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

Pursuant to a scheduling order issued by the magistrate judge that included a report of the parties’ discovery conference, the initial date agreed for disclosures was April 6, 2011. It was undisputed that plaintiff Sun River had a "D&O" insurance policy, which potentially covered securities-related counterclaims asserted by defendants, thus requiring Sun River to disclose the policy pursuant to the scheduling order. No disclosure of the policy was made until eighteen months later, only after counsel for defendants repeatedly pressed the issue based on other information raising suspicions of an undisclosed policy, and then filed a motion to compel its production. By that time coverage under this “claims made” policy had lapsed. When the omission came to light, defendants moved for an order sanctioning Sun River under Rule 37(b)(2)(A) by dismissing Sun River’s claims against defendants and entering a default judgment for defendants on their counterclaims against Sun River. The magistrate judge held an evidentiary hearing on the motion, taking testimony from Sun River's former attorneys, in-house counsel James Pennington and outside counsel (and counsel-of-record) Stephen Csajaghy regarding events surrounding their failure to timely disclose the policy. The magistrate judge ultimately recommended that the motion for sanctions be granted insofar as it sought a default judgment against Sun River on defendants’ counterclaims, but denied insofar as it sought dismissal of Sun River’s claims against defendants, which were not affected by the operative nondisclosure. The district court agreed with the magistrate judge about counsel’s performance with respect to disclosure of the D&O Policy, but concluded that Sun River should not be held responsible in the matter. Instead, the district court decided counsel were culpable for the disclosure violation and should be held personally liable for the attorney fees expended by defendants in pursuing the motion for sanctions. The attorneys moved for reconsideration, arguing: (1) Rule 37(c) did not authorize sanctions on counsel; (2) counsel acted with substantial justification, precluding the imposition of sanctions; (3) any sanction should have been imposed on Sun River, Pennington’s employer at the time of the initial nondisclosure, rather than on counsel; and (4) due process precluded the imposition of a sanction on Csajaghy, who had withdrawn and was not present at a July 2013 pretrial conference when the district court redirected the focus of the requested sanction from Sun River to counsel. The district court reaffirmed the sanction against both counsel and reduced it to judgment. The Tenth Circuit reversed as to the sanction against Pennington, and affirmed it against Csajaghy. While the district court found that the failure to disclose the insurance policy was not substantially justified, it did not find that Pennington acted in bad faith, vexatiously, wantonly, or for oppressive reasons. The district court did not abuse its discretion in concluding that Csajaghy’s unfounded assumption about Pennington’s review of the D&O Policy was insufficient to establish a substantial justification for his failure to disclose the policy. View "Sun River Energy v. Nelson" on Justia Law

In April 2013, plaintiffs filed a complaint in Utah state court seeking declaratory and injunctive relief. The complaint sought a declaration as to the authority of the Ute Indian Tribe of the Uintah and Ouray Reservation (the "Tribe") over non-Indian businesses operating on certain categories of land. It also alleged that Dino Cesspooch, Jackie LaRose, and Sheila Wopsock (individuals affiliated with the Ute Tribal Employment Rights Office ("UTERO")), had harassed and extorted plaintiffs in violation of state law. Defendants filed a motion to dismiss in state court by way of a special appearance, arguing that service of process had been insufficient, that the state court lacked subject matter jurisdiction in the absence of a valid waiver of tribal sovereign immunity, that the Tribe and its officers were immune from suit but were necessary and indispensable parties, and that plaintiffs failed to exhaust administrative remedies in tribal court. Cesspooch and LaRose were properly served. Two attorneys for the defendants moved for pro hac vice admissions. The motions were granted. Following a hearing on the motion to dismiss, the state court ordered further briefing on whether defendants' motion constituted a general appearance and authorized substituted service on the Tribe and Wopsock. The court then granted plaintiffs' motion to file an amended complaint adding additional defendants. The Tribe, Cesspooch, LaRose, and Wopsock were served the amended complaint. The Tribe filed a notice of removal in the U.S. District Court for the District of Utah. In its notice, the Tribe stated that Cesspooch, LaRose, and Wopsock consented to removal, and that the remaining defendants would consent. The remaining defendants (save one) filed consent and joinders to removal. Plaintiffs moved to remand, arguing that the initial defendants waived their right to removal (or to consent to removal) by litigating in state court, removal was untimely, the defendants had not unanimously consented to removal, and that the federal court lacked subject matter jurisdiction. The district court granted the motion to remand. The Tribe appealed the remand order. The Tenth Circuit dismissed this appeal, finding that under 28 U.S.C. 1447(d), a district court order remanding a case to state court was "not reviewable on appeal or otherwise." Further, the Court held that a district court order remanding because the defendants did not unanimously join or consent to removal was patently "not reviewable." In addition, the Court concluded that the remand order in this case was colorably characterized as being based on lack of unanimity. View "Harvey v. Ute Indian Tribe" on Justia Law

Attorney John Cogswell appealed the imposition of a Rule 11 sanction. Acting on behalf of Predator International, Inc., Cogswell filed a lawsuit in April 2009 against Gamo Outdoor USA, Inc. and Industrias El Gamo, S.A. (collectively, Gamo). The original complaint alleged patent infringement and other claims. When it appeared that Lee Phillips, a co-inventor of the patent at issue, was asserting that he still owned half the patent, Cogswell moved to dismiss the infringement claim, explaining that Predator would litigate ownership in state court with the expectation of reviving the patent-infringement claim once it had established its ownership. The state litigation expanded after Gamo purchased Phillips’s interest in the patent. Cogswell then moved in federal court to supplement Predator’s complaint with a challenge to Gamo’s claimed interest in the patent and moved to amend the complaint by reviving the patent-infringement claim. The district court denied the motion. Eventually the district court imposed a Rule 11 sanction on Cogswell for filing the motion to supplement and amend Predator’s complaint, justifying the sanction on grounds that he was forum shopping on the claims he wished to add, his motion came too long after he had learned of Gamo’s purchase of Phillips’s interest in the patent, and nothing had changed to justify his reinstating the patent-infringement claim. The Tenth Circuit reversed: the motion to supplement and amend was not unwarranted under existing law. View "Predator International v. Gamo Outdoor" on Justia Law

Plaintiffs in this case alleged their former bankruptcy trustee breached professional duties due them because of conflicting obligations the trustee owed the bankruptcy estate. Plaintiffs sought recovery under state law. However, plaintiffs filed suit in federal court against the trustee alleging diversity jurisdiction and the right to have the case resolved in an Article III court. The trustee maintained the case should have been heard in an Article I bankruptcy court because the alleged-breached professional duties arose from the bankruptcy proceedings. The district court concluded the case should have been heard in the Article I court, and certified its decision for immediate appeal. The Tenth Circuit concluded that an Article III court had jurisdiction, and reversed the district court's order. View "Loveridge v. Hall" on Justia Law

Petitioner Yang You Lee was a native and citizen of Thailand. He became a permanent resident of the United States in 1987 when he was five years old. In 2014, an immigration judge (IJ) sitting in Dallas found him removable for committing a crime of violence (a misdemeanor domestic assault) and denied his application for cancellation of removal. In the Board of Immigration Appeal's order dismissing Lee's appeal, the BIA noted Oklahoma City next to Lee's file number, apparently indicating Lee's final hearing was located there. Lee filed his petition for review in the Fifth Circuit, which transferred the petition to the Tenth Circuit sua sponte and without explanation. The Tenth Circuit concluded after review that venue was proper with the Fifth Circuit, and transferred this case back to that court for further proceedings. View "Lee v. Lynch" on Justia Law

In 1989, FBI agents raided the nuclear weapons production facility known as Rocky Flats, first operated by Dow Chemical Company, then Rockwell International Corporation. The agents discovered that plant workers had been mishandling radioactive waste for years. The waste found its way into the nearby soil and groundwater.The plant's neighbors followed the government's criminal action with a civil suit, citing the federal Price-Anderson Act and state nuisance law as grounds for relief. A jury found for plaintiffs, and the district court approved roughly $177 million in compensatory damages and $200 million in punitive damages, as well as $549 million in prejudgment interest. Defendants appealed, arguing that the district court had failed to instruct the jury properly about the terms of the Price-Anderson Act. Dow and Rockwell made a "curious tactical decision," arguing that the district court's jury instructions about what constituted a nuclear incident were too permissive. The Tenth Circuit agreed that the district court's jury instructions about what did and did not qualify as a nuclear incident were too permissive. On this basis, it vacated the district court's judgment and remanded the case for further proceedings in light of the Act's correct construction. Plaintiffs appealed, renouncing the benefits the Act provided to both parties. Plaintiffs accepted the premise that they could not prove a nuclear incident as the term was interpreted by the Tenth Circuit. Instead, plaintiffs relied on their state law tort claim. Defendants countered with the argument that the Act precluded plaintiffs' state law claim. Furthermore, defendants argued that the Tenth Circuit's mandate in the first appeal of this case barred plaintiffs from relief on their state law nuisance verdict. The district court ruled in favor of defendants, and again this case came before the Tenth Circuit on appeal. "In two separate appeals spanning many years the defendants have identified no lawful impediment to the entry of a state law nuisance judgment on the existing verdict. They have shown no preemption by federal law, no error in the state law nuisance instructions, no mandate language specifically precluding this course. No other error of any kind is even now alleged." The Tenth Circuit vacated the district court's judgment and remanded the case for further proceedings. View "Cook v. Rockwell International" on Justia Law

In 2008, Donald Stewart, driving a semi-tractor trailer, hit the back of a tow truck driven by Melvin Mathis. Mathis sued Stewart and his employer, Huff & Puff Trucking, Inc., for negligence in the District of Wyoming. After a bench trial, the district court issued findings of fact and conclusions of law. The court determined Stewart was 100 percent at fault for the accident, and entered judgment in favor of Mathis. The damages award, which was significantly less than Mathis sought, was based on findings that his spinal injuries from the accident were only temporary and he did not suffer a mild traumatic brain injury (“MTBI”). Mathis moved for a new trial, arguing, among other things, that the judge’s law clerk had an undisclosed conflict of interest. The court denied the motion. On appeal, Mathis challenged: (1) the district court’s factual findings relating to his back and head injuries; (2) whether the court impermissibly allowed a defense expert to testify beyond his qualifications as a biomechanical engineer; and (3) the court’s denial of his motion for a new trial based on the alleged law clerk conflict. Finding no reversible error, the Tenth Circuit affirmed. View "Mathis v. Huff & Puff Trucking" on Justia Law

At issue in this case was the district court's grant of summary judgment to the court-appointed receiver for Winsome Investment Trust, a business entity whose founder, Robert Andres, caused it to illegally distribute funds as part of a Ponzi scheme. The court found that Andres had fraudulently transferred funds from Winsome to William Cornelius and his law firm, Cornelius & Salhab, and that the receiver could recover these funds on Winsome's behalf under the Uniform Fraudulent Transfer Act (UFTA). Cornelius, who was unaware of the fraud, raised several challenges to the district court's jurisdiction and its judgment on the merits. Finding no reversible error, the Tenth Circuit affirmed: the receiver was entitled to sue Cornelius in Utah, and no federal jurisdictional impediments prevent the district court from reaching the UFTA claim. The district court also correctly concluded the payments to Cornelius violated the UFTA and the four-year statute of limitations did not bar the receiver's claim. View "Klein v. Cornelius" on Justia Law

Plaintiff-appellant Sabreen Gad filed a complaint with the Equal Employment Opportunity Commission against Kansas State University, alleging she was discriminated against in her effort to obtain a tenure-track position. Despite the EEOC sending her a formal charge document to sign and verify, as both Title VII and EEOC regulations required, she never did so. The EEOC elected not to pursue her case; she brought a Title VII suit against KSU. The issue this appeal presented for the Tenth Circuit's review centered on whether Title VII's requirement that a claimant verify the charges against an employer was a jurisdictional prerequisite to suit: if yes, then the district court correctly concluded that it lacked Article III subject-matter jurisdiction and dismissed the complaint; if the verification requirement was a non-jurisdictional condition precedent to suit, it could be waived without defeating jurisdiction. The Tenth Circuit concluded the verification requirement was non-jurisdictional and did not divest the federal courts of subject-matter jurisdiction. Consequently, the Court reversed the district court's contrary decision and remanded the case for further proceedings. View "Gad v. Kansas State University" on Justia Law

Several voters filed a challenge to Sandoval County’s administration of the 2012 local election, and the district court concluded that the County’s election procedures were so dysfunctional that an immediate remedy was necessary to avoid voter disenfranchisement in the approaching 2014 election. To remedy the anticipated election day problems, the court entered a preliminary injunction that required the County to adhere to new regulations increasing the number of voting centers and voting machines. County election officials sought interlocutory appellate review of the preliminary injunction prior to the election, but the Tenth Circuit declined to intervene at that time. The election went off without a hitch, and the Court reviewed the County’s challenge to the injunction. In addition, the Court considered a motion to dismiss the appeal as moot presented by the voters who brought the suit. Concluding the issues raised by the grant of the preliminary injunction were mooted by the passage of the 2014 election, the Court granted the motion and dismissed the appeal for lack of jurisdiction. View "Fleming v. Gutierrez" on Justia Law