Legal News

Case Summaries

Securities Law

[05/06] In re: Slatkin
Summary judgment in favor of bankruptcy trustee, avoiding under 11 U.S.C. section 548(a) and California Civil Code section 3439.04(a) certain transfers made by the debtor during his operation of a Ponzi scheme, is affirmed where: 1) the bankruptcy court did not abuse its discretion in denying appellants-investors' motion for a continuance to conduct further discovery; 2) investors' right to a jury trial was not violated by the grant of summary judgment; 3) the bankruptcy court properly determined that debtor acted with the actual intent to "hinder, delay, or defraud" his creditors; 4) a determination that debtor was not a "stockbroker" under the Bankruptcy Code was proper; and 5) prejudgment interest was properly awarded.

[05/05] Benton v. Merrill Lynch & Co., Inc.
In an action against defendant alleging a violation of the Arkansas Securities Act and common law fraud, dismissal of plaintiffs' complaint for failure to state facts on which relief could be granted is affirmed where: 1) plaintiffs' complaint was devoid of any allegations which might establish that defendant-Merrill Lynch materially aided the fraudulent sale of promissory notes, for purposes of a claim under Arkansas Securities Act; and 2) the allegations in the complaint did not include factual allegations which demonstrate Merrill Lynch assisted or even knew of the fraud, for purposes of a common law fraud claim.

[05/05] US v. Edwards
In a prosecution for wire fraud and related crimes, defendant's conviction is affirmed over claims that: 1) the district court erred in denying his motion for judgment of acquittal made after he rested his defense; 2) he was denied a fair trial and the ability to confront witnesses when the district court permitted several prosecution witnesses to remain in the courtroom and listen to testimony before they took the witness stand; 3) the court erred in denying a motion to suppress certain documents submitted to the SEC during its investigation of a sale and lease-back program; and 4) the court's jury instructions constructively amended the indictment. However, defendant's sentence is vacated and remanded for a new sentencing hearing where, although defendant was convicted of one count of conspiracy to commit money laundering and multiple counts of wire fraud and money laundering, he only received one sentence.

[05/01] MAS Capital, Inc. v. Biodelivery Sciences Int'l, Inc.
In a removed suit brought by plaintiff, which was incorporated in Nevada and had its principal place of business in Taiwan, against defendant-citizen of Delaware and New Jersey over monies owed for services rendered, summary judgment for defendant is affirmed where: 1) diversity jurisdiction was proper under 28 U.S.C. section 1332 because the foreign principal place of business does not count for jurisdictional purposes; and 2) on the merits, plaintiff signed a release to any claim of additional compensation.

[04/30] Stephenson v. El-Batrawi
In a securities-related action wherein default judgment was entered against defendant in the amount of $67.5 million for damages, denial of defendant's motion to set aside the default judgment is affirmed where: 1) defendant was properly served, evaded service of process, and thus was not blameless for his failure to timely appear; 2) defendant failed to establish the existence of a meritorious defense; and 3) reopening the matter would be prejudicial to the parties in light of the amount of time that had lapsed. However, because there was no adequate record to evaluate the district court's damage determinations, matter is remanded for the district court to make findings regarding the evidentiary support and any necessary calculation for any damage award it may enter.

[04/30] Luce, Forward, Hamilton & Scripps, LLP v. Koch
An arbitration award need not be vacated on grounds that the arbitrator refused to disqualify him or herself after receiving a timely notice of disqualification, when the notice was based on the disclosure of information the arbitrator was not required to disclose but nonetheless revealed out of an abundance of caution.

[04/30] Laperriere v. Vesta Ins. Group, Inc.
In an appeal addressing whether, and to what extent, the proportionate liability scheme of section 21(D)(f) of the Securities Exchange Act of 1934 (Act), enacted as part of the Private Securities Litigation Reform Act of 1995 (PSLRA), amends section 20(a) of the Act, under which a person who controls a violator of the Act is "liable jointly and severally with and to the same extent" as that violator, the circuit court rules that section 21(D)(f) and section 20(a) should be read in harmony to preserve both the PSLRA's proportionate liability scheme and a controlling person's derivative liability under section 20(a).

[04/28] Consol. Mgmt. Group, LLC v. Dep't of Corp.
In a case wherein the trial court denied a petition for writ of administrative mandamus which sought to overturn a California Department of Corporations desist and refrain order concerning offers and sales of interests in certain Kansas general partnerships, the judgment is affirmed where: 1) federal law does not preempt the Department's authority to issue the desist order; and 2) substantial evidence supported a determination that the interests at issue were securities.

[04/25] Kirschbaum vs. Reliant Energy, Inc.
Certification of a class and grant of corporate defendants' motion for summary judgment on all claims related to plaintiff-employee's ERISA class action is affirmed where: 1) even if defendants had a fiduciary duty to liquidate a particular investment option in the plan (defendant-company's stock fund) and cease purchasing its shares, notwithstanding the plan's express contrary requirements; nevertheless, 2) plaintiff fell short of bearing his heavy burden to rebut the presumption that defendants satisfied their legal duties.

[11/15] Hildreth v. Castle Dental Centers, Inc.
In an action challenging judicial allocation of a corporation's fair value between preferred and common stockholders wherein the common shareholders contend that an issuance of preferred stock was void and the trial court erroneously valued preferred stock on an as-if-converted basis because there were insufficient authorized shares of common stock to permit the conversion, judgment is affirmed where: 1) the underlying preferred stocks were validly issued; and 2) the trial court acted within its discretion in its valuation of the two classes of stock.

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Workers' Comp

[05/06] Steed v. Astrue
Denial of social security disability and supplemental security income benefits is affirmed where: 1) substantial evidence supported a finding that claimant retained the capacity to perform light work and suffered only mild degenerative changes to her back; and 2) the ALJ did not err in its evaluation of medical evidence or in discounting claimant's credibility.

[04/30] Antelope Valley Press v. Poizner
In a case considering whether, for purposes of worker's compensation insurance, persons who made deliveries of newspapers for a newspaper publisher were independent contractors or employees, the court of appeals finds that the specific facts of this case and relevant case law supported a conclusion that the carriers were employees, and not independent contractors.

[04/29] Ramirez v. Murdick
In an action wherein plaintiff filed a Huffman claim seeking liquidated damages, attorney's fees and costs for the late payment of worker's compensation benefits, summary judgment for defendants is affirmed where: 1) the Superior Court did not err in its interpretation and application of Workers' Compensation Act, 19 Del. C. sections 2357 and 2362(c); and 2) although the Superior Court erred in converting employer's motion to dismiss into a motion for summary judgment without notice, the error was harmless.

[04/22] Sewell Coal Co. v. Dir., Office of Workers' Compensation Programs
In proceedings arising from a claim for benefits under the Black Lung Benefits Act (the BLBA), an order of the Benefits Review Board affirming an award of benefits is vacated and remanded where: 1) the three year statute of limitations under 20 C.F.R. section 725.308(a) applies to subsequent claims for benefits; and 2) a remand was proper for further proceedings on whether the claim was timely under the three year statute of limitations, as it applies to subsequent claims.

[04/21] Glazer v. Reliance Standard Life Ins. Co.
In an appeal invoking an issue under ERISA as to when medical reports relied on by a plan administrator during the review of a denial of benefits must be produced to the claimant for her to receive a "full and fair review", summary judgment for plan administrator is affirmed where: 1) the pertinent federal regulations did not require plan administrator to produce the medical reports requested by plaintiff during the pendency of the review; 2) the district court applied the correct legal standard of review; and 3) the decision by plan administrator to deny plaintiff's application for benefits was right.

[04/18] Brooks v. Workers' Comp. Appeals Bd.
In a case considering whether a year of industrial disability leave (IDL) payable to state employees under Government Code 19869-19877.1 falls within the ambit of the two-year limitation of aggregation of temporary disability payments in Labor Code section 4656 subdivision (c)(1), the court of appeals rules that, under the current statutory scheme, state employees are limited to a maximum of two years of combined temporary disability indemnity.

[04/17] Foster v. Workers' Comp. Appeals Bd.
In a case considering the appropriate application of Labor Code section 4656(c)(1) to situations where multiple independent industrial injuries result in temporary disability, the court of appeals agrees with Workers' Compensation Appeals Board's conclusion that "where independent injuries result in concurrent periods of temporary disability, the 104[-]week/two[-]year limitation likewise runs concurrently".

[04/17] Smith v. The Waukegan Park Dist.
In a retaliatory discharge action, dismissal of the complaint is reversed where local public entities do not have immunity from claims that employees have been discharged for filing workers' compensation claims.

[12/05] Levan v. Independence Mall Inc.
In an action arising from an injury in a work-related accident wherein a petition for additional compensation was filed with the Industrial Accident Board more than 5 years after the employer's insurance carrier mailed the last medical expense payment, judgment that the petition was time-barred under 19 Del. C. section 2361(b) is affirmed over claims that: 1) the limitations period began to run when the claimant or his medical provider actually receives the last payment; and 2) the Board's decision was not supported by substantial evidence; and 3) the Superior Court applied its own construction of section 2361(b) incorrectly and erred when it upheld the Board's ultimate ruling of the petition as barred.

[11/21] Asbestos Workers Local Union No. 42 Welfare Fund v. Brewster
In a subrogation action brought by an ERISA Fund wherein one of its members sought to have her medical expenses from an automobile accident paid by the Fund, summary judgment for plan administrators is affirmed whereby: 1) the Fund's state law subrogation claim was preempted by ERISA section 514, as the claim "relates to" the ERISA plan; and 2) the Fund's subrogation claim duplicated or supplemented a civil enforcement remedy available to the Fund under section 502(a)(3) of ERISA.

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