Articles Posted in Civil Procedure

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Plaintiffs Maralex Resources, Inc. (Maralex), Alexis O’Hare and Mary C. O’Hare (the O’Hares) filed this action against the Secretary of the Department of the Interior (Secretary), the Department of the Interior, and the United States seeking review of a decision of the Interior Board of Land Appeals (IBLA) the upheld four Notices of Incidents of Noncompliance that were issued by the Bureau of Land Management’s (BLM’s) Tres Rios Field Office to Maralex for failing to allow a BLM representative to access certain oil and gas lease sites operated by Maralex on land owned by the O’Hares. The district court affirmed the IBLA’s decision. The Tenth Circuit determined the BLM, in issuing the Notices of Incidents of Noncompliance, lacked authority to require plaintiffs to provide BLM with a key to a lease site on privately-owned land or to allow the BLM to install its own locks on the gates to such lease site. Consequently, the Court reversed and remanded to the district court with instructions to enter judgment in favor of plaintiffs on this “key or lock” issue. View "Maralex Resources v. Barnhardt" on Justia Law

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Dennis Woolman, former president of The Clemens Coal Company, challenged a district court’s determination that Liberty Mutual Fire Insurance Company didn’t breach a duty to him by failing to procure for Clemens Coal an insurance policy with a black-lung disease endorsement. Clemens Coal operated a surface coal mine until it filed for bankruptcy in 1997. Woolman served as Clemens Coal’s last president before it went bankrupt. Federal law required Clemens Coal to maintain worker’s compensation insurance with a special endorsement covering miners’ black-lung disease benefits. Woolman didn’t personally procure insurance for Clemens Coal but instead delegated that responsibility to an outside consultant. The policy the consultant ultimately purchased for the company did not contain a black-lung-claim endorsement, and it expressly excluded coverage for federal occupational disease claims, such as those arising under the Black Lung Benefits Act (the Act). In 2012, a former Clemens Coal employee, Clayton Spencer, filed a claim with the United States Department of Labor (DOL) against Clemens Coal for benefits under the Act. After some investigation, the DOL advised Woolman that Clemens Coal was uninsured for black-lung-benefits claims as of July 25, 1997 (the last date of Spencer’s employment) and that, without such coverage, Woolman, as Clemens Coal’s president, could be held personally liable. Woolman promptly tendered the claim to Liberty Mutual for a legal defense. Liberty Mutual responded with a reservation-of-rights letter, stating that it hadn’t yet determined coverage for Spencer’s claim but that it would provide a defense during its investigation. Then in a follow-up letter, Liberty Mutual clarified that it would defend Clemens Coal as a company (not Woolman personally) and advised Woolman to retain his own counsel. Liberty Mutual eventually concluded that the insurance policy didn’t cover the black-lung claim, and sued Clemens Coal and Woolman for a declaration to that effect. In his suit, Woolman also challenged the district court’s rejection of his argument that Liberty Mutual should have been estopped from denying black-lung-disease coverage, insisting that he relied on Liberty Mutual to provide such coverage. Having considered the totality of the circumstances, the Tenth Circuit Court of Appeals concluded the district court didn’t err in declining Woolman’s extraordinary request to expand the coverages in the Liberty Mutual policy. “Liberty Mutual never represented it would procure the coverage that Woolman now seeks, and the policy itself clearly excludes such coverage. No other compelling consideration justifies rewriting the agreement— twenty years later—to Woolman’s liking.” View "Liberty Mutual Fire Insurance v. Woolman" on Justia Law

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Enable Intrastate Transmission, LLC owned and operated a natural gas pipeline that crossed Indian allotted land in Anadarko, Oklahoma. A twenty-year easement for the pipeline expired in 2000. Enable failed to renew the easement but also failed to remove the pipeline. In response, roughly three-dozen individual Native American Allottees who held equitable title in the allotted land filed suit. The district court granted summary judgment to the Allottees, ruling on the basis of stipulated facts that Enable was liable for trespass. The court then enjoined the trespass, ordering Enable to remove the pipeline. Enable appealed both rulings; the Tenth Circuit affirmed in part, reversed in part and remanded for further proceedings. The Court determined the district court properly granted summary judgment to the Allottees but erred in issuing the permanent injunction. A federal district court’s decision to permanently enjoin a continuing trespass on allotted land should take into account: (1) whether an injunction is necessary to prevent “irreparable harm;” (2) whether “the threatened injury outweighs the harm that the injunction may cause” to the enjoined party; and (3) whether the injunction would “adversely affect the public interest.” The Tenth Circuit concluded that by ordering Enable to remove the pipeline on the basis of liability alone, the district court legally erred and thus abused its discretion. The district court incorporated a simplified injunction rule from Oklahoma law when it should have adhered to basic tenants of federal equity jurisprudence. This matter was remanded for the district court "for a full weighing of the equities." View "Davilla v. Enable Midstream Partners" on Justia Law

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Plaintiff-Appellant DTC Energy Group, Inc., sued two of its former employees, Adam Hirschfeld and Joseph Galban, as well as one of its industry competitors, Ally Consulting, LLC, for using DTC’s trade secrets to divert business from DTC to Ally. DTC moved for a preliminary injunction based on its claims for breach of contract, breach of the duty of loyalty, misappropriation of trade secrets, and unfair competition. The district court denied the motion, finding DTC had shown a probability of irreparable harm from Hirschfeld’s ongoing solicitation of DTC clients, but that DTC could not show the ongoing solicitation violated Hirschfeld’s employment agreement. After review, the Tenth Circuit determined the district court did not abuse its discretion when denying DTC's motion for a preliminary injunction, and affirmed. View "DTC Energy Group v. Hirschfeld" on Justia Law

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Terry Schulenberg, a train engineer for BNSF Railway Company, was injured when the train he was riding “bottomed out.” Schulenberg filed suit against BNSF, alleging liability for negligence under the Federal Employers’ Liability Act (FELA). BNSF filed motions to exclude Schulenberg’s expert witness and for summary judgment, both of which the district court granted. Schulenberg appealed, but the Tenth Circuit Court of Appeals concluded the district court did not abuse its discretion in excluding the expert witness because there was no discernable methodology offered for his opinions. And the Court concluded the district court was correct in granting summary judgment to BNSF because Schulenberg failed to present a dispute of material fact on his sole theory of liability on appeal, negligence per se. View "Schulenberg v. BNSF Railway Company" on Justia Law

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Husky Ventures, Inc. (“Husky”) sued B55 Investments Ltd. (“B55”) and its president, Christopher McArthur, for breach of contract and tortious interference under Oklahoma law. In response, B55 filed counterclaims against Husky. A jury reached a verdict in Husky’s favor, awarding $4 million in compensatory damages against both B55 and McArthur and $2 million in punitive damages against just McArthur; the jury also rejected the counterclaims. In further proceedings, the district court entered a permanent injunction and a declaratory judgment in Husky’s favor. After the court entered final judgment, B55 and McArthur appealed, and moved for a new trial under Federal Rule of Civil Procedure 59(a) or, in the alternative, to certify a question of state law to the Oklahoma Supreme Court. The court denied the motion in all respects. On appeal, B55 and McArthur contended the district court erred in denying their motion for a new trial and again moved to certify a question of state law to the Oklahoma Supreme Court. In addition, they appealed the permanent injunction and declaratory judgment and argue that the district court erred in refusing to grant leave to amend the counterclaims. The Tenth Circuit dismissed B55 and McArthur’s claims relating to the motion for a new trial for lack of appellate jurisdiction and denied their motion to certify the state law question as moot. The Court otherwise affirmed the district court’s judgment on the remaining issues. View "Husky Ventures v. B55 Investments" on Justia Law

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Billy Hamilton appealed a district court’s order granting summary judgment in favor of defendant Northfield Insurance Company as to Hamilton’s claim for breach of the implied duty of good faith and fair dealing and his accompanying request for punitive damages. In March 2015, Hamilton purchased a Northfield insurance policy for a commercial building in Council Hill, Oklahoma. Northfield had a third party inspect the property for underwriting purposes; the underwriting survey report concluded the risk was “Satisfactory with Recommendation Compliance” and identified eight recommendations for repairs. A tenant informed him the roof was leaking in December 2015, and Hamilton reported the leak and the resulting interior damage to Northfield. Northfield denied the claim because a claims adjuster saw no evidence of damage. Hamilton had made repairs, but the adjuster did not see evidence of them, and did not ask whether any were made. A week after receiving the denial, Northfield informed Hamilton it would not renew his policy when it expired. Hamilton was unsuccessful in his suit against Northfield, challenging on appeal the outcome with respect to breach of the implied duty of good faith and fair dealing (he won a jury verdict on his breach of contract claim). The Tenth Circuit found no abuse of the trial court’s discretion in its rulings on Hamilton’s claims, and affirmed. View "Hamilton v. Northfield Insurance Company" on Justia Law

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Wakaya Perfection, LLC and its principals sued Youngevity International Corp. and its principals in Utah state court. The Youngevity parties responded by bringing their own suit against the Wakaya parties in a California federal district court, then removing the Utah case to federal court. These steps resulted in concurrent federal cases sharing at least some claims and issues. The California litigation progressed; and in November 2017, the federal district court in Utah ordered dismissal. The issues presented for the Tenth Circuit's review centered on whether: (1) the federal district court should have abstained from exercising jurisdiction under the Colorado River Water Conservation District v. United States, 424 U.S. 800 (1976) test; and (2) and arbitrator would have needed to decide the arbitrability of Wakaya's claims. The Tenth Circuit reversed on both grounds: the federal trial court applied the wrong abstention test and erroneously ruled that an arbitrator should have decided whether Wakaya's claims were arbitrable. View "Wakaya Perfection, LLC v. Youngevity International" on Justia Law

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George Straub, an employee of BNSF Railway Company (“BNSF”), injured his back and neck when, in the course and scope of his duties, he attempted to adjust the engineer’s chair of Locomotive #6295. Straub brought suit, asserting BNSF was (among other things) strictly liable for his injuries under the provisions of the Federal Locomotive Inspection Act (“LIA”). BNSF moved to dismiss; the district court concluded Straub’s injuries did not implicate LIA. The district court ruled the adjustment mechanism of the engineer’s seat was not an “integral or essential part of a completed locomotive.” Instead, according to the district court, the seat adjustment mechanism was a non-essential comfort device. In reaching this conclusion, the district court relied on the Tenth Circuit’s decision in King v. Southern Pacific Transportation Co., 855 F.2d 1485 (10th Cir. 1988). Straub appealed, arguing the district court’s reliance on King was misplaced. The Tenth Circuit held that the allegations set out in Straub’s complaint (i.e., that the engineer’s chair failed when moved initially and stopped abruptly as Straub was attempting to adjust it) stated a violation of LIA: “Once BNSF installed an engineer’s chair with a seat adjustment mechanism, 49 U.S.C. 20701(1) mandated that BNSF maintain the chair so that the seat adjustment device be ‘in proper condition and safe to operate without unnecessary danger of personal injury’ and 49 C.F.R. 229.7 mandated that BNSF maintain the chair so that the seat adjustment mechanism was ‘in proper condition and safe to operate in service . . . without unnecessary peril to life or limb.’” The Court reversed the district court’s grant of BNSF’s motion to dismiss Straub’s claim to the extent it depended on LIA-based strict liability, and remanded this matter for further proceedings. View "Straub v. BNSF" on Justia Law

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Utah officials had interpreted its old law to require Plaintiff Rainbow Direct Marketing to register and obtain a permit in the State of Utah to be a professional fundraising consultant. Rainbow viewed these requirements as unconstitutional and unsuccessfully sued in district court. But during the appeal, Utah substantially revised its law, prompting officials to concede that the new restrictions did not apply to Rainbow. The Tenth Circuit concluded this change in the law rendered the appeal moot. View "American Charities v. O'Bannon" on Justia Law