Justia Civil Procedure Opinion Summaries

After plaintiffs were unable to collect on a $55 million judgment against Dynex Commercial, Inc., plaintiffs filed a lawsuit against Dynex Commercial, Inc. and Dynex Capital, Inc., alleging fraudulent-transfer and alter-ego claims.The Fifth Circuit affirmed the district court's dismissal of plaintiffs' second amended complaint with prejudice based on the grounds that the fraudulent transfer claim is time-barred and the alter ego claim is barred by res judicata. In this case, plaintiffs knew of or reasonably could have discovered the transfers at least by February 2004, if not earlier, and plaintiffs reasonably could have discovered the allegedly fraudulent nature long before April 2016. Furthermore, plaintiffs' failure to raise an alter-ego claim against Dynex Capital during the state-court litigation does not mean that they can raise such a claim now. The court also stated that the district court appropriately used judicial notice of the Form 10-K and state court record. View "Basic Capital Management, Inc., v. Dynex Capital, Inc." on Justia Law

Defendant the City of Tulsa (City), passed an ordinance creating a tourism improvement district that encompassed all properties within City which had hotels or motels with 110 or more rooms available for occupancy. Plaintiff-appellee Toch, LLC owned Aloft Downtown Tulsa (Aloft) with 180 rooms. Toch petitioned for a declaratory judgment that the ordinance was invalid for a variety of reasons, including that the district did not include all hotels with at least 50 rooms available. The court granted summary judgment to Toch based on its determination that City exceeded the authority granted in title 11, section 39-103.1. The question before Oklahoma Supreme Court was whether section 39-103.1 granted authority to municipalities to limit a tourism improvement district to a minimum room-count of a number larger than 50. To this, the Court answered in the affirmative, reversed the trial court, and remanded for further proceedings. View "Toch, LLC v. City of Tulsa" on Justia Law

Dr. My Tran and Dr. Ian Murray were dentists who owned a dental practice known as Bird Rock Dental. Dr. Murray worked at the practice and Dr. Tran handled the business operations through his own separate entity. About two years after they formed the practice, they had financial disputes. In the midst of these disputes, Dr. Tran accused Dr. Murray of substandard work and published his claims to several individuals and groups, mainly to people working for Dr. Tran, but also to Dr. Murray’s new employer and to one retired dentist. Both parties sued the other, and the lawsuits were consolidated. Dr. Murray’s second amended complaint asserted 22 causes of action, two of which were at issue in this appeal: defamation per se and defamation. Dr. Tran moved to dismiss the causes of action under the anti-SLAPP statute. The trial court found the defamation claims were governed by this statute, and Dr. Murray did not meet his burden to show a probability of prevailing. The court thus struck the two causes of action from the complaint. Dr. Murray appealed. After review, the Court of Appeal reversed in part. The Court found Dr. Murray alleged five separate defamation claims for purposes of anti-SLAPP analysis, and Dr. Tran met his burden to show only one of those claims alleged speech protected under the anti-SLAPP statute: the alleged defamatory statements to Dr. Murray’s new employer. As to that claim, Dr. Murray did not meet his burden to show a probability of prevailing because he did not present evidence that Dr. Tran in fact made these statements. The Court determined the alleged statements in four of the five asserted categories of defamatory statements were not made in connection with a public conversation or discussion of issues, and thus not protected by the anti-SLAPP statute. The trial court was instructed to vacate its order granting the anti-SLAPP motion and to issue another order denying the motion on all defamatory claims, except for claims listed in paragraphs 319 and 335 of Dr. Murray's second amended complaint. View "Murray v. Tran" on Justia Law

Plaintiffs' second amended complaint alleged derivative causes of action on behalf of ALI against AIG for conspiracy to commit fraud, fraud by concealment, breach of fiduciary duty, declaratory relief, conversion, and accounting.The Court of Appeal affirmed the trial court's order of dismissal entered as to the AIG defendants after the trial court sustained without leave to amend the AIG defendants' demurrer to plaintiffs' second amended complaint. The court held that, although plaintiffs' appeal is timely, their derivative claims are barred by the compulsory cross-complaint rule under Code of Civil Procedure section 426.30, subdivision (a). In this case, ALI may not assert against AIG the related causes of action not pleaded in the AIG v. Mahdavi action. Because ALI is barred from asserting the related causes of action against AIG, so are plaintiffs. The court explained that, because plaintiffs stand in the shoes of ALI in seeking redress for ALI's injuries, they are generally subject to the procedural rules that would apply to ALI as plaintiff in a direct action. The court stated that it would be inequitable to AIG to allow plaintiffs to assert claims ALI failed to assert by compulsory cross-complaint in the earlier-filed action, subjecting AIG to the precise piecemeal litigation section 426.30 was designed to prevent. View "Heshejin v. Rostami" on Justia Law

Plaintiff Mentis Sciences, Inc. appealed a superior court order dismissing its claims for damages representing the cost of recreating lost data and lost business and negligence against defendant Pittsburgh Networks, LLC. Plaintiff was an engineering firm that, among other things, designed, developed, and tested advanced composite materials for United States Department of Defense customers. Since entering this sector in 1996, plaintiff acquired “a vast amount of valuable data that was utilized in its operations.” In 2010, the defendant began providing the plaintiff with technological support or “IT” services. In August 2014, defendant notified plaintiff that a drive in one of its servers had failed and would need to be replaced; a controller malfunctioned, causing the corruption of some of plaintiff’s data. Defendant attempted to recover the corrupted data; however, the data was permanently lost because defendant had failed to properly back it up. Plaintiff filed suit against defendant, alleging breach of contract and negligence. In its complaint, plaintiff alleged that the lost data “represents valuable intellectual property compiled over many years and is of daily critical use in [the plaintiff’s] business.” Further, plaintiff alleged that, as a result of the data loss, it was required to conduct “massively expensive” testing in order to recreate the data and that, without the lost data, it was “unable to bid or participate in various projects worth potentially millions of dollars.” Plaintiff argued on appeal of the dismissal of its suit that the trial court erred by: (1) concluding that the damages representing the cost of recreating lost data and lost business were consequential; (2) concluding that the limitation of liability clause in the parties’ contract is enforceable; and (3) dismissing its claim for negligence. The New Hampshire Supreme Court affirmed because the damages sought by plaintiff were consequential and the limitation of liability clause in the parties' contract precluded plaintiff from recovering consequential damages. The Court also concluded the economic loss doctrine barred plaintiff’s negligence claim. View "Mentis Sciences, Inc. v. Pittsburgh Networks, LLC" on Justia Law

California’s automatic renewal law, Bus. & Prof. Code 17600, requires a consumer’s affirmative consent to any subscription agreement automatically renewed for a new term when the initial term ends and requires “clear and conspicuous” disclosure of the offer terms, and an “easy-to-use mechanism for cancellation.” Mayron sued Google on behalf of a putative class, alleging that Google’s subscription data storage plan violates the automatic renewal law: “Google Drive” allows users (those registered for a Google account) to remotely store electronic data that can be accessed from any computer, smartphone, or similar device. There is no charge for 15 gigabytes of storage capacity. For a $1.99 monthly fee, users can upgrade to 100 gigabytes of storage. Plaintiff alleged Google did not provide the required clear and conspicuous disclosures nor obtain his affirmative consent to commence a recurring monthly subscription agreement and did not adequately explain how to cancel, and alleged unfair competition, Bus. & Prof. Code 17200.The court of appeal affirmed the dismissal of the complaint. There is no private right of action for violation of the automatic renewal law and, because Mayron has not alleged an injury caused by Google’s conduct, he has no standing to sue under the unfair competition statute. View "Mayron v. Google LLC" on Justia Law

Windsor I, LLC appealed a superior court's decision to grant defendants' CWCapital Asset Management LLC (“CWCAM”) and U.S. Bank National Association (“U.S. Bank”) motion to dismiss. Windsor owned a 48,000 square foot commercial property and building encumbered by debt eventually held by U.S. Bank. In 2015, after learning that the Property’s sole tenant intended to vacate, Windsor sought special servicing to refinance the debt. After nearly two years of negotiation and litigation, CWCAM, the special servicer, offered to sell the loan to Windsor in a proposed transaction for $5,288,000, subject to credit committee approval. The credit committee, however, rejected the transaction, and Defendants filed a foreclosure action against Windsor in 2017. Defendants thereafter held an online auction to sell the loan. A Windsor representative participated in the auction. After the auction, Defendants sold the loan to a third party, WM Capital Partners 66 LLC (“WM Capital”), and Windsor ultimately paid $7.4 million to WM Capital in full satisfaction of the loan. In its action seeking relief based upon quasi-contractual theories of promissory estoppel and unjust enrichment, Windsor alleged that but for the credit committee’s arbitrary rejection of the proposed transaction, Windsor would have purchased the note and loan nearly a year earlier for over $2,112,000 less than it paid to WM Capital. The Superior Court ultimately held that Windsor failed to state claims for promissory estoppel and unjust enrichment, and that the claims were barred because Windsor’s representative had agreed to a general release as part of an auction bidding process. Finding no reversible error, the Delaware Supreme Court affirmed dismissal. View "Windsor I, LLC v. CWCapital Asset Mgmt, LLC" on Justia Law

Two doctors and a former pharmaceutical sales representative formed a partnership, JKJ, to sue several pharmaceutical companies as a qui tam relator under the False Claims Act with respect to the marketing of the anti-clotting drug, Plavix. When one of them left the partnership and was replaced, that change amounted to forming a new partnership. The defendant’s moved to dismiss because the Act’s first-to-file bar stops a new “person” from “interven[ing] or bring[ing] a related action based on the [same] facts,” 31 U.S.C. 3730(b)(5).The Third Circuit vacated the dismissal, after noting responses by the Delaware Supreme Court to certified questions indicating that the two partnerships were distinct. The verb “intervene” means to inject oneself between two existing parties, as under Federal Rule of Civil Procedure 24. The new partnership did not do that but instead came in as the relator. The district court ruling was based mainly on a dictum from a Supreme Court case on a very different issue and never considered the issue here. The Act’s plain text bars only intervention or bringing a related suit. View "In Re: Plavix Marketing, Sales Practices and Products Liability Litigation" on Justia Law

Plaintiffs Cheryl Thurston and Luis Licea (collectively Thurston) were California residents who purchased items from defendant Fairfield Collectibles of Georgia, LLC (Fairfield), a Georgia limited liability company, through the company's website. Thurston alleged Fairfield’s website was not fully accessible by the blind and the visually impaired, in violation of the Unruh Civil Rights Act. The trial court granted Fairfield’s motion to quash service of summons, ruling that California could not obtain personal jurisdiction over Fairfield, because Fairfield did not have sufficient minimum contacts with California. The Court of Appeal reversed, finding the evidence showed that Fairfield made some eight to ten percent of its sales to Californians. "Hence, its website is the equivalent of a physical store in California. Moreover, this case arises out of the operation of that website." The trial court therefore could properly exercise personal jurisdiction over Fairfield. View "Thurston v. Fairfield Collectibles of Georgia, LLC" on Justia Law

After Buyers purchased two care facilities from Sellers, Buyers filed suit alleging that Sellers made fraudulent or, at best, negligent misrepresentations in the parties' sale agreements. Buyers also brought claims against Sellers' representatives in their individual capacities.The Fifth Circuit affirmed the district court's dismissal of Buyers' claims with prejudice for failure to state a claim. The court held that the district court properly dismissed Buyers' non-fraud claims for negligent misrepresentation and breach of contractual representations and warranties because these claims were subject to arbitration. In regard to the remaining claims, the court held that Buyers have not adequately pleaded a misrepresentation with respect to both facilities and thus they failed to meet the particularity requirements of Federal Rule of Civil Procedure 9(b). Therefore, because there was no misrepresentation, there was no fraud. View "Colonial Oaks Assisted Living Lafayette, LLC v. Hannie Development, Inc." on Justia Law