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CIVIL PRACTICE Clayton Act jurisdiction not tied to proper venue Taking up two first impression issues, the 9th U.S. Circuit Court of Appeals ruled on May 27 that venue and personal jurisdiction are not interlinked requirements under the Clayton Act, and that the existence of personal jurisdiction under the act does not depend on there being proper venue. Action Embroidery Corp. v. Atlantic Embroidery Inc., No. 02-56770. After failing to win a military contract, Action Embroidery and Vanguard Industries filed an antitrust suit against a competitor, Atlantic Embroidery and its Virginia attorneys Wolcott Rivers Wheary Basnight Kelly under the federal Clayton Act. The plaintiffs also alleged state law claims. Finding that venue was improper, a California federal court dismissed the case against the firm for lack of personal jurisdiction. Reversing, the 9th Circuit said, “The existence of personal jurisdiction under Section 12 [of the act] does not depend on there being proper venue.” The panel explained that � 12′s nationwide service of process provision authorizes personal jurisdiction in the Central District of California and complies with the requirements of the due process clause of the Fifth Amendment. Adopting the doctrine of “pendent personal jurisdiction,” the circuit court added that the lower court had personal jurisdiction over the law firm with respect to the federal antitrust claims and had the discretion to exercise pendent personal jurisdiction over state law claims against it too.   Full text of the decision CONSUMER PROTECTION Service contract not a warranty under Calif. act A service contract is not an express warranty under California’s Song-Beverly Consumer Warranty Act, the California Supreme Court said on May 27. Gavaldon v. DaimlerChrysler Corp., nos. G026626, G027036. In June 1993, Rosemarie Gavaldon bought a new Dodge Caravan minivan that came with a three-year/36,000 mile basic warranty. She added a service contract for $890. Over the next four years, Gavaldon experienced chronic transmission problems. Her February 1997 request to the car manufacturer to have the car repurchased or replaced was denied. Because she continued to have problems even after having the transmission completely replaced, in October 1997, Gavaldon sued Chrysler for breach of its obligations under the Song act. The trial court ruled that a service contract was an express warranty under the act and awarded Gavaldon the purchase price minus a deduction for actual use of the vehicle. California’s intermediate appellate court reversed. Affirming, California’s high court noted that the act says, “[i]f the manufacturer or its representative in this state is unable to service or repair a new motor vehicle . . . to conform to the applicable express warranties after a reasonable number of attempts, the manufacturer shall either promptly replace the new motor vehicle . . . or promptly make restitution to the buyer.” But, looking at the way the terms “service contract” and “express warranty” are used in different parts of the statute and at legislative history, the high court found that the terms were mutually exclusive. It concluded that the breach of the service contract did not make the replacement/restitution remedy of the statute apply.   Full text of the decision CONSTITUTIONAL LAW Individual’s free speech right not bartered away An individual does not contract away his First Amendment right to contest a real estate development plan simply because he also protested as a member of a nonprofit neighborhood association that settled with the developer, the Colorado Supreme Court ruled on May 24. Krystkowiak v. W.O. Brisben Cos., No. 02SC686. Real estate developer W.O. Brisben proposed to build a 160-unit apartment complex in Colorado Springs, across from Erik Krystkowiak’s neighborhood. Krystkowiak and others formed a neighborhood association to oppose the plan, and Krystkowiak volunteered to represent the group’s interests at public meetings. The association eventually reached a settlement with the developer and withdrew its opposition, but Krystkowiak continued to oppose the plan. The city eventually denied Brisben’s proposal. Brisben later sued the association for breach of contract and Krystkowiak for tortious interference with a contract. The trial court found that the developer’s suit against Krystkowiak was filed in retaliation for his exercising of his First Amendment rights, and threw out the claim. The trial court did not, however, award Krystkowiak attorney fees on the ground that the prevailing party on summary judgment is ineligible for them. The state’s intermediate appeals court affirmed the dismissal on agency principles, but also impliedly found that Krystkowiak had waived his First Amendment rights because he was a member of the group that had settled with Brisben. Colorado’s high court affirmed the dismissal, but remanded with directions for the trial court to determine an appropriate fee award. It explicitly rejected the conclusion that a person gives up his First Amendment rights by joining a nonprofit corporation, and the conclusion that this was a purely contractual dispute. The court explained that while First Amendment rights can be contracted away, Colorado’s Nonprofit Corporation Act represents a clear declaration that members of a nonprofit corporation generally are not liable for the contracts or torts for which their corporation is liable. Also, Krystkowiak’s First Amendment right of association cannot limit his First Amendment right to petition, the court said.   Full text of the decision CONTRACTS Contract lacking needed details can’t be enforced A manufacture-and-sale contract for propellers was a contract for “goods,” governed by the statute of frauds, and was unenforceable for lack of specified quantity or exclusivity, the 5th Circuit U.S. Court of Appeals held on May 26. Propulsion Technologies Inc. v. Attwood Corp., No. 03-40652. Propulsion Technologies, d/b/a PowerTech Marine Propellers, markets boat propellers made by a unique process. Attwood Corp. formerly produced rough castings of propellers for PowerTech. A Texas federal court jury awarded PowerTech damages against Attwood, after finding that Attwood breached a contract with PowerTech, fraudulently induced PowerTech into the contract and misappropriated trade secrets. Attwood appealed, contesting each claim on which damages were awarded. PowerTech cross-appealed, contesting the trial court’s refusal to order the contract damages the jury had awarded and its refusal to award attorney fees. Disagreeing with the trial court’s characterization of the agreement as a “hybrid” contract for goods and services, rather than just for “goods,” the 5th Circuit ruled that the defendant, Attwood, was entitled to judgment as a matter of law. Attwood’s provision of “foundry services” and “quality control” were not sufficient to take the contract outside the realm of “goods.” As a contract for “goods,” it was bound by the Texas Uniform Commercial Code, which contains a statute of frauds rendering unenforceable any transaction in goods with no ascertainable quantity term and with no exclusivity provision. This contract had neither. The lack of a contract defeated most of PowerTech’s claims. The court also ruled that the trade secrets claim was not established.   Full text of the decision CRIMINAL PRACTICE Court can’t decide who public defender defends A pennsylvania trial court does not have the authority to institute financial eligibility requirements that effectively prohibit county public defenders from representing defendants who the public defender otherwise deems eligible for representation, the Pennsylvania Supreme Court ruled on May 27. Dauphin County Public Defender’s Office v. Court of Common Pleas of Dauphin County, No. J-167-2003. Though the Dauphin County public defender’s office had discretion to determine who was eligible for representation, the president judge of the county common pleas court implemented new requirements in July 2003. The new rules excluded from eligibility those defendants whose incomes were above the federal poverty income guidelines. The public defender’s office filed a writ in the state’s high court challenging the order and the judge’s authority to issue it. After first affirming that the public defender was an aggrieved party with standing to bring the challenge, the Supreme Court then ruled that the county court did not have authority under either the Public Defender Act or the Pennsylvania Rules of Criminal Procedure to set the financial eligibility requirements. The rules of procedure give courts the authority to appoint a public defender, not to dictate whom he or she is prohibited from representing, the high court said.   Full text of the decision JUDGES Ties to Mormon Church don’t disqualify jurist Denying petitions for a writ of mandamus and a writ of prohibition, the 10th U.S. Circuit Court of Appeals held on May 26 that petitioners have not presented adequate evidence of a judge’s personal bias or prejudice as to cast doubts about his impartiality. McCarthey v. Kearns-Tribune LLC, No. 03-4269. In a case involving the dispute over the ownership and control of the Salt Lake Tribune newspaper, the petitioners moved for a writ compelling Utah federal Judge B. Ted Stewart to disclose certain facts about his involvement with the Mormon Church and any knowledge he may have gained about this case while serving in the Utah state government. They also moved for a writ directing Stewart to take no further action in the case until the disclosures have been made and petitioners have been given a reasonable time to consider whether to move for recusal. The 10th Circuit found that Stewart had already disclosed on the record that he has no independent knowledge of any of the events in the case from his service in the Utah government. The judge also revealed that, despite his contributions to the Mormon Church, he has no financial interest in the outcome of this case.   Full text of the decision LEGAL PROFESSION Claim for failure-to-file needs expert testimony A legal malpractice claim based on an attorney’s failure to file certain documents requires expert testimony, the U.S. Circuit Court for the District of Columbia ruled on May 21. Kaempe v. Myers, No. 03-7037. Staffan Kaempe conceived of a hydraulic pump that he believed would ultimately replace conventional pumps altogether. He revealed his invention to Dennis Ewald and the pair agreed in 1997 to name Ewald as co-inventor in the patent application if Ewald would pay the attorney fees of George Myers. The two formed a corporation to make and distribute the pumps, then Myers filed a patent application for the pump. At Kaempe’s later request, Myers prepared a “continuation-in-part” (CIP) application for improvements to the initial invention, but failed to file it in a timely fashion. Meanwhile, at Ewald’s request, Myers filed with the U.S. Patent and Trademark Office (PTO) a copy of Ewald’s and Kaempe’s 1997 agreement, as well as the company’s incorporation articles. The PTO issued a patent in 2000, naming Ewald and Kaempe as inventors. Kaempe sued Myers for conversion-for assigning Kaempe’s rights by filing the 1997 agreement-and for legal malpractice. The district court dismissed the former, and granted summary judgment on the latter claim. The D.C. Circuit affirmed, stating that the conversion claim should be dismissed because it “simply cannot be inferred . . . that Kaempe’s patent rights were assigned or otherwise conveyed.” The only documents filed with the PTO were the 1997 agreement and the incorporation articles, and neither of these assigned or otherwise conveyed Kaempe’s patent interests, it ruled. The malpractice claim failed too, the court said, due to a lack of expert testimony. Myers’ actions related to the CIP are not within the “common knowledge” exception of attorney failures for which expert testimony is not necessary, it said.   Full text of the decision NATIVE AMERICAN LAW South Carolina courts must hear intratribe case In the absence of a tribal court, South Carolina state courts retain exclusive jurisdiction over intratribe disputes among members Catawba Indian Tribe of South Carolina, the 4th U.S. Circuit Court of Appeals ruled on May 26. Wade v. Blue, No. 03-2245. As part of a $50 million land settlement with South Carolina, the tribe agreed to have the state retain jurisdiction over tribal disputes until the tribe created its own court. A dispute eventually developed over tribal governance and the way the executive committee of the tribe’s general council was controlling the assets from the settlement. Council members and other voting tribe members sued the executive committee in a South Carolina federal court, alleging breach of contract and violations of the settlement agreement. The trial court granted the committee’s motion to dismiss the contract claim, but denied its motion to dismiss the settlement claims for lack of jurisdiction. Reversing, the 4th Circuit noted that the settlement agreement, which was ratified by Congress, mandates that jurisdiction over all civil matters involving the tribe’s members resides in South Carolina’s state courts until a tribal court is established. “It is revealing that the type of claim involved here-a quintessentially internal matter dealing with the governance of the tribe-would be handled exclusively in tribal court if such a court were established,” the circuit court ruled.   Full text of the decision

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