The Lawletter Vol 43 No 1

Paul Ferrer, Senior Attorney, National Legal Research Group

     Laches is "'a defense developed by courts of equity' to protect defendants against 'unreasonable, prejudicial delay in commencing suit.'" SCA Hygiene Prods. Aktiebolag v. First Quality Baby Prods., LLC, 137 S. Ct. 954, 960 (2017) (quoting Petrella v. Metro-Goldwyn-Mayer, Inc., 134 S. Ct. 1962, 1967, 1973 (2014)). It is a familiar statement of the law that laches generally does not apply when the statute of limitations applicable to a legal claim has not run. But many state courts continue to indicate that, in some circumstances, "laches may bar a legal claim even if the statutory period of limitations has not yet expired." Tenneco Inc. v. Amerisure Mut. Ins. Co., 281 Mich. App. 429, 456-57, 761 N.W.2d 846, 863-64 (2008); see also Veysey v. Nelson, 2017 UT App 77, ¶ 7, 397 P.3d 846, 848 ("[B]ecause laches may apply in situations where the statute of limitations has not yet run, the existence of a statute of limitations does not … automatically preclude application of the laches doctrine."), cert. denied, 400 P.3d 1046 (Utah 2017); Bldg. & Constr. Trades Council of N. Nev. v. State ex rel. Pub. Works Bd., 108 Nev. 605, 611, 836 P.2d 633, 637 (1992) ("Especially strong circumstances must exist . . . to sustain a defense of laches when the statute of limitations has not run.").  However, that no longer appears to be the case in federal court, at least with respect to a federal claim as to which Congress has expressly supplied a statute of limitations.

       In Petrella, the U.S. Supreme Court held that laches cannot defeat a damages claim brought within the three-year period prescribed by the Copyright Act's statute of limitations. 134 S. Ct. at 1972-75 (applying 17 U.S.C. § 507(b) (requiring a copyright holder claiming infringement to file suit "within three years after the claim accrued")); see also SCA Hygiene, 137 S. Ct. at 961 ("We saw in this language a congressional judgment that a claim filed within three years of accrual cannot be dismissed on timeliness grounds."). In so holding, the Court spoke in very broad terms: "[I]n the face of a statute of limitations enacted by Congress, laches cannot be invoked to bar legal relief." Petrella, 134 S. Ct. at 1974. Petrella's holding rested on both separation-of-powers principles and the traditional role of laches in equity. Since

The Lawletter Vol 42 No 10

Lee Dunham, Senior Attorney, National Legal Research Group

            During the holiday season, many of us open our homes to friends and coworkers and, unfortunately, sometimes a guest is injured or becomes sick on the property. What is the scope of a host's duty to render first aid to the uncle who cuts his hand while carving the turkey, or the New Year's Eve guest who has far too much to drink?

            Courts of most states generally follow the scheme outlined in the Restatement (Second) of Torts as to duty to render aid. The general rule, of course, is that there is no duty to render aid to one who is in peril, even if it would be easy to provide assistance. See Restatement § 314 ("The fact that the actor realizes or should realize that action on his part is necessary for another's aid or protection does not of itself impose upon him a duty to take such action."). But an exception applies when a "special relationship" exists between the parties.

The Lawletter Vol 42 No 10

Fred Shackelford, Senior Attorney, National Legal Research Group

            Can a plaintiff motorist's comparative fault be considered in crashworthiness cases based on strict liability or breach of warranty? That was the issue of first impression for the South Carolina Supreme Court in Donze v. General Motors, LLC, 420 S.C. 8, 800 S.E.2d 479 (2017). In Donze, the plaintiff passenger had been smoking synthetic marijuana earlier in the day. He sustained severe burn injuries when the truck in which he was riding burst into flames after colliding with another vehicle at a controlled intersection. The accident occurred because the truck driver failed to stop and pulled directly in front of the other vehicle.

            The plaintiff brought a crashworthiness case against the truck's manufacturer, alleging that the truck's design was defective because the gas tank was placed outside of the truck's frame. Two issues were certified to the Donze court:

1. Does comparative negligence in causing an accident apply in a crashworthiness case when the plaintiff alleges claims of strict liability and breach of warranty and is seeking damages related only to the plaintiff's enhanced injuries?
2. Does South Carolina's public policy bar impaired drivers from recovering damages in a crashworthiness case when the plaintiff alleges claims of strict liability and breach of warranty?

The Lawletter Vol 42 No 10

Nicole D. Prysby, Senior Attorney, National Legal Research Group

            The price of Bitcoin has soared in recent months, from approximately $900 in January 2017 to a current price of over $15,000. But even before the 2017 increase, Bitcoin had periods where its value rose sharply. For example, in 2013, it went from about $15 to $800. Bitcoin’s short-term gains have made it a very attractive hook for would-be Ponzi scheme developers. In fall 2017, the Commodity Futures Trading Commission (“CFTC”) sued Gelfman Blueprint, Inc. (“GBI”), and GBI’s Chief Executive Officer (“CEO”) for operating a Bitcoin Ponzi scheme that allegedly defrauded investors out of more than $600,000.

            In early 2014, the company’s CEO opened a Bitcoin fund and sought customers. He claimed to have a high-frequency, algorithmic, trading strategy (using a bot named “Jigsaw”) and advertised the fund as having monthly returns of 7%-11% with zero downside risk because “trading results are maximized during price drops.” He was able to attract at least 80 customers, who contributed between a few hundred dollars and tens of thousands of dollars each. Once the customers signed up and paid into the fund, the CEO provided them with various reports and materials purporting to show that they were earning 7%-9% per month, that the customers owned specific amounts of Bitcoin, and that the company’s assets and performance were audited by a CPA.

The Lawletter Vol 42 No 10

Charlene Hicks, Senior Attorney, National Legal Research Group

            In what has been termed a groundbreaking opinion, the Second Circuit recently held that the federal Telephone Consumer Protection Act (“TCPA”), 47 U.S.C. § 227(b), bars a consumer-buyer from revoking his or her contractual consent to receive creditor calls concerning the underlying contract or account.  The case, Reyes v. Lincoln Automotive Financial Services, 861 F.3d 51 (2d Cir. 2017), provides creditors with a strong defense against consumers who issue complaints about the creditors’ debt collection processes.

            In the case, Alberto Reyes Jr. (“Reyes”) leased a new Lincoln MKZ luxury sedan from a Ford dealership. The lease was financed by Lincoln. One provision of the lease stated that Reyes expressly consented to electronic or verbal contact from Ford and Lincoln and their agents, affiliates, and representatives. Id. at 53-54. This contact included manual calling methods, prerecorded voice messages, texts, and emails to any email or telephone number that Reyes provided, “now or in the future, including a number for a cellular phone or wireless device[.]” Id. at 54. In his lease application, Reyes provided Lincoln with his cell phone number.

The Lawletter Vol 42 No 9

Jeremy Taylor, Senior Attorney, National Legal Research Group

            The United States Court of Appeals for the Eighth Circuit recently held that evidence of other incidents involving unintended acceleration of the defendant automobile manufacturer’s vehicles was admissible in a products liability action brought by family members of persons killed in an unintended acceleration event.  See Adams v. Toyota Motor Corp., 867 F.3d 903 (8th Cir. 2017). 

            The driver of a 1996 Toyota Camry alleged that he was unable to stop his vehicle after exiting an interstate highway, despite attempts to apply the brakes.  While traveling at approximately 75 miles per hour, his vehicle collided with a car stopped at a red light. There were numerous fatalities and other severe injuries from the incident.

The Lawletter Vol 42 No 9

Steve Friedman, Senior Attorney, National Legal Research Group

            "An easement is the privilege to use the land of another in a particular manner and for a particular purpose, but it does not give the owner of the dominant estate an ownership interest in the servient tract." Beach v. Turim, 287 Va. 223, 228, 754 S.E.2d 295, 297 (2014) (internal quotation marks omitted). "Easements may be created by express grant or reservation, by implication, by estoppel or by prescription." Id.

            Each type of easement is established (and sometimes governed) by a different set of rules. See Palmer v. R.A. Yancey Lumber Corp., 294 Va. 140, 803 S.E.2d 742, 749 (2017) (noting that "express easements and easements by prescription . . . have their own set of rules separate and apart from the rules governing easements by necessity").

The Lawletter Vol 42 No 9

Suzanne Bailey, Senior Attorney, National Legal Research Group

            A recent decision from the Fourth Circuit Court of Appeals is a reminder of both the strength of federal forfeiture laws and the limits on the right to appellate counsel. On a practical level, it illustrates the danger of assuming that assets that might be subject to postconviction forfeiture will be available to pay for an appeal.

            Following his convictions for a host of drug, conspiracy, and money laundering offenses, and following the court's order for forfeiture in the amount of $51.3 million, the defendant in United States v. Marshall, 872 F.3d 213 (4th Cir. 2017), made a motion in the district court to release $59,000 in the defendant's credit union account in order to pay for his appeal. The motion correctly noted that the order of forfeiture did not specifically mention the $59,000 credit union assets. Although the Government previously had filed a bill of particulars providing notice that it intended to seek the forfeiture of the $59,000 in the credit union account, the bill did not indicate whether the Government classified the credit union funds as assets derived from the crimes pursuant to 21 U.S.C. § 853(a) or substitute assets pursuant to 21 U.S.C. § 853(p), that is, assets that are a substitute for assets derived from the crime that cannot be located due to an act or omission of the defendant.

The Lawletter Vol 42 No 9

Anne Hemenway, Senior Attorney, National Legal Research Group

            Since the United States Supreme Court's decision in Bivens v. Six Unknown Named Agents of Federal Bureau of Narcotics, 403 U.S. 388 (1971), federal courts have allowed individuals to seek damages for unconstitutional conduct by individual federal officers. A Bivens action, as they are known, recognizes an implied cause of action directly under authority of the U.S. Constitution, where there is an absence of any statute specifically conferring the cause of action.

            Recently, in Ziglar v. Abbasi, 137 S. Ct. 1843 (2017), the Supreme Court recognized Bivens actions but held that it will now take a more "cautious" approach to each Bivens case presented to the Court to determine if the action falls under the previous Bivens claims and will not accept a Bivens action that is brought in a new context. The Court's stated purpose in taking this new cautious approach is to avoid intruding on the role of Congress to enact statutes for claims outside of the current Bivens context. To determine whether a Bivens action falls outside of the current Bivens context and is thus "novel" and not actionable, the Court rejected the Second Circuit Court of Appeals' previous two-part test and instead stated that the proper test for determining whether a case presents a new Bivens context is "[i]f the case is different in a meaningful way from previous Bivens cases decided by this Court." Id. at 1859. 

The Lawletter Vol 42 No 8

Jim Witt, Senior Attorney, National Legal Research Group

            It is not often, if ever, that the U.S. Tax Court quotes a show business celebrity in its opinions, but it did so in a summary opinion filed on August 16, 2017, in the case of Omoloh v. Commissioner, T.C. Summ. Op. 2017-64, 2017 WL 3530853. The case turned on whether the taxpayer, Wilfred Omoloh, was age 59½ at the time that he took a distribution from his individual retirement account ("IRA"). I.R.C. § 72(t) ("10-percent additional tax on early distributions from qualified retirement plans") provides in subsection that (1) if the taxpayer receives a distribution from a qualified retirement plan such as an IRA, the taxpayer's income tax liability for the year will be increased by an amount equal to 10% of the portion of the distribution includible in gross income. However, under subsection (2), the 10% penalty of subsection (1) shall not apply if the distribution is made on or after the date on which the taxpayer attains age 59½.