Justia Civil Procedure Opinion Summaries

Several senior financial advisors resigned from a national investment advisory firm’s Des Moines branch to join a competitor that was opening a new local office. After their departure, nearly all remaining advisors at the branch also resigned en masse and joined the competitor, which offered substantial incentives. The resignations occurred despite restrictive covenants in the former advisors’ employment contracts, which limited their ability to solicit clients, disclose confidential information, and recruit other employees. The competitor and the departing advisors soon began servicing many of their former clients, resulting in a substantial loss of business for their previous employer.Following these events, the original firm filed suit in the United States District Court for the Southern District of Iowa, alleging breach of contract, tortious interference, and theft of trade secrets. The district court initially denied a temporary restraining order but later granted a broad preliminary injunction. This injunction prohibited the former advisors from servicing or soliciting covered clients, using confidential information, or recruiting employees, and it barred the competitor from using confidential information or interfering with employment agreements. The defendants sought a stay but were denied by both the district court and the appellate court.On appeal, the United States Court of Appeals for the Eighth Circuit reviewed the preliminary injunction. The appellate court determined that the record did not show a likelihood of irreparable harm that could not be compensated by money damages, as required for preliminary injunctive relief. The court found that the alleged financial harms were calculable and that the claimed destruction of the Des Moines branch had already occurred, rendering injunctive relief ineffective for preventing future harm. The Eighth Circuit therefore vacated the preliminary injunction and remanded the case for further proceedings. View "Choreo, LLC v. Lors" on Justia Law

Two competing software companies specializing in business process management platforms were embroiled in a dispute after one company's employee, acting as a covert consultant, obtained confidential information about the other’s products. The employee, who had access through a third-party government contractor, provided the competitor with detailed tutorials, internal documentation, and live presentations designed to help the competitor improve its own offerings and target the rival’s weaknesses in sales efforts. The information was disseminated within the competitor’s organization and used both to inform product development and to shape competitive strategy. The aggrieved company discovered the espionage years later when the consultant’s handler joined its staff and disclosed the conduct. The company then pursued claims for trade secret misappropriation under the Virginia Uniform Trade Secrets Act, among other causes.The Circuit Court for Fairfax County oversaw a lengthy trial and issued several key evidentiary and instructional rulings: it excluded evidence about the number of users who had access to the alleged trade secrets, limited the competitor’s damages defense based on a discovery response, prohibited the competitor from authenticating certain software versions except on a specified laptop, and issued a damages instruction that shifted the burden of proof to the competitor. The jury found for the plaintiff and awarded substantial damages. The Court of Appeals of Virginia affirmed the jury’s finding of misappropriation but reversed the judgment, holding that the circuit court committed multiple errors in its evidentiary rulings and jury instructions, and remanded for a new trial on the trade secret claims.On further appeal, the Supreme Court of Virginia affirmed the Court of Appeals’ judgment. It held that the circuit court erred by shifting the burden of proof for damages to the defendant, by limiting the defendant’s damages evidence, by precluding authentication of software exhibits, and by instructing the jury that the number of people with access to the trade secrets was irrelevant. The Supreme Court ordered a remand for further proceedings consistent with its opinion. View "Appian Corporation v. Pegasystems" on Justia Law

A South Korean entertainment company that owns trademarks for the popular “Baby Shark” song and related products brought a lawsuit in the United States District Court for the Southern District of New York against dozens of China-based businesses. The company alleged these businesses manufactured or sold counterfeit Baby Shark merchandise, violating trademark, copyright, and unfair competition laws. Seeking to stop the alleged counterfeiting, the company obtained temporary and preliminary injunctions and moved to serve the defendants by email, arguing that this method was appropriate under Federal Rule of Civil Procedure 4(f)(3).After the plaintiff served process by email, most defendants did not respond, leading to default judgments against many of them. However, two defendants appeared and challenged the court’s jurisdiction, arguing that service by email violated the Hague Service Convention, to which both the United States and China are parties. The district court agreed, finding that the Convention did not permit service by email on parties in China, and dismissed the claims against these defendants without prejudice for improper service. The plaintiff appealed to the United States Court of Appeals for the Second Circuit.The United States Court of Appeals for the Second Circuit affirmed the district court’s decision. The appellate court held that the Hague Service Convention does not allow email service on defendants located in China, as China has expressly objected to alternative methods such as those in Article 10 of the Convention. The court further held that neither Federal Rule of Civil Procedure 4(f)(2) nor any purported emergency exception permitted email service in these circumstances. The court also upheld the denial of a default judgment, finding no abuse of discretion. Accordingly, the dismissal of the claims against the two China-based defendants for lack of proper service was affirmed. View "Smart Study Co., LTD v. Shenzhenshixindajixieyouxiangongsi" on Justia Law

Micron Technology and its subsidiaries, along with the State of Idaho, were sued for patent infringement by Katana Silicon Technologies in the United States District Court for the Western District of Texas. The patents at issue related to technology for shrinking semiconductor devices and had expired. In response, Micron asserted a counterclaim under the Idaho Bad Faith Assertions of Patent Infringement Act, alleging that Katana had made bad faith assertions of patent infringement. Katana moved to dismiss the counterclaim, arguing that the Idaho Act was preempted by federal patent law. The case was transferred to the United States District Court for the District of Idaho, where the State of Idaho intervened to defend the statute. Separately, Micron filed suit in Idaho state court against Longhorn IP, alleging similar bad faith assertions and seeking the imposition of a bond. Longhorn removed that case to federal court and also moved to dismiss on preemption grounds.The United States District Court for the District of Idaho denied both motions to dismiss, holding that federal law did not preempt the Idaho statute. The court also imposed an $8 million bond on Longhorn and Katana pursuant to the Act, finding that there was a reasonable likelihood that a bad faith assertion of patent infringement had occurred. Katana and Longhorn appealed these decisions to the United States Court of Appeals for the Federal Circuit.The United States Court of Appeals for the Federal Circuit dismissed the appeal for lack of jurisdiction. The appellate court determined that there was no final judgment from the district court, as the only decisions made were the denial of motions to dismiss and the imposition of a bond, neither of which ended the litigation on the merits. The Federal Circuit also found that none of the exceptions for interlocutory appellate review applied, including those for injunctions, the collateral order doctrine, or mandamus, nor was pendent jurisdiction appropriate. View "Micron Technology, Inc. v. Longhorn IP LLC" on Justia Law

A dispute arose from the design and installation of cabinetry in a luxury home in Charleston, South Carolina. Design Gaps, Inc., owned by David and Eva Glover, had a longstanding business relationship with Shelter, LLC, a general contractor operated by Ryan and Jenny Butler. After being dissatisfied with Design Gaps’ performance, the homeowners, Dr. Jason and Kacie Highsmith, and Shelter terminated their contract with Design Gaps and hired Distinctive Design & Construction LLC, owned by Bryan and Wendy Reiss, to complete the work. The Highsmiths and Shelter initiated arbitration against Design Gaps, which led to the arbitrator ruling in favor of the homeowners and Shelter on their claims, and against Design Gaps on its counterclaims, including those for copyright infringement, tortious interference, and unfair trade practices.After the arbitration, Design Gaps sought to vacate the arbitration award in the United States District Court for the District of South Carolina, but the court instead confirmed the award. Concurrently, Design Gaps filed a separate federal lawsuit against several parties, including some who were not part of the arbitration. The defendants moved to dismiss, arguing that res judicata and collateral estoppel barred the new claims, or alternatively, that the claims failed on other grounds such as the statute of limitations and laches. The district court agreed, dismissing most claims based on preclusion or other legal bars, and granted summary judgment on the remaining claims.The United States Court of Appeals for the Fourth Circuit reviewed the district court’s decisions. The court held that res judicata and collateral estoppel applied to bar most of Design Gaps’ claims, even against parties not directly involved in the arbitration but in privity with those who were. For the remaining claims, the court found they were properly dismissed on grounds such as the statute of limitations, waiver, or laches. The Fourth Circuit affirmed the district court’s judgment in full. View "Design Gaps, Inc. v. Distinctive Design & Construction LLC" on Justia Law

EscapeX IP, LLC brought a patent infringement suit against Google LLC, alleging that Google’s YouTube Music product infringed its ’113 patent. After Google responded, pointing out factual deficiencies in EscapeX’s claims and highlighting that the accused features either did not exist or predated the patent, EscapeX amended its complaint to target a different Google product. Google repeatedly notified EscapeX that its claims were baseless and requested dismissal, but EscapeX did not respond. The case was transferred from the Western District of Texas to the Northern District of California. Meanwhile, a separate court found all claims of the ’113 patent ineligible under 35 U.S.C. § 101, which EscapeX did not appeal.Upon transfer, EscapeX attempted to file a joint stipulation of dismissal without Google’s consent, misstating that both parties would bear their own fees. Google demanded withdrawal, and a corrected stipulation was later filed. Google moved for attorneys’ fees under 35 U.S.C. § 285, arguing EscapeX’s claims were frivolous and that EscapeX had unreasonably prolonged litigation. The United States District Court for the Northern District of California found Google to be the prevailing party, determined EscapeX’s case was exceptional due to its lack of adequate pre-suit investigation and frivolous claims, and awarded Google attorneys’ fees and costs. EscapeX then moved to amend the judgment under Rule 59(e), presenting new declarations as “new evidence,” but the district court denied the motion, finding the evidence was not newly discovered.Google sought additional attorneys’ fees under 28 U.S.C. § 1927 for costs incurred opposing EscapeX’s Rule 59(e) motion. The district court found EscapeX’s motion frivolous and sanctioned EscapeX and its attorneys jointly and severally. On appeal, the United States Court of Appeals for the Federal Circuit affirmed all of the district court’s orders. The main holdings were that the case was exceptional under § 285, supporting an award of attorneys’ fees, and that sanctions under § 1927 for frivolous litigation conduct were appropriate. View "ESCAPEX IP, LLC v. GOOGLE LLC " on Justia Law

After separating from his wife Monique in 2016, Brett, a sculptor, was ordered in a dissolution proceeding to pay spousal and child support. Brett accumulated approximately $2 million in unpaid support obligations and, according to his own testimony, held no assets apart from a copyright in certain works associated with Michael Jackson. Monique moved to have a receiver appointed and to compel Brett to assign the copyright to the receiver for purposes of monetization to satisfy the outstanding support debt.The Superior Court of Los Angeles County granted Monique’s request, appointing a receiver and ordering Brett to assign his copyright to that receiver. Brett did not dispute his debt or the fact that his copyright was his only asset but argued that existing law did not authorize courts to compel the assignment of a copyright, contending that such authority existed only for patents. He timely appealed from this order.The California Court of Appeal, Second Appellate District, Division One, reviewed the case. The court held that, under Code of Civil Procedure section 695.010, subdivision (a), all property of a judgment debtor, including copyrights, is subject to enforcement of a money judgment unless a specific exception applies. The court found no exception for copyrights. It further reasoned that although no published California case had previously addressed forced assignment of copyrights, statutes and past cases regarding other intellectual property, such as patents, supported the trial court’s authority. The court also found persuasive support in analogous federal and out-of-state decisions. Consequently, the Court of Appeal affirmed the trial court’s order compelling Brett to assign his copyright to the receiver and denied Monique’s request for appellate sanctions. Respondent was awarded costs on appeal. View "In re Marriage of Strong" on Justia Law

The dispute centers on allegations by a manufacturer of semiconductor wafers that it developed a novel porous silicon technology in 2018 and entered into a non-disclosure agreement with a group of semiconductor companies and their executives. The parties discussed a potential collaboration, during which the manufacturer claims it disclosed proprietary trade secrets. While negotiations were ongoing, the semiconductor companies filed a series of patent applications, which the manufacturer alleges incorporated its confidential technology without crediting its inventors. The negotiations ultimately failed, and the manufacturer was not included as an inventor on any of the resulting patents.The manufacturer filed suit in the United States District Court for the Central District of California, asserting federal claims for trade secret misappropriation and correction of inventorship, as well as several California state law claims, including trade secret misappropriation and interference with economic advantage. The defendants moved to dismiss and also filed a special motion to strike the state law claims under California’s anti-SLAPP statute, which is designed to quickly dismiss lawsuits targeting protected speech or petitioning activity. The district court granted in part and denied in part the motion to dismiss, and denied the anti-SLAPP motion to strike. The defendants appealed the denial of the anti-SLAPP motion.The United States Court of Appeals for the Federal Circuit held that the denial of a California anti-SLAPP motion to strike is immediately appealable under the collateral order doctrine as a matter of Federal Circuit law. The court found that the district court erred by conflating the two steps of the anti-SLAPP analysis, improperly considering the merits of the trade secret claims at the first step. The Federal Circuit vacated the district court’s denial of the motion to strike and remanded for further proceedings consistent with its opinion. View "IQE PLC v. NEWPORT FAB, LLC " on Justia Law

Several physicians who were employed by an anesthesia practice left their positions and became employees of a hospital with which their former practice had a service contract. The physicians had previously sold their ownership interests in the practice to another entity, and their employment contracts contained restrictive covenants, including non-compete and non-solicitation provisions. After the hospital indicated it might not renew its contract with the practice, the physicians and hospital administrators began discussing future employment arrangements, retaining legal counsel and entering into a common interest agreement. The hospital ultimately sent notice of nonrenewal, and the physicians resigned and signed employment contracts with the hospital. The anesthesia practice and its parent company sued the physicians and the hospital, alleging breach of contract, tortious interference, misappropriation of trade secrets, breach of fiduciary duty, and civil conspiracy. The hospital also sued the practice, seeking to bar enforcement of the restrictive covenants.The Hillsborough County Superior Court (Northern District) issued several orders during discovery, compelling the hospital and physician defendants to disclose certain communications they claimed were protected by attorney-client privilege and the common interest doctrine, and ordering their counsel to sit for depositions. The court found that the crime-fraud exception to privilege applied to alleged breaches of fiduciary duty and tortious interference, and limited the application of the common interest doctrine to communications after litigation was pending. It also ordered disclosure of some privileged communications under a theory of necessity.On interlocutory appeal, the Supreme Court of New Hampshire held that the crime-fraud exception to attorney-client privilege does not apply to claims of breach of fiduciary duty or tortious interference with contractual relations. The court affirmed the trial court’s ruling that the common interest doctrine did not apply until litigation was pending, but vacated the orders permitting depositions of counsel and requiring disclosure of privileged communications under a necessity theory, remanding those issues for further proceedings. The disposition was affirmed in part, reversed in part, vacated in part, and remanded. View "Atl. Anesthesia, P.A. v. Lehrer" on Justia Law

A patent owner brought two infringement lawsuits in the United States District Court for the Western District of Texas against a semiconductor company, alleging that certain integrated circuit products infringed three patents related to electronic circuitry and power-saving features. The accused products included specific chips that allegedly implemented a particular feature. After the lawsuits were filed, the defendant challenged the cases on grounds including improper service, lack of personal jurisdiction, and failure to state a claim. During the litigation, the plaintiff produced a licensing agreement with a third party, and subsequently entered into another agreement covering the accused products. Shortly thereafter, the plaintiff voluntarily dismissed both cases without prejudice.Following the dismissals, the defendant moved for attorneys’ fees, costs, and sanctions, arguing that the lawsuits were baseless. The district court denied the defendant’s motions for attorneys’ fees under 35 U.S.C. § 285, costs under Rule 54(d)(1), and sanctions under Rule 11 and 28 U.S.C. § 1927, but converted the voluntary dismissals to dismissals with prejudice as a sanction. The court also denied the defendant’s discovery requests related to confidentiality and access to certain materials.On appeal, the United States Court of Appeals for the Federal Circuit held that the district court erred in denying fees under § 285 and costs under Rule 54(d)(1), because the defendant became a prevailing party when the dismissals were converted to dismissals with prejudice. The Federal Circuit vacated those portions of the district court’s decision and remanded for further proceedings. The appellate court affirmed the district court’s denial of Rule 11 sanctions and fees under § 1927, finding no abuse of discretion. It also affirmed the denial of the remaining discovery request, concluding that the district court did not abuse its discretion in applying the protective order. The judgment was thus vacated in part, affirmed in part, and remanded. View "FUTURE LINK SYSTEMS, LLC v. REALTEK SEMICONDUCTOR CORPORATION " on Justia Law