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Insurance Benefits – Unreasonable Delay and Denial. Supreme Court of Colorado Decides Three Cases Against Insurance Companies.

In a trio of case opinions issued on May 29, 2018, – all written by Chief Justice Nancy Rice who will retire in June – the Colorado Supreme Court ruled against the arguments of insurance companies. 

Ninth Circuit: Seller is not liable for calls made by telemarketer in violation of the Telephone Consumer Protection Act

In a recent decision that may affect any company that sells products or services using telemarketers, the United States Court of Appeals for the Ninth Circuit affirmed the district court’s grant of summary judgment in Jones v. Royal Admin. Servs., Inc. in favor of a product seller, holding the seller was not vicariously liable for calls made by a telemarketer in violation of the Telephone Consumer Protection Act[1] (TCPA) because the telemarketer was an independent contractor.

Eleventh Circuit: Consumers may “partially revoke” consent to be called by automatic dialing systems

In a new decision that may have important implications for telemarketers and others using automatic dialing systems, the United States Court of Appeals for the Eleventh Circuit held in the case of Schweitzer v. Comenity Bank that the Telephone Consumer Protection Act (TCPA) allows a consumer to partially revoke his or her consent to receive automated telemarketing calls.

The Second Circuit issues potentially impactful ruling on revocation of consent to be called under the Telephone Consumer Protection Act when that consent is given as bargained-for consideration for a binding contract

Congress enacted the Telephone Consumer Protection Act, 47 U.S.C. § 227, et seq., (TCPA) to protect consumers from “[u]nrestricted telemarketing, which it determined to be “an intrusive invasion of privacy.” The TCPA prohibits, among other conduct, telephone calls to residential phone lines or cell phones using an artificial or prerecorded voice to deliver a message without the prior express consent of the called party.

When is a seller liable for illegal calls made by a third party telemarketer? Fleshing out vicarious liability under the Telephone Consumer Protection Act

Using a telemarketer to market goods or services can be extremely costly to the seller if the telemarketer conducts its business in a manner that violates the Telephone Consumer Protection Act (TCPA). Penalties for violations of the TCPA range from $500 to $1,500 per call. And with call or text campaigns that may reach thousands of recipients, or even millions – the potential liability can be astronomical. It should be no surprise TCPA class action lawsuits are flourishing.

Oklahoma – New Law Requires the Losing Party to Pay Attorney Fees

HB 1470, signed into law last week, does away with the “American Rule,” which impacts which party is responsible for attorney fees at the conclusion of a lawsuit. Set to go into effect in November 2017, the new law requires the court to award attorney fees to the prevailing party – paid for by the non-prevailing party.

Federal Court in Missouri holds technical failure to comply with the FCC’s TCPA opt-out notice requirements on fax advertisements does not confer standing on recipient who consented to receive the faxes

The FCC’s TCPA “opt-out” notice requirements for sending solicited faxes continues to be weakened.

Governor Greitens Orders Review of Every Missouri Regulation

On January 10, 2017, Missouri Governor Eric Greitens signed Executive Order 17-03 (the “Order”). Among other things, the Order compels all state agencies to review each and every Missouri regulation appearing in the Code of State Regulations that falls within their jurisdiction.

A federal district court in Missouri rejects an FDCPA claim based on the legal theory that post-judgment interest in Missouri nontort cases must be specifically awarded in the judgment to be collectable

We are pleased to report a victory in the Eastern District of Missouri in an FDCPA case concerning the collection of statutory post-judgment interest on an unpaid Missouri state court judgment.

Manufacturer’s Corner: A Word on Warranties of Future Performance

Courts sometimes have trouble determining whether a warranty explicitly extends to future performance.  A recent case provides refreshing clarity on the issue.

Manufacturer’s Corner: Climate Change and Consumer Protection Statutes

A new theory of securities fraud may prove important (and dangerous) to manufacturers.

Manufacturer’s Corner: Highlighting Some Important Distinctions Between UCC Article 2 and CISG

If you’re like many manufacturers who sell internationally, your standard terms and conditions provide that the UN Convention on Contracts for the International Sale of Goods (“CISG”) does not apply to your transaction.  But, maybe they don’t, or maybe your disclaimer is ineffective (it happens a lot).  In those instances, it’s important to understand where CISG differs from Article 2 of the Uniform Commercial Code, which typically covers sales of goods within the United States.

Manufacturer’s Corner: Delivery Terms Have Important Tax Implications for Missouri Manufacturers

Today’s column is prompted by a recent decision by the Supreme Court of Missouri, in which the Court denied a Missouri manufacturer a sales tax refund.

New Trademark Office Program Helps You Preserve Your Trademark Registration as Technologies Evolve

Starting September 1, the U. S. Patent and Trademark Office (USPTO) has instituted a pilot program to help you preserve your trademark registration if new technology replaces the format under which the underlying goods or services identified under the registration are offered for sale or provided to consumers.

A federal district court in California denies class certification to a nationwide putative TCPA class of consumers against a debt collector who allegedly made more than 500 million prohibited calls

The United States District Court for the Southern District of California recently issued an order denying class certification to a nationwide putative class of consumers against The CBE Group, Inc. (“CBE”), which alleged that CBE made over 500 million calls to these consumers’ cell phones without their prior express consent in violation of the Telephone Consumer Protection Act, 47 U.S.C. § 227, et seq. (“TCPA”).  Blair, et al. v. The CBE Group, Inc., No. 3:13-cv-00134-MMA-WVG (S.D. Cal. August 26, 2015).

The Sixth Circuit sheds light on meaning of “prior express consent” under the TCPA in a case involving hundreds of calls to a debtor’s cellphone by a creditor using an autodialer

One thing that telemarketers and other companies that communicate with their customers by calling their customer’s cellphones crave is clarity under the Telephone Consumer Protection Act (“TCPA”), 47 U.S.C. § 227.  The Sixth Circuit recently shed some light on the meaning of “prior express consent” under the TCPA in connection with calls by a creditor to its debtor’s cellphone in the case of Hill v. Homeward Residential, Inc., No. 14-4168 (6th Cir. August 21, 2015).

The Eleventh Circuit rules that Capital One is not a debt collector under the FDCPA with respect to defaulted credit card debt it acquired from HSBC

In the case of Davidson v. Capital One Bank (USA), N.A., No. 14-14200 (August 21, 2015), the Eleventh Circuit had occasion to decide whether a bank that collects on defaulted debt it acquired from another bank is a “debt collector” under the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. §§ 1692-1692p.

Manufacturer’s Corner: Conflict Mineral Reporting Requirement Still Illegal

On August 18, 2015, the D.C. Circuit Court of Appeals, sitting en banc, upheld its prior order striking a portion of the SEC’s conflict mineral rule.

Manufacturer’s Corner: The Danger of Conditioning Your Sale on the Buyer’s Acceptance of Your Terms

If you review the terms and conditions given by many manufacturers in their invoices (including, probably, yours), you likely will find a provision that says something to the effect of “we agree to sell you this product if, and only if, you agree to each of these terms and conditions.”  It’s a common term, and there’s a good reason for it: it can counteract standard form language in the buyer’s purchase order that you don’t like.

Using Alack’s “Magic Word” in Exculpatory Contract Provisions

There is almost never such a thing as a magic word anymore.  In medieval England, people would recite things three times to get magical protection (“third time’s the charm”).  Similarly, in the earliest days of the law, parties would write contracts “under seal” that protected them, regardless of whether the contract was otherwise valid.  That is what a magic word does; it protects you just by being there.  Today, the law hates magic words; courts constantly dig into the hidden meaning behind material terms and the intent and understanding of the parties who use them.  Because there is almost never such a thing as a magic word these days, when one does occur business owners would do well to take note.

Supreme Court Upholds Limit On Royalties To Life Of Patent, But Other Strategies Exist To Extend Life Of Compensation

A patent issued under the U.S. Patent Laws has a finite life, which is 20 years from the date of filing.  A strategy to monetize a patent through licensing must take into consideration that finite life span because after the 20 year patent term, the underlying invention falls into the public domain.  A patent holder may not continue to receive license royalties after the patent’s expiration, as long ago decided by the U.S. Supreme Court in Brulotte v. Thys Co., 379 U. S. 29 (1964).

Manufacturer’s Corner: Breach of Warranty Claims and CGL Coverage

A court recently held that a CGL insurer owed a duty to defend its insured accused of breaching express and implied warranties.

Manufacturer’s Corner: Manufacturer Gets Second Chance Following Unsuccessful Litigation With Supplier

This is a story about a U.S. manufacturer who got into a dispute with its Chinese supplier. 

Western District of Missouri Bankruptcy Court Finds No FDCPA Violation for Proof of Claim Filed on Time-Barred Debt

Recently, several courts across the country have considered whether filing a proof of claim on debt that is barred by the statute of limitations violates the Fair Debt Collection Practices Act (“FDCPA”). The increased attention on this issue was sparked by the Eleventh Circuit’s decision in Crawford v. LVNV Funding, LLC, 758 F.3d 1254 (11th Cir. 2014). The Eleventh Circuit held that filing a proof of claim on debt that is barred by the applicable statute of limitations violates the FDCPA. After the Eleventh Circuit’s decision, many other courts have decided the issue, and the results of these cases have been mixed. Last week, the Bankruptcy Court for the Western District of Missouri weighed in, and it found that there was no violation of the FDCPA. Dunaway v. LVNV Funding, LLC, No. 14-04132-drd, Adv. No. 14-4132, Doc. 29 (Bankr. W.D. Mo. May 19, 2015).

Manufacturer’s Corner: FTC Announces Nothing

In 2011, the FTC requested public comment regarding its interpretations, rules, and guides issued under the Magnuson-Moss Warranty Act.  After four years of hard work, the FTC today issued a press release headlined “FTC Will Keep Consumer Product Warranty Rules in Current Form with Some Modifications.”

Can a Rule 68 offer of judgment that offers complete relief to the named plaintiff in a putative class action moot the entire case? While federal courts continue to reach different conclusions, the Supreme Court may finally weigh in

One tactic often used with varying degrees of success to thwart putative class actions brought under various federal statutes is to file an early offer of judgment under Rule 68 that provides the named plaintiff or plaintiffs complete relief in an effort to moot the putative class claims at the inception of a class case.

Manufacturer’s Corner: Eighth Circuit Offers Expansive View of Economic Loss Doctrine

If you regularly read this column, you know that one of the things we spend a lot of time discussing is working appropriate protections into your contracts.  Plaintiffs’ attorneys understand that, and often try to work around those protections by restyling breach of contract or breach of warranty actions as tort claims – that is, claims for negligence or fraud or the like.

What does it mean to be an “Additional Insured?”

The answer lies in the details of the underlying contract and the details of the underlying insurance policy. Today more and more companies are focusing on risk transfer mechanisms within the contracts they have with their vendors, suppliers, contractors and sub-contractors.

Manufacturer’s Corner: Warranties of Future Performance

File this one under “does your warranty really say what you think it says?”

A federal district in Pennsylvania dismisses a putative FDCPA class action based on the filing a proof a claim on a time-barred debt in a Chapter 13 bankruptcy

I recently wrote about a decision from a federal district court in Alabama that sidestepped the Eleventh Circuit’s Crawford decision by finding that the Bankruptcy Code (the “Code”) and the Fair Debt Collection Practices Act (“FDCPA”) were in irreconcilable conflict, and the FDCPA gave way to the Code on the question of whether the mere act of filing a proof of claim on a stale debt in a Chapter 13 bankruptcy violated the FDCPA.

Manufacturer’s Corner: The “Ambush Election” Rule Is In Effect

Beware union organizers loitering around your premises!

Federal Judge in California brings down the curtain on a FCRA class action against Paramount Pictures

Class actions alleging technical violations of the Fair Credit Reporting Act (FCRA) against employers who obtain consumer reports on job applicants are all the rage, generating large settlements and headlines (at least in legal circles).

Manufacturer’s Corner: Warranty Disclaimers By Intermediate Sellers

If you’re like many manufacturers, you have no dealings with the end user of your product.  Rather, you sell to a distributor or other intermediate seller, who then sells your product to the end user.  We have previously discussed disclaiming your implied warranties against your intermediate buyer and whether that disclaimer travels “downstream” to the end user, but we haven’t addressed whether a disclaimer made by the intermediary can protect you in a suit by the end user if, say, you failed to disclaim your implied warranties yourself or if for some reason they are not effective against the end user.

The bona fide error defense to FDCPA claims is alive and well in the Eleventh Circuit

In the case of Isaac, et al. v. RMB, Inc., et al., No. 14-11560 (11th Cir. March 17, 2015), the Eleventh Circuit recently upheld summary judgment in favor of a debt collector based on the affirmative defense of bona fide error.  The case presents a good opportunity to see what type of evidence is needed to prevail on the defense.

Manufacturer’s Corner: The Interplay Between Limited Remedies and Damages Limitations

I previously have urged you to limit the remedies available under your express warranty (e.g. to repair or replacement), and to disclaim liability for incidental and consequential damages.  Here, we’ll discuss a common argument made by people who want to render your efforts meaningless.

A federal district court sidesteps Crawford in dismissing claim for FDCPA violation based on filing a proof of claim on a time-barred debt in a Chapter 13 bankruptcy

In a 2014 decision rued by debt collectors everywhere, the Eleventh Circuit in Crawford v. LVNV Funding, LLC, 758 F.3d 1254 (11th Cir. 2014) ruled that filing a proof of claim to collect a time-barred debt in a Chapter 13 bankruptcy violated the Fair Debt Collection Practices Act

Manufacturer’s Corner: Just What Is the “Ordinary Use” for a Product Anyway?

For this installment, we turn to an aspect of the implied warranty of merchantability that has not gotten its fair share of attention here: what is “the ordinary purpose” for which your product is used?  It seems like a simple question, but it can be deceptively tricky.

Manufacturer’s Corner: Merchants, Battles of the Forms, and Forum-Selection Clauses

If you read this column with any regularity, it will not surprise you that I was thrilled to read this introduction to a recent court opinion: “The motions to dismiss in this case present a difficult legal issue, as if a civil procedure professor and a Uniform Commercial Code professor conspired on a law school exam question[.]”

Illinois court rules that engineering firm that prepared and recorded plat for new subdivision is not entitled to a mechanic’s lien

An Illinois appellate court recently had an opportunity to decide whether an engineering firm hired to plat undeveloped land for a new subdivision was entitled to file and enforce a mechanic’s lien after the firm was not paid in full for its work.

Manufacturer’s Corner: The West Coast Port Labor Dispute and You

Manufacturer’s Corner. So, there’s a big shipping backlog forming out west while port owners and the longshoremen work a few things out.  How’s that affecting your supply contracts?

Home mortgage lenders hire law firm to send 88,937 collection letters to defaulted borrowers: Borrowers allege this violated the FDCPA and a federal judge certifies the class

In Lori Jo Vincent, et al. v. The Money Store, Inc. et al, No. 03 cv 2876 (S.D.N.Y.  February 2, 2015), the United States District Court for the Southern District of New York certified a class of home mortgage borrowers who defaulted on their loans and received uniform “breach letters” from a law firm sent on behalf of the defendant mortgage servicing company and the defendant lenders. 

Manufacturer’s Corner: Disclaiming Implied Warranties to Remote Purchasers

As I’ve noted before in these columns, an implied warranty disclaimer is an essential part of your terms and conditions.  But giving an effective disclaimer is sometimes easier said than done, especially when you do not sell your product directly to the end user, but rather through a wholesaler, retailer, or other intermediary.

Manufacturer’s Corner: President Proposes New Federal Data Breach Notification Law

Shortly before issuing his State of the Union address, President Obama released a proposed federal law mandating notification to individuals whose personal information is compromised in certain data breaches.  Not long ago, I wouldn’t have written about this issue in a Manufacturer’s Corner column, but since I recently decided that the Internet of Things will expose manufacturers to litigation over data privacy, it seems appropriate.

Unfair Competition: Righting Wrongs

If you’re in business, chances are you’ve experienced unfair marketing tactics by one or more of your competitors. Such tactics may include false or misleading advertising or representations concerning the nature or quality of the competitor’s products or services. Or, they may consist of false or misleading statements about what you sell.
You need not stand by while your competition engages in such underhanded tactics.

Is a communication between a debt collector and a credit reporting agency a communication “in connection with the collection of any debt” for purposes of the FDCPA?

In a case in which the Eighth Circuit found against a debtor on her claim against a collection agency based on the FDCPA, the court nevertheless adopted a standard followed by other circuits in defining when a communication is “…in connection with the collection of any debt” for purposes of the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. §§ 1692 et seqSarah McIvor v. Credit Control Services, Inc., No. 14-1164 (December 4, 2014).

The Sixth Circuit rules that making an offer to settle a valid but time-barred debt may give rise to an FDCPA violation.

In a case that will likely cause debt collectors seeking to collect time-barred obligations grave concern, the Sixth Circuit recently ruled that making an offer to settle a time-barred debt at a discount could mislead an unsophisticated consumer to believe the debt could be enforced in court in violation of the Fair Debt Collection Practices Act.  Buchanan v. Northland Group, Inc., No. 13-2523 (January 13, 2015).

Manufacturer’s Corner: New Law Exempts Non-Financial End Users From Margin Requirements For Uncleared Swaps

Here is good news for a certain subset of Manufacturer’s Corner readers.

Manufacturer’s Corner: A Word on Consumer Class Actions

This is not a litigation column, but I’m a trial attorney, so litigation is always on my mind.  I’ve been hearing a lot of chatter lately about consumer class actions.  Specifically: what must a putative consumer class do to show that the class members are ascertainable – that is, that the court and the lawyers and the class members can figure out who is in the class and who is not.

Manufacturer’s Corner: Don’t Fall For Your Own “No Oral Modification” Clause

Here’s a thing that probably appears in your standard terms and conditions: “This agreement cannot be modified or rescinded, except in writing signed by an authorized agent of [your company].”  You can go ahead and check.  It’s probably down toward the bottom, above the miscellaneous provisions like choice of law.

Manufacturer’s Corner: The Importance of Notice Provisions

An easily-overlooked portion of a contract for the sale of goods is the one that addresses what notice the buyer must give the seller in the event the goods do not conform to contract specifications or warranties.  These provisions warrant your close attention, however, because they can be outcome-determinative in the event of litigation over the alleged non-conformity.

Manufacturer’s Corner: Missouri Supreme Court Limits Scope of Manufacturers’ Sales and Use Tax Exemption

Here is a troubling new case from the Missouri Supreme Court.  And I don’t mean troubling in the abstract sense of “oh maybe there could be liability down the road if you don’t do this,” which is pretty much the bread and butter of this column.  I mean troubling in the “you may have already botched this, so you better pull out the books and call the accountants and lawyers” sense.

Manufacturer’s Corner: Incorporating Software Into Your Products (Part 3)

Now that we have completed our brief detour into what the Supreme Court could maybe do with the BP oil spill case if it decides to do anything with it, we resume our ongoing series on what law applies when you incorporate software into your products.

Manufacturer’s Corner: Supreme Court Considering Case With Important Implications for Manufacturers

We take a break from our series on incorporating software into your products to talk about a case the Supreme Court is considering that may prove significant to manufacturers.  This column is not typically the place to go for predictions on what the Supreme Court may do, but I want to bring this case to your attention, and circumstances are forcing me to do it now rather than later.

Manufacturer’s Corner: Incorporating Software Into Your Products (Part 2)

In the first installment of this series, we discussed the general scope of Article 2 of the Uniform Commercial Code, and, in the broadest terms, whether and when the purchase or sale of software falls within that scope.  In this installment, we’ll move toward our goal of understanding when your purchase or sale of software is governed by Article 2 by looking at how the question has been treated by various courts over time.

Manufacturer’s Corner: Incorporating Software Into Your Products (Part 1)

This column spends a lot of time talking about Article 2 of the Uniform Commercial Code.  A lot of time.  That’s because it’s a column directed to manufacturers, and Article 2, generally speaking, deals with sales of goods.But that “generally speaking” glosses over quite a bit, and it can cause us to miss important issues.

Loan officer’s statements about lien priority in home mortgage transaction do not give rise to borrower’s claims for breach of fiduciary duty and negligent misrepresentation against lender

The North Carolina Supreme Court recently analyzed whether a loan officer owes a borrower a fiduciary duty in a home mortgage transaction.  Dallaire v. Bank of Am., ___N.C.___, 747 S.E.2d 535 (2013), decided June 12, 2014, No. 51PA13.  Jacques and Fernande Dallaire (“Borrowers”) purchased a home as their primary residence in 1998.  Seven years later they filed Chapter 7 bankruptcy due to unrelated business debts. 

Manufacturer’s Corner: Apple Revisited

Remember when I wrote a glowing column about a Master Development and Supply Agreement Apple and its lawyers drafted?  It was one of the most-read posts I’ve written, so I bet a good number of you do.  Since the post was so popular, and since there have been some, well, we’ll say “unanticipated consequences” for Apple, I thought it warranted some follow up.

Class certification denied to putative class alleging Quest Diagnostics engaged in consumer fraud by routinely overbilling patients

The Third Circuit recently affirmed denial of certification of a class of patients who alleged that the medical testing company, Quest Diagnostics, Inc., routinely overbilled patients.  See Grandalski, et a. v. Quest Diagnostics, Inc., et al., No. 13-4329 (September 11, 2014).  Quest Diagnostics is the country’s largest provider of medical testing.

Manufacturer’s Corner: Obligatory Post on the Internet of Things

There’s an unwritten rule that if you blog about manufacturing, you must blog about the Internet of Things.  I blog about manufacturing, so here we are.

Manufacturer’s Corner: Apple’s Master Course on Master Supply Agreements

This post comes to you based on a story by the always-excellent Matt Levine of BloombergView. Evidently Apple loaned a company called GT Advanced Technologies a bunch of money so GTAT could develop and supply Apple with sapphire screens for a long time. Anyway, there may have been a default under part of that agreement, and GTAT filed for bankruptcy protection because that default was going to ruin everything (at least according to industry speculation).

Manufacturer’s Corner: A Brief Return to Our Discussion of Statutes of Limitations

A thing I like to do is approach people at parties and other gatherings and ask them if they know they can use contracts to shorten some statutes of limitations.  Usually I get quizzical looks, but I guess the context just worked better when I mentioned it while speaking at a recent event put on by the Kansas Bar Association.  An especially attentive participant asked a good follow-up question that warrants some discussion: can you shorten the limitations period for fraud?

Manufacturer’s Corner: Anatomy of a Limited Warranty (Part 5)

In the first four installments of this series, we covered the essential components of an effective limited warranty.  But each of those installments carried an important caveat: that you were not selling consumer goods.  In this fifth and final installment of the series, we turn our attention to additional warranty issues to consider when selling consumer goods.

Manufacturer’s Corner: Anatomy of a Limited Warranty (Part 4)

We pick up our discussion of effective limited warranties by addressing limitations of remedies.

Putative class action alleging United Airlines breached its frequent-flyer program is dismissed by the Seventh Circuit

The Seventh Circuit recently affirmed dismissal of a putative class action alleging that a major airline improperly calculated frequent-flyer miles.  In Han v. United Continental Holdings, Inc. et al., No. 13-3871, decided August 11, 2014, the plaintiff, Hongbo Han, filed a putative class action against United Air Lines, Inc. and related entities (“United”) alleging it breached the terms of its frequent-flyer program, called the “MileagePlus Program.”

Home builder’s Commercial General Liability Insurance Policy does not cover faulty workmanship of subcontractors

In the case of J-McDaniel Construction Co., Inc. v. Mid-Continent Casualty Company, the Eighth Circuit, applying Arkansas law, had occasion to explore the scope of a home builder’s coverage under its Commercial General Liability Insurance Policy. No. 13-267, August 4, 2014.

Manufacturer’s Corner: Anatomy of a Limited Warranty (Part 3)

In our last installment in this series, we looked at the express warranty portion of an effective limited warranty.  We now turn our attention to the importance of shortening the limitations period for bringing a warranty claim.  Please remember that, for our purposes here, we’re assuming a non-consumer sale.

Manufacturing Custom-made Goods in the United States

Pat and I recently had the opportunity to publish an article with Practical Law, called “Manufacturing Custom-made Goods in the United States.”

Manufacturer’s Corner: Anatomy of a Limited Warranty (Part 2)

In our last installment, I introduced the importance of making your warranty terms clear.  Now, we turn to the specifics, beginning with the express warranty itself.  Here are some of the boxes you need to check when reviewing your express warranty.

Are federal courts committing a FCRA violation when lawyers pay filing fees online?

Fellow federal practitioners, could something most of us do on a regular basis be a money making opportunity we’ve simply overlooked? An enterprising lawyer in the Northern District of Illinois thought so.  Unfortunately, in the case of Bormes v. United States of America, No. 13-1602, (7th Circuit), handed down July 22, 2014, the Seventh Circuit answered in the negative.

Antitrust “market allocation” claims against nation’s two biggest grocery wholesalers survive summary judgment

In In re: Wholesale Grocery Products Antitrust Litigation, No. 13-1297 (May 21, 2014), the Eighth Circuit allowed an antitrust case brought by a small town, family owned grocery store in Iowa, D&G, Inc.,[1] to continue against the nation’s two largest wholesale distributors, SuperValu, Inc. and C&S Wholesale Grocers, Inc., finding disputed facts prevented summary judgment.

Update on rideshare battle in St. Louis: Court issues preliminary injunction against Lyft

I previously wrote about the legal battle in St. Louis brought by Metropolitan Taxicab Commission (“MTC”) against the rideshare app company Lyft in the Circuit Court of the City of St. Louis, Missouri, Case No. 1422-CC0089-01. My comment can be found here.
As I discussed, the court entered a temporary restraining order prohibiting Lyft from operating in St. Louis and St. Louis County. On July 14, 2014, the court again ruled in favor of the MTC, granting a preliminary injunction prohibiting Lyft from operating in the St. Louis area until a final decision is reached on the merits of the case.

Manufacturer’s Corner: Anatomy of a Limited Warranty (Part 1)

It’s a sad fact of life at companies and law firms that sometimes things are done a certain way just because that’s how they’ve always been done. Part of the reason this column spends so much time talking about your terms and conditions, however, is because that’s dangerous: how you do things now should be informed by the past, but not bound by the past.

Eighth Circuit continues to hold that Missouri’s economic loss doctrine bars negligent misrepresentation claims involving allegedly defective or unsuitable products

Manufacturers and lessors of equipment and other products doing business in Missouri can take heart that the Eighth Circuit has issued its third opinion in the past year applying Missouri’s economic loss doctrine to bar negligent misrepresentation claims in cases involving allegedly defective or unsuitable products. 

Manufacturer’s Corner: Revocation of Acceptance and the Statute of Frauds

I’m going to break my self-imposed rule of writing for manufacturers instead of lawyers. This post is some pretty in-the-weeds stuff, but the topic has been on my mind and I think it’s interesting. If you have opinions on it, I’d love to hear them.

Manufacturer’s Corner: Dealing With Sales on Approval or Return

Expanding on our recent discussion about how your shipping terms can affect risk of loss in the product you sell, let’s turn to other contract provisions that implicate the same issue: sales on approval or return.

Manufacturer’s Corner: Responding to Claims That Your Goods Do Not Conform to Contract Specifications

It’s inevitable: at some point, you will ship goods to your buyer, and the buyer will complain that they don’t conform to the contract specifications.  When you’re dealing with a small shipment or a great customer, often the simplest solution is to accept the return and send replacement goods.  Other times, however, you’ll be dealing with a major shipment or a problem customer, and you must be certain that you protect yourself while responding to the customer’s concerns.

Manufacturer’s Corner: When Bankruptcy and Your Shipping Terms Collide

In recent installments of the Manufacturer’s Corner, we have discussed how to protect yourself from insolvent customers and how your shipping terms can expose you to unexpected risk. Thanks to the Bankruptcy Court for the Eastern District of Pennsylvania, we can explore how those two issues play together.

Manufacturer’s Corner: Recent Development in Implied Warranties (Part 2)

We continue our discussion of June’s interesting implied warranty cases with a trip south to the Supreme Court of Texas.  As I mentioned in the previous installment of the Manufacturer’s Corner, the Court declared a simple, bright-line rule on how a valid disclaimer of the implied warranty of merchantability affects remote purchasers.

Manufacturer’s Corner: Recent Developments in Implied Warranties

In this head-scratcher of an opinion, the Michigan Court of Appeals makes three legal conclusions that will shock practitioners.

Manufacturer’s Corner: Protecting Against the “Efficient Breach”

The Oregon Supreme Court has given us a great platform to discuss what happens when a buyer simply decides that breaching the contract is a better idea than performing.  It’s an important case to consider, both in your capacity as a seller of goods, and in your capacity as a frequent buyer of goods under long-term sales contracts.

Manufacturer’s Corner: Can You Prove the Contents of Your Shipment?

In a happy coincidence of timing, the Eleventh Circuit Court of Appeals recently issued an entertaining opinion addressing the Carmack Amendment, which is a federal law limiting the liability of motor carriers for loss or damage of goods during shipment. The opinion will allow us to continue our discussion of mitigating shipping risks, introduced in the last installment of this column.

Manufacturer’s Corner: Are Your Shipping Terms Exposing You to Unexpected Risk?

Today we continue our review of your terms and conditions to make sure they are appropriate for you.  Manufacturers are often surprised to learn that their shipping terms can be a significant source of risk.  Let’s explore that risk – and learn how to guard against it – by beginning with the basics.

Manufacturer’s Corner: EPA Issues Final Rule on Cooling Water Intake (Again)

After much legal wrangling over earlier rulemaking efforts, on May 19 EPA issued a new final rule pursuant to Section 316(b) of the Clean Water Act.

FDCPA Summary Judgment Victory

We are pleased to report a victory in the Eastern District of Missouri in an FDCPA case.

It’s a match: federal district court in New York certifies rare nationwide class on fraud claim against “It’s Just Lunch” matchmaking company

A rare nationwide class of plaintiffs in a fraud action was certified by the United States District Court for the Southern District of New York in the case of Rodriguez, et al. v. It’s Just Lunch International, Inc., et al., No. 07 Civ. 9227 (SHS), May 14, 2014.
As everyone knows from its advertising, It’s Just Lunch (“IJL”) provides personalized matchmaking services nationally through franchises.  The plaintiffs proposed that both a nationwide class of customers and a New York specific class of customers be certified.   The crux of the plaintiffs’ nationwide fraud claim was that they were enticed to pay for IJL’s services by means of corporate-mandated misrepresentations repeated by individual IJL employees.  Specifically, plaintiffs allege that IJL required its salespeople to use a corporate prepared uniform script that told prospective customers that IJL had at least two matches in mind for those customers’ first dates – even if this statement was not true.

Manufacturer’s Corner: A Primer on “Vouching In”

Here at the Manufacturer’s Corner, we typically focus on litigation avoidance rather than litigation tactics. After all, this column is written for manufacturers, not lawyers. But we want to take a moment to address a procedure called “vouching in,” because (a) it can be a useful tool for you, and (b) if somebody is trying to vouch you into litigation, you need to recognize what is happening and understand the consequences.

Contracts for Contractors – A Best Practices Guide (Part Two)

In my last post, I discussed the fact that the most important tool for a contractor is your written contract, which can help build a customer’s confidence in your company and avoid the types of misunderstandings and unrealistic expectations that ultimately can lead to a breakdown of the customer relationship, jeopardize the project and result in litigation.

Manufacturer’s Corner: Dealing With Your Insolvent Buyer

It’s unfortunate, but it happens: you reach a deal with your customer and prepare to perform your side of the agreement, only to discover that your buyer is insolvent or close to it. It is essential that you having a working knowledge your rights in this situation, because time is of the essence.

Contracts for Contractors – A Best Practices Guide

The most important tool for a contractor is your written contract. A good solid contract is the foundation for a positive experience for both you and your customers. It establishes a relationship with your customers, and builds their confidence in you and your company. More importantly, it helps to prevent misunderstandings and false expectations that can lead to a breakdown in your customer relationship, jeopardize the project and result in litigation.

Manufacturer’s Corner: Implied Warranties, Part 6

We bring our series on implied warranties to a close with a discussion about the consequences of breaching an implied warranty. The general rule is that the damages for breach of warranty are the difference in value of the goods as delivered and the value of the goods as promised. But, that simplistic statement glosses over many important issues that you need to consider in evaluating how to price your product.

Manufacturer’s Corner: Should You Opt Out of the CISG?

So far, the Manufacturer’s Corner has usually assumed that your contract will be controlled by the law of a U.S. jurisdiction that has adopted Article 2 of the Uniform Commercial Code. But that may not always be the case.  In some instances, you may sell non-consumer goods to a company that is deemed to have its place of business outside the United States, and that place of business may be in a country that is a party to the U.N. Convention on Contracts for the International Sale of Goods (“CISG”). Although the provisions of CISG are similar to the provisions of Article 2, there are important differences both in the substance of the rules and in some procedural matters.

Eighth Circuit Rules that Chiropractor who had license suspended prior to seeking treatment for alleged disability does not qualify for disability income benefits

The Eighth Circuit recently handed down a decision determining whether a chiropractor whose license to practice was suspended prior to a purported diagnosis of disability qualified for disability payments under two disability insurance policies he maintained.  Cich v National Life Ins. Co. et al., No. 12-3223, April 8, 2014.

Is it Kosher? Eighth Circuit rules buyers of hot dogs who alleged products were not 100% kosher as advertised lacked standing because they did not allege the actual products they purchased were defective

The Eighth Circuit, in Melvin Wallace, et al. v. ConAgra Foods, Inc., No. 13-1485, April 4, 2014, recently addressed the requirements of adequately pleading an actual injury in fact sufficient to maintain standing in federal court in the context of an allegedly defective product – in this case, kosher hot dogs. The plaintiffs are consumers who claim that some of the hot dogs they purchased from Hebrew National are not 100% kosher, as the label reads. These individuals sued Hebrew National’s parent company, ConAgra Foods, Inc., in Minnesota state court, seeking to represent a class consisting of all Hebrew National buyers in the country over a multi-year period.

Manufacturer’s Corner: Implied Warranties, Part 5

This post is prompted by a recent BloombergBusinessweek article reporting that the American Tort Reform Association “announced a ‘multiyear, multistate campaign to reform [state consumer protection laws].’”  Those laws address a host of issues, many of which are not particularly important to manufacturers.  But, they can serve as a workaround for plaintiffs who want to circumvent a warranty disclaimer and, accordingly, they are important to consider in this series.

Need a Lyft? St. Louis judge issues restraining order against rideshare app in St. Louis City and County

A St. Louis Circuit Court Judge, David Dowd, entered a temporary restraining order finding that immediate and irreparable harm will or may result in the form of risk to the public by allowing the online ride share app Lyft to engage in the business of transporting passengers in commerce without being duly licensed under the Metropolitan Taxicab Commission Vehicle for Hire Code. The relief granted in the restraining order is quite sweeping: it requires Lyft to “…disable its software application from use by prospective riders within the City of St. Louis or St. Louis County.”

Manufacturer’s Corner: Implied Warranties, Part 4

In each of Parts 1, 2, and 3 of this series on implied warranties, we urged you to disclaim your implied warranties, and promised that we would soon tell you how. In this post, we make good on that promise.

Landlords Beware: Court rules that a new owner’s failure to give a tenant timely notice of the purchase of rental property bars action for unpaid rent

Thinking about buying rental property in Missouri?  If you are, make sure you review all relevant statutes or, better yet, give us a call. 
The recent opinion handed down by the Missouri Court of Appeals in Investors Alliance, LLC v. Bordeaux, No. ED99804 (April 15, 2014), serves as a cautionary tale for unwary buyers of rental properties.

Manufacturer’s Corner: SEC’s Final Rule on Conflict Minerals Partially Stricken by D.C. Circuit

In 2010, Congress tasked the SEC with imposing disclosure requirements on reporting company manufacturers if so-called “conflict minerals” are “necessary to the functionality or production of [their] product[s].”  On April 14, the D.C. Circuit struck down part of the SEC’s final rule, but left most of it intact.

The Heartbleed Paradox

Data breaches have been big news lately.  Hot on the heels of revelations by major retailers that hackers were able to obtain personal information about their customers, a vulnerability in Open SSL was made public on April 7.  The vulnerability, known colloquially as Heartbleed, allowed easy access to sensitive information held by a host of major companies, including customer passwords.

Manufacturer’s Corner: Implied Warranties, Part 3

We now turn to the implied warranty of fitness for a particular purpose. This is an important one, because it examines not only how your product should perform as a general matter, but how the product should perform with respect to specific customers.

Manufacturer’s Corner: Know Thy Outside Sales Representative

Thank you for bearing with us while Pat and I prepared for trial.  The case ended up settling at the eleventh hour, but we learned some valuable lessons from it.  Please indulge this detour from our ongoing series on implied warranties, which will resume shortly.
We represented a manufacturer (of course).  The plaintiff contended that he was owed a commission on our client’s sale of a substantial piece of equipment, pursuant to an alleged oral agreement he entered with an employee of our client.  Our client’s position was that no such contract existed and, even if one did, the plaintiff failed to perform under it (long story).
The plaintiff faced a series of obstacles in recovering from our client, and those obstacles will serve as good learning tools for manufacturers.

Collection Fees Based on Percentage of Debt Violates FDCPA

For convenience, when collecting a debt, lenders may be tempted to simply add a percentage of the outstanding balance as the collection costs, rather than determining the actual costs of collection. The Eleventh Circuit, in the recent case of Bradley v. Franklin Collection Service, Inc., determined that, even in situations where the debtor has agreed to pay all costs of collection, this practice violates the Fair Debt Collection Practices Act (“FDCPA”).

Manufacturer’s Corner: The Unenumerated Implied Warranties

This post continues our series on implied warranties under the Uniform Commercial Code (“UCC”). In our last installment, we discussed the most-litigated implied warranty, the warranty of merchantability. Here, we go to the other extreme and discuss the least-litigated – and often forgotten – implied warranties: those that aren’t actually enumerated in the UCC.

Seventh Circuit tells debtor who attempted to evade creditor by transferring assets to new entity after collection lawsuit was filed to heed the old adage: “When you’re in a hole, stop digging”

Every so often, a debtor tries to evade creditors simply by transferring assets to another entity owned or controlled by the same principals. The Seventh Circuit, applying Illinois law, recently handed down an opinion dealing with this exact scenario in the case of Centerpoint Energy Services, Inc. v. Halim, Nos. 13–1797, 13–1807, (7th Circuit, February 18, 2014). The defendant debtor and its principals owned numerous rental properties in the Chicago area and contracted with plaintiff, a natural gas supplier, to buy natural gas for those properties. Defendant stopped paying plaintiff and racked up $1.2 million in unpaid gas bills.

Idaho Supreme Court: No Implied Warranty Claims By Remote Purchasers (Usually)

We have written before about the need for clarity as to whether vertical contractual privity is an element of a breach of implied warranty claim under Section 2-314 of the Uniform Commercial Code.  Idaho may not have reached that lofty goal quite yet, but it recently clarified that the answer is generally “yes.”

Manufacturer’s Corner: Implied Warranties, Part 1

If you only read one series in the Manufacturer’s Corner, I hope it’s this one.  In this series, we will discuss the implied warranties that come with your product unless you disclaim them.  Without a working knowledge of these warranties, you may be breaching contract terms you didn’t know existed.  And even worse, you are inviting a court to second-guess your determinations of what your industry and your product require.  Please follow us carefully through this series.

Ninth Circuit denies class certification to a putative class of retail customers who rented tools from Home Depot, finding each member would have to demonstrate they were exposed to misleading information during the transaction

The Ninth Circuit recently denied class certification to a putative class of individuals who rented tools from Home Depot stores in California.  In Berger, et al v. The Home Depot, Inc., No. 11-55592, February 3, 2014, the named plaintiff alleged that Home Depot automatically imposed a ten percent surcharge for a damage waiver on tool rentals in its California stores and failed to inform its customers that the surcharge was optional and could be declined.  The plaintiff alleged various causes of action against Home Depot, including a claim for unfair competition. 

Responding to Data Breaches: What Should a Federal Law Look Like?

Nearly every state has its own statute on responding to data breaches, and each of them imposes different obligations and penalties.  So, if you do business nationwide and you are the victim of a data breach, the laws of 47 jurisdictions are there to add insult to injury.  That’s why it is so pleasing to see that federal legislators are looking at imposing a federal law on point.  What should such a bill include?

FCC Seeks Comment on a Controversial Rule and on a Petition Filed by Spencer Fane Britt & Browne

The Federal Communications Commission (“FCC”) has solicited public comment on its rule that requires certain opt-out language on faxes for which the recipients have agreed to receive. If the language is not included, the fax sender is subject to statutory damages.  Seizing on this rule, class action lawsuits have proliferated.  In these lawsuits, plaintiffs are seeking statutory damages—millions of dollars in damages—for engaging in consensual communications.

Third-Party Claims under the Fair Debt Collection Practices Act

A recent decision from the Seventh Circuit reminds creditors, including banks, that the provisions of the Fair Debt Collection Practices Act (the “FDCPA”) may apply to parties other than the debtor.  In the case of Todd v. Collecto, Inc., a man brought claims under the FDCPA against a debt collection company that contacted him with respect to a debt owed by the man’s mother. 

Manufacturer’s Corner: Forming the Contract

In the introduction to this column, we discussed in very broad terms how two people can form a contract for the sale of goods: one person offers to buy or sell, and the other accepts the offer. Simple!
But that isn’t the way business usually happens, and when it does, things go wrong. Consider this far more common scenario: your customer issues you a purchase order, you issue an invoice, you deliver product, you receive payment. If everything goes smoothly, it really can be (and often is) this easy.
Say there is a problem though. You have an issue with your supplier and can’t get the product out to your customer as you quickly as you thought. Or your customer isn’t paying when you expected.  Now we need to know what the terms of the contract are, and that can be tricky.

Manufacturer’s Corner: An Introduction

We here at the MCLB love manufacturers.  In an economic climate where so much of our growth rests on intangibles and virtual goods, you provide the tangible items and the jobs that make it all possible.
As a way to say thank you, we’re beginning this column for you.  The Manufacturer’s Corner will focus on important issues for manufacturers, such as warranty exclusions, protection against insolvent buyers, and product liability issues.

What to do When Litigation Happens: Part I

Doug Weems discusses what to do when litigation happens. Although litigation risks can be minimized, litigation is a fact of life in the United States.  Here are some suggested steps to take if you or your bank is sued.

In a Putative Class Action Case, Another Missouri Appellate Court Finds an Automated Red Light Camera is Unconstitutional and Void for Conflicting with State Law. Are Automated Speed Cameras Next?

In Missouri, red-light enforcement systems are now the target of class actions and recent rulings suggest the gravy train for Missouri cities using these cameras, and their corporate partner, may be coming to an end.

How Missouri’s Consumer Protection Laws Would Require Target to Respond to Its Data Breach

The laws governing corporate responses to various forms of data breaches are extensive, but I think it would be useful to take a look at Missouri’s consumer protection law that provides the proper response to data breaches.  It will serve as a helpful reminder to companies doing business in Missouri of their notice obligations and, perhaps by extension, their data security obligations.  If it helps persuade you that this is worth your attention, violators are subject to civil penalties of up to $150,000 per breach if they fail to notify the appropriate parties.

Missouri’s Economic Loss Doctrine Bars a Negligent Misrepresentation Claim Against a Product Manufacturer for Recommending a Product Allegedly Unfit for its Intended Purpose

The economic loss doctrine is a judicially crafted rule that defines the remedies of a purchaser of a product who suffers only economic harm when that product fails to perform up to expectations. Economic harm is defined as damage caused by the allegedly defective product, including its diminished value and any lost profits caused by the product’s failure to perform as expected.

Good Faith Counterparty Dealings in Zero-Sum Contracts

In October, Bloomberg reported a delightful trade in which a unit of Blackstone (1) bought short-dated CDS on a troubled global gambling concern called Codere SA; (2) took over Codere’s revolver on the condition that Codere delay an interest payment sufficiently to trigger a credit event under the CDS contracts; and (3) made a whole bunch of money doing so.
There are two ways to view the trade. One is that it is a hilarious bit of creative maneuvering in an everyone-for-themselves market. The other is that, well, the whole thing smacks of bad-faith collusion (especially since Codere got advance permission from the majority of its US and EU bondholders prior to entering the new loan agreement, and as part of that permission the bondholders agreed not to accelerate bond obligations upon the specifically-contemplated default).

A Friendly Reminder About Lost Profits and Consequential Damages Waivers

I recently had occasion to litigate the issue of whether a client was barred by a contractual consequential damages waiver from recovering lost profits. I had never given the issue much thought, but the contract provision was a problem for our client, so I needed a workaround.
As it turns out, lost profits are not (always) consequential damages, and therefore recovery of lost profits is not barred by a consequential damages waiver unless specifically called out.

Under Illinois Law, Projections as to Future Sales Figures Given to Franchisees by a Franchisor to Entice Them to Purchase Franchises Were Held Not Actionable As Fraud

An Illinois court recently held that projected sales figures contained in pro formas given to franchisees by the franchisor, presumably to entice the franchisees to purchase a franchise, were statements of opinion rather than fact, and thus could not be the basis of the franchisees’ fraud and negligent misrepresentation claims when the franchisees actual sales figures never met expectations.

Some Practical Thoughts About the Brave New World of Virtual Currencies

A few days ago, I was speaking with some friends about the “cryptocurrency” called Bitcoin. We laughed about the bubble in the Bitcoin market (it gained 1200% on the US Dollar in the past six months), the perceived need for such a “currency” untethered from any nation or central bank, and whether Bitcoin would be subject to U.S. regulation in the near future. It was a good time. If you’re interested in investing in our new Bitcoin fund, let me know.

It’s Time to Clarify the Law on Breach of Warranty and Vertical Privity

You’re a manufacturer.  If you’re also a client of ours, I hope you’ve already taken our advice and disclaimed your implied warranties under Article 2 of the Uniform Commercial Code (e.g., that the product will be merchantable, fit for its intended purpose, etc.). 
But let’s say you’re not a client of ours or, for whatever reason, you decided to keep the implied warranties, or your disclaimer was ineffective.  You sold your product to a big box store, and an end user purchased it from there.  The end user has decided to sue you for breach of the implied warranty.

Federal Court Puts to Rest Challenges to the Method of Determining the Amount of Foreclosure Deficiency

In prior Alerts we described appellate court decisions addressing challenges to the Missouri common law rule of basing the amount of loan deficiency after real estate foreclosure on the foreclosure price paid, regardless of the fair market value of the affected real property. Challengers have pressed for adoption of a rule that would establish the amount of deficiency as the difference between the unpaid loan obligation and the fair market value of the real property subject to the foreclosure sale. By statute that is the rule in several states, including Kansas.

The Bankruptcy Code v. the Fair Debt Collection Practices Act: Who Wins?

The case of Simon v. FIA Card, Services, N.A., recently decided by the Third Circuit, demonstrates the potential for conflicts between the Bankruptcy Code and the Fair Debt Collection Practices Act (“FDCPA”) and emphasizes that banks should approach bankruptcy debtors with caution.

Environmental Indemnity or Waste of Words?

On November 12, 2013, the First Circuit Court of Appeals handed down its decision in VFC Partners 26, LLC v. Cadlerocks Centennial Drive, LLC, slip op. (1st Cir., 2013). This decision serves as a reminder that courts will look carefully at the words used in a loan agreement’s environmental indemnity provisions to decide whether or how they apply. If the actual wording chosen (likely many years earlier) does not fit the environmental costs sought to be indemnified, the party pursuing indemnity may be greatly disappointed.

Top Tips: What To Do When Litigation Happens – Part II

Doug Weems reminds employers although litigation risks can be minimized, litigation is a fact of life in the United States.

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