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Bar News - January 21, 2005 US District Court Decisions - December 2004 ABSTENTION 12/23/04 Plaintiff filed this declaratory judgment action seeking a judicial declaration that its members hold a parking easement on adjacent property owned by defendant. But, because that very issue is currently pending before the state supreme court, the court determined that principles of comity and the efficient use of legal resources counseled in favor of staying this proceeding pending a decision from the state court. 13 pages. Chief Judge Steven J. McAuliffe.
ARBITRATION 12/3/04 Following arbitration, the plaintiff filed a petition to confirm the arbitrators' award. After the arbitration panel denied the defendant's application to correct errors in the award, the defendant objected to the petition to confirm and sought a stay of the proceedings to allow time to file a motion to vacate the award, which it later filed. The defendant argued that the choice of law provision in the parties' agreement provided that New Hampshire law would govern their dispute. The court ruled that based upon the choice of law provision and the court's previous order that the Federal Arbitration Act governed the proceedings, the Act, rather than New Hampshire law, provided the governing law. The court also denied the defendant's request for a stay, concluding that the defendant's motion to vacate the award was untimely. Based on the filings, the court confirmed the arbitration award. 7 pages. Judge Joseph A. DiClerico, Jr.
CIVIL RIGHTS § 1983: PRISONER 12/16/04 Plaintiff, a former inmate at the Cheshire County Department of Corrections, claimed that the defendant, a corrections officer, ignored his requests for a cell transfer, deliberately leaving him in a cell with someone known to be violent. As a result, says plaintiff, his cell-mate violently beat him, causing severe injuries. Defendant moved for summary judgment. The court denied that motion, noting that the existence of several genuinely disputed material facts precluded the entry of judgment as a matter of law. 12 pages. Chief Judge Steven J. McAuliffe.
CONTEMPT 12/17/04 Following the entry of an injunction under the Railway Labor Act preventing the use of a non-union alter ego to fly large-jet aircraft "in service traditionally performed by" its union affiliate, the union moved to hold the defendants in contempt of the injunction for using the non-union entity to perform charter flights. Over the union's objections, the court adopted the magistrate's recommendation that the motion be denied because (1) the qualifying language "traditionally performed" could not be read out of the injunction, particularly in light of the union's failure to object to the language in the first instance, and (2) the evidence received by the magistrate did not show that the union affiliate historically performed charters, but that it had regularly performed charters for only one tour company, which was itself a company different from those for which the non-union entity had performed the flights that were the subject of the contempt motion. 17 pages. Judge Joseph A. DiClerico, Jr.
CONTRACTS 12/22/04 In an employee's breach of contract action, to recover the full amount offered by his employer in an incentive/bonus program, employer's motion for summary judgment was denied due to a factual dispute over the application of the rules of the incentive program. 16 pages. Chief Judge Steven J. McAuliffe.
ERISA 12/2/04 The plaintiffs in this ERISA class action, participants in retirement plans ("Plans") sponsored by Tyco International (US) Inc., filed a consolidated complaint alleging breach of fiduciary duty claims against Tyco US, its parent corporation, Tyco International Ltd., the committee ("Committee") that administered the Plans, and several former officers and directors of Tyco US and its parent corporation. The claims concerned the Tyco Stock Fund, which holds Tyco International stock and is one of the Plans' investment options. Plaintiffs charged in Count I that defendants made material misstatements and omissions concerning Tyco International's financial condition and the risk characteristics of the fund. They also alleged in Count II that defendants were negligent in allowing participants to invest in the fund. Defendants' filed motions to dismiss, arguing (1) that only the Committee that administered the Plans was a fiduciary; (2) that plaintiffs' claims are barred by Section 404(c) of ERISA, which precludes certain breach of fiduciary claims for losses caused by a participant's own investment decisions; (3) that Count I fails because it does not allege any actionable misstatements or omissions, and Count II is deficient because it does not sufficiently allege that defendants acted imprudently; and (4) that the complaint must be dismissed because ERISA does not authorize Plan participants to recover monetary relief for fiduciary breaches. As to defendants' argument in Count I that only the Committee that administered the Plans was a fiduciary because only the Committee was named as fiduciary in the Plans, the court first found that the complaint did not sufficiently allege that Robert Bent and Kelly Heffernan, the Clerk and authorized signatory of the Committee, respectively, were members of the Committee or that they acted in a fiduciary capacity because they signed SEC filings on the Committee's behalf. The court also found that the complaint did not sufficiently allege that the Plan documents assigned Tyco US discretionary authority with respect to Plan administration, nor did Tyco US actually engage in discretionary acts of Plan administration when it responded to participants' routine requests for information or processed requests to reallocate investments. Finally, the court was unable to resolve defendants' challenge to plaintiffs' claim that Tyco US is vicariously liable, under the doctrine of respondeat superior, for the fiduciary breaches of its employees who served on the Committee. As to the breach of fiduciary duty claim against Tyco US Board members, the court concluded that the Board of Directors of Tyco US owed fiduciary duties to the Plans and their participants because it acted in a fiduciary capacity when it appointed and retained members of the Committee. Next, to support their contention that Tyco International was a fiduciary, the plaintiffs made three arguments. First they argued that Tyco International assumed fiduciary duties by disseminating documents that it was required to file with the SEC or to make available to Plan participants in order to comply with federal securities laws. Defendants countered that in disseminating these documents, Tyco International was acting in a corporate capacity rather than in a fiduciary capacity. The court agreed, pointing out that Tyco was engaging in plan "management," acting solely as an issuer of stock, rather than as a fiduciary, when it disseminated the documents. Second, plaintiffs argued that Tyco International is vicariously liable for the fiduciary breaches of Tyco US because it is the alter ego of its subsidiary. The court found that the plaintiffs had not pled sufficient facts to state a claim that Tyco International is the alter ego of Tyco US. Finally, the plaintiffs alleged that Tyco International is vicariously liable for Dennis Kozlowski's fiduciary breaches under the doctrine of respondeat superior. Again, the court reserved judgment as to when an ERISA breach of fiduciary claim may be maintained using a respondeat superior theory and thus declined to dismiss plaintiffs' claims against Tyco International to the extent that they were based on Kozlowski's alleged misstatements. Next, the court considered defendants' argument that Section 404(c) bars plaintiffs' claims because their losses were the result of their own poor investment decisions, rather than defendants' misconduct. The court declined to dismiss the complaint based on this defense, finding that it was not possible to determine from the complaint whether defendants exercised improper influence over the participants or concealed material nonpublic information from them. Having concluded its examination of fiduciary status in Count I and the defendants' Section 404(c) defense, the court then considered the defendants' argument that the alleged misstatements and omissions in Count I are not actionable under ERISA. The court noted that neither the Supreme Court nor the First Circuit have determined whether a breach of fiduciary duty claim can be premised on negligent misrepresentations, as here, and therefore declined to express a view on this issue without the benefit of an evidentiary record. The court also expressed uncertainty as to whether defendants can be held liable for a failure to disclose material information under these circumstances. The court then considered defendants' argument that Count II should be dismissed because they cannot be charged with breach of fiduciary duty for allowing participants to invest in the Tyco Stock Fund because the Plans did not give them the discretion to prevent such investments and because the complaint does not sufficiently allege that the defendants acted imprudently. In rejecting defendants' arguments, the court found that because the Tyco Stock Fund is an "investment fund," the Committee retained the power to determine whether participants should be permitted to invest in the fund and that the evidence cited in the complaint, including publicly available information, is sufficient to support the imprudent investment claim. Lastly, the court rejected defendants' argument that the plaintiffs' claims must be dismissed because they seek a form of relief not available under ERISA, because the complaint plainly seeks to recover on behalf of both the Plan and their participants. Accordingly, the court granted defendants' motion to dismiss all claims against Bent, Heffernan, the former directors of Tyco International and the former officers of Tyco International, other than Kozlowski. Count II was dismissed insofar as it asserted claims against Tyco International and Kozlowski. Defendants' motions to dismiss were denied in all other respects. 31 pages. Judge Paul Barbadoro.
HABEAS CORPUS 12/9/04 Paul Blackmer, a state prisoner, petitioned for a writ of habeas corpus based on: (1) ineffective assistance of counsel at trial; (2) denial of counsel at trial; (3)illegal search and seizure; (4) denial of the right to present evidence at trial; and (5) prosecutorial misconduct. Blackmer's basic argument was that his 1994 indictment, and his subsequent conviction, resulted from perjured grand jury testimony of a DEA Agent. He further argued that the State's refusal to disclose whether the Agent had in fact committed perjury prevented him from mounting an adequate defense at trial and from properly appealing his conviction. Prior to petitioner's federal habeas application, the State Supreme Court dismissed his direct appeal for failure to file a brief. Petitioner then filed a number of collateral attacks on his conviction, as well as a state habeas corpus petition. The State dismissed each of these applications. The Warden filed a motion for summary judgment, arguing that Blackmer's petition was barred by the Antiterrorism and Effective Death Penalty Act's ("AEDPA") one-year statute of limitations that governs habeas petitions and, moreover, that none of petitioner's applications for State post-conviction relief or other collateral review were "properly filed" under AEDPA so as to toll the limitations period. Summary judgment was granted against Blackmer because (1) his federal habeas petition was filed more than one year after the limitations period had expired; and (2) none of his applications for State post-conviction were "properly filed" for the purpose of tolling the limitations period. 17 pages. Judge Paul Barbadoro.
HABEAS CORPUS - 28 U.S.C. § 2254 12/23/04 The pro se petitioner sought habeas relief from his conviction on charges of negligent homicide and reckless conduct and consecutive sentences, asserting twelve issues. Both sides moved for summary judgment. The Warden invoked procedural default to bar several of Demeritt's claims. After Demeritt conceded that two claims were defaulted, the court ruled that two others were also barred for the same reason. As to two claims that were raised in Demeritt's pro se brief in his direct appeal, which the New Hampshire Supreme Court "denied" without explanation, the court ruled that because the record lacked any indication of an independent and adequate state ground for the supreme court's decision, the claims were not defaulted. On the merits, the court concluded that the altered indictment was not invalid; Demeritt's consecutive sentences did not violate double jeopardy; the state supreme court's harmless error decision was not contrary to Supreme Court precedent, and the state supreme court's decisions on the other issues were neither contrary to nor an unreasonable application of Supreme Court precedent. Summary judgment was granted in favor of the Warden. 26 pages. Judge Joseph A. DiClerico, Jr.
CIVIL PROCEDURE 12/22/04 PMH Research Associates, a New Hampshire limited liability company, sued two Florida corporations, Life Extension Buyer's Club, Inc. and Life Extension Foundation, Inc., for misappropriation of trade secrets. Defendants moved to dismiss for lack of personal jurisdiction. Their motion was granted. The long-arm statute in New Hampshire is coextensive with constitutional limitations. Under the Due Process clause, a court has authority over a defendant if either general or specific jurisdiction exists. In this case, there was no general jurisdiction because defendants contacts with the state were not sufficiently continuous and systematic to justify haling them into court here. Plaintiff argued that because defendant did business with it while it was located in New Hampshire, defendant breached this threshold. This argument was rejected because plaintiff's decision to exist in New Hampshire was made unilaterally and so may not be included in the contact calculus. Defendant otherwise owned no property in New Hampshire, was not licensed to do business here, was not involved in independent litigation here, nor dispatched employees here. Its contacts were therefore deemed neither continuous nor systematic, and thus insufficient to establish general jurisdiction. Plaintiff's claim that specific jurisdiction existed was also rejected. Two of the three elements necessary to establish specific jurisdiction, relatedness, personal availment, were not met. The relatedness element was not met because none of the facts that gave rise to the dispute occurred in New Hampshire. The trade secret was allegedly misappropriated during contract negotiations that occurred between Florida and Nebraska. These facts are unrelated to New Hampshire. Plaintiff argued that it felt the effects of the misappropriation in New Hampshire. In-forum harm, however, does not support a finding of relatedness. Similarly, because defendants played no part in plaintiff's decision to locate itself in New Hampshire, plaintiff also failed to prove that defendants purposefully availed themselves of forum privileges. Specific jurisdiction was therefore denied and summary judgment granted in favor of the defendants. 20 pages. Judge Paul Barbadoro.
CONSTITUTIONAL LAW 12/27/04 Kyle Williams sued the Town of Newbury and one of its Police Officers, E. Neill Cobb, claiming that Cobb violated his Fourth Amendment rights. Defendants moved for summary judgment on all of Williams' claims. Its motion for summary judgment with respect to the Town's liability was granted. Summary judgment as to Officer Cobb's liability was denied. Williams was forcefully detained by Officer Cobb on June 26, 2001. Cobb claims that Williams, who was carrying a container of beer, appeared drunk and required protective custody. Williams disagrees. He argues that there was no basis for the detention and thus that his constitutional rights were violated. Because a dispute persists over whether Cobb had a legitimate basis for detaining Williams, summary judgment was denied. Williams next argues that he was unconstitutionally frisked. A frisk is constitutional if an officer reasonably suspects that a person is armed and dangerous. Officer Cobb argues that Williams had a bulge in his pocket that may have been a weapon. Williams disputes this fact. Because resolution of this dispute will determine whether Officer Cobb could reasonably suspect that Williams was armed and dangerous, summary judgment is inappropriate. Williams third claim is that Officer Cobb detained him using excessive force. Force is excessive if objectively unreasonable. Among the factors used to determine whether force is excessive are (1) the severity of the crime, (2) whether the suspect poses a threat to the officer, and (3) whether the suspect actively resisted arrest. Despite the fact that Williams largely cooperated with Officer Cobb's detention, he was handcuffed after he tried to resist Officer Cobb's attempts to pull his arm behind his back. He argues that he resisted because his arm, which was in a sling, was recovering from surgery. These factors place the reasonableness of Officer Cobb's actions into question. Summary judgment was therefore again, denied. Finally, Williams claimed that the Town of Newbury was liable because its failure to adequately train Officer Cobb constituted deliberate indifference to Williams' rights. Williams offered no proof, however, that this was the case. The Town, on the other hand, offered proof that it hired Cobb only after he passed through New Hampshire's Police Academy and went through a police training program, each of which teaches officers the contours of citizen's constitutional rights. Williams thus failed to offer proof of the Town's deliberate indifference. Failing that, the Town was granted judgment as a matter of law. 14 pages. Judge Paul Barbadoro.
PATENT LAW 12/09/04 Thermal Dynamics Corporation holds a patent over ridged electrodes used to conduct plasma gas at a lower voltage range than un-ridged electrodes. TATRAS, Inc. manufactures ridged electrodes of its own. Thermal Dynamics has sued TATRAS for infringing its patent. Parties disputed the meaning of the patent's terms. First they disputed the meaning of the term "arc chamber." As required by law, the court adopted the definition provided in the patent specification. According to the specification, an "arc chamber" is housed in that part of the electrode where electrical arcing occurs. Defendant argued that the "arc chamber" was confined to the electrode's cylindrical side. The court rejected this argument because it presupposes that an electrode must be shaped as a cylinder. The patent language contains no such limitation and the court found no reason to otherwise impose it. Next, the parties disputed the meaning of the phrase, "extending along said electrode so as to provide a path for arcing." Defendant argued that "along" means "lengthwise over the longest side surface." The court considered this interpretation unduly narrow. It concluded that a ridge could still extend "along" an electrode even if the ridge existed on many side surfaces. It then concluded that using the orientation of the object was more in keeping with an ordinary understanding of the word "along." Plaintiff, alternatively, argued that "along" was synonymous with "on." The court considered this definition unduly broad. The court concluded that "along," as ordinarily understood, has a lengthwise component. Finally, the parties asked the court to determine the degree to which the phrase, "thereby producing a longer wearing electrode so as to provide a path for arcing," limited the scope of the claimed invention. The court concluded that "thereby producing a longer wearing electrode" places no limitation on the claimed invention because, as a matter of law, a statement of the patent's result is not considered limiting language. On the other hand, the court concluded that the phrase "so as to provide a path for arcing" does limit the scope of the claimed invention because plaintiff had conceded the point. 18 pages. Judge Barbadoro.
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