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CIVIL PRACTICE Missed damages hearing isn’t the end for plaintiff A prevailing plaintiff whose attorney was late for a damages hearing and missed it may have a new hearing on damages, which had been entered for zero dollars, the 10th U.S. Circuit Court of Appeals held on Jan. 4. Jennings v. Rivers, No. 04-6000. Alison Jennings sued four college football players, alleging that they sexually assaulted her while she was a student. After settling with two defendants, Jennings obtained default judgment against the other two. But her counsel was mistaken as to the time of the damages hearing. By the time he arrived, the judge had entered an award of zero damages, due to Jennings’ failure to present evidence. The same day, Jennings’ counsel filed an undenominated motion asking the Oklahoma federal district court to set aside the judgment and schedule another damages hearing. The motion was denied. The 10th Circuit reversed and remanded. After saying that “it was not unreasonable” for the court to award zero damages, since it is “far too busy to conduct a search for missing attorneys and litigants,” the court nevertheless concluded that the district court had erroneously applied the Fed R. Civ. P. 59(e) test rather than the Fed. R. Civ. P. 60(b)(1) test to the motion to set aside the judgment. In the motion, Jennings’ attorney emphasized that he, not his client, should bear the consequences for his own personal failure to note the correct time for the hearing, and he offered to pay any expenses associated with having one defendant return to court from 600 miles away. Full text of the decision CONSTITUTIONAL LAW City’s anti-smoking law doesn’t amount to taking An Ohio city’s ordinance regulating smoking in public places doesn’t amount to a “taking,” the 6th U.S. Circuit Court of Appeals ruled on Jan. 6. D.A.B.E. Inc. v. City of Toledo, No. 03-4662. In 2003, the city council of Toledo, Ohio, repealed a prior ordinance regulating smoking in public places and passed a new, more stringent ordinance. Under the new ordinance, smoking is banned in restaurants and bars except in separate smoking lounges that must satisfy various criteria: They must be completely enclosed with their own ventilation systems, and they must not incorporate the sole path to or from rest rooms or other nonsmoking areas. A coalition of restaurant and bar owners challenged the ordinance as a regulatory taking in violation of the Fifth and 14th amendments. The district court refused the group’s request for declaratory and injunctive relief. The 6th Circuit affirmed, ruling that the ordinance did not deprive the group’s members of “economically viable use” of their respective properties. The ordinance has no effect on any aspect of their business other than to restrict the area where patrons may smoke. And the ordinance doesn’t categorically prohibit smoking inside these establishments; it merely regulates the conditions under which it may occur. The cost of complying with the ordinance does not amount to a “taking.” Full text of the decision CONTRACTS E-mail message may constitute a contract A fact issue can exist over whether an e-mail incorporating material terms could be considered a contract, the U.S. Court of Appeals for the Federal Circuit ruled on Jan. 7. Lamle v. Mattel Inc., No. 04-1151. Stewart Lamle secured a patent on a tic-tac-toe-like board game called Farook. He negotiated with Mattel to develop Farook and was paid $25,000 not to license the game to anyone else during the negotiation period. The payment was said to be an advance against royalties should a contract materialize. Lamle also signed a product disclosure form acknowledging that any obligation Mattel might assume would be contingent on a contract. Lamle and Mattel agreed to certain terms referred to in a later e-mail as “The Deal,” but a contract was never formalized or signed. Later, as Lamle was meeting with potential investors, Mattel notified him that it would not be developing Farook. Lamle sued for breach of contract, and the district court granted summary judgment for Mattel. Applying California law, the Federal Circuit reversed and remanded, finding a genuine issue of fact over whether a contract existed. The district court was required to determine the parties’ objectively manifested intent with respect to the product disclosure form and the oral agreement forming “The Deal.” The court also held that the e-mail referring to “The Deal” and its terms satisfied the statute of frauds, as it had a Mattel employee’s name on it and was similar to a typewritten signature on a telegram. Full text of the decision ENVIRONMENTAL LAW No funding under law for contamination inquiry Landowners may not recover under the Superfund act for the financial costs of a contamination investigation, where their expenditures were not “necessary” and they did no real “cleanup,” the 10th U.S. Circuit Court of Appeals held on Jan. 4. Young v. USA, No. 02-7133. The Youngs and Jameses bought property in Henryetta, Okla., knowing that the Environmental Protection Agency had conducted cleanup on the adjacent Superfund site. They later discovered hazardous substances on their own property, and spent more than $200,000 to conduct an abbreviated site investigation and an assessment of the potential risks to humans who worked on their property. They discovered contamination and health risks to workers. The owners abandoned the property, not planning to spend any money on cleaning it up. They sued the federal government and the city pursuant to the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), seeking to recover the costs of “responding” to the hazardous substances allegedly released from the Superfund site. An Oklahoma federal court dismissed all claims except the cost-recovery claim, then granted the defendants summary judgment on that claim. The 10th Circuit affirmed, explaining that CERCLA allows private party recovery of “necessary costs of response incurred . . . consistent with” the National Contingency Plan (NCP). Costs are not “necessary” to the containment of cleanup of hazardous releases “absent some nexus between the alleged response cost and an actual effort to respond to environmental contamination.” The court said that some of the plaintiffs’ costs are “classic examples” of preliminary steps taken in response to the discovery of a release. But the claim fails because the costs were neither necessary to the containment and cleanup of hazardous releases nor consistent with the NCP. “CERCLA is about ‘cleanup,’ and none occurred here,” the court said. Full text of the decision INTELLECTUAL PROPERTY No subpoenas on ISPs to reveal subscriber data Under the digital Millennium Copyright Act, copyright owners and their representatives may not get and serve subpoenas on Internet service providers (ISPs) to obtain personal information about subscribers who are allegedly transmitting copyrighted material, the 8th U.S. Circuit Court of Appeals held on Jan. 4. In re Charter Communications Inc., No. 03-3802. The Recording Industry Association of America (RIAA), a trade association representing record companies, sued individuals who allegedly committed copyright infringement using peer-to-peer systems, which allow users to disseminate files stored on their computers to other Internet users. Using tracking programs, the RIAA determined the Internet protocol addresses and user names of subscribers of the ISP, Charter Communications, who were allegedly trading copyrighted music files. Since only the ISP can provide the names and physical addresses of their subscribers, the RIAA obtained subpoenas requiring Charter to produce the personal information of about 200 of its subscribers. A Missouri federal court denied Charter’s motion to quash. The 8th Circuit denied Charter’s emergency motion to stay the order of enforcement of the subpoenas pending appeal. Charter subsequently turned over the subpoenaed information of its subscribers. The 8th Circuit reversed, noting that 17 U.S.C. 512(h) allows a court to issue a subpoena to an ISP for identification of an alleged infringer, as long as the ISP is notified. Since in this case Charter was acting merely as a conduit for transferring infringing material between two Internet users, the court found that the subpoena was improperly issued because Charter was not able to remove or disable access to the allegedly infringing material. Full text of the decision LABOR LAW Forced wearing of union logo is breach of NLRA Bellsouth Telecommunications Inc.’s policy of requiring employees to wear on their uniforms a union logo along with the company’s logo violated Section 7 of the National Labor Relations Act, the 4th U.S. Circuit Court of Appeals held on Jan. 4. Lee v. NLRB, No. 01-2075. Pursuant to a collective bargaining agreement between BellSouth and the Communications Workers of America, BellSouth required certain employees to wear uniforms featuring the company’s logo along with the union’s logo. BellSouth, which had had a relationship with the union since the 1940s, believed that having the union logo alongside the company logo served the business interest of showing the public that the company had a well-trained union work force that had good relations with the company. Gary Lee and Jim Amburn, two BellSouth employees who were not members of the union, filed complaints with the National Labor Relations Board (NLRB), arguing that the compulsory wearing of the union logo violated Section 7 of the National Labor Relations Act, or in the alternative, their rights under the First Amendment of the U.S. Constitution. The NLRB issued a decision and dismissed their complaints. Granting the employees’ petition for review and vacating the NLRB’s order, the 4th Circuit held that there were no special circumstances warranting an abridgement of the employees’ right not to wear the union logo. Rejecting the NLRB’s reasoning that the compulsory wearing of the logo served BellSouth’s “public interest business objective,” and differentiating uniforms from other places union logos might appear, the court said, “we are of opinion that being required to display the union logo on your person is fundamentally different than being exposed to the logo on bulletin boards and company forms. Mentioning the same on various papers concerning company and employee business could not reasonably be taken to convey an individual’s support of the union, as does the display on the uniform.” Full text of the decision LEGAL PROFESSION No attorney fees for DoD official in Starr inquiry Kenneth Bacon, an assistant secretary of defense for public affairs in the Clinton administration, was not entitled to reimbursement of attorney fees he incurred related to the independent counsel’s investigation of the Clinton-Lewinsky matter, because he failed to show that he would not have incurred the legal fees but for the requirements of the independent counsel provisions of the Ethics in Government Act, the U.S. Circuit Court for the District of Columbia held on Jan. 7. In re Madison Guaranty Savings & Loan, No. 94-1. During the Office of Independent Counsel’s investigation of President Bill Clinton’s activities with intern Monica Lewinsky, a reporter for the New Yorker contacted Kenneth Bacon, seeking confirmation of information that witness Linda Tripp had failed to disclose a 1969 arrest on her employment application with the Defense Department. Bacon confirmed that Tripp had failed to disclose the arrest. Although he was never indicted, the independent counsel investigated Bacon for attempt to intimidate a cooperating witness and obstruction of justice. Bacon incurred $10,780 in legal fees, and petitioned for reimbursement pursuant to the Ethics in Government Act. Denying Bacon’s petition, the D.C. Circuit held that Bacon had failed to satisfy the Ethics in Government Act’s four-pronged test for reimbursement of fees. Specifically, Bacon had failed to show that he would not have incurred the fees “but for the requirements of the Act.” Rejecting Bacon’s argument that no prosecutor-as opposed to an independent counsel-would have investigated a minor matter such as the instant Privacy Act violation, the court said, “As the DOJ in its evaluation points out, the investigation of Bacon concerned much more than just the Privacy Act. It also involved the possibility of a conspiracy to obstruct justice by intimidating a government witness, which the DOJ notes is a crime that it ‘of course investigates and prosecutes.’ “ Full text of the decision TORTS ESPN’s ‘pimp’ comment didn’t defame Knievel The ESPN network defamed neither stuntman Evel Knievel nor his wife by posting a photo of the couple with a caption referring to him as a “pimp,” the 9th U.S. Circuit Court of Appeals held on Jan. 4. Knievel v. ESPN, No. 02-36120. At the 2001 ESPN Action Sports and Music Awards, motorcycle stuntman Evel Knievel and his wife, Krystal, were photographed with another woman. ESPN posted the photograph, which featured Evel Knievel in a motorcycle jacket and rose-colored sunglasses with Krystal Knievel on one arm and the other woman on the other, on its extreme sports Web site with the caption, “Evel Knievel proves you’re never too old to be a pimp.” The Knievels sued ESPN, arguing that ESPN had defamed them by accusing them falsely of “immoral and improper behavior,” claiming that Evel Knievel had lost endorsements due to the posting. A federal district court dismissed the Knievels’ suit, holding that no reasonable person would have interpreted the caption as an allegation that Evel Knievel was a “pimp” in the criminal sense. Affirming, the 9th Circuit applied the court’s three-pronged test for determining whether a statement was capable of defamatory meaning. The court held that ESPN’s pimp comment had to be taken in context with the rest of the site, and could not be interpreted reasonably as an accusation of criminal conduct. The court said, “Read in the context of the satirical, risque, and sophomoric slang found on the rest of the site, the word ‘pimp’ cannot be reasonably interpreted as a criminal accusation.” Full text of the decision TRUSTS AND ESTATES Insurance proceeds are exempt from creditors Insurance proceeds from damage to a testator’s homestead were exempt from creditors, the Iowa Supreme Court ruled on Jan. 7. In the Matter of the Estate of Tolson, No. 151/03-1808. When Patricia Tolson died on Sept. 9, 2002, her will gave her homestead to her three children. U.S. Bank held a perfected mortgage on the homestead. Clinton National Bank held a judgment lien against the decedent for $35,998.37, for which it filed a timely claim on Feb. 5, 2003. During the pendency of estate proceedings, a water pipe broke in the homestead, causing damage to the house and personal property. Iowa Mutual Insurance Co., as the insurer of the house and its contents, issued a check for $46,833.22 to cover damage to the homestead. The check was deposited into the estate account. The trial court determined that the insurance proceeds were not exempt from creditors because there was no proof that they would actually be used to repair damage to the house. The Iowa Supreme Court reversed, noting that Iowa Code � 561.19 provides that a homestead passes to one’s children free from any existing debt. The court concluded that the insurance proceeds were a substitute for the homestead, and that there is no requirement to establish intent to use the funds to repair the homestead. Full text of the decision

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