Monday, October 6, 2014

Business law, civil procedure, and ground almond corn meal souffle pancakes with fresh peaches lightly sauteed in butter and dark maple syrup

Richardson v. Koch Law Firm, P.C.
Court: U.S. 7th Circuit Court of Appeals
Docket: 12-3868 Opinion Date: September 26, 2014
Judge: Easterbrook
Areas of Law: Bankruptcy, Civil Procedure

Richardson, apparently a lawyer who has been suspended several times, incurred educational debt in 1988 but did not pay. Indiana University, the creditor, sued in 1998. Richardson filed a bankruptcy petition days before trial but did not tell the court, the University, or its counsel. Nor did he appear for trial. The state judge entered a default judgment, which the law firm tried unsuccessfully to collect. After learning about the bankruptcy, the law firm stopped collection efforts. The bankruptcy ended in 2001, and the firm resumed collection efforts, relying on 11 U.S.C. 523(a)(8), which makes most educational debts nondischargeable. Richardson filed a second bankruptcy in 2002 that lasted until 2007. Again the law firm ceased its efforts until after its end. The post-2007 efforts resulted in Richardson’s claim that the law firm violated the Fair Debt Collection Practices Act, 15 U.S.C. 1692e, 1692f, by trying to enforce a judgment that had been entered in violation of the Bankruptcy Code’s automatic stay. The district court treated the suit as a collateral attack on the state court’s judgment and dismissed for want of jurisdiction, invoking the Rooker-Feldman doctrine. The Seventh Circuit held that the dismissal should be on the merits, noting that the state court judgment was vacated at the request of Indiana University.

Wells Fargo Equip. Fin., Inc. v. Titan Leasing Inc.
Court: U.S. 7th Circuit Court of Appeals
Docket: 13-2291 Opinion Date: September 30, 2014
Judge: Easterbrook
Areas of Law: Business Law, Commercial Law, Contracts

Gerdau leased a locomotive from Titan for use in switching at its Knoxville mill. Titan shipped the locomotive in 2008, but it was damaged in transit and sent for repair. It did not reach Gerdau’s plant until 2009. Gerdau rejected it, stating that it needed further repairs. While the locomotive was being repaired, Titan assigned the lease to Leasing, an affiliated business, which then used the lease as security for a loan from Wells Fargo. The loan is nonrecourse: Wells Fargo agreed to look for repayment exclusively from the stream of rentals expected from Gerdau. Leasing made several warranties. Gerdau has never made a payment on the lease. Wells Fargo has taken control of the locomotive and is attempting to sell it. The district court granted summary judgment against Wells Fargo, ruling that Leasing had kept its promises. The court looked to the lease, and then to the Uniform Commercial Code, to see whether the locomotive had been “accepted” when the lease was assigned. Gerdau had an opportunity and the lease required Gerdau to inspect before shipment. The Seventh Circuit reversed. Gerdau did not acknowledge the locomotive’s receipt; Leasing did not live up to its warranties. It must repay Wells Fargo. Titan must perform the guarantees.

Foodmark, Inc. v. Alasko Foods, Inc.
Court: U.S. 1st Circuit Court of Appeals
Docket: 13-2188 Opinion Date: October 1, 2014
Judge: Thompson
Areas of Law: Business Law, Consumer Law, Contracts

Alasko Foods, Inc. (“Alasko”), a Canadian corporation that sells frozen produce to retail outlets, and Foodmark, Inc. (“Foodmark”), a Massachusetts corporation that assists food manufacturers in marketing branded-label and private-label products to retailers, entered into a “U.S. Representation Agreement [and] Sales Management Agreement” wherein Alasko retained Foodmark to market Alasko’s products in the United States. Five years later, Alasko terminated the Agreement. Foodmark filed a complaint against Alasko, alleging that Alasko’s refusal to pay the “Non-Renewal Termination Fee” contemplated by the Agreement constituted a breach of the Agreement and of its covenant of good faith and fair dealing. A federal district court entered summary judgment for Foodmark and awarded $1.1 million in damages. The First Circuit affirmed, holding that there were no genuine issues of fact, and Foodmark was entitled to a termination fee in the amount calculated by the district court.

Lightfoot v. Cendant Mortgage Corp.
Court: U.S. 9th Circuit Court of Appeals
Docket: 10-56068 Opinion Date: October 2, 2014
Judge: Fletcher
Areas of Law: Civil Procedure

Plaintiffs appealed the district court's judgment dismissing her claims against Fannie Mae, contending that the district court lacked jurisdiction over their claims. The court affirmed, concluding that, under the rule announced in American National Red Cross v. S.G., the sue-and-be sued clause in Fannie Mae's federal charter confers federal question jurisdiction over claims brought by or against Fannie Mae. Accordingly, the district court had subject matter jurisdiction over plaintiffs' claims.

Bersin Bagel Group v. The Original Brooklyn Water Bagel Co., et al.
Court: U.S. 11th Circuit Court of Appeals
Docket: 13-12798 Opinion Date: September 30, 2014
Judge: Marcus
 Areas of Law: Civil Procedure

The district court entered a final judgment that barred future lawsuits against OBWB related to certain false patent marking or advertising after OBWB settled a qui tam false marketing suit. Subsequently, Bersin filed suit against OBWB for damages tied to Bersin's investment in an OBWB franchise. The district court issued an order that purported to enforce the federal judgment by enjoining Bersin's state court suit. The court concluded that it lacked jurisdiction to hear the appeal where the order was not final under 28 U.S.C. 1291 because it was not the proper tool for enforcing an injunction. The order did not hold a noncompliant party in contempt or impose sanctions, nor was the order an appealable interlocutory decision for purposes of section 1292(a)(1). The order merely clarified the existing injunction found in the district court's judgment. Accordingly, the court dismissed the appeal.

Scarlott v. Nissan North America, Inc., et al.
Court: U.S. 5th Circuit Court of Appeals
Docket: 13-20528 Opinion Date: September 30, 2014
Judge: Higginson
Areas of Law: Civil Procedure

Plaintiff filed suit in Texas state court against Nissan for breach of express warranty, breach of implied warranty, and violation of Texas law. Plaintiff then amended her complaint to add claims against the dealership, a Nissan distributor, and an auto care company (Hurricane). Defendants asserted federal question jurisdiction under the Magnuson-Moss Warranty Act, 15 U.S.C. 2301 et seq., and removed to federal court. Plaintiff raised the issue of subject matter jurisdiction three months after removal. Plaintiff subsequently dismissed her claims against the dealership and distributor. Plaintiff then filed a motion to remand the suit to state court and the district court denied the motion. The court reversed and remanded, concluding that the district court erred by denying plaintiff's motion to remand where it was not facially apparent that her total damages meet the $50,000 jurisdictional threshold.

Monkton Ins. Servs., Ltd. v. Ritter
Court: U.S. 5th Circuit Court of Appeals
Docket: 13-50941 Opinion Date: September 26, 2014
Judge: Elrod
Areas of Law: Civil Procedure

Plaintiff filed a third-party complaint against Butterfield, a Cayman bank organized and regulated under Cayman law and located on the Island of Grand Cayman, alleging that Butterfield breached contracts with Geneva by failing to detect forged signatures on withdrawals from Geneva's bank account. On appeal, plaintiff challenged the dismissal of his claims against Butterfield for lack of personal jurisdiction. The court concluded that exercising specific jurisdiction over Butterfield would be improper because Butterfield has not purposefully availed itself of the benefits and protections of Texas law through minimum contacts related to the cause of action. Accordingly, the court affirmed the district court's grant of Butterfield's motion to dismiss for lack of personal jurisdiction. Further, the district court did not abuse its discretion in denying plaintiff's motion for jurisdictional discovery.

Cedar Lodge Plantation, L.L.C., et al. v. CSHV Fairway View I, L.L.C., et al.
Court: U.S. 5th Circuit Court of Appeals
Docket: 14-30735 Opinion Date: September 26, 2014
Judge: Jones
Areas of Law: Civil Procedure, Class Action

Cedar Lodge filed a proposed class action suit against Fairway Defendants in Louisiana state court and Fairway Defendants removed to federal court under the Class Action Fairness Act (CAFA), 28 U.S.C. 1332(d). Cedar Lodge subsequently amended the complaint to add STS, a Louisiana citizen, as defendant and moved to remand to state court under the local controversy exception to CAFA jurisdiction. The district court remanded. This court then granted the Fairway Defendants permission to appeal the remand order and now hold that the application of the local controversy exception depends on the pleadings at the time the class action is removed, not on an amended complaint filed after removal. Accordingly, the court reversed and remanded for further proceedings.

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