Case Summaries

Bankruptcy Law

[07/03] Gen. Elec. Capital Corp. v. Future Media Prods., Inc.
In an appeal brought by an oversecured creditor in a bankruptcy matter, an order denying the creditor default interest and attorney's fees is reversed and remanded where: 1) the bankruptcy court improperly applied the circuit court's rule from In re Entz-White Lumber and Supply, Inc., 850 F.2d 1338 (9th Cir. 1988), to the facts of this case; and 2) the bankruptcy court should apply a presumption of allowability for the contracted for default rate, "provided that the rate is not unenforceable under applicable non-bankruptcy law."

[07/01] Donell v. Kowell
In a suit arising to recover gains made by defendant, an innocent investor, from a Ponzi scheme, a judgment requiring him to disgorge his profits as fraudulent transfers under the Uniform Fraudulent Transfer Act is affirmed where the circuit court: 1) adopted the largely uniform analysis used for applying the UFTA to allow recovery from investors in a Ponzi scheme, and describes a two-step process for determining the existence and amount of liability; 2) found there was no error in the district court's application of such analysis; 3) rejected arguments that courts should not be allowed to require innocent investors to disgorge net profits; and 4) declined to permit good faith investors to claim offsets for taxes or other expenses paid in connection with receipt and management of income from a Ponzi scheme.

[06/25] AG Capital Funding Partners v. State Street Bank and Trust Co.
In an action alleging breach of contract, violation of federal Trust Indenture Act, breach of fiduciary duty, and negligence based on defendant's alleged failure to deliver debt transaction registration statements required to secure a debt, the court of appeals finds that: 1) plaintiffs' contract and Trust Indenture Act claims were barred by a release previously executed by plaintiffs as part of a bankruptcy settlement and that no fiduciary duties existed; however; 2) because negligence claims were not barred by the release and there were issues of fact as to whether defendant owed and violated a duty of care, plaintiffs' cause of action for negligence is reinstated.

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Commercial Law

[07/02] Deckers Corp. v. US
In a suit contesting the proper classification of three styles of sports sandals under the Harmonized Tariff Schedule of the United States, a decision holding that the merchandise was properly classified under subheading 6404.19.35 is affirmed where the sandals at issue have open toes and open heels, and lack the features of the named exemplars of 6406.11.80, and thus the imported goods are not classifiable under that subheading notwithstanding their claimed status as athletic footwear.

[07/02] Cavin v. Home Loan Ctr., Inc.
In a suit involving a mailer sent by defendant announcing its mortgage program and claiming that defendant violated the Fair Credit Reporting Act by failing to present plaintiffs' with a firm offer of credit, summary judgment for defendant is affirmed where: 1) the letter at issue presented a firm offer of credit, despite the absence of some material terms and the minimal number of consumers who obtained the loan; and 2) thus, defendant did not violate the FCRA.

[06/30] Waltrip v. Kimberlin
In a priority dispute between competing liens, by a judgment creditor and debtor's attorney, over settlement proceeds, judgment finding the judgment lien had priority over the attorney lien is reversed and remanded where: 1) the creditor had a lien which did not cover commercial tort claims while the settlement proceeds at issue stemmed from commercial tort claims; 2) the attorney lien was created by the retainer agreement between plaintiffs and counsel, and it was created before creditor filed a notice of lien in the pending action; and 3) the notice of lien did not relate back to prior liens, as those liens covered different property.

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Intellectual Property

[06/30] Fisher Tool Co., Inc. v. Gillet Outillage
Where Lanham Act and state tort claims are based on a defendant's representation that someone infringed his patent, a plaintiff must show that defendant's representation was made in bad faith. In a suit against a French company that makes hose clamp pliers and its lawyers, brought by plaintiffs who sold similar pliers in the U.S. and alleged antitrust violations and malicious prosecution in a prior patent suit brought by defendant, summary judgment for defendants is affirmed where: 1) plaintiffs failed to establish that defendant-maker did not act in good faith or that it did not provide its law firm with facts in its possession that it "knew or should have known would defeat" the lawsuit; 2) defendant-firm could reasonably conclude that defendant-maker's infringement case was "tenable"; 3) Lanham Act and state tort law claims failed as plaintiffs did not present any evidence that defendants drafted or forwarded certain letters in bad faith; and 4) antitrust claims were barred by the Noerr-Pennington doctrine.

[06/30] Greenberg v. Nat'l Geographic Society
In a lawsuit filed against National Geographic and Mindscape alleging plaintiff's copyrights were infringed by defendants' CD-ROM collection of the monthly magazine which included his photographs, the circuit court finds that: 1) publisher-defendant is privileged to reproduce and distribute digital CD-ROMs of the magazine under the "revision" prong of section 201(c) of the Copyright Act; and 2) despite reproductions in a different medium or enhanced digital search functions, the publisher's privilege continues as long as the original context of a collective work is not destroyed.

[06/20] Warren Freedenfeld Ass'n, Inc. v. McTigue
In a copyright infringement lawsuit brought by an architectural firm against its quondam client wherein the district court dismissed the architecture firm's copyright infringement claims as time-barred, ruled the client's counterclaim incapable of being proven, and denied anticipatory claims for attorney's fees, judgment is affirmed in part and vacated in part where: 1) the district court incorrectly charged the architectural firm with inquiry notice of the alleged acts of copyright infringement based on speculative facts on the record; 2) challenges to the court's denial of attorney's fees were moot, as defendants were no longer prevailing parties as to the copyright infringement claim; and 3) there was no trial-worthy issue as to any material fact on the resolution of client's counterclaims.

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Banking Law

[07/03] Gen. Elec. Capital Corp. v. Future Media Prods., Inc.
In an appeal brought by an oversecured creditor in a bankruptcy matter, an order denying the creditor default interest and attorney's fees is reversed and remanded where: 1) the bankruptcy court improperly applied the circuit court's rule from In re Entz-White Lumber and Supply, Inc., 850 F.2d 1338 (9th Cir. 1988), to the facts of this case; and 2) the bankruptcy court should apply a presumption of allowability for the contracted for default rate, "provided that the rate is not unenforceable under applicable non-bankruptcy law."

[07/02] Cavin v. Home Loan Ctr., Inc.
In a suit involving a mailer sent by defendant announcing its mortgage program and claiming that defendant violated the Fair Credit Reporting Act by failing to present plaintiffs' with a firm offer of credit, summary judgment for defendant is affirmed where: 1) the letter at issue presented a firm offer of credit, despite the absence of some material terms and the minimal number of consumers who obtained the loan; and 2) thus, defendant did not violate the FCRA.

[07/02] US v. Erpenbeck
A sentence for bank fraud and conspiracy to obstruct justice is affirmed where: 1) the arguments raised by defendant in his appeal had no merit; 2) any errors committed by the court at sentencing were either harmless or militated in defendant's favor; and 3) the government agreed to waive arguments in its cross-appeal in the absence of a remand.

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