Case Updates

Summary: A California appellate court has held that a trial court had the power to authorize "super-priority" status for a loan to a receiver, which enabled the receiver to remediate illegal conditions on a parcel of real property, even though the new loan pushed the refinancing lender's lien into second place. [City of Sierra Madre vs. SunTrust Mortgage, Inc., 2019 Westlaw 926096 (Cal.App.).] Read more

Summary: Resolving a split in the circuits, the United States Supreme Court held in Mission Product Holdings, Inc. v. Tempnology, LLC, 587 U.S. ___, 2019 WL 2166392 (May 20, 2019), in an 8-1 opinion with broad implications for executory agreements in bankruptcy proceedings, that a debtor/licensor’s rejection of a trademark license agreement did not deprive the licensee of the right to continue to use the trademark within the scope the agreement. (The dissent argued the appeal was moot.) Read more

On May 6, 2019, the San Francisco Board of Supervisors voted 8-1 to pass the “Stop Secret Surveillance” Ordinance severely limiting facial recognition technology by the San Francisco Police department and other City government agencies. The Ordinance is the first of its type in the United States and is expected to go into effect 30 days after its passing. Read more

On May 16, 2019, the California Senate Appropriations Committee held a hearing that included S.B. 561, the “Attorney General amendment” to the California Consumer Privacy Act (“CCPA”). The bill is being held in committee and under submission, which means the bill has been blocked and is likely dead. Read more

On April 22, 2019, the United States District Court for the Northern District of California granted a motion by Defendants VIP Petcare Holdings, Inc. (VIP) and PetIQ, Inc. (PetIQ) to dismiss with prejudice an amended complaint by Plaintiffs Med Vets Inc. (“Med Vets”) and Bay Medical Solutions Inc. (“Bay Medical”), which alleged unlawful merger and other antitrust violations, finding that Plaintiffs failed to allege a relevant market and market power in such a market. Med Vets, Inc. v. Vip Petcare Holdings, Inc., No. 18-cv-02054-MMC, 2019 U.S. Dist. LEXIS 68099 (N.D. Cal. Apr. 22, 2019). United States District Judge Maxine M. Chesney issued the decision. Read more

Employers and business owners breathed a collective sigh of relief on April 24, 2019, when the United States Supreme Court issued its highly anticipated ruling in Lamps Plus, Inc. v. Varela, No. 17-988, ___ U.S. ___, 139 S. Ct. 1407 (2019), and held, in a 5-to-4 decision, that under the Federal Arbitration Act (FAA), an ambiguous agreement cannot provide the basis for concluding that the parties agreed to submit to class arbitration. The Varela opinion reaffirms the Court’s decision in Stolt-Nielsen S. A. v. AnimalFeeds Int’l Corp., 559 U. S. 662 (2010), which held that a court may not compel class arbitration when an agreement is silent on the availability of such proceedings. Read more

The United States Supreme Court held that consumers have standing to pursue a putative antitrust class action against Apple for monopolization. In Apple Inc. v. Pepper, et al., Case No. 17-204 (May 13, 2019), the Court ruled 5-4 that the consumer plaintiffs were not barred by the “indirect purchaser rule” that generally limits standing in federal antitrust cases for damages to direct purchaser plaintiffs only. Read more

Summary: The Second Circuit has held that despite an express "delayed accrual" clause, claims stemming from breach of warranties by a seller of residential mortgage-backed securities began to run at the moment of the sale, not upon discovery; therefore, the buyer's claims against the seller were therefore time-barred. [Lehman XS Trust, Series 2006-GP2 by U.S. Bank N.A. vs. GreenPoint Mortgage Funding, Inc., 2019 Westlaw 452888 (2nd Cir.).] Read more

Summary: A bankruptcy court in New York has held that a liquidated damages clause based on "stipulated loss value" contained in an equipment lease was void because the lessee's liability was not connected to any losses caused by the lessee's default; further, the clause could not be enforced against a guarantor, even though the guarantee contained broad waivers. [In re Republic Airways Holdings, Inc., 2019 Westlaw 630336 (Bankr. S.D.N.Y.).] Read more

Summary: The California Supreme Court has held that when a creditor proffers a declaration in lieu of live testimony in a limited civil case, the affiant must be available for service of process within 150 miles of the place of trial, under some circumstances. [Meza v. Portfolio Recovery Associates, LLC, 2019 Westlaw 641517 (Cal.).] Read more