10th Circuit reinstates some claims in drug failure to warn case; reverses the issuance of a preliminary injunction; vacates enhanced sentence in felon in possession case; reinstates computer code misappropriat...
Brigham Young University J. Reuben Clark Law School
Cerveny appealed summary judgment to Aventis on their claims arising form the use of a fertility drug. The panela affirmed in part and reversed and remanded in part. It held the claims based on failure to include specific warnings proposed in the complaint about risk to the fetus from prepregancay use were preempted based on the Federal drug Admisntration’s rejection of a petition to add such warnings to the drug label which had the same argeutmns as those advanced by Cerveny and thus Aventis proved that any attempt to add the warnings would have been rejected and further held that there the FDA treats citizen petitions the same as manufactures’ petitions and has a policy against overwarning and distinguished Carveny’s cases as involving petitions before use of a drug, leave open the issue of rejected citizen petitions as evidence or involved significantly different drugs. It affirmed as to claims about failing to provide a general warning about use before pregnancy as the FDA itself did not include such a warning when it initialed a label review in 1987. It held there was no preemption of claims base don failure to warn about harm during pregnancy as the FDA proposed such a warming and Aventis failed to raise state based argeutmns in its summary judgment motion and remanded for consideration of these argeutmns. It held that remand was also necessary on the fraud, negligent misrepresentation and implied warranty claims, as they were unrelated to the warning claims. It finally held there was no abuse of discretion in implicitly dneyign more time for discovery as Carve file to include required information in their supporting affidavit.
First Western Capital Management Company v Malamed
Malamed appealed the preliminary injunction entered in this trade secrets case. The panel reversed as Company failed to prove irreparable harm, under current circuit precedent irreparable harm must be proven unless a statute requires issuance of a preliminary injunction and here neither the federal nor Colorado statutes require an injunction be entered.
O’Connor appealed his sentence arguing the crime of violence enhancement did not apply as to his Hobbes robbery conviction. The panel agreed, vacated the sentence and remanded. It held that Hobbs act robbery and extortion reach takings of property form another using threats to property dn thus are broader than generic robbery and extortion which only cover threats against a person, the guidelines definition of crime of violence is limited to generic robbery and the extortion guideline is ambiguous as physical injury in the definition could be limited to harm to the person or extend to harms to property and thus the rule of lenity requires that the enhancement based on the Hobbs robbery conviction not apply.
The SEO Group, Inc. v International Business Machines Corporation
SEO appealed summary judgment to IBM on its misappropriation and tortious interference with business relations claims and the denial of its motion to amend its complaint. The panel, with one judge dissenting in part, affirmed in part and reversed and remanded in part. Applying New York state law, the panel reversed and remanded on the misappropriation claim holding the district court erred in applying the independent tort doctrine as IBM owed a duty not to take SEO property in bad faith and use it to compete against SEO independent of the contract here; the contract did not declare assignments without IBM consent void and SEO is enforcing assigned tort rights and has standing to do so; the tort claim accrued when IBM released a computer operating system using code from SEO’s processor in interest less than two years before suit was field and thus suit was timely; and the New York state tort claim requires proof of bad faith and thus is not preempted by federal copyright law. Applying Utah law, the panel, 2-1, affirmed on the tortious interference claim holding Utah precedent does not support extending the tort to disclosures to the public at large, there was no evidence that IBM actually interfered with four of the five companies identified in the complaint and as to the one business which was contacted and merely asking a company to not do business with someone they currently have a business relationship is not actionable under Utah law as it does not violate a statute, common law duty or a binding regulation. The panel affirmed the denial of the motion to amend as the scheduling order had already been modified, adding a copyright claim would have made the case more complex and SEO could have investigated its specific claim before filing or added the claim on information and belief. Bacharach dissented as to the improper means issue arguing remand was necessary as the district court did not consider the issue and SEO identified disputed facts as to whether there was direct contact with the five companies, whether there was causation and whether there were damages.
Pyle and Jones v Woods and Cottonwood Heights
In this consolidated appeal, Pyle and Jones appealed the dismissal of their individual 4th Amendment and fair credit reporting claims against Woods and Cottonwood Heights. The panel affirmed. It held woods was entitled to qualified immunity because at eh time he searched a database of prescription drug records without a warrant, no court let alone the United States Supreme court or 10th Circuit had held there was a right to have a warrant before a database is searched. It affirmed at to Cottonwood Heights in Pyle as the Utah Attorney General was not notified of the constitutional challenge to the statute allowing the warrantless search here and affirmed as to Jones as there was insufficient factual allegations that a policy or custom existed concerning searches of the database or that Woods was acting under such a policy or custom. It finally affirmed as to fair credit reporting as the search here was done in connection with allegations an employee stole drugs form ambulances, Pyle and Jones were employees who had access to ambulances and thus the searches fit into the employee misconduct exception in the fair debt collection act.
In re Gary L. Bryan, Debtor (Peters v Clark, Janel Bryan and Aurora Loan Services, LLC)
Peters appealed the division of real estate sale proceeds and Clark, Bryan and Aurora cross-appealed the reversal of expenses from the proceeds. The panel, with one judge concurring in part, affirmed. It held the panel had jurisdiction as the appellate panel here only remanded for mathematical calculations with Lille room for discretion. The majority held the appellate panel properly considered the expenses issue de novo as a matter of statutory construction, the issue was preserved, Peters chose to include statutory commissions in his request and this did not create a benefit to the estate to justify awarding costs. Briscoe dissented as to the costs issue arguing Peters and Clark agreed to an award of fees under a different part of the bankruptcy code and the appellate panel ignored this agreement and thus remand was necessary to evaluate the effect of the agreement.
Racher v Westlake Nursing Home Limited Partnership
Westlake appealed the damages judgment in this elder abuse case. The panel affirmed. It held that Westlake waived its Oklahoma statutory right to cap noneconomic damages as Federal rule of Civil Procedure 8(c) requires the pleading of affirmative defenses and under Oklahoma law the cap is an affirmative defense as the statute is silent on the issue of whether the cap is an affirmative defense or a pleading requirement, ordinary practice in Oklahoma does not impose heightened pleading requirements beyond plausible demonstration that the elements of the claim can be proven and treating the cap as an affirmative defense is consistent with Oklahoma Supreme Court precedent on similar issues. It held the $1.2 million in noneconomic damages were not excessive given evidence Racher’s mother was abused daily for over three years and the emotional distress contributed to her death. It held that while closing argeutmns statements about punitive damages were improper during the compensatory phase one of the trial, this error was harmless as the statements were brief and Racher’s counsel explicitly reminded the jury that only compensatory damages were at issue in the first phase, there were adequate jury instructions on damages in phase one and the compensatory award and $10,000 punitive award demonstrate the jury was not acting in phase one on a punitive basis. It finally affirmed the admission of other abuse as the timing of the recording of the abuse of Racher’s mother was disputed, the instruction would allow consideration of the prior acts as the abuse might have been ongoing after the video was taken and there was no unfair prejudice.
Ellis appealed some of his drug and firearms convictions and sentences and his supervised release sentence. The panel affirmed in part, vacated in part and remanded for resentencing. It held the evidence was sufficient to prove conspiracy to distribute cocaine and other drugs as Ellis was found to have drugs in his possession when he was arrested and members of the conspiracy connected him to the conspiracy. However, it held the life sentence here was illegal because the jury was not asked to determine how much cocaine and crack was attributable to Ellis or foreseeably part of the conspiracy, there is no evidence Ellis’ attorney agreed to omit the weight element from the verdict form, Ellis objected to his life sentence arguing he was not responsible for the amount of drugs necessary to trigger a life sentence and held the government failed to present overwhelming evidence connecting Ellis to sufficient amounts of powder cocaine or crack cocaine to overcome the constitutional violation here. It held circuit precedent did not authorize an automatic life sentence based on the drugs attributable to the conspiracy as a whole because Ellis was not integral to the conspiracy in that the drugs he was responsible for did not correspond to those distributed by the conspiracy as a whole and individualized weight responsibilities must be made for each conspirator. It affirmed Ellis’ conviction for maintaining a drug house as evidence of drug sales within a few weeks of the date in the indictment was sufficient. It affirmed the firearm conviction as the jury could conclude the cocaine, other drugs and paraphernalia Ellis possessed when arrested was for distribution and the gun involved was on his person. It held any claims for failure to provide substitute counsel at sentencing were moot given the remand here. It finally held Ellis’ briefing on the supervised release issues was inadequate.