Articles

Case Summaries

Bankruptcy Law

[09/08] In re: Paolo
A debtor's appeal of a district court's decision to abstain from deciding a tax dispute with the government as an adjunct to the debtor's personal bankruptcy proceeding is dismissed as the appeal is barred by section 1334(d) .

[09/03] Official Comm. of Unsecured Creditors v. Anderson Senior Living Prop., LLC.
In an appeal from the Bankruptcy Appellate Panel's (BAP) grant of debtors' motion to dismiss as moot pursuant to 11 U.S.C. section 363(m), plaintiffs' appeal of the bankruptcy court's authorization of the sale of debtors' interests in seven co-owned properties as well as the undivided interests of the tenants in common (TIC), is affirmed as the BAP properly determined that section 363(m) moots the appeal because, even though the bankruptcy court approved the sale of the TIC property interests pursuant to section 363(h), the debtors ultimately sold the properties pursuant to section 363(b) and that sale was never stayed.

[09/02] US v. Ritchie Special Cred. Invs., Ltd.
In intervenor's application to intervene in an adversary proceeding initiated by the government pursuant to 18 U.S.C. section 1345 against the alleged author of a Ponzi scheme, the denial of the application is affirmed where: 1) the litigation progressed substantially between the initiation of these proceedings and intervenor's second motion to intervene; and 2) intervenor had knowledge of all the facts surrounding the district court's injunction, and failed to take issue with it when first presented with an opportunity to do so.

[09/02] Ritchie Special Cred. Invs., Ltd. v. US Trustee
In a creditor's objection to the appointment of a bankruptcy trustee, arguing that the trustee did not qualify as a “disinterested person� as required by 11 U.S.C. section 1104(d), the denial of the objection is affirmed where: 1) the bankruptcy court did not abuse its discretion in concluding that the trustee's role and interests as a receiver did not predispose him towards forfeiture or amount to a disqualifying material adverse interest; and 2) there was no abuse of discretion in the bankruptcy court’s determination that creditor failed to show that it would be prejudiced by the trustee's appointment as trustee in the jointly administered estates.

[08/27] Paloian v. Lasalle Bank, N.A.
In a debtor-hospital's trustee's action to recover, as fraudulent conveyances, some loan payments made during the last years before hospital entered bankruptcy, judgment of the district court is vacated and remanded where: 1) LaSalle Bank is an "initial transferee" as an entity that receives funds for use in paying down a loan, or passing money to investors in a pool, is an "initial transferee" even though the recipient is obliged by contract to apply the funds according to a formula; 2) because the hospital was solvent in August 1997, the ensuing months' debt service cannot be recaptured as a fraudulent conveyance; and 3) on remand, the bankruptcy court is instructed to determine whether the transfer of the accounts receivable to MMA Funding was a true sale, such that MMA Funding served as the bankruptcy-proofing intermediary that the lenders desired.

[08/26] In re: Zarnel
In an appeal from a district court's order dismissing a bankruptcy trustee's appeal for lack of standing and in the alternative affirming the bankruptcy court's decision to strike the bankruptcy petitions filed by respondents rather than to dismiss their cases, the order is vacated where: 1) the U.S. Trustee's responsibility to represent and protect the public interest afforded it a substantial interest in, and therefore standing, to proceed with this appeal; 2) the court needed only assure itself that it was deciding a live case or controversy, and Article III jurisdiction existed; and 3) the restrictions of 11 U.S.C. sections 301 and 109(h) were not jurisdictional, but rather elements that must be established to sustain a voluntary bankruptcy proceeding.

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Injury & Tort Law

[09/08] Tamraz v. Lincoln Elec. Co.
In plaintiffs' suit against several manufacturers of welding supplies, claiming that the fumes from their products had caused his parkinsonism and that labels on the products had failed to warn of the danger, jury's verdict in favor of the plaintiffs is reversed as the district court exceeded its discretion in admitting an expert's opinion that the manufacturers' products triggered "manganese-induced parkinsonism" in plaintiff, because the "knowledge" requirement of Rule 702 requires more than subjective belief or unsupported speculation.

[09/08] Scottsdale Ins. Co. v. Univ. Crop Protection Alliance, LLC
In a declaratory judgment action seeking a ruling that a pollution exclusion in defendant's insurance policy relieved plaintiff of any obligation to defend or indemnify defendant, summary judgment for plaintiff is affirmed where: 1) in the insurance policy coverage context, a declaratory judgment action is ripe irrespective of whether the underlying litigation is ongoing or resolved; and 2) the underlying complaint made clear the relofted particulates at issue were toxic, and therefore, would qualify as "pollutants" under the policy.

[09/08] Wilcox v. Homestake Mining Co.
In an action brought under the Price-Anderson Act, 42 U.S.C. section 2210, claiming that plaintiffs suffered cancer due to exposure to radiation from defendants' uranium mill, summary judgment for defendant is affirmed where: 1) there was no basis in New Mexico law for extending the exception to the but-for causation requirement beyond the limited bounds the court described in interpreting the Restatement view under Colorado law in June; and 2) to the extent Tafoya altered the but-for test in situations where a defendant's actions aggravated but did not cause an injury, it was not applicable in this case.

[09/08] Mohamed v. Jeppesen Dataplan, Inc.
In an action alleging that the Central Intelligence Agency (CIA), working in concert with other government agencies and officials of foreign governments, operated an extraordinary rendition program to gather intelligence by apprehending foreign nationals suspected of involvement in terrorist activities and transferring them in secret to foreign countries for detention and interrogation by U.S. or foreign officials, dismissal of the action is affirmed where: 1) the Reynolds state secret privilege may be asserted at any time, even at the pleading stage; and 2) at least some of the matters the government sought to protect from disclosure in the litigation were valid state secrets, which, in the interest of national security, should not be divulged.

[09/08] Butler v. Yusem
In a dispute over an agreement to construct a commercial retail and office building, the Fourth District court's holding that failure to establish justifiable reliance is a bar to recovery based on fraudulent misrepresentation is quashed, as the district court failed to properly apply the tipsy coachman principle, and the matter is remanded for the trial court to reconsider whether plaintiff is entitled to relief based on his claims for fraudulent misrepresentation and negligent misrepresentation.

[09/08] U.S. ex rel. Poteet v. Bahler Med., Inc.
In plaintiff's qui tam action against 120 spine surgeons and eighteen medical device distributors claiming that defendants defrauded the federal government by unlawfully promoting the medical products of plaintiff's former employer and its parent company, dismissal of the action is affirmed where: 1) the district court did not err in holding that the False Claims Act's (FCA) public disclosure provision barred her claims against the doctor defendants; 2) as used in the statute, "hearing" is synonymous with "proceeding," and because a disclosure in a civil complaint is a disclosure in a civil proceeding, the disclosures emanate from a statutorily listed source; 3) plaintiff's qui tam action is "based upon" the prior disclosures of fraud; 4) district court did not abuse its discretion in dismissing the action with prejudice; and 5) district court did not err in denying plaintiff's motion to file a second amended complaint.

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