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

Articles Posted in Contracts
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The case involves Robert James McCabe, a former sheriff of the City of Norfolk, Virginia, who was convicted of carrying out fraud and bribery schemes with contractors concerning medical and food services for prisoners in the Norfolk Jail. Over 20 years, McCabe provided favored contractors with inside information about competing bids for the Jail’s contracts, altered and extended contracts for their benefit, and received various things of substantial value in return. McCabe was convicted of 11 federal offenses, including charges of conspiracy, honest services mail fraud, Hobbs Act extortion, and money laundering. He was sentenced to 144 months in prison, plus supervised release.McCabe appealed his convictions and sentences, raising four contentions of error. He argued that his trial was unfairly conducted before a trial of a co-defendant, that the trial court erred by admitting hearsay statements, that the jury instructions were incorrect, and that the court wrongly applied an 18-level sentencing enhancement. The United States Court of Appeals for the Fourth Circuit rejected all of McCabe’s contentions and affirmed his convictions and sentences. View "US v. McCabe" on Justia Law

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The case involves Zion Williamson, a former Duke University basketball player, and Prime Sports Marketing, LLC, and its president, Gina Ford. Williamson signed a contract with Prime Sports for marketing representation after his last game at Duke but before being drafted into the NBA. However, Williamson terminated the contract shortly after and signed with a competitor agency, Creative Artists Agency (CAA). Prime Sports argued that Williamson was not a "student-athlete" when he signed the contract, and therefore, he could not benefit from the protections of the North Carolina Uniform Athlete Agents Act, which governs contracts between student-athletes and their agents.The United States District Court for the Middle District of North Carolina rejected Prime Sports' argument and granted summary judgment to Williamson on Prime's contract and tort claims. The court ruled that Williamson was a "student-athlete" when he signed the contract with Prime Sports, and Prime's failure to comply with the Act's requirements voided the contract.The United States Court of Appeals for the Fourth Circuit affirmed the district court's decision. The appellate court agreed that Williamson was a "student-athlete" when he signed the contract and that Prime's failure to comply with the Act's requirements voided the contract. The court also affirmed the district court's grant of summary judgment on Prime's contract and tort claims. View "Williamson v. Prime Sports Marketing, LLC" on Justia Law

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The United States Court of Appeals for the Fourth Circuit examined a dispute between the plaintiffs, John and Dawn Harrell, and the defendant, Douglas DeLuca. The Harrells sued DeLuca, a general contractor from whom they purchased a home, for fraudulent inducement, constructive fraud, breach of contract, and violations of the Virginia Consumer Protection Act. The district court granted summary judgment in favor of DeLuca regarding the Harrells’ fraud claims based on one category of misrepresentations. The case otherwise proceeded to a bench trial where the court found DeLuca liable for breaching the contract, but not for the remaining claims. The Harrells appealed, arguing that summary judgment was inappropriate and that the district court should have made explicit findings related to their constructive fraud and breach-of-contract claims.The Court of Appeals upheld parts of the lower court's decision but also vacated parts of it. It agreed with the Harrells that the summary judgment was inappropriate, vacated it, and remanded the case for additional proceedings. It also agreed that the district court should have made explicit findings related to one of each of their constructive fraud and breach-of-contract claims. However, it affirmed the resolutions of the remaining claims which were not challenged by the Harrells on appeal. The court remanded the case back to the district court for further proceedings consistent with its opinion. View "Harrell v. Deluca" on Justia Law

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In a dispute between SmartSky Networks, LLC and DAG Wireless, Ltd., DAG Wireless USA, LLC, Laslo Gross, Susan Gross, Wireless Systems Solutions, LLC, and David D. Gross over alleged breach of contract, trade secret misappropriation, and deceptive trade practices, the United States Court of Appeals for the Fourth Circuit ruled that the district court did not have the jurisdiction to enforce an arbitration award. Initially, the case was stayed by the district court pending arbitration. The arbitration tribunal found in favor of SmartSky and issued an award, which SmartSky sought to enforce in district court. The defendants-appellants argued that, based on the Supreme Court decision in Badgerow v. Walters, the district court lacked subject matter jurisdiction to enforce the arbitration award. The Fourth Circuit agreed, noting that a court must have a basis for subject matter jurisdiction independent from the Federal Arbitration Act (FAA) and apparent on the face of the application to enforce or vacate an arbitration award. The court concluded that the district court did not have an independent basis of subject matter jurisdiction to confirm the arbitration award. As such, the court reversed and remanded the case to the district court for further proceedings. View "Smartsky Networks, LLC v. DAG Wireless, LTD." on Justia Law

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In the case, Remy Holdings International, LLC ("Remy") sued Fisher Auto Parts, Inc. ("Fisher") after Fisher terminated their business relationship and sold its inventory to a different manufacturer. Remy claimed that Fisher wrongfully terminated their agreement and that the inventory Fisher sold belonged to Remy. Remy brought claims for breach of contract, unjust enrichment, and conversion. Fisher counterclaimed for breach of contract due to Remy's poor performance.The United States Court of Appeals for the Fourth Circuit affirmed the district court's decisions, which were all in Fisher's favor. The court found that Remy committed the first material breach of the contract by failing to keep Fisher competitive in the marketplace. Furthermore, Fisher did not waive its right to assert the first material breach defense by continuing to order from Remy and occasionally waiving the order-fill penalty. Therefore, Remy was precluded from enforcing the contract and its breach of contract claim related to ownership of the inventory was dismissed.The court also rejected Remy's argument that the district court should have reinstated its unjust enrichment claim after declaring its contractual rights unenforceable. Remy had failed to respond to Fisher's motion for summary judgment seeking the dismissal of the unjust enrichment claim, and as a result, forfeited any opposition to its dismissal.Lastly, the court found no error with the district court's evidentiary rulings, including the admission of expert testimony and the USA Core Policy, and its refusal to instruct the jury on certain defenses. View "Remy Holdings International, LLC v. Fisher Auto Parts, Inc" on Justia Law

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In this case between Norfolk Southern Railway Company and Zayo Group, LLC, the United States Court of Appeals for the Fourth Circuit affirmed the district court's judgment on the pleadings. The dispute arose from a lease agreement between the parties, in which Zayo leased a utility duct from Norfolk Southern. When the time came to renew the lease, the parties could not agree on the renewal rent and referred the dispute to three appraisers, as specified in the lease. The appraisers decided the rent by a two-to-one vote, but Zayo refused to pay the rent, arguing that the decision was not unanimous. Norfolk Southern sued for breach of the lease, and the district court entered judgment for Norfolk Southern, ordering Zayo to pay the rental amount determined by the appraisers. Zayo appealed, contending that the appraisers could determine the rent only by unanimous vote. The Fourth Circuit held that the lease's language was unambiguous and did not impose a unanimity requirement on the appraisers. Therefore, it found that Zayo breached the lease by refusing to pay the full amount determined by the appraisers. The court affirmed the district court's judgment, requiring Zayo to pay the rental amount determined by the appraisers. View "Norfolk Southern Railway Company v. Zayo Group, LLC" on Justia Law

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John Doe (“Appellant”) filed this civil action alleging claims for defamation, abuse of process, tortious interference with contract, intentional infliction of emotional distress, and civil conspiracy against Jane Doe (“Appellee”) after Appellee accused Appellant of sexual assault. When Appellant filed his complaint, he also filed an ex parte motion to proceed using the pseudonym “John Doe” rather than his real name. The district court denied the motion.   The Fourth Circuit affirmed. The court explained that in considering the district court’s entire analysis of the James factors, it concluded that the district court did not abuse its discretion because it did not rely on incorrect factual or legal premises, nor did it give any indication that it was acting by general rule. Instead, the district court conducted a thorough, case-specific analysis when it exercised its discretion. The court wrote that the district court considered each of Appellant’s arguments, and it carefully balanced Appellant’s stated interests against the public’s interest in the openness of judicial proceedings as required by Public Citizen. It did not abuse its discretion in doing so. View "John Doe v. Jane Doe" on Justia Law

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In November 2018, Marriott International, Inc., announced that hackers had breached one of its guest reservation databases, giving them access to millions of guest records. Customers across the country began filing lawsuits, which were consolidated into multidistrict litigation in Maryland. Plaintiffs then moved to certify multiple class actions against Marriott and Accenture LLP, an IT service provider that managed the database at issue. The district court obliged in part. It certified classes for monetary damages on breach of contract and statutory consumer-protection claims against Marriott under Rule 23(b)(3) of the Federal Rules of Civil Procedure. It also certified “issue” classes on negligence claims against Marriott and Accenture under Rule 23(c)(4), limited to a subset of issues bearing on liability.   The Fourth Circuit granted Defendants’ petitions to appeal the district court’s certification order and now concludes that the order must be vacated. The court found that the district court erred in certifying damages classes against Marriott without first considering the effect of a class action waiver signed by all putative class members. And because the existence of damages classes against Marriott was a critical predicate for the district court’s decision to certify the negligence issue classes, that error affects the whole of the certification order. Accordingly, the court vacated the district court’s certification order. View "Peter Maldini v. Accenture LLP" on Justia Law

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Plaintiff worked for Tug Hill Operating, LLC, for approximately a year and a half at rig sites in West Virginia. He commenced an action against Tug Hill under the Fair Labor Standards Act (“FLSA”), alleging that while Tug Hill formally classified him as an independent contractor, he actually qualified as an employee for purposes of the FLSA based on the degree of control that Tug Hill exercised over his work. He, therefore, claimed that Tug Hill was required to pay him overtime for those weeks in which he worked more than 40 hours. Tug Hill filed a motion to dismiss Plaintiff’s action on the ground that Plaintiff was contractually required to arbitrate his claim against it. In addition, RigUp itself filed a motion to intervene in order to seek the action’s dismissal in favor of arbitration. The district court granted both motions.   The Fourth Circuit reversed both rulings and remanded. The court explained that the numerous provisions in the Agreement preclude any conclusion that the Agreement was entered into solely or directly for the benefit of Tug Hill, such that Tug Hill could enforce it as a third-party beneficiary. Accordingly, the district court erred in granting Tug Hill’s motion to dismiss and compelling Plaintiff, under the arbitration agreement between him and RigUp, to proceed to arbitration with respect to his FLSA claim against Tug Hill. Moreover, the court explained that because RigUp’s agreement with Plaintiff expressly disclaimed any interest in any litigation, Plaintiff might have with a company in Tug Hill’s position RigUp cannot now opportunistically claim that intervention is necessary. View "Lastephen Rogers v. Tug Hill Operating, LLC" on Justia Law

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In this appeal from the district court, Plaintiffs A.A. and Kirk Amos Delivery and Courier, LLC (“Kirk Delivery”) challenged an order of the district court compelling the arbitration of various claims that Plaintiffs seek to pursue against Amazon Logistics, Inc. (“Amazon”).  Conceding that each of their claims against Amazon falls within the scope of a binding commercial contract made between Kirk Delivery and Amazon in 2019 — and that an arbitration clause governed by the Federal Arbitration Act (the “FAA”) is set forth within that contract — Plaintiffs contend, in relevant part, that arbitration is not required due to the FAA’s exemption for “contracts of employment” with “transportation workers.”   The Fourth Circuit affirmed the district court’s judgment. The court held that the binding commercial contract is a business services deal struck between two corporate entities, not a “contract of employment” — the FAA’s so-called “transportation worker” exemption is inapplicable in these circumstances. The FAA thus mandates arbitration of all Plaintiffs’ claims. View "Ahaji Amos v. Amazon Logistics, INC." on Justia Law