Justia U.S. 9th Circuit Court of Appeals Opinion Summaries

This case concerned a Railcar Contract with TriMet that required Colorado Railcar to secure a $3 million standby letter of credit, which Colorado Railcar arranged through Collateral II, a bankruptcy remote entity. TrimMet certified Collateral II's default and drew on the Letter of Credit when Colorado Railcar defaulted. At issue was whether Collateral II was a surety to Colorado Railcar, entitled to the defense of discharge. The court held that it was not. Because the standby letter of credit issued by KeyBank required TriMet to certify Collateral II's default, TriMet sought clarification that should Colorado Railcar default, TriMet's authority to certify Collateral II's default would be triggered. In response to TriMet's concern, Collateral II agreed to become a part of the Railcar Contract via Modification No. 1, but it undertook no new obligation nor did it subject itself to any additional liability beyond what it previously undertook by securing the Letter of Credit at Colorado Railcar's direction. Thus, no suretyship was created. Because Collateral II was not entitled to the protections of a surety, it was error for the district court to grant summary judgment in its favor.

This case stemmed from credit agreements Lehman entities entered into with Palmdale Hills, LLC entities. Palmdale filed for chapter 11 bankruptcy in November 2008 and Lehman subsequently filed eight motions for relief from Palmdale's stay to foreclose on the collateral securing the loans that were in default. The court held that the Bankruptcy Appellate Panel (BAP) correctly held that Lehman had standing to appeal the bankruptcy court's finding that the automatic stay did not prevent equitably subordinating Lehman's claims. The court also held that the BAP correctly determined that the appeal was not moot. The court further held that the BAP correctly determined that Lehman's automatic stay prevented Lehman's claims from being subordinated. Accordingly the court affirmed the BAP's judgment.

Appellant appealed an order of summary judgment in favor of the United States Bureau of Customs and Border Protection ("CBP") in his eight Freedom of Information Act ("FOIA"), 5 U.S.C. 552, requests for 19 C.F.R. 133.21(c) Notices of Seizures of Infringing Merchandise ("Notices") from certain United States ports. Appellant raised several issues of error on appeal. The court held that the district court's findings that the Notices contained plainly commercial information, which disclosed intimate aspects of an importers business such as supply chains and fluctuations of demand for merchandise, was well supported. The court also held that the district court was not clearly erroneous in its finding that the information at issue was confidential and privileged where the trade secret exemption of FOIA ("Exemption 4") was applicable. The court further held that when an agency freely disclosed to a third party confidential information covered by a FOIA exemption without limiting the third-party's ability to further disseminate the information then the agency waived the ability to claim an exemption to a FOIA request for the disclosed information. Therefore, the district court's ruling was affirmed in regards to FOIA Exemption 4 but the district court's conclusion as to the fees charged to appellant was reversed where CBP must follow the FOIA fee provisions under 19 C.F.R. 103.