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CONSTITUTIONAL LAW Franchise law that covers whole state is too broad A Virginia law allowing existing motorcycle dealers to protest the establishment of new dealerships violated the dormant commerce clause doctrine of the U.S. Constitution, the 4th U.S. Circuit Court of Appeals held on March 18. Yamaha Motor Corp. v. Jim’s Motorcycle Inc., No. 03-2070. Under the “Second Paragraph” of Virginia’s motorcycle-dealer franchise law, Va. Code Ann. � 46.2-1993.67(5), an existing motorcycle dealer could protest the opening of a new motorcycle dealership if the new dealership were to sell the same make or line of bikes anywhere in the state. When Yamaha Motor Corp. attempted to open a dealership 26 miles from a Bristol, Va., dealership owned by Jim’s Motorcycle Inc., Jim’s filed a protest pursuant to state law. Yamaha sued Jim’s and the commissioner of the Virginia Department of Motor Vehicles in federal court, arguing that the law violated the dormant commerce clause doctrine. After certifying questions to the Virginia Supreme Court, the district court rejected Yamaha’s challenge to the law, and Yamaha appealed. Reversing, the 4th Circuit conceded that it had rejected a dormant commerce clause challenge to a similar Virginia law for auto dealers. However, the court distinguished the bike case because the motorcycle law’s Second Paragraph allowed dealers to protest a new dealership anywhere in the state, as opposed to the car law’s local-radius provision. The court said, “If we were to uphold the blanket statewide protection of the Second Paragraph, we would be giving Virginia the green light to extend similar protection to automobile dealers and franchisees of other product lines, thereby turning Virginia into an island of economic protectionism.” Full text of the decision DAMAGES Right to punitives OK’d in construction deaths The estates of men killed during construction of a new Milwaukee Brewers baseball stadium were entitled to send the punitive damages issue to a jury, the Wisconsin Supreme Court held on March 18. Wischer v. Mitsubishi Heavy Industries America Inc., No. 01-0724. During construction of a retractable roof on Miller Park, three men died when a 45-stories-high crane collapsed. Their wives sued Mitsubishi Heavy Industries America and others involved in the construction. A jury accepted the plaintiffs’ theory that the huge crane collapsed because there were high winds, no wind-speed calculations had been made and the crane’s load chart limitations had been exceeded. The jury thus found that Mitsubishi had acted “in an intentional disregard of the rights” of the plaintiffs. A punitive damages award was entered for $84,625,000, but an appellate court reversed the judgment on punitives. The Wisconsin Supreme Court reversed on the punitive damages issue, referring to its separate, same-date holding in Strenke v. Hogner, that the intent requirement in the relevant Wisconsin statute necessitates that a defendant act with a purpose to disregard the plaintiff’s rights or be aware that his or her conduct is substantially certain to result in the plaintiff’s rights being disregarded, in order to warrant punitive damages. Thus a plaintiff need not show that a defendant intended to cause harm or injury to the plaintiff. Here, the evidence sufficed to submit the punitive damages question to the jury, which could have believed the plaintiffs’ theory. The Wisconsin high court declined to address the constitutionality of the amount of the punitive award, due to other unresolved issues. Full text of the decision EMPLOYMENT ERISA pre-empts N.J.’s collateral source rule law New Jersey’s collateral source rule statute is completely pre-empted by the Employee Retirement Income Security Act (ERISA) in an action to be reimbursed by one’s health care insurance provider, the 3d U.S. Circuit Court of Appeals ruled on March 16. Levine v. United Healthcare Corp., nos. 04-1224 and 04-1225. After suffering various independent injuries, three plaintiffs filed personal injury lawsuits against the responsible third parties. Acting under policy clauses authorized by a New Jersey regulation on subrogation and reimbursement, the insurers required the plaintiffs to reimburse the insurers for previously paid amounts, which the plaintiffs did. Soon after, the New Jersey Supreme Court struck down the regulation as in conflict with the state’s collateral source rule statute. The plaintiffs thus sued the insurers under the statute to recover the amounts they paid in reimbursements. The case was removed from state to federal district court. The district court denied the plaintiffs’ motion to remand to state court, but also denied the insurers’ motion to dismiss. The district court then certified three questions to the 3d Circuit. A divided 3d Circuit ruled that the district court was correct in refusing to remand, as ERISA completely pre-empts the plaintiffs’ claims for what essentially amounts to a claim for benefits due from their plan providers. The court also ruled that the district court erred in not dismissing the case, finding that ERISA specifically pre-empted New Jersey’s collateral source rule statute. A third question addressing retroactive application of the New Jersey Supreme Court case was rendered moot by the court’s other two holdings. Full text of the decision ENVIRONMENTAL LAW Alaska’s liability statute broader than CERCLA Alaska’s CERCLA-type statute intentionally contains a more inclusive arranger liability provision than the federal Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), the Alaska Supreme Court held on March 18. Berg v. Popham, No. 5879. The Bergs had a dry-cleaning business at which the Norge Corp. designed and installed equipment that uses perchloroethylene (PCE). Hazardous PCE escaped into the environment. The state of Alaska held the Bergs strictly liable for remediation, costing them more than $1 million. They sought contribution from Maytag, Norge’s successor-in-interest, alleging “arranger liability” under Alaska’s environmental statute, Alaska Stat. � 46.03.822(a)(4), which closely mimics CERCLA. Alaska’s version imposes strict liability on any person who arranged for disposal of hazardous substances “owned or possessed by the person . . . or by any other party or entity, at any facility . . . owned or operated by another party . . . and containing hazardous substances, from which there is a release.” The case went to federal court, where Maytag prevailed. The 9th Circuit then certified two questions to Alaska’s Supreme Court, on the presence of the word “or” in the critical part of Alaska’s statute, in contrast to CERCLA. The Alaska Supreme Court reversed, holding that Alaska does not require that a person own, possess, have authority to control or have a duty to dispose of the hazardous substance that is released in order to face arranger liability. Saying that the state statute was meant to be more inclusive than CERCLA, the court held that an entity may face arranger liability if it manufactures, sells and installs a “useful product” that when used as designed, directs a hazardous substance into the city sewer system. Full text of the decision GOVERNMENT County board can avoid use of state’s attorney In certain circumstances, a county board of commissioners may choose not to use a duly elected state’s attorney to represent the county, the South Dakota Supreme Court ruled on March 16. Hanks v. Corson County Board of Commissioners, No. 2005 SD 38. Curtis Hanks was elected to be the part-time state’s attorney for Corson County, S.D. Upon taking office, he sued the county board of commissioners, challenging the validity of a contract the board entered into with an outside law firm to represent the board in future state or federal court civil litigation. The trial court held that the board did not have legal authority to substitute its choice of lawyer for a lawyer duly elected to serve the county. A divided state supreme court reversed. The state’s attorney is to represent the board in civil and criminal matters within the county, but this arrangement is not absolute. A board may contract with an outside attorney for criminal and civil cases with more than one lawyer in opposition, for representation in other counties, federal or tribal courts, and for legal advice and opinions to the board. Full text of the decision INSURANCE LAW Post-damage sales can’t determine insured’s loss Post-damage sales could not be taken into account in determining the losses a furniture company was entitled to as a result of flooding, the 5th U.S. Circuit Court of Appeals ruled on March 15. Finger Furniture Co. Inc. v. Commonwealth Ins. Co., No. 04-20359. Finger Furniture Co., which owns seven furniture stores in Houston, lost sales over the June 9, 2001, weekend as a result of flooding caused by Tropical Storm Allison. The next weekend, sales increased dramatically when Finger discounted its prices. After Commonwealth Insurance Co., Finger’s insurer, denied its claim for lost sales, a declaratory judgment action was filed. The parties stipulated that Finger incurred a gross earnings loss of $325,402.86 over the weekend of the flood. The trial court entered summary judgment in favor of Finger. The 5th Circuit affirmed. The business interruption provision of Finger’s policy states that Commonwealth shall be liable for the “actual loss sustained” by the insured and indicates that the loss shall be determined by historical sales figures. The court agreed that the stipulated amount of loss was based on historical sales figures, and that there was no evidence that sales that were lost over the flood weekend were made up the following weekend. Full text of the decision INTERNATIONAL LAW Several tickets is one trip for Warsaw purposes Despite buying multiple tickets on different days, including travel on multiple airlines, an injured airline passenger’s travel was still a “single operation” of international travel for purposes of the Warsaw Convention, the U.S. Circuit Court for the District of Columbia held on March 18. Robertson v. American Airlines Inc., No. 03-2070. Kathleen Robertson purchased multiple tickets for travel over several days with stops, including London, Denver and Washington. She traveled on both British Airways and American Airlines, and purchased tickets on different days, but she used the same travel agent for all the transactions. After arriving from London, and staying in Denver for three hours, she boarded an American Airlines flight from Denver to Washington via Chicago. During the flight, she was injured. Almost three years later, she sued American in a District of Columbia court, which granted summary judgment to American, holding that the leg of Robertson’s flight on which she was injured constituted international travel under the Warsaw Convention, meaning that her suit was time-barred under Warsaw. Robertson appealed, arguing that the leg was domestic travel, and thus subject to D.C.’s three-year statute of limitation. Affirming, the D.C. Circuit held that, despite the multiple purchases, multiple tickets and multiple airlines, the domestic leg was still part of a “single operation” for Warsaw Convention purposes. Noting Robertson’s short layover in Denver and the fact that her intent was germane, the court said, “[T]here can be no genuine dispute that Robertson regarded the Denver-Chicago trip as part of a unified journey from London to Washington.” Full text of the decision LEGAL PROFESSION No private right of action to protest judicial hiring A rejected applicant for United States attorney had no private right of action under the Federal Advisory Committee Act (FACA) to challenge the Federal Judicial Qualifications Committee, formed by U.S. senators Dianne Feinstein and Barbara Boxer, for failure to hold public meetings, the 9th U.S. Circuit Court of Appeals held on March 17. Manshardt v. Federal Judicial Qualifications Comm., No. 03-55683. Patrick Manshardt, an attorney and candidate for appointment as U.S. attorney for the Central District of California, sued the Federal Judicial Qualifications Committee, an advisory committee established by Feinstein and Boxer and a Republican businessman for the purpose of advising the president on judicial nominations in California. Manshardt sued the senators and the businessman, arguing, inter alia, that the committee’s failure to hold public meetings violated FACA. A district court dismissed the complaint, holding that the matter was a nonjusticiable political dispute. Affirming, the 9th Circuit held that there was no private right of action under FACA. Rejecting Manshardt’s argument that, although FACA does not contain an express provision for private rights of action, one could be implied, the court cited U.S. Supreme Court precedent, and said, “[I]n the absence of clearly expressed Congressional intent to create a private right of action, no such action may be implied. It is irrelevant that a private right of action may be ‘necessary to make effective the congressional purpose,’ or may be desirable as a matter of public policy; private rights of action to enforce federal law, like substantive federal law itself, must be created by Congress.” Full text of the decision TORTS Spying on neighbors, woman wasn’t ‘nuisance’ A woman who filed false reports with child services against her neighbors, spied on them and videotaped their guests does not meet the legal definition of a nuisance, the West Virginia Supreme Court of Appeals ruled on March 15. Booker v. Foose, No. 31769. Amy and Anthony Booker sued their neighbor Carolyn Foose and her mother Shirley Foose for nuisance. The Bookers said Carolyn made false reports to child services against the Bookers, photographed them and their children, videotaped their activities, posted signs in her window falsely stating that state and federal charges were pending against the Bookers, photographed and videotaped their guests, looked in their house windows and made false criminal conduct reports with the local police. The trial court granted the Fooses’ motion for summary judgment. The West Virginia high court affirmed, finding that a nuisance is established only by a showing that a person used or misused his or her property in some way to deprive another of the use and enjoyment of his or her own property. Though the Bookers may have been inconvenienced, or even outraged, by Carolyn’s actions, they had not shown that Carolyn used her property in such a way that it impaired the Bookers’ right to use and enjoy their property. Full text of the decision

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