Justia U.S. 10th Circuit Court of Appeals Opinion Summaries

William Harris and David Pettinato were two attorneys who represented Summit Park Townhome Association who represented Summit Park in a lawsuit against its insurer. The two attorneys were sanctioned for failing to disclose information. The Tenth Circuit affirmed sanctions against them, finding that regardless of whether the district court had authority to require the disclosures, the attorneys were obligated to comply. They did not, and the district court acted reasonably in issuing sanctions, determining the scope of the sanctions, and calculating the amount of the sanctions. View "Auto-Owners Insurance Co. v. Summit Park Townhome Assoc." on Justia Law

This appeal grew out of a dispute between an insured (Summit Park Townhome Association) and its insurer (Auto-Owners Insurance Company) over the value of property damaged in a hail storm. To determine the value, the district court ordered an appraisal and established procedural requirements governing the selection of impartial appraisers. After the appraisal was completed, Auto-Owners paid the appraised amount to Summit Park. But the court found that Summit Park had failed to make required disclosures and had selected a biased appraiser. In light of this finding, the court vacated the appraisal award, dismissed Summit Park’s counterclaims with prejudice, and awarded interest to Auto-Owners on the amount earlier paid to Summit Park. Summit Park appealed, but the Tenth Circuit affirmed. “In the absence of a successful appellate challenge to the disclosure order, Summit Park was obligated to comply and did not. The court was thus justified in dismissing Summit Park’s counterclaims. In addition, Summit Park’s failure to select an impartial appraiser compelled vacatur of the appraisal award under the insurance policy. Finally, Summit Park obtained due process through the opportunity to object to the award of interest.” View "Auto-Owners v. Summit Park" on Justia Law

William Harris and David Pettinato were attorneys who represented Summit Park Townhome Association. While representing Summit Park against its insurer, the two attorneys were sanctioned for failing to disclose information. In this appeal, the attorneys raised five arguments to challenge the sanctions. After review, the Tenth Circuit affirmed: “Regardless of whether the district court had authority to require the disclosures, the attorneys were obligated to comply. They did not, and the district court acted reasonably in issuing sanctions, determining the scope of the sanctions, and calculating the amount of the sanctions.” View "Auto-Owners Insurance Co. v. Summit Park Townhome Assoc." on Justia Law

This appeal arose out of a private enforcement action under Section 505 of the Clean Water Act (CWA), 33 U.S.C. 1365. Defendant-Appellant Ozark Materials River Rock, LLC, appealed a district court’s order approving Plaintiff-Appellee David Benham’s proposed restoration plan of unlawfully filled wetlands in Saline Creek. Ozark was a sand and gravel mining company that operated on property adjacent to Saline Creek in Oklahoma. Benham recreates in Saline Creek and claimed Ozark’s operations degraded his ability to do so. In March 2011, Benham served Ozark with a notice letter pursuant to Section 505, informing the company that it was violating Section 404 of the CWA, 33 U.S.C. 1344. Section 404 required a permit from the Army Corps of Engineers to discharge dredge or fill material into navigable waters if the activity disturbed more than one-half acre of wetland, and Ozark did not have a Section 404 permit. The Army Corps of Engineers had inspected Ozark’s operations in 2010 (again in 2012 and 2013) by driving through the property, but it found no CWA violations. Nevertheless, after receiving Benham’s notice, Ozark hired an environmental consulting firm to perform a Section 404 impact analysis of Ozark’s Saline Creek operations. By June 1, 2011, Ozark had not addressed the CWA violations that Benham alleged in his notice, so he filed the underlying citizen suit, as authorized by Section 505. The district court held a bench trial and found that Ozark’s construction of a roadway in Saline Creek and the filling of its surrounding wetlands without a permit constitute a continuing violation of the CWA. The district court imposed a civil penalty of $35,000 and ordered briefing on a restoration plan for the unlawfully filled wetlands. On June 1, 2017, the district court issued an order adopting (substantially all of) Benham’s proposed restoration plan; one element of the plan created a conservation easement for the restoration site. Ozark raised several issues on appeal challenging the district court’s order and underlying findings of fact and conclusions of law. But finding no reversible error, the Tenth Circuit affirmed the district court. View "Benham v. Ozark Materials River Rock" on Justia Law

Plaintiff-Appellant Market Synergy Group appeals from the district court’s judgment in favor of Defendant-Appellee United States Department of Labor. This case stemmed from the Department of Labor’s (DOL) final regulatory action on April 8, 2016, as it applied to fixed indexed annuity (FIA) sales. Plaintiff-Appellant Market Synergy Group (MSG) was a licensed insurance agency that works with insurers to develop specialized, proprietary FIAs and other insurance products for exclusive distribution. It partnered with independent marketing organizations (IMOs) to distribute these products. MSG did not directly sell FIAs but conducted market research and provided training and products for IMO member networks and the independent insurance agents that IMOs recruit. In April 2015, the DOL issued a proposed rule redefining who is a “fiduciary” of an employee benefit plan under ERISA and the Internal Revenue Code, which would “update existing rules to distinguish more appropriately between the sorts of advice relationships that should be treated as fiduciary in nature and those that should not.” The final rule contained two changes important to this case: (1) it created a new exemption, with added regulatory requirements, the Best Interest Contract Exemption (BICE), which imposed a more stringent set of requirements on prohibited transactions than those required under PTE 84-24; and (2) the DOL removed FIAs (as well as variable annuities) from the PTE 84- 24 exemption and placed them in the newly created BICE. MSG filed this suit under the Administrative Procedure Act (APA) claiming the DOL violated the APA: (1) by failing to provide adequate notice of its intention to exclude transactions involving FIAs from PTE 84-24; (2) arbitrarily treated FIAs differently from other fixed annuities by excluding FIAs from PTE 84-24; and (3) by not adequately considering the detrimental economic impact of its exclusion of FIAs from PTE 84-24. MSG alleged that it would lose 80% of its revenue if the new regulation were to be enforced and sought a preliminary injunction to prevent the DOL from implementing the new regulation. The district court denied the preliminary injunction. On cross-motions for summary judgment, the district court ruled in favor of the DOL, finding that there was adequate notice, no arbitrary treatment of FIAs as compared to other fixed annuities, and an adequate economic impact analysis. Finding no reversible error, the Tenth Circuit affirmed the district court. View "Market Synergy Group v. Department of Labor" on Justia Law

This case arose out of a 2007 injunction, which prohibited Paragon Contractors Corporation and its president, Brian Jessop, from engaging in oppressive child labor. The Department of Labor procured a contempt citation, with the district court finding that Paragon and Jessop had violated the injunction by employing children to harvest pecans. For this violation, the district court sanctioned Paragon and Jessop by: (1) appointing a special master to monitor Paragon’s ongoing compliance with the injunction; and (2) ordering Paragon and Jessop to pay $200,000 into a fund to compensate the children. Paragon and Jessop appealed the contempt finding and the sanctions. After review, the Tenth Circuit concluded the district court did not err in (1) finding that Paragon and Jessop had violated the injunction by oppressively employing children; and (2) ordering Paragon and Jessop to pay $200,000. But the Court reversed the district court’s appointment of a special master. View "Acosta v. Paragon Contractors" on Justia Law

The United States Bureau of Land Management leased 2,500 acres of geothermal mineral rights in Hidalgo County, New Mexico to Plaintiff Lightning Dock Geothermal HI-01, LLC (LDG), a Delaware company. LDG developed and owned a geothermal power generating project in Hidalgo County. LDG also developed a geothermal well field on the subject tract as part of its project. Defendant AmeriCulture, a New Mexico corporation under the direction of Defendant Damon Seawright, a New Mexico resident, later purchased a surface estate of approximately fifteen acres overlying LDG’s mineral lease, ostensibly to develop and operate a tilapia fish farm. Because AmeriCulture wished to utilize LDG’s geothermal resources for its farm, AmeriCulture and LDG (more accurately its predecessor) entered into a Joint Facility Operating Agreement (JFOA). The purpose of the JFOA, from LDG’s perspective, was to allow AmeriCulture to utilize some of the land’s geothermal resources without interfering or competing with LDG’s development of its federal lease. Plaintiff Los Lobos Renewable Power LLC (LLRP), also a Delaware company, was the sole member of LDG and a third-party beneficiary of the JFOA. The parties eventually began to quarrel over their contractual rights and obligations. Invoking federal diversity jurisdiction, Plaintiffs LDG and LLRP sued Defendants Americulture and Seawright in federal court for alleged infractions of New Mexico state law. AmeriCulture filed a special motion to dismiss the suit under New Mexico’s anti-SLAPP statute. The district court, however, refused to consider that motion, holding the statute authorizing it inapplicable in federal court. After review of the briefs, the Tenth Circuit Court of Appeals agreed and affirmed. View "Los Lobos Renewable Power v. Americulture" on Justia Law

The United States Bureau of Land Management leased 2,500 acres of geothermal mineral rights in Hidalgo County, New Mexico to Plaintiff Lightning Dock Geothermal HI-01, LLC (LDG), a Delaware company. LDG developed and owned a geothermal power generating project in Hidalgo County. LDG also developed a geothermal well field on the subject tract as part of its project. Defendant AmeriCulture, a New Mexico corporation under the direction of Defendant Damon Seawright, a New Mexico resident, later purchased a surface estate of approximately fifteen acres overlying LDG’s mineral lease, ostensibly to develop and operate a tilapia fish farm. Because AmeriCulture wished to utilize LDG’s geothermal resources for its farm, AmeriCulture and LDG (more accurately its predecessor) entered into a Joint Facility Operating Agreement (JFOA). The purpose of the JFOA, from LDG’s perspective, was to allow AmeriCulture to utilize some of the land’s geothermal resources without interfering or competing with LDG’s development of its federal lease. Plaintiff Los Lobos Renewable Power LLC (LLRP), also a Delaware company, was the sole member of LDG and a third-party beneficiary of the JFOA. The parties eventually began to quarrel over their contractual rights and obligations. Invoking federal diversity jurisdiction, Plaintiffs LDG and LLRP sued Defendants Americulture and Seawright in federal court for alleged infractions of New Mexico state law. AmeriCulture filed a special motion to dismiss the suit under New Mexico’s anti-SLAPP statute. The district court, however, refused to consider that motion, holding the statute authorizing it inapplicable in federal court. After review of the briefs, the Tenth Circuit Court of Appeals agreed and affirmed. View "Los Lobos Renewable Power v. Americulture" on Justia Law

Plaintiffs Sherida Felders, Elijah Madyun and Delarryon Hansend filed a complaint under 42 U.S.C. 1983 alleging, among other things, that Defendant Brian Bairett and other law enforcement officers violated Plaintiffs’ Fourth Amendment rights during a traffic stop. In February 2009, before Plaintiffs served Bairett (or any other defendant) with a summons and the complaint, Bairett offered to settle the case by paying the driver, Felders, $20,000 and passengers Madyun and Hansend $2,500 each. Plaintiffs did not accept Bairett’s offer. Two months later, Plaintiffs timely sent Bairett’s counsel a request to waive service of the summons and complaint, which Bairett’s attorney executed. Six years later, a jury found Defendant Bairett liable for unlawfully searching Plaintiffs’ car and awarded the driver, Felders, $15,000, and her two passengers, Madyun and Hansend, nominal damages of $1 each. After the jury’s verdict, Plaintiffs moved “To Strike and/or Deem Ineffective Bairett’s Alleged ‘Offer of Judgment.’” The district court granted that motion, ruling that Bairett’s February 2009 offer to settle the case did not qualify as a Fed. R. Civ. P. 68 offer to allow judgment against Bairett because he made that settlement offer before he became a party to this litigation. Ordinarily prevailing parties can recover litigation costs from their opponent. Bairett argued on appeal that he effectively invoked Rule 68 to limit his liability for Plaintiffs’ costs. But the district court ruled that Bairett’s Rule 68 offer of judgment was premature, and thus ineffective, because Bairett made it before he had become a party to this litigation. To this, the Tenth Circuit agreed: because Rule 68 required the “party defending against a claim” to make an “offer to allow judgment” against him, and because a court cannot enter judgment against the offeror until he has first been made a party to the litigation, Bairett’s offer, filed before Plaintiffs served him with the summons and complaint or obtained his waiver of service, was too early to be effective. View "Felders v. Bairett" on Justia Law

In 2014, while skiing an untamed and ungroomed run inside the boundaries of Jackson Hole Ski Resort, Plaintiff Michael Roberts skied into a lightly covered pile of boulders, falling between two of them, and severely injuring himself. He sued Jackson Hole Mountain Resort (“JHMR”) to recover for his injuries, and his wife joined his lawsuit alleging loss of consortium. JHMR moved for summary judgment on the basis of the Wyoming Recreation Safety Act (“WRSA”) which limited a recreational activity provider’s liability for so-called “inherent risks” of the activity. The district court granted summary judgment, holding that Roberts’s injuries were the result of an “inherent risk” of alpine skiing. Finding no reversible error in the district court’s judgment, the Tenth Circuit Court of Appeals affirmed the district court in full. View "Roberts v. Jackson Hole Mountain Resort" on Justia Law