Case Summaries
Bankruptcy Law
[09/02] US v. Ritchie Special Cred. Invs., Ltd.
In intervenor's application to intervene in an adversary proceeding initiated by the government pursuant to 18 U.S.C. section 1345 against the alleged author of a Ponzi scheme, the denial of the application is affirmed where: 1) the
litigation progressed substantially between the initiation of these proceedings and intervenor's second motion to intervene; and 2) intervenor had knowledge of all the facts surrounding the district court's injunction, and failed to take issue with it when first presented with an opportunity to do so.
[09/02] Ritchie Special Cred. Invs., Ltd. v. US Trustee
In a creditor's objection to the appointment of a bankruptcy trustee, arguing that the trustee did not qualify as a “disinterested person” as required by 11
U.S.C. section 1104(d), the denial of the objection is affirmed where: 1) the
bankruptcy court did not abuse its discretion in concluding that the trustee's role and interests as a receiver did not predispose him towards forfeiture or amount to a disqualifying material adverse interest; and 2) there was no abuse of discretion in the bankruptcy court’s determination that creditor failed to show that it would be prejudiced by the trustee's appointment as trustee in the jointly administered estates.
[08/27] Paloian v. Lasalle Bank, N.A.
In a debtor-hospital's trustee's action to recover, as fraudulent conveyances, some loan payments made during the last years before hospital entered bankruptcy, judgment of the district court is vacated and remanded where: 1) LaSalle Bank is an "initial transferee" as an entity that receives funds for use in paying down a loan, or passing money to investors in a pool, is an "initial transferee" even though the recipient is obliged by contract to apply the funds according to a formula; 2) because the hospital was solvent in August 1997, the ensuing months' debt service cannot be recaptured as a fraudulent conveyance; and 3) on remand, the bankruptcy court is instructed to determine whether the transfer of the accounts receivable to MMA Funding was a true sale, such that MMA Funding served as the bankruptcy-proofing intermediary that the lenders desired.
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Commercial Law
[09/01] Hollander v. Copacabana Nightclub
In a 42 U.S.C. section 1983 action brought against several New York City nightclubs for discriminating against men on “Ladies’ Nights," dismissal of the complaint is affirmed where the nightclubs were not state actors and thus were not subject to section 1983.
[08/31] Sinoying Logistics Pte Ltd. v. Yi Da Xin Trading Corp.
In an action seeking to attach defendant's property in New York as pre-judgment security for a pending arbitration in Hong Kong, dismissal of the action for lack of personal jurisdiction is affirmed where the district court did not err in declining to fashion an equitable remedy in circumstances where it was clear that the original attachment order could not be sustained in light of Shipping Corp. of India Ltd. v. Jaldhi Overseas Pte Ltd., 585 F.3d 58 (2d Cir. 2009).
[08/30] Princo Corp. v. Int'l Trade Comm'n
In plaintiff's patent infringement suit related to two types of digital storage devices, recordable discs (CD-Rs) and rewritable compact discs (CD-RWs), claiming that defendant was violating section 337(a)(1)(B) of the Tariff Act of 1930 by importing CD-Rs and CD-RWs that infringed its patents, the International Trade Commission's decision that the doctrine of patent misuse does not bar intervenor-U.S. Philips Corporation from enforcing its patent rights against defendant is affirmed as, even if Phillips and Sony engaged in an agreement not to license the patent at issue for non-Orange-Book purposes, that hypothesized agreement had no bearing on the physical or temporal scope of the patents in suit, nor did it have anti-competitive effects in the relevant market. Therefore, the asserted agreement between Phillips and Sony did not constitute misuse and cannot justify rendering all of Phillips' Orange Book patents unenforceable.
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Contracts
[09/02] Travelers Prop. Cas. Ins. Co. of Am. v. Nat'l. Union Ins. Co.
In an action by one insurer against another seeking $10 million in subrogation proceeds, summary judgment for defendants is affirmed in part where plaintiff waived certain rights by refusing repeated invitations to participate in subrogation discussions. However, the judgment is reversed in part where, as the excess insurer, plaintiff was entitled to a priority interest in the subrogation proceeds representing insured losses.
[09/02] Bodum USA, Inc. v. La Cafetiere, Inc.
In a suit for common law trade dress of a French-press coffee maker known as the Chambord, district court's judgment in favor of the defendant is affirmed as, Article 4 of the parties' contract is clear and precise as it allows defendant to sell the coffee maker design anywhere except France - provided that it does not use the Chambord or Melior names and does not use plaintiff's supply channels for four years.
[09/01] US ex rel. SNAPP v. Ford Motor Co.
District court's denial of plaintiff's motion to file a second amended complaint concluding that the proposed amended complaint, which included a list of contracts that the government allegedly entered into as a result of fraudulent representations on the part of Ford, did not allege with sufficient particularity the existence of a "claim" as defined by the False Claims Act (FCA), is affirmed as, because no holding of Bledsoe II affected the circuit's law on the questions at issue before the district court, the district court did not abuse its discretion in holding that its original rationale for not permitting plaintiff to file its second amended complaint pursuant to Rule 59(e) still obtained and that permitting such a filing was not otherwise "required in order to prevent an injustice."
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Corporation & Enterprise Law
[08/30] Metavante Corp. v. Emigrant Savings Bank
In plaintiff's suit for breach of contract against defendant-bank for nonpayment of fees under the parties' Technology Outsourcing Agreement, judgment of the district court is affirmed where: 1) an expert's testimony was both relevant and reliable; 2) district court correctly determined that plaintiff did not breach the Agreement's performance warranty and its duty of good faith; 3) district court did not err in concluding that any reliance by defendant on the alleged misrepresentations of plaintiff was not reasonable; 3) district court committed no reversible error in determining that defendant's fraud claims were without merit; 4) district court determined correctly that defendant's success on the in-house issue does not render it a "prevailing party" within the meaning of the contract; and 5) the district court acted within the bounds of its discretion in determining that no additional guarantee of reasonableness was required.
[08/30] Flood v. ClearOne Communications, Inc.
In defendant's appeal from a preliminary injunction requiring defendant-corporation to advance attorney fees and costs to its former CEO, who was then facing a criminal trial, the order is vacated where the district court misread the parties' contract as a matter of law, disregarding express conditions to advancement specified in their agreement.
[08/30] HCM Healthcare, Inc. v. California Ins. Guarantee Ass'n
In a residential nursing facility's suit against California Insurance Guarantee Association (CIGA) for breach of contract and for violating the Insurance Code for refusing to provide plaintiffs with defense counsel and indemnification for underlying lawsuits for elder abuse, judgment in favor of defendant is affirmed where: 1) as a creature of statute, and not of contract, in some instances CIGA may not be responsible for an insured loss to the same extent as the insolvent insurer might be under the terms of its insurance contract; and 2) Pennsylvania's liquidation order imposed a June 30, 2005 deadline for filing against an insurer and because plaintiff did not meet the deadline, CIGA may not honor their claims.
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Criminal Law & Procedure
[09/02] US v. Beale
Defendants' convictions for conspiracy to prevent by intimidation a judicial officer from discharging her official duties, and obstruction of justice, are affirmed where: 1) the evidence was sufficient to convict defendants of conspiracy to prevent by force, intimidation or threat, an officer of the U.S. from discharging her duties; 2) the First Amendment did not bar defendants' convictions because the conduct underlying the convictions was an unprotected true threat; and 3) the jury was advised more than once about the protections afforded by the First Amendment.
[09/02] US v. Holmes
Defendant's convictions for being a felon in possession of a firearm, and for possessing with intent to distribute in excess of five grams of crack cocaine, are affirmed in part where the evidence was sufficient to overcome a challenge to the sufficiency of the evidence to support defendant's conviction on the felon-in-possession charge. However, the convictions are reversed in part where neither defendant nor his attorney on his behalf made a clear and intentional waiver of defendant's rights to confrontation that would allow the full extent of the confidential informant's statements read by an officer.
[09/02] US v. Rea
District court's conviction of defendants for conspiracy to distribute in excess of 500 grams of a mixture containing methamphetamine and other related offenses, and their sentences are affirmed in part and vacated in part where: 1) because the government concedes defendant's argument, that the conspiracy alleged in his indictment is a lesser included offense of the continuing criminal enterprise (CCE) and that, along with a special assessment for each, his concurrent sentences thus amount to cumulative punishment not authorized by Congress, defendant's conviction and sentence for conspiracy are vacated; 2) the evidence presented against defendant was sufficient to justify his continuing criminal enterprise conviction; 3) district court did not abuse its discretion by admitting the statements made by defendant's co-conspirators and any error related to an agent's testimony was harmless; 4) district court did not plainly err by imposing the firearm sentencing enhancement upon the defendant as the government demonstrated that the guns were found in close proximity to drug paraphernalia and that defendant dealt in large quantities of meth on a frequent basis; 5) sufficient evidence supported co-defendant's conviction for conspiracy as based on the evidence, any reasonable juror could find that the relationship between the defendants exceeded that of a buyer-seller relationship; and 6) district court's calculation errors did not affect co-defendant's substantial rights.
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Dispute Resolution & Arbitration
[08/31] Cent. States Southeast & Southwest Areas Pension Fund v. O'Neil Bros. Transfer & Storage Co.
In a multi-employer pension fund administrator's suit against an employer seeking interim payment of withdrawal liability under the Employee Retirement Income Security Act, district court's grant of summary judgment for administrator is affirmed as defendant's default is governed by the provisions of 29 U.S.C. section 1399(c)(5)(B), and under that section, as interpreted reasonably by the Pension Benefit Guaranty Corporation (PBGC), the entire amount of the withdrawal payment is immediately payable upon default and that obligation is not deferred because of the pendency of arbitration.
[08/31] Cotchett, Pitre & McCarthy v. Universal Paragon Corp.
In defendant's suit against a law firm, claiming that an arbitrator's award of $7,554,149.13 in attorney fees and expenses for the law firm, related to its representation of defendant in an underlying complex environmental litigation, is unconscionable and violates public policy, superior court's affirmance of the award is affirmed as, assuming that defendant's claim of unconscionability is subject to judicial review as a predicate for determining whether the arbitration award violates public policy, the claim is rejected on the merits as neither the fee agreement nor the award actually issued by the arbitrator is unconscionable under rule 4-200 of the Rules of Professional Conduct.
[08/30] Next Step Med. Co., Inc. v. Johnson & Johnson Int'l
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Securities Law
[08/26] Bank of Am., N.A. v. UMB Fin. Servs., Inc.
In an appeal from a series of orders in which the district court declined to compel plaintiff to submit to arbitration and declined to stay litigation pending the outcome of such arbitration, the orders are affirmed where: 1) plaintiff never signed an agreement containing an arbitration clause, and the document plaintiff did sign, the employment agreement, did not incorporate the arbitration clause of the FINRA contracts by reference or otherwise; and 2) the court need not reach the question of waiver since the district court properly determined there was no existing right to arbitration in this case.
[08/20] Lustgraaf v. Behrens
In an action for damages arising out of a Ponzi scheme perpetrated by a registered representative of one defendant and general agent of another, the dismissal of the complaint is affirmed in part where the complaint did not allege the additional facts necessary to demonstrate that defendant actually exercised control over its subsidiary's general operations rather than merely possessing the ability to do so. However, the order is reversed in part where plaintiffs met their burden of alleging falsity under the Private Securities Litigation Reform Act.
[08/20] Schleicher v. Wendt
In a securities-fraud suit against some managers of a large, publicly traded financial-services holding company, district court's conclusion that investors can use the fraud-on-the-market doctrine as a replacement for person-specific proof of reliance and causation in granting the class certification is affirmed as, the district court assured itself that the market for the company's stock was thick enough to transmit defendants' statements to investors by way of the price, and as such, the district court did not commit a legal error, or abuse of discretion, in deciding that the fraud-on-the-market doctrine should not be conscripted to serve some other function.
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