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

Dmarcian, Inc. (dInc) and dmarcian Europe BV (dBV)—and a broken business relationship. The original dmarcian, dInc, is a Delaware corporation with headquarters in North Carolina. Its corporate homonym, dBV, is a Dutch entity based in the Netherlands. The two companies negotiated an agreement authorizing dBV to sell dInc’s software in Europe and Africa. The license was done on a handshake, and the parties now dispute its terms. Among other allegations, dInc accuses dBV of directly competing for customers, which prompted dInc to bring claims of copyright and trademark infringement, misappropriation of trade secrets, and tortious interference. The district court exercised personal jurisdiction over dBV and declined to dismiss for forum non conveniens. The district court also issued a preliminary injunction limiting dBV’s use of dInc’s intellectual property. The district court later held dBV in contempt for violating the injunction, and dBV appealed.   The Fourth Circuit affirmed except as to one aspect of the contempt order, which the court vacated and remanded for further proceedings as to the proper amount of sanctions. The court explained that the district court did not err in exercising personal jurisdiction, in declining to dismiss for forum non conveniens, and in issuing a preliminary injunction. Further, the court held that the district court was also justified in issuing a contempt sanction; but the court  requires a more thorough examination of the sanction amount. While the preliminary injunction may not be the final word on the merits, its entry was also not an abuse of discretion considering the weighty interests and detailed findings discussed at length above. View "Dmarcian, Inc. v. Dmarcian Europe BV" on Justia Law

These consolidated cases involve a dispute between Antero Resources Corporation (“Antero”) and a group of landowners (“Lessors”) over the payment of natural gas royalties under several oil and gas leases. The leases permit Antero to extract and sell natural gas owned by the Lessors in exchange for royalty payments. Antero appealed from the district court’s summary judgment order, which held that Antero breached the terms of the leases by deducting certain “post-production costs” from the royalties it paid Lessors and awarded damages. Lessors cross-appeal the district court’s earlier dismissal of their fraud and punitive damages claims against Antero.   The Fourth Circuit affirmed the district court’s summary judgment order in part and vacated in part. The court concluded that some of the leases prohibit Antero from deducting any post-production costs from Lessors’ royalties, but other leases—namely, those that contain a “Market Enhancement Clause”—do authorize deductions in certain circumstances. Separately, the court affirmed the dismissal of the fraud and punitive damages claims because Lessors did not plead them with sufficient particularity. View "Gerald Corder v. Antero Resources Corporation" on Justia Law

Section 20.5 of North Carolina’s 2017 Farm Act contains provisions making it illegal to enter into two types of contractual agreements: (1) any settlement agreement conditioned on an agricultural producer’s union affiliation (the Settlement Provision) and (2) any agreement that would require an agricultural producer to process dues checkoffs for its farmworker-employees (the Dues Provision). The Farm Labor Organizing Committee and others (collectively, FLOC) contend that these prohibitions violate the First Amendment, Fourteenth Amendment, and 42 U.S.C. Section 1981. FLOC initiated this action against the Attorney General of North Carolina and the Governor of North Carolina (collectively, the State). The district court held that the Settlement Provision violated the Constitution and so enjoined it, but upheld the constitutionality of the Dues Provision, and then held that neither provision violated Section 1981.   The Fourth Circuit reversed the judgment of the district court as to the Settlement Provision and vacated the accompanying injunction, but affirmed in all other respects. The court explained that a rational basis supports Section 20.5. Agriculture is North Carolina’s largest industry, which makes it a subject of great interest for state legislators. The state also embraces its right-to-work policies and has worked repeatedly to strengthen them. In addition to these general bases for enacting Section 20.5, both challenged provisions respond to discrete legislative concerns. Further, the Settlement Provision prohibits parties from conditioning a settlement agreement on an agricultural producer’s union affiliation. Thus, the court rejected the broad reading advanced by FLOC and adopted by the district court that this statutory provision bars any settlement agreement between an agricultural producer and labor union. View "Farm Labor Organizing Committee v. Joshua Stein" on Justia Law

Appellants, who were maimed in a hot air balloon accident in southeastern Pennsylvania in 2015, pursued appellate challenges to the District of Maryland’s rulings against them and in favor of T.H.E. Insurance Company (the “Insurer”) in an insurance coverage dispute. In federal court proceedings initiated in Maryland, Appellants sued certain of the Insurer’s named insureds, and a business called New Horizon Balloon Team (collectively, the “Insureds”) — for the gruesome injuries Appellants’ sustained in the balloon accident (the “damages lawsuit”). While the damages lawsuit was pending, the Insurer initiated these insurance coverage proceedings in the Eastern District of Pennsylvania, naming as defendants the three Insureds, plus Appellants. The district court awarded summary judgment in favor of the Insurer’s contention with respect to a $100,000 coverage limit for each balloon passenger. The Memorandum Opinion also rejected both of Appellants’ bad faith claims. Appellants appealed those rulings.   The Fourth Circuit affirmed. Applying Maryland principles of res judicata in this dispute, the court was satisfied that the coverage issue presented by the Insurer in these proceedings is not barred by the settlement agreement in the damages lawsuit. As such, the court agreed with the district court that Appellants are not entitled to a summary judgment award on the coverage issue on res judicata grounds. Further, the district court thus did not err in ruling Appellants were inside the balloon’s basket at the time of their injuries. As such, Appellants were “passengers” under the Policy and Coverage B’s limit of $100,000 per passenger applies. View "T.H.E. Insurance Company v. Melyndia Davis" on Justia Law

Plaintiff a commercial-real-estate broker specializing in tenant representation sued Newmark Southern Region, LLC (Newmark)—an international real-estate brokerage and advisory firm. Plaintiff alleged eight state law claims, including breach of contract. Newmark counterclaimed, alleging only breach of contract. The district court dismissed each of Plaintiff’s claims at the pleading stage, with the exception of his claim for breach of contract. Following the district court’s judgment against him, Plaintiff appealed. In addition to seeking reversal of the judgment, Plaintiff also sought reversal of the district court’s dismissal of his various claims at the pleading stage.   The Fourth Circuit concluded that this situation warrants vacatur and remand for dismissal without prejudice. The court reasoned that first Plaintiff and Newmark agree that complete diversity did not exist between them at the time of filing, given the North Carolina citizenship of at least one limited partner of Newmark Holdings, L.P.—a great-grandparent entity to Newmark. Consequently, the district court lacked subject-matter jurisdiction over Plaintiff’s claims against Newmark pre-consolidation, so it lacked the power to consolidate the lawsuits in the first place.   Further, neither side of this dispute lacked the means to ascertain Newmark’s citizenship at any point. Whether mutual contentment with the federal forum or genuine obliviousness brought the parties to this unfortunate juncture, the court explained that it will not condone the exercise of jurisdiction where it did not truly exist. View "Timothy Capps v. Newmark Southern Region, LLC" on Justia Law

Plaintiffs in this class action are a class of all West Virginia citizens who refinanced a total of 2,769 mortgages with Defendant Quicken Loans Inc. (now Rocket Mortgage, LLC) from 2004 to 2009, for whom Quicken Loans obtained appraisals from Defendant appraisal management company Title Source, Inc. (now Amrock Inc.) using a request form that included an estimate of value of the subject property. The district court certified the proposed class and granted summary judgment to Plaintiffs on three claims: unconscionable inducement under West Virginia Code Section 46A-2-121(a)(1); breach of contract; and conspiracy.   Previously the Fourth Circuit concluded that Plaintiffs had standing because all of the class members had paid “for independent appraisals that . . . they never received”. Three months later, the Supreme Court issued its opinion in TransUnion LLC v. Ramirez, which addressed Article III standing in the context of a class-action case. Having considered the parties' submissions, the Fourth Circuit concluded that the district court should apply TransUnion to the facts of this case in the first instance. Accordingly, the court vacated and remanded for further proceedings. View "Phillip Alig v. Rocket Mortgage, LLC" on Justia Law

Southern Farm Bureau Life Insurance Company (“Farm Bureau”) issued a term life insurance policy to S.M. S.M.’s husband, Plaintiff, who was the policy’s primary beneficiary. Farm Bureau received a notification from the Post Office indicating that S.M.’s address had changed. Farm Bureau sent its semiannual bill to S.M. at her South Carolina address, informing her that her payment was due on November 23, 2016. S.M. did not pay the bill. Plaintiff sued Farm Bureau in federal district court, seeking the policy’s coverage amount as well as excess damages for alleged unfair and deceptive trade practices on the part of Farm Bureau. He argued that Farm Bureau had not complied with a statutory notice requirement prior to canceling the insurance policy for nonpayment and he was therefore entitled to the policy’s benefits. The parties filed cross-motions for summary judgment, and the district court granted summary judgment to Farm Bureau.   The Fourth Circuit affirmed finding that Farm Bureau complied with the statute’s notice requirement. The court wrote that a literal interpretation of the statute’s language—referring to a notice being sent to the “last known post-office address in this State”—would not put S.M. on notice at all. Rather it would have Farm Bureau send “notice” to an address where it knows she no longer resides. Additionally, there is substance in Farm Bureau’s argument that a rigidly literal reading of the words “in this State” would require insurers to implement burdensome and nonsensical notice policies. View "Robert Whitmire v. Southern Farm Bureau Life Insurance Company" on Justia Law

The Tennessee Valley Authority sells its power to the BVU Authority in Virginia, one of its many customers. The BVU Authority in turn sells its power to local consumers who need electricity. Among those local consumers is Plaintiff, who believes that the TVA has a statutory duty to use the fruits of its sales to large industrial buyers to subsidize consumers’ electricity consumption. Plaintiff believes that a string of TVA rate changes, shifting costs from industry to consumers, were illegal. So he sued BVU Authority and TVA under three theories, which all more or less amount to claims that the TVA failed to live up to its statutory duties under Section 11. The district court dismissed all three claims because TVA’s rate-making authority is committed to agency discretion and thus unreviewable.   The Fourth Circuit affirmed the district court’s dismissal of all three of Plaintiff’s claims. The court explained that Section 11 of the TVA Act lays out broad policies and goals that operate more like aspirations than commands. It does not support any of the claims that Plaintiff offers against TVA or BVU Authority. TVA rate-making is a presumptively unreviewable category of agency action under 701(a)(2), and the policy-laden language of Section 11 does not provide any guidelines or limits to overcome that presumption. Because the TVA-BVU contract simply repeats the vague statutory language, Plaintiff’s contract claim is really a statutory claim in disguise, and Section 11 of the TVA Act does not provide a private cause of action. View "David Holbrook v. Tennessee Valley Authority" on Justia Law

The Board of Trustees of the Sheet Metal Workers’ National Pension Fund (“the Fund”) sought to recover a delinquent exit contribution from Four-C-Aire, Inc., a former participating employer, under Section 515 of the Employee Retirement Income Security Act of 1974 (“ERISA”). 29 U.S.C. Section 1145. The Fund claims Four-C-Aire’s obligation arose under a collective-bargaining agreement (“the CBA”) between the Sheet Metal Workers’ International Association Local Union No. 58 and the Central New York Sheet Metal Contractors Association, a multiemployer bargaining unit. According to the Fund, Four C-Aire signed on to this preexisting agreement while it was a member of the Contractors Association.   The Fourth Circuit affirmed, finding that Four-C-Aire adopted the agreement by its conduct. The court held that even if Four-C-Aire had preserved the issue, it’s meritless. The record contains several iterations of the written trust documents, including those imposing the exit-contribution requirement. And the Fund’s Director of Operations verified each version of the document in a declaration to the district court. Further, the court wrote there is no evidence the trust documents are invalid. In sum, Four-C-Aire offers no reason why the court shouldn’t enforce the plain terms of the agreement and trust documents, as ERISA requires. View "Board of Trustees v. Four-C-Aire, Inc." on Justia Law

Plaintiff entered into a share purchase agreement with Defendants for the sale of her business, which agreement the parties later amended (the contract, or the amended agreement). Plaintiff filed suit in December 2019 in North Carolina state court, alleging that Defendants had not made interest and earnout payments as required under the amended agreement. Defendants removed the case to federal district court in the Middle District of North Carolina, where they argued that the state or federal courts in New York were the exclusive forums for Plaintiff’s complaint under the contract’s forum selection clause. Defendants also argued that Plaintiff’s claims were not yet ripe because, at the time the complaint was filed, all payments that were due under the contract had been made. The district court remanded the case to the North Carolina state court, and Defendants appealed.   The Fourth Circuit initially concluded that Plaintiff’s claims are ripe, both as originally pleaded and under the facts developed prior to the district court’s judgment. The court also agreed with the magistrate judge that Plaintiff’s claims do not relate to a setoff and that under the contract’s forum selection clause, the state or federal courts in New York are the exclusive forums for Plaintiff’s  claims. The court therefore vacated and remanded with instructions that the district court transfer this case to the Southern District of New York. View "Pamela Whitaker v. Monroe Staffing Services, LLC" on Justia Law