Articles Posted in Civil Procedure

Plaintiffs, operators of a gas purification plant, filed suit against its insurer, Ace, after the insurer denied coverage for damage caused by broken metal brackets that secured crucial components. The Ninth Circuit affirmed the district court's application of Washington law and its discovery sanctions against plaintiffs. However, the panel reversed the district court's grant of summary judgment in favor of the insurer and held that there was a triable issue of fact as to whether the insurer was prejudiced by plaintiffs' remedial actions, whether plaintiffs' loss was fortuitous, whether the policy's Boiler and Machinery endorsement applied to independently confer coverage for plaintiffs' losses, whether the Endorsement's "accident" coverage applied, and whether a 16 month shutdown was consistent with the exercise of due diligence and dispatch. View "Ingenco Holdings, LLC v. ACE American Insurance Co." on Justia Law

The Ninth Circuit affirmed the district court's exercise of diversity jurisdiction over an action stemming from the foreclosure of plaintiff's property. The panel held that the Supreme Court's decision in Navarro Savings Ass'n v. Lee, 446 U.S. 458, 458 (1980), which held that a trustee is a real party to the controversy for purposes of diversity jurisdiction when he possesses certain customary powers to hold, manage, and dispose of assets for the benefit of others, was still controlling and the Supreme Court's decision in Americold Realty Trust v. ConAgra Foods, Inc., 136 S. Ct. 1012 (2016), did not upset the holding in Navarro or the panel's precedent. In this case, HSBC and the other defendants were not, like plaintiff, citizens of California and therefore there was complete diversity. Accordingly, the court properly exercised diversity jurisdiction. View "Demarest v. HSBC Bank USA" on Justia Law

The Ninth Circuit affirmed the district court's denial of plaintiffs' motion to remand to state court. The panel joined the Fourth Circuit in holding that receipt of an initial pleading by a statutorily designated agent does not begin the thirty-day removal clock under 28 U.S.C. 1446(b)(1), and that it was instead actual receipt by State Farm that started the removal clock. The panel applied this rule and held that State Farm timely removed the case where removal was calculated from when the forwarded copy of the complaint reached State Farm's designated recipient. View "Anderson v. State Farm Mutual Automobile Insurance Co." on Justia Law

The Ninth Circuit did not reach the merits of the Tribe's sovereign immunity defense and held, on de novo review, that the district court lacked subject matter jurisdiction in an action brought by the Tribe against the state, seeking a declaration that the Tribe's sovereign immunity barred any lawsuit arising from a particular contract with Washington. The panel held that the Tribe's anticipatory defense to a state court lawsuit did not form a basis for federal jurisdiction. Therefore, the panel vacated the district court's judgment and remanded with instructions to dismiss for lack of subject matter jurisdiction. View "Stillaguamish Tribe of Indians v. Washington" on Justia Law

Federal Rule of Civil Procedure 6(a) governs how to calculate the Federal Arbitration Act's three-month filing deadline. The Ninth Circuit affirmed the district court's denial of a petition to vacate an arbitral award because the petition was filed one day late. The panel clarified how to perform the Rule 6(a) calculation and held that the petition to vacate was untimely. View "Stevens v. Jiffy Lube International" on Justia Law

The Ninth Circuit affirmed the district court's dismissal of a shareholder derivative suit on behalf of the Walt Disney Company, holding that plaintiff failed to satisfy Federal Rule of Civil Procedure 23.1's demand futility requirement. In this case, plaintiff alleged that Disney and its board of directors and several corporate officers participated in a conspiracy to enact illegal anticompetitive agreements between Disney and other animation studios. The panel held that the allegations in plaintiff's amended complaint did not constitute particularized facts demonstrating demand futility. The panel explained that, whether the board's misconduct is characterized as conscious inaction or active connivance, plaintiff needed to demonstrate that a majority of the director defendants knew of the conspiracy, and he failed to do so. View "Towers v. Iger" on Justia Law

The Ninth Circuit affirmed the district court's order holding the record custodian for various collective entities in contempt for his failure to comply with an order to respond to twelve grand jury subpoenas. The panel held that Braswell v. United States, 487 U.S. 99, 104 (1988), remained good law. The panel further held that the Fifth Amendment provides no protection to a collective entity's records custodians—and that the size of the collective entity and the extent to which a jury would assume that the individual seeking to assert the privilege produced the documents are not relevant. Therefore, the custodian's challenge to the contempt order failed. View "In re Twelve Grand Jury Suboenas" on Justia Law

FDA trans fat regulations governing the contents of the Nutrition Facts Panel did not preempt California's unfair competition laws proscribing false or misleading advertising elsewhere on a food product's label. The Ninth Circuit reversed the district court's dismissal of a putative consumer class action alleging that The Kroger Company sold Kroger Bread Crumbs that included misleading labels in violation of California law. The panel held that plaintiff had standing to challenge the legitimacy of defendant's product advertising on the face of the label that it contained "0g Trans Fat per serving." The panel took the occasion to reinforce and apply it's holding in Reid v. Johnson & Johnson,780 F.3d 952, 960 (9th Cir. 2015), that a requirement to state certain facts in the nutrition label was not a license to make that statement elsewhere on the product. The panel also held that plaintiff's labeling claims were not preempted because the FDA regulations did not authorize the contested statements. View "Hawkins v. The Kroger Co." on Justia Law

Insitu designs and manufactures unmanned aerial systems (drones) and Fidelitad is a value-added reseller of Insitu's drones. Fidelitad filed suit in Washington state against Insitu, alleging that Insitu improperly delayed shipment of its orders, wrongfully terminated a purported distributorship agreement, and then moved into the Latin American market, appropriating Fidelitad's prior groundwork. Insitu removed to the district court under 28 U.S.C. 1442(a)(1). The Ninth Circuit reversed the district court's denial of Fidelitad's motion to remand and grant of summary judgment to Insitu. The panel held that the motion to remand should have been granted because, even construed in the light most favorable to Insitu, the notice of removal did not establish that Insitu was acting under the direction of a federal officer in its relevant dealings with Fidelitad. Furthermore, the defect was not cured prior to entry of judgment and no party has suggested a basis for subject matter jurisdiction other than section 1442(a)(1). Accordingly, the panel remanded with instructions to remand to state court. View "Fidelitad, Inc. v. Insitu, Inc." on Justia Law

A defendant who travels to Nevada and commits an intentional tort there can be sued in that state, absent circumstances that would make such a suit unreasonable. The Ninth Circuit reversed the district court's dismissal of an action alleging that John Schmidt made defamatory statements about Freestream Aircraft (Bermuda) Limited at an aviation industry conference in Nevada. The panel held, under the minimum contacts test and the applicable authority, that there was specific jurisdiction in Nevada. In this case, Nevada's exercise of personal jurisdiction over defendants comported with constitutional due process because all three prongs of the minimum contacts test for specific jurisdiction were satisfied. View "Freestream Aircraft (Bermuda) Ltd. v. Aero Law Group" on Justia Law