New England Biz Law Update
Below are summaries of
important opinions affecting
in-house attorneys issued
by the 1st and 2nd circuits.
1st Circuit
Banks and banking
Credit card – Rate increase
Where a judge dismissed a class action that challenged the validity of a defendant bank’s retroactive rate increases imposed on credit card holders, the dismissal was proper under the version of the Truth in Lending Act in effect at the relevant time.
Shaner v. Chase Bank USA, N.A. Docket No. 09-1157. Nov. 25, 2009.
Civil practice
Injunction – Milk prices
Where plaintiff fresh milk processors (1) filed suit alleging that the regulatory scheme governing milk prices mandated by the defendant Milk Industry Regulation Administration of the Commonwealth of Puerto Rico violates the Due Process, Equal Protection, Takings and dormant Commerce Clauses of the U.S. Constitution and (2) sought an injunction keeping the administrator of the defendant agency from continuing to implement the challenged regulatory scheme, a federal judge did not err in rejecting the defendant’s equitable defenses or its Burford abstention and Eleventh Amendment arguments and committed no abuse of discretion in granting the plaintiffs a preliminary injunction.
Vaqueria Tres Monjitas, Inc., et al. v. Irizarry, et al. Docket Nos. 07-2240 and 07-2369. Nov. 23, 2009.
Commercial
Product disparagement – Damages
Where a jury awarded damages of $4.5 million in lost profits on a plaintiff’s product disparagement claim, the judgment should be affirmed subject to a remittitur limiting recovery to $2.7 million apart from interest, costs and other incidentals.
Vascular Solutions, Inc. v. Marine Polymer Technologies, Inc. Docket No. 08-1911. Decided Dec. 23, 2009.
Consumer
protection
Pharmaceuticals –
Class action – Settlement
The inclusion of a “cy pres” provision in the proposed settlement of a class action lawsuit concerning pharmaceutical pricing was not improper.
In re Pharmaceutical Industry Average Wholesale Price Litigation. Docket No. 09-1196. Nov. 19, 2009.
Contract
Breach – Home equity line of credit
Where the plaintiff recipients of a home equity line of credit (HELOC) filed a putative class action against the defendant issuer for breach of contract, violation of the Truth in Lending Act and violation of M.G.L.c. 93A, a judge acted permissibly in dismissing the complaint based on his well-supported conclusions (1) that the defendant did not breach the relevant agreement, as the defendant was entitled to terminate the HELOC under the agreement’s express terms, and (2) that the TILA and G.L.c. 93A claims could not go forward because the defendant had not modified the agreement nor breached any of its provisions.
Cunningham, et al. v. National City Bank. Docket No. 09-1225. Nov. 25, 2009.
Employment
ADA – Bankrupt employer
A defendant airline was correctly awarded summary judgment on a plaintiff employee’s handicap discrimination suit, as all “claims” against the airline were discharged in bankruptcy.
Rederford v. US Airways, Inc. Docket No. 09-1005. Decided Dec. 14, 2009.
ADA – Scope of
administrative complaint
Where a defendant employer was awarded summary judgment on a plaintiff employee’s disability discrimination claims under the Americans with Disabilities Act, the judgment should not be disturbed, as the allegations encompassed by the plaintiff’s August 2001 charge filed with the Massachusetts Commission Against Discrimination do not support his ADA claims.
Thornton v. United Parcel Service, Inc. Docket No. 08-2162. Decided Nov. 12, 2009.
Discrimination
A defendant employer’s decision to suspend and later terminate a plaintiff employee for refusing a human resource manager’s orders to meet with her was not pretextual and therefore the plaintiff’s discrimination case must fail.
Windross v. Barton Protective Services, Inc. Docket No. 08-2254. Decided Nov. 17, 2009.
Environmental
Bankruptcy discharge – Consummation Order
Where a prior owner of a contaminated parcel of property initiated an action to enjoin the current owner from seeking contribution for the costs of cleaning up the land, the request for injunctive relief should have been granted based on a Consummation Order that was entered when the prior owner was discharged from bankruptcy.
Boston and Maine Corp. v. Massachusetts Bay Transportation Authority. Docket No. 09-1185. Nov. 24, 2009.
Evidence
Expert – Dismissal
A judgment for the defendant in a product liability case must be vacated, as the judge below erred by precluding the plaintiff’s expert evidence as a sanction for missing a discovery deadline.
Esposito v. Home Depot U.S.A., Inc., et al. Docket No. 08-2115. Decided Dec. 30, 2009.
Insurance
Disability benefits – ERISA
Where a plaintiff sued a defendant insurance company for allegedly violating the Employment Retirement Security Act of 1974 by using an arbitrary and capricious procedure in terminating his short-term disability benefits and refusing to grant him long-term disability benefits, a judge correctly entered summary judgment for the defendant, as (1) a review of the administrative record demonstrates that the defendant did not abuse its discretion in denying the plaintiff’s short-term disability claim and (2) the federal judge lacked jurisdiction to consider the plaintiff’s long-term disability benefit claim because he had not yet exhausted his administrative remedies.
Medina v. Metropolitan Life Insurance Company. Docket No. 08-2564. Nov. 25, 2009.
Labor
Motion to compel arbitration
Where a plaintiff company has appealed a decision allowing a defendant union’s motion to compel arbitration and denying the plaintiff’s motion for a declaratory judgment, the appeal must be rejected because the union neutrality agreement at issue was not void ab initio and the arbitration clause in the agreement remained in effect.
South Bay Boston Management, Inc. v. Unite Here, Local 26. Docket No. 09-1081. Decided Nov. 12, 2009.
Patent and
trademark
Settlement
Where defendants in a trademark case claimed that the plaintiff was barred from using the “SUPER CLIPS” mark in New England, that claim was correctly rejected by the lower court based on the wording of a settlement agreement between the parties.
Great Clips, Inc. v. Hair Cuttery of Greater Boston, L.L.C., et al. Docket No. 09-1376. Decided Jan. 5, 2010.
2nd Circuit
Admiralty
Retroactivity of rule
The rule announced in Shipping Corporation of India Ltd. v. Jaldhi Overseas Pte Ltd. (2d Cir. Oct. 16, 2009) regarding maritime attachments applies retroactively.
Hawknet, Ltd. v. Overseas Shipping Agencies, et al. Docket No. 09-21-28-cv. Decided Dec. 22, 2009.
Bankruptcy
Fees – Indemnity agreement
An unsecured creditor can collect post-petition counsel fees based on a pre-petition indemnity agreement.
Ogle v. Fidelity & Deposit Company of Maryland. Docket No. 09-0691-bk. Decided Nov. 5, 2009.
Civil rights
Demolition of hotel
A village’s “emergency” demolition of an old hotel, which was badly damaged by fire and was located along an important throroughfare, did not amount to a violation of the owners’ civil rights or amount to an unlawful seizure.
WWBITV, Inc. et al. v. Village of Rouses Point, et al. Docket No. 08-5112-cv. Decided Dec. 9, 2009.
Corporate
Lanham Act – Dilution
In a case involving a federal dilution claim filed under the Lanham Act, (1) a judge correctly found that no likelihood existed that the defendant’s use of “Mr. Charbucks” and “Charbucks Blend” to describe a particular type of coffee would dilute plaintiffs’ “Starbucks” mark by tarnishment but (2) a remand is necessary for further proceedings on a related allegation of dilution by blurring.
Starbucks Corporation v. Wolfe’s Borough Coffee, Inc. Docket No. 08-3331-cv. Decided Dec. 3, 2009.
Employment
EEOC – Subpoena
A judge erred by refusing to enforce an administrative subpoena filed by the Equal Employment Opportunity Commission requesting information about how religious exemptions to an employer’s Uniform and Personal Appearance Guidelines, which apply to every UPS facility across the country, are handled nationwide.
Equal Employment Opportunity Commission v. United Parcel Service, Inc. Docket No. 08-5348-cv. Decided: Nov. 19, 2009.
Railway Labor Act
A special adjustment board constituted pursuant to the Railway Labor Act did not fail to comply with the Act or exceed its jurisdiction when it held that the National Railroad Passenger Corporation was permitted to discipline an employee for conduct that occurred while that employee was functioning as a union representative.
United Transportation Union, et al. v. National Railroad Passenger Corporation. Docket No. 08-0854-cv. Decided Dec. 9, 2009.
Labor
Administrative employee – Underwriter
An underwriter, tasked with approving loans in accordance with detailed guidelines provided by their employer, is not an administrative employee exempt from the overtime requirements of the Fair Labor Standards Act, as the underwriter did not perform work directly related to management policies or general business operations.
Whalen v. J.P. Morgan Chase & Co. Docket No. 08-4092-cv. Decided Nov. 20, 2009.
FLSA – Exempt professional
A “Product Design Specialist II” is not a professional exempt from the overtime requirements of the Fair Labor Standards Act.
Young v. Cooper Cameron Corporation. Docket No. 08-5847. Decided Nov. 12, 2009.
Securities
Aiding and abetting
Where evidence indicated that the Connecticut state treasurer invested assets from the state pension fund with Thayer Capital Partners, arranged for certain defendants to receive a fee for the investment from Thayer and increased the amount of the pension fund investment with Thayer to increase the defendants’ fee — all without informing the state treasury department, the governor or the relevant legislative committee, a jury acted permissibly in finding the defendants liable for “aiding and abetting” violations of the Securities Exchange Act of 1934 and the Investment Advisors Act of 1940.
Securities and Exchange Commission v. DiBella, et al. Docket No. 08-1673-cv(L). Decided Nov. 25, 2009.
Confidential information – Third party
An SEC opinion, finding that a petitioner violated NYSE Rule 476(a)(6) by disclosing a client’s confidential information to a third party, should be upheld because bad faith, and not mere unethical conduct, was not required to sustain the finding of a violation.
Heath v. Securities And Exchange Commission. Docket No. 09-0825-ag. Decided Nov. 4, 2009.
