Justia Civil Procedure Opinion Summaries

The City of Los Angeles contracted with PricewaterhouseCoopers (PwC) to modernize the billing system for the Department of Water and Power (LADWP). The rollout in 2013 resulted in billing errors, leading the City to sue PwC in 2015, alleging fraudulent misrepresentation. Concurrently, a class action was filed against the City by Antwon Jones, represented by attorney Jack Landskroner, for overbilling. Discovery revealed that the City’s special counsel had orchestrated the class action to settle claims favorably for the City while planning to recover costs from PwC.The Los Angeles County Superior Court found the City engaged in extensive discovery abuse to conceal its misconduct, including withholding documents and providing false testimony. The court imposed $2.5 million in monetary sanctions against the City under the Civil Discovery Act, specifically sections 2023.010 and 2023.030, which allow sanctions for discovery misuse.The California Court of Appeal reversed the sanctions, interpreting the Civil Discovery Act as not granting general authority to impose sanctions for discovery misconduct beyond specific discovery methods. The appellate court held that sections 2023.010 and 2023.030 do not independently authorize sanctions but must be read in conjunction with other provisions of the Act.The Supreme Court of California reversed the Court of Appeal’s decision, holding that the trial court did have the authority to impose monetary sanctions under sections 2023.010 and 2023.030 for the City’s pattern of discovery abuse. The Supreme Court clarified that these sections provide general authority to sanction discovery misuse, including systemic abuses not covered by specific discovery method provisions. View "City of Los Angeles v. Pricewaterhousecoopers, LLP" on Justia Law

Taxinet Corporation sued Santiago Leon, alleging various claims stemming from a joint effort to secure a government concession for a taxi-hailing app in Mexico City. The district court granted summary judgment for Leon on all claims except for a Florida-law unjust enrichment claim, which went to trial along with Leon’s counterclaims for fraudulent and negligent misrepresentation. The jury awarded Taxinet $300 million for unjust enrichment and Leon $15,000 for negligent misrepresentation. However, the district court granted Leon’s Rule 50(b) motion for judgment as a matter of law, ruling that the damages award was based on inadmissible hearsay and was speculative.The United States District Court for the Southern District of Florida initially allowed testimony regarding a $2.4 billion valuation by Goldman Sachs, which was later deemed inadmissible hearsay. The court concluded that without this evidence, there was insufficient support for the jury’s $300 million award. The court also noted that the valuation was speculative and not directly tied to the benefit conferred by Taxinet in 2015.The United States Court of Appeals for the Eleventh Circuit affirmed the district court’s Rule 50(b) order, agreeing that the valuation evidence was inadmissible hearsay and that the remaining evidence was insufficient to support the $300 million award. However, the appellate court exercised its discretion to remand for a new trial on the unjust enrichment claim. The court found that Taxinet had presented enough evidence to show that it conferred a benefit on Leon, which he accepted, and that it would be inequitable for him to retain the benefit without payment. The court also noted that Taxinet could potentially present other evidence of damages in a new trial.The appellate court affirmed the district court’s summary judgment on Taxinet’s other claims, ruling that the alleged joint venture agreement was subject to Florida’s statute of frauds, as it could not be completed within a year. Thus, any claims based on the existence of the joint venture agreement were barred. View "Taxinet Corp. v. Leon" on Justia Law

Ryan Cox filed a class action lawsuit alleging that the defendants manipulated the price of a cryptocurrency called HEX by artificially lowering its ranking on CoinMarketCap.com. The defendants include two domestic companies, a foreign company, and three individual officers of the foreign company. Cox claimed that the manipulation caused HEX to trade at lower prices, benefiting the defendants financially.The United States District Court for the District of Arizona dismissed the case for lack of personal jurisdiction, concluding that Cox needed to show the defendants had sufficient contacts with Arizona before invoking the Commodity Exchange Act's nationwide service of process provision. The court found that none of the defendants had sufficient contacts with Arizona.The United States Court of Appeals for the Ninth Circuit reviewed the case and held that the Commodity Exchange Act authorizes nationwide service of process independent of its venue requirement. The court concluded that the district court had personal jurisdiction over the U.S. defendants, CoinMarketCap and Binance.US, because they had sufficient contacts with the United States. The court also found that Cox's claims against these defendants were colorable under the Commodity Exchange Act. Therefore, the court reversed the district court's dismissal of the claims against the U.S. defendants and remanded for further proceedings.However, the Ninth Circuit affirmed the district court's dismissal of the claims against the foreign defendants, Binance Capital and its officers, due to their lack of sufficient contacts with the United States. The court vacated the dismissal "with prejudice" and remanded with instructions to dismiss the complaint against the foreign defendants without prejudice. View "COX V. COINMARKETCAP OPCO, LLC" on Justia Law

The case involves a pass-through billing scheme orchestrated by Beau Gertz, Mark Blake, SeroDynamics, and LabMed Services (collectively, the Sero Defendants). They made it appear that blood tests conducted at their Colorado lab were performed at a small hospital in Unionville, Missouri, resulting in a $26.3 million profit. The scheme involved billing Blue Cross using the hospital's provider numbers, despite the tests not being conducted there. Blue Cross paid the hospital $18,053,015 for these tests. The Sero Defendants were found liable for fraud, tortious interference with contract, civil conspiracy, and money had and received.The United States District Court for the Western District of Missouri oversaw the trial. After five days of evidence, the jury found the Sero Defendants liable and awarded Blue Cross $18,053,015 in compensatory damages and $1.9 million in punitive damages against each of the four Sero Defendants. The Sero Defendants appealed, raising multiple claims of error, including the exclusion of their lead counsel from delivering closing arguments and the admission of certain evidence.The United States Court of Appeals for the Eighth Circuit reviewed the case. The court affirmed the district court's judgments, finding no abuse of discretion in the exclusion of lead counsel from closing arguments due to repeated misconduct. The court also upheld the admission of a portion of an audit report, finding it relevant and not unfairly prejudicial. The court found sufficient evidence to support the jury's findings of fraud and tortious interference, noting that the Sero Defendants had actual knowledge of the contract between Putnam and Blue Cross and intentionally interfered with it. The court also upheld the jury's award of damages and punitive damages, finding no miscarriage of justice.In conclusion, the Eighth Circuit affirmed the district court's judgments, rejecting all of the Sero Defendants' claims of error. View "RightCHOICE Managed Care v. Labmed Services, LLC" on Justia Law

A mortgage company, Approved Mortgage Corporation, initiated two wire transfers, but the instructions for the transactions were altered by a third party. The funds were transferred to Truist Bank, which deposited the funds into an account it had previously flagged as suspicious. The funds were then withdrawn in the form of cashier’s checks. Approved Mortgage sued Truist, seeking damages in the amount of the transfers. The company asserted two claims under the Indiana Uniform Commercial Code (UCC), which governs the rights, duties, and liabilities of banks and their customers with respect to electronic funds transfers, and a common law negligence claim.The district court dismissed the UCC claims due to lack of privity between Approved Mortgage and Truist, and dismissed the negligence claim as preempted by the UCC. The court held that the UCC does not establish an independent remedy and must be read with another section of the UCC, which entitles a sender to a refund only from the bank which received its payment.On appeal, the United States Court of Appeals for the Seventh Circuit affirmed the dismissal of the UCC claims, agreeing with the lower court that the UCC does not establish an independent remedy and must be read with another section of the UCC. However, the appellate court reversed the dismissal of the negligence claim, holding that to the extent the negligence claim arises from Truist’s issuance of the cashier’s checks after Truist credited the funds to the suspicious account, the claim is not preempted by the UCC. The case was remanded to the district court for further proceedings. View "Approved Mortgage Corporation v. Truist Bank" on Justia Law

This case involves Commerzbank AG, a German bank, and U.S. Bank, N.A., an American bank. Commerzbank sued U.S. Bank, alleging that it had failed to fulfill its duties as a trustee for residential mortgage-backed securities (RMBS) that Commerzbank had purchased. The case revolved around three main issues: whether Commerzbank could bring claims related to trusts with "No Action Clauses"; whether Commerzbank's claims related to certificates held through German entities were timely; and whether Commerzbank could bring claims related to certificates it had sold to third parties.The district court had previously dismissed Commerzbank's claims related to trusts with No Action Clauses, granted judgment in favor of U.S. Bank on the timeliness of Commerzbank's claims related to the German certificates, and denied Commerzbank's claims related to the sold certificates. Commerzbank appealed these decisions.The United States Court of Appeals for the Second Circuit affirmed the district court's decisions on the timeliness of the German certificate claims and the denial of the sold certificate claims. However, it vacated the district court's dismissal of Commerzbank's claims related to trusts with No Action Clauses and remanded the case for further proceedings. The court found that Commerzbank's failure to make pre-suit demands on parties other than trustees could be excused in certain circumstances where these parties are sufficiently conflicted. View "Commerzbank AG v. U.S. Bank, N.A." on Justia Law

The case revolves around a dispute between Private Jet Services Group, LLC (PJS), a private aircraft booking agent, and Tauck, Inc., a provider of domestic and international guided tours. The parties had entered into an "Air Charter Services Blanket Purchase Agreement" (BPA) in January 2018, which established the terms under which Tauck would book and pay for air transportation for the New Zealand portion of its Australia and New Zealand tours. In May 2018, they executed a Statement of Work (SOW) that required Tauck to guarantee a minimum of fifty tours per year and to pay PJS an agreed-upon sum for each "missed" tour. The SOW also included a force majeure clause that protected PJS from delays, losses, or damages caused in whole or in part by force majeure events, including epidemics and acts of civil or military authority.The dispute arose when the COVID-19 pandemic prevented Tauck from conducting tours in New Zealand. After Tauck cancelled its remaining 2020 tours, PJS sued Tauck in the New Hampshire federal court alleging a breach of contract. Tauck responded by invoking the doctrines of impossibility and frustration of purpose to excuse performance of its obligations under the contracts. Both parties moved for summary judgment on the count relating to the 2020 tour season, which the district court denied without prejudice. The district court then certified a question to the Supreme Court of New Hampshire regarding the interpretation of the force majeure clause and its impact on the common law defenses of impossibility, impracticability, and frustration of commercial purpose.The Supreme Court of New Hampshire held that the common law contract defenses of impossibility, impracticability, and frustration of commercial purpose are so fundamentally related to contract formation and purpose that they remain viable unless expressly waived. Therefore, a force majeure clause that protects only one party to a contract should not be deemed, in and of itself, a relinquishment of the other party’s right to interpose those common law defenses. The case was remanded back to the lower court for further proceedings. View "Private Jet Services Group, LLC v. Tauck, Inc." on Justia Law

FedEx Ground Package Systems, Inc. (FXG) filed a lawsuit against Route Consultant, Inc., alleging that the latter company had made nine false or misleading statements about FXG's business practices. FXG contended that these statements were intended to foster discontent between FXG and its contractors, thereby damaging FXG and benefiting Route Consultant. The suit was brought under both the Lanham Act's false advertising provision and the Tennessee Consumer Protection Act's statutory disparagement provision.The United States Court of Appeals for the Sixth Circuit confirmed the lower court's decision to dismiss the case. The court found that FXG had failed to plausibly allege that Route Consultant made a single false or misleading statement. The court emphasized that only statements of fact--not opinions, puffery, or rhetorical hyperbole--are actionable under the false advertising provision of the Lanham Act. Moreover, a plaintiff must plead and prove the literal falsity of the defendant's statement or demonstrate that the statement is misleading. FXG's complaint did not meet these standards.The court also held that FXG's claim under the Tennessee Consumer Protection Act failed for the same reasons as its Lanham Act claim. Thus, the court affirmed the district court's dismissal of FXG's lawsuit against Route Consultant. View "FedEx Ground Package Systems, Inc. v. Route Consultant, Inc." on Justia Law

In 2014, plaintiffs Medallion Film LLC and Pelican Point Capital Partners entered into a consulting fee agreement with Clarius Capital Group, managed by William Sadleir. The agreement stipulated that Medallion Film and Pelican Point would assist Clarius in obtaining funding for film projects, and Clarius would pay them a portion of any funding obtained. However, it is alleged that Sadleir dissolved Clarius and its affiliate and subsidiary entities in 2015 and formed a new set of corporate entities under the name Aviron with the assistance of the law firm Loeb & Loeb.The plaintiffs allege that Sadleir controlled both the Clarius and Aviron entities and transferred Clarius’s assets to the Aviron entities. Aviron later obtained a loan for its film projects from BlackRock, which Medallion Film and Pelican Point claim they were entitled to a portion of under their agreement with Clarius. However, Sadleir denied any affiliation between Aviron and Clarius and said he was solely an employee of Aviron.The plaintiffs sued Loeb & Loeb in December 2021, alleging causes of action for fraudulent misrepresentation, deceit by concealment, negligent misrepresentation, aiding and abetting fraud, and violating California Business and Professions Code section 17200. Loeb & Loeb filed a special motion to strike the first amended complaint as a strategic lawsuit against public participation under section 425.16. The trial court granted the special motion to strike.However, the Court of Appeal of the State of California Second Appellate District Division Eight vacated the judgment, reversed the order granting the special motion to strike, and remanded with directions to enter a new order denying the motion. View "Medallion Film LLC v. Loeb & Loeb LLP" on Justia Law

The Supreme Court of North Carolina was required to decide whether a trial court can refuse to hear oral testimony during a summary judgment hearing on the mistaken belief that the North Carolina Rules of Civil Procedure prohibit the receipt of such testimony. The plaintiff, a corporation, had sued the defendants for breach of a commercial lease, and the defendants counterclaimed for fraud. During the summary judgment hearing, the trial court declined a request by the defendants to introduce live testimony, asserting that it was not permitted during a summary judgment hearing. The defendants appealed, and the Court of Appeals vacated the trial court's summary judgment order and remanded the case, leading to this appeal.The Supreme Court of North Carolina held that a trial court errs if it fails to exercise its discretion under the misapprehension that it has no such discretion, referring to Rule 43(e) of the North Carolina Rules of Civil Procedure that allows for the introduction of live oral testimony during a summary judgment hearing at the discretion of the trial court. The court found that the trial court was mistaken in its belief that it could not allow oral testimony, and this error warranted vacatur and remand for reconsideration. The Supreme Court thereby modified and affirmed the decision of the Court of Appeals to vacate the trial court's summary judgment order and remand the case. View "D.V. Shah Corp. v. VroomBrands, LLC" on Justia Law