Justia Civil Procedure Opinion Summaries

Plaintiff Steven Bird, an independent contractor hired to install a new checkout lane at Defendant Pruett's Food store, was injured after falling off a ladder Defendant had supplied to aid Plaintiff in completing the work. Plaintiff initiated a negligence action, seeking damages from his injuries and lost wages. Plaintiff presented his case at trial, after which Defendant demurred to Plaintiff's evidence. The trial court sustained the demurrer. Plaintiff appealed. The Oklahoma Supreme Court held that Plaintiff failed to establish that Defendant owed him a duty of care. View "Bird v. Pruett's Food, Inc." on Justia Law

EpicentRx, Inc. and several of its officers, employees, and affiliates (collectively, the defendants) challenged a trial court order denying their motion to dismiss plaintiff-shareholder EpiRx, L.P.’s (EpiRx) lawsuit on forum non conveniens grounds. The defendants sought dismissal of the case based on mandatory forum selection clauses in EpicentRx’s certificate of incorporation and bylaws, which designated the Delaware Court of Chancery as the exclusive forum to resolve shareholder disputes like the present case. The trial court declined to enforce the forum selection clauses after finding that litigants did not have a right to a civil jury trial in the Delaware Court of Chancery and, therefore, enforcement of the clauses would deprive EpiRx of its inviolate right to a jury trial in violation of California public policy. The California Court of Appeal agreed with the trial court that enforcement of the forum selection clauses in EpicentRx’s corporate documents would operate as an implied waiver of EpiRx’s right to a jury trial, thus the Court concluded the trial court properly declined to enforce the forum selection clauses at issue, and denied the defendants’ request for writ relief. View "EpicentRx, Inc. v. Super. Ct." on Justia Law

Defendant-appellee Malcolm Penney left a wedding which was held at The Springs Event Venue and proceeded to drive the wrong way down a highway. He crashed head-on into a vehicle driven by Marissa Murrow, killing her. Murrows' parents sued The Springs. They did not allege that The Springs over-served Penney. Rather, they alleged The Springs had a duty to prevent Penney from leaving, and to enforce their policies which prohibited outside alcohol from being brought onto the premises. The trial court determined that the event venue had no duty to prevent harm to third-parties such as the deceased, and it granted summary judgment to The Springs. The Oklahoma Supreme Court held that Oklahoma law did not recognize a duty on the part of a private event venue extending to third parties killed by a voluntarily intoxicated adult who attended, but was not "over-served" by the event venue. The trial court therefore did not err in denying the parents' Motion to Vacate/Modify. View "Murrow v. Penney" on Justia Law

Plaintiffs Dominick Martin and Rusty Rendon filed suit under the Unruh Civil Rights Act for disability discrimination, contending that one of Thi E-Commerce’s Web sites discriminated against the blind by being incompatible with screen reading software. Plaintiffs contended the court erred by concluding that a Web site was not a place of public accommodation under the Americans with Disabilities Act (incorporated into the Unruh Act). Although this was an issue that has split the federal courts (and California Courts of Appeal), the appellate court here concluded the ADA unambiguously applied only to physical places. Moreover, even if the Court found ambiguity and decided the issue on the basis of legislative history and public policy, it would still conclude that the ADA did not apply to Web sites. Plaintiffs alternatively contended they stated a cause of action against Thi E-Commerce on a theory of intentional discrimination. To this, the Court of Appeal concluded the allegations of the complaint did not state a claim under that theory either and affirmed the judgment. View "Martin v. THI E-Commerce, LLC" on Justia Law

A Texas citizen brought state-law claims in federal court against “Dining Alliance Inc.” Prior to the suit, however, Dining Alliance Inc. had converted into Dining Alliance LLC (“Dining Alliance”), whose citizenship may include both Texas and Delaware. This potential jurisdictional defect was not recognized because Dining Alliance originally answered under the name Dining Alliance Inc. and represented itself as a Massachusetts citizen. Dining Alliance unacceptably hid the ball with respect to the elementary jurisdictional facts during the entire course of litigation, including on appeal. The district court dismissed its third-party claims with prejudice as a sanction for that willful abuse of the judicial process.   The Fifth Circuit affirmed. The court explained that a district court may invoke its inherent power to dismiss claims with prejudice in order to protect “the integrity of the judicial process.” It must find that the litigant acted in bad faith or willfully abused the judicial process. It must also find that “lesser sanctions would not serve the best interests of justice.” The court wrote that contrary to Dining Alliance’s assertion, the district court found that Dining Alliance itself willfully abused the judicial process based on the totality of its litigation misconduct, which culminated in its refusal to obey the court’s order. That misstatement was reckless because the company’s transformation into Dining Alliance LLC should have been and apparently was known at the time. Accordingly, the court held that the district court neither lacked jurisdiction nor abused its discretion in dismissing Dining Alliance LLC’s third-party claims with prejudice as a sanction for its willful abuse of the judicial process. View "Dining Alliance v. Foodbuy" on Justia Law

The Colorado Supreme Court granted review in this case to consider whether the common law litigation privilege for party-generated publicity in pending class action litigation excluded situations in which the identities of class members were ascertainable through discovery. In 2018, two law firms, Killmer, Lane & Newman, LLP and Towards Justice (collectively, along with attorney Mari Newman of Killmer, Lane & Newman, “the attorneys”), filed on behalf of former employee and nail technician Lisa Miles and those similarly situated a federal class action lawsuit. This lawsuit named as defendants BKP, Inc.; Ella Bliss Beauty Bar LLC; Ella Bliss Beauty Bar-2, LLC; and Ella Bliss Beauty Bar-3, LLC (collectively, “the employer”), among others. The employer operated three beauty bars in the Denver metropolitan area. Pertinent here, the class action complaint alleged that the employer’s business operation was “founded on the exploitation of its workers.” The complaint alleged that the employer violated the Fair Labor Standards Act and the Colorado Wage Claim Act by not paying service technicians for hours spent performing janitorial work, electing to forgo hiring a janitorial service. The Supreme Court concluded the division erred in conditioning the applicability of the litigation privilege in pending class action litigation on whether the identities of class members were ascertainable through discovery. The Court reached this conclusion for two reasons: (1) ascertainability was generally a requirement in class action litigation, and imposing such a condition would unduly limit the privilege in this kind of case; and (2) the eventual identification of class members by way of documents obtained during discovery was not a substitute for reaching absent class members and witnesses in the beginning stages of litigation. The Court found the litigation privilege applied in this case: five allegedly defamatory statements at issue "merely repeated, summarized, or paraphrased the allegations made in the class action complaint, and which served the purpose of notifying the public, absent class members, and witnesses about the litigation, were absolutely privileged." View "Killmer, Lane & Newman v. B.K.P., Inc." on Justia Law

Defendants-appellants and cross-appellees, Gregory Holifield (“Holifield”) and GH Blue Holdings, LLC (“Blue”), appealed a Court of Chancery memorandum opinion in favor of plaintiff- appellee and cross-appellant, XRI Investment Holdings LLC (“XRI”). The issue this case presented was whether Holifield validly transferred his limited liability membership units in XRI to Blue on June 6, 2018. The resolution of that issue bore on the ultimate dispute between the parties (not at issue here) on whether XRI validly delivered to Holifield a strict foreclosure notice purporting to foreclose on the XRI membership units, or whether such notice was incorrectly delivered to him because Blue was, in fact, the owner of the units following the transfer. Following a one-day trial, the Court of Chancery determined that the transfer of the units from Holifield to Blue was invalid because it was not a permitted transfer under XRI’s limited liability company agreement, which provided that noncompliant transfers of XRI interests were “void.” The trial court, in interpreting the Delaware Supreme Court's holding in CompoSecure, L.L.C. v. CardUX, LLC, 206 A.3d 807 (Del. 2018), held that the use of the word “void” in XRI’s LLC agreement rendered the transfer incurably void, such that affirmative defenses did not apply. Despite this holding, the trial court, in dicta, further found that XRI had acquiesced in the transfer. The Delaware Supreme Court affirmed Court of Chancery’s judgment with respect to the Blue Transfer, but reversed the judgment insofar as it precluded XRI’s recovery for breach of contract damages and recoupment of legal expenses advanced to Holifield. The Court held that the trial court’s finding of acquiescence as to only one of the alleged breaches did not bar either remedy, and the Court remanded the case for the trial court to make further determinations. View "Holifield v. XRI Investment Holdings LLC" on Justia Law

The petitioners here—two motorcycle dealerships who sought to enforce restrictive covenants against a former employee under Florida law— asked the Georgia Supreme Court to reconsider the application of a public-policy exception, citing recent changes in Georgia law that required a more flexible and permissive approach to enforcing restrictive covenants. When contracting parties choose the law of a jurisdiction other than Georgia to govern their contractual relations, Georgia courts generally honored that choice unless applying the foreign law would violate Georgia's public policy. Having taken a fresh look, the Supreme Court concluded that Georgia law remained "the touchstone for determining whether a given restrictive covenant is enforceable in our courts, even where the contract says another state’s law applies." After a careful review of Georgia decisional law and statutory history in this space, the Court found the Georgia legislature has codified this view, including with the recent enactment of the Georgia Restrictive Covenants Act. In this case, the trial court accepted the parties’ choice of Florida law to govern the employment contracts at issue without first determining whether the restrictive covenants in the contracts complied with the GRCA. The Court of Appeals reversed, and in doing so, correctly identified application of the GRCA as the first step in the analysis of whether the public-policy exception overrides the parties’ choice of foreign law. But because the Supreme Court set out a clear framework for that analysis in this opinion, it left it for the trial court to apply that framework in the first instance. The Court therefore vacated the decisions below for further review by the trial court. View "Motorsports of Conyers, LLC, et al. v. Burbach" on Justia Law

The underlying case against Defendants TeamHealth—a group of private equity-owned healthcare entities—was brought under the qui tam provisions of the False Claims Act. Two former TeamHealth employees (together, the “Relators”) alleged that TeamHealth routinely billed for nonexistent doctor examinations and critical care services. The matter was unsealed in 2018 after federal and state governments declined to intervene. The Relators moved forward with their case, which survived dismissal and proceeded through extensive discovery. Movant sought to permissively intervene in this closed matter to challenge the sealing of records. The district court denied Movant’s intervention on three independent grounds.   The Fifth Circuit reversed and remanded. The court explained that although courts are afforded great discretion in deciding intervention pursuant to Federal Rule of Civil Procedure 24(b), the district court’s reasoning was premised on several significant errors. The court explained it has permitted intervention by nonparties who seek only to challenge record-related restrictions. The court concluded that Movant’s claim shares a common question of law with the district court’s decisions related to sealing records: Whether there are compelling reasons for sealing that outweigh the public’s right of access. Thus, the court reversed the district court’s determination that Movant has failed to satisfy the requirements of Rule 24(b)(1).  The court explained that it firmly holds that Movant has satisfied standing and the requirements of Rule 24(b)(1), however, it reiterated the district court’s discretion in ultimately deciding Movant’s motion. View "USA v. Team Finance" on Justia Law

The Securities and Exchange Commission (“SEC”) sued Defendant as well as other individual Defendants and corporate entities for securities violations. Defendant appealed the district court’s order appointing a receiver over all corporations and entities controlled by him. A central dispute between the parties is what test the district court should have applied before imposing a receivership. Defendant argued the district court abused its discretion because it did not apply the standard or make the proper findings under the factors set forth in Netsphere (“Netsphere factors”). The SEC responded that Netsphere is inapplicable and the district court’s findings were sufficient under First Financial.   The Fifth Circuit vacated the district court’s order appointing a receiver. The court granted in part Defendant’s motion for a partial stay pending appeal. The court explained that, as Defendant points out, the district court’s order denying the stay discussed events and actions that took place after the receivership was already in place. Accordingly, the court vacated the appointment of the receiver and remanded so that the district court may consider whether to appoint a new receivership under the Netsphere factors. The court immediately suspended the receiver’s power to sell or dispose of property belonging to receivership entities, including the power to complete sales or disposals of property already approved by the district court. The court explained that the suspension does not apply to activities in furtherance of sales or dispositions of property that have already occurred or been approved by the district court. The court clarified that “activities in furtherance” do not include the completion of the sale of any property. View "SEC v. Barton" on Justia Law