Legal News

Case Summaries

Administrative Law

[07/03] Tablada v. Thomas
In a case involving whether the Bureau of Prisons (BOP) violated the Administrative Procedure Act (APA) in promulgating a regulation interpreting 18 U.S.C. section 3624(b), which governs the calculation of good conduct time for federal prisoners, the court finds that: 1) the BOP concededly violated the APA by failing to articulate a rational basis for its decision to promulgate the regulation; but 2) the remedy for the violation is to interpret the federal statute in accordance with the BOP's Program Statement 5880.28; and 3) the BOP's methodology for calculating good time credits under Statement 5880.28 was both reasonable and persuasive under applicable law.

[07/03] Lands Council v. McNair
Denial of a preliminary injunction to halt a project, which called for the selective logging of 3,829 acres in a national forest, is affirmed where: 1) plaintiff was not likely to succeed on any of its claims under the National Forest Management Act (NFMA) or the National Environmental Policy Act (NEPA); and 2) plaintiff failed to show that, if the Forest Service were allowed to proceed with the project, the balance of hardships tipped sharply in its favor. (En banc opinion)

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Agriculture

[06/25] Lands Council v. Martin
In environmental organization's action arising after the U.S. Forest Service initiated a salvage logging operation in the aftermath of a forest fire in a Washington national forest, summary judgment for government defendants is affirmed in part and reversed in part where: 1) plaintiffs' challenges to the Service's new definition of "live trees" failed; 2) an Environmental Impact Statement's soil analysis violated neither NEPA nor NFMA; but 3) the Forest Service failed to include an adequate discussion of the effects of proposed logging on two significant roadless areas.

[05/22] Ebbetts Pass Forest Watch v. Ca. Dep't of Forestry and Fire Protection
In a challenge to the approval of certain timber harvest plans, based on claims that the California Department of Forestry (CDF) failed to follow the law or its own implementing regulations when selecting geographic areas for assessing the cumulative impacts of logging on two animal species and in analyzing the effects of possible use of herbicides after logging, a ruling in favor of conservation groups is reversed where: 1) the analysis used by the CDF complied with the Forest Practice Act as to the geographic scope required for a cumulative impacts assessment; and 2) the CDF did not erroneously rely on the Department of Pesticide Regulations' regulatory program nor fail to conduct its own environmental impacts assessment since they continued with extensive discussion of the potential impacts, mitigation measures, and alternatives to herbicide use.

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Asset Forfeiture

[07/01] US v. Andrews
In a prosecution for wire fraud and money laundering in which defendant agreed to forfeit remaining money to the government for division among her victims, denial of a request to impose a constructive trust that would grant claimants priority to the money over defendant's other victims is affirmed where the district court did not abuse its discretion in deciding that the traditional purpose of a constructive trust, avoiding unjust enrichment, would not be served here because the parties in opposition to claimants were other fraud victims, who would not be unjustly enriched by receiving appropriate shares of defendant's remaining loot.

[07/01] Stevens v. US
In proceedings arising from a criminal prosecution, denial of petitioner's motion to return property is affirmed where: 1) the government met its burden of showing that it was no longer in possession of the items seized; 2) there is no presumption of untruthfulness in a Fed. R. Crim. P. 41(g) proceeding; and 3) defendant may not challenge his conviction by way of a Rule 41(g) motion.

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Attorney's Fees

[06/30] Waltrip v. Kimberlin
In a priority dispute between competing liens, by a judgment creditor and debtor's attorney, over settlement proceeds, judgment finding the judgment lien had priority over the attorney lien is reversed and remanded where: 1) the creditor had a lien which did not cover commercial tort claims while the settlement proceeds at issue stemmed from commercial tort claims; 2) the attorney lien was created by the retainer agreement between plaintiffs and counsel, and it was created before creditor filed a notice of lien in the pending action; and 3) the notice of lien did not relate back to prior liens, as those liens covered different property.

[06/30] Sanders v. Lawson
The attorney's fees provision of the Elder Abuse Act does not authorize the award of trustee fees as costs.

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Banking Law

[07/03] Gen. Elec. Capital Corp. v. Future Media Prods., Inc.
In an appeal brought by an oversecured creditor in a bankruptcy matter, an order denying the creditor default interest and attorney's fees is reversed and remanded where: 1) the bankruptcy court improperly applied the circuit court's rule from In re Entz-White Lumber and Supply, Inc., 850 F.2d 1338 (9th Cir. 1988), to the facts of this case; and 2) the bankruptcy court should apply a presumption of allowability for the contracted for default rate, "provided that the rate is not unenforceable under applicable non-bankruptcy law."

[07/02] Cavin v. Home Loan Ctr., Inc.
In a suit involving a mailer sent by defendant announcing its mortgage program and claiming that defendant violated the Fair Credit Reporting Act by failing to present plaintiffs' with a firm offer of credit, summary judgment for defendant is affirmed where: 1) the letter at issue presented a firm offer of credit, despite the absence of some material terms and the minimal number of consumers who obtained the loan; and 2) thus, defendant did not violate the FCRA.

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Bankruptcy Law

[07/03] Gen. Elec. Capital Corp. v. Future Media Prods., Inc.
In an appeal brought by an oversecured creditor in a bankruptcy matter, an order denying the creditor default interest and attorney's fees is reversed and remanded where: 1) the bankruptcy court improperly applied the circuit court's rule from In re Entz-White Lumber and Supply, Inc., 850 F.2d 1338 (9th Cir. 1988), to the facts of this case; and 2) the bankruptcy court should apply a presumption of allowability for the contracted for default rate, "provided that the rate is not unenforceable under applicable non-bankruptcy law."

[07/01] Donell v. Kowell
In a suit arising to recover gains made by defendant, an innocent investor, from a Ponzi scheme, a judgment requiring him to disgorge his profits as fraudulent transfers under the Uniform Fraudulent Transfer Act is affirmed where the circuit court: 1) adopted the largely uniform analysis used for applying the UFTA to allow recovery from investors in a Ponzi scheme, and describes a two-step process for determining the existence and amount of liability; 2) found there was no error in the district court's application of such analysis; 3) rejected arguments that courts should not be allowed to require innocent investors to disgorge net profits; and 4) declined to permit good faith investors to claim offsets for taxes or other expenses paid in connection with receipt and management of income from a Ponzi scheme.

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Civil Rights

[07/03] Easley v. Reuss
On petition for rehearing, the circuit court grants a petition to cure an administrative error to a prior order but declines further review where: 1) petitioner failed to meet the strict requirements of Appellate Rule 35 for a hearing en banc; and 2) petitioner was raising issues that were not previously raised.

[07/03] White v. Baxter Healthcare Corp.
In an employment discrimination suit brought under federal and Michigan state law, summary judgment for defendant is reversed and the case is remanded for a new trial where: 1) plaintiff offered sufficient evidence to suggest that defendant's purported reason for not promoting him had no basis in fact, did not motivate defendant's decision, or was not sufficient to explain its hiring choice; and 2) plaintiff produced sufficient evidence for a reasonable jury to find in his favor on both single motive and mixed motive race discrimination claims.

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Commercial Law

[07/02] Deckers Corp. v. US
In a suit contesting the proper classification of three styles of sports sandals under the Harmonized Tariff Schedule of the United States, a decision holding that the merchandise was properly classified under subheading 6404.19.35 is affirmed where the sandals at issue have open toes and open heels, and lack the features of the named exemplars of 6406.11.80, and thus the imported goods are not classifiable under that subheading notwithstanding their claimed status as athletic footwear.

[07/02] Cavin v. Home Loan Ctr., Inc.
In a suit involving a mailer sent by defendant announcing its mortgage program and claiming that defendant violated the Fair Credit Reporting Act by failing to present plaintiffs' with a firm offer of credit, summary judgment for defendant is affirmed where: 1) the letter at issue presented a firm offer of credit, despite the absence of some material terms and the minimal number of consumers who obtained the loan; and 2) thus, defendant did not violate the FCRA.

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Constitutional Law

[07/03] Easley v. Reuss
On petition for rehearing, the circuit court grants a petition to cure an administrative error to a prior order but declines further review where: 1) petitioner failed to meet the strict requirements of Appellate Rule 35 for a hearing en banc; and 2) petitioner was raising issues that were not previously raised.

[07/03] MLC Automotive, LLC v. Town of Southern Pines
In a suit alleging that the rezoning of a certain piece of real estate violated plaintiff's common law vested rights in the property and its federal and state substantive due process rights, denial of defendants' Rule 60(b) motion is affirmed where: 1) defendant-town's Rule 60(b) motion was filed within ten days of the original judgment, called into question the correctness of the judgment, and is properly construed as a Rule 59(e) motion; 2) the district court did not abuse its discretion in concluding that Burford abstention was appropriate because the case involved difficult issues of state land use policy.

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Contracts

[07/03] Gen. Elec. Capital Corp. v. Future Media Prods., Inc.
In an appeal brought by an oversecured creditor in a bankruptcy matter, an order denying the creditor default interest and attorney's fees is reversed and remanded where: 1) the bankruptcy court improperly applied the circuit court's rule from In re Entz-White Lumber and Supply, Inc., 850 F.2d 1338 (9th Cir. 1988), to the facts of this case; and 2) the bankruptcy court should apply a presumption of allowability for the contracted for default rate, "provided that the rate is not unenforceable under applicable non-bankruptcy law."

[07/03] United Steel, Paper & Forestry, etc. v. TriMas Corp.
In an action to compel arbitration under the Labor-Management Relations Act (LMRA) arising out of the parties' dispute over a neutrality agreement, summary judgment for union is affirmed where the district court correctly: 1) found that the dispute was covered by the language of the arbitration clause; and 2) left consideration of certain extrinsic evidence to the arbitrator.

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Dispute Resolution & Arbitration

[07/01] In the Matter of Fiveco, Inc. v. Haber
In the context of a party commencing a proceeding to permanently stay arbitration after the 20-day limitations period for objecting to arbitration under CPLR 7503(c), such petitions are time-barred unless the basis of a party's objection falls within the exception set forth in Matter of Matarasso (Continental Cas. Co.) (56 NY2d 264 [1982]). That exception does not apply, however, when an arbitration provision found within a contract prevents finding that the parties never agreed to arbitrate.

[07/01] Espericuenta v. Shewry
In an action to recover damages arising from an automobile accident wherein a lien was asserted against the settlement proceeds to recover certain medical payments, an order denying a motion to extinguish or strike the lien imposed is affirmed where: 1) there had already been a judicial allocation of the medical expenses portion of the settlement in the order approving the victim's compromise; and 2) thus, there was no basis for modifying the order.

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Evidence

[07/03] US v. Morriss
Denial of a motion to suppress statements made outside the presence of counsel is affirmed over defendant's claims that: 1) the district court erroneously found his Sixth Amendment right to counsel did not attach during an interview in which he provided inculpatory statements; and 2) the government violated his due process rights by interviewing him during a lapse in representation.

[07/03] US v. Anderson
A conviction for insider trading and money laundering is affirmed over claims of error that: 1) the government's evidence was insufficient to convict him, 2) the district court erred in failing to give his theory-of-the-case jury instruction; and 3) that he is entitled to a new trial. The sentence is affirmed over the government's claims of error that the sentence was unreasonable because the court erroneously excluded certain stock sales as relevant conduct when considering the U.S.S.G. for illegal insider training.

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Government Contracts

[07/02] City of Geneseo v. Utilities Plus
In an action to recover damages from corporate defendant based on claims of contractual breach, unjust enrichment, promissory estoppel, and fraud, summary judgment for defendant is affirmed where: 1) defendant's president was found to lack actual authority to enter a binding contract on the company's behalf; 2) the doctrine of apparent authority, which was limited under state laws, did not alternatively create a contract to be enforced; and 3) plaintiff had no basis to recover damages under alternative principles of contractual remedies.

[06/27] Impresa Construzioni Geom. Domenico Garufi v. U.S.
In proceedings involving an application for Equal Access to Justice Act (EAJA) fees and other expenses relating to petitioner's successful bid protest, denial of the application as untimely is reversed and remanded where: 1) the circuit court adopts a uniform rule for EAJA petitions in the Court of Federal Claims, whereby appeal rights from voluntary dismissals are presumed unless expressly disclaimed or specifically prohibited; and 2) petitioner's period for filing its EAJA fee application started upon expiration of the period for filing a petition for certiorari from the final judgment of the Federal Circuit.

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Indian Law

[07/01] In re Cheyanne F.
Order terminating the parental rights of a mother pursuant to Welfare and Institutions Code section 366.26 is affirmed over claims that the juvenile court erroneously omitted information required for notification forms under the Indian Child Welfare Act.

[06/27] US v. Vasquez-Ramos
Denial of defendants' motion to dismiss their indictments for possessing feathers and talons of bald and golden eagles and other migratory birds without a permit in violation of the Bald and Golden Eagle Protection Act (BGEPA), and the Migratory Bird Treaty Act (MBTA), is affirmed where, pursuant to prior circuit precedent which remains binding, the prosecutions did not violate the Religious Freedom Restoration Act (RFRA). (Substituted opinion)

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Injury & Tort Law

[07/03] Crowley Marine Servs. Inc. v. Maritrans Inc.
In an action arising out of the collision of plaintiff's tug boat with defendants' oil tanker, a district court's reallocation of fault in the matter is affirmed where: 1) the district court did not err in considering the coordinated nature of the tug escort, the tug boat's violations of Rules 5 and 17(b), or the negligence of both plaintiff and the tug's captain; and 2) it did not err in apportioning 70% of the responsibility for the collision to the tug boat.

[07/03] Sherman v. Winco Fireworks, Inc.
In an action arising from an accident with fireworks, order granting defendant-fireworks manufacturer leave to amend and remand for a new trial on the plaintiffs' failure-to-warn claim in addition to plaintiff husband's pendent consortium claim is reversed in part where: 1) the district court did not apply the good-cause standard in ruling on motion to amend; 2) and the district court abused its discretion in allowing the amendment; 3) and the error was not harmless as it significantly affected plaintiffs' claims.

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Judgment Enforcement

[06/25] Landau, P.C. v. LaRossa, Mitchell & Ross
A judgment dismissing a complaint without prejudice on the basis of a corporation's lack of capacity does not have res judicata effect on a subsequent action brought by the corporation's successor.

[06/20] Talbot v. Hustwit
Judgment entered against defendants on a guaranty agreement after lender foreclosed on real property securing a loan made to a trust structured by defendants is affirmed where: 1) case law has uniformly held the requirements for a deficiency judgment under Code of Civil Procedure 580a inapplicable to guarantors; and 2) considering the manner in which defendants structured the trust arrangement to detach from debts owed by the trust, there was ample basis for finding them not principal obligors to the loan, but true guarantors.

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Landlord Tenant

[06/25] Plains Commerce Bank v. Long Family Land & Cattle Co.
In a discrimination, breach of contract, and bad faith suit brought in Tribal Court by an Indian couple against a non-Indian bank, which sold land that it owned, and had previously leased to plaintiffs, on a tribal reservation to non-Indians, judgment and award for plaintiffs is reversed where the tribal court lacked jurisdiction to adjudicate a discrimination claim concerning the non-Indian bank's sale of fee land it owned.

[06/20] California Nat'l Bank v. Woodbridge Plaza LLC
In an appeal involving interpretation of a provision dealing with calculation of rent for the extended term of plaintiff's lease of premises owned by defendant, a judgment in favor of defendant is affirmed where: 1) the provision, interpreted from the parties' mutual intent at the time of contracting, was intended as a rent cap based on rent paid by a "financial institution" occupying a defunct bank's premises; and 2) because non-bank tenants were not the "successors" anticipated by the contract, their rent could not be used as a factor for calculating plaintiff's new rent, which is instead subject to the "then prevailing rate" as defined by the lease.

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Legal Malpractice

[07/02] Allen v. Brown Clinic, P.L.L.P
In a medical malpractice suit, jury verdict for defendant-doctor is affirmed over claims that the district court erred when it denied his motion to exclude for cause: 1) all jurors who had ever received medical treatment at a particular clinic or with a particular doctor; 2) all jurors who had family members who had been treated at the clinic or by the doctor; and 3) two jurors who had relatives with connections to the defendants. A claim that the district court erred in denying a motion to exclude defendants' medical expert is also rejected.

[07/02] Rodriguez-Rivera v. Federico Trilla Reg'l Hosp. of Carolina
In a medical malpractice case against defendant-hospital presenting the issue of whether an Asset Purchase Agreement entered between past and present owners of the hospital absolved the current owner's liability for acts or omissions by the hospital's previous owners and/or operators, the circuit court finds that the terms of the asset purchase agreement not only could, but did, absolve the present owners from liability.

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Military

[07/01] Clements v. Serco, Inc.
In an action by civilian military recruiters seeking a judgment that they are entitled to overtime compensation under the Fair Labor Standards Act, summary judgment for plaintiffs, as well as an award of back-pay calculated on the "fluctuating workweek" approach instead of the "time-and-a-half" approach, are affirmed where: 1) plaintiffs were not exempt "outside salesmen" because they were engaged in promotional work; 2) plaintiffs lacked authority to obtain a commitment from a prospective recruit; and 3) the "fluctuating workweek" method was appropriate since it is used when there is a clear mutual understanding of the parties that the fixed salary is compensation, apart from overtime premiums, for the hours worked each workweek, whatever their number, rather than for working 40 hours or another fixed period.

[06/20] Parhat v. Gates
In the first review of its kind under the Detainee Treatment Act (DTA), a Combatant Status Review Tribunal's (CSRT) determination that petitioner-Chinese Guantanamo detainee is an "enemy combatant" is reversed and remanded where: 1) the record before petitioner's CSRT was insufficient to support a finding that he was an enemy combatant, even under the Defense Department's own definition of that term; and 2) the government is directed to release petitioner, transfer him, or convene a new CSRT to consider properly submitted evidence.

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Probate Trusts

[06/26] Murphy v. Murphy
A probate court judgment finding plaintiff entitled to a constructive trust over one-half interest of decedent's real and personal property existing on the date of his death is reversed on collateral estoppel grounds where: 1) prior to the decedent's death, a probate court previously issued an order on behalf of decedent, authorizing the decedent's conservator to execute a living trust and pour-over will to implement an estate plan which effectively disinherited plaintiff; and 2) a careful balance of all the relevant factors supported that principles of collateral estoppel should serve to bar plaintiff's subsequent causes of action.

[06/25] Safai v. Safai
In a case involving a dispute over whether a minor's actions triggered the "no contest clause" contained in a trust instrument, the court of appeals finds that the minor's act of signing the "minor's consent" portion of an ex parte application for appointment of guardian ad litem did not equate to "voluntarily" participating in a trust contest, an act which a minor is legally incapable of pursuing by their own volition.

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Professional Malpractice

[07/02] Allen v. Brown Clinic, P.L.L.P
In a medical malpractice suit, jury verdict for defendant-doctor is affirmed over claims that the district court erred when it denied his motion to exclude for cause: 1) all jurors who had ever received medical treatment at a particular clinic or with a particular doctor; 2) all jurors who had family members who had been treated at the clinic or by the doctor; and 3) two jurors who had relatives with connections to the defendants. A claim that the district court erred in denying a motion to exclude defendants' medical expert is also rejected.

[07/02] Rodriguez-Rivera v. Federico Trilla Reg'l Hosp. of Carolina
In a medical malpractice case against defendant-hospital presenting the issue of whether an Asset Purchase Agreement entered between past and present owners of the hospital absolved the current owner's liability for acts or omissions by the hospital's previous owners and/or operators, the circuit court finds that the terms of the asset purchase agreement not only could, but did, absolve the present owners from liability.

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Public Utilities

[07/03] BNSF Ry. Co. v. Swanson
Provisions of Minnesota Statute sections 609.849(a)(1) and (a)(2), governing a railroad's treatment of injured workers, are both preempted by the Internal Control Plans regulations adopted by the Federal Railroad Administration pursuant to the Federal Railroad Safety Act.

[06/26] Morgan Stanley Capital Group Inc. v. Pub. Util. Dist. No. 1 of Snohomish County
In a case involving wholesale-energy contracts and the Mobile-Sierra doctrine under which the FERC must presume that the rate set out in a freely negotiated wholesale-energy contract meets the "just and reasonable" requirement imposed by law, judgment granting petitions for review of FERC decisions upholding certain contracts is affirmed where: 1) contrary to the Ninth Circuit's view, the FERC was required to apply the Mobile-Sierra presumption in evaluating the contracts in this case and the FERC may abrogate a valid contract only if it harms the public interest; 2) the Ninth Circuit's "zone of reasonableness" test, used to evaluate a buyer's rate-challenge, fails to accord an adequate level of protection to contracts; but 3) nevertheless, two flaws in the FERC's analysis provided alternate grounds for affirmance.

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Remedies

[07/03] Crowley Marine Servs. Inc. v. Maritrans Inc.
In an action arising out of the collision of plaintiff's tug boat with defendants' oil tanker, a district court's reallocation of fault in the matter is affirmed where: 1) the district court did not err in considering the coordinated nature of the tug escort, the tug boat's violations of Rules 5 and 17(b), or the negligence of both plaintiff and the tug's captain; and 2) it did not err in apportioning 70% of the responsibility for the collision to the tug boat.

[07/02] Appel v. Spiridon
A preliminary injunction, preventing defendants from requiring plaintiff to submit to a psychological examination in order to maintain her teaching position at a state school, is reversed and remanded in light of a recent Supreme Court decision holding that the Equal Protection Clause does not apply to a public employee asserting a violation of the Clause based on a "class of one" theory.

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Sanctions

[07/03] Kountze v. Gaines
In an action seeking to remove trustees from an educational board, summary judgment for defendants and imposition of sanctions on plaintiff are both affirmed where: 1) the district court did not err in finding that plaintiff was not a member of the board at the time he filed this derivative action and that he lacked capacity under state law to bring the action; and 2) there was no abuse of discretion in sanctioning plaintiff on basis that he included a defendant for improper purpose, knowing that the claims against it were barred by a prior dismissal.

[06/30] US v. Morse
In proceedings arising from investigations into defendant's tax filing, grant of the government's petition to enforce IRS summons to provide testimony and produce documents to assess defendant's tax liability is affirmed where defendant's tax liability challenges were insufficient to rebut the government's prima facie case for enforcing the summons. Also, the government's request for imposing sanctions upon defendant is granted where defendant asserted frivolous arguments while previously warned against raising them.

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Uniform Commercial Code

[06/25] BRASHER'S CASCADE AUTO AUCTION v. VALLEY AUTO SALES AND LEASING
The former version of the California Uniform Commercial Code requires a merchant buyer to adhere to reasonable commercial standards to obtain the status of a buyer in the ordinary course of business for purposes of section 9307.

[05/26] PROPULSION TECHS. v. ATWOOD CORP.
An agreement to manufacture boat parts is unenforceable under the Statute of Frauds as a transaction in goods with no ascertainable quantity term, thus the claim for fraud in the inducement cannot survive.

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