Recent Developments in the Law Hantzes & Reiter Attorneys McLean Virginia

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Case Summaries

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Commercial Law

[09/03] Flying J, Inc. v. Hollen
In plaintiff's facial challenge to Wisconsin's gasoline pricing regulations, district court's grant of plaintiff's motion for summary judgment is reversed and remanded and a permanent injunction against enforcing provisions of the regulations is dissolved as the lack of evidence in the record supporting plaintiff's allegations of collusive conduct by gasoline dealers is fatal to its claim that the motor vehicle fuel provisions of the Unfair Sales Act are preempted by the Sherman Act as it cannot be found on the face of the statute any compelled or authorized conduct that constitutes a violation of federal antitrust law.

[09/03] Superior Seafoods, Inc. v. Tyson Foods, Inc.
District court's denial of plaintiff's Rule 60(d)(3) motion to vacate an underlying consent judgment involving a series of trademark-related actions stemming from plaintiff's sale of a seafood-products business to defendant is affirmed as, given the facts, and given the equitable requirement that the party seeking relief be free from negligence and fault, the district court clearly did not abuse its discretion in finding equitable relief inappropriate in this case.

[09/03] Songer v. Dillon Resources, Inc.
In an action brought by truck drivers who operate commercial trucks against defendants for unpaid overtime under the Fair Labor Standards Act (FLSA), summary judgment for defendants and dismissal of plaintiffs' claims with prejudice is affirmed where the Motor Carrier Act exemption applies to bar plaintiffs' claims as: 1) the MCA applies to defendant-staff leasing agency because is a joint employer with the two companies, both of whom are subject to the exemption, and 2) plaintiffs engaged in activities that directly affect operational safety of motor vehicles in transport of property in interstate commerce.

[09/03] Fed. Trade Comm'n v. Leshin
In the Federal Trade Commission's suit against defendants for providing debt consolidation services in violation of the Federal Trade Commission Act and the Telemarketing and Consumer Fraud and Abuse Prevention Act, district court's judgment holding defendants in contempt for violating a stipulated injunction and ordering defendants to disgorge all fees collected in violation of the injunction is affirmed where: 1) district court did not abuse its discretion by holding the defendants in contempt; 2) district court did not err by holding the counseling center in contempt, by holding defendants individually liable, or by holding the contempt defendants jointly and severally liable; 3) district court did not abuse its discretion by ordering disgorgement as the sanction for contempt or in calculating the amount to be disgorged; 4) district court issued civil contempt sanctions and did not violate the contempt defendants' right to due process; and 5) the provision of the final order of disgorgement that allows the Commission to convert unpaid balance into a money judgment is not ripe for review.

[09/03] SmallBizPros, Inc. v. MacDonald
In an appeal arising from the entry of a contempt order against defendant enforcing a settlement agreement with plaintiff, the contempt order is vacated and remanded where, although the parties and the district court likely intended for the district court to retain ancillary jurisdiction to enforce the terms of the settlement agreement, a stipulation effectively dismissed the case when it was filed, and thus, the district court lacked jurisdiction to enforce the terms of the settlement agreement.

[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.

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Contracts

[09/03] F.B.T. Prods., LLC v. Aftermath Records
In a dispute concerning the percentage of royalties due to plaintiffs under their contracts with defendant in connection with the recordings of the rapper Eminem, judgment in favor of defendant is reversed and an attorney's fees award in its favor is vacated where: 1) a "Masters Licensed" provision unambiguously applies to permanent downloads and mastertones; and 2) thus, the district court should have granted summary judgment to plaintiffs.

[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] Atlantic Nat'l Trust LLC v. Mt. Hawley Ins. Co.
In an action seeking insurance proceeds arising from a fire, defendants' appeal from the grant of plaintiff's motion to remand is dismissed where the court lacked appellate jurisdiction to review a federal district court order remanding a case to state court based on a ground colorably characterized as a "defect" for purposes of 28 U.S.C. section 1447(c).

[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.

[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.

[08/27] Russell v. Comm'r of Internal Rev.
In taxpayers' appeal from the tax court’s decision that several loans did not constitute "indebtedness of the S corporation to the shareholder" such that taxpayers could claim losses incurred by the Missouri River Royalty Corporation (MMRC), the order is affirmed where the court's review of the record revealed no error in the tax court's rulings.

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Trade Secrets

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