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Bar News - May 20, 2005 US District Court Decisions ~ March & April 2005 * Published MARCH CIVIL RIGHTS 3/30/05 The defendants, a New Hampshire town and the members of its board of selectmen, moved to dismiss the former police chief's amended complaint for failure to state a claim on which relief could be granted, following the dismissal of the chief's initial complaint on the same basis. The court ruled that (1) because the chief agreed to retire on the terms proposed by the board, he failed to state any procedural due process claim arising out of the deprivation of his continued employment, and (2) the fact that the defendants refused to accede to the chief's subsequent request to attach additional conditions to his retirement following the service of the lawsuit upon them failed to state an equal protection claim based on the theory that the defendants had retaliated against him for the exercise of his right to sue. The court also ruled that the chief's allegations that the board unwisely went about the process of hiring his replacement following his retirement and improperly participated in a criminal case he had initiated against a third person failed to state a substantive due process claim. 8 pages. PATENT LAW 3/2/05 Following a hearing conducted pursuant to Markman v. Westview Instruments, Inc., 517 U.S. 370 (1996), the court construed two disputed terms in the claims of the patents which were the subject of the plaintiffs' patent infringement action. The court construed the first term, "extrusion," to mean "material exiting extruding equipment," rejecting the defendant's proposed interpretation of the term to mean "a form produced by an extruding process that holds a shape defined by the extruding die after exiting the die." The court ruled that (1) the claims' repeated references to the extrusion as "molten" necessitated the defendant's construction, (2) the patent's preferred embodiment, which attributed dimensions to the extrusion, could not be read to limit the plain meaning of the term, and (3) the patentee's statement to the examiner during prosecution of the patent seeking to differentiate it from existing technology did not amount to a disavowal of a broader meaning of "extrusion." Treating the second disputed term, "means for providing pressure," as a means-plus-function element in accordance with 35 U.S.C. § 112, 6, the court construed it to embrace an extruder and die apparatus, which was adequately disclosed in the patent's "Background" section. The fact that the patent referred to that structure only in discussing prior art did not disqualify the extruder and die as a corresponding structure for purposes of the means-plus-function analysis because the patent did not describe the structure as incapable of performing the function. 20 pages. APRIL CASE OR CONTROVERSY: STANDING 4/25/05 Pro se plaintiff brought this action against Sprint Communications Co., seeking damages for alleged acts of fraud, negligent misrepresentation, and theft of proprietary information and trade secrets. Plaintiff's claims arose out of a failed contract between a corporation he created - The Bevill Company - and a subsidiary of Sprint. The court granted defendant's motion to dismiss concluding that, despite plaintiff's claim that he was the "alter ego" of The Bevill Company, he lacked authority to pursue claims in his individual capacity that actually belong to the corporation. Additionally, the court noted that even if plaintiff were permitted to amend his complaint to name the corporation as a party-plaintiff, its claims would be barred by principles of res judicata and collateral estoppel, since the corporation had already fully litigated virtually identical claims in the District of Kansas. 11 pages. CERTIFICATION TO NH SUPREME COURT 4/21/05 After plaintiff prevailed on his motion for a new criminal trial due to ineffective assistance of counsel, the State declined to reprosecute him. He then brought this criminal malpractice action against his former attorney. Defendant moved to dismiss plaintiff's claim, arguing that it is barred by the pertinent state limitations period. Plaintiff objected, asserting that his claim did not "accrue" until his state court conviction was vacated, thus allowing proof of one of the essential elements of his malpractice cause of action: actual innocence. Observing that there is a decided disagreement among state courts that have addressed the issue, the court certified to the New Hampshire Supreme Court the question of when, under state law, a claim for criminal legal malpractice actually accrues. 6 pages. CONTRACTS 4/6/05 Cin-Doo, Inc., a 7-Eleven franchisee, sued 7-Eleven for failing to reconstruct the store Cin-Doo operated. 7-Eleven moved for summary judgment, which was denied, because plaintiffs created a genuine issue of material fact concerning its theory that 7-Eleven was estopped from denying the existence of an agreement to reconstruct the store and from relying upon a "no oral modification" clause in the written agreement between the parties. 12 pages. CRIMINAL CASES, MOTIONS HABEAS CORPUS 4/29/05 Sean Ahern, convicted of armed bank robbery, moved for a new trial based upon newly discovered evidence and petitioned for a writ of habeas corpus. Both were denied. Ahern's "newly discovered evidence," deemed insufficient to have resulted in an acquittal, was an alleged confession by a convicted murderer, who said he committed the bank robbery for which Ahern was convicted. That "confession" was insufficient to require a new trial because, among other things, it referred to a bank in Portsmouth rather than Dover, the location of the bank Ahern was convicted of robbing, and because it contained numerous factual assertions plainly contrary to those established at trial. 34 pages. TITLE VII 4/27/05 The plaintiff brought a claim of discriminatory retaliation under Title VII of the Civil Rights Act of 1964, along with related state law claims, against his former employer and supervisor, alleging that he was fired because he supported a fellow employee's complaint of sexual harassment and participated in the internal investigation of that complaint. The court held that while participation in an internal investigation, in the absence of a complaint to the EEOC, was not protected activity for purposes of Title VII, the plaintiff's opposition to the treatment of his co-worker was protected. The court granted the defendants' motion for summary judgment, however, because the plaintiff failed to show a material factual dispute as to whether his termination was retaliatory, whether the employment handbook altered his at-will status, and whether the defendants' actions constituted intentional infliction of emotional distress. 22 pages. EMPLOYMENT (TITLE VII) 4/6/05 The plaintiff in this Title VII ethnic discrimination action asserted claims of disparate treatment and retaliation against his employer. Summary judgment was granted to the defendant because plaintiff: failed to establish a prima facie case of failure to promote or disparate compensation, failed to produce evidence to support a claim that his employer's limitation of his use of the company's tuition reimbursement program was pretextual, and, with regard to his retaliation claim, failed to present evidence to refute his employer's assertion of a legitimate, non-retaliatory reason for not promoting him. 26 pages. 4/29/05 The defendant in this Title VII gender discrimination action, based upon its failure to grant the plaintiff a lateral transfer, was granted summary judgment because denial of a request for a lateral transfer was not an adverse employment action for Title VII purposes and because plaintiff failed to produce evidence that the position he sought was given to someone outside the protected class, in this case, a woman. 31 pages. ERISA 4/11/05 In this action, Harrison challenged Unum's decision to deny her long-term disability benefits under her insurance policy. The basis for the denial was that Harrison's injury resulted from the commission of a crime for which she was convicted-in this case, a DWI. Injuries of this sort are excluded from coverage by the policy. Harrison argued that the claim turned on the definition of the word "crime." Harrison further argued that she was a first-time DWI offender, and under the laws of New Hampshire, a first-time DWI offense is a violation, not a crime. This, she maintained, entitled her to coverage under the plan. Unum countered that it used the Webster's Dictionary definition in interpreting the policy, and that under this definition, any violation of the law is a "crime." A DWI is a violation of the law. Because Unum reserved the right to interpret the terms of the policy, the court reviewed this decision under an abuse of discretion standard and concluded that Unum's decision should be upheld. It specifically noted that dictionaries have been treated as an authoritative source when interpreting terms in an ERISA benefits plan, and therefore that reliance on a dictionary definition in this case was not an abuse of discretion. Harrison's motion for summary judgment was therefore denied and Unum's motion for summary judgment was granted. 12 pages. FEDERAL JURISDICTION 4/08/05 Anthem Health Plans of New Hampshire, Inc. moved to dismiss Chapman's diversity suit claiming that Chapman failed to allege facts sufficient to meet the $75,000 amount in controversy requirement set forth in 28 U.S.C. § 1332(a). A motion on these grounds may be granted only if it appears to a "legal certainty" that the amount controversy does not exceed the jurisdictional amount. The court ruled that Anthem failed to prove this to be the case. The availability of attorney's fees under RSA § 491:22-b, coupled with plaintiff's claim for medical expenses, and his claim for lost income could potentially prove to be more than enough to meet § 1332(a)'s amount in controversy requirement. Anthem's motion was therefore denied. 6 pages. REMOVAL 4/6/05 A late-served defendant removed this action from state court. Plaintiff subsequently moved to remand, asserting that the originally-served defendants had lost the right to assent to removal by allowing that right to lapse. The court agreed, adopting the so-called "first-served defendant" rule, which provides that once a defendant allows its right to remove (or the right to assent to removal) to lapse, it loses the ability to consent to subsequent removal efforts. And, absent valid consent from all defendants, removal is improper. 12 pages. SECURITIES 4/21/05 Tyco International, Ltd brought suit against former Chief Executive Officer Kozlowksi and former Chief Financial Officer Swartz pursuant to Section 16(b) of the Securities and Exchange Act of 1934, 15 U.S.C. § 78p(b) ("Section 16(b)"). Tyco seeks disgorgement of approximately $30 million in short-swing profits resulting from prohibited transactions in Tyco Stock. Defendants moved to partially dismiss the Amended Complaint pursuant to Fed. R. Civ. P. 12(b)(6), arguing that 17 of the transactions detailed therein are barred by Section 16(b)'s two-year statute of limitations. The court ruled that although in some cases, an affirmative defense, including the statute of limitations, may be adjudicated on a Rule 12(b)(6) motion to dismiss, such adjudication was not proper here because the facts gleaned from the parties' submissions do not conclusively establish that the 17 transactions are barred by the statute of limitations and are not subject to equitable tolling. Specifically, the court found that Tyco is not required to plead equitable tolling with the particularity required by Fed. R. Civ. P. 9(b) and that Tyco had sufficiently pleaded that it lacked adequate notice of defendants' wrongful conduct to support an equitable tolling claim. Defendants' motion to dismiss was thus denied. 11 pages. 4/22/05 Plaintiffs, former shareholders in AMP, Inc., acquired Tyco stock when AMP and Tyco merged in April 1999. They have sued Tyco, various former officers and directors, and PricewaterhouseCoopers LLP ("PwC"), Tyco's auditor, for, inter alia, violations of the Securities and Exchange Act of 1934 and the Securities Act of 1933. PwC moved to dismiss the claims against it, arguing that they were time-barred. The court ruled that plaintiffs' claims against PwC were time-barred under the three-year statute of repose that governed such claims prior to the enactment of the Sarbanes-Oxley Act of 2002 ("SOX"). In so ruling, the court found that plaintiffs' claims could not be saved by the class action tolling doctrine articulated by the United States Supreme Court in American Pipe & Constr. Co. v. Utah, 414 U.S. 538 (1974) because PwC was not named as a defendant in the original class action suit. Moreover, the court concluded that the Sarbanes-Oxley Act's five-year statute of repose could not save plaintiffs claims because SOX does not apply retroactively to resurrect already time-barred claims such those in this case. PwC's motion to dismiss was thus granted. 13 pages. SOCIAL SECURITY 4/25/05 Plaintiff Debra Burrows appealed a decision by the Commissioner of Social Security denying her disability benefits. Plaintiff suffered from obesity, osteomyelitis, cellulitis, and venous insufficiency. The Administrative Law Judge ("ALJ") determined that plaintiff could not return to her prior work as a caretaker, but that she could engage in sedentary or light work, and thus was not entitled to benefits. Plaintiff first claimed that the ALJ erred in assessing her credibility. The court found that plaintiff's statements regarding her disability were given little weight because her testimony was contradicted by medical records and was internally inconsistent and the ALJ sufficiently explained the basis for her credibility determinations. Next, plaintiff argued that the ALJ erred by failing to further develop the medical record regarding her functional capacity. The court concluded that the ALJ appropriately assessed plaintiff's functional capacity based upon detailed medical records and an assessment made by a doctor reviewing plaintiff's medical records. The court also noted that the ALJ need not have developed the record regarding a doctor's statement in plaintiff's social history that plaintiff was "totally disabled" because that statement was cumulative of other medical records. having determined that plaintiff's arguments failed, the court rejected her claim. 17 pages. TORTS 4/18/05 The plaintiff in this tort case, who was struck by an automobile driven by a man on his way to work, sued various parties, including the employer of the driver who hit her. The employer was granted summary judgment, on grounds that the employer was not vicariously liable because the driver was not acting within the scope of his employment when he was driving to work, and that the employer was not directly liable because it had no control over how its employee drove to work and did not know, and had no reason to think, that he might drive negligently. 21 pages. VENUE (TRANSFER) 4/8/05 Defendant in this criminal action was charged with making false statements in connection with a passport application. Although that application was processed in New Hampshire, it was completed and filed in defendant's home town of Chicago. Pursuant to Rule 21(b) of the Federal Rules of Criminal Procedure, the court concluded that, in the interest of justice and for the convenience of the defendant and likely witnesses, the proceeding should be transferred to the Northern district of Illinois. Motion for venue transfer granted. 11 pages. Chief Judge Steven J. McAuliffe. |
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