Justia Civil Procedure Opinion Summaries

Counsel filed a class action lawsuit on behalf of copyright holders of musical compositions and recovered a little over $50,000 for the class members from Defendant Rhapsody International, Inc. (now rebranded as Napster), a music streaming service. The class members obtained no meaningful injunctive or nonmonetary relief in the settlement of their action. The district court nonetheless authorized $1.7 in attorneys’ fees under the “lodestar” method.   The Ninth Circuit reversed the district court’s award of attorneys’ fees to Plaintiffs’ counsel and remanded. The panel held that the touchstone for determining the reasonableness of attorneys’ fees in a class action under Federal Rule of Civil Procedure 23 is the benefit to the class. Here, the benefit was minimal. The panel held that the district court erred in failing to calculate the settlement’s actual benefit to the class members who submitted settlement claims, as opposed to a hypothetical $20 million cap agreed on by the parties. The panel held that district courts awarding attorneys’ fees in class actions under the Copyright Act must still generally consider the proportion between the award and the benefit to the class to ensure that the award is reasonable. The panel recognized that a fee award may exceed the monetary benefit provided to the class in certain copyright cases, such as when a copyright infringement litigation leads to substantial nonmonetary relief or provides a meaningful benefit to society, but this was not such a case. The panel instructed that, on remand, the district court should rigorously evaluate the actual benefit provided to the class and award reasonable attorneys’ fees considering that benefit. View "DAVID LOWERY, ET AL V. RHAPSODY INTERNATIONAL, INC." on Justia Law

Plaintiff Wudi Industrial (Shanghai) Co., Ltd. Challenged two adverse rulings made by the district court in favor of defendant Wai L. Wong and his business entity, GT Omega Racing, Ltd. (collectively “GTOR”). Wudi and GTOR are Asian-centered business entities that compete in the marketing of video gaming chairs and other products. In March 2017, Wudi obtained from the United States Patent and Trademark Office (“USPTO”) a registration for the stylized word mark “GTRACING.” For its part, GTOR claimed that it already owned an earlier use of a similar word mark — that is, “GT OMEGA RACING” — and challenged Wudi’s registration of the “GTRACING” word mark in cancellation proceedings before a USPTO component called the Trademark Trial and Appeals Board (the “Board”). In June 2020, the Board ruled in favor of GTOR, concluding that Wudi’s use of the “GTRACING” word mark encroached on GTOR’s earlier use of its own “GT OMEGA RACING” word mark.   The Fourth Circuit vacated the challenged rulings and remanded. The court agreed with Wudi’s primary contention that the district court’s challenged rulings constitute awards of injunctive relief in favor of GTOR and against Wudi. Secondly, the court also agreed that the challenged rulings failed to comport with the applicable Rules of Civil Procedure and controlling precedent. The court emphasized that the First Order possesses all of the necessary attributes and thus qualifies as an injunction order. That is, the First Order contains “clear, enforceable directives” and threatens Wudi with contempt for noncompliance. View "Wudi Industrial (Shanghai) Co., Ltd. v. Wai Wong" on Justia Law

The Supreme Court affirmed the judgment of the district court denying Exile Brewing Company's attempt to intervene in the underlying probate matter and striking Exile's motion to vacate, dismiss, and close two estates seeking to pursue certain claims, holding that the probate court did not err in denying the request to intervene and close the estates.During the 1950s and '60s, Ruth Bisignano owned and operated a popular bar in Des Moines. In 2012, Exile named one of its craft beers "Ruthie" and used Ruth's image. Ruthie died in 1993, and her estate was closed that year. Her husband Frank Bisignano died three years later, and his estate was closed in 1999. In 2020, Plaintiff successfully filed petitions to reopen both estates. Subsequently, as administrator of Frank's estate, Plaintiff sued Exile alleging common law appropriation and other claims. Exile filed a motion to vacate, dismiss, and close both estates, arguing that the probate court lacked statutory jurisdiction to reopen the estates. The probate court denied the motion, concluding that Exile had no right to intervene in the probate proceedings. The Supreme Court affirmed, holding that the probate court correctly determined that Exile was an interloper with no ability to challenge the estates' reopening. View "In re Estate of Bisignano" on Justia Law

The First Circuit vacated the judgment dismissing on claim preclusion grounds Plaintiff's claims against Eastern States Exposition alleging violations of federal copyright infringement law and the U.S. Visual Artists Rights Act, holding that the district court erred.On appeal, Plaintiff argued that the claim preclusive order gave claim preclusive effect to the dismissal in a prior action that she brought even where the dismissal rested on several grounds, not all of which would on their own render the dismissal claim preclusive. In support of her claim, Plaintiff argued that federal res judicata law recognizes the "alternative-determinations" doctrine. The First Circuit vacated the judgment dismissing the claims at issue, holding (1) the assertedly preclusive dismissal rested on one ground that, on its own, would not allow the dismissal to be claim preclusive, even though the dismissal also rested on two counts that could have; and (2) federal res judiata law recognizes the alternative-determinations doctrine, which strips a dismissal of claim preclusive effect if the dismissal rests on multiple grounds, not all of which would on their own render the dismissal claim preclusive, and the doctrine applied in this case. View "Foss v. Eastern States Exposition" on Justia Law

Microsoft Corporation offers email security software to shield users from cyber threats. TocMail, Inc. is a relative newcomer to the cybersecurity scene and offers a product geared towards a specific type of threat called Internet Protocol (IP) evasion. TocMail sued Microsoft for false advertising—all within two months. In its complaint, TocMail alleged that Microsoft misled the public into believing that Microsoft’s product offered protection from IP evasion. And TocMail—who had been selling its product for two months, spent almost nothing on advertising and had not made a single sale—alleged billions of dollars in lost profits. TocMail brought two counts: false and misleading advertising under the Lanham Act (count one); and contributory false and misleading advertising under the Lanham Act. The district court entered summary judgment for Microsoft.   The Eleventh Circuit vacated the district court’s summary judgment order and remanded to the district court with instructions to dismiss this case without prejudice for lack of standing. The court explained that to establish an injury, in fact, a plaintiff must show “an invasion of a legally protected interest which is (a) concrete and particularized; and (b) actual or imminent, not conjectural or hypothetical.” The court wrote that TocMail failed to meet this standard because TocMail has offered no evidence from which a reasonable jury could find that it suffered any injury. TocMail didn’t offer testimony from any witness saying that he or she would have purchased TocMail’s product if not for Microsoft’s advertising. TocMail didn’t offer any expert testimony calculating TocMail’s lost sales from consumers who went with Microsoft. View "TocMail Inc. v. Microsoft Corporation" on Justia Law

Defendant Citizens Equity First Credit Union (CEFCU) petitioned the Trademark Trial and Appeal Board (TTAB) to cancel a trademark registration belonging to Plaintiff San Diego County Credit Union (SDCCU). SDCCU procured a stay to the TTAB proceedings by filing an action seeking declaratory relief to establish that it was not infringing either of CEFCU’s registered and common-law marks and to establish that those marks were invalid. The district court granted SDCCU’s motion for summary judgment on noninfringement. After a bench trial, the district court also held that CEFCU’s common-law mark was invalid and awarded SDCCU attorneys’ fees.   The Ninth Circuit filed (1) an order amending its opinion, denying a petition for panel rehearing, and denying on behalf of the court a petition for rehearing en banc; and (2) an amended opinion affirming in part and vacating in part the district court’s judgment and award of attorneys’ fees. The panel held that SDCCU had no personal stake in seeking to invalidate CEFCU’s common-law mark because the district court had already granted summary judgment in favor of SDCCU, which established that SDCCU was not infringing that mark. The panel held that the district court correctly exercised personal jurisdiction over CEFCU regarding SDCCU’s noninfringement claims, which sought declaratory relief that SDCCU was not infringing CEFCU’s registered mark or common-law mark. View "SAN DIEGO COUNTY CREDIT UNION V. CEFCU" on Justia Law

Plaintiffs, Apple and four other companies, have repeatedly been sued for patent infringement and thereafter petitioned the Patent and Trademark Office (PTO) to institute inter partes reviews (IPRs), under 35 U.S.C. 311–319, with unpatentability challenges to patent claims that were asserted against them in court. They sued the PTO under the Administrative Procedure Act (APA), 5 U.S.C. 701– 706, challenging instructions issued to the Patent Trial and Appeal Board concerning how to exercise, under delegation by the Director, the Director’s discretion whether to institute a requested IPR. Plaintiffs assert that the instructions are likely to produce too many denials.The district court dismissed the APA action, finding that the Director’s instructions were made unreviewable by 35 U.S.C. 314(d): “The determination by the Director whether to institute an inter partes review under [section 314] shall be final and nonappealable.” The Federal Circuit affirmed the unreviewability dismissal of plaintiffs’ challenges to the instructions as being contrary to the statute and arbitrary and capricious. No constitutional challenges are presented. The court reversed the unreviewability dismissal of the challenge to the instructions as having been improperly issued because they had to be, but were not, promulgated through notice-and-comment rulemaking under 5 U.S.C. 553. Apple had standing to present that challenge. View "Apple Inc. v. Vidal" on Justia Law

Springboards for Education (“Springboards”) brought trademark infringement claims against McAllen Independent School District (“MISD”), a public school district in Texas, and IDEA Public Schools (“IDEA”), a nonprofit organization operating charter schools in Texas. The district court dismissed the suit against IDEA, concluding it was an arm of the state and therefore shared Texas’s sovereign immunity. As for MISD, the court found that it did not have sovereign immunity but ultimately granted summary judgment in MISD’s favor.   The Fifth Circuit affirmed the district court’s judgment for MISD. The court explained that while it disagrees with the district court’s conclusion that IDEA has sovereign immunity, the court affirmed the judgment for IDEA on alternate grounds. The court reasoned that in determining whether an entity is an arm of the state, the court balances the so-called “Clark factors,” which our court first articulated decades ago in Clark v. Tarrant County. Those factors are: (1) whether state statutes and case law view the entity as an arm of the state; (2) the source of the entity’s funding; (3) the entity’s degree of local autonomy; (4) whether the entity is concerned primarily with local, as opposed to statewide, problems; (5) whether the entity has the authority to sue and be sued in its own name; and (6) whether it has the right to hold and use property. The court held that factors one and three favor sovereign immunity while factors two, four, five, and six do not. The court concluded that IDEA is not an arm of the state and does not share in Texas’s sovereign immunity. View "Springboards v. IDEA Public Schools" on Justia Law

Defendant Citizens Equity First Credit Union (CEFCU) petitioned the Trademark Trial and Appeal Board (TTAB) to cancel a trademark registration belonging to plaintiff San Diego County Credit Union (SDCCU). SDCCU procured a stay to the TTAB proceedings by filing an action seeking declaratory relief to establish that it was not infringing either of CEFCU’s registered and common-law marks and to establish that those marks were invalid. The district court granted SDCCU’s motion for summary judgment on noninfringement. After a bench trial, the district court also held that CEFCU’s common-law mark was invalid and awarded SDCCU attorneys’ fees.   The Ninth Circuit affirmed in part and vacated in part the district court’s judgment and award of attorneys’ fees in favor of Plaintiff and remanded. The panel held that SDCCU had no personal stake in seeking to invalidate CEFCU’s common-law mark because the district court had already granted summary judgment in favor of SDCCU, which established that SDCCU was not infringing that mark. Hence, there was no longer any reasonable basis for SDCCU to apprehend a trademark infringement suit from CEFCU. After it granted summary judgment in favor of SDCCU, the district court was not resolving an actual “case” or “controversy” regarding the validity of CEFCU’s common-law mark; thus, it lacked Article III jurisdiction to proceed to trial on that issue. The panel therefore vacated the district court’s judgment and its award of attorneys’ fees, which was based, in part, on the merits of the invalidity claim over which the district court lacked Article III jurisdiction. View "SAN DIEGO COUNTY CREDIT UNION V. CEFCU" on Justia Law

Ahern Rentals, Inc. (Ahern), alleges that two competitors— EquipmentShare.com, Inc. (EquipmentShare) and EZ Equipment Zone, LLC (EZ)— misappropriated its trade secrets to gain an unfair advantage in the construction equipment rental industry. The district court first dismissed EZ from the lawsuit, ruling that Ahern failed to state a plausible claim for relief against it. Later, the district court dismissed the case altogether, ruling that Ahern’s remaining claims against EquipmentShare were duplicative of claims against EquipmentShare in several other ongoing lawsuits brought by Ahern. Ahern appealed both rulings, arguing that the district court erred in dismissing its claims.   The Eighth Circuit reversed. The court reasoned that, according to Ahern, EquipmentShare developed programs by exploiting Ahern’s trade secrets. Ahern also alleged that the market information used by EZ to develop profitable utilization and rental rates is based on Ahern’s trade secrets illegally obtained by EquipmentShare. Taking all factual allegations as true, Ahern pled enough facts to make it entirely plausible that EZ is at least using systems developed by EquipmentShare through the exploitation of Ahern’s trade secrets. Further, the court found that Ahern has pled sufficient facts to state a claim against EZ for unjust enrichment. It is not disputed that Ahern’s trade secrets are a benefit with real economic value. And, as alleged in the complaint, EquipmentShare and EZ have used the benefit to their advantage. Finally, Ahern plausibly alleges malfeasance in the acquisition of these confidential trade secrets. Thus, the district court erred in dismissing Ahern’s claims against EZ for civil conspiracy and unjust enrichment. View "Ahern Rentals, Inc. v. EquipmentShare.com, Inc." on Justia Law