Justia Civil Procedure Opinion Summaries

PDIC’s patent allegedly covers encoding digital images in the JPEG format. PDIC licensed the patent to Adobe, promising not to sue Adobe or Adobe’s customers for claims arising “in whole or part owing to an Adobe Licensed Product.” PDIC sued Adobe customers, alleging that encoding JPEG images on the customers’ websites infringed its patent. Adobe was allowed to intervene to defend nine customers, asserting that PDIC breached its license agreement. PDIC dismissed the actions in which Adobe had intervened. Adobe unsuccessfully sought "exceptional case" attorneys’ fees, 35 U.S.C. 285, and FRCP 11 sanctions. The court concluded that it could not determine the prevailing party nor "say that PDIC’s pre-suit investigation was inadequate or that any filing was made for any improper purpose.” The court denied in part PDIC’s motion for summary judgment, finding that a reasonable juror could find "that PDIC’s infringement allegations . . . cover the use of Adobe products,” and violated the agreement; it held that Adobe could only collect fees incurred in defending its customers in suits that violated the agreement but could not recover fees incurred in the affirmative breach-of-contract suit. After failed attempts to identify "purely defense fees,” Adobe requested judgment in favor of PDIC. The court reiterated “that there are purely defensive damages that can be proven,” but entered the judgment. The Federal Circuit dismissed an appeal for lack of jurisdiction. There was no final ruling barring recovery on Adobe’s breach claim. Under New Jersey law, actual damages are not a required element of a breach of contract claim. View "Princeton Digital Image Corp. v. Office Depot Inc." on Justia Law

Oliveira is a driver for a trucking company, under an agreement that calls him an independent contractor and contains a mandatory arbitration provision. Oliveira filed a class action alleging that the company denies its drivers lawful wages. The company invoked the Federal Arbitration Act, arguing that questions regarding arbitrability should be resolved by the arbitrator. The First Circuit and Supreme Court agreed that a court should determine whether the Act's section 1 exclusion applies before ordering arbitration. A court’s authority to compel arbitration under the Act does not extend to all private contracts. Section 2 provides that the Act applies only when the agreement is “a written provision in any maritime transaction or a contract evidencing a transaction involving commerce.” Section 1 provides that “nothing” in the Act “shall apply” to “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.” The sequencing is significant. A “delegation clause,” giving the arbitrator authority to decide threshold questions of arbitrability is merely a specialized type of arbitration agreement and is enforceable under sections 3 and 4 only if it appears in a contract consistent with section 2 that does not trigger section 1’s exception. Because “contract of employment” refers to any agreement to perform work, Oliveira’s contract falls within that exception. At the time of the Act’s 1925 adoption, the phrase “contract of employment” was not a term of art; dictionaries treated “employment” as generally synonymous with “work," not requiring a formal employer-employee relationship. Congress used the term “contracts of employment” broadly. View "New Prime Inc. v. Oliveira" on Justia Law

Dennis Woolman, former president of The Clemens Coal Company, challenged a district court’s determination that Liberty Mutual Fire Insurance Company didn’t breach a duty to him by failing to procure for Clemens Coal an insurance policy with a black-lung disease endorsement. Clemens Coal operated a surface coal mine until it filed for bankruptcy in 1997. Woolman served as Clemens Coal’s last president before it went bankrupt. Federal law required Clemens Coal to maintain worker’s compensation insurance with a special endorsement covering miners’ black-lung disease benefits. Woolman didn’t personally procure insurance for Clemens Coal but instead delegated that responsibility to an outside consultant. The policy the consultant ultimately purchased for the company did not contain a black-lung-claim endorsement, and it expressly excluded coverage for federal occupational disease claims, such as those arising under the Black Lung Benefits Act (the Act). In 2012, a former Clemens Coal employee, Clayton Spencer, filed a claim with the United States Department of Labor (DOL) against Clemens Coal for benefits under the Act. After some investigation, the DOL advised Woolman that Clemens Coal was uninsured for black-lung-benefits claims as of July 25, 1997 (the last date of Spencer’s employment) and that, without such coverage, Woolman, as Clemens Coal’s president, could be held personally liable. Woolman promptly tendered the claim to Liberty Mutual for a legal defense. Liberty Mutual responded with a reservation-of-rights letter, stating that it hadn’t yet determined coverage for Spencer’s claim but that it would provide a defense during its investigation. Then in a follow-up letter, Liberty Mutual clarified that it would defend Clemens Coal as a company (not Woolman personally) and advised Woolman to retain his own counsel. Liberty Mutual eventually concluded that the insurance policy didn’t cover the black-lung claim, and sued Clemens Coal and Woolman for a declaration to that effect. In his suit, Woolman also challenged the district court’s rejection of his argument that Liberty Mutual should have been estopped from denying black-lung-disease coverage, insisting that he relied on Liberty Mutual to provide such coverage. Having considered the totality of the circumstances, the Tenth Circuit Court of Appeals concluded the district court didn’t err in declining Woolman’s extraordinary request to expand the coverages in the Liberty Mutual policy. “Liberty Mutual never represented it would procure the coverage that Woolman now seeks, and the policy itself clearly excludes such coverage. No other compelling consideration justifies rewriting the agreement— twenty years later—to Woolman’s liking.” View "Liberty Mutual Fire Insurance v. Woolman" on Justia Law

The Court of Chancery granted Defendant’s motion to dismiss this complaint alleging that Defendant breached an earnest agreement for lack of subject matter jurisdiction, holding that the complaint did not seek equitable relief and that an adequate remedy existed at law.This complaint focused on Defendant’s purported breaches of the earnest agreement that the parties entered into on the same day they entered into a stock purchase agreement. Defendant moved to dismiss the complaint for lack of subject matter jurisdiction. The Court of Chancery granted the motion, holding that Defendant’s failure to perform its obligations under the earnest agreement could be remedied with money damages, and because Plaintiff had an adequate remedy at law, the Court lacked subject matter jurisdiction over this matter. View "Quarum v. Mitchell International, Inc." on Justia Law

BankDirect and Capital make loans to finance insurance premiums. In 2010, Capital, having exhausted the line of credit, approached BankDirect, which was willing to purchase Capital's loans and pay Capital to service those loans. BankDirect had a right to purchase Capital’s business after five years. If BankDirect did not purchase Capital, either party could extend the term by notice before January 4, 2016; otherwise, the agreement would terminate on January 31, 2016. Any extension could not go beyond June 1, 2018. BankDirect exercised the option in November 2015, but Capital refused to honor it. BankDirect sued. Capital sought an injunction to require BankDirect to continue purchasing loans and paying it to service them. BankDirect continued the arrangement through May 1, 2017, when it seized several Capital accounts and stated that it would no longer buy Capital's loans. BankDirect withdrew its request for specific performance. The district court concluded that Capital was entitled to a preliminary injunction so that the purchase‐and‐service arrangement would continue pending a judgment but did not address the 2018 terminal date or other disputes; failed to enter an injunction as a separate document under Fed. R. Civ. P. 65(d)(1)(C); and did not require Capital to post a bond (Rule 65(c)). The Seventh Circuit declined to address the merits or Rules 65(c) and (d), stating that the “injunction” should have contained a terminal date: June 1, 2018, and remanded for a determination of whether damages are available. View "Bankdirect Capital Finance, Inc. v. Texas Capital Bank National LLC" on Justia Law

The Eighth Circuit affirmed the district court's grant of Medtronic's motion to remand an employment contract dispute back to state court. Applying Minnesota law, the court held that plaintiff waived his right to remove the case to federal court because the employment contract he signed contained an enforceable forum selection clause. In this case, Medtronic alleged that plaintiff failed to repay the company pursuant to the Repayment Agreement. The court held that the Employee Agreement contained a clear and unequivocal forum selection clause that unambiguously encompassed the Repayment Agreement. View "Medtronic Sofamor Danek, Inc. v. Gannon" on Justia Law

The First Circuit affirmed the order of the district court dismissing Plaintiff’s contract and tort claims for lack of personal jurisdiction, holding that the federal court in Puerto Rico lacked personal jurisdiction over Defendants.Plaintiff, a Puerto Rico tour company, brought this diversity suit in the United States District of Puerto Rico, alleging that a California youth soccer organization and related defendants breached duties that the organization owed to Plaintiff under Puerto Rico contract and tort law. The allegations centered around Defendants’ acts of first requesting that Plaintiff make an offer for a potential soccer trip to Puerto Rico for some of the organization’s teams and their families and then declining after further communications to book the tour. The district court dismissed the claims for lack of personal jurisdiction. The First Circuit affirmed, holding that the exercise of specific jurisdiction in the forum over the out-of-forum defendants did not conform to the federal constitutional test. View "PREP Tours, Inc. v. American Youth Soccer Organization" on Justia Law

Trustee Annette Besaw held a security interest in fifty shares of stock of the Champlain Bridge Marina, Inc. She acquired the interest previously held by Ernest Giroux upon his death, in her capacity as trustee of his living trust. Champlain Bridge Marina was a family business in Addison, Vermont. Ernest (defendant Bryan Giroux’s grandfather) and Raymond Giroux (defendant’s father) started it in 1987. In the beginning, grandfather and father each owned fifty of the Marina’s 100 shares. On December 30, 1998, grandfather sold his fifty shares to father in exchange for the promissory note in which father promised to pay grandfather $272,000 plus interest. The associated January 1, 1999 security agreement gave grandfather a security interest in the fifty shares of Marina stock to secure payment on the note. Trustee appealed the superior court’s ruling on summary judgment that her suit to recover collateral under a security agreement was time-barred. The central issue in this case was when the trustee’s right to sue accrued, starting the statute-of-limitations clock. The Vermont Supreme Court concluded trustee’s right to sue under the security agreement accrued in 2013 when the borrower failed to pay the balance due on the note within forty-five days of trustee’s notice of default and borrower’s right to cure. Accordingly, the suit was not time-barred; the Court reversed and remanded. View "Besaw v. Giroux" on Justia Law

The Supreme Court affirmed the judgment of the court of appeals denying Appellant’s complaint for writs of mandamus and prohibition against Richland County Court of Common Pleas Judge James DeWeese seeking to compel Judge DeWeese to enter a final, appealable order on prior rulings made by Judge James Henson, vacate several orders Judge DeWeese had entered in the underlying case, and bar Judge DeWeese from moving forward with a trial, holding that Appellant was not entitled to the relief it sought.Appellant filed a complaint for breach of contract. Judge Henson granted summary judgment in favor of Appellant as to certain defendants. The trial court then awarded Appellant attorney fees. While appeals that were ultimately dismissed for lack of a final, appealable order were pending Judge Henson retired, and the case was reassigned to Judge DeWeese. Judge DeWeese vacated the summary judgment orders and granted summary judgment for one defendant. Appellant then filed this action. The court of appeals denied relief, and the Supreme Court affirmed, holding (1) Judge DeWeese clearly exercised jurisdiction in the underlying case, and that exercise of jurisdiction was authorized; and (2) because Appellant could not show that it had clear legal right to relief, it was not entitled to a writ of mandamus. View "State ex rel. Technical Construction Specialties, Inc. v. DeWeese" on Justia Law

Husky Ventures, Inc. (“Husky”) sued B55 Investments Ltd. (“B55”) and its president, Christopher McArthur, for breach of contract and tortious interference under Oklahoma law. In response, B55 filed counterclaims against Husky. A jury reached a verdict in Husky’s favor, awarding $4 million in compensatory damages against both B55 and McArthur and $2 million in punitive damages against just McArthur; the jury also rejected the counterclaims. In further proceedings, the district court entered a permanent injunction and a declaratory judgment in Husky’s favor. After the court entered final judgment, B55 and McArthur appealed, and moved for a new trial under Federal Rule of Civil Procedure 59(a) or, in the alternative, to certify a question of state law to the Oklahoma Supreme Court. The court denied the motion in all respects. On appeal, B55 and McArthur contended the district court erred in denying their motion for a new trial and again moved to certify a question of state law to the Oklahoma Supreme Court. In addition, they appealed the permanent injunction and declaratory judgment and argue that the district court erred in refusing to grant leave to amend the counterclaims. The Tenth Circuit dismissed B55 and McArthur’s claims relating to the motion for a new trial for lack of appellate jurisdiction and denied their motion to certify the state law question as moot. The Court otherwise affirmed the district court’s judgment on the remaining issues. View "Husky Ventures v. B55 Investments" on Justia Law