Addressing an issue of first impression, the Oregon Court of Appeals today held that the inconvenient-forum doctrine, or forum non conveniens, is available as a basis to dismiss a lawsuit in state court. In Espinoza v. Evergreen Helicopters, Inc., the trial court dismissed a wrongful death action arising from a helicopter crash in Peru, applying the inconvenient-forum doctrine. On appeal, plaintiffs contended that Oregon courts lack discretion to decline to exercise jurisdiction.
Judge Rex Armstrong, writing for the court, surveyed Oregon case law and determined that courts have inherent power to decline jurisdiction, including based on the inconvenient-forum doctrine. To obtain dismissal on that basis, a defendant bears the burden of demonstrating that an alternative forum is available and adequate, and that considerations of convenience and justice so outweigh the plaintiff's choice of forum that the action should be dismissed. The court remanded the case to the trial court for application of the new test.
Last week the Oregon Court of Appeals reinforced the challenges facing parties seeking prejudgment interest. In Davis v. F.W. Financial Services, Inc., defendant asserted a counterclaim for conversion of funds, and sought interest accruing on that sum of money through the date of judgment.
According to the court, a claim for prejudgment interest is properly pleaded when the claimant alleges the exact amount due and the dates during which the claimant was deprived of the funds. While the defendant in Davis did allege in its counterclaim the exact amount converted by plaintiff, defendant was denied prejudgment interest because it incorrectly stated the date on which the conversion began. The court reached that result even though the plaintiffs themselves had properly stated in their complaint the date on which they took control of the funds. Because defendant "pleaded only legally erroneous dates" it was not entitled to prejudgment interest.
The Oregon Supreme Court earlier this month refined its test for personal jurisdiction, rejecting thirty-year-old precedent and adopting a flexible approach consistent with more recent U.S. Supreme Court case law.
Robinson v. Harley-Davidson Motor Co. focuses on the test courts use to determine whether a lawsuit arises from or is related to the out-of-state defendant's contacts with the forum. In Robinson, plaintiff was a resident of Oregon who purchased a motorcycle in Oregon, had the motorcycled serviced by defendant dealership in Idaho, and was injured in Wyoming due to defendant's allegedly negligent repair. Plaintiff sued defendant in Oregon, and defendant sought to dismiss on the ground that it was not subject to personal jurisdiction in an Oregon court.
Plaintiff argued for specific jurisdiction, claiming that defendant was subject to suit because it engaged in activity in Oregon and the claim arose from or related to that activity. While the defendant dealership had no physical presence in Oregon, its contacts with the state included selling a limited number of products to Oregon residents through its interactive web site, advertising in publications distributed in Oregon, and selling products to Oregon residents who visit its Idaho location.
In 1982 the Oregon Supreme Court held in State ex rel. Michelin v. Wells that a court may exercise personal jurisdiction when at least one of the defendant's contacts with the forum state is substantively relevant to the cause of action. The court in Robinson acknowledged that this so-called "substantive relevance" test has been rejected by certain federal courts as "mechanical and rigid" and not consistent with more recent U.S. Supreme Court opinions on personal jurisdiction. The court accordingly disavowed Michelin, and stated that litigation arises from and relates to the defendant's activity in the forum if the activity (1) is a but-for cause of the litigation and (2) provides a basis for a determination that the litigation was foreseeable.
Applying this test, the supreme court concluded that defendant's contacts in Oregon were not such that it was reasonably foreseeable that it would be sued in Oregon as a result of work performed in Idaho. On that basis the court affirmed dismissal of the claim against the dealership.
Courts considering motions to certify a class action can't shy away from considering the merits, if doing so is necessary to determine whether the class meets the requirements of FRCP 23(a). That was the conclusion reached last week by the US Supreme Court in Comcast Corp. v. Behrend.
In Comcast, the plaintiffs sought to certify a class of Comcast cable television customers in the Philadelphia area. Plaintiffs claimed an antitrust violation arising out of Comcast's acquisition of competitor cable providers. In order to certify a class action under FRCP 23(a), plaintiffs were required to show, among other things,that damages were measurable on a classwide basis through a common methodology. In agreeing to certify the class, the Third Circuit Court of Appeals refused to entertain certain of defendant's arguments about the plaintiffs' damages model because those arguments had a bearing on the merits of plaintiffs' claim.
Justice Scalia, writing for the majority, stated that the inability of plaintiff's expert to tie the above-market prices to the alleged antitrust violations made the case improper for class certification. The Third Circuit's refusal to address that issue because it touched on the merits was improper.
The Oregon Court of Appeals last week affirmed a jury award of $100,000 in punitive damages in a case where compensatory damages were $500. The Court applied the standards set forth by the Oregon Supreme Court last year in Hamlin v. Hampton Lumber Mills, Inc., finding that the defendant engaged in sufficiently reprehensible behavior to justify punitive damages 200 times compensatory damages.
In Lithia Medford LM, Inc. v. Yovan, defendant purchased an automobile from plaintiff, and soon thereafter found a discrepancy between the mileage on the odometer and the actual mileage. Following an extended dispute over how to resolve the issue, plaintiff sued to rescind the sale due to mutual mistake. Defendant counterclaimed for violation of the Oregon Unlawful Debt Collections Practices Act. The trial court reduced the jury's award of $100,000 in punitive damages to $2,000, to bring it in line with the modest amount of compensatory damages.
Hearing the case en banc, the Court of Appeals split on whether the trial court properly reduced the punitives award to a single-digit multiple of the compensatory damages. Judge Nakamoto, writing for the majority, stated that the consumer had proven that the car dealer "repeatedly used deceptive and abusive tactics against a financially vulnerable consumer to enhance its financial interests." The court also pointed to the dealer's "arrogant presentation to the jury of its position that it had done nothing wrong" to justify retaining the jury's punitive damages award. These facts supported the 200-1 ratio of punitive to compensatory damages.
Judge Wollheim, writing for the minority, advocated for reducing the punitives to $25,000, which is comparable to the statutory penalties available under the Unlawful Debt Collections Practices Act.
See our discussion of Hamlin, and its analysis of punitive damages in cases in which compensatory damages are small, here.
Even famed test pilot Chuck Yeager can't avoid the sham affidavit rule. Last month the Ninth Circuit affirmed a district court judge's decision to disregard a declaration that Yeager submitted in opposition to a summary judgment motion, on the ground that it contradicted his earlier deposition testimony.
In Yeager v. Bowlin, Yeager filed suit in the Eastern District of California against sellers of aviation-related memorabilia, claiming, among other things, violations of the Lanham Act and California's common law right to privacy. Yeager -- who gained fame when he was featured in the book and movie The Right Stuff -- was deposed in connection with the lawsuit and reportedly remembered "almost nothing" about events central to the case. He was unable to recall answers to approximately 185 questions. Yet in response to defendants' summary judgment motion, he submitted a declaration in which he recalled the same events "with perfect clarity."
The sham affidavit rule provides that a party cannot create an issue of fact and avoid summary judgment by offering an affidavit contradicting his prior deposition testimony. Yeager argued that the declaration was not a sham because it did not contradict his deposition testimony, but merely showed that he had later "refreshed his recollection" by reviewing documents.
The Ninth Circuit held that a declaration may be rejected as sham when it contains facts that the declarant previously testifed he could not remember. While courts should not make credibility determinations when granting or denying summary judgment, in this case the disparity between the declaration and the deposition was "so extreme" that no juror would believe the explanation provided for the later recovery of memory.
Buried in a lengthy Ninth Circuit opinion about a controversial Arizona sheriff is a procedural nugget of interest to federal court litigants: Failure to reallege a dismissed claim in an amended complaint no longer constitutes a waiver of the right to appeal the dismissal of that claim.
In Lacey v. Maricopa County, journalists asserted civil rights claims against Sheriff Joe Arpaio and others, claiming retaliation in violation of the First Amendment, false arrest, and selective prosecution. An en banc panel of the Ninth Circuit last month denied defendants' motions to dismiss and determined that the claims can proceed against Arpaio and two county prosecutors.
While none of the parties briefed the issue, the court sua sponte addressed whether plaintiffs had waived their right to appeal the dismissal of claims against one of the prosecutors by failing to name him as a defendant in an amended complaint. The court's longstanding rule, which it called the Forsyth rule, is that a plaintiff waives all claims alleged in a dismissed complaint which are not realleged in an amended complaint. Criticized as harsh and overly formalistic, the rule has been rejected by other circuits.
The court disclaimed the Forsyth rule and held that "for claims dismissed with prejudice and without leave to amend, we will not require that they be repled in a subsequent amended complaint to preserve them for appeal." As to claims dismissed voluntarily, the court will continue to consider them waived if not repled.
When a plaintiff invokes the federal courts' diversity jurisdiction, it must plead both the state of incorporation and the principal place of business of corporate parties. In 2010, the U.S. Supreme Court in Hertz Corp. v. Friend adopted the "nerve center" test for determining a corporation's principal place of business. Earlier this month, the Ninth Circuit held in Harris v. Rand that, while Hertz provided a uniform test for determining subject matter jurisdiction, it did not adopt a heightened pleading standard for the allegations supporting diversity jurisdiction. So it's sufficient for a complaint asserting diversity jurisdiction to state the location of a party's principal place of business; plaintiffs are not required to plead facts showing why that location is the "nerve center." But the Ninth Circuit warned that, if the allegations of a principal place of business are "implausible," then the District Court has the authority to require more specific pleading.
See our earlier coverage of Hertz here, and our coverage of Bell Atlantic Corp. v. Twombly and Ashcroft v. Iqbal, the Supreme Court's key opinions regarding federal court pleading standards, here and here.
The Oregon Court of Appeals last week drew a hard line in enforcing the procedures for recovering attorney fees. In Anderson v. Dry Cleaning To-Your-Door, Inc., the Court reversed a trial court award of more than $100,000 in attorney fees to plaintiffs who successfully defeated contempt sanctions, on the ground that plaintiffs failed to allege the right to fees in a pleading or motion as required by ORCP 68C(2).
In Anderson, plaintiffs in a breach of contract case obtained a judgment against defendant which included a non-competition provision. Defendant later claimed that plaintiffs violated the non-competition portion of the judgment, and initiated contempt proceedings against plaintiffs under ORS 33.055. The trial court found plaintiffs were not in contempt, and requested that the parties prepare a proposed judgment.
The trial court entered plaintiffs' proposed form of judgment, in which plaintiffs asserted for the first time an entitlement to recover their fees in the contempt proceeding. Defendant objected that plaintiffs did not allege a right to attorney fees in a pleading or motion as required by ORCP 68C(2), but the trial court nonetheless awarded the requested fees in the amount of $115,980.
On appeal, the Court of Appeals held that plaintiffs could not avoid the obligation to state in a pleading or motion the facts, statute or rule that entitled them to recover fees. That obligation exists even though plaintiffs did not initiate the contempt proceedings. Because plaintiffs did not comply with ORCP 68C(2), the Court reversed the award of fees.
Earlier this month the Oregon Court of Appeals ruled that a three-year statute of limitations for final paycheck penalty claims begins to run at the end of the 30-day penalty period.
ORS 652.140 specifies the time in which the employer must pay an employee's final wages. ORS 652.150 imposes a daily penalty for late payment of the final wages. The daily penalty is calculated by multiplying the employee's hourly rate by eight hours. The daily penalty runs for up to a maximum of 30 days, but stops accruing if either (1) the employer pays the wages or (2) the employee sues for the wages.
The statute of limitations for final paycheck claims has been disputed. Employers have argued for the application of the one-year statute of limitations established by ORS 12.130. Plaintiffs have argued for the application of the three-year limitation specified in ORS 12.100(2) with some success at the trial court level. In Russell v. U.S. Bank, the Oregon Court of Appeals applied the three-year limitations period. Further, the court held that the three-year period does not begin to run until the total amount of penalty wages owed to the employee has accrued. In other words, if the final paycheck is not paid for 30 or more days, the claim does not accrue until the 30th day. The court emphasized that "the key point is that the employee's cause of action . . . is for the penalty wages themselves, not for the earned wages that the employer should have paid the employee on his or her last day of work."
The employee has a single penalty claim which increases by one day of wages for each day the final wages remain unpaid, up to a maximum of 30 days. In this case, the employee sued three years and eight days after her termination. Because her final wages remained owing after 30 days following her termination, the court ruled that her claim was timely filed.