Charlene Hicks—Senior Attorney, National Legal Research Group

            Corporate shareholders, individual members of a limited liability company, or residents of a homeowners' association often file derivative complaints on behalf of the entity to assert rights that the entity itself has failed to raise against third parties. Sometimes these derivative actions prompt the entity to file its own lawsuit against the same third parties, resulting in parallel proceedings.

            In Star v. TI Oldfield Development, LLC, 962 F.3d 117, 131 (4th Cir. 2020), the Fourth Circuit considered for the first time the issue of "whether a plaintiff's derivative action on behalf of an entity is rendered moot by the entity's settlement of the same or similar claims in another action." As a matter of first impression, the court held that it may.

            The evidence showed that the Board of Directors of Oldfield, a residential community in South Carolina, filed lawsuits related to Oldfield's development. Rob Star, an Oldfield resident, later filed a derivative action on Oldfield's behalf, alleging similar claims against the same defendants. After the Board settled the lawsuits that it brought, the defendants moved to dismiss Star's derivative action on the ground that the settlements rendered the derivative lawsuit moot, and, therefore, the court lacked jurisdiction. In opposition, Star alleged that the settlement agreement was invalid due to a conflict of interest by certain board members and that the derivative action alleged claims not included in the Board's lawsuits.

Charlene Hicks—Senior Attorney, National Legal Research Group

            The COVID-19 pandemic has proven disastrous for cruise lines and passengers alike, with multiple coronavirus outbreaks and lengthy quarantine periods imposed. The resulting lawsuits have met with mixed results.

            In Weissberger v. Princess Cruise Lines, Ltd., No. 2:20-CV-02328-RGK-SK, 2020 WL 3977938 (C.D. Cal. July 14, 2020), plaintiffs claimed that Princess Cruise Lines was negligent and/or grossly negligent because it had knowledge that a disembarking passenger had symptoms of COVID-19 but it made the conscious decision to continue sailing with 3,000 passengers aboard. The Weissbergers claimed emotional distress damages arising from the ship's quarantine and the associated trauma from fear of developing the virus.

Charlene Hicks—Senior Attorney, National Legal Research Group

            One potentially overused legal principle that is often recited in appellate cases is that a party waives any issues or legal theories that he or she fails to assert at the trial court level. In other words, a party generally cannot raise a new issue for the first time on appeal. Any attempt to do so will likely be rejected by the appellate court.

            Even so, an appellate attorney would do well to keep in mind that this oft-repeated principle does not apply to certain situations, including questions pertaining to the standard of review employed by the lower court. The proper standard of review that is applicable to a particular legal issue is a nonwaivable matter. See Winfield v. Dorethy, 871 F.3d 555, 560 (7th Cir. 2017), cert. denied, 138 S. Ct. 2003 (2018); Gardner v. Galetka, 568 F.3d 862, 879 (10th Cir. 2009). Accordingly, an appellant does not forfeit a claim that the lower court failed to employ the proper standard of review “by failing to argue it” to the lower court. Sierra Club v. U.S. Dep't of Interior, 899 F.3d 260, 286 (4th Cir. 2018); see also United States v. Freeman, 640 F.3d 180, 186 (6th Cir. 2011). Similarly, the parties to a case cannot agree on or assign an incorrect legal standard of review to an issue. Sierra Club, 899 F.3d at 286.