Case Updates

Court certified a direct appeal to the Third Circuit to resolve whether the bankruptcy court had subject matter jurisdiction over a lawsuit by the reorganization plan's buyer's financial advisor to enforce against the reorganized debtor the fee provision of a contract that was signed before the effective date by a person who became an officer of the reorganized debtor only on the effective date. Read more

On September 28, 2020, on an issue of first impression, a federal district court in Louisiana held that the TCPA’s autodialer and pre-recorded message provision (the “automated-call ban”) is unconstitutional as applied to any calls made between November 2015 and July 6, 2020. Read more

Creditor, whose security interest lapsed prepetition when debtor changed its name, was unsecured because creditor failed to timely re-perfect its interest even though it had viable options to do so. Read more

Physician may pursue whistleblower suit—alleging hospital’s exclusive staffing agreement was retaliatory—without first seeking writ relief. Read more

A New Mexico bankruptcy court has held that the cross-collateralization provision in each of debtor's second and third loan agreements with a credit union was sufficient to render a vehicle–which was purchased by debtor and her spouse with their first loan from the credit union, and which secured this first loan– collateral for second and third loans. Read more

In Produce Pay, Inc. v. FVF Distributors Inc., 2020 WL 3448384 (S.D, Cal. 6/24/20) the United States District Court held that the rights and remedies of a seller of produce to collect from a buyer under the Perishable Agricultural Commodities Act (“PACA”) 7 U.S.C. §§ 499a-499t could be assigned to a commercial finance company factoring the seller’s accounts, allowing the finance company to sue the buyer and its principals in tort, even in a case where the buyer mistakenly paid the account in full to the seller, and not to the assignee. Read more

Third Circuit certifies a critical question to the Pennsylvania Supreme Court: "Under Pennsylvania law, is an e-commerce business, like Amazon, strictly liable for a defective product that was purchased on its platform from a third-party vendor, where the product was neither possessed nor owned by the e-commerce business. Read more

By affirming in part and reversing in part the bankruptcy court and the Ninth Circuit BAP, both of which had allowed total recoupment, the United States Court of Appeals for the Ninth Circuit demonstrated the fine line distinction between setoff, which is subject to the automatic stay, and recoupment, which is not, and the difficulty the lower courts have in applying the distinction. Read more

A creditor cannot enforce an arbitration clause in a credit card agreement in a contempt proceeding the debtor brought against the creditor for violation of the discharge injunction. Read more

The Ninth Circuit Bankruptcy Appellate Panel recently ruled that issue preclusion was properly applied against a debtor in a nondischargeability action under §523(a)(6) based on a state court judgment notwithstanding that (1) the bankruptcy court failed to address the public policy element of issue preclusion and (2) the debtor was deprived of his opportunity to complete his appeal of the state court judgment when the chapter 7 trustee sold those appellate rights to the successor of the state court plaintiff. Read more