Justia Civil Procedure Opinion Summaries

An instrumentality of Iran attempted to wire nearly $10 million through an American bank, but the funds were blocked by the U.S. government under the International Emergency Economic Powers Act (IEEPA) due to Iran’s designation as a state sponsor of terrorism. Two groups of plaintiffs, each holding substantial judgments against Iran for its support of terrorist acts, sought to attach these blocked funds to satisfy their judgments. The funds had been frozen by the Office of Foreign Assets Control (OFAC) and were the subject of a pending civil-forfeiture action initiated by the United States.The United States District Court for the District of Columbia initially quashed the plaintiffs’ writs of attachment. The court reasoned, first, that the funds were not “blocked assets” as defined by the Terrorism Risk Insurance Act (TRIA) and thus were immune from attachment. Second, it held that the government’s earlier-filed civil-forfeiture action invoked the prior exclusive jurisdiction doctrine, barring any subsequent in rem proceedings against the same property. The district court also noted that the existence of the Victims of State Sponsored Terrorism Fund suggested Congress did not intend to encourage individual attachment actions.On appeal, the United States Court of Appeals for the District of Columbia Circuit reversed. The court held that the funds in question are “blocked assets” under TRIA, as they remain frozen by OFAC and are not subject to a license required by a statute other than IEEPA. The court further held that the prior exclusive jurisdiction doctrine does not bar multiple in rem proceedings filed in the same court. Accordingly, the court concluded that neither sovereign immunity nor the prior exclusive jurisdiction doctrine prevented the plaintiffs from seeking attachment of the funds and reversed the district court’s order quashing the writs of attachment. View "Estate of Levin v. Wells Fargo Bank, N.A." on Justia Law

A dispute arose after Howard Misle, acting as lender, provided funds to Abram, LLC, under a promissory note to support the company’s real estate ventures. The note, initially executed in 2004 and later amended, allowed advances up to $5 million at 3% interest. In 2007, after selling a property known as Park Place, Howard was paid sums from the sale proceeds, including a payoff for the note and reimbursement for advances. Later, Howard continued to make advances to Abram for new properties in Pennsylvania. In 2020, Howard demanded repayment on the note, and when Abram did not pay, he filed suit. Abram responded by asserting a defense of recoupment, claiming Howard had been overpaid in 2007, and also filed counterclaims for breach of fiduciary duty and fraudulent concealment.The District Court for Lancaster County granted summary judgment for Howard on the recoupment defense, finding the 2007 payment was a separate transaction from the advances Howard sought to recover. After a bench trial, the court also found that the statute of limitations barred Abram’s counterclaims, concluding that Abram’s agents had knowledge of the relevant facts and that the discovery rule did not toll the limitations period. The court adopted Howard’s calculation of interest on the note without an evidentiary hearing, overruling Abram’s objections.The Nebraska Supreme Court reviewed the case de novo. It held that Abram’s recoupment defense regarding the alleged 2007 overpayment should not have been dismissed on summary judgment, as it arose from the same transaction as Howard’s claim on the note. However, the court affirmed summary judgment for Howard on recoupment related to a personal loan to a third party. The court also found that the statute of limitations was tolled for Abram’s breach of fiduciary duty counterclaim but affirmed the dismissal of the fraudulent concealment claim. The case was affirmed in part, reversed in part, and remanded for further proceedings, including a determination of whether interest should be calculated as simple or compound. View "Konecne v. Abram, LLC" on Justia Law

In this case, Christopher C. Brown, through his company Tattooed Millionaire Entertainment (TME), owned a Memphis music studio and insured both the studio and its equipment with Hanover American Insurance Company. John Falls, a musician, leased Studio B and its equipment from Brown and also obtained insurance from Hanover for the equipment and lost business income. In 2015, the studio was damaged by arson, and both Brown and Falls submitted insurance claims. Hanover discovered Brown had forged receipts for equipment purchases and sued to recover advance payments and for a declaratory judgment of no further liability. Brown, Falls, and another lessee counter-sued for breach of contract. After a jury trial in the United States District Court for the Western District of Tennessee, Falls was awarded $2.5 million for equipment loss and $250,000 for business income, while Brown was found to have committed insurance fraud.Hanover moved to set aside the verdict under Rule 50(b), which the district court granted. On appeal, the United States Court of Appeals for the Sixth Circuit reversed, holding Hanover had forfeited its Rule 50(b) motion by failing to make a Rule 50(a) motion as to Falls, and ordered reinstatement of the jury verdict. Subsequent proceedings included a federal interpleader action and a parallel state court action between Falls and TME. The district court enjoined the state action, but the Sixth Circuit reversed the injunction.In the present appeal, the United States Court of Appeals for the Sixth Circuit affirmed the district court’s allocation of the insurance payout, holding that Hanover was precluded by res judicata from challenging Falls’s recovery on grounds that could have been raised earlier. The court found the district court’s error in interpreting the wrong lease was harmless and upheld the allocation of funds based on the value of Falls’s leasehold interest. The court also held that Tennessee public policy barred Brown from recovering his allocated share due to his insurance fraud. The district court’s judgment was affirmed. View "Hanover American Insurance Co. v. Tattooed Millionaire Entertainment" on Justia Law

Several residents of a recreational vehicle park in Oregon brought a class action lawsuit against the park’s owners and managers, alleging that the park’s utility billing practices violated the Oregon Residential Landlord Tenant Act (ORLTA). Specifically, the plaintiffs claimed that they were charged for electricity at rates higher than the actual cost and were improperly assessed meter reading fees. The plaintiffs sought to certify a class covering a ten-year period prior to the filing of the complaint, arguing that the statute of limitations should be tolled until tenants discovered or reasonably should have discovered the alleged violations.The Marion County Circuit Court agreed with the plaintiffs, holding that the one-year statute of limitations in ORS 12.125 incorporated a discovery rule. The court certified a class including tenants who paid the disputed charges during the ten years before the complaint was filed, provided they did not or should not have discovered the facts giving rise to their claims more than one year before filing. The court later granted partial summary judgment for the plaintiffs, found the defendants liable, and awarded substantial damages and attorney fees.On appeal, the Oregon Court of Appeals reversed the trial court’s class certification and related rulings, holding that ORS 12.125 does not include a discovery rule and that the one-year limitations period is not tolled by a plaintiff’s lack of knowledge of the claim. The plaintiffs sought review of this issue.The Supreme Court of the State of Oregon affirmed the Court of Appeals’ decision. The court held that ORS 12.125 does not incorporate a discovery rule; the one-year statute of limitations begins to run when the alleged violation or breach occurs, not when the plaintiff discovers it. The Supreme Court reversed the circuit court’s judgment and remanded the case for further proceedings. View "Hathaway v. B & J Property Investments, Inc." on Justia Law

A catastrophic multi-vehicle collision occurred in Westmoreland County, Pennsylvania, involving a motorcoach bus, FedEx and UPS tractor-trailers, and other vehicles. The crash resulted in five deaths and numerous injuries, requiring a large emergency response and extensive investigation. Plaintiffs, who resided in various locations across the country and abroad, filed civil lawsuits in the Philadelphia County Court of Common Pleas against several corporate defendants, all of which conduct business nationwide. The defendants sought to transfer the cases to Westmoreland County, arguing that the majority of witnesses, including first responders and investigators, were located there and would face significant hardship if required to travel over 200 miles to Philadelphia for trial.The Philadelphia County Court of Common Pleas granted the defendants’ petitions to transfer venue, finding that the burden on witnesses was substantial and that the doctrine of forum non conveniens warranted transfer. The court noted that the defendants had identified numerous witnesses whose testimony would be material and who would be significantly inconvenienced by the distance. The plaintiffs appealed, and the Superior Court of Pennsylvania reversed, holding that the defendants failed to show that the identified witnesses were “key witnesses” whose testimony was “critical” to the defense, and that the affidavits did not sufficiently detail the necessity of their testimony.The Supreme Court of Pennsylvania reviewed the case and reversed the Superior Court’s order. The Court held that the Superior Court’s imposition of a “key witness” requirement was inconsistent with Pennsylvania precedent. The Supreme Court clarified that a petitioner seeking transfer for forum non conveniens must identify the burdened witnesses and provide a general statement of their expected testimony, but need not show that their testimony is “critical” or “necessary” to the defense. The trial court’s decision to transfer the cases to Westmoreland County was found to be a proper exercise of discretion. View "Tranter v. Z&D Tour, Inc." on Justia Law

Three former employees of the District of Columbia Department of Forensic Sciences were terminated as part of a reduction in force. They appealed their terminations to the Office of Employee Appeals (OEA), which upheld the terminations in separate orders issued in August 2023. The OEA’s decisions became final in October 2023, and the employees were required to file petitions for judicial review in the Superior Court of the District of Columbia within thirty days. However, each employee filed their petition more than two months after the deadline, attributing the delay to their union counsel’s failure to file timely and seeking extensions based on excusable neglect.The Superior Court of the District of Columbia reviewed each petition. In Ms. Gilliam’s case, the court ruled that the thirty-day deadline was mandatory and could not be extended for excusable neglect. In Ms. Washington’s case, the court similarly found the deadline mandatory but also ruled, in the alternative, that she had not shown excusable neglect. In Ms. Ruiz-Reyes’s case, the court did not address whether the deadline was mandatory, instead finding that she had not established excusable neglect.The District of Columbia Court of Appeals held that the thirty-day deadline for seeking Superior Court review of OEA decisions can be extended upon a showing of excusable neglect. The court affirmed the Superior Court’s dismissal of Ms. Ruiz-Reyes’s petition, finding no abuse of discretion in the determination that she had not shown excusable neglect. However, the court vacated the dismissals of Ms. Gilliam’s and Ms. Washington’s petitions and remanded those cases for further proceedings, instructing the Superior Court to reconsider the excusable neglect issue without relying on an erroneous finding of prejudice to the agency. View "Gilliam v. D.C. Department of Forensic Sciences" on Justia Law

Katie Orndoff appeared as a witness for the prosecution in a felony domestic assault jury trial in the Circuit Court for Loudoun County. During her testimony, she repeatedly referenced the defendant’s prior arrests and incarceration, despite admonitions from the court and objections from defense counsel. The circuit court observed that Orndoff’s demeanor was unusual, including rocking in her chair and nearly falling over, and questioned her about possible substance use. Orndoff admitted to smoking marijuana earlier that day. The circuit court found her in summary contempt for “misbehavior in the presence of the court” due to voluntary intoxication, sentenced her to ten days in jail, and declared a mistrial.Orndoff appealed her contempt conviction to the Court of Appeals of Virginia. A three-judge panel reversed the circuit court’s finding, holding that the trial judge did not personally observe all essential elements of the alleged contempt and improperly relied on Orndoff’s admission rather than direct observation. The panel found that summary contempt was inappropriate and that Orndoff’s due process rights were violated. Upon rehearing en banc, the Court of Appeals was evenly divided, resulting in an affirmance of the circuit court’s judgment without opinion.The Supreme Court of Virginia reviewed the case and applied an abuse of discretion standard. It held that summary contempt requires the judge to personally observe all essential elements of the misconduct in open court. The Supreme Court found that the evidence did not establish beyond a reasonable doubt that Orndoff was voluntarily intoxicated while testifying, as the circuit court’s findings were contradicted by the record and relied on unreliable admissions. The Supreme Court reversed the judgment of the Court of Appeals, reversed the circuit court’s contempt finding, and vacated Orndoff’s conviction. View "Orndoff v. Commonwealth" on Justia Law

Plaintiffs, representing themselves and a putative class, purchased Kleenex Germ Removal Wet Wipes manufactured by Kimberly-Clark Corporation. They alleged that the product’s labeling misled consumers into believing the wipes contained germicides and would kill germs, rather than merely wiping them away with soap. Plaintiffs claimed that this misrepresentation violated several California consumer protection statutes. The wipes were sold nationwide, and the plaintiffs included both California and non-California residents.The United States District Court for the Northern District of California first dismissed the non-California plaintiffs’ claims for lack of personal jurisdiction and dismissed the remaining claims under Rule 12(b)(6), finding that the labels would not plausibly deceive a reasonable consumer. The court dismissed the Second Amended Complaint (SAC) without leave to amend, and plaintiffs appealed.On appeal, the United States Court of Appeals for the Ninth Circuit reviewed whether subject-matter jurisdiction existed under diversity jurisdiction statutes, 28 U.S.C. §§ 1332(a) and 1332(d)(2). The court found that the SAC failed to allege Kimberly-Clark’s citizenship and did not state the amount in controversy. The panel held that diversity of citizenship cannot be established by judicial notice alone and that the complaint must affirmatively allege the amount in controversy. Plaintiffs were permitted to submit a proposed Third Amended Complaint (TAC), which successfully alleged diversity of citizenship but failed to plausibly allege the required amount in controversy for either statutory basis. The court concluded that neither it nor the district court had subject-matter jurisdiction and vacated the district court’s judgment, remanding with instructions to dismiss the case without prejudice. The panel denied further leave to amend, finding that additional amendment would be futile. View "ROSENWALD V. KIMBERLY-CLARK CORPORATION" on Justia Law

Angel Lynn Realty, Inc. (ALR) entered into a partnership agreement with Real Estate Portfolio Management, LLC (REPM) to purchase, rehabilitate, and sell properties, splitting profits equally. ALR alleged that REPM breached the agreement by failing to pay over $800,000 in profits and also breached its fiduciary duties. ALR further claimed that Steve George, REPM’s sole member, was the alter ego of REPM. After REPM failed to pay the judgment, ALR conducted a debtor’s examination and asserted that postjudgment actions by George fraudulently drained REPM’s assets to avoid payment.The Superior Court of Sacramento County held a bench trial and found in favor of ALR on the breach of partnership and fiduciary duty claims, awarding nearly $1 million in damages and interest against REPM. However, the court found that ALR had not proven George was REPM’s alter ego and entered judgment accordingly. When ALR later moved to amend the judgment to add George as a judgment debtor based on alleged postjudgment fraudulent conduct, the trial court denied the motion, ruling that collateral estoppel barred relitigation of the alter ego issue since it had already been decided.The California Court of Appeal, Third Appellate District, reviewed the case and held that the trial court erred by applying collateral estoppel without considering whether new facts or changed circumstances had arisen since the prior decision. The appellate court clarified that collateral estoppel does not bar reconsideration of an issue if material facts have changed after the original judgment. The order denying ALR’s motion to amend the judgment was reversed and the case remanded for the trial court to determine whether postjudgment events warrant a different outcome on the alter ego issue. View "Angel Lynn Realty, Inc. v. George" on Justia Law

A business operating a strip club featuring nude dancing and alcohol sales entered into a settlement agreement with DeKalb County, Georgia, in 2001, which was later amended in 2007. The amended agreement granted the club non-conforming status, allowing it to continue its business model for fifteen years, with the possibility of renewal, and required annual licensing fees. In 2013, the City of Chamblee annexed the area containing the club and subsequently adopted ordinances restricting adult entertainment establishments, including bans on alcohol sales, stricter food sales requirements for alcohol licenses, and earlier closing times. The City initially issued alcohol licenses to the club but later denied renewal, citing failure to meet new requirements and the club’s status as an adult establishment.The United States District Court for the Northern District of Georgia dismissed some of the club’s claims for lack of standing and granted summary judgment to the City on the remaining claims. The district court found that the club lacked standing to challenge certain ordinances as it was not an alcohol licensee, and that the City’s ordinances regulating adult entertainment and alcohol sales were constitutional under the secondary-effects doctrine, applying intermediate scrutiny. The court also determined there was no valid contract between the club and the City, rejecting the Contract Clause claims, and found no equal protection violation, as the club failed to identify a similarly situated comparator.On appeal, the United States Court of Appeals for the Eleventh Circuit affirmed the district court’s rulings. The Eleventh Circuit held that the club lacked standing for equitable relief due to its permanent closure, but had standing for damages for a limited period. The court upheld the application of intermediate scrutiny to the ordinances, found no impairment of contract, and agreed that the club failed to establish an equal protection violation. The district court’s judgment in favor of the City was affirmed. View "WBY, Inc. v. City of Chamblee, Georgia" on Justia Law