Justia Civil Procedure Opinion Summaries

In 2016, a federal grand jury in Utah returned a single count indictment against Kemp & Associates, Inc. (“Kemp”) and its Vice President/COO Daniel Mannix (collectively, “Defendants”) for knowingly entering into a combination and conspiracy in violation of the Sherman Act. Kemp was an “Heir Location Service,” a company that “identif[ies] heirs to estates of intestate decedents and, in exchange for a contingency fee, develop evidence and prove heirs’ claims to an inheritance in probate court.” The Government alleged at some point before January 29, 2014, Defendants “knowingly entered into and engaged in a combination and conspiracy with Richard Blake, Jr., [a competitor Heir Location Service] and other unindicted co-conspirators to suppress and eliminate competition by agreeing to allocate customers of Heir Location Services sold in the United States.” Under this agreement, when the two companies both contacted a potential heir, “the co-conspirator company that first contacted that heir would be allocated certain remaining heirs to that estate who had yet to sign a contract with an Heir Location Services provider.” In return, the company to which heirs were allocated “would pay to the other co-conspirator company a portion of the contingency fees ultimately collected from those allocated heirs.” The Government alleged that, in furtherance of this scheme, Defendants “made payments to the co- conspirator company, and received payments from the co-conspirator company, in order to effectuate this agreement.” Defendants moved for an order that the antitrust case would proceed pursuant to the rule of reason, as opposed to the per se rule, and to dismiss the indictment. As to the statute of limitations, Defendants noted that the limitations period for criminal violations of the Sherman Act was five years, and they argued that the indictment was thus untimely because any agreement between the alleged co- conspirators ended prior to a Mannix email from July 2008, whereas the charging Indictment wasn’t returned until August 2016, and served on defendants on September 1, 2016. The Tenth Circuit determined that the indictment at issue here was timely, but that it did not have jurisdiction over the district court's rule of reason order, and that mandamus was inappropriate in this circumstance. Therefore, the Court reversed the district court's dismissal of the indictment, dismissed the Government's appeal of the rule of reason order for lack of jurisdiction, and remanded this matter for further proceedings. View "United States v. Kemp & Associates" on Justia Law

Au pairs and former au pairs filed a class action lawsuit against AuPairCare, Inc. (“APC”) and other au pair sponsoring companies alleging violations of antitrust laws, the Racketeer Influenced and Corrupt Organizations Act (“RICO”), the Fair Labor Standards Act (“FLSA”), federal and state minimum wage laws, and other state laws. Eventually, the au pairs amended their complaint and added two former au pairs, Juliane Harning and Laura Mejia Jimenez, who were sponsored by APC. In response, APC filed a motion to compel arbitration, which the district court denied. The district court found the arbitration provision between the parties both procedurally and substantively unconscionable and declined to enforce it. Because the arbitration provision contained only one substantively unconscionable clause, the Tenth Circuit concluded the district court abused its discretion by refusing to sever the offending clause and otherwise enforce the agreement to arbitrate. The Court therefore reversed the district court’s ruling and remanded for further proceedings. View "Beltran v. Interexchange, Inc." on Justia Law

Plaintiff-Appellant Jeffrey Allen was injured in a car accident in May 2013. His automobile insurance policy included coverage for medical expenses arising from car accidents, but this coverage contained a one-year limitation period such that he could not obtain reimbursement for medical expenses that accrued a year or more after an accident. Allen sought reimbursement for medical expenses accruing more than a year after his accident, arguing this limitation period was invalid on two grounds: (1) a 2012 disclosure form that his insurer sent him stated that his policy covers reasonable medical expenses arising from a car accident, Colorado’s reasonable-expectations doctrine rendered the one-year limitations period unenforceable; and (2) Colorado’s MedPay statute, which required car insurance companies to offer at least $5,000 of coverage for medical expenses, prohibited placing a one-year time limit on this coverage. The district court granted summary judgment in favor of the insurer. After review, the Tenth Circuit rejected both of Allen’s arguments and affirmed the district court order. View "Allen v. USAA" on Justia Law

Plaintiff Omega Forex Group LC (Omega), appearing by and through partner Robert Flath (Flath), appealed a district court decision affirming two Notices of Final Partnership Administrative Adjustment (FPAA) issued by the Internal Revenue Service to Omega. The two FPAAs, on the basis of fraud at the partnership level, eliminated large losses reported by Omega on its tax returns for years 1998 and 1999, and imposed penalties on Omega. Flath was an endodontist in private practice in Utah. At some point in 1997 or 1998, one of the endodontists in Flath’s practice suggested that Flath meet with Dennis Evanson, an “expert in options trading and general business organization and planning, tax planning and asset protection.” Evanston was Omega’s managing partner. Through their business arrangement, Flath would make contributions or investments in Omega or other entities controlled by Evanston. Evanson, in exchange for Flath’s agreed payments, “manufactured fictitious transactions to conceal income [for Flath] and create apparent [tax] deductions [for Flath].” For the years at issue here, Flath or his endodontist practice would claim pass-through losses from Omega. Flath was not completely forthcoming with his tax accountant. In 2005, a grand jury indicted Evanson and other individuals related to Omega. In February 2008, Evanson was convicted of conspiracy to commit mail and wire fraud, tax evasion, and assisting in the filing of false tax returns. Omega’s FPAAs were upheld. Flath, on behalf of Omega, raised three issues on appeal: (1) whether the district court erred in holding that the FPAAs issued by the IRS to Omega were not barred by the applicable statute of limitations; (2) even assuming the district court applied the proper statute of limitations, whether it incorrectly applied the legal standards for determining whether Flath had fraudulent intent as to his personal tax returns; and (3) whether the district court erred in determining the asserted fraud penalty at the partnership level. The Tenth Circuit rejected all of these arguments and affirmed the district court’s decision. View "Omega Forex Group v. United States" on Justia Law

The plaintiffs were two wholly owned subsidiaries of First American Financial Corporation: First American Title Insurance Company (FA Company) and First American Title Company, LLC (FA LLC) (collectively Plaintiffs). The defendants, who appealed a judgment against them (Defendants) were Michael Smith, Kristi Carrell, and Northwest Title Insurance Agency, LLC. Jeffrey Williams was also a defendant, but is not a party to the appeal. Defendants raised numerous grounds on appeal of a large jury award based on breaches of contractual and fiduciary duties, many of which the Tenth Circuit concluded were not adequately preserved or presented. Therefore, the Tenth Circuit affirmed the district court's judgment, "[w]e may not have awarded the same amount, but we see no abuse of discretion." View "First American Title Insurance v. Northwest Title Insurance" on Justia Law

Charles Payan appealed the district court’s grant of summary judgment in favor of United Parcel Service (“UPS”) in relation to his claims for racial discrimination and retaliation arising under Title VII and 42 U.S.C. 1981, as well as his state law claims for breach of contract and breach of the covenant of good faith and fair dealing. Payan identified himself as Hispanic and worked for UPS since 1991. UPS uses the “Ready Now” list to determine candidates for promotions, so Payan’s removal from the list meant that he could no longer be considered for promotions. Charles Martinez, Payan's direct supervisor, continued thereafter to rate Payan’s promotion status as “Retain at Current Level,” meaning he believed Payan needed more time to develop before being promoted. After Payan’s downgrade, two UPS employees with similar credentials were promoted to Security Division Managers, positions that Payan wanted but was not eligible for in light of his promotion status downgrade. In November 2012, and in response to the recommendations of Martinez, UPS put Payan through a Management Performance Improvement Process (“MPIP”), designed to “help employees who are not performing well go through a formalized training with their manager to help them improve their skill sets so they could perform effectively and eliminate whatever those deficiencies are.” At some point, UPS determined Payan was not meeting the plan’s requirements. Shortly thereafter, Payan filed a charge of discrimination with the Equal Employment Opportunity Commission (“EEOC”). Payan alleged that he had been subjected to harassing and degrading behavior from Martinez and that his non-Hispanic coworkers were not treated in such a way. He also alleged that UPS retaliated against him by placing him on an MPIP. The EEOC ultimately dismissed Payan’s charge of discrimination and issued him a right-to-sue letter. Finding no reversible error in the district court's grant of summary judgment to UPS, the Tenth Circuit affirmed. View "Payan v. United Parcel Service" on Justia Law

The district court dismissed with prejudice of the Secretary of Labor’s complaint against Jani-King of Oklahoma, Inc. Jani-King is a janitorial company providing cleaning services in the Oklahoma City area. Following an investigation into Jani-King’s employment practices, the Secretary of Labor filed a complaint alleging violations of the Fair Labor Standards Act and seeking an injunction to require Jani-King to keep the requisite FLSA employee records. Specifically, the Secretary asserted that individuals who formed corporate entities and enter franchise agreements as required by Jani-King “nonetheless personally perform the janitorial work on behalf of Jani-King” and, based on the economic realities of this relationship, were Jani-King’s employees under the FLSA. Jani-King successfully moved to dismiss, arguing: (1) under Rule 12(b)(6), the Secretary failed to plausibly suggest that every franchise owner should have been treated as an employee under the FLSA; and (2) under Rule 12(b)(7), the Secretary failed to name the franchisees as necessary parties. The Tenth Circuit found the Secretary’s amended complaint contained sufficient facts to state a facially plausible claim for relief. In so concluding, the Court made no determination as to the merits of the case, only that it survived the initial Rule 12(b)(6) motion to dismiss. View "Acosta v. Jani-King of Oklahoma" on Justia Law

Ryan Lee sued four Sheriff’s Deputies, pursuant to 42 U.S.C. 1983, alleging violations of his First and Fourth Amendment rights. On July 4, 2014, Lee and his wife, Tamila Lee, attended a barbecue where they consumed alcohol. After the couple returned home, an altercation broke out over a set of car keys. Tamila, in an attempt to keep her husband from driving, blocked him from exiting their home, and a physical struggle ensued. Deputies Mark O’Harold and Todd Tucker arrived first and entered the home with Tamila’s consent. Shortly afterward, Deputies Amanda Weiss and Chad Walker also arrived at the Lees’ home and separated the Lees for questioning. Lee was largely uncooperative. Tucker attempted to detain him, and another struggle broke out. O’Harold and Weiss, hearing a commotion, reentered the home. O’Harold applied an arm bar hold to Lee. Lee collided with the kitchen cabinets and refrigerator, and Weiss then struck him twice in the shoulder in an effort to force him to let go of the refrigerator. O’Harold also struck Lee twice in the neck. Tucker drew his Taser and applied it three to five times to Lee’s back, with each application lasting approximately three, five, and eight seconds respectively. Lee then lost consciousness. Throughout the incident, Walker observed but did not intervene. Weiss then handcuffed Lee and escorted him to Weiss’ squad car. Lee subsequently pled guilty to misdemeanor domestic violence. The district court granted the motion as to Lee’s First Amendment retaliation claim and the portion of his excessive force claim based on handcuffing, but denied it as to the remainder of his excessive force claim. The district court concluded that the facts remaining in dispute, when viewed in the light most favorable to Lee, precluded a grant of qualified immunity. Defendants appealed. The Tenth Circuit determined it lacked interlocutory appellate jurisdiction to review the district court’s determination of evidentiary sufficiency at the summary judgment stage. As to the purely legal challenge defendants raised on appeal, the Court concluded the district court correctly held that defendants used excessive force and did so in violation of clearly established law. The appeal was dismissed as to the factual challenges, and affirmed in all other respects. View "Lee v. Tucker" on Justia Law

Two years after the district court denied class certification, the parties settled the individual claims. After settling, the parties jointly asked the court to enter a stipulated judgment dismissing with prejudice the Trusts’ individual claims, and the court did so. In the judgment, the Trusts reserved any right they may have to appeal the district court’s class-certification denial. The Trusts now appealed that denial, contending that the class-certification order merged with the stipulated judgment dismissing their individual claims, resulting in a final, appealable order under 28 U.S.C. 1291. Relying on Microsoft Corp. v. Baker, 137 S. Ct. 1702 (2017), the Tenth Circuit held that it lacked statutory appellate jurisdiction to review the district court’s order denying class certification. "Voluntarily dismissing the Trusts’ individual claims with prejudice after settling them doesn’t convert the class-certification denial—an inherently interlocutory order—into a final decision under 28 U.S.C. 1291." The Court dismissed this appeal. View "Anderson Living Trust v. WPX Energy Production" on Justia Law

Belsen Getty, LLC, a registered investment adviser owned by Terry Deru, obtained a claims-made financial-services-liability policy (the Policy) from XL Specialty Insurance Company covering Belsen Getty and its advisers for the period for one year. Under the policy, XL had no duty to defend. During the policy period James, Jenalyn, and Wade Morden brought claims against Belsen Getty and Deru alleging improper and misleading investment advice. XL denied coverage, asserting the Mordens’ claims and claims brought by the Securities and Exchange Commission (SEC) before the policy period concerned “Interrelated Wrongful Acts,” as defined by the Policy, and that the Policy therefore required treating the two claims as one claim made before the policy period. Belsen Getty and Deru then settled with the Mordens, assigning their rights against XL; and the Mordens sued XL in federal district court, raising the assigned claims that XL breached its covenant of good faith and fair dealing and its fiduciary duties to Belsen Getty and Deru in denying coverage under the Policy. XL counterclaimed that the Policy’s Interrelated Wrongful Acts provision precluded coverage. The Mordens moved for partial summary judgment on the counterclaim and on several of XL's affirmative defenses. XL moved for summary judgment based on the policy and for failure to prove bad faith or breach of fiduciary duty. The district court denied XL's counterclaim, but granted summary judgment on the bad-faith and fiduciary-duty claims. The Mordens appealed summary judgment against them on their bad-faith and fiduciary-duty claims and on the denial of their motion to amend their complaint to add a breach-of-contract claim. XL cross-appealed the summary judgment against it on its counterclaim that the Policy’s Interrelated Wrongful Acts provision barred all the Mordens’ claims. The Tenth Circuit reversed the denial of XL’s motion for summary judgment on its counterclaim: this reversal undermined the Mordens’ challenges to the summary judgment against them and the denial of their motion to amend. The Court therefore affirmed summary judgment against the Mordens on their claims and the denial of their motion to amend. View "Morden v. XL Specialty Insurance" on Justia Law