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Case Summaries

Commercial Law

[05/13] N. Pacifica LLC v. City of Pacifica
In an action brought by a developer against the city of Pacifica involving a proposed condominium project, dismissal of developer's substantive due process claim is affirmed, but an order holding city liable for an equal protection violation is reversed and the resultant damages awards vacated where: 1) the developer was not entitled to judgment on an equal protection claim, as the city did not intentionally treat it differently from any other developer; and 2) a due process claim should not be resurrected because developer did not allege any irrational delay in the city's approval of its permits.

[05/13] United Stars Indus., Inc. v. Plastech Engineered Prods., Inc.
In an action over monies owed, judgment in favor of plaintiff and sanctions imposed against defendant's attorneys are affirmed where: 1) the compromise that was reached after the initial dispute over pricing and monies owed included defendant's overcharge claims; 2) the contract allowed plaintiff to pass on an increase in costs due to the use of additional materials other than nickel through a surcharge; 3) defendant was liable to pay for the entire cost of the materials bought even though some of it was lost during the production process; and 4) the district judge did not abuse her discretion by sanctioning defendant's lawyers for making unsupported allegations during litigation.

[05/08] Royal Ins. Co. of Am. v. Orient Overseas Container Line Ltd.
In an action brought by Ford and its cargo insurer against defendant-ocean carrier for damages arising from the loss of cargo during a transatlantic voyage, partial summary judgment for defendant and third-party defendants is reversed where the district court erroneously interpreted the bill of lading to apply Carriage of Goods by Sea Act (COGSA) instead of the Hague-Visby Rules, and additional briefing and fact-finding may be required before the liability limitation may be appropriately applied. (Amended opinion)

[05/07] Family Home & Fin. Ctr, Inc. v. Fed. Home Loan Mortgage Corp.
In mortgage broker's action raising claims against Freddie Mac for intentional interference with contract, unfair competition under California state law, and defamation, summary judgment and a related ruling for Freddie Mac are affirmed where: 1) the intentional interference claim failed as there was no admissible evidence that Freddie Mac influenced or caused another party to terminate its mortgage broker contract with plaintiff, intentionally or otherwise; 2) Freddie Mac's placement of plaintiff on its "Exclusionary List" did not constitute unfair competition; 3) for purposes of the defamation claim, plaintiff failed to show malice to defeat the Common Interest Privilege; and 4) there was no abuse of discretion in denying a request to defer ruling on summary judgment.

[05/07] B & H Med., L.L.C. v. ABP Admin., Inc.
In an antitrust case involving the legality of an agreement which established an exclusive network of preferred providers to supply types of medical equipment to enrollees in certain health-benefits plans offered to Chrysler, Ford, and state employees and retirees, a judgment and sanctions against plaintiff whose application to the network was rejected are affirmed, and appellate sanctions imposed, where: 1) plaintiff's antitrust claims lacked any conceivable merit; 2) a challenge to a discovery order failed; and 3) sanctions imposed below were not an abuse of discretion, and further, appellate sanctions were warranted.

[05/06] Pludeman v. N. Leasing Sys., Inc.
The court of appeals rules that plaintiffs sufficiently pleaded a cause of action for fraud against individually-named corporate defendants pursuant to CPLR 3016(b) where it was not unequivocal, as a matter of law, that a finder of fact could not reasonably infer the requisite knowledge or participation by the individual defendants in an act of fraud.

[04/30] Delaware Valley Surgical Supply Inc. v. Johnson & Johnson
In an interlocutory appeal stemming from a disagreement between two different groups of plaintiffs about who has standing as a "direct purchaser" to bring a claim against Johnson & Johnson and subsidiaries under federal antitrust laws, a judgment ruling against plaintiff-hospital is affirmed as it lacked standing to pursue an antitrust claim under a direct purchaser theory.

[04/30] Blickman Turkus, LP v. MF Downtown Sunnyvale, LLC
In a case primarily addressing whether a realtor who represented the lessee in a complex commercial lease transaction had a duty to inform the lessor, after the lease was signed but before the lessee took possession, that the lessee's ability to perform the conditions of the lease was jeopardized by its deteriorating financial condition, the judgment below is affirmed primarily as the trial court did not err: 1) in determining that the lessor failed to plead facts sufficient to establish any duty on the realtor's part; nor 2) in refusing to award attorney fees to the lessor based upon its defeat of the realtor's claims for unpaid commissions pursuant to Civil Code section 1717.

[04/30] Trans-Spec Truck Serv., Inc. v. Caterpillar Inc.
In a case applying the accrual and statute of limitations provisions of the Massachusetts U.C.C. to breach of warranty claims brought against an engine manufacturer, dismissal of plaintiff's warranty and Massachusetts Gen. Laws chapter 93A claims as time-barred, as well as summary judgment for defendant on plaintiff's negligence claims, are affirmed where: 1) the breach of warranty claim, accruing on the date of delivery of goods, was filed after the expiration of the limitations period, and plaintiff's equitable estoppel arguments were unavailing; and 2) plaintiff made no compelling argument and cited no specific facts which would invalidate the exculpatory language contained in a negligence exclusion clause.

[04/30] City of New York v. Beretta U.S.A. Corp.
In an action involving the Protection of Lawful Commerce in Arms Act (PLCAA), which provides that any "qualified civil liability action that is pending on October 26, 2005, shall be immediately dismissed by the court in which the action was brought or is currently pending", the circuit court finds that: 1) a claim by the city of New York, predicated on New York Penal Law section 240.45, did not fall within an exception to the claim restricting provisions of the Act; and 2) the PLCAA was a valid exercise of Congressional power under the Commerce Clause, and the PLCAA did not violate the separation of powers doctrine or otherwise offend the Constitution in any manner alleged by the city.

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Tax Law

[05/13] S&M Brands, Inc. v. Cooper
In an action involving the Tennessee's Attorney General's enforcement of an amended escrow provision in the Master Settlement Agreement between various states and tobacco manufacturers alleging an impermissible retroactive effect in violation of due process, a summary judgment ruling is reversed and remanded with instructions to dismiss the case without prejudice on grounds of sovereign immunity where: 1) continuous application of the retroactive statute is unlikely; 2) states enjoy immunity in federal court for tax-related claims; 3) the inherent dignity of the sovereign state favors immunity; and 4) the semi-tax nature of the escrow system would better lend itself to a suit in state court.

[05/12] Kornman & Assocs. Inc. v. US
In a proceeding under the Tax Equity and Fiscal Responsibility Act (TEFRA) in which plaintiffs were alleged to have attempted to create an artificial tax loss through the short sale of Treasury Notes and the transfer of partnership interests, summary judgment for the government and dismissal with prejudice of a petition for readjustment of partnership items is affirmed where the obligation to close a short sale is a liability for purposes of I.R.C. section 752.

[05/08] US v. Mendoza
A conviction for subscribing to a false income tax return is reversed and remanded due to a violation of defendant's Sixth Amendment speedy-trial right where, despite defendant's departure to the Philippines, an eight-year delay between defendant's indictment and arrest was a result of the government's negligence, and prejudice is presumed. (Superseding opinion)

[04/29] Lewis v. Cir.
Tax Court's decision against plaintiff based on a failure to file a timely return, failure to timely pay the amount of tax shown on a federal income tax return, and underpayment of estimated income tax is affirmed where: 1) IRS Form 1040 satisfies the requirements of the Paperwork Reduction Act (PRA); 2) OMB #1545-0074 is currently valid; 3) the PRA does not require an expiration date to be printed on any tax information collection forms; 4) the PRA does not require disclosure information to be printed on Form 1040; and 5) sanctions on appeal were unwarranted as to either party.

[04/29] Bay Area Cellular Tel. Co. v. City of Union City
A fee imposed on telephone lines by a city to fund its 911 emergency communication is a "special tax" which must be approved by two-thirds of the voters in the city under Proposition 218.

[04/29] BB&T Corp. v. U.S.
In a suit against the government for a tax refund originating from a "lease-in/lease-out" (LILO) transaction, summary judgment for the government is affirmed where: 1) the transaction is not a genuine lease and sublease since it does not allocate rights, obligations, and risks as in a traditional lease which disallows plaintiff from making rental deductions; and 2) plaintiff is not entitled to deduct interests paid on a loan from its taxable income since the loan does not constitute genuine indebtedness.

[04/28] Korean Air Lines Co., LTD v. County of Los Angeles
A judgment awarding plaintiff a refund of certain property taxes and a post-judgment attorney's fees order are reversed and remanded where plaintiff had a taxable possessory interest in a Federal Inspection Services area for the subject tax years, and thus assessment for the interest was invalid.

[04/28] Airflow Technology, Inc. v. U.S.
In a customs case concerning the classification of an air filter for import duty purposes, summary judgment for the government is reversed and the case remanded where: 1) the term "straining cloth" applies only to products that separate solids from liquids; and 2) the court concludes that the meaning of the phrase "of a kind used in oil presses or the like" means "of a kind used in oil presses or other mechanisms that separate solids from liquids."

[04/24] In the Matter of Steel Los III/Goya Foods, Inc. v. Bd. of Assessors of County of Nassau
Nassau County Administrative Code (NCAC) section 6-26.0(b)(3)(c) applies to "payments-in-lieu-of-taxes" (PILOT payments), thus making deficits incurred by affected taxing jurisdictions resulting from property over-assessments "a county charge."

[04/23] State Bldg. and Constr. Trades Council of California v. Duncan
Tax credits provided by the state to facilitate construction of low-income housing come within the definition of Labor Code section 1720, which requires employers engaged on public works projects to pay the prevailing wage to their workers if the project is "paid for in whole or in part out of public funds".

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