Case Summaries

Contracts

[06/18] Cappiello v. ICD Publications, Inc.
Following judgment for plaintiff in a breach of contract/employment action, the district court correctly, and constitutionally, held that plaintiff was entitled to post-judgment interest at the rate set forth in 28 U.S.C. section 1961, and not the post-judgment interest rate provided for in New York C.P.L.R. section 5004, notwithstanding that the judgment had been entered in a diversity action and had been docketed by plaintiff in a New York state court.

[06/17] Federal Trade Commission v. Actavis, Inc.
The Eleventh Circuit erred in affirming the dismissal of a suit brought by plaintiff Federal Trade Commission (FTC) alleging that violated section 5 of the Federal Trade Commission Act by unlawfully agreeing to abandon their patent challenges, to refrain from launching their low-cost generic drugs, and to share in the patent holder's monopoly profits, where: 1) although the anti-competitive effects of the reverse settlement agreement might fall within the scope of the exclusionary potential of the patent holder's patent, this does not immunize the agreement from antitrust attack; 2) the FTC should have been given the opportunity to prove its antitrust claim; but 3) reverse payment settlement agreements are not presumptively unlawful, but should be reviewed by applying the "rule of reason," rather than under a "quick look" approach.

[06/14] Donlen v. Ford Motor Company
The trial court erred in granting defendant a new trial following a jury verdict awarding plaintiff damages in his lemon law action against defendant, and the judgment in favor of plaintiff is affirmed, where: 1) there was no error in law on which the trial court could grant a new trial because its denial of defendant's motion in limine motion finding that the non-warranty repair evidence was relevant and not unduly prejudicial, was not error; 2) the new trial order cannot be affirmed on the ground of lack of substantial evidence, as the trial court did not specify that as a ground for granting the motion; and 3) substantial evidence supported the verdict.

[06/14] Series AGI West Linn v. Eves
If a surety specifically excludes a specified asset from a continuing guaranty, the proceeds from the sale of that asset are not exempt from being attached to satisfy the surety's obligation.

[06/13] Tarrant Regional Water District v. Herrmann
The Red River Compact, a congressionally sanctioned agreement that allocates water rights within the Red River basin among the States of Oklahoma, Texas, Arkansas, and Louisiana, does not pre-empt Oklahoma water statutes that restrict out-of-state diversions of water, because the Compact creates no cross-border rights in its signatories for these statutes to infringe, and the Oklahoma water statutes also do not run afoul of the Commerce Clause.

[06/13] Liberty National Enterprises, LP v. Chicago Title Insurance Company
Judgment for plaintiff-insured against defendant-title insurer on the cause of action for breach of the implied covenant of good faith and fair dealing is reversed, where: 1) defendant had no duty to defend the third party lawsuit for which plaintiff demanded the defense because the action did not allege defective title, but tortious conduct in the manner in which plaintiff acquired title; and as such, 2) plaintiff's other claims on appeal are rendered moot.

[06/13] American Trucking Associations, Inc. v. City of Los Angeles
In a challenge to defendant's concession agreement, which was implemented as part of the Clean Truck Program to govern the relationship between the defendant's Port and drayage companies whose short-haul companies move cargo into and out of the Port, the Ninth Circuit's judgment finding only the driver employment provision of the agreement preempted, is reversed in part and remanded, where: 1) the Federal Aviation Administration Authorization Act expressly preempts the concession agreement's placard and parking requirements because defendant's placard and parking requirements relate to a motor carrier's price, route, or service with respect to transporting property, and have the force and effect of law; but 2) this Court declines to decide in the case's present, pre-enforcement posture whether Castle v. Hayes Freight Lines, Inc., limits the way the Port can enforce the financial-capacity and truck-maintenance requirements upheld by the Ninth Circuit.

[06/12] Schaefer v. Elder
The trial court did not err in determining that the defendant-insured in this case had a right to independent counsel rather than counsel provided by the intervenor-insurer and in disqualifying said counsel, where: 1) there is an actual conflict of interest between the defendant-insured and the intervenor-insurer; and 2) it was proper to disqualify counsel because counsel had simultaneously represented defendant-insured and intervenor-insurer.

[06/11] J.R. Marketing v. Hartford Casualty
In action for reimbursement of allegedly excessive or otherwise inappropriate legal fees and costs billed by independent counsel for plaintiff to defendant-insurer after defendant-insurer disclaimed coverage for the action under the relevant insurance policy, judgment for the independent counsel is affirmed, where: 1) when a conflict arises with respect to defense fees or costs paid by an insurer in breach of its duty to defend to the independent counsel hired by its insured following this breach, the insurer must look to the insured, not independent counsel, to resolve the conflict; and 2) as to Harrington, an individual named as a defendant in the underlying tort matter but not insured by defendant-insurer, defendant-insurer failed to state facts supporting its reimbursement cause of action against Harrington, and to present timely and legally-supported arguments as to how the trial court erred or how the operative complaint could be amended to remove any defect.

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Corporation & Enterprise Law

[06/18] Castillo Grand, LLC v. Sheraton Operating Corporation
The district court's order awarding defendant $200,000 in attorney's fees and $30,000 in costs, is vacated and remanded with directions to delete the award of attorney's fees, where: 1) 28 U.S.C. section 1919 does not authorize an award of attorney's fees; and 2) although such fees may be awarded on a non-statutory basis for bad faith in the conduct of litigation, fees were not warranted under the circumstances of this case, where plaintiff re-filed a lawsuit after non-diverse members of a limited liability corporation were dropped in an attempt to invoke diversity of citizenship jurisdiction.

[05/30] Bush v. US
Dismissal of plaintiff-taxpayers' refund suit by the Court of Federal Claim is affirmed, where: 1) under the Tax Equity and Fiscal Responsibility individual partners may not bring tax challenges relating to subject matter attributable to a partnership item, rather, such claims must be brought in a partnership-level suit by the partnership representative or Tax Matters Partner; and 2) plaintiffs' claim for a refund of taxes and penalties assessed for substantial underpayments of tax attributable to tax motivated transactions of their oil and gas partnership, is an impermissible collateral attack.

[05/30] Schlessinger v. Valspar Corporation
In response to the certified questions: 1) General Business Law section 395-a, which (with certain exceptions) forbids the termination before expiration of any "maintenance agreement covering parts and/or service," does not make contract clauses that contradict its terms null and void; and 2) violation of section 395-a alone does not give rise to a cause of action under General Business Law section 349.

[05/29] AREI II Cases
Judgment dismissing causes of action against defendant investment bankers for their role in structuring a real estate transaction in which the seller failed to disclose that its sole owner was a convicted felon and concealed the existence of a second loan that grossly overleveraged the property is reversed, where: 1) the operative second amended complaint does not state a cause of action against the defendant investment bankers for materially assisting in a securities law violation under Corporations Code section 25504.1; but 2) the facts as pleaded are minimally sufficient to state a cause of action against the defendant investment bankers for common law fraud based upon a conspiracy to defraud the investors.

[05/24] Massachusetts Retirement Systems v. CVS Caremark Corporation
Dismissal of a putative class action for securities fraud against defendant and certain of its current and former employees, is vacated and remanded, where: 1) plaintiffs' allegations indicate that the drop in defendant's share price was causally related to its misstatements regarding the integration of CVS and Caremark, and these allegations are sufficiently plausible to foreclose dismissal; 2) the new information revealed in the subject earnings call regarding the reason for the contract losses could plausibly have caused the plaintiffs' losses; and 3) the analyst reports should have been considered in deciding the motion to dismiss.

[05/24] Painter's Mill Grille, LLC v. Brown
The district court properly dismissed plaintiffs' complaint alleging that defendant-landlord and its agents, motivated by racial animus, interfered with plaintiffs' business and its opportunity to sell the restaurant, including its leasehold interest, in violation of federal statutes and state tort principles, where: 1) plaintiff principals do not have standing because they elected to conduct their business through a limited liability company; and 2) plaintiff company did not set forth sufficient facts to state a claim to relief that is plausible on its face, for any of its causes of action.

[05/21] CARCO GROUP, Inc. v. Maconachy
Judgment for plaintiffs and award of attorneys' fees in breach of contract action and related claims is: 1) vacated as to the district court's judgment and awards with respect to plaintiffs' breach of contract claim and remanded for further findings as to proximate causation; 2) vacated as to the award of attorneys' fees and remanded for recalculation of those fees following the district court's determination as to whether plaintiffs proved proximately-caused damages on the contract claim; 3) reversed with regard to the district court's decision that attorneys' fees should be reduced by twenty percent across-the-board, and the denial of interest on the attorneys’ fees awards; and 4) affirmed in all other respects.

[05/21] In Re: Majestic Star Casino LLC
Summary judgment to debtors and certain of its subsidiaries and affiliates on their motion to avoid its controlling entity's termination of its status as an "S" corporation, an entity type that is not subject to federal taxation is vacated and remanded with directions to dismiss the complaint for lack of jurisdiction, where: 1) S-corp status is not "property" within the meaning of the Internal Revenue Code; 2) the debtors' QSub status was not "property" and the Bankruptcy Court's contrary conclusion was error; 3) even if the debtors' QSub status were "property," it is not properly seen as property of debtors' bankruptcy estate, and the contrary conclusion of the Bankruptcy Court cannot stand; and 4) debtors do not have standing to challenge the revocation of the tax status by its corporate parent.

[05/21] Schwartz v. Provident Life and Accident Insurance Co.
Summary adjudication and subsequent judgment for defendant-insurer on plaintiff's claim alleging deceptive claims handling practices to wrongfully deny benefits to some insureds is affirmed, where: 1) plaintiff-insured was never denied benefits; and thus, 2) plaintiff-insured lacked standing to pursue an Unfair Competition Law cause of action because the plaintiff-insured had not suffered injury in fact nor lost money or property as a result of the unfair competition.

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Trademark

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Tax Law

[06/13] Fourth Investment LP v. US
The district court's decision denying plaintiffs' quiet title claims to remove federal tax liens encumbering their real properties and upholding the validity of tax liens filed by the Internal Revenue Service is affirmed, where: 1) California law unambiguously recognizes the existence of nominee ownership; and 2) applying criteria set forth in relevant federal cases, the district court properly concluded that plaintiffs held legal title to the San Diego properties as nominees of the taxpayers.

[06/11] In the Matter of Norman E. Roth v. City of Syracuse
In a Real Property Tax Law article 7 proceeding challenging the tax assessments of certain residential properties: 1) petitioner failed to rebut the presumption of validity that attaches to the tax assessments of the properties by the City of Syracuse; and 2) petitioner failed to proffer substantial evidence demonstrating a diminution in market value to his properties caused by the mere presence of lead paint.

[06/06] US v. Hasan
Defendant's convictions of various offenses related to the trafficking of contraband cigarettes are affirmed, where: 1) the actions undertaken by the ATF in this case were not unlawful; 2) there is no merit to defendant' claim that ATF agents in this case otherwise engaged in behavior that is "offensive to traditional notions of fundamental fairness;" and 3) the district court did not err in calculating the forfeiture amount by calculating the sum based on the gross proceeds, rather than profits, realized by the contraband cigarette distribution scheme.

[05/30] Bush v. US
Dismissal of plaintiff-taxpayers' refund suit by the Court of Federal Claim is affirmed, where: 1) under the Tax Equity and Fiscal Responsibility individual partners may not bring tax challenges relating to subject matter attributable to a partnership item, rather, such claims must be brought in a partnership-level suit by the partnership representative or Tax Matters Partner; and 2) plaintiffs' claim for a refund of taxes and penalties assessed for substantial underpayments of tax attributable to tax motivated transactions of their oil and gas partnership, is an impermissible collateral attack.

[05/23] US v. Shellef
Second judgment of conviction for conspiracy to commit tax fraud, wire fraud, and money laundering is affirmed, where: 1) the findings necessary to extend the prescribed period for retrial from 70 to 180 days under 18 U.S.C. section 3161(e), the Speedy Trial Act, can be made after the initial 70-day period for retrial has passed; 2) the factors relied on by the district judge in granting an extension to 180 days resulted from passage of time, insofar as they reflected changed circumstances between the close of the original trial and the grant of the extension affecting retrial; and 3) the district judge correctly identified sufficient excludable delay to support the conclusion that defendant was retried within 180 days of this court's mandate.

[05/21] Williams v. Commissioner of Internal Revenue
Summary judgment granted by the U.S. Tax Court in favor of the Commissioner of Internal Revenue sustaining a proposed levy to recover outstanding income tax liabilities for the 2000, 2001, and 2002 taxable years is affirmed, where: 1) the IRS was justified in denying a face-to-face hearing here and sustaining the proposed levy; and 2) therefore, the Tax Court did not err by so concluding.

[05/21] In Re: Majestic Star Casino LLC
Summary judgment to debtors and certain of its subsidiaries and affiliates on their motion to avoid its controlling entity's termination of its status as an "S" corporation, an entity type that is not subject to federal taxation is vacated and remanded with directions to dismiss the complaint for lack of jurisdiction, where: 1) S-corp status is not "property" within the meaning of the Internal Revenue Code; 2) the debtors' QSub status was not "property" and the Bankruptcy Court's contrary conclusion was error; 3) even if the debtors' QSub status were "property," it is not properly seen as property of debtors' bankruptcy estate, and the contrary conclusion of the Bankruptcy Court cannot stand; and 4) debtors do not have standing to challenge the revocation of the tax status by its corporate parent.

[05/20] PPL Corp. v. Commissioner of Internal Revenue
The U.K. one-time "windfall tax" imposed on privatized companies in 1997 and paid by petitioner, is creditable under Internal Revenue Code section 901(b)(1), which states that any "income, war profits, and excess profits taxes" paid overseas are creditable against U.S. income taxes, where here, the U.K. windfall tax's predominant character is that of an excess profits tax, a category of income tax in the U.S. sense.

[05/17] Cooper v. Commissioner of the Internal Revenue Service
In consolidated appeals in which plaintiff-taxpayers seek redeterminations of their tax liability from the Internal Revenue Service (IRS) and tax refunds from the Virgin Islands Bureau of Internal Revenue (VIBIR), judgment dismissing the claims is affirmed, where: 1) the district courts correctly held that the Tax Court is the only venue for plaintiffs' claims against the IRS because Congress has designated the Tax Court as the only court with jurisdiction to adjudicate a tax prepayment deficiency dispute; and 2) the district court correctly granted the VIBIR's motion to dismiss plaintiff McGrogan's claim because the statute of limitations barred his claims against the VIBIR.

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Trade Secrets

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