v. Harrop
In a dispute involving the control of a pest control company started by decedent, asserting causes of action to recover damages for conversion, breach of fiduciary duty, and aiding and abetting breach of fiduciary duty based on actions taken by defendant (decedent's wife) in cooperation with the decedent, the trial court granted of defendant's anti-SLAPP motion as to plaintiff's intentional infliction of emotional distress claim is: 1) modified by granting defendants' motion to strike the specific claims founded on allegations of protected activity in each remaining cause of action in the cross-complaint; and 2) otherwise affirmed as modified.

[02/16] People v. Black
In the People's appeal pursuant to Penal Code section 1238(a)(1), challenging the trial court's order to set aside certain counts of charges against defendant for using false statements in the offer or sale of a security, Corp. Code sections 25401, 25540(b), after defendant persuaded an acquaintance to invest in a real estate development opportunity in Idaho in return for a promissory note, the terms of which were amended and extended several times but never realized, the trial court's order is affirmed where the promissory notes offered for the investment in the real estate development scheme were not securities within the meaning of the Corporate Securities Law.

[02/02] Western Surety Co. v. La Cumbre Office
In an action for breach of an indemnity agreement, the trial court's grant of summary judgment requiring defendant to pay plaintiff approximately $6.07 million pursuant to the indemnity agreement is affirmed where although the signatory did not have actual authority to execute the indemnity agreement on defendant's behalf, in these circumstances, the person's signature binds defendant pursuant to former Corporations Code section 17157(d) (now section 17703.01(d)), provided that the other party to the agreement does not have actual knowledge of the person's lack of authority to execute the agreement on behalf of defendant.

[01/18] Trikona Advisers Limited v. Chugh
In a complaint alleging breach of fiduciary duty by defendant, a former partner and fifty percent owner of plaintiff corporation, the district court's grant of summary judgment to defendants is affirmed over plaintiff's meritless arguments that: 1) the district court incorrectly applied the doctrine of collateral estoppel; and 2) Chapter 15 of the United States Bankruptcy Code prevents the district court from giving preclusive effect to the Cayman court's factual findings.

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Trademark

[05/24] Joseph Phelps Vineyards, LLC v. Fairmount Holdings, LLC
In a petition for cancellation of a trademark, brought by the owner of the INSIGNIA mark used to sell wines since 1978 against the registrant of the ALEC BRADLEY STAR INSIGNIA mark used for cigars and cigar products, the Trademark Trial and Appeal Board's denial of the petition is vacated and remanded for reconsideration where: 1) the Board erred in its legal analysis, in analyzing the 'fame' of INSIGNIA wine as an all-or-nothing factor, and discounting it entirely in reaching the conclusion of no likelihood of confusion as to source, contrary to law and precedent; and 2) as a result of this error, the Board did not properly apply the totality of the circumstances standard, which requires considering all the relevant factors on a scale appropriate to their merits.

[05/16] Elliot v. Google, Inc.
In an action under the Lanham Act, seeking cancellation of the GOOGLE trademark on the ground that it is generic, the district court's summary judgment in favor of defendant Google is affirmed where: 1) a claim of genericness or 'genericide,' where the public appropriates a trademark and uses it as a generic name for particular types of goods or services irrespective of its source, must be made with regard to a particular type of good or service; 2) the district court thus correctly focused on internet search engines rather than the 'act' of searching the internet; and 3) the verb use of the word 'google' to mean 'search the internet,' as opposed to adjective use, did not automatically constitute generic use.

[05/05] Grayson O Co. v. Agadir Int'l LLC
In a trademark and unfair competition action brought by a haircare product manufacturer and holder of a registered trademark against a competitor haircare product manufacturer, the district court's grant of summary judgment in favor of defendant is affirmed where plaintiff failed to show the marks were likely to be confused.

[04/18] Covertech Fabricating Inc v. TVM Building Products Inc.
In a trademark dispute in which no written contract designates ownership, involving the paradigm through which common law ownership of an unregistered trademark is determined when the initial sale of goods bearing the mark is between a manufacturer and its exclusive distributor, the district court's judgment is: 1) affirmed on alternative grounds as to ownership, where the court failed to recognize and apply the rebuttable presumption of manufacturer ownership that pertains where priority of ownership is not otherwise established; 2) affirmed as to fraud and acquiescence; and 3) vacated and remanded on damages under the Lanham Act, where the court incorrectly relied on gross sales unadjusted to reflect sales of infringing products to calculate damages.

[01/18] Slep-Tone Entertainment Corp. v. Wired for Sound Karaoke and DJ Servs., LLC
In a suit for trademark infringement and unfair competition brought under the Lanham Act by a producer of karaoke music tracks, alleging that the defendants performed karaoke shows using unauthorized 'media-shifted' files that had been copied onto computer hard drives from the compact discs released by the plaintiff, the district court's dismissal is affirmed where plaintiff did not state a claim under the Lanham Act because there was no likelihood of consumer confusion about the origin of a good properly cognizable in a claim of trademark infringement.

[12/12] In Re: Jobdiva, Inc.
In a trademark case to determine whether appellant used its marks in connection with personnel placement and recruitment services, or whether the Trademark Trial and Appeal Board correctly held that it failed to do so because it used its marks on software offerings, without more, the Board's decision is vacated where proper question is whether appellant, through its software, performed personnel placement and recruitment services and whether consumers would associate appellants registered marks with personnel placement and recruitment services, regardless of whether the steps of the service were performed by software.

[11/14] Christian Faith Fellowsihp Church v. Adidas AG
In a petition filed by Adidas, the Trademark Trial and Appeal Board's final judgment cancelling a Church's trademarks for failing to use the marks in commerce before registering them, on the grounds of the Church's de minimus sale of two marked hats to an out-of-state reside, is reversed where: 1) the Lanham Act defines commerce as all activity regulable by Congress; and 2) the Church's sale to an out-of-state resident fell within Congress?s power to regulate under the Commerce Clause.

[11/07] Cross Commerce Media, Inc. v. Collective, Inc.
In a trademark infringement dispute between software companies over several trademarks containing the word 'collective,' the District Court's granted summary judgment to Cross Commerce Media on virtually all points in dispute and awarded attorney's fees under the Lanham Act are reversed in part where: 1) the unregistered mark 'collective' is suggestive, not descriptive; 2) there is a genuine dispute of material fact as to whether CI used the unregistered mark 'collective' in commerce before CCM introduced its allegedly infringing marks; 3) the district court prematurely granted summary judgment as to CI's counterclaim for infringement of the registered marks, an action that neither party requested and the district court did not explain; and 4) there is a genuine dispute of material fact as to whether CI abandoned its registered marks 'Collective Network' and 'Collective Video.' Award of attorney fees is vacated.

[08/26] Trader Joe's Co. v. Hallatt
In a trademark infringement action, arising after defendant purchased Trader Joe's goods in the United States and resold them at a mimic store in Canada, the district court's dismissal of plaintiff's Lanham Act claims is reversed where: 1) the extraterritorial application of the Lanham Act is a question as to the merits of a trademark claim instead of federal courts' subject-matter jurisdiction; and 2) Trader Joe's alleges a nexus between defendant's conduct and American commerce sufficient to warrant extraterritorial application of the Lanham Act.

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Trade Secrets

[02/14] Organik Kimya v. Int'l Trade Comm'n
In a case involves trade secrets relating to opaque polymers, which are hollow spheres used as paint additives for interior and exterior paints to increase the paint's opacity, the International Trade Commission's (ITC) decision, imposing default judgment sanctions for spoliation of evidence and entering a limited exclusion order against plaintiff, is affirmed where the Commission did not abuse its discretion in entering default judgment as a sanction for plaintiff's spoliation of evidence and further did not abuse its discretion in entering the limited exclusion order.

[11/24] Richtek USA v. uPI Semiconductor Corp.
In a trademark secrets and employment case arising out of the formation of defendant uPI Semiconductors by employees of plaintiff Richtek, the sustaining of defendants' demurrer is reversed where the trial court improperly took judicial notice of the substantive allegations contained in two 2007 court complaints filed in Taiwan to resolve factual disputes in the case.

[04/28] Cypress Semiconductor Corp. v. Maxim Integrated Products, Inc.
Award of attorney fees to defendant in an underlying action for misappropriation of trade secret by seeking to hire away plaintiff's employees, is affirmed where: 1) the trial court's findings are free of procedural error; 2) the finding of plaintiff's bad faith is amply supported by evidence that defendants did no more than attempting to recruit the employees of a competitor, which they are entitled to do under California state law; and 3) defendant prevailed when plaintiff dismissed the suit to avoid an adverse determination on the merits.

[12/17] ABB Turbo Systems AG v. TurboUSA, Inc.
In this case, plaintiffs allege that defendants violated state-law torts of misappropriation of trade secrets and engaged in conspiracy to misappropriate trade secrets. Dismissal of the complaint for failure to state a claim on which relief can be granted is reversed and remanded for further proceedings, where: 1) the district court relied on judgments about the merits that go beyond what is authorized at the complaint stage; and 2) plaintiffs' specific factual allegations of protective measures taken against trade secret misappropriation are enough to survive a motion to dismiss.

[09/25] uPI Semiconductor Corporation v. ITC
Ruling of the International Trade Commission that respondent-intervenor uPI violated the Consent Order as to the imports known as "formerly accused products" is affirmed, the modified penalty is affirmed, and the ruling of no violation as to the post-Consent Order products is reversed, where: 1) substantial evidence does not support the Commission's conclusion that uPI's post-Consent Order products were independently developed; and 2) the United States sale or importation of downstream products, which incorporate uPI's formerly accused upstream products and infringe the '190 patent, constitutes a violation of the Consent Order's knowingly aiding or abetting provision.

[08/27] Parrish v. Latham & Watkins
In this malicious prosecution action brought by plaintiffs against defendant-attorneys, order granting defendants' anti-SLAPP motion and order granting defendant its attorney fees and costs are reversed, where: 1) the Code of Civil Procedure section 340.6 is not the appropriate statute of limitations for a malicious prosecution action; and 2) plaintiffs have presented sufficient evidence that they otherwise have a probability of prevailing.

[05/08] Altavion, Inc. v. Konica Minolta Systems Laboratory
Judgment for plaintiff finding that defendant had misappropriated plaintiff's trade secrets regarding its digital stamping technology (DST), which was disclosed to defendant during negotiations pursuant to Non-Disclosure Agreement, is affirmed, where: 1) plaintiff did not fail to adequately identify its trade secrets; 2) the trial court did not err in its identification of the misappropriated trade secrets; 3) ideas are protectable as trade secrets; 4) design concepts underlying plaintiff's DST constitute protectable "information"; 5) substantial evidence supports the trial court's finding that plaintiff's DST design concepts had independent economic value and the finding that defendant misappropriated plaintiff's trade secrets; 6) the trial court properly based its damages award on the reasonable royalty measure of damages, and did not err in awarding prejudgment interest; and 7) defendant has not demonstrated the trial court abused its discretion in basing its fee award on local hourly rates or shown the hourly rates employed by the trial court were unreasonable.

[03/26] StoneEagle Services, Inc. v. Gillman
The district court's orders purporting to clarify a preliminary injunction and enjoining defendants from using various materials and processes first developed by plaintiff, are vacated and remanded, where the district court lacked jurisdiction over this case when plaintiff initiated this lawsuit because plaintiff's complaint does not allege a sufficient controversy concerning inventorship, but instead concerns only ownership of the disputed patent.

[03/20] Energy Recovery, Inc. v. Hauge
The district court's decision finding defendant in contempt of its 2001 order adopting the parties' Settlement Agreement that plaintiff would be the sole owner of three U.S. patents and one pending U.S. patent application, is reversed and the injunction is vacated, where none of challenged conduct in developing and selling the pressure exchanger violates any provision of the 2001 Order.

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Tax Law

[05/12] Washington Mutual, Inc. v. US
In a tax refund action, the district court's judgment, finding that taxpayer had failed to establish a reliable cost basis in certain rights for which it sought tax deductions and losses in connection with taxpayer's acquisition of certain failed savings and loan associations during the 1970s and 1980s, is affirmed where the district court permissibly concluded that taxpayer did not meet its burden of establishing a cost basis for its intangible assets.

[05/09] Rubel v. Commissioner Internal Revenue
In a petition challenging the IRS's final determinations denying her requests for relief for tax liability under the innocent spouse relief provisions of 26 U.S.C. section 6015, the United States Tax Court's dismissal of her petition for lack of jurisdiction is affirmed where: 1) petitioner failed to file her petition by the deadline set forth in 26 U.S.C. section 6015(e)(1)(A); and 2) the deadline is jurisdictional.

[05/08] US v. Cardaci
In an action involving the Government's attempts to collect unpaid taxes assessed against a homeowner, seeking a judicial sale of the home, the district court's judgment, that a forced sale would be inequitable and order that the homeowner make monthly rent payments to the Government instead, is: 1) affirmed as to the district court?s authority to consider whether the property should be subject to a forced sale; but 2) vacated and remanded for recalculation of the ownership interests in the property and reconsideration of the equitable factors weighing for and against a sale.

[05/08] In re: Giacchi
In an appeal involving the issue of whether Internal Revenue Service Forms 1040, filed after the IRS has made an assessment of the taxpayer's liability, constitute 'returns' for purposes of determining the dischargeability in bankruptcy of tax debts under 11 U.S.C. section 523(a)(1)(B), the district court's judgment affirming the bankruptcy court's order denying discharge of years covered by the 1040s is affirmed where: 1) debtor's belated filings after assessment are not an honest and reasonable effort to comply with the tax law under the Beard test and, as such, the filings do not constitute returns; and 2) because debtor's tax debts for tax years 2000, 2001, and 2002 are debts for tax obligations for which no return was filed, the debts are not dischargeable in bankruptcy pursuant to 11 U.S.C. section 523(a)(1)(B).

[05/05] Adkins v. US
In a taxpayer's action seeking review of a decision of the Court of Federal Claims dismissing with prejudice their complaint for an income tax refund based on financial losses plaintiffs sustained as victims of a fraudulent investment scheme, the Claims Court decision is vacated and remanded where the court both misinterpreted Treas. Reg. section 1.165-1(d)(3) and improperly required abandonment of their arbitration claim.

[05/02] In re: The Trustees of Conneaut Lake PArk, Inc.
In a bankruptcy case involving 40 Pa. Stat. section 638, which prohibits insurance companies from paying fire insurance proceeds to a 'named insured' unless the local municipality certifies that no delinquent taxes are owed on the property where the insured structure was located, the District Court's judgment reversing the Bankruptcy Court grant of summary judgment to the Taxing Authorities and holding that 'named insured' as used in Section 638 includes only those who own the structure at issue and are responsible for the delinquent taxes, is reversed where this interpretation contravenes the text of the statute.

[04/27] 8x8, Inc. v. US
In a suit brought by a provider of local and long-distance telephone services over a broadband internet connection via Voice over Internet Protocol (VoIP) in the U.S. Court of Federal Claims, seeking a refund of more than $1 million in Federal Communications Excise Tax, the Claims Court's grant of summary judgment to the Government, denying the refund, is affirmed where: 1) as a collector of the FCET, plaintiff has failed to fulfill the necessary requirements of I.R.C. section 6415(a); and 2) plaintiff failed to fulfill the requirements of I.R.C. section 6415(a) because plaintiff neither refunded its customers the FCET, nor obtained their consent to seek the refund.

[04/07] Manteca Unified Sch. Dist. v. Reclamation Dist. No. 17
In a tax case involving the interpretation and application of Water Code section 51200 and articles XIII C and XIII D of the California Constitution, as approved by California voters in 1996 as Proposition 218, and the interplay between them, brought by a school that owns property within defendant-district's boundaries, alleging section 51200 exempts plaintiff from paying assessments to defendant and Proposition 218 does not confer such authority, the trial court's judgment that the assessments levied by defendant were invalid under section 51200 but denial of recovery of assessment payments made during the pendency of the action and concluded plaintiff's action was not barred by the statute of limitations, is reversed where the trial court erred in declining to apply the constitutional mandate of Proposition 218 to the statutory exemption from assessments provided by section 51200.

[03/24] Minda v. US
In a case in which the IRS sent a report containing plaintiffs' names, social security numbers, and financial information, to the wrong person --- an unauthorized unrelated third party -- brought under 26 U.S.C. section 7431, which permits a taxpayer whose return or return information has been unlawfully disclosed to bring a civil action against the United States for damages, the district court's grant of summary judgment to the Government is affirmed where, plaintiffs are only entitled to 1,000 each in statutory damages for the disclosure of the report, not $1000 for the disclosure of each item of information contained in the report.

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