CONTRACTS CASES

• Bell Atlantic Corp. v. Twombly
• Incase Inc. v. Timex Corp.
• Tractebel Energy Mktg., Inc. v. AEP Power Mktg., Inc.
• Stein v. KPMG, LLP
• Grace v. Corbis-Sygma
• State of Texas v. Soileau
• Chicago Title Ins. Corp. v. Magnuson
• In re: DSC, Ltd.
• Ford Motor Co. v. Mustangs Unlimited, Inc.
• Bowers v. Federation Internationale de l'Automobile
• Skit Int'l, Ltd. v. DAC Techs. of Arkansas, Inc.
• Liberty Mut. Fire Ins. Co. v. Scott
• Santana v. City & County of Denver
• Monsanto Co. v. McFarling
• Wagner Constr. Co. v. Pac. Mech. Corp.
• Melican v. Regents of the Univ. of Cal.
• Fassberg Constr. Co. v. Housing Auth. of the City of L.A.
• Franklin v. Monadnock Co.
• Delgado v. Interinsurance Exch. of the Auto. Club of S. Cal.

U.S. Supreme Court, May 21, 2007
Bell Atlantic Corp. v. Twombly, No. 05-1126
Stating a claim under section 1 of the Sherman Act requires a complaint with enough factual matter (taken as true) to suggest that an agreement was made. An allegation of parallel conduct and a bare assertion of conspiracy will not suffice. Under such plausibility standard, plaintiffs' putative class action at hand should be dismissed as it alleged only that major telecommunications providers engaged in certain parallel conduct unfavorable to competition, and did not make any independent allegation of actual agreement among the Incumbent Local Exchange Carriers for purposes of a conspiracy in restraint of trade. Read more...

U.S. 1st Circuit Court of Appeals, May 24, 2007
Incase Inc. v. Timex Corp., No. 06-1577
In a suit by a manufacturer of plastic packaging products against a watch and electronics manufacturer involving claims of misappropriation of trade secret, unfair trade practices, breach of contract, and implied contract: 1) judgment as a matter of law (JMOL) on the trade secret claim is affirmed where there was no evidence to support plaintiff's argument that it took reasonable steps to preserve the secrecy of the design in question; 2) JMOL on the implied contract claim is affirmed where plaintiff offered no evidence as to the actual value of the services provided; 3) denial of JMOL on the express contract claim is affirmed where there was sufficient evidence for the jury to find that a contract existed; 4) there was no evidence of coercion, fraud, abusive litigation, or similar behavior by defendant, thus the judge was correct to deny punitive damages for plaintiff on the unfair trade practices claim; and 5) the district court did not abuse its discretion in denying defend! ant's motion for a new trial based on unfair surprise. Read more...

U.S. 2nd Circuit Court of Appeals, May 22, 2007
Tractebel Energy Mktg., Inc. v. AEP Power Mktg., Inc., No. 05-4985
In cross-suits alleging breach of a long-term energy contract, award of damages to defendants for replacement products is vacated where plaintiff was not under any obligation to take replacement products in the pre-commercial operation date period. Denial of damages to defendants under the termination payment provision is also vacated where district court erroneously concluded, however, that the profits lost were consequential damages, and where the court erred in requiring defendant to prove the extent of its damages to a reasonable certainty. Read more...

U.S. 2nd Circuit Court of Appeals, May 23, 2007
Stein v. KPMG, LLP, No. 06-4358
Exercise of ancillary jurisdiction in a criminal tax fraud prosecution over a state law contractual claim for attorneys' fees, and denial of a motion to compel arbitration under the Federal Arbitration Act, is vacated as to order asserting ancillary jurisdiction as it is beyond the district court's power. Read more...

U.S. 2nd Circuit Court of Appeals, May 25, 2007
Grace v. Corbis-Sygma, No. 06-0195
In case involving dispute between distinguished photographer and his agents over lost photographic images, money judgment for plaintiff after bench trial is vacated as the district court applied an arbitrary methodology in assessing damages and its award was untethered to the facts or to its own correct analysis of the applicable law. Read more...

U.S. 5th Circuit Court of Appeals, May 22, 2007
State of Texas v. Soileau, No. 05-20501
In a Chapter 7 bankruptcy case involving the potential discharge of a state's forfeiture judgments against licensed bail bondsman, who served as absconded defendants' surety on bail bonds, denial of Texas's motion to dismiss the bankruptcy petition on the basis of sovereign immunity is affirmed as Supreme Court precedent has established that the discharge of a debt like petitioner's is not barred by such immunity. Read more...

U.S. 6th Circuit Court of Appeals, May 21, 2007
Chicago Title Ins. Corp. v. Magnuson, No. 05-4411
In an appeal involving a covenant not to compete, summary judgment for plaintiff-former employer, and a jury verdict awarding it compensatory and punitive damages for former employee's breach of contract and defendant-competitor's tortious interference, are affirmed in part and reversed in part where: 1) summary judgment for plaintiff was properly entered as to the contract and tortious interference claims; 2) a new trial was required as to damages as the district court erred in granting judgment as a matter of law ruling that plaintiff was a lost volume seller; 3) jury may have considered actions taken by defendant beyond the time when the covenant was enforceable; and 4) defendant-competitor's conduct was not reprehensible enough to support a punitive damages award. Read more...

U.S. 6th Circuit Court of Appeals, May 23, 2007
In re: DSC, Ltd., No. 06-1813
In litigation arising from an amended petition for involuntary bankruptcy filed by plaintiffs, dismissal of the petition due to a lack of a sufficient number of qualified creditors under 11 U.S.C. section 303(b)(1) is affirmed where: 1) debtor's settlement with an entity did not moot the appeal; 2) the bankruptcy court did not err in establishing and enforcing its joinder deadline; and 3) the bankruptcy court did not err in holding that plaintiffs were not qualified petitioning creditors under section 303(b)(1). While 11 U.S.C. section 303(c) allows joinder "before a case is dismissed or relief is ordered," the statute does not prohibit a court from setting a deadline for creditors to join an involuntary petition, based upon the court's case management authority, in order to ensure orderly, fair, and efficient proceedings. Read more...

U.S. 6th Circuit Court of Appeals, May 24, 2007
Ford Motor Co. v. Mustangs Unlimited, Inc., No. 06-1537
In an appeal arising from the parties' voluntary settlement of a federal action in which Ford Motor Company alleged that defendant-Mustangs Unlimited had committed trademark counterfeiting, infringement, dilution, and other violations, grant of Ford's motion to set aside the consent judgment pursuant to Federal Rule of Civil Procedure 60(b)(6) is vacated and remanded as: 1) a breach of a settlement agreement does not, without more, constitute an exceptional or extraordinary circumstance warranting relief under Rule 60(b)(6); and 2) the record below contained neither an explicit determination that the circumstances were extraordinary or exceptional, nor any specific reasoning supporting such a determination. Read more...

U.S. 7th Circuit Court of Appeals, May 25, 2007
Bowers v. Federation Internationale de l'Automobile, No. 06-2718
In a suit by auto race fans seeking to recoup their expenses in attending and viewing an auto race where most of the field dropped out beforehand, dismissal for failure to state a claim is affirmed where: 1) even assuming that plaintiffs had a contractual right to a regulation race, the race regulations did not provide for a minimum number of racers; 2) there was no contractual obligation for defendants to use reasonable efforts to avoid cancellations or provide an exciting race; 3) the contracts between defendants were not violated in this case, and dismissal of the plaintiffs' claims as third-party beneficiaries of these contracts was appropriate; 4) plaintiffs' promissory estoppel claim failed because no reasonable promoter or racing fan would have regarded a race's advertising and promotion as a promise upon which someone could reasonably rely; and 5) a negligence claim was barred by Indiana's economic loss doctrine. Read more...

U.S. 8th Circuit Court of Appeals, May 22, 2007
Skit Int'l, Ltd. v. DAC Techs. of Arkansas, Inc., No. 06-3496
In an action brought by plaintiff seeking to have a judgment that defendant had obtained against it in state court set aside for lack of service and lack of personal jurisdiction, dismissal of the action is affirmed based on the Rooker-Feldman doctrine. Read more...

U.S. 8th Circuit Court of Appeals, May 23, 2007
Liberty Mut. Fire Ins. Co. v. Scott, No. 06-1626
In an insurer's declaratory judgment action against defendant seeking a declaration that its property insurance policy afforded no coverage for fire damage to her house and personal property, judgment as a matter of law for insurer is affirmed as: 1) no rational jury would be able to reconcile the difference between insured's stated personal property in a bankruptcy and in an insurance claim less than one year later; and 2) the only reasonable inference on the evidentiary record was that insured made a material misrepresentation in submitting her claim, thus voiding her coverage. Read more...

U.S. 10th Circuit Court of Appeals, May 24, 2007
Santana v. City & County of Denver, No. 05-1111
In a sheriff sergeant's action raising gender discrimination claims against the city and county of Denver, summary judgment for the city is reversed in part as to a disparate impact claim where the district court erred by dismissing the claim for lack of standing, because plaintiff did not need to demonstrate that interviewers for a position rated her poorly because of her gender in order for her to have standing for the disparate impact claim. Read more...

U.S. Federal Circuit Court of Appeals, May 24, 2007
Monsanto Co. v. McFarling, No. 05-1570, 05-1598
In a patent dispute involving the Roundup system for weed control that uses genetically modified crops, a judgment awarding damages to plaintiff for defendant's patent infringement, rejecting defendant's arguments for vacating a judgment of liability, and refusing plaintiff's request to modify a permanent injunction, is affirmed over claims that: 1) plaintiff's withdrawal of a patent infringement claim undermined the rationale of a prior decision of the circuit court and required revisiting defendant's defenses and counterclaims; 2) the damages award grossly exceeded the amount that was justified, and plaintiff's expert should not have been allowed to testify regarding the reasonable royalty amount; and 3) the district court erred as to the scope of an injunction against defendant. Read more...

Supreme Court of California, May 21, 2007
Wagner Constr. Co. v. Pac. Mech. Corp., No. S136255
Where parties have agreed to arbitrate any dispute arising out of their contract, the affirmative defense that the statute of limitations has run is for the arbitrator rather than the court to decide. Read more...

California Appellate Districts, May 24, 2007
Melican v. Regents of the Univ. of Cal., No. G036583
In suit alleging mishandling of remains by the Willed Body Program of U.C. Irvine, orders sustaining demurrers to breach of contract claim and granting summary judgment for defendant on claims of negligence and negligent misrepresentation are affirmed over claims that: 1) UCI breached its agreement to return decedent's cremains as the cremains plaintiffs received contained metal snaps for clothing the decedent did not wear; 2) UCI owed a legal duty to ensure the cremains returned to the family were not commingled with those of another person; and 3) plaintiffs raised triable issues of fact concerning whether UCI made misrepresentations about the cremains and donations raised by the family for research. Read more...

California Appellate Districts, May 24, 2007
Fassberg Constr. Co. v. Housing Auth. of the City of L.A., No. B181989
In case involving breach of construction contract and submission of thousands of false claims to defendant, a multi-million dollar judgment for defendant on cross-complaint is reversed based on principal holdings that: 1) the evidence does not support a finding of 2,983 false claims and does not establish a sufficient basis for the civil penalty; 2) the evidence does not support a finding that defendant suffered $455,000 in damages for false claims and does not support the treble damages award; 3) the damages awarded for breach of contract are excessive; 4) the award of compensatory damages for misrepresentation is not supported by substantial evidence; and 5) the court properly required an election of remedies by defendant. Read more...

California Appellate Districts, May 24, 2007
Franklin v. Monadnock Co., No. B191267
In suit for wrongful termination in violation of public policy where plaintiff alleged he was terminated after reporting a death threat by, and later an assault by, a coworker against him, sustaining of defendants' demurrer is reversed where plaintiff's allegations were sufficient to state a claim for wrongful termination based on the public policies that require employers to provide a safe and secure workplace and encourage employees to report credible threats of violence in the workplace. Read more...

California Appellate Districts, May 24, 2007
Delgado v. Interinsurance Exch. of the Auto. Club of S. Cal., No. B191272
In suit brought after plaintiff settled underlying personal injury action with insured and insured assigned his rights against insurer to plaintiff, dismissal of complaint for bad faith refusal to defend is reversed as the underlying complaint contained allegations demonstrating a potential for coverage under the insured's policy, and insurer's refusal to provide its insured with a defense was without justification and constituted bad faith as a matter of law. Read more...