Justia Civil Procedure Opinion Summaries

This interlocutory appeal concerned a contract dispute about the provision of food services at the Fort Riley Army base in Kansas. The Department of the Army (Army) contracts with outside vendors for food preparation and related supporting services for its cafeteria dining facilities at Fort Riley. Since 2006, the State of Kansas, through the Kansas Department for Children and Families (Kansas), successfully bid under the RSA on those food preparation and related services contracts at Fort Riley. Kansas’s most recent contract awarded under the RSA was scheduled to expire in February 2016. As that date approached, the Army determined that its next dining contract at Fort Riley would be for supporting services only. The Army therefore decided that it need not solicit bids under the RSA and it approached another vendor directly, as permitted by the JWOD. Kansas took exception to the Army’s decision because it eliminated Kansas’s ability to bid on the contract. So Kansas initiated arbitration proceedings under the RSA’s dispute resolution provisions. And upon learning that the Army intended to contract with the other vendor despite the commencement of arbitration proceedings, Kansas sued in federal court, seeking to preliminarily enjoin the Army from executing the JWOD contract pending arbitration. The root of the dispute was the intersection of two federal statutes that both address the procurement of food services at federal facilities: (1) the Randolph-Sheppard Vending Facility Act of 1936 (RSA), and (2) the Javits Wagner O’Day Act (JWOD). The parties disagreed as to which of these statutes governed the award of the Fort Riley food services contract. And due to events that have occurred since this action was filed, the parties also disputed whether this appeal was rendered moot. The Tenth Circuit concluded that the issue raised by this appeal fell within an exception to the mootness doctrine for matters capable of repetition yet evading review. Because an arbitration panel has since issued its decision thereby dissolving the injunction at issue in this appeal, the Court declined to address whether the district court correctly granted the injunction. View "Kansas Department for Children v. SourceAmerica" on Justia Law

First Western Capital Management (“FWCM”), and its parent company First Western Financial, Inc. (collectively, “First Western”), sought a preliminary injunction against former employee Kenneth Malamed for misappropriating trade secrets. In 2008, FWCM acquired Financial Management Advisors, LLC (“FMA”), an investment firm Malamed founded in 1985 primarily to serve high net worth individuals and entities such as trusts and foundations. After selling FMA, Malamed worked for FWCM from 2008 until FWCM terminated him on September 1, 2016. In early 2016, a committee of FWCM directors began discussing the possibility of selling FWCM to another company. Although Malamed was not involved in these discussions, he learned about the potential sale and, in a meeting with other FWCM officers, expressed his displeasure with the buyer under consideration. Following the meeting, Malamed emailed his assistant asking her to print three copies of his client book, which contained the names and contact information for approximately 5,000 FWCM contacts. Of these contacts, 331 were current FWCM clients and roughly half of those had been clients of FMA before First Western acquired it. The printout also contained spreadsheets that included, among other information, client names, the total market value of their holdings under management, and the fees being charged by FWCM. On September 1, 2016, shortly after Malamed’s employment contract expired, First Western fired him. That same day, First Western served him with a complaint it had filed in federal court a month earlier, alleging misappropriation of trade secrets under the federal Defend Trade Secrets Act of 2016 (“DTSA”), and the Colorado Uniform Trade Secrets Act (“CUTSA”), breach of employment contract, and breach of fiduciary duty. First Western moved for a temporary restraining order and a preliminary injunction to prevent Malamed from soliciting FWCM’s clients. The district court excused First Western from demonstrating irreparable harm (one of the four elements a party seeking injunctive relief is typically required to prove) and granted the injunction. As applied here, the Tenth Circuit determined that if First Western could not show irreparable harm, it cannot obtain injunctive relief. The district court should not have entered the preliminary injunction here. View "First Western Capital v. Malamed" on Justia Law

The Santa Cruz Operation, Inc. (Santa Cruz) entered into a business arrangement with International Business Machines Corp. (IBM) to develop a new operating system that would run on a more advanced processor manufactured by Intel Corporation (Intel). The parties signed an agreement memorializing this relationship, calling it “Project Monterey.” Another technology company, The SCO Group, Inc. (SCO), then acquired Santa Cruz’s intellectual property assets and filed this lawsuit for IBM’s alleged misconduct during and immediately after Project Monterey. SCO accused IBM of stealing and improperly using source code developed as part of the Project to strengthen its own operating system, thereby committing the tort of unfair competition by means of misappropriation. The district court awarded summary judgment to IBM on this claim based on the independent tort doctrine, which barred a separate tort action where there was no violation of a duty independent of a party’s contractual obligations. SCO also accused IBM of disclosing Santa Cruz’s proprietary materials to the computer programming community for inclusion in its Linux open-source operating system. In a separate order, finding insufficient evidence of actionable interference by IBM, the district court granted summary judgment in favor of IBM on these tortious interference claims. Finally, after the deadline for amended pleadings in this case, SCO sought leave to add a new claim for copyright infringement based on the allegedly stolen source code from Project Monterey. SCO claimed it had only discovered the essential facts to support this claim in IBM’s most recent discovery disclosures. The district court rejected SCO’s proposed amendment for failure to show good cause. SCO appealed. After review, the Tenth Circuit reversed the district court’s order awarding IBM summary judgment on the misappropriation claim, and affirmed as to all other issues. View "SCO Group v. IBM" on Justia Law

Plaintiff Greggory Owings sustained an on-the-job injury, for which he received long-term disability benefits by defendant United of Omaha Life Insurance Company (United), under the terms of a group insurance policy issued by United to Owings’ employer. Owings disagreed with, and attempted without success to administratively challenge, the amount of his disability benefits. He then filed suit against United in Kansas state court, but United removed the action to federal district court, asserting that the federal courts had original jurisdiction over the action because the policy was governed by the Employee Retirement Income Security Act of 1974 (ERISA). The district court ultimately granted summary judgment in favor of United. Owings appealed. The Tenth Circuit concluded after review of this matter that United was arbitrary and capricious in determining the date that Owings became disabled and, in turn, in calculating the amount of his disability benefits. Consequently, the Court reversed the district court’s grant of summary judgment in favor of United and remanded with directions to enter summary judgment in favor of Owings. View "Owings v. United of Omaha Life" on Justia Law

HCG Platinum, LLC ("HCG") and Preferred Product Placement Corporation (“PPPC”) entered into a Marketing Agreement under which PPPC agreed to place HCG products into specified retailers in exchange for a percentage of the proceeds. Shortly thereafter, HCG filed the underlying breach-of-contract action against PPPC, seeking compensatory damages for PPPC’s alleged breaches and a declaratory judgment that HCG properly terminated the Marketing Agreement on account of these breaches. PPPC counterclaimed for breach of contract and asserted third-party contract claims against individuals and entities associated with HCG. Prior to trial, HCG moved to preclude PPPC from presenting evidence of damages, asserting that PPPC’s initial (and never supplemented) disclosures provided an insufficient description and computation of PPPC’s damages theory. Finding PPPC’s initial disclosures insufficient and its request to compel discovery untimely, the district court excluded the damages evidence from PPPC’s disclosures. Exclusion of that evidence, in turn, necessarily barred PPPC from pursuing its counterclaims, and the district court subsequently entered judgment against PPPC on that basis. PPPC appealed, arguing that the district court abused its discretion by imposing a discovery sanction that carried the force of dismissal, despite the fact that its discovery shortcomings resulted in only minimal and curable prejudice to HCG. After review, the Tenth Circuit reversed the district court’s judgment in favor of HCG on PPPC’s counterclaims ​and remanded for the district court to reconsider the exclusion of PPPC’s damages evidence under an analysis that considers, among other things, the availability of lesser sanctions. View "HCG Platinum v. Right Way Nutrition" on Justia Law

Plaintiff David Speed filed a petition asserting a putative class action against defendant JMA Energy Company, LLC. He alleged that JMA had willfully violated an Oklahoma statute that required payment of interest on delayed payment of revenue from oil and gas production. He further asserted that JMA fraudulently concealed from mineral-interest owners that it owed interest due under the statute, intending to pay only those who requested interest. JMA removed the case to the United States District Court for the Eastern District of Oklahoma, asserting that the district court had jurisdiction under the Class Action Fairness Act (CAFA - 28 U.S.C. 1332(d)). After conducting jurisdictional discovery, Speed filed an amended motion to remand the case to state court. The district court granted this motion, relying on an exception to CAFA that permitted a district court to decline to exercise jurisdiction over a class action meeting certain citizenship prerequisites “in the interests of justice and looking at the totality of the circumstances,” based on its consideration of six enumerated factors. On appeal JMA challenged the district court’s remand order. Because the district court properly considered the statutory factors and did not abuse its discretion by remanding to state court, the Tenth Circuit affirmed. View "Speed v. JMA Energy Company" on Justia Law

Eryetha Mayberry was abused by two certified nursing assistants while in the care of Quail Creek Nursing Home, operated by Westlake Nursing Home Limited Partnership and Westlake Management Company (collectively “Quail Creek” or “Westlake”). Plaintiffs, Mrs. Mayberry’s three daughters, filed suit against Westlake under Oklahoma law for negligence, negligence per se, and intentional infliction of emotional distress. After a trial, the jury found for plaintiffs and against Westlake on the claims of negligence and negligence per se, and made a special finding that Westlake had acted with reckless disregard for the rights of others. The jury awarded $1.2 million in compensatory damages and $10,000 in punitive damages. Westlake appealed, but finding no reversible error in the trial court’s decision, the Tenth Circuit affirmed. View "Racher v. Westlake Nursing" on Justia Law

Plaintiff Earl Oldam raised chickens for O.K. Farms since 1995. In 2014, he and O.K. entered into the chicken-growing contract at issue in this case. The contract had a three-year duration, but O.K. retained the right to terminate the contract for certain specified reasons, including “[b]reach of any term or condition of this contract,” “[a]bandonment or neglect of a flock,” and “[f]ailure to care for or causing damage to [O.K.’s] equipment or property.” In 2016, Plaintiff discovered that one of his three chicken houses had flooded after an overnight rainstorm. Plaintiff contacted O.K. to inform them of the issue; some of the flock in the affected henhouse perished from the flood. Remaining chickens were collected by O.K. Plaintiff was paid for the work he had done in raising the surviving chickens to this point, reduced by various expenses such as the costs of catching and moving the chickens. Shortly thereafter, O.K. sent Plaintiff a letter providing him with a ninety-day notice of contract termination for breach of the terms of the contract. Plaintiff filed suit in state court, alleging that O.K. breached the contract by terminating the agreement without adequate cause. O.K. removed the action to federal court and filed a motion for summary judgment. The district court stated that it had looked at the undisputed material facts from the summary judgment pleadings and found “questions of fact galore” on all of the arguments raised by O.K. in its motion. “But,” the court continued, “all that doesn’t matter,” because Plaintiff “didn’t say come take away the chickens from the flooded henhouse. He said come take them all.” The court granted O.K.’s motion for summary judgment, reasoning that because there was “nothing in the evidentiary material showing [that the chickens in the other henhouses] were in danger at all, he abandoned them” by telling O.K. to come pick them all up. In reversing the district court’s judgment, the Tenth Circuit found plaintiff raised arguments that directly addressed the district court’s sua sponte reasoning and that he was not provided an opportunity to make at trial, and argued he was prejudiced by the district court’s entry of judgment on this basis without considering any of the contrary arguments he might have made given notice and a reasonable time to respond. The Court was persuaded that Plaintiff had shown prejudice from the trial court’s sua sponte summary judgment decision. View "Oldham v. O.K. Farms" on Justia Law

In cases consolidated for review, the issue presented for the Tenth Circuit centered on whether the Bureau of Land Management (BLM) acted beyond its statutory authority when it promulgated a regulation, 43 C.F.R. sec. 3162.3-3 (2015), governing hydraulic fracturing (fracking) on lands owned or held in trust by the United States. The district court invalidated this regulation as exceeding the BLM’s statutory authority. While these appeals were pending, a new President of the United States was elected, and shortly thereafter, at the President’s direction, the BLM began the process of rescinding the Fracking Regulation. Given these changed and changing circumstances, the Tenth Circuit concluded these appeals were unripe for review. As a result, the Court dismissed these appeals and remanded with directions to vacate the district court’s opinion and dismiss the action without prejudice. View "Wyoming v. Zinke" on Justia Law

Cox Cable subscribers cannot access premium cable services unless they also rent a set-top box from Cox. A class of plaintiffs in Oklahoma City sued Cox under antitrust laws, alleging Cox had illegally tied cable services to set-top-box rentals in violation of section 1 of the Sherman Act, which prohibits illegal restraints of trade. Though a jury found that Plaintiffs had proved the necessary elements to establish a tying arrangement, the district court disagreed. In granting Cox’s Fed. R. Civ. P. 50(b) motion, the court determined that Plaintiffs had offered insufficient evidence for a jury to find that Cox’s tying arrangement "foreclosed a substantial volume of commerce in Oklahoma City to other sellers or potential sellers of set-top boxes in the market for set- top boxes." After careful consideration, the Tenth Circuit ultimately agreed with the district court and affirmed. View "Healy v. Cox Communications" on Justia Law