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CONTRACTS: Harsh Arbitration Provisions May Be Found to Be Unconscionable Under State Law

The Lawletter Vol 39 No 5

Charlene Hicks, Senior Attorney, National Legal Research Group

     In the last few years, the U.S. Supreme Court has issued controversial opinions that allow companies that use take-it-or-leave-it arbitration provisions in consumer contracts to require that unsatisfied consumers arbitrate all claims against the issuing companies on an individual,
rather than a class-wide, basis. See AT&T Mobility, LLC v. Concepcion, 131 S. Ct. 1740 (2011); Stolt Nielsen S.A. v. Animalfeeds Int'l Corp., 559 U.S. 662 (2010). Due to the high cost of arbitration, the practical effect of these decisions has been to discourage consumers from asserting any contractual dispute against the issuing companies and to thereby insulate large companies from liability for relatively minor small-dollar claims.

     Even so, some state courts have avoided the potentially far-reaching effects of Concepcion and Stolt Nielsen by analyzing the alleged unconscionability of an arbitration provision in a consumer contract under state law grounds. One particularly illuminating opinion is Gandee v. LDL Freedom Enterprises, Inc., 293 P.3d 1197 (Wash. 2013). In that case, the Washington Supreme Court ruled that a binding arbitration clause in a debt adjustment contract was unconscionable. The contract at issue required an indebted Washington consumer to travel to Orange County, California, to resolve her claim, shortened Washington's Consumer Protection Act statute of limitations from four years to 30 days, and required the consumer to pay the company's attorney's fees and costs if her claim was unsuccessful.

     In ruling that the arbitration clause in Freedom Enterprise Inc.'s ("Freedom") contract was substantively unconscionable, the Gandee court first found that the venue provision imposed prohibitive costs on the consumer. Next, the court determined that the "'loser pays' provision serves to benefit only Freedom and . . . effectively chills Gandee's ability to bring suit" under the state Consumer Protection Act. Id. at 1201. Third, the court concluded that the shortening of the state statute of limitations from four years to 30 days was substantively unconscionable.

     Finally, the court rejected Freedom's argument that the court's state law analysis was preempted by the U.S. Supreme Court's opinion in Concepcion. According to the Gandee court, Concepcion disallowed a California state court rule that invalidated an arbitration clause "that might be otherwise conscionable under California law." Id. at 1203. In contrast, the Gandee court's application of Washington's generally applicable unconscionability doctrine to the facts of the case before it was consistent with Concepcion and the Federal Arbitration Act. Thus, the Gandee court concluded: "Concepcion provides no basis for preempting our relevant case law nor does it require the enforcement of Freedom's arbitration clause." Id.

     Gandee limits the scope of Concepcion and the Federal Arbitration Act to arbitration provisions that are potentially conscionable under relevant state law. This suggests that where an arbitration agreement is so one-sided or overly harsh that it would be classified as unconscionable under state law grounds, a state court may feel free to invalidate the arbitration provision notwithstanding the Supreme Court's opinion in Concepcion. Although Concepcion may reflect the Supreme Court's recent trend of expanding the scope and general applicability of arbitration clauses, that opinion is not so far-reaching as to preempt traditional state law analysis of allegedly unconscionable contracts.

CRIMINAL LAW: Driving Under the Influence of a Proscribed Drug or "Its Metabolite"

The Lawletter Vol 39 No 5

Suzanne Bailey, Senior Attorney, National Legal Research Group

     Arizona is one of seven states that make it unlawful for a driver to be in actual physical  ontrol of a motor vehicle while there is a proscribed drug or "its metabolite" in the operator's body. Ariz. Rev. Stat. § 28-1381(A)(3). (The other six zero-tolerance jurisdictions are Delaware, Georgia, Indiana, Minnesota, Pennsylvania, and Utah. Joshua C. Snow, The Unconstitutional Prosecution of Controlled Substance Metabolites Under Utah Code § 41-6a-517, 2013 Utah L. Rev. OnLaw 195, 212 n.14 (2013).) In State ex rel. Montgomery v. Harris, 322 P.3d 160 (Ariz. 2014), the Supreme Court of Arizona was asked to determine whether the phrase "its metabolite" includes Carboxy-Tetrahydrocannabinol ("Carboxy-THC"), a nonimpairing metabolite of marijuana, which is a drug proscribed by statute. The court concluded that it does not.

     In Montgomery, the driver was stopped for speeding and making unsafe lane changes. After admitting to smoking some "weed" the night before, the driver voluntarily submitted to a blood test that revealed Carboxy-THC in his blood. He was charged with driving under the influence of a drug, in violation of section 28-1381(A)(1), and driving while a metabolite of a proscribed drug was in his body, in violation of section 28-1381(A)(3). The justice court dismissed the charge based on the presence of "its metabolite," and the State voluntarily dismissed the driving-under-the-influence charge. The superior court affirmed the justice court, but the court of appeals reversed, finding that the statute included the metabolite Carboxy-THC and that inclusion was not overbroad. State ex rel. Montgomery v. Harris ex rel. County of Maricopa, 301 P.3d 580 (Ariz. Ct. App. 2013). The state supreme court vacated the opinion of the court of appeals and affirmed the dismissal of the "its metabolite" charge, with one justice dissenting.

     The court found "its metabolite" to be ambiguous because it could mean all of a proscribed drug's metabolites, some of its metabolites, or only metabolites that cause impairment. The driver argued that the phrase referred to only Hydroxy-THC, the initial product of the metabolism of THC. The State insisted that the statute referred to all metabolites, including the nonimpairing Carboxy-THC, which was tested for. Significantly, the impairing Hydroxy-THC does not remain in the blood for very long and quickly converts to Carboxy-THC, which is why the State tests for Carboxy-THC but not for Hydroxy-THC. Carboxy-THC, on the other hand, can remain in the body for as many as 28 to 30 days after the ingestion of marijuana.

     Looking to the legislative history, which demonstrated an intent to prevent impaired driving, the court concluded that "its metabolite" is limited to metabolites capable of causing impairment. To hold otherwise could lead to the absurd result that a driver could be found guilty regardless of how long the metabolite remained in his or her body or whether it had an impairing effect. Furthermore, given that Arizona legalizes marijuana for medicinal purposes, the State's overinclusive reading could criminalize legitimate use after the impairing effects have worn off. Finally, a broad reading of "its metabolite" could allow the prosecution of an individual who drives after ingesting a legal substance that shares a nonimpairing metabolite with a proscribed substance.

     This decision in Montgomery hardly leaves Arizona without the ability to prosecute those driving under the influence of proscribed drugs. The prosecution may still establish criminal liability by evidence of impairment. Moreover, as the State admitted, it is possible to test for the impairing Hydroxy-THC, and the State may choose to do so. The decision merely serves to ensure that only those who are actually driving while impaired can be convicted.

CONSTITUTIONAL LAW: Refining "Clearly Established" Fourth Amendment Jurisprudence

The Lawletter Vol 39 No 5

Steve Friedman, Senior Attorney, National Legal Research Group

     A law enforcement officer is entitled to qualified immunity for his or her unconstitutional actions if "the right at issue was 'clearly established' at the time of defendant's alleged misconduct." Pearson v. Callahan, 555 U.S. 223, 232 (2009). "It is clearly established that citizens have a Fourth Amendment right to be free from unreasonable seizures accomplished by excessive force." Valladares v. Cordero, 552 F.3d 384, 388 (4th Cir. 2009).  But what is "unreasonable"?

     As summarized by a federal district court:

In assessing claims of excessive force under the Fourth Amendment, the court must apply a standard of "objective reasonableness." Graham v. Connor, 490 U.S. 386, 395, 109 S.Ct. 1865, 104 L.Ed.2d 443 (1989). Specifically, the court must determine "whether a reasonable officer in the same circumstances would have concluded that a threat existed justifying the particular use of force."  Elliott v. Leavitt, 99 F.3d 640, 642 (4th Cir. 1996) (citing Graham, 490 U.S. at 396-97, 109 S. Ct. 1865).  This fact‑intensive balancing test must be applied in light of the fact that "police officers are often forced to make split‑second judgments—in circumstances that are tense, uncertain, and rapidly evolving— about the amount of force that is necessary in a particular situation."  Graham, 490 U.S. at 397, 109 S. Ct. 1865.

Sloan v. Dulak, 868 F. Supp. 2d 535, 540 (W.D. Va. 2012).

     Due to the fact-sensitive nature of the analysis, the existence or absence of analogous case law is crucial. In a recent decision, the U.S. Supreme Court provided yet another ruling on a police shooting incident to help in that regard. See Plumhoff v. Rickard, 134 S. Ct. 2012 (2014).

     Around midnight on July 18, 2004, a West Memphis, Arkansas, police officer pulled over a vehicle driven by Rickard. As is relevant here, Rickard sped away and thus began a high-speed chase involving multiple police vehicles. Eventually, Rickard's car spun out into a parking lot and collided with one of the police cruisers. A couple of officers exited their cruisers, guns drawn, and ordered Rickard to exit his vehicle. Ignoring the officers' orders, Rickard continued his attempt to escape. Although one of the officers fired three shots into Rickard's vehicle, Rickard was nonetheless able to escape in his vehicle. However, other officers then fired a total of 12 shots toward Rickard's vehicle as it drove away. Shortly thereafter, Rickard crashed into a building and died from some combination of gunshot wounds and the collision.

     Rickard's daughter then brought a civil suit pursuant to 42 U.S.C. § 1983 against several of the police officers, alleging excessive force. The officers moved for summary judgment based on qualified immunity. The district court denied the officers' motion, holding that their conduct violated clearly established Fourth Amendment law. The officers appealed but the Sixth Circuit affirmed. The U.S. Supreme Court granted the officers' petition for writ of certiorari.

     The Plumhoff Court held first that it was not excessive for the police to use deadly force under the circumstances here. "[I]t is beyond serious dispute that Rickard's flight posed a grave public safety risk, and [thus] the police acted reasonably in using deadly force to end that risk." Id. at 2022.

     The Court held second that it was not excessive for the police to fire a total of 15 rounds at Rickard and his vehicle. "[D]uring the 10-second span when all the shots were fired, Rickard never abandoned his attempt to flee. Indeed, even after all the shots had been fired, he managed to drive away and to continue driving until he crashed." Id. The Court held third that, even if there was a constitutional violation, the officers were entitled to summary judgment based on qualified immunity. The Court's decision in Brosseau v. Haugen, 543 U.S. 194 (2004), illustrates that as of February 1999, when the events at issue in Brosseau occurred, "it was not clearly established that it was unconstitutional to shoot a fleeing driver to protect those whom his flight might endanger." Plumhoff, 134 S. Ct. at 2023.  However, the plaintiff here could not "meaningfully distinguish Brosseau," nor could she point to "a controlling case or a robust consensus of cases [decided between 1999 and 2004] that could be said to have clearly established the unconstitutionality of using lethal force to end a high-speed car chase." Id. at 2024 (internal quotation marks omitted).

     Therefore, the U.S. Supreme Court reversed the Sixth Circuit decision and remanded the matter for entry of summary judgment in favor of the officers.

CIVIL RIGHTS: Same-Sex Sexual Harassment

The Lawletter Vol 39 No 5

Dora Vivaz, Senior Attorney, National Legal Research Group

     There is a long line of cases discussing the principles that govern claims of sex discrimination in the form of sexual harassment, including, more recently, cases addressing same-gender harassment. In Oncale v. Sundowner Offshore Services, 523 U.S. 75 (1998), the Court explained that the critical issue in same-gender cases, as in all other sex discrimination cases, is whether "members of one sex are exposed to disadvantageous terms or conditions of employment to which members of the other sex are not exposed."  Id. at 80. Thus, the Court found that sexual harassment between members of the same gender is actionable if it amounts to discrimination because of sex. The Court noted that proposals for sexual activity by a homosexual harasser would allow the inference of discrimination because of sex, but explained that harassing conduct can also consist of conduct showing sex-specific hostility, rather than sexual desire.

     In a recent California case, the court addressed the issue of what evidentiary showing is needed under that state's law to support an inference that same-gender harassment constitutes discrimination on the basis of sex, noting that there was disagreement among the state's appellate courts. Lewis v. City of Benicia, 169 Cal. Rptr. 3d 794, 806 (Ct. App. 2014). While some courts had concluded that sexual comments designed to humiliate and challenge the plaintiff's gender identity would be sufficient without showing that the conduct had been motivated by sexual interest, at least one court had required a showing of genuine sexual interest. In Lewis, the court found it unnecessary to decide the question, because the evidence before it supported an inference that the harasser was, in fact, motivated by sexual interest.

     The court's decision not to determine the issue is particularly interesting, given that it took note of the fact that a recent legislative amendment specifically states that harassment because of sex "need not be motivated by sexual desire," id. at 803 n.8 (internal quotation marks omitted). The court, however, stated that it did not need to address the "effect of the amendment," id., because even if evidence of sexual desire were necessary, there were fact issues on that question. Perhaps more to the point, there did not appear to be any evidence in support of the alternative evidentiary route, that is, a showing of same-sex-specific hostility.

EVIDENCE: Evidence of Product or Design Defect Essential to Prevailing on Strict Products

The Lawletter Vol 39 No 5

Anne Hemenway, Senior Attorney, National Legal Research Group

     Consumer product defects can give rise to litigation as either a breach-of-warranty action or a strict products liability action. In determining whether a "defect" in the product exists, it is important to distinguish between these two claims. A strict products liability action is a tort claim, and a breach-of-warranty action is a contract claim. Litigants often confuse the evidence of a defect in these two contexts.

     In fact, evidence of a product or design "defect" is not required for a finding of unmerchantability in the context of a breach of implied warranty or breach of express warranty, although it is recognized that a product that is not "merchantable" or fit for a particular purpose is one that is defective. Hoffman v. Paper Converting Mach. Co., 694 F. Supp. 2d 359 (E.D. Pa. 2010) (citing Hittle v. Scripto-Tokai Corp., 166 F. Supp. 2d 142 (M.D. Pa. 2001)). To be merchantable, the goods sold must satisfy certain standards of quality and acceptability by the public but not necessarily be completely defect-free. Golden v. Den-Mat Corp., 276 P.3d 773 (Kan. Ct. App. 2012). The implied warranty of merchantability is intended to protect consumers and exists in all contracts for the sale of goods if the seller is a merchant. Paulk v. Thomasville Ford Lincoln Mercury, 732 S.E.2d 297 (Ga. Ct. App. 2012).

     Evidence of an actual product defect, however, is essential in order to prevail on a tort claim for strict product liability. Hoffman, 694 F. Supp. 2d 359 (citing Restatement (Third) of Torts: Products Liability § 2)); Wetzel v. Capital City Real Estate, LLC, 73 A.3d 1000 (D.C. 2013); Gresser v. Dow Chem. Co., 989 N.E.2d 339 (Ind. Ct. App. 2013).

FAMILY LAW: Children, Cars, and Equitable Distribution

The Lawletter Vol 39 No 4

Brett Turner, Senior Attorney, National Legal Research Group

     When a husband and wife get divorced, can the court equitably divide automobiles owned by the parties' children?

     This question arose in the Mississippi case of Terrell v. Terrell, 133 So. 3d 833 (Miss. Ct. App. 2013), cert. denied, 133 So. 3d 818 (Miss. 2014). The parties to that case were Robert and Mary. Robert and Mary had a daughter, Catherine. During the marriage, Robert purchased a car for Catherine, titling the car in Catherine's name. The trial court held that the car was marital property, apparently because it had been purchased with marital funds, and treated it as part of Mary's share of the marital estate.

     On appeal, the Mississippi Court of Appeals reversed:

     We agree that the vehicle should not have been deemed a part of the marital estate. While it was purchased during the course of the marriage, it is not marital property, nor is it separate property. Rather, it was a gift from Robert and Mary to Catherine, who was a third-party recipient. Catherine has retained physical custody of the vehicle and has been the legal title holder of the vehicle since it was purchased. It was not an asset of Robert or Mary either jointly or separately. Accordingly, we reverse and render this issue specifically for the elimination of Catherine's automobile from the marital estate.

Id. at 839 (& 17); see also In re Marriage of Sullins, 715 N.W.2d 242 (Iowa 2006) (error to treat car as marital property, where it had been purchased for daughter and titled in her name).

     The court reached the correct result. Definitions of "marital property" vary, but the term can generally be defined as property acquired by the parties during the marriage. Property owned by a third person falls outside this definition, because it was never acquired by a party to the marriage. A child of the marriage is just as much a third party as is any other nonspouse.

     It is worth noting that the car in Terrell was not separate property, either. Separate property is generally property acquired by a party before the marriage, property acquired by a party after the date of classification (where it is before the date of the property division hearing), and property acquired by a party during the marriage by various specific methods (e.g., gift or inheritance). The car in Terrell falls outside these definitions, again because it was not acquired by a party.

     In a divorce case, therefore, assets owned by nonparties are neither marital nor separate property. They fall into a third category, third-party property, which is not subject to division by the court. See generally 1 Brett R. Turner, Equitable Distribution of Property § 5:14 (3d ed. 2005).

     What seems to have misled the trial court in Terrell was that the car had been acquired with marital funds. But it is not uncommon for parties to a marriage to acquire property with marital funds, and then give that property away. This occurs every time the parties buy a nonparty a Christmas or birthday present. Property given away, with the consent of both spouses, is no longer marital. There is no suggestion in Terrell that either party objected to the gift of the car to Catherine.

     In specific cases, it is possible that a car used by a child might still be marital property. The key point in Terrell is that the car was titled in the name of the daughter. If the car had remained titled in the name of one of the parents, it might then have been marital property. E.g.Panettiere v. Panettiere, 945 S.W.2d 533 (Mo. Ct. App. 1997) (cars given to daughters were still property of parties, because parties had not filed documents required to change legal ownership of motor vehicles).

     Where transfer of title is complete, however, a car owned by one of the parties' children is generally not marital property in the parents' divorce case.

CONTRACTS: Breach—Super Bowl Tickets—Failure to Provide Seating

The Lawletter Vol 39 No 4

Jim Witt, Senior Attorney, National Legal Research Group

     In a case involving the four plaintiffs' purchase of tickets to Super Bowl XLV (played on February 6, 2011; Packers 31, Steelers 25), the U.S. District Court for the Western District of Pennsylvania examined the causes of action asserted by the plaintiffs based upon the alleged failure of the National Football League ("NFL") and the Dallas Cowboys Football Club, Ltd., to provide a suitable facility for viewing the game. Pollock v. Nat'l Football League, No. 2:12cv130, 2013 WL 1102823 (W.D. Pa. Mar. 15, 2013), aff'd, No. 13-1987, 2014 WL 503640 (3d Cir. Feb. 10, 2014).

     In early January 2011, the plaintiffs submitted applications for Super Bowl XLV tickets through a ticket lottery with the Pittsburgh Steelers Sports, Inc., an agent of the NFL. Each application was accompanied by $800, and the NFL issued four tickets, with each ticket designating a specific seat in Dallas Cowboys Stadium in Arlington, Texas, and stating that it "'grants entry in the stadium and a spectator seat for the game.'" Id. at *1. The stadium's normal seating capacity was 80,000, and the defendant Dallas Cowboys Football Club, Ltd., desired to construct temporary seating to increase the stadium's seating capacity for the Super Bowl to more than 100,000. Construction of the temporary seating commenced prior to the submission of complete construction documents and the acquisition of occupancy permits (a permit was conditionally issued). Construction problems arose, and a number of issues remained unresolved as of the night before game day. Additionally, the defendants failed to commit sufficient resources to the undertaking so that an occupancy permit could be issued for every seat by game day, and the seating contractor failed to have adequate manpower available. As a result, the defendants failed to complete the construction of at least 2,400 seats.

     The plaintiffs were

(1) initially denied entry into the stadium, (2) required to spend hours traversing about and around the stadium in an effort to gain admission, (3) unable to obtain information about why they were unable to get in, (4) relocated to a section within the stadium that did not have seats and had an obstructed view, and (5) only able to watch the game without a seat either on monitors or with an obstructed view of the field.


     In their initial complaint, the plaintiffs alleged breach of contract, based upon the defendants' alleged failure to provide the seats designated on the face of the tickets, and four tort claims: fraudulent misrepresentation by concealment, negligent/gross negligent misrepresentation by concealment, violation of Pennsylvania's Unfair Trade Practices and Consumer Protection Law, and fraudulent inducement. The defendants moved to dismiss all of the causes of action. The plaintiffs amended their complaint, dropping the cause of action for breach of contract but reasserting all four tort claims. The defendants moved to dismiss the amended complaint on the basis of Pennsylvania's "economic loss"/"gist of the action" doctrine. (Under the economic loss doctrine, where the plaintiff's loss is solely economic, recovery is limited to an action in contract; the gist-of-the-action doctrine precludes recovery in tort where the tort claim is only collateral to, and is interwoven with, a claim sounding in contract.) As the court stated:

     In general, the difference between contract claims and tort claims depends upon the origin of the duties alleged to have been breached by the defendant's conduct. "Tort actions lie for breaches of duties imposed by law as a matter of social policy, while contract actions lie only for breaches of duties imposed by mutual consensus agreements between particular individuals." [eToll, Inc. v. Ellias/Savion Advertising, Inc., 811 A.2d 10, 14 (Pa. Super. 2002)] (quoting Bash v. Bell Tel. Co., 411 Pa. Super. 347, 601 A.2d 825, 829 (Pa. Super.1992)).

Id. at *4.

     The defendants contended that all of the tort claims failed under the gist-of-the-action doctrine because the plaintiffs were hiding what was essentially a claim in contract behind tort allegations and because the NFL did not make any misstatement of fact and had no duty to disclose the allegedly concealed information. The court agreed with the defendants:

     Here, the parties' obligations arise solely from plaintiff's purchase and the NFL's sales of the Super Bowl tickets. Any duties imposed on defendants were created as a result of those transactions. And the alleged breach was the failure to provide the very essence of what the parties' contract obligated defendants to provide: admission to and a spectator seat for the game. The asserted breach gives rise to liability grounded in the contract and plaintiffs' damages result from defendants' failure to provide what was promised by sales of the tickets.

     Plaintiff's effort to convert the gravamen of the complaint into a tort action by referencing defendants' inability to know with certainty that occupancy permits would be obtained for all ticket sales falls short of the mark. At its base, plaintiffs simply complain that defendants were unable to live up to the contractual agreement.

Id. at *5.

     The court also ruled that under the Pennsylvania economic loss doctrine, the causes of action in tort could not survive:

In Pennsylvania, the economic loss doctrine precludes recovery for economic losses in a negligence action where the plaintiff has suffered no physical injury or property damage. Aikens v. Baltimore & Ohio R.R. Co., 348 Pa.Super. 17, 501 A.2d 277, 279 (Pa. Super.1985) (no cause of action lies for negligence that causes only economic loss[.]

Id. at *5 n.1.

     Finally, the court agreed with the defendants' contention that the entire case had to be dismissed for lack of subject-matter jurisdiction in that even if the causes of action in tort were viable, the damages alleged, whether in tort or contract, by each plaintiff could not meet the minimum $75,000 amount in controversy required by 28 U.S.C. § 1332(a). While the plaintiffs were seriously inconvenienced, they simply failed to allege an actionable wrong on the part of the defendants.

PATENTS: "Patent Trolling"—Award of Fees

The Lawletter Vol 39 No 4

Tim Snider, Senior Attorney, National Legal Research Group

     Some owners of patents that have little or no commercial value in and of themselves exploit those patents to promote litigation and thus force patentees who are practicing their inventions to compromise and settle infringement claims as an alternative to running up ruinous fees and costs to defend their patents. This practice has become known as "patent trolling." It is the bane of the patent bar.

     In Highmark, Inc. v. AllCare Health Management System, Inc., 134 S. Ct. 1744 (2014), the district court had entered summary judgment in favor of Highmark, which had sought a declaration that its patent was noninfringing. Highmark, Inc. v. AllCare Health Management System, Inc., 706 F. Supp. 2d 713 (N.D. Tex. 2007). Highmark then moved for an award of fees and costs under 35 U.S.C. § 285, arguing that the case was "exceptional."

     The district court granted Highmark's motion, reasoning that Allcare had engaged in a  pattern of "vexatious" and "deceitful" conduct throughout the litigation. Specifically, it found that Allcare had "pursued this suit as part of a bigger plan to identify companies potentially infringing the [patent in suit] under the guise of an informational survey, and then to force those companies to purchase a license of [U.S. Patent No. 5,301,105] under threat of litigation." Id. at 736-37. The court found that Allcare had "maintained infringement claims [against Highmark] well after such claims had been shown by its own experts to be without merit" and had "asserted defenses it and its attorneys knew to be frivolous." Id. at 737.

     In a subsequent opinion, the district court fixed the amount of the award in favor of Highmark at $4,694,727.40 in attorney's fees and $209,626.56 in expenses, in addition to $375,400.05 in expert fees. On appeal, 687 F.3d 1300 (Fed. Cir. 2012), the Federal Circuit affirmed in part and reversed in part. The Federal Circuit concluded that because the determination of whether a party's litigating position is "objectively baseless" is an issue of law, it was free to review the merits of the district court's judgment de novo.

     Justice Sotomayor, writing for a unanimous Court, disagreed and concluded that the review of the district court's determination under § 285 should instead be subject to review under the standard of abuse of discretion. That provision authorizes fee shifting, whereby a party's fees and costs may be awarded if the case is found to be "exceptional." She reasoned that as a matter of the sound administration of justice, the district court is better positioned to decide whether a case is exceptional, because it lives with the case over a prolonged period of time. As a practical matter, rarely will a district court's finding be reversed on appeal.

     Rarely does the Supreme Court review decisions of the Federal Circuit in patent cases, much less reverse that court's judgments, since the Federal Circuit is recognized as having unique knowledge and insight into technical fields such as patent law. The two courts, however, have been at odds over the Federal Circuit's apparent reluctance to authorize the district courts to act proactively in deterring patent trolling. The Supreme Court, however, has made it clear that the district courts should be vigilant in taking action to deter litigants from bringing cases that the Court is persuaded do not belong in federal court. See Pierce v. Underwood, 487 U.S. 552, 559 (1988) (determinations whether a litigating position is "substantially justified" for purposes of fee shifting under the Equal Access to Justice Act are to be reviewed for abuse of discretion); Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 405 (1990) (sanctions under Federal Rule of Civil Procedure 11 are to be reviewed for abuse of discretion). In that respect, Highmark is part and parcel of the Supreme Court's broader policy of limiting cases to be heard in federal court to those that are at least facially plausible, even if not ultimately meritorious. See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007) (to survive a motion to dismiss, respondents need only allege "enough facts to state a claim to relief that is plausible on its face").

CRIMINAL LAW: Search and Seizure—Warrantless Search of Motor Vehicle

The Lawletter Vol 39 No 4

Mark Rieber, Senior Attorney, National Legal Research Group

     A plurality of the Supreme Court of Pennsylvania, with one justice concurring in the result, recently held that where a warrantless search of a motor vehicle is supported by probable cause, article I, section 8 of the Pennsylvania Constitution affords no greater protection than does the Fourth Amendment to the U.S. Constitution. Commonwealth v. Gary, No. 26 EAP 2012, 2014 WL 1686766 (Pa. Apr. 29, 2014). Accordingly, the court adopted the federal automobile exception to the warrant requirement, which allows police officers to search a motor vehicle when there is probable cause to do so and does not require any exigency beyond the inherent mobility of the motor vehicle.

     In so holding, the court examined the history of the U.S. Supreme Court decisions on the issue of warrantless searches of vehicles, as well as its own history of decisions on the issue, which sometimes indicated that exigent circumstances are required in addition to probable cause, thus diverging from U.S. Supreme Court precedent. The court recognized that as its detailed review of its jurisprudence in the area of automobile searches demonstrated, it "has been unable to articulate a consistent, clear, and readily applicable majority expression of the automobile exception to the warrant requirement."  Id. at *19. The court concluded that there was no compelling reason to interpret its constitution as providing greater protection with regard to warrantless searches of motor vehicles than does the Fourth Amendment. Therefore, Gary held that in Pennsylvania, the law governing warrantless searches of motor vehicles is coextensive with federal law under the Fourth Amendment. "The prerequisite for a warrantless search of a motor vehicle is probable cause to search; no exigency beyond the inherent mobility of a motor vehicle is required."  Id. at *32

FAMILY LAW: Husband's Attempt to Avoid a Maryland Divorce by Claiming That His Marriage Was Invalid Is Rejected by Maryland's Highest Court

The Lawletter Vol 39 No 3

Sandra Thomas, Senior Attorney, National Legal Research Group

     Maryland's highest court has rejected an attempt by a husband to avoid a divorce in Maryland by claiming that he did not participate in the marriage that the wife testified had occurred in 1993 in Zaire, now known as the Democratic Republic of the Congo. Tshiani v. Tshiani, 81 A.3d 414 (Md. 2013).

     According to the wife's testimony, the husband participated in the marriage ceremony by telephone and was represented at the event by his cousin and by other members of his family who provided the dowry required by the tribal tradition and who joined in the eight-hour celebration following the marriage. The husband was reported to have been asked: "'Do you know this girl? Do you like this girl? Do you want us to give the dowery [sic] and the gift to this family so that you, this person can be your husband or wife?'" Id. at 417. Several days after the ceremony, the wife traveled to Virginia, where she lived in an apartment with the husband for a period of time before they moved to Maryland, where they remained until their separation, almost 15 years later. The parties had three sons during the marriage. The husband was employed at the World Bank.

     At the hearing on the wife's complaint for divorce, first filed in 2009, the husband contested the divorce, arguing that he and the wife were never legally married. The trial court rejected the husband's claim, and in the divorce judgment issued in 2011 the trial court ordered the husband to pay the wife "a $543,000.00 monetary award, $23,493.75 in attorneys' fees, indefinite alimony, child support for the parties' three children, and 50% of the marital portion of the pension and separation grant he may receive eventually from his employer." Id.

     In appeals to the intermediate appellate court and the Maryland Court of Appeals, the husband argued variously that the wife had failed to provide adequate evidence of Congolese law with regard to marriage, that she had failed to adequately document the facts of their marriage, and that such a marriage was against the public policy of Maryland. In rejecting these claims, the court of appeals documented the evidence presented by the wife, including the husband's letters to his employer seeking benefits for his "wife" or "spouse"; similar references in an immigration application for the wife's legal residency papers; and testimony confirming real property in Maryland titled in the names of the parties as "tenants by the entireties," which in Maryland is reserved for married couples.

     Electing not to address the question of whether a telephone marriage would be valid if conducted in Maryland, the court concluded that a marriage by telephone conducted in the Congo was not "'repugnant' to Maryland's 'public policy'" and thus was sufficient to be entitled to comity in the courts of Maryland. Id. at 426.

     The court distinguished its decision in Aleem v. Aleem, 947 A.2d 489 (Md. 2008), in which it had refused to recognize a divorce acquired by the husband, who had gone to the Embassy of Pakistan in Washington, D.C., and obtained a unilateral divorce after the wife had filed for divorce in Maryland. In Aleem, the court of appeals had concluded that the foreign divorce "was in conflict with Maryland statutes and deprived the wife of her constitutional rights." Tshiani, 81 A.3d at 426. There appeared to be no comparable objection to the foreign procedures in Tshiani. The court of appeals therefore affirmed the lower-court decisions.

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