Justia Civil Procedure Opinion Summaries

Itron alleged that misrepresentations by three of SmartSynch's corporate officers (defendants) caused it unknowingly to assume an unwanted $60 million contractual obligation to a third party, Consert. Itron eventually settled Consert's claims and then filed suit against defendants for negligent misrepresentation. The magistrate judge ordered Itron to produce, without qualification, materials that were shielded from disclosure by the attorney-client privilege. The Fifth Circuit granted Itron's petition for mandamus and vacated the magistrate judge's order, holding that the mere act of filing the lawsuit effected no waiver of any attorney-client privilege. The court remanded with instructions to reevaluate defendants' motion. View "In Re: Itron, Inc." on Justia Law

Murphy was awarded a judgment in his federal civil rights suit against two prison guards, including an award of attorney’s fees; 42 U.S.C. 1997e(d)(2) provides that in such cases “a portion of the [prisoner’s] judgment (not to exceed 25 percent) shall be applied to satisfy the amount of attorney’s fees awarded against the defendant.” The district court ordered Murphy to pay 10% of his judgment toward the fee award, leaving defendants responsible for the remainder. The Seventh Circuit reversed, holding that section 1997e(d)(2) required the district court to exhaust 25% of the prisoner’s judgment before demanding payment from the defendants. The Supreme Court affirmed. The mandatory phrase “shall be applied” suggests that the district court has some nondiscretionary duty to perform. The infinitival phrase “to satisfy the amount of attorney’s fees awarded” specifies the purpose of the preceding verb’s nondiscretionary duty and “to satisfy” an obligation, especially a financial obligation, usually means to discharge the obligation in full. The district court does not have wide discretion to pick any “portion” that does not exceed the 25% cap. This conclusion is reinforced by section 1997e(d)’s surrounding provisions, which also limit the district court’s pre-existing discretion under section 1988(b). View "Murphy v. Smith" on Justia Law

Jaworski provided construction services to Master Hand, an Illinois general contractor, over several years. Some of these services went unpaid. Jaworski alleged violations of the federal Fair Labor Standards Act, the Illinois Minimum Wage Law, the Illinois Wage Payment and Collection Act, and the Employee Classification Act, which makes it unlawful for construction firms to misclassify an employee as an independent contractor. The Classification Act presumes that the complainant is an employee unless the contractor proves otherwise; a misclassified employee is entitled to double “the amount of any wages, salary, employment benefits, or other compensation denied or lost to the person by reason of the violation.” The judge held that Master Hand had misclassified Jaworski and was entitled to the compensation guaranteed by the Minimum Wage Law and Wage Payment and Collection Act without having to prove that he is an employee. Those statutes do not include the presumption that plaintiffs are employees. The judge rejected Master Hand’s insolvency defense and ordered Master Hand to pay $200,000 in damages, plus $150,000 in attorneys’ fees. The Seventh Circuit affirmed, adding attorneys’ fees for the frivolous appeal. The court declined to review the rulings challenged by Master Hand, as a sanction for failure to follow court rules. View "Jaworski v. Master Hand Contractors, Inc." on Justia Law

Jaworski provided construction services to Master Hand, an Illinois general contractor, over several years. Some of these services went unpaid. Jaworski alleged violations of the federal Fair Labor Standards Act, the Illinois Minimum Wage Law, the Illinois Wage Payment and Collection Act, and the Employee Classification Act, which makes it unlawful for construction firms to misclassify an employee as an independent contractor. The Classification Act presumes that the complainant is an employee unless the contractor proves otherwise; a misclassified employee is entitled to double “the amount of any wages, salary, employment benefits, or other compensation denied or lost to the person by reason of the violation.” The judge held that Master Hand had misclassified Jaworski and was entitled to the compensation guaranteed by the Minimum Wage Law and Wage Payment and Collection Act without having to prove that he is an employee. Those statutes do not include the presumption that plaintiffs are employees. The judge rejected Master Hand’s insolvency defense and ordered Master Hand to pay $200,000 in damages, plus $150,000 in attorneys’ fees. The Seventh Circuit affirmed, adding attorneys’ fees for the frivolous appeal. The court declined to review the rulings challenged by Master Hand, as a sanction for failure to follow court rules. View "Jaworski v. Master Hand Contractors, Inc." on Justia Law

The district court ordered Jackson to pay Cooke the death benefit on her husband’s life insurance policy and to reimburse Cooke’s legal expenses. The court concluded that her husband died before the end of a grace period allowed for late premium payments and that Jackson should have expedited the litigation by attaching documents to its answer and by making some arguments sooner. The court’s order granted Cooke summary judgment but stated: This case is hereby dismissed with prejudice. The Seventh Circuit dismissed an appeal for lack of jurisdiction under the final-decision rule, 28 U.S.C. 1291. The order is contradictory and does not provide relief. It states that a motion has been granted and an award made, but it does not say who is entitled to what; it “transgresses almost every rule applicable to judgments.” A second document avoided the internal contradiction but lacked vital details and the judge’s signature. The court later entered an order specifying that Jackson must pay $191,362.06 on the insurance policy, plus 10% per annum simple interest, which Jackson paid, but did not specify the amount of attorneys’ fees. A declaration of liability, including an award of attorneys' fees, lacking an amount due is not final and cannot be appealed. View "Cooke v. Jackson National Life Insurance Co." on Justia Law

The district court ordered Jackson to pay Cooke the death benefit on her husband’s life insurance policy and to reimburse Cooke’s legal expenses. The court concluded that her husband died before the end of a grace period allowed for late premium payments and that Jackson should have expedited the litigation by attaching documents to its answer and by making some arguments sooner. The court’s order granted Cooke summary judgment but stated: This case is hereby dismissed with prejudice. The Seventh Circuit dismissed an appeal for lack of jurisdiction under the final-decision rule, 28 U.S.C. 1291. The order is contradictory and does not provide relief. It states that a motion has been granted and an award made, but it does not say who is entitled to what; it “transgresses almost every rule applicable to judgments.” A second document avoided the internal contradiction but lacked vital details and the judge’s signature. The court later entered an order specifying that Jackson must pay $191,362.06 on the insurance policy, plus 10% per annum simple interest, which Jackson paid, but did not specify the amount of attorneys’ fees. A declaration of liability, including an award of attorneys' fees, lacking an amount due is not final and cannot be appealed. View "Cooke v. Jackson National Life Insurance Co." on Justia Law

The Sauter Estate filed a complaint in the Southern District of New York against Citigroup, Banamex and Banamex U.S.A., seeking information pertaining to Sauter’s accounts. The Estate's amended complaint added Grupo as a defendant and added a claim for Racketeer Influenced and Corrupt Organizations Act Infractions, 18 U.S.C. 1961-1968. After defendants moved to dismiss, the Estate filed a notice of voluntary withdrawal under Federal Rule of Civil Procedure 41(a)(1)(A)(i). The defendants unsuccessfully moved to vacate that notice and to dismiss with prejudice and requested sanctions under 28 U.S.C. 1927 and the court’s “inherent powers to impose sanctions as a deterrent against continued vexatious litigation." The court noted that the Federal Rules provide safeguards in case the plaintiff commences a second action, including ordering plaintiff to pay all of defendants’ costs and fees in the dismissed action, Fed. R. Civ. P. 41(a)(1)(B)(d). The Estate subsequently filed a complaint in the Delaware District Court, naming only Citigroup. Citigroup moved for costs, including attorneys’ fees, under Rule 41(d). The district court granted the motion for costs but concluded that because the plain language of Rule 41(d) does not provide for an award of attorneys’ fees. The Third Circuit affirmed. Attorneys’ fees may only be awarded as “costs” under Rule 41(d) when the substantive statute under which the lawsuit was filed defines costs to include attorneys’ fees; no such statute is involved here. View "Garza v. Citigroup Inc" on Justia Law

The Sauter Estate filed a complaint in the Southern District of New York against Citigroup, Banamex and Banamex U.S.A., seeking information pertaining to Sauter’s accounts. The Estate's amended complaint added Grupo as a defendant and added a claim for Racketeer Influenced and Corrupt Organizations Act Infractions, 18 U.S.C. 1961-1968. After defendants moved to dismiss, the Estate filed a notice of voluntary withdrawal under Federal Rule of Civil Procedure 41(a)(1)(A)(i). The defendants unsuccessfully moved to vacate that notice and to dismiss with prejudice and requested sanctions under 28 U.S.C. 1927 and the court’s “inherent powers to impose sanctions as a deterrent against continued vexatious litigation." The court noted that the Federal Rules provide safeguards in case the plaintiff commences a second action, including ordering plaintiff to pay all of defendants’ costs and fees in the dismissed action, Fed. R. Civ. P. 41(a)(1)(B)(d). The Estate subsequently filed a complaint in the Delaware District Court, naming only Citigroup. Citigroup moved for costs, including attorneys’ fees, under Rule 41(d). The district court granted the motion for costs but concluded that because the plain language of Rule 41(d) does not provide for an award of attorneys’ fees. The Third Circuit affirmed. Attorneys’ fees may only be awarded as “costs” under Rule 41(d) when the substantive statute under which the lawsuit was filed defines costs to include attorneys’ fees; no such statute is involved here. View "Garza v. Citigroup Inc" on Justia Law

Petitioners California Self-Insurers’ Security Fund (the Fund) and Nixon Peabody LLP (Nixon Peabody or the firm) sought a writ of mandate to direct the trial court to vacate its order disqualifying Nixon Peabody from representing the Fund in the underlying case. Petitioners argued the trial court mistakenly believed it was compelled by law to disqualify the firm; the court instead should have made further factual findings and exercised its discretion. Real parties in interest contended disqualification was mandatory and therefore no discretion needed to be exercised. The Court of Appeal concluded that automatic disqualification was not required under these facts. View "CA Self-Insurers' Sec. Fund v. Super. Ct." on Justia Law

Debra Sands appealed the grant of summary judgment in favor of Menard, Inc. Sands and John Menard, Jr., were involved in a romantic relationship from late 1997 to April 2006. Sands alleged that from 1998 until 2006 she cohabitated with Menard and they engaged in a "joint enterprise" to work together and grow Menard's businesses for their mutual benefit. Menard and his affiliated entities argued that by failing to comply with Supreme Court Rule 20:1.8(a), which regulated business transactions between lawyers and their clients, Sands was precluded from seeking an ownership interest in any of Menard's various business ventures. As to the claim she characterized as a “Watts” unjust enrichment claim, the Wisconsin Supreme Court concluded Sands failed to allege facts which, if true, would support her legal conclusion that she and Menard had a joint enterprise that included accumulation of assets in which both she and Menard expected to share equally. Furthermore, the Court held SCR 20:1.8(a) could guide courts in determining required standards of care generally; however, it could not be used as an absolute defense to a civil claim involving an attorney. Finally, the Court concluded the court of appeals properly granted summary judgment to Sands on Menard, Inc.'s counterclaim for breach of fiduciary duty, and to the Trustees on their motion for summary judgment dismissing Sands' claim. View "Sands v. Menard, Jr." on Justia Law