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Case Law For In-House Counsel

Below are summaries of important opinions affecting in-house attorneys issued by the U.S. Supreme Court and the 1st and 2nd Circuits from late April through early July 2003.

U.S. Supreme Court

Affirmative Action

College Affirmative Action Program Upheld

The state has a compelling interest in creating diversity, therefore colleges and universities may use race as a consideration in selecting students for admission.

Grutter v. Bollinger. Docket No. 02-516. Decided June 23, 2003.


Arbitration Clause Enforceable Under Federal Law

An arbitration provision in a debt-restructuring agreement is enforceable under the Federal Arbitration Act because the agreement sufficiently affects interstate commerce within the meaning of the Commerce Clause.

The Citizens Bank v. Alafabco, Inc. Docket No. 02-1295. Decided June 2, 2003.

Arbitrator Must Rule On Class Action Arbitration

An arbitrator — not a judge — must decide whether an arbitration agreement between a group of consumers and a home mortgage lender precludes the consumers from pursuing a class action.

Green Tree Financial Corp. v. Bazzle. Docket No. 02-634. Decided June 23, 2003.


Federal Banking Act Preempts State Law Usury Claim

The National Bank Act, 12 U.S.C. §§85 and 86 completely preempts state law usury claims against a national bank.

Beneficial National Bank v. Anderson. Docket No. 02-306. Decided June 2, 2003.

Civil Procedure

Party Bound By Implied Consent To Trial Before Magistrate

A party to a civil case can impliedly consent to a trial before a magistrate through the party’s conduct during litigation.

Roell v. Withrow. Docket No. 02-69. Decided April 29, 2003.

Corporate Law

Subsidiary An ‘Instrumentality’ Of Foreign State If State Owns Majority Of Shares

A corporate subsidiary is “instrumentality” of a foreign state under the Foreign Sovereign Immunities Act (28 U.S.C. §1603) only if the foreign state owns a majority of the shares of the subsidiary — not just the corporate parent — at the time the suit is filed.

Dole Food Co. v. Patrickson. Docket No. 01-59. Decided April 22, 2003.


Employment Shareholder Doctors Are ‘Employees’ When Assessing If ADA Applies To Practice

Doctors who are shareholders in a professional corporation are “employees” for purposes of determining if the practice is covered by the ADA if they are subject to the firm’s control but not if they operate independently. [See news article on page one in May 12, 2003 issue of Lawyers Weekly USA.]

Clackamas Gastroenterology Associates P.C. v. Wells. Docket No. 01-1435. Decided April 22, 2003.

Employer Can Remove Fair Labor Claim To Federal Court

An employer can remove a Fair Labor Standards Act case filed in state court to federal court.

Breuer v. Jim’s Concrete of Brevard, Inc. Docket No. 02-337. Decided May 19, 2003.

Direct Evidence Of Bias Not Necessary In Title VII Mixed Motive Case

Plaintiffs don’t need to demonstrate direct evidence of discrimination in “mixed motive” cases where the employer claims other lawful reasons motivated employment decision. [See news article on page one in June 23, 2003 issue of Lawyers Weekly USA.]

Desert Palace, Inc. v. Costa. Docket No. 02-679. Decided June 9, 2003.


Opinions Of Treating Physicians Not Given Special Deference

ERISA does not require a disability-plan administrator to accord special deference to the opinions of treating physicians.

Black & Decker Disability Plan v. Nord. Docket No. 02-469. Decided May 27, 2003.

First Amendment

Court Punts On Commercial Speech Case

The Supreme Court didn’t decide whether a corporation that allegedly made false statements about its labor practices and the working conditions in its factories response to public criticism can be sure for violating state false advertising and unfair competition laws.

Nike, Inc. v. Kasky. Docket No. 02-575. Decided June 26, 2003.


State Can Prosecute False Or Misleading Telemarketing

The First Amendment does not prohibit a state from pursuing a fraud action against professional fundraisers who make false or misleading representations designed to deceive donors about how their donations will be used.

Illinois ex. rel. Madigan v. Telemarketing Associates, Inc. Docket No. 01-1806. Decided May 5, 2003.


Copying Uncopyrighted Work Not A Violation Of Lanham Act

Unaccredited copying of an uncopyrighted work doesn’t violate §43(a) of the Lanham Act.

Dastar Corp. v. Twentieth Century Fox Film Corp. Docket No. 02-428. Decided June 2, 2003.

1st U.S. Circuit Court of Appeals


Employee’s Restitution Obligation Nondischargeable

The court upheld the Bankruptcy Appellate Panel’s ruling that a New Hampshire state court judgment enforcing one debtor-plaintiff’s outstanding criminal restitution obligation to his former employer (the defendant) was nondischargeable under 11 U.S.C. §1328(a)(3).

In re Bova. Docket No. 02-9004. Decided April 22, 2003.

Severance Pay Claim Not Entitled To Priority

Where an employee of a Chapter 11 corporation seeks severance pay under two pre-petition contracts, her claim is not entitled to priority as an administrative expense.

In re FBI Distribution Corp., et al. Docket No. 02-2054. Decided May 27, 2003.


Worker With Anxiety Disorder Fails To Establish ADA Claim

The plaintiff employee failed to present sufficient evidence that his employer failed to reasonably accommodate his alleged disability of a panic and anxiety disorder.

Rocafort, et al. v. IBM Corp. Docket No. 02-1638. Decided June 30, 2003.

Company Didn’t Violate LMRA By Firing Employee Over Violation Of Sex Harassment Policy

A company that fired a worker for violating its sexual harassment policy didn’t run afoul of the Labor Management Relations Act after agreeing refusing to arbitrate the worker’s grievance.

Mulvihill v. Top-Flite Golf Co. Docket No. 02-2494. Decided July 2, 2003.


Court Denies Plaintiff’s Request For Attorneys’ Fees Following Carrier’s ‘Good Faith’ But Unsuccessful Appeal

A defendant insurance company that unsuccessfully appealed a judgment for the plaintiff in an ERISA case is not required to pay attorneys’ fees because the appeal was pursued in good faith.

Cook v. Liberty Life Assurance Co. of Boston. Docket No. 02-1656. Decided July 3, 2002.


Med-Mal Defendant Must Request Damages Cap

A physician waived his argument that a $1.46 million malpractice verdict against him should be reduced to $500,000 under a Massachusetts statute (G.L.c. 231, §60H) because he failed to request that the trial judge instruct the jury about the statute.

Primus v. Galgano. Docket No. 02-1419. Decided May 21, 2003.


Electronic Gathering Of Consumer Information May Violate Privacy Law

Where plaintiffs filed suit alleging that the defendant accessed personal information about them in violation of the Electronic Communications Privacy Act of 1986, a judgment for the defendant should be vacated and the case remanded, as the court that entered the judgment misapplied the statute’s “consent” provision.

In re Pharmatrak, Inc. Privacy Litigation. Docket No. 02-2138. Decided May 9, 2003.

2nd U.S. Circuit Court of Appeals

Civil Procedure

Education Disabilities Claim Time-Barred

Because the equitable tolling rule of Connecticut General Statutes §10-76h(a)(3) is not applicable in this case, plaintiffs’ claims under the Individuals with Disabilities Education Act (IDEA) and the Rehabilitation Act of 1973 are time-barred.

M.D. v. Southington Board of Education. Docket No. 00-9412. Decided June 30, 2003.


‘Gradual’ Pollution Claims Fall Within Insurance Exclusion Clause

Gradual environmental pollution claims fell within pollution exclusion clauses of general liability insurance policies, and not within the “sudden and accidental” exception to those clauses. New York law, rather than the law of numerous states, was appropriately applied.

Maryland Casualty Co. v. Continental Casualty Co. Docket No. 01-7482. Decided June 13, 2003.


Employer Could Defend ADA Claim Under ‘Business Necessity’

Although defendant’s sick leave policy requiring employees to submit general diagnoses as part of a medical certification procedure following certain absences violates the Americans with Disabilities Act, genuine issues of material fact preclude summary judgment on the issue of the business necessity defense provided for in the statute.

Conroy v. New York State Dept. of Correctional Services. No. 02-7415. Decided June 18, 2003.

Plaintiff’s Unsworn Letter To EEOC Not A Timely Complaint

The plaintiff failed to file a timely EEOC complaint within 300 days of the allegedly discriminatory act, as required by statute. Plaintiff is barred from arguing that her timely, but unsworn, letter to the EEOC should be treated as a formal EEOC complaint because she admitted in sworn statements that the letter was not a formal EEOC complaint.

Edelglass v. New York City Transit Authority. Docket No.01-7641. Decided June 17, 2003.


Employer Satisfied Pension Obligations Under Separation Provision

Where plaintiff received all the pension benefits to which he was entitled under ERISA, and where defendants did not violate the percentage accrual test set forth in ERISA §204(b)(1)(B) by pro rating his monthly benefit in accordance with the plan’s separation provisions, summary judgment to defendant is affirmed.

Langman v. Laub. Docket No. 02-7457. Decided May 6, 2003.


Remand Order Under Securities Litigation Uniform Standards Act Not Reviewable

Defendant’s appeal of an order remanding state law claims related to securities transactions to state court after defendant’s removal was dismissed because it was not a reviewable order on appeal.

Spielman v. Merrill Lynch, Pierce, Fenner & Smith. Docket No. 01-9189. Decided June 13, 2003.