Justia U.S. 4th Circuit Court of Appeals Opinion Summaries

This case arose more than fifteen years ago as a bid-rigging scheme conjured up by shipping businesses to defraud the United States. In the qui tam proceedings at issue, a jury returned a verdict in 2011 against the Gosselin defendants. Relators appealed, contesting the district court's refusal to award civil penalties. The court granted relief and remanded for further proceedings. On remand, the district court was called upon to resolve the issue of whether relator Kurt Bunk was entitled to recover his judgment from another defendant, Government Logistics N.V. (GovLog). As a preliminary issue, the court concluded that the Peacock v. Thomas principle is inapplicable here, and the district court’s exercise of supplemental jurisdiction over the successor corporation liability claim against GovLog was entirely appropriate. The court concluded that the district court properly declined to apply the substantial continuity test here. However, the district court erred by dismissing Bunk's successor corporation liability claim as insufficiently pleaded. Finally, the court concluded that the district court erred in making the summary judgment award to GovLog. Accordingly, the court vacated and remanded for further proceedings. View "US ex rel. Kurt Bunk v. Government Logistics N.V." on Justia Law

Victims of a massive ponzi scheme centered in South Carolina obtained a judgment of over $150 million against Derivium and others. Plaintiffs are now pursuing others whom they claim also participated in the scheme. The district court granted Vision International's motion to dismiss for lack of personal jurisdiction under FRCP 12(b)(2). The district court also granted Randolph Anderson, Patrick Kelley, and Total Eclipse's motion for judgment as a matter of law on plaintiffs' claim for aiding and abetting common law fraud. Plaintiffs filed separate appeals on the two rulings. The court consolidated the appeals. The court concluded that, because the parties engaged in full discovery on the jurisdictional issue and fully presented the relevant evidence to the district court, that court properly addressed Vision International’s Rule 12(b)(2) motion by weighing the evidence, finding facts by a preponderance of the evidence, and determining as a matter of law whether plaintiffs carried their burden of demonstrating personal jurisdiction over Vision International. Further, the court agreed with the district court’s conclusion that South Carolina has not recognized a cause of action for aiding and abetting common law fraud and that it is not the court's role as a federal court to so expand state law. Accordingly, the court affirmed the judgment as to both appeals. View "Grayson v. Anderson" on Justia Law

Plaintiff filed suit alleging that he was unlawfully fired in retaliation for engaging in activities protected under the Sarbanes-Oxley Act of 2002 (SOX), 18 U.S.C. 1514A. On appeal, plaintiff challenged the district court's grant of summary judgment to defendants. The court affirmed, concluding that plaintiff had not successfully established the contributing factor element of his prima facie case. In this instance, the standard would be toothless if the court held that a preponderance of the evidence showed that the long-past activities at issue affected plaintiff's termination given the lengthy history of antagonism and the intervening events which caused the Outside Directors to view plaintiff as an insubordinate. View "Feldman v. Law Enforcement Assoc. Corp." on Justia Law

Plaintiff filed suit against the government, seeking a refund of payments on a federal withholding tax penalty assessed against her under 26 U.S.C. 6672. The government counterclaimed against plaintiff and her husband to reduce to judgment the remaining balance of the trust fund recovery penalties assessed against them. The district court granted summary judgment to the government. The court affirmed the district court's grant of summary judgment against the husband individually where he did not provide a basis of law for his contention that the assessment of the 100% penalty against him was not made within the limitation period set forth in section 6672; affirmed the district court's grant of summary judgment against plaintiff because the undisputed record showed that she was properly liable for the 100% penalty where she was a "responsible person" under section 6672 during the relevant tax periods and where she "willfully" failed to see that the withholding taxes were paid; and affirmed the district court's determination of the amounts of the respective tax liabilities under section 6672. View "Johnson v. United States" on Justia Law

HomeAway filed suit in the District Court of Travis County, Texas, against Eye Street and others, asserting, inter alia, state law claims for breach of contract and misappropriation of trade secrets. Eye Street did not attempt to remove HomeAway's Texas suit to federal district court but, instead, filed its own action against HomeAway and others in federal district court. After HomeAway moved to dismiss Eye Street's action for improper venue or, alternatively, to transfer venue to the U.S. District Court for the Western District of Texas, the district court stayed the action pending the resolution of HomeAway's Texas lawsuit. On appeal, Eye Street challenged the propriety of the stay. The court concluded that the district court did not abuse its discretion in staying Eye Street's action. Given the strong case for a stay under the United Capitol Insurance Co. v. Kapiloff factors and Eye Street's deliberate choice to forego removal, the district court's decision would be an appropriate exercise of discretion under either Brillhart v. Excess Insurance Co. of America/Wilton v. Seven Falls Co. or Colorado River Water Conservation District v. United States. Accordingly, the court affirmed the judgment. View "VRCompliance LLC v. HomeAway, Inc." on Justia Law

Painter's Mill Grille, the owner and operator of a restaurant, and its principals filed a complaint against the restaurant's landlord and its agents. Plaintiff alleged that defendants, motivated by racial animus, interfered with plaintiff's business and its opportunity to sell the restaurant, including its leasehold interest, in violation of 42 U.S.C. 1981, 1982, and 1985(3), as well as state tort principles. The court agreed with the district court's conclusion that plaintiff's principals did not have standing to be plaintiffs and that Painter's Mill Grille did not set forth sufficient facts to state a claim to relief that was plausible on its face. Accordingly, the court affirmed the district court's dismissal of the complaint under Rule 12(b)(6). View "Painter's Mill Grille, LLC v. Brown" on Justia Law

This is an adversary proceeding arising out of the bankruptcy of debtor (Derivium). Plaintiff (Grayson), assignee of the Chapter 7 bankruptcy trustee, appealed from a district court judgment affirming the bankruptcy court's decision to grant summary judgment for defendants (Wachovia). The court concluded that the district court did not err in affirming the grant of summary judgment for Wachovia on Grayson's Customer Transfers claim; summary judgment for Wachovia on Grayson's Cash Transfers claim; the bankruptcy court's determinations that the stockbroker defense applied to commissions; and the bankruptcy court's ruling that in pari delicto barred Grayson's tort claims against Wachovia. View "Grayson Consulting, Inc. v. Wachovia Securities, LLC" on Justia Law

Country Vintner sued Gallo, under North Carolina law over the wholesale distribution of an Argentinian wine. At issue on appeal was what expenses related to electronically stored information (ESI) were taxable under the federal taxation-of-costs statute, 28 U.S.C. 1920(4). The district court entered an order taxing only the costs of converting electronic files to non-editable formats, and transferring files onto CDs. The court agreed with the district court's finding that only the conversion of native files to TIFF and PDF formats, and the transfers of files onto CDs, constituted "making copies" under section 1920(f), and that none of Gallo's expenses constituted fees for exemplification. View "The Country Vintner v. E & J Gallo Winery" on Justia Law

The Trustee filed this action against former directors and officers of Bancshares. The directors also all formerly served as the officers and directors of the Bank, a wholly owned subsidiary of Bancshares. The court held that the Trustee could pursue her claims only as to the directors' alleged improper subordination of Bancshares' LLC interest. Therefore, the court reversed and remanded the district court's judgment as to that claim, but affirmed its judgment in all other respects. Accordingly, the court held that the district court did not err in granting the directors' motion to dismiss except as to the claim for subordination of the LLC interest of Bancshares. View "Beach First National Bancshare v. Anderson" on Justia Law

In April 2010, Mike Miller resigned from his position as Project Director for WEC Carolina Energy Solutions, Inc. (WEC). Twenty days later, he made a presentation to a potential WEC customer on behalf of WEC's competitor, Arc Energy Services, Inc. (Arc). The customer ultimately chose to do business with Arc. WEC contended that before resigning, Miller, acting at Arc's direction, downloaded WEC's proprietary information and used it in making the presentation. Thus, it sued Miller, his assistant Emily Kelley, and Arc for, among other things, violating the Computer Fraud and Abuse Act (CFAA) (18 U.S.C. 1030). The district court dismissed WEC's CFAA claim, holding that the CFAA provided no relief for Appellees' alleged conduct. Upon review of the trial court record, the Fourth Circuit agreed with the court's opinion and therefore affirmed. View "WEC Carolina Energy Solutions v. Miller" on Justia Law