Latest 2 Cases: Blue Grass Savings Bank v. Community Bank & Trust Co. (Banking), Merrill v. Valley View Swine, LLC (Real Estate & Property Law)

Supreme Court Gives States the Green Light to Infringe Copyrights

MICHAEL C. DORF

Cornell law professor Michael C. Dorf comments on a recent decision in which the U.S. Supreme Court held that Congress lacked constitutional authority to enact the Copyright Remedy Clarification Act of 1990, which gives individuals the right to sue a state for damages for copyright infringement. Dorf describes the complexity of the Court’s sovereign immunity doctrine and points out the Court’s peculiar failure to simply invalidate a portion of the statute while severing and preserving the valid portions and/or applications of it—which the Court has done in some other cases.

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Blue Grass Savings Bank v. Community Bank & Trust Co.

Docket: 19-0657

Opinion Date: March 27, 2020

Judge: Edward M. Mansfield

Areas of Law: Banking, Real Estate & Property Law

The Supreme Court reversed the foreclosure decree entered by the district court giving priority under a future-advances clause to the full amount of credit extended by the first lienholder rather than the maximum amount set forth in the notice provision of the first lienholder's mortgage, holding that the first lienholder's priority was capped at $148,000. A bank made a series of loans to a farmer and obtained a mortgage with a future-advances clause on a farm property. The bank's mortgage contained language stating that the mortgage secured credit in the amount of $148,000. The farmer later took out a loan from a second bank, also secured in part by the same farm property. When the first bank filed a foreclosure proceeding, the parties disputed whether the first bank's lien had priority for all amounts due to the first bank or only up to $148,000. The district court found that the first bank's priority was not limited to $148,000 but extended to all debt secured by the mortgage. The Supreme Court reversed, holding (1) the first bank's priority was capped at $148,000, plus interest; and (2) the first bank was not allowed to collect default interest at eighteen percent as part of its first-priority lien where there was no written agreement to pay that rate.

Merrill v. Valley View Swine, LLC

Docket: 19-0821

Opinion Date: March 27, 2020

Judge: Edward M. Mansfield

Areas of Law: Real Estate & Property Law

The Supreme Court affirmed the judgment of the district court finding that Plaintiffs had a "losing cause of action," concluding that Plaintiffs' claims against Defendants were frivolous, and granting Defendants' motion for costs and expenses, holding that the district court did not err or abuse its discretion. A group of property owners alleged that confined animal feeding operations (CAFOs) operated and supported by Defendants amounted to a nuisance. The plaintiffs later dismissed their lawsuit because they failed to exhaust farm mediation and then later refiled. Two of the plaintiffs (together, Plaintiffs), however, voluntarily dismissed their claims a second time, resulting in an adjudication against them on the merits. Defendants sued Plaintiffs seeking costs and expenses pursuant to Iowa Code 657.11(5). The district court granted the motions. The Supreme Court affirmed, holding (1) two voluntary dismissals meant Plaintiffs had "a losing cause of action"; (2) Plaintiffs' claims were frivolous; and (3) the district court's apportionment of costs and expenses was appropriate.