Justia Legal Ethics Opinion Summaries

PDIC’s patent allegedly covers encoding digital images in the JPEG format. PDIC licensed the patent to Adobe, promising not to sue Adobe or Adobe’s customers for claims arising “in whole or part owing to an Adobe Licensed Product.” PDIC sued Adobe customers, alleging that encoding JPEG images on the customers’ websites infringed its patent. Adobe was allowed to intervene to defend nine customers, asserting that PDIC breached its license agreement. PDIC dismissed the actions in which Adobe had intervened. Adobe unsuccessfully sought "exceptional case" attorneys’ fees, 35 U.S.C. 285, and FRCP 11 sanctions. The court concluded that it could not determine the prevailing party nor "say that PDIC’s pre-suit investigation was inadequate or that any filing was made for any improper purpose.” The court denied in part PDIC’s motion for summary judgment, finding that a reasonable juror could find "that PDIC’s infringement allegations . . . cover the use of Adobe products,” and violated the agreement; it held that Adobe could only collect fees incurred in defending its customers in suits that violated the agreement but could not recover fees incurred in the affirmative breach-of-contract suit. After failed attempts to identify "purely defense fees,” Adobe requested judgment in favor of PDIC. The court reiterated “that there are purely defensive damages that can be proven,” but entered the judgment. The Federal Circuit dismissed an appeal for lack of jurisdiction. There was no final ruling barring recovery on Adobe’s breach claim. Under New Jersey law, actual damages are not a required element of a breach of contract claim. View "Princeton Digital Image Corp. v. Office Depot Inc." on Justia Law

The Estate appealed the district court's order denying its motion for reconsideration of an adverse grant of summary judgment. SPV cross-appealed the denial of its 28 U.S.C. 1927 and Federal Rule of Civil Procedure 26(g)(3) sanctions against the Estate's attorneys.The Eighth Circuit affirmed in part, holding that the district court did not abuse its discretion in considering the Estate's motion for reconsideration because the Estate sought to use its motion for reconsideration for the impermissible purpose of introducing new arguments it could have raised earlier and failed to support those arguments with any evidence even after receiving additional time for discovery. The court also held that the district court did not abuse its discretion in denying 28 U.S.C. 1927 sanctions. The court reversed in part, holding that the district court erred by denying the Estate's request for sanctions under Rule 26(g)(1) with respect to Attorney Kroll. However, the district court did not abuse its discretion denying sanctions against Attorney Donahoe. View "SPV-LS, LLC v. The Estate of Nancy Bergman" on Justia Law

Plaintiffs-appellants were an adult daughter (believed to be incompetent) and her mother. After retaining counsel, the mother brought a tort action as the daughter’s next friend for in utero injuries to the daughter, which the mother alleged were caused almost 20 years previously in a boating accident. The defendants filed a motion for summary judgment, but they also offered to permit plaintiffs to dismiss the case with each side to bear its own costs and fees. The plaintiffs’ attorney believed that accepting this walk-away offer was in the daughter’s best interest, but the mother disagreed. Facing a conflict of interest between his two clients, the attorney moved to withdraw. The superior court permitted the attorney to withdraw and ultimately granted the unopposed motion for summary judgment and awarded costs and fees against both plaintiffs. The mother and daughter appealed. The Alaska Supreme Court held that before granting the attorney’s motion to withdraw the court should have determined the daughter’s competency, and if she was found incompetent the court should have appointed a guardian ad litem or taken further action to protect her interests pursuant to Alaska Civil Rule 17(c). Therefore, the Court reversed the trial court’s orders granting the motion to withdraw and summary judgment, vacated the award of attorney’s fees and costs, and remanded for further proceedings. View "Bravo v. Aker" on Justia Law

Plaintiffs-appellants Jamie and Kelly Etcheson brought an action under the Song-Beverly Consumer Warranty Act (commonly known as the "lemon law") against defendant and respondent FCA US LLC (FCA) after experiencing problems with a vehicle they had purchased new for about $40,000. After admitting the vehicle qualified for repurchase under the Act, FCA made two offers to compromise under Code of Civil Procedure section 998: one in March 2015, to which plaintiffs objected and the trial court found was impermissibly vague, and a second in June 2016, offering to pay plaintiffs $65,000 in exchange for the vehicle's return. Following the second offer, the parties negotiated a settlement in which FCA agreed to pay plaintiffs $76,000 and deem them the prevailing parties for purposes of seeking an award of attorney fees. Plaintiffs moved for an award of $89,445 in lodestar attorney fees with a 1.5 enhancement of $44,722.50 for a total of $134,167.50 in fees, plus $5,059.05 in costs. Finding the hourly rates and amount of counsels' time spent on services on plaintiffs' behalf to be reasonable, the trial court tentatively ruled plaintiffs were entitled to recover $81,745 in attorney fees and $5,059.05 in costs. However, in its final order the court substantially reduced its award, concluding plaintiffs should not have continued to litigate the matter at all after FCA's March 2015 section 998 offer. It found their sought-after attorney fees after the March 2015 offer were not "reasonably incurred," and cut off fees from that point, awarding plaintiffs a total of $2,636.90 in attorney fees and costs. Pointing out their ultimate recovery was double the estimated value of FCA's invalid March 2015 section 998 offer, which they had no duty to counter or accept, plaintiffs contended the trial court abused its discretion by cutting off all attorney fees and costs incurred after that offer. The Court of Appeal agreed and reversed the order and remanded back to the trial court with directions to award plaintiffs reasonable attorney fees for their counsels' services, including those performed after FCA's March 2015 offer, as well as reasonable fees for services in pursuing their motion for fees and costs. View "Etcheson v. FCA US LLC" on Justia Law

This appeal stemmed from lawsuits filed nearly 20 years ago known as the Antelope Valley Groundwater Adjudication cases. The Court of Appeal held that there was substantial evidence to support the trial court's conclusion that AVEK effectively consented to BB&K's representation of District No. 40, and its inordinate delay in seeking disqualification estopped AVEK from seeking to disqualify District No. 40's chosen counsel. The court held that the trial court did not abuse its discretion in concluding that disqualification would deprive District No. 40 of its chosen counsel, that District No. 40 (as well as many other parties) would suffer serious detriment from disqualification, and that AVEK unreasonably delayed seeking disqualification. View "Antelope Valley Groundwater Cases" on Justia Law

While the parties in this case litigated contempt proceedings over the course of seven years, the children at the center of the case aged out of the system and became peripheral to a nearly $4,000,000 judgment in favor of Respondents Janet and James Mercer-Smith, who pleased no contest to allegations of abuse against their two minor daughters Julia and Rachel. This case began in 2001 as an abuse and neglect proceeding and turned into a dispute over whether Children, Youth and Families Department (CYFD) had violated the district court's decision and Julia and Rachel could not be placed with former employees of a group home where they had been residing. After protracted litigation, the district court held CYFD in contempt for violating its placement decision and, almost four years later, imposed the sanction for the violation, ordering CYFD to pay the Mercer-Smiths more than $1,600,000 in compensatory damages and more than $2,000,000 in attorney fees and costs. The award was based on the district court’s determination that the violation of the placement decision resulted in the loss of the Mercer-Smiths' chance of reconciliation with Julia and Rachel. The New Mexico Supreme Court held that the purpose for which the district court exercised its contempt power was not remedial in nature and therefore could not be upheld as a valid exercise of civil contempt power. Accordingly, the Court reversed the contempt order and vacated the award in its entirety. View "New Mexico ex rel. CYFD v. Mercer-Smith" on Justia Law

Carlson was co-lead counsel representing the plaintiffs in the CBNV litigation. He began working on the case while an associate with the SSEM firm and continued working on it after he left the firm. He entered into agreements with SSEM regarding how fees recovered in CBNV and other cases would be allocated. After the final order approving the CBNV class settlement and fee award, SSEM filed a state court breach of contract action against Carlson, alleging that he owed the firm part of his CBNV fees. Carlson moved the federal district court, which had handled the CNBV litigation, to stay the state case and confirm his fee award. That court exercised ancillary jurisdiction to stay the state case and granted Carlson’s motion, concluding that SSEM was not entitled to any portion of the Carlson's fee because a condition precedent had not occurred. The Third Circuit reversed. The district court erred in exercising ancillary jurisdiction over the state contract dispute because it did not retain jurisdiction over disputes arising from the allocation of fees, the state law contract claim is factually distinct from the federal CBNV claims, exercising ancillary jurisdiction was not necessary to resolve matters properly before it, and the court had no control over the funds SSEM seeks. View "In Re: Community Bank of Northern Virginia Mortgage Lending Practices Litigation" on Justia Law

Attorney Beverly Gassner filed suit against her former client Loretta Stasa for unpaid fees. Gassner was represented by the Grossman firm. In 2016, Gassner voluntarily dismissed the action without prejudice. The trial court awarded costs - not only against the plaintiff, but also against the Grossman firm. The plaintiff moved to vacate the costs order, but the trial court denied that motion. The Grossman firm appealed. With regard to the order awarding costs, the Court of Appeal determined there was a split of authority as to whether such an order was appealable when it was made after a voluntary dismissal without prejudice. The Court followed the case law holding that it was appealable. The Grossman firm, however, failed to file a timely appeal of that order. With regard to the order denying the motion to vacate, ordinarily such an order was not appealable on grounds that could have been raised in an appeal from the underlying order. This bar does not apply, however, when the underlying order is void. "Moreover, the appeal is timely with respect to this order." On the merits, the Court held that the order awarding costs against the Grossman firm was indeed void, because the Grossman firm was not a party. Accordingly, the Court reversed the trial court's order. View "Gassner v. Stasa" on Justia Law

The issue this case presented for the Mississippi Supreme Court centered on release language in a settlement agreement. This case began as a legal malpractice action by Delie Shepard and Ashley Stowers (the Plaintiffs) against Robert Germany and his law firm, Pittman, Germany, Roberts & Welsh, LLP. Shepard and Stowers were represented by Michael Crowley and Edward Blackmon; Germany and his firm were represented by Fred Krutz and Daniel Mulholland. After several years of litigation and mediation, the parties reached a settlement. In the settlement, Shepard and Stowers agreed “to execute a Full and Complete Release.” The parties agreed to and memorialized the essential terms of their settlement in an email exchange. Although the essential terms were agreed upon, Crowley’s email to Krutz did not specify the precise language of the “Full and Complete Releases.” Believing that the parties had a meeting of the minds on the essential terms of the settlement in an email exchange, Germany moved to enforce the settlement agreement using the release language proposed by his attorneys. Shepard and Stowers later filed their own motion to enforce the settlement agreement using their proposed releases. Before Shepard and Stowers filed their motion, the circuit court held a hearing on Germany’s motion to enforce the settlement agreement. The circuit court entered an Order Enforcing Settlement Agreement and Judgment of Dismissal. Unsatisfied with the order enforcing the settlement agreement, which required their signature on the releases, Crowley and Blackmon filed an emergency petition for writ of prohibition with the Supreme Court, which was ordered to be treated as a Notice of Appeal. They later filed a notice of appeal in the underlying case on behalf of Shepard and Stowers. The appeal sought essentially the same relief as Crowley and Blackmon’s petition, so the Supreme Court consolidated the cases. The issue for the Supreme Court was whether the circuit court abused its discretion by enforcing a settlement agreement using specific release language that required the Plaintiffs’ attorneys’ signatures. Finding that the circuit court abused its discretion, the Supreme Court reversed the Order Enforcing Settlement Agreement and Judgment of Dismissal and remanded the case for further proceedings. View "Crowley v. Germany" on Justia Law

Pursuant to a former version of Code of Civil Procedure section 128.5, the trial court ordered CPF Vaseo Associates, LLC (CPF) and its counsel, John Byrne, to pay Bruce and Barbara Gray (the Grays) just over $30,000 in fees and costs. Yet a mandatory procedural prerequisite to that award was never fulfilled. The motion requesting sanctions was served and filed on the same day, and no safe harbor period was afforded for CPF and Byrne to correct the challenged conduct. While a panel of the Court of Appeal previously determined that no such safe harbor applied to a sanctions motion like the one here, the Legislature's subsequent clarifying amendment of the section and the contrary opinion of another court convinced the Court to now reach a different conclusion. For that reason, the Court reversed and remanded for further proceedings. View "CPF Vaseo Associates, LLC v. Gray" on Justia Law