Latest 2 Cases This Week: Luebbert v. Global Control Systems, Inc. (8th Cir.), Mojave Desert Holdings, LLC v. Crocs, Inc. (Fed. Cir.)

Why the Biden Administration Was Right Earlier This Week to Change Course in the Obamacare Challenge Pending Before the Court

VIKRAM DAVID AMAR

Illinois Law Dean Vikram David Amar comments on an unusual move by the U.S. Solicitor General’s office, sending a letter to the U.S. Supreme Court amending the position of the federal government in a case currently pending before the Court challenging the Affordable Care Act. Dean Amar explains why the arrival of a new administration should generally not trigger such position reversals, but he argues that the unusual circumstances—specifically the “exceptional implausibility” of the government’s prior filings—may justify the government’s action in this instance.

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Luebbert v. Global Control Systems, Inc.

Court: US Court of Appeals for the Eighth Circuit

Docket: 19-2751

Opinion Date: February 9, 2021

Judge: Kobes

Areas of Law: Bankruptcy

The Eighth Circuit took this opportunity to clarify its jurisprudence about exceptions to discharge under 11 U.S.C. 523(a)(6) and concluded that a judgment for an intentional tort is not necessary to find judgment debt for a breach of contract nondischargeable. The willfulness requirement is met when the bankruptcy court finds facts showing that the debtor's conduct accompanying the breach of contract amounted to an intentional tort against the creditor. The court perceived that this aligns with the core of the analyses performed by the Ninth and Fifth Circuits. In this case, debtor sought to discharge hundreds of thousands of dollars in judgment debt in bankruptcy after a breach of contract lawsuit indebted him to his former employer. The court affirmed the bankruptcy court's determination that the debt resulted from his infliction of a willful and malicious injury on his former employer and so was non-dischargeable under 11 U.S.C. 523(a)(6). In this case, debtor's conduct amounted to an intentional tort under Missouri law.

Mojave Desert Holdings, LLC v. Crocs, Inc.

Court: US Court of Appeals for the Federal Circuit

Docket: 20-1167

Opinion Date: February 11, 2021

Judge: Timothy B. Dyk

Areas of Law: Bankruptcy, Government & Administrative Law, Intellectual Property, Patents

Crocs's Design Patent 789, titled “Footwear,” has a single claim for the “ornamental design for footwear.” Crocs sued Dawgs for infringement, Dawgs sought inter partes reexamination (IPE) under 35 U.S.C. 311. The district court stayed its proceedings. The examiner rejected the claim as anticipated, 35 U.S.C. 102(b). While an appeal to the Patent Trial and Appeal Board was pending, Dawgs filed for Chapter 11 bankruptcy. The bankruptcy court approved the sale of all of its assets to a new entity, Holdings, “not free and clear of any Claims Crocs . . . may hold for patent infringement occurring post-Closing Date by any person ... or any defenses Crocs may have in respect of any litigation claims that are sold.” The bankruptcy court authorized the distribution of the net sale proceeds and dismissed Dawgs’s bankruptcy case. Holdings assigned all rights, including explicitly the claims asserted by Dawgs in the infringement action and the IPE, to Mojave. Dawgs dissolved but continued to exist for limited purposes, including “prosecuting and defending suits" and "claims of any kind.” The Board declined to change the real-party-in-interest from the IPE requestor to Mojave, then reversed the examiner’s rejection of the patent’s claim. The Federal Circuit granted the motion to substitute. The assignments indicate that Mojave is Dawgs's successor-in-interest; as such, Mojave has standing. If the Board precludes substitution on the basis of a transfer in interest because of a late filing, it would defeat the important interest in having the proper party before the Board.