Justia Civil Procedure Opinion Summaries

GN and Plantronics manufacture telephone headsets, selling the headsets to customers through distributors. Under the voluntary Plantronics-Only Distributor (POD) program, distributors receive incentives such as favorable credit terms, rebates, and website support in exchange for not purchasing headsets directly from other manufacturers and not marketing competitors’ products on resellers’ websites. GN sent Plantronics a demand letter and filed suit in 2012, alleging that Plantronics’ POD program constituted monopolization.Plantronics issued a litigation hold to relevant employees, provided training sessions to ensure compliance, and sent quarterly reminders requiring acknowledgment of compliance. Plantronics’ Senior Vice President of Sales, Houston, nonetheless instructed employees to delete emails that referenced Plantronics’ competitive practices or its competitors. In 2014, Plantronics’ Associate General Counsel learned of Houston’s conduct, instituted a litigation hold on Houston’s assistant, and requested back-up tapes of Houston’s email account. Plantronics engaged its discovery vendor and a leading forensics expert to try to recover Houston’s emails. Some were recovered. The spoliation, however, continued. Plantronics did not complete its recovery efforts and destroyed the back-up tapes. During depositions, Plantronics executives were evasive. GN moved for a default liability judgment in light of the spoliation.The district court found that Plantronics acted in “bad faith” with an “intent to deprive GN” but denied the motion and issued a permissive adverse inference instruction to the jury, fined Plantronics three million dollars, and ordered it to pay GN’s spoliation-related fees. GN subsequently unsuccessfully sought to present evidence of spoliation. The jury returned a verdict in favor of Plantronics. The Third Circuit reversed in part and remanded for a new trial, after upholding the denial of the motion for default judgment. The court committed reversible error when it excluded GN’s expert testimony on the scope of Plantronics’ spoliation. View "GN Netcom Inc. v. Plantronics Inc." on Justia Law

Defendant Native Wholesale Supply Company (NWS), an Indian-chartered corporation headquartered on a reservation in New York, sold over a billion contraband cigarettes to an Indian tribe in California, which then sold the cigarettes to the general public in California. The cigarettes were imported from Canada, stored at various places in the United States (not including California), and then shipped to California after they were ordered from the reservation in New York. The California Attorney General succeeded on his motion for summary judgment holding NWS liable for civil penalties in violation of two California cigarette distribution and sale laws and Business and Professions Code section 17200 (the unfair competition law), and obtained a permanent injunction precluding NWS from making future sales. The Attorney General further obtained an award of attorney fees and expert expenses. NWS appealed the judgment and the attorney fee order. Finding no reversible error, the Court of Appeal affirmed. View "California v. Native Wholesale Supply Co." on Justia Law

The Supreme Court affirmed in part the district court's denial of Defendants’ request for attorney fees and dismissed in part Defendants’ appeal from orders vacating summary judgment in favor of Defendants and overruling Defendants’ subsequent motion for summary judgment, holding that Defendants did not qualify as prevailing parties and that this Court lacked jurisdiction to review the summary judgment orders.The State brought claims against Defendants under Nebraska’s Consumer Protection Act, Neb. Rev. Sat. 59-1601 et seq., and the Uniform Deceptive Trade Practices Act, Neb. Rev. Stat. 87-301 et seq. The district court entered summary judgment in favor of Defendants and then later vacated its order of summary judgment. Defendants moved again for summary judgment, which the district court denied. After years of litigation, the State voluntarily dismissed the claims. The district court denied Defendants’ request for attorney fees, finding that the State’s voluntary dismissal did not make Defendants prevailing parties or purposes of section 59-1608(1). The Supreme Court affirmed in part and dismissed in part, holding that this Court lacked jurisdiction to review Defendants’ claim that the district court’s summary judgment orders were erroneous and that the district court did not err in denying Defendants’ motion for attorney fees. View "State ex rel. Peterson v. Creative Community Promotions, LLC" on Justia Law

In March 2015, the Boards of Penn State Hershey Medical Center and PinnacleHealth formally approved a plan to merge. They had announced the proposal a year earlier; the Commonwealth of Pennsylvania and the Federal Trade Commission (FTC) were already investigating the impact of the proposed merger. This joint probe resulted in the FTC filing an administrative complaint alleging that the merger violated Section 7 of the Clayton Act, 15 U.S.C. 18. The FTC scheduled an administrative hearing for May 2016. The Commonwealth and the FTC jointly sued Hershey and Pinnacle under Section 16 of the Clayton Act, and Section 13(b) of the FTC Act, 15 U.S.C. 53(b) seeking a preliminary injunction. In September 2016, the Third CIrcuit reversed the district court and directed it to preliminarily enjoin the merger “pending the outcome of the FTC’s administrative adjudication.” Hershey and Pinnacle terminated their Agreement. The Commonwealth then moved for attorneys’ fees and costs, asserting that it “substantially prevailed” under Section 16 of the Clayton Act. The district court denied the motion, finding the Commonwealth had not “substantially prevailed” under Section 16. The Third Circuit affirmed, reasoning that it had ordered the injunction based on Section 13(b) of the FTC Act, not Section 16 of the Clayton Act. View "Federal Trade Commission v. Penn State Hershey Medical Center" on Justia Law

Plaintiff-Appellant DTC Energy Group, Inc., sued two of its former employees, Adam Hirschfeld and Joseph Galban, as well as one of its industry competitors, Ally Consulting, LLC, for using DTC’s trade secrets to divert business from DTC to Ally. DTC moved for a preliminary injunction based on its claims for breach of contract, breach of the duty of loyalty, misappropriation of trade secrets, and unfair competition. The district court denied the motion, finding DTC had shown a probability of irreparable harm from Hirschfeld’s ongoing solicitation of DTC clients, but that DTC could not show the ongoing solicitation violated Hirschfeld’s employment agreement. After review, the Tenth Circuit determined the district court did not abuse its discretion when denying DTC's motion for a preliminary injunction, and affirmed. View "DTC Energy Group v. Hirschfeld" on Justia Law

In 2008, Standard sued, on behalf of itself and “all others similarly situated," alleging that was injured when it “purchased several items of steel tubing [at an inflated price] indirectly … for end use," claiming that eight U.S. steel producers colluded to slash output to drive up the price of steel so that plaintiffs overpaid for steel sheets, rods, and tubing. Eight years later, the plaintiffs amended their complaint, asserting that they overpaid for end-use consumer goods, including vehicles, washing machines, and refrigerators, that were manufactured by third parties using steel. The district court dismissed the suit as time-barred because it redefines “steel products” to give rise to an entirely different, and exponentially larger, universe of plaintiffs, and, in the alternative, for not plausibly pleading a causal connection between the alleged antitrust conspiracy and plaintiffs’ own injuries. The Seventh Circuit affirmed. No reasonable defendant, reading the original complaint, would have imagined that plaintiffs were actually suing over the thousands of end-use household and commercial goods manufactured by third parties—a reading so broad that it would make nearly every person in the country a potential class member. The court further noted that it was unclear how to trace the effect of an alleged overcharge on steel through the complex supply and production chains that gave rise to consumer products. View "Supreme Auto Transport, LLC v. Arcelor Mittal USA, Inc." on Justia Law

The First Circuit held that federal law requires prior FDA approval for a manufacturer of prescription eye drops to change the medication’s bottle so as to alter the amount of medication dispensed into the eye, and therefore, state law claims challenging the manufacturers’ refusal to make this change are preempted.Plaintiff sued in federal court on their own behalf and on behalf of a putative class of prescription eye solution purchasers, asserting that Defendants deliberately designed their dispensers to emit unnecessarily large drops. Plaintiffs alleged that Defendants’ practice was “unfair” under Massachusetts state law and twenty-five other states and allied claims for unjust enrichment and for “money had and received.” The district court dismissed the complaint without ruling on the merits, finding that FDA regulations preempted Plaintiffs’ suit. The First Circuit affirmed, holding (1) changing a product bottle so as to dispense a different amount of prescription eye solution is a “major change” under 21 C.F.R. 314.70(b); and (2) therefore, Plaintiffs’ state law claims were preempted. View "Gustavsen v. Alcon Laboratories, Inc." on Justia Law

This matter stemmed from a lawsuit filed by the State of Mississippi against the defendant pharmacies. The State alleged deceptive trade practices and fraudulent reporting of inflated “usual and customary” prices in the defendant’s reimbursement requests to the Mississippi Department of Medicaid. The State argued that Walgreens, CVS, and Fred’s pharmacies purposefully misrepresented these prices to obtain higher prescription drug reimbursements from the State. Finding that the circuit court was better equipped to preside over this action, the DeSoto County Chancery Court transferred the matter to the DeSoto County Circuit Court in response to the defendants’ request. Aggrieved, the State timely filed an interlocutory appeal disputing the chancellor’s decision to transfer the case. After a thorough review of the parties’ positions, the Mississippi Supreme Court found that though the chancery court properly could have retained the action, the chancellor correctly used his discretion to transfer the case, allowing the issues to proceed in front of a circuit-court jury. As a result, the Supreme Court affirmed the chancellor’s decision. View "Mississippi v. Walgreen Co." on Justia Law

Xlear, Inc. and Focus Nutrition, LLC were both in the business of selling sweeteners that used the sugar alcohol xylitol. Xlear filed a complaint raising a trade dress infringement claim under the Lanham Act, a claim under the Utah Truth in Advertising Act (UTIAA), and a claim under the common law for unfair competition. The claims all alleged that Focus Nutrition copied the packaging Xlear used for one of its sweetener products. Focus Nutrition moved to dismiss Xlear’s Lanham Act claim. At a hearing on Focus Nutrition’s motion to dismiss, the district court judge made several comments questioning the validity of Xlear’s Lanham Act claim but, ultimately, denied the motion. Following the hearing, the parties, pursuant to Federal Rule of Civil Procedure 41(a)(1)(A)(ii), stipulated to the dismissal of all claims with prejudice. Under the stipulation, the parties reserved the right to seek attorneys’ fees and Focus Nutrition exercised its right by filing a motion under Federal Rule of Civil Procedure 54 to recover its fees under the Lanham Act and the UTIAA. The district court concluded that Focus Nutrition was a prevailing party under both the Lanham Act and the UTIAA, and that Focus Nutrition was entitled to all of its requested fees. On appeal, Xlear raised five challenges to the district court’s order. The Tenth Circuit Court of Appeals reversed the district court’s award of attorneys’ fees under the Lanham Act because Focus Nutrition was not a prevailing party under federal law. As to the UTIAA, the Court vacated the district court’s award of attorneys’ fees and remanded for further proceedings to permit the district court to analyze the factors governing prevailing party status under Utah law and, if the court concluded Focus Nutrition was a prevailing party under the UTIAA, to determine what portion of the requested fees Focus Nutrition incurred in defense of the UTIAA claim and the reasonableness of the requested fees. View "Xlear v. Focus Nutrition" on Justia Law

Purchasers of vitamin C filed suit, alleging that Chinese exporters had agreed to fix the price and quantity of vitamin C exported to the U.S., in violation of the Sherman Act. The exporters unsuccessfully moved to dismiss the complaint and later sought summary judgment, arguing that Chinese law required them to fix the price and quantity of exports, shielding them from liability under U.S. antitrust law. China’s Ministry of Commerce, the authority authorized to regulate foreign trade, asserted that the alleged conspiracy was actually a pricing regime mandated by the Chinese Government. The purchasers countered that the Ministry had identified no law or regulation requiring the agreement; highlighted a publication announcing that the sellers had agreed to control the quantity and rate of exports without government intervention; and noted China’s statement to the World Trade Organization that it ended its export administration of vitamin C in 2002. The Second Circuit reversed a verdict for the purchasers, stating that federal courts are “bound to defer” to the foreign government’s construction of its own law, whenever that construction is “reasonable.” The Supreme Court vacated. A federal court determining foreign law under Federal Rule of Civil Procedure 44.1 should accord respectful consideration to a foreign government’s submission, but is not bound to accord conclusive effect to such statements. Relevant considerations include the clarity, thoroughness, and support of the foreign government's statement; its context and purpose; the transparency of the foreign legal system; the role and authority of the entity or official offering the statement; and the statement’s consistency with the foreign government’s past positions. Determination of foreign law must be treated as a question of law; courts are not limited to materials submitted by the parties, but “may consider any relevant material or source.” View "Animal Science Products, Inc. v. Hebei Welcome Pharmaceutical Co." on Justia Law