Justia Civil Procedure Opinion Summaries

Farmers Direct Property and Casualty Insurance Company filed a declaratory judgment action against Dennis Perez, seeking a declaration that it no longer had a duty to defend or indemnify Perez under an auto insurance policy in connection with an automobile accident involving Victor Montez. Perez had been uncooperative in his defense in the underlying state court tort action filed by the Montezes, leading Farmers Direct to claim that Perez breached the policy's cooperation clause. The Montezes intervened and moved to set aside the default judgment entered against Perez, arguing that the district court lacked subject matter jurisdiction because the amount in controversy did not meet the statutory requirement.The United States District Court for the Central District of California granted the Montezes' motion, vacating the default judgment on the grounds that the amount in controversy was limited to the policy's $25,000 face amount, which did not satisfy the jurisdictional threshold of over $75,000. Farmers Direct appealed this decision.The United States Court of Appeals for the Ninth Circuit reviewed the case and reversed the district court's order. The appellate court held that the district court erred in determining that the value of the declaratory judgment action was limited to the policy's $25,000 maximum liability. The Ninth Circuit found that there was at least an arguable basis that the amount in controversy was satisfied by considering either the potential excess liability of the underlying tort claim or Farmers Direct's anticipated future defense fees and costs, or both. The appellate court concluded that the judgment was not void for lack of subject matter jurisdiction and remanded the case for further proceedings. View "FARMERS DIRECT PROPERTY AND CASUALTY INSURANCE COMPANY V. MONTEZ" on Justia Law

A church in Washington, Cedar Park Assembly of God, challenged the state's Reproductive Parity Act (Parity Act), which mandates insurance carriers to cover all federally approved contraceptives and, if maternity care is included, abortions. The church argued that this law violated its First Amendment rights and religious autonomy because it could not find a comparable health plan that excluded abortion coverage after its insurer, Kaiser Permanente, stopped offering such a plan.The United States District Court for the Western District of Washington granted summary judgment in favor of the state officials, Myron Kreidler and Jay Inslee, who were sued in their official capacities. The district court found that the church did not have standing to challenge the Parity Act because it could not demonstrate that its inability to obtain a suitable health plan was directly caused by the Act.The United States Court of Appeals for the Ninth Circuit reviewed the case de novo and vacated the district court's summary judgment, remanding with instructions to dismiss the action for lack of standing. The Ninth Circuit held that Cedar Park Assembly of God failed to establish that its injury was traceable to the Parity Act or that invalidating the Act would redress its injury. The court noted that Washington's conscientious-objection statute allows insurers to accommodate religious objections, and nothing in the Parity Act prevents insurers from offering plans that exclude abortion coverage. The court concluded that the church's injury was due to the independent decisions of insurers, not the Parity Act, and thus, the church lacked standing to sue. View "CEDAR PARK ASSEMBLY OF GOD OF KIRKLAND, WASHINGTON V. KREIDLER" on Justia Law

50 Exchange Terrace LLC sought to collect under a property insurance policy with Mount Vernon Specialty Insurance Company for damage to its property in Rhode Island. The insurance policy required an appraisal if the parties disagreed on the amount of loss. After frozen pipes caused water damage, Mount Vernon paid its estimated value but demanded an appraisal. 50 Exchange filed a lawsuit in California state court, alleging wrongful withholding of compensation by Mount Vernon while awaiting the appraisal outcome.The case was removed to the United States District Court for the Central District of California, where Mount Vernon moved to dismiss based on forum non conveniens. The district court requested supplemental briefing on ripeness and Article III standing and subsequently dismissed the action for lack of both. 50 Exchange appealed the dismissal.The United States Court of Appeals for the Ninth Circuit reviewed the case and affirmed the district court's dismissal. The court held that the injuries asserted by 50 Exchange were not actual or imminent because the extent of any loss could not be determined until the appraisal process was completed. The court concluded that any alleged injury before the appraisal was too speculative to create an actionable claim, thus failing to meet the requirements for ripeness and Article III standing. The court did not address the parties' arguments under the doctrine of forum non conveniens. View "50 EXCHANGE TERRACE LLC V. MOUNT VERNON SPECIALTY INSURANCE CO." on Justia Law

Dawn Lui, a longtime employee of the United States Postal Service (USPS), alleged disparate treatment, a hostile work environment, and unlawful retaliation under Title VII of the Civil Rights Act. Lui, a woman of Chinese ethnicity, claimed she was targeted with false complaints and grievances by employees at the Shelton Post Office due to her race, sex, and national origin. She was demoted from her position as Postmaster in Shelton, Washington, to a lower-paying Postmaster position in Roy, Washington, and replaced by a white man. Lui filed an informal discrimination complaint through USPS’s Equal Employment Opportunity (EEO) System and later a formal EEO complaint.The United States District Court for the Western District of Washington granted summary judgment to USPS on all of Lui’s claims. The court found that Lui failed to establish a prima facie case of discrimination, did not exhaust her administrative remedies for her hostile work environment claim, and failed to establish a causal connection for her retaliation claim.The United States Court of Appeals for the Ninth Circuit reviewed the case. The court reversed the district court’s summary judgment on Lui’s disparate treatment claim, holding that Lui established a prima facie case of discrimination by showing she was replaced by a white man, which gave rise to an inference of discrimination. The court also found a genuine dispute of material fact about whether the decision to demote Lui was influenced by subordinate bias.The Ninth Circuit vacated the district court’s summary judgment on Lui’s hostile work environment claim, concluding that Lui exhausted her administrative remedies and remanded the case for the district court to address the merits of this claim. However, the court affirmed the district court’s grant of summary judgment on Lui’s retaliation claim, finding that Lui failed to establish a causal connection between her protected activity and the demotion. View "LUI V. DEJOY" on Justia Law

Ryan Six filed a lawsuit against IQ Data International, Inc. under the Fair Debt Collection Practices Act (FDCPA), alleging that IQ sent him a debt verification letter after he had informed the company that all communications should be directed to his attorney. Six claimed that this action violated 15 U.S.C. § 1692c(a)(2), which prohibits debt collectors from directly communicating with a consumer known to be represented by an attorney.The United States District Court for the District of Arizona dismissed Six's action for lack of subject matter jurisdiction, ruling that he lacked Article III standing because he did not suffer an injury in fact. The district court reasoned that receiving one unwanted letter did not constitute a concrete harm akin to those traditionally recognized by American courts, nor was it the type of abusive debt collection practice the FDCPA was intended to prevent.The United States Court of Appeals for the Ninth Circuit reviewed the case and reversed the district court's dismissal. The Ninth Circuit held that Six had Article III standing to bring his claim under § 1692c(a)(2). The court concluded that receiving a letter in violation of this provision constituted a concrete injury because it infringed on Six's privacy interests, a harm that Congress intended to prevent with the FDCPA. The court also found that this harm was analogous to the common law tort of intrusion upon seclusion, which protects against unwanted intrusions into one's private affairs. The court determined that Six's injury was particularized and actual, and that the remaining elements of standing were met, as there was a causal connection between the injury and IQ's conduct, and the relief sought would redress the intrusion.The Ninth Circuit reversed the district court's dismissal and remanded the case for further proceedings consistent with its opinion. View "SIX V. IQ DATA INTERNATIONAL, INC." on Justia Law

A Texas attorney, Robert M. Roach, claimed to have an oral agreement with Fred Schrader, the former owner of Schrader Cellars, LLC, regarding the creation of another company, RBS LLC, which Roach asserted had an ownership interest in Schrader Cellars. After Fred Schrader sold Schrader Cellars to Constellation Brands, Roach sued Fred and Constellation in Texas state court, claiming the sale was improper. Schrader Cellars then filed the current action, seeking declaratory relief that Roach had no ownership interest in Schrader Cellars, and Roach counterclaimed.The United States District Court for the Northern District of California granted summary judgment in favor of Schrader Cellars on its claim for declaratory relief and dismissed Roach’s counterclaims. The court concluded that the oral agreement violated California Rule of Professional Responsibility 3-300 and that Roach did not rebut the presumption of undue influence. The case proceeded to trial on Schrader Cellars’s claim for breach of fiduciary duty, where the jury found that Roach’s breach caused harm but did not award damages due to the litigation privilege defense.The United States Court of Appeals for the Ninth Circuit reversed the district court’s summary judgment in favor of Schrader Cellars on its claim for declaratory relief and Roach’s counterclaims, finding triable issues of fact regarding whether Roach rebutted the presumption of undue influence. The appellate court also held that the district court erred in concluding and instructing the jury that Roach breached his fiduciary duties. However, the Ninth Circuit affirmed the district court’s judgment after trial, concluding that the erroneous jury instruction had no effect on the outcome because the jury found that the gravamen of the breach of fiduciary duty claim was based on Roach’s filing of the Texas lawsuit, which was barred by the California litigation privilege. View "SCHRADER CELLARS, LLC V. ROACH" on Justia Law

Gina Champion-Cain operated a Ponzi scheme through her company ANI Development, LLC, defrauding over 400 investors of approximately $389 million. The SEC initiated a civil enforcement action, freezing Cain’s and ANI’s assets, appointing a receiver for ANI, and temporarily staying litigation against ANI. Defrauded investors then sued third parties, including Chicago Title Company and the Nossaman law firm, alleging their involvement in the scheme.The United States District Court for the Southern District of California approved a global settlement between the Receiver and Chicago Title, which included a bar order preventing further litigation against Chicago Title and Nossaman related to the Ponzi scheme. Kim Peterson and Ovation Fund Management II, LLC, whose state-court claims against Chicago Title and Nossaman were extinguished by the bar orders, challenged these orders.The United States Court of Appeals for the Ninth Circuit reviewed the case. The court held that the district court had the authority to enter the bar orders because the claims by Peterson and Ovation substantially overlapped with the Receiver’s claims, seeking recovery for the same losses stemming from the Ponzi scheme. The bar orders were deemed necessary to protect the ANI receivership estate, as allowing the claims to proceed would interfere with the Receiver’s efforts and deplete the receivership’s assets.The Ninth Circuit also concluded that the Anti-Injunction Act did not preclude the bar orders, as they were necessary in aid of the district court’s jurisdiction over the receivership estate. The court rejected Peterson’s argument that the bar order was inequitable, noting that Peterson had the opportunity to file claims through the receivership estate but was determined to be a net winner from the Ponzi scheme. Consequently, the Ninth Circuit affirmed the district court’s bar orders. View "USSEC V. CHICAGO TITLE COMPANY" on Justia Law

An underage user of the Grindr application, John Doe, filed a lawsuit against Grindr Inc. and Grindr LLC, alleging that the app facilitated his sexual exploitation by adult men. Doe claimed that Grindr's design and operation allowed him to be matched with adults despite being a minor, leading to his rape by four men, three of whom were later convicted. Doe's lawsuit included state law claims for defective design, defective manufacturing, negligence, failure to warn, and negligent misrepresentation, as well as a federal claim under the Trafficking Victims Protection Reauthorization Act (TVPRA).The United States District Court for the Central District of California dismissed Doe's claims, ruling that Section 230 of the Communications Decency Act (CDA) provided Grindr with immunity from liability for the state law claims. The court also found that Doe failed to state a plausible claim under the TVPRA, as he did not sufficiently allege that Grindr knowingly participated in or benefitted from sex trafficking.The United States Court of Appeals for the Ninth Circuit reviewed the case and affirmed the district court's dismissal. The Ninth Circuit held that Section 230 barred Doe's state law claims because they implicated Grindr's role as a publisher of third-party content. The court also agreed that Doe failed to state a plausible TVPRA claim, as he did not allege that Grindr had actual knowledge of or actively participated in sex trafficking. Consequently, Doe could not invoke the statutory exception to Section 230 immunity under the Allow States and Victims to Fight Online Sex Trafficking Act of 2018. The Ninth Circuit affirmed the district court's dismissal of Doe's claims in their entirety. View "DOE V. GRINDR INC." on Justia Law

Haley Olson was arrested in Idaho for marijuana possession and consented to a search of her phone by Idaho police, who created a copy of its contents. Glenn Palmer, then-Sheriff of Grant County, Oregon, learned of the arrest and, curious about Olson's relationship with Grant County Deputy Tyler Smith, asked County Attorney Jim Carpenter to request the phone extraction from the Idaho prosecutor. Carpenter obtained and reviewed the extraction, allegedly deleting it afterward. However, Olson later heard gossip about the contents of her phone, including nude photos, seemingly originating from the sheriff’s office. Olson sued Palmer, Carpenter, and Grant County, alleging Fourth Amendment violations.The United States District Court for the District of Oregon granted summary judgment for Palmer, finding no supervisory liability, and for Carpenter, granting him qualified immunity as his actions did not violate clearly established law. Olson appealed these decisions.The United States Court of Appeals for the Ninth Circuit affirmed the district court’s summary judgment. The court agreed that Palmer was not liable due to lack of supervisory authority over Carpenter. The court also held that Carpenter was entitled to qualified immunity because Olson’s right to be free from Carpenter’s search was not clearly established at the time. However, the court concluded that Carpenter’s search did violate Olson’s Fourth Amendment rights, as it was conducted without a warrant, consent, or suspicion of criminal activity. The court emphasized the importance of developing constitutional precedent in this area, despite affirming the grant of qualified immunity to Carpenter. View "OLSON V. COUNTY OF GRANT" on Justia Law

Frankie Greer filed a lawsuit against the County of San Diego under 42 U.S.C. § 1983, claiming he suffered serious injuries while incarcerated in the San Diego Central Jail. During discovery, Greer requested documents from the County’s Critical Incident Review Board (CIRB) meetings related to in-custody deaths. The CIRB’s purpose is to consult with legal counsel on incidents that may lead to litigation, assess civil exposure, and recommend remedial actions. The district court ruled that the CIRB documents were not protected by attorney-client privilege, as the CIRB served multiple purposes beyond obtaining legal advice. After Greer settled his claims, several media organizations intervened to unseal the CIRB documents.The United States District Court for the Southern District of California denied the County’s motion for reconsideration and ordered the production of the CIRB documents, which were then produced under an attorneys’-eyes-only protective order. The district court also granted the media organizations' motion to intervene and unseal the documents, leading to the County’s appeal.The United States Court of Appeals for the Ninth Circuit reviewed the case and held that the appeal was not moot, as effective relief could still be provided by ordering the return or destruction of the CIRB documents. The court determined that the attorney-client privilege applied to the CIRB documents, as the primary purpose of the CIRB meetings was to obtain legal advice regarding potential litigation and to avoid future liability. The court found that the district court had made significant legal errors in its determination and that the County had not waived the privilege. The Ninth Circuit reversed the district court’s order and remanded with instructions to require the return and/or destruction of the privileged documents. View "GREER V. COUNTY OF SAN DIEGO" on Justia Law