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Case Summaries

Commercial Law

[10/08] Structural Polymer Group, Ltd. v. Zoltek Corp.
In appeals arising following a jury's award in lost profits from defendant for breach of a requirements contract for the sale of carbon fiber, denial of defendant's motion for a new trial and motion for judgment as a matter of law are affirmed over claims that the district court erred: 1) by refusing to allow it to raise two arguments to the jury; 2) in ruling that defendant failed to make a submissible case that SP had abandoned the Supply Agreement; 3) by failing to remedy unfairly prejudicial testimony at trial; and 4) in various respects with regards to damages issues. However, modification of the jury award to reduce it by almost $16 million is affirmed on cross-appeal where the district court properly found the award duplicative.

[10/08] Noble Sys. Corp. v. Alorica Cent., LLC
In an action against defendants for tortious interference with a business relationship, fraud and intentional and negligent misrepresentation, conversion, unjust enrichment, and conspiracy to defraud plaintiff and convert its property, rulings against plaintiff are affirmed where: 1) grant of defendant's motion to take judicial notice of a financing statement it filed was not error; 2) one tortious interference claim failed as the allegations did not show that the defendant acted without justification, and the other claim was properly dismissed; 3) fraud and intentional and negligent misrepresentation claims were meritless; 4) conversion and replevin claims failed as plaintiff possessed no property interest that it could enforce against defendants; and 5) civil conspiracy and unjust enrichment claims failed as there was no requisite underlying fraud, conversion or tort supporting such claims.

[10/01] In re Heritage Bond Litig.
In a challenge to the scope of bar orders issued in securities class action settlements, bar orders forbidding all suits by non-settling defendant against settling defendants relating to or arising out of the class action are vacated as overly broad and remanded for modification because bar orders issued pursuant to Private Securities Litigation Reform Act section 4(f)(7)(A) or California Code of Civil Procedure section 877.6 can only bar claims for contribution, indemnity, and claims where the injury is the non-settling defendant's liability to the class action plaintiffs.

[09/30] Golden Gate Rest. Ass'n v. City and County of San Francisco
In a challenge to municipally mandated employer health care spending requirements, summary judgment for plaintiff is reversed and the case remanded with instruction to enter summary judgment for defendant where the spending requirements are not preempted by ERISA because: 1) the spending requirements do not create an ERISA "plan" as defined by 29 U.S.C. section 1002(1); and 2) the spending requirements do not have an impermissible connection with employers' ERISA plans, or make impermissible reference to such plans.

[09/25] US v. Able Time, Inc.
In an suit involving allegedly counterfeit watches seized by Customs and the resulting civil penalties imposed, grant of summary judgment for defendant is reversed and remanded where: 1) the Tariff Act does not contain an identity of goods or services requirement; and 2) as a matter of law, goods imported by defendant could not be "merchandise bearing a counterfeit mark" under 19 U.S.C. section 1526(e) because the owner of the trademark in question did not at the time make the type of goods imported by defendant.

[09/25] Direct TV, Inc. v. Webb
In a dispute arising from piracy of satellite television signals, a judgment of unauthorized reception of broadcast signals in violation of 47 U.S.C. section 605(e)(4), 18 U.S.C. section 2511(1)(a) and 47 U.S.C. section 605(a) is affirmed in part and reversed in part where: 1) 47 U.S.C. section 605(e)(4) does not apply to end users of pirate access devices; and 2) though circumstantial evidence can sustain claims under 18 U.S.C. section 2511(1)(a) and 47 U.S.C. section 605(a), possession of multiple pirate access devices does not constitute multiple violations of these statutes.

[09/24] Abagninin v. AMVAC Chem. Corp.
In a case brought under the Alien Tort Statute regarding use of a sterility inducing pesticide in the Ivory Coast, summary judgment for defendants on a genocide claim and dismissal of a crimes against humanity claim are affirmed where: 1) genocide requires intent, not the lower knowledge standard within the Rome Statute of the International Criminal Court (Rome Statute), because the U.S. has not signed or ratified the Rome Statute; and 2) plaintiffs claim of crimes against humanity did not allege state or state-like organizational action.

[09/23] Barboza v. New Form, Inc.
In a case considering whether damages for willful copyright infringement are dischargeable debt in the infringer's bankruptcy, summary judgment that such damages are non-dischargeable is reversed and remanded where: 1) there was a genuine issue of material fact as to whether the willful copyright infringement was a willful injury under Bankruptcy Code section 523(a)(6); and 2) the maliciousness requirement of Bankruptcy Code section 523(a)(6) was not addressed separately from the willfulness requirement.

[09/23] New England Surfaces v. E.I. Du Pont De Nemours and Co.
In a suit involving tort claims for fraudulent and negligent misrepresentation, breach of fiduciary duty and interference with contractual and prospective relations, dismissal of claims is affirmed in part and vacated in part where: 1) dismissal of plaintiff's state Franchise Act is reversed is vacated and remanded where the Act applies "only to franchise agreements...the performance of which contemplates or requires the franchisee to establish or maintain a place of business in [the state]"; and 2) district court properly ruled on summary judgment on plaintiff's other claims.

[09/22] In re Exide Tech. v. Pacific Dunlop Holdings, Inc.
In a bankruptcy decision involving claims against the foreign subsidiaries of a debtor in bankruptcy, approval of an order including claims against debtor's subsidiaries within the automatic stay of claims against the debtor is vacated and remanded, where: 1) the bankruptcy court did not properly conclude that the debtor was the only proper party for each of plaintiff's claims against defendant subsidiaries; 2) plaintiffs' filing a proof of claim in bankruptcy court against the debtor does not render different claims against defendant subsidiaries "core" claims for determining bankruptcy court jurisdiction; and 3) intertwinement of non-core and core claims does not give bankruptcy court jurisdiction over non-core claims.

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Tax Law

[10/10] Wagner v. US
In a claim for the return of funds allegedly wrongfully levied by the government, summary judgment for defendant is vacated and suit is dismissed for lack of subject-matter jurisdiction where there was no basis for jurisdiction under the Internal Revenue Code sections permitting claims for wrongful levy or substitution of value, or as a general third-party refund action.

[10/08] Jefferson v. US
In a suit to recover back payroll taxes for a day-care center which were assessed personally against plaintiff-director, summary judgment for defendant is affirmed where: 1) plaintiff was a "responsible person"; 2) plaintiff willfully failed to pay the day care's taxes; 3) plaintiff was not exempt from the trust fund recovery penalty; 4) defendant was not estopped from assessing the tax against plaintiff; and 5) defendant's failure to turn over evidence did not preclude summary judgment.

[09/29] Palahnuk v. Comm'r of Internal Revenue
Respondent's determination of a tax deficiency on petitioners' 2001 federal income tax return is affirmed where: 1) the rules governing the calculation of net operating loss for regular income tax purposes also apply to the alternative tax net operating loss except where otherwise indicated; 2) sections 172(c) and (d) of the Internal Revenue Code effectively preclude net capital losses from inclusion in net operating loss, and section 1211(b) limits capital loss deductions to $3000 per year; and 3) nothing in section 56(d) of the I.R.C. alters the rules for calculating net operating losses such that petitioners may include net capital losses in the calculation of the alternative tax net operating loss.

[09/24] Thomas v. State of Rhode Island
In a suit brought by members of an Indian tribe claiming that state officials violated their constitutional rights by arresting them without lawful authority on tribal lands for alleged cigarette tax violations, dismissal of action for failure to state a claim is affirmed over claims of error that: 1) the court construed their allegations too narrowly, thereby ignoring a viable Fourth Amendment claim based on the lack of probable cause for arrest; and 2) the court wrongly denied their request to amend the complaint, thereby denying them the opportunity to remedy any tax deficiencies.

[09/24] Wright v. Everson
In an action by plaintiff-"unenrolled" tax preparer challenging IRS' refusal to allow him to represent clients before the IRS, grant of summary judgment in favor of defendant-government is affirmed where: 1) Congress expressly delegated authority to the Secretary to promulgate regulations governing who may practice before the IRS; 2) 31 C.F.R. section 10.7(c)(1)(viii) is a reasonable regulation which is not arbitrary, capricious, or manifestly contrary to the statute; 3) plaintiff, as an unenrolled representative, was not authorized to represent taxpayers before the IRS if he prepared their tax returns and could not represent taxpayers whose tax returns he prepared when they were engaged in dealings with the IRS on matters other than examinations of the tax returns which he prepared.

[09/23] Cheung, Inc. v. US
In a case challenging the interest rate used in a wrongful levy award, the award is reversed and remanded where: 1) wrongful levies are treated like overpaid taxes for purposes of calculating the overpayment rate under 26 U.S.C. section 6621, including section 6621(a)(1)'s requirement of a one and a half point reduction in cases of overpayment exceeding $10,000.

[09/23] Acar v. Comm'r of Internal Revenue Serv.
In a challenge to denial of a retroactive tax refund, summary judgment for the IRS is affirmed where: 1) to elect mark to market accounting treatment under Internal Revenue Code section 475(f) for a tax year after 1998, one must file the necessary request with the tax return for the year prior; 2) plaintiff's section 475(f) request was untimely; and 3) hindsight does not qualify as a reasonable and good faith reason for extension under Treasury Regulation section 301.9100-3.

[09/23] US v. Cavins
Chiropractor's conviction for willfully attempting to evade and defeat payment of federal income tax is affirmed over claims that: 1) the indictment failed to charge and the government failed to prove a willful violation of 26 U.S.C. section 7201; 2) the district court erred in refusing to dismiss the indictment because Form 1040 returns for the 1992-1994 tax years failed to comply with the Paperwork Reduction Act; and 3) the admission of evidence that he failed to file income tax returns violated his Fifth Amendment rights.

[09/23] Univ. of Chicago Hosps. v. US
In an action by a hospital to recover FICA taxes paid on behalf of medical residents, denial of summary judgment for defendant is affirmed where the statutory student exception from FICA tax does not categorically exclude medical residents as "students" potentially eligible for exemption from payment of FICA taxes.

[09/18] Bay County v. Town of Cedar Grove
Two judgments validating tax-increment-financed bonds proposed for issuance by a town are affirmed where: 1) the town was not required to conduct two readings of its proposed redevelopment resolutions; and 2) the proposed bonds were not a pledge of the town's taxing power and so were not subject to the referendum requirement.

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