Not Letting Felons Vote Damages Democracy for All Citizens

AUSTIN SARAT

Austin Sarat— Associate Provost, Associate Dean of the Faculty, and William Nelson Cromwell Professor of Jurisprudence and Political Science at Amherst College—argues that disenfranchising felons, as most American states do in some way, does substantial harm to everyone in our democracy. Sarat praises a recent decision by a federal district court in Florida striking down a state law requiring people with serious criminal convictions to pay court fines and fees before they can register to vote, but he cautions that but much more needs to be done to ensure that those who commit serious crimes can exercise one of the essential rights of citizenship.

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Jackson v. Abernathy

Court: US Court of Appeals for the Second Circuit

Docket: 19-1300

Opinion Date: May 27, 2020

Judge: Per Curiam

Areas of Law: Civil Procedure, Securities Law

The Second Circuit affirmed the district court's denial of plaintiff's motion to file an amended securities fraud complaint against the manufacturers of an allegedly defective surgical gown. The court held that plaintiff's proposed amendment would be futile, because he failed to raise a strong inference of collective corporate scienter by (1) relying on the knowledge of employees unconnected to the challenged statements or (2) pleading that the challenged statements concerned a key product with which the company's senior management would be expected to be familiar.

Sierra Frac Sand, LLC v. CDE Global Limited

Court: US Court of Appeals for the Fifth Circuit

Docket: 19-40489

Opinion Date: May 26, 2020

Judge: Leslie H. Southwick

Areas of Law: Civil Procedure

After plaintiff filed suit for fraud, misrepresentation, and breach of contract, defendant moved to dismiss under the doctrine of forum non conveniens based on a forum-selection clause found in a document external to, but incorporated into, the parties' contract. The Fifth Circuit affirmed the district court's enforcement of the forum-selection clause and dismissal of the complaint. The court held that the forum-selection clause was incorporated into the contract and is binding. In this case, all the forum non conveniens private-interest factors weigh in defendant's favor of litigating the case in Northern Ireland. Furthermore, there are no unusual circumstances that warrant retaining the litigation in Texas.

City of Oakland v. BP PLC

Court: US Court of Appeals for the Ninth Circuit

Docket: 18-16663

Opinion Date: May 26, 2020

Judge: Sandra Segal Ikuta

Areas of Law: Civil Procedure

Defendants removed two complaints brought by California cities in state court alleging that defendants' production and promotion of fossil fuels is a public nuisance under California law. The Ninth Circuit held that the state-law claim for public nuisance does not arise under federal law for purposes of 28 U.S.C. 1331, and remanded to the district court to consider whether there was an alternative basis for subject-matter jurisdiction. The panel held that neither exception to the well-pleaded-complaint rule applies to the original complaints and thus the district court erred in holding that it had jurisdiction under section 1331 at the time of removal. The panel also held that the cities cured any subject-matter jurisdiction defect by amending their complaints to assert a claim under federal common law. The panel joined the Fifth Circuit in holding that a dismissal for failure to state a claim, unlike a grant of summary judgment or judgment after trial, is generally insufficient to forestall an otherwise proper remand.

Cooper v. Tokyo Electric Power Co.

Court: US Court of Appeals for the Ninth Circuit

Docket: 19-55295

Opinion Date: May 22, 2020

Judge: Jay S. Bybee

Areas of Law: Civil Procedure, International Law

The Ninth Circuit affirmed the district court's dismissal of claims brought by U.S. servicemembers and their families against TEPCO and GE, alleging that they were exposed to radiation from the Fukushima Daiichi Nuclear Power Plant. The Japanese Act on Compensation for Nuclear Damage provides that the operator of a nuclear power plant is strictly liable for any damage caused by the operation of the power plant but no other person shall be liable. The panel held that Japan's Compensation Act was a liability-limiting statute with outcome-determinative implications and was substantive for Erie purposes. In this case, the district court did not err in proceeding with the full choice-of-law analysis at the motion-to-dismiss stage of the litigation. The panel applied California's three step "governmental interest" test in deciding the choice-of-law questions and ultimately concluded that the district court did not err when it decided that the laws of Japan, not California, govern plaintiffs' claims against GE. The panel likewise held that the district court did not err in proceeding with the choice-of-law analysis and finding that Japanese law also applies to plaintiffs' claims against TEPCO. Finally, having decided that Japanese law applies to the case and considering Japan's strong interests in the case being litigated in Japan, the panel held that the district court did not abuse its discretion when it dismissed the claims against TEPCO on international-comity grounds.

County of San Mateo v. Chevron Corp.

Court: US Court of Appeals for the Ninth Circuit

Dockets: 18-15499, 18-15502, 18-15503, 18-16376

Opinion Date: May 26, 2020

Judge: Sandra Segal Ikuta

Areas of Law: Civil Procedure

Counties and cities filed six complaints in California state court against energy companies, alleging nuisance and other causes of action arising from the role of fossil fuel products in global warming. After removal to federal court, the district court granted plaintiffs' motion to remand. The Ninth Circuit held, under 28 U.S.C. 1447(d), that the single ground of removal that it has jurisdiction to review is whether the district court erred in holding that there was no subject matter jurisdiction under the federal officer removal statute, 28 U.S.C. 1442(a)(1). Therefore, the panel dismissed in part for lack of jurisdiction to the extent the energy companies seek review of the district court's ruling as to other bases for subject matter jurisdiction. The panel affirmed in part, holding that the district court did not err in holding that there was no subject matter jurisdiction under section 1442(a)(1) where the energy companies failed to establish that they were "acting under" a federal officer's directions.

Corona v. City of Clovis

Court: US Court of Appeals for the Tenth Circuit

Docket: 19-2147

Opinion Date: May 27, 2020

Judge: Baldock

Areas of Law: Civil Procedure, Civil Rights, Constitutional Law

Plaintiff Jorge Corona was a backseat passenger in a car pulled over for a routine traffic stop by Clovis Police Officer Brent Aguilar. Plaintiff was arrested when he did not produce identification in response to the officer's demand for ID. Defendant Aguilar charged Plaintiff with: (1) resisting, evading, or obstructing an officer; and (2) concealing his identity. The district attorney’s office dismissed the concealing-identity charge, and a jury later acquitted Plaintiff of the charge against him for resisting, evading, or obstructing an officer. Plaintiff subsequently sued the arresting officers, Defendant Aguilar and police officer Travis Loomis; the City of Clovis; and the Clovis Police Department for, among other things, alleged constitutional violations under 42 U.S.C. 1983. As relevant here, Plaintiff alleged Defendant Aguilar violated his Fourth Amendment right to be free from unlawful arrest by arresting him without probable cause. Defendant Aguilar moved for partial summary judgment on Plaintiff’s unlawful-arrest claim based on qualified immunity, but the district court denied his motion. The Tenth Circuit disagreed with Officer Aguilar's contention that the district court erred in denying him qualified immunity. The Tenth Circuit determined the officer arrested plaintiff without probable cause. "Additionally, clearly established law would have put a reasonable officer in Defendant Aguilar’s position on notice that his conduct violated Plaintiff’s Fourth Amendment right to be free from unlawful arrest. Defendant Aguilar is therefore not entitled to qualified immunity."

Couser v. Gay

Court: US Court of Appeals for the Tenth Circuit

Docket: 19-3088

Opinion Date: May 22, 2020

Judge: Scott Milne Matheson, Jr.

Areas of Law: Civil Procedure, Civil Rights, Constitutional Law, Government & Administrative Law

In August 2017, Kansas law enforcement officers, after a traffic chase, pulled over Matthew Holmes for suspected vehicular burglary. The officers were from the City of Newton Police Department (“NPD”), McPherson County Sheriff’s Office (“MCSO”), and Harvey County Sheriff’s Office (“HCSO”). After Holmes stopped and exited the car, officers wrestled him to the ground. McPherson County Sheriff’s Deputy Chris Somers shot Holmes in the back. He later died from the gunshot wound. Holmes' estate sued, alleging constitutional violations under 42 U.S.C. 1983 ad a state law claim. The district court granted in part and denied in part Defendants' Rule 12(b)(6) motions. In particular, it denied each sheriff’s motion to dismiss based on Eleventh Amendment immunity because, “with respect to local law enforcement activities, sheriffs are not arms of the state but rather of the county that they serve.” The Tenth Circuit determined the district court did not err in denying the sheriffs' motions, and therefore affirmed.

Cox v. Wilson

Court: US Court of Appeals for the Tenth Circuit

Docket: 18-1353

Opinion Date: May 22, 2020

Judge: Harris L. Hartz

Areas of Law: Civil Procedure, Civil Rights, Government & Administrative Law

Plaintiff Cody Cox sued Defendant Don Wilson, a deputy in the Clear Creek County Sheriff’s Department, under 42 U.S.C. 1983. Cox alleged that when Wilson shot him in his vehicle while stopped on Interstate 70, Wilson violated the constitutional prohibition against the use of excessive force by law-enforcement officers. Plaintiff appealed when the jury returned a verdict in favor of the deputy, arguing the district court erred in failing to instruct the jury to consider whether Wilson unreasonably created the need for the use of force by his own reckless conduct. The Tenth Circuit determined that although the district court incorrectly stated the Supreme Court had recently abrogated the Tenth Circuit's precedents requiring such an instruction in appropriate circumstances, the evidence in this case did not support the instruction. "No law, certainly no law clearly established at the time of the incident, suggests that Wilson acted unreasonably up to and including the time that he exited his vehicle and approached Cox’s vehicle." Therefore, the Tenth Circuit affirmed the district court's judgment in favor of Deputy Wilson.

Odyssey Logistics & Technology Corp. v. Iancu

Court: US Court of Appeals for the Federal Circuit

Docket: 19-1066

Opinion Date: May 22, 2020

Judge: Todd Michael Hughes

Areas of Law: Civil Procedure, Intellectual Property, Patents

Odyssey filed the 678 patent application in 2004. After several procedural disputes and appeals, the Patent Board reversed an examiner’s rejections. The Technology Center Director issued an “examiner’s request for rehearing.” Odyssey did not address the merits, objecting to the procedural propriety of the request, and requesting reconsideration. Odyssey eventually made merits arguments, but without waiting for the Board’s decision, it sought judicial review. Odyssey filed its 603 application in 2006. After a final rejection of all claims, Odyssey appealed and filed a petition demanding that the examiner make certain evidence part of the written record and supplement his responses. The examiner further explained his decision. The Technology Center Director dismissed the petition as moot. Odyssey believed that the examiner’s answer to its appeal brief included new grounds for rejection. The Technology Center Director dismissed that assertion. Rather than filing a brief replying to the examiner’s answer, Odyssey sought judicial review. The PTO amended its rules of practice in ex parte appeals; final rules were published in November 2011, applicable to all ex parte appeals filed on or after January 23, 2012. Odyssey challenged the legality of these amendments. The Federal Circuit affirmed the dismissal of all three claims. In the first two counts, Odyssey was challenging actions not yet final before the Board; the Board could provide Odyssey with an adequate remedy, and if not, Odyssey had remedies under 35 U.S.C. 141 or 145. Count III was untimely under 28 U.S.C. 2401, the six-year statute of limitations for a facial APA challenge, which runs from the date the regulations were published. The complaint was filed in January 2018.

Edwards v. Pearson

Court: Supreme Court of Alabama

Docket: 1180801

Opinion Date: May 22, 2020

Judge: Stewart

Areas of Law: Civil Procedure, Personal Injury

Rita Edwards, as mother of Raven Edwards, appealed the grant of summary judgment entered in favor of Penny Pearson on the ground of State-agent immunity. In 2014, Raven, an eight-year-old student at Airport Road Elementary School, attempted to cross the Deatsville Highway to board a school bus being driven by Pearson, an employee of the Elmore County Board of Education. As she did so, Raven was struck by an automobile, and she ultimately died as a result of her injuries. Edwards sued for wrongful death, alleging Pearson negligently had instructed and/or invited Raven to cross the highway to board the school bus. Pearson filed an answer denying the allegations in the complaint and asserting various affirmative defenses, including, among others, State-agent immunity. After review, the Alabama Supreme Court determined Pearson demonstrated she was entitled to State-agent immunity, and Edwards failed to demonstrate that an exception to that immunity applied. Accordingly, the trial court properly entered a summary judgment in Pearson's favor.

Mohr v. CSX Transportation, Inc.

Court: Supreme Court of Alabama

Docket: 1180338

Opinion Date: May 22, 2020

Judge: Mitchell

Areas of Law: Civil Procedure, Personal Injury, Transportation Law

In April 2017, Jerry Mohr, a Mobile County resident and an employee of CSX Transportation, Inc. ("CSX"), was injured in an on-the-job accident while working on a crew that was repairing a section of CSX railroad track near the Chef Menteur Bridge in Louisiana. Mohr sued CSX in the Mobile Circuit Court, asserting a negligence claim under the Federal Employers' Liability Act ("FELA"). The trial court ultimately entered a summary judgment in favor of CSX. Mohr appealed that judgment, arguing there were genuine issues of material fact that could only be resolved by a jury. Finding no reversible error, the Alabama Supreme Court affirmed.

Russell Construction of Alabama, Inc. v. Peat

Court: Supreme Court of Alabama

Docket: 1180979

Opinion Date: May 22, 2020

Judge: Greg Shaw

Areas of Law: Arbitration & Mediation, Civil Procedure, Construction Law

Russell Construction of Alabama, Inc. ("Russell"), appealed a circuit court order that vacated an arbitration award in favor of Russell and against Christopher Peat. In 2015, Russell and Peat entered into a contract pursuant to which Russell agreed to construct a residence for Peat on "a cost plus a fee basis." The documents executed in connection with the contract provided, in the event of a controversy or dispute, first for mediation and then for arbitration in accordance with the rules of the American Arbitration Association. Upon completion of the residence, a dispute arose between Russell and Peat regarding Russell's performance and the balance due Russell under the contract. In January 2018, Russell filed a formal demand for arbitration, seeking $295,408 allegedly due from Peat for the construction of the residence. Peat counterclaimed, alleging breach of fiduciary duty and breach of contract and disputing his consent to costs incurred by Russell; Peat sought specific performance and an award of $255,000 on his counterclaims. Thereafter, in May 2018, the parties reached, as a result of mediation, a settlement agreement. In essence, the settlement agreement required Russell to make certain repairs to the residence; required Peat to pay Russell $245,408 on or before June 15, 2018, at which time Russell agreed to release its recorded lien; and required Peat to deposit into escrow an additional $50,000 to ensure completion, by the end of August 2018, of a "punch-list" to the satisfaction of a third-party "Construction Consultant." The Alabama Supreme Court determined the circuit court did not err to the extent that it set aside the judgment entered pursuant to the arbitrator's Final Award. The Court affirmed the trial court's July 25, 2019 order to the extent that it vacated any judgment on the arbitrator's Final Award related to Russell's and Peat's breach of the provisions of the settlement agreement that remained in effect after the Modified Partial Final Award and the distribution of the outstanding $50,000 at issue. The Court reversed that same order to the extent it purported to vacate any judgment on the Modified Partial Final Award of $258,959.89 and remanded this case for further proceedings.

Kenneth P. Jacobus, P.C. v. Kalenka

Court: Alaska Supreme Court

Docket: S-16977

Opinion Date: May 22, 2020

Judge: Carney

Areas of Law: Civil Procedure, Legal Ethics

After a conflict of interest between an attorney and a long-time client arose during settlement negotiations, the attorney filed a confidential motion with the superior court criticizing his client. The client discharged the attorney and hired new counsel. But the attorney continued to control the settlement funds and disbursed himself his fee, even though the amount was disputed by the client. The court found that the attorney’s actions had violated the rules of professional conduct and ordered forfeiture of most of his attorney’s fees. Finding no reversible error in the superior court's order, the Alaska Supreme Court affirmed.

City of Chula Vista v. Sandoval

Court: California Courts of Appeal

Docket: C080711(Third Appellate District)

Opinion Date: May 27, 2020

Judge: Vance W. Raye

Areas of Law: Civil Procedure, Constitutional Law, Government & Administrative Law

The Court of Appeal summed up the issue before it on appeal in this matter: a fight between the tax entities who negotiated favorable passthrough agreements before their redevelopment agencies were dissolved, and those who did not, for their pro rata share of the residual pool of money in the redevelopment property tax fund left for distribution after the successor agencies first paid the passthrough agreements in full, enforceable obligations, and administrative costs. Seven cities filed a petition for mandamus and declaratory relief against Tracy Sandoval, the auditor-controller for the County of San Diego (Auditor) challenging the methodology the Auditor used to distribute the residual pool of former tax increment, a method that favored San Diego County and, at least, three community college districts, all of whom had passthrough agreements with their former redevelopment agencies. The trial court agreed with Cities and granted their petition. Auditor appealed. The Court of Appeal concluded there was no plain meaning to be attributed to the applicable statutory language. The Court felt compelled nonetheless to construe the "mangled" statutes as it found them, and offered direction to auditor-controllers throughout California. The Court accepted nearly all of Cities’ contentions, including their premise that the fundamental purpose of Health & Safety Code section 34188, was to include passthrough payments as part of a taxing entity’s Assembly Bill No. 8 (1977-1978 Reg. Sess.) pro rata share and thereby equalize the tax distributions to those taxing entities with favorable passthrough agreements and those without. The Court reversed the trial court's decision to grant the Cities' petition for a writ of mandate. "Without deciding on the constitutionality of Cities’ interpretation of the statutes, we can say their interpretation raises substantial doubt as to the constitutionality of Cities’ methodology, adding support to our conclusion the trial court erred and Auditor’s methodology must prevail."

Hester v. Public Storage

Court: California Courts of Appeal

Docket: G057335(Fourth Appellate District)

Opinion Date: May 28, 2020

Judge: Moore

Areas of Law: Civil Procedure, Contracts

Plaintiff David Hester was a reality television star on “Storage Wars.” Plaintiff made the winning bid and purchased the contents of a self-storage unit at an auction held by defendant, Public Storage. Defendant learned it had mistakenly sold the goods about half an hour after the sale was complete. The unit’s occupant had paid his past due rent weeks before the auction, but defendant’s computer system incorrectly marked the unit for sale. Due to this error, defendant immediately rescinded the deal based on two documents plaintiff had signed that contained clauses allowing defendant to void the sale for any reason. Plaintiff claimed defendant’s rescission was invalid and sued for breach of contract and conversion, among other claims. Defendant moved for summary judgment on the contract and conversion claims on grounds it had properly voided the sale under the null and void clauses. The trial court granted defendant’s motion. Plaintiff appealed, arguing summary judgment was inappropriate because the null and void clauses were invalid because: (1) they were precluded by various statutes governing self-storage auction sales; and (2) he agreed to them under duress. After review, the Court of Appeal disagreed, and rejected plaintiff’s argument that defendant was required to file an unlawful detainer action to retake possession of the purchased goods after it rescinded the sale.

Insalaco v. Hope Lutheran Church of West Contra Costa County

Court: California Courts of Appeal

Docket: A156562(First Appellate District)

Opinion Date: May 27, 2020

Judge: Miller

Areas of Law: Civil Procedure, Real Estate & Property Law, Zoning, Planning & Land Use

The Insalacos own property atop of a slope. At the bottom of the slope is Wilkie Creek. Hope Lutheran Church owns property on the other side of the creek. After a landslide made their house uninhabitable, the Insalacos sued the Church and adjoining landowners, including the Du/Wongs. They alleged that water runoff from the Church caused the creek to rise, which caused their backyard to flood. The flooding saturated the soil in their backyard, which caused the landslide. The Du/Wongs filed a cross-complaint, alleging tort causes of action related to the landslide and seeking indemnification. The court granted the Church summary judgment. The court of appeal reversed The trial court erred in denying a timely motion by the Insalacos for a continuance to take additional discovery (a site inspection) and oppose the summary judgment motion. They presented a detailed declaration from their attorney explaining the particular facts essential to opposing the motion that may exist but could not then be presented. As to the Du/Wongs, concededly material facts were disputed. The Church placed at issue how much rain fell on the date of the incident, whether there are “two ways in which water flow in a creek could destabilize a slope,” and whether the channel of Wilkie Creek is stable and shows no evidence of recent erosion.

Mosley v. Pacific Specialty Ins. Co.

Court: California Courts of Appeal

Docket: E071287(Fourth Appellate District)

Opinion Date: May 26, 2020

Judge: Carol D. Codrington

Areas of Law: Civil Procedure, Insurance Law, Real Estate & Property Law

Plaintiffs-appellants James and Maria Mosley rented out a home they owned that defendant-respondent Pacific Specialty Insurance Company (PSIC) insured under a homeowners’ policy (the Property). The Mosleys’ tenant started growing marijuana in the Property. To support his marijuana-growing operation, the tenant re-routed the Property’s electrical system to steal power from a main utility line. The tenant’s re-routed electrical system caused a fuse to blow, which started a fire that damaged the Property. PSIC denied coverage, citing a provision in the Mosleys’ policy that excluded any loss associated with “[t]he growing of plants” or the “manufacture, production, operation or processing of . . . plant materials.” The Mosleys sued, but the trial court granted summary judgment in favor of the insurance company, finding that the Mosleys had control over their tenant's conduct. A divided Court of Appeals reversed, finding no evidence the Mosleys were aware of their tenant's marijuana growing operation, and because the record was silent as to what the Moseleys could or should have done to discover it. "[T]he Mosleys did not use the Property in a prescribed way that would have allowed PSIC to suspend their insurance and deny all coverage. More importantly, contrary to PSIC’s assertion and the trial court’s finding, there was no evidence Mosleys knowingly increased a risk of fire hazard. In addition, a fact issue remains as to whether [the Tenant's] hazard-increasing conduct was within their control. If it was, then PSIC properly denied coverage. But by denying the Mosleys coverage for Lopez’s conduct, regardless of the Mosleys’ control over or knowledge of it, the Policy did not provide 'substantially equivalent' coverage to that required under [Insurance Code] section 2071."

Third Laguna Hills Mutual v. Joslin

Court: California Courts of Appeal

Docket: G057230(Fourth Appellate District)

Opinion Date: May 26, 2020

Judge: Moore

Areas of Law: Civil Procedure, Real Estate & Property Law

Third Laguna Hills Mutual (a homeowner’s association, “the HOA”) filed a complaint alleging homeowner Jeff Joslin violated its covenants. Joslin filed a cross-complaint alleging the HOA unlawfully prevented him from renting out his home. The HOA filed an anti-SLAPP motion to strike the cross-complaint: “It is clear that Joslin is suing the [HOA] for suing him.” The court denied the motion. The HOA appealed. The Court of Appeal affirmed the trial court's denial of the HOA's anti0SLAPP motion. "The filing of a complaint is a protected activity under the anti-SLAPP statute (the right to petition). But to some degree, every party that files a cross-complaint is suing because it is being sued. Here, Joslin’s cross-complaint arises from the HOA’s alleged tortious acts, but not from the HOA’s protected act of filing a complaint."

Borealis Power Holdings Inc. v. Hunt Strategic Utility Invesment

Court: Delaware Supreme Court

Docket: 68, 2020

Opinion Date: May 22, 2020

Judge: Traynor

Areas of Law: Business Law, Civil Procedure

Hunt Strategic Utility Investment, L.L.C. (“Hunt”) owned a one-percent stake in Texas Transmission Holdings Corporation (“TTHC”), a utility holding company. The remaining ninety-nine percent was split equally between the Borealis entities (Borealis Power Holdings, Inc. and BPC Health Corporation, together, “Borealis”) and Cheyne Walk Investment PTE LTD (“Cheyne Walk”); neither Borealis nor Cheyne Walk owned a majority stake in TTHC, each owned 49.5%. TTHC wholly owned Texas Transmission Finco LLC, which wholly owned Texas Transmission Investment LLC (“TTI”). TTI in turn owned 19.75% of Oncor Electric Delivery Company LLC (“Oncor”). The remaining 80.25% of Oncor is held by Sempra Texas Holdings Corp. (“STH) and Sempra Texas Intermediate Holding Company, LLC (“STIH” and, together with STH, “Sempra”). This dispute involved a purported conflict between two separate contracts binding two discrete sets of parties who owned Oncor. Hunt’s sale of its one-percent stake is subject to the TTHC Shareholder Agreement (the “TTHC SA”), which gives Borealis and Cheyne Walk a right of first offer in the event that Hunt wishes to sell (the “ROFO”). But Sempra argued the sale was also subject to a separate contract - the Oncor Investor Rights Agreement (the “Oncor IRA”) - which provided Sempra with a right of first refusal (the “ROFR”) in the event Oncor LLC units were transferred. The Court of Chancery decided in Sempra’s favor, holding that Hunt’s sale of its 1% stake in TTHC was also a “transfer” of Oncor LLC units, as defined in the Oncor IRA. The court thus held Hunt’s proposed sale triggered Sempra’s ROFR, which preempted Borealis’s ROFO because the source of the ROFO was the TTHC SA, which itself stated that enforcement of the TTHC SA could not breach the Oncor IRA. After a de novo review of the language of both the TTHC SA and the Oncor IRA, the Delaware Supreme Court concluded the Oncor IRA, which, by its terms, restricted transfers by Oncor’s Minority Member (TTI) and not by Hunt, did not apply to Hunt’s sale of its interest in TTHC. The Court therefore reversed the judgment of the Court of Chancery.

Noell Industries v. Idaho Tax Commission

Court: Idaho Supreme Court - Civil

Docket: 46941

Opinion Date: May 22, 2020

Judge: Moeller

Areas of Law: Civil Procedure, Government & Administrative Law, Tax Law

In 2010, Noell Industries, Inc. sold its interest in a limited liability company for a net gain of $120 million. Noell Industries reported the income to Idaho, but paid all of the resulting tax on the gain to the Commonwealth of Virginia, its commercial domicile. Following an audit, the Idaho Tax Commission concluded the net gain was “business income” pursuant to Idaho Code section 63-3027(a)(1) and, thus, apportionable to Idaho. Noell Industries sought judicial review before the Ada County District Court pursuant to Idaho Code section 63-3049(a). The district court ruled that the Commission erred when it: (1) determined that Noell Industries paid insufficient taxes in 2010; and (2) assessed additional tax and interest against it. The Commission appealed. Finding no reversible error in the trial court's judgment, the Idaho Supreme Court affirmed.

HWCC-Tunica, Inc. v. Mississippi Dept. of Revenue

Court: Supreme Court of Mississippi

Citation: 2019-CA-00336-SCT

Opinion Date: May 28, 2020

Judge: James W. Kitchens

Areas of Law: Civil Procedure, Gaming Law, Government & Administrative Law, Tax Law

HWCC-Tunica, LLC, and BSLO, LLC, had casino members’ rewards programs that allowed members to earn entries into random computerized drawings to win prizes. In 2014, after recalculating their gross revenue and deducting the costs of prizes from their rewards programs’ drawings, HWCC and BSLO filed individual refund claims for the tax period of October 1, 2011, through August 31, 2014. The Mississippi Department of Revenue (MDOR) denied the refund claims in 2015. HWCC and BSLO appealed, and MDOR and the Mississippi Gaming Commission (MGC) filed a joint motion for summary judgment, arguing the plain language of Mississippi Code Section 75-76-193 (Rev. 2016) does not allow a casino to deduct the cost of prizes purchased for a rewards program’s drawings because “these promotional giveaways are not the result of 'a legitimate wager’ as used in [Mississippi Code Section] 75-76-193.” After a hearing on the motion, the chancellor determined that Section 75-76-193 does not allow HWCC and BSLO to deduct the cost of the prizes and that there were no genuine issues of material fact. After review, the Mississippi Supreme Court found the chancellor erred by giving deference to the MDOR’s and the MGC’s interpretations of Code Section 75-76-193. That error notwithstanding, the Supreme Court found the chancellor reached the right conclusion: that no genuine issues of material fact existed. Accordingly, the Supreme Court affirmed the chancellor’s grant of summary judgment.

Methodist Specialty Care Center v. Mississippi Division of Medicaid

Court: Supreme Court of Mississippi

Citation: 2019-CC-00037-SCT

Opinion Date: May 28, 2020

Judge: Chamberlin

Areas of Law: Civil Procedure, Government & Administrative Law, Health Law, Public Benefits

Methodist Specialty Care Center was the only nursing facility for the severely disabled (NFSD) in Mississippi. NFSDs generally incur higher costs than other nursing facilities, and because of this, Methodist received a percentage adjustment to its new-bed-value (NBV) calculation when the Mississippi Division of Medicaid (DOM) determined how much it should reimburse Methodist for its property costs through the DOM’s fair-rental system. A NBV was intended to reflect what it would cost to put a new bed into service in a nursing facility today. Methodist had received a NBV adjustment of 328.178 percent added to the standard NBV every year since it opened in 2004 until State Plan Amendment (SPA) 15-004 was enacted. During the 2014 Regular Session, the Mississippi Legislature passed House Bill 1275, which authorized the DOM to update and revise several provisions within the State Plan; one such amendment changed Methodist's adjustment rate, and made the facility experience a substantial decrease in its NBV, while all other nursing facilities in the state received increases. Methodist appealed the DOM’s changes to its NBV that were enacted in SPA 15-004. After a hearing, an Administrative Hearing Officer (AHO) upheld the decreased percentage adjustment to Methodist’s NBV, but also determined the DOM had miscalculated Methodist’s NBV adjustment. The DOM had planned to calculate Methodist’s adjustment as 175 percent of the base NBV, but the AHO found that Methodist’s adjusted NBV should be calculated in the same manner as it was calculated preamendment - by taking 175 percent of the standard NBV and adding that value to the standard NBV. Methodist still felt aggrieved because its NBV adjustment rate had not been restored to the preamendment rate. Methodist appealed the DOM’s final decision to the Chancery Court. When the chancellor affirmed the DOM’s final decision, Methodist appealed to the Mississippi Supreme Court. After review, the Supreme Court found the DOM’s final decision was supported by substantial evidence, was not arbitrary or capricious, did not violate Methodist’s constitutional or statutory rights and that the DOM was acting within its power in reaching and adopting its final decision.

Appeal of New Hampshire Department of Environmental Services

Court: New Hampshire Supreme Court

Docket: 2018-0650

Opinion Date: May 22, 2020

Judge: Anna Barbara Hantz Marconi

Areas of Law: Civil Procedure, Government & Administrative Law, Zoning, Planning & Land Use

Petitioner New Hampshire Department of Environmental Services (DES) appealed a decision by the New Hampshire Wetlands Council remanding an administrative order issued by DES that directed respondents Bryan and Linda Corr to cease and desist unpermitted work on their lakefront property. The Corrs owned property in Moultonborough located on the shore of Lake Winnipesaukee. When they purchased the property, it contained a dry boathouse, positioned approximately two feet from the shore, which was partially collapsed as a result of snow load. The boathouse was considered a “grandfathered” or nonconforming structure for purposes of the Shoreland Protection Act. The Corrs made plans to replace the boathouse. They hired a land use consultant to assist them with the process, which required approvals from the Town of Moultonborough, as well as DES. After obtaining the building permit from the Town and the PBN from DES, the Corrs commenced construction. They spent over $100,000 on the permitted structure. When the structure was framed and nearing completion, DES visited the site to conduct an inspection, purportedly in response to a complaint the department had received. Subsequently, DES issued a Letter of Deficiency to the Corrs informing them that the structure was 27 feet tall, and therefore not compliant with DES regulations. The Corrs appealed DES’ administrative order to the Council. In their appeal, the Corrs raised four alternative arguments as to how DES had acted unlawfully and unreasonably in issuing its order. The New Hampshire Supreme Court agreed with the Corrs that DES did not have the authority to limit the height of their structure. The COurt affirmed the Council's decision to the extent that it concluded that a 12-foot height restriction did not apply to the Corrs’ structure. However, the Court vacated all other aspects of the Council’s decision, remanding with instructions to grant the Corrs’ appeal and to vacate DES’ administrative order, which relied solely on the alleged height violation. In light of the result reached, the Court did not address any additional arguments raised by the parties.

Balzotti Global Group, LLC v. Shepherds Hill Proponents, LLC

Court: New Hampshire Supreme Court

Docket: 2019-0120

Opinion Date: May 27, 2020

Judge: Gary E. Hicks

Areas of Law: Civil Procedure, Contracts, Real Estate & Property Law

Plaintiffs Balzotti Global Group, LLC (the Global Group) and Caesar Balzotti, Sr., appealed a superior court order dismissing their claims against defendants Shepherds Hill Proponents, LLC (Proponents), Shepherds Hill Development Company, LLC (Development Company), Shepherds Hill Homeowners Association, Inc. (Association), Ralph Caruso, and Ernest J. Thibeault, III, on the ground that their claims were time-barred. At some point before 1999, the Development Company obtained approval to construct 400 condominium units. After work had begun on the project, the real estate market collapsed, and the Development Company filed for bankruptcy. Balzotti, Caruso, and Thibeault proposed to reorganize the Development Company so that the project could be completed and creditors could be paid. Their proposal included creating the Proponents, a limited liability company in which Caruso, Thibeault and Balzotti would have an interest. The bankruptcy court accepted the proposal as the reorganization plan in 2000. In 2003, the Development Company established the Shepherds Hill Condominium by recording a declaration of condominium with the county registry of deeds. The Development Company amended the declaration, setting a deadline for the conversion of Units located within the "convertible land." Between February 26, 2003, and July 6, 2009, the Development Company periodically exercised its right to build new condominium units on convertible land. However, by July 6, 2009, only 274 out of the possible 400 units had been constructed. Balzotti opened an involuntary bankruptcy proceeding on Development Company, the Proponents, and Thibeault when they missed payments on a promissory note issued as part of the original bankruptcy plan. By 2011, pursuant to the original condominium declaration, the Association was governed by a board elected by the condominium unit owners. The Development Company unsuccessfully attempted to amend the condominium declaration to obtain rights to develop the remaining land and unfinished units remaining prior to the association taking control. By 2018, plaintiffs sued the Development Company, Proponents, Caruso and Thibeault, asserting a number of claims arising out of the Development Company's loss of the Development Right. Defendants successfully argued plaintiffs' claims were time-barred because they were brought more than three years after the Development Right was lost. The New Hampshire Supreme Court concluded the trial court did not err in concluding plaintiffs' claims were time barred.

State ex rel. City of East Cleveland v. Dailey

Court: Supreme Court of Ohio

Citation: 2020-Ohio-3079

Opinion Date: May 28, 2020

Judge: Per Curiam

Areas of Law: Civil Procedure, Criminal Law

The Supreme Court affirmed the judgment of the court of appeals holding that it lacks original jurisdiction over declaratory judgment actions and dismissing the City of East Cleveland's petition for declaratory judgment sua sponte, holding that it is well settled that courts of appeals lack original jurisdiction over claims for declaratory judgment. The City of East Cleveland brought criminal charges against Randolph Dailey and Patricia Coleman, both of whom were sergeants in the Cleveland police department. A jury found Coleman not guilty. In an attempt to obtain review of the trial court's evidentiary rulings before Dailey went to trial, East Cleveland filed a petition for declaratory judgment. The court of appeals dismissed the case for lack of jurisdiction. The Supreme Court affirmed, holding that the court of appeals lacked original jurisdiction over the City's claim for declaratory judgment.

McCormick v. Oregon Parks & Recreation Dept.

Court: Oregon Supreme Court

Docket: S066206

Opinion Date: May 21, 2020

Judge: Duncan

Areas of Law: Civil Procedure, Personal Injury, Zoning, Planning & Land Use

Plaintiff Benjamin McCormick brought this action against the State of Oregon for injuries he sustained while recreating in Lake Billy Chinook. The State moved for summary judgment, asserting that it was entitled to recreational immunity under ORS 105.682. In response, plaintiff contended that the state did not “directly or indirectly permit” the public to use the lake for recreational purposes. Specifically, he contended that, under both the public trust doctrine and the public use doctrine, the public already had a right to use the lake for recreational purposes and, therefore, the State did not “permit” that use. The trial court granted the State summary judgment, but the Court of Appeals reversed. On review, the Oregon Supreme Court reversed the Court of Appeals decision. For the purposes of the recreational immunity statute, the Supreme Court held an owner could “permit” public recreational use of its land, even if it could not completely prohibit that use. More specifically, an owner could “permit” public recreational use of its land if, among other alternatives, it made that use possible by creating access to and developing the land for that use.

Thomerson v. DeVito

Court: South Carolina Supreme Court

Docket: 27972

Opinion Date: May 27, 2020

Judge: Donald W. Beatty

Areas of Law: Business Law, Civil Procedure, Contracts

The United States District Court for the District of South Carolina certified a question of law to the South Carolina Supreme Court. Plaintiff Johnny Thomerson alleged Defendants, the former owners of Lenco Marine (a manufacturer of boat products), failed to give him a three-percent ownership interest in Lenco that was promised to him as part of his compensation package. Plaintiff was hired by Lenco no later than May 2007. Defendant Samuel Mullinax was the CEO of Lenco and Defendant Richard DeVito was its president. Lenco was sold in December 2016 to Power Products, LLC. In his complaint, Plaintiff asserted claims against Defendants for: (1) breach of contract and the covenant of good faith and fair dealing; (2) promissory estoppel; (3) quantum meruit and unjust enrichment; (4) negligent misrepresentation; (5) constructive fraud; and (6) amounts due under the South Carolina Payment of Wages Act. Defendants moved for summary judgment, arguing the claims were time-barred. The federal court asked whether the three-year statute of limitations of S.C. Code Ann. 15-3-530 applied to claims for promissory estoppel. The Supreme Court took the opportunity to clarify state law in this regard, and held that the statute of limitations did not apply to promissory estoppel claims.

ACLU of Utah v. State

Court: Utah Supreme Court

Citation: 2020 UT 31

Opinion Date: May 21, 2020

Judge: Per Curiam

Areas of Law: Civil Procedure

The Supreme Court dismissed the petition for extraordinary relief brought by ACLU of Utah, Disability Law Center, and Utah Association of Criminal Defense Attorneys (collectively, Petitioners) seeking relief on behalf of all individuals in criminal custody in the state who are at risk of contracting COVID-19, holding that Petitioners lacked standing. Rather than claiming that have traditional standing or associational standing, Petitioners argued that they had public interest standing. While two members of the Court have previously expressed serious doubt about the continued validity of public interest standing, the Supreme Court held that it need not engage in an extended discussion of the doctrine. Instead, the Court held that Petitioners did not meet their burden of demonstrating that the issues they sought to litigate were unlikely to be raised if they were denied standing.