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Archive for March, 2011

In 2009, the Pacific Merchant Shipping Association (“PMSA”) sued the head of the California Air Resources Board over the state’s Vessel Fuel Rules, which require ships to use cleaner fuels within 24 miles of the coast as they move through the state’s busy ports. The PMSA argued that the regulations were pre-empted by the federal Submerged Lands Act (“SLA”). The PMSA filed a motion for summary judgment on its pre-emption claim, but the trial court denied it.

On appeal, the Ninth Circuit Court of Appeals unanimously affirmed that decision. The court noted that the rules amount to an "expansive and even possibly unprecedented state regulatory scheme," but found that California has a right to mitigate its environmental problems, which "are themselves unusual and even unprecedented." Although the regulations will likely cost the shipping industry some $1.5 billion through the end of the 2014, the court stated that California had “clear justification” for the rules:

It appears uncontested that ocean-going vessels have long been a leading source of air pollution in California, due in large part to the widespread use of low-grade bunker fuel.

The court referenced data showing that ocean-going vessels traveling within 24 nautical miles of the California coast spew about 15 tons of diesel particulate matter per day, as well as 157 tons of nitrogen oxides and 117 tons of sulfur oxides. The vessel fuel rules are expected to significantly reduce such harmful emissions and "should prevent, between 2009 and 2015, approximately 3,500 premature deaths and nearly 100,000 asthma attacks as well as reduce cancer risks."

The court noted that, while the SLA granted states the rights to all of their coastal lands within 3 nautical miles of the continent, other courts have rejected challenges to state laws despite the 3-mile regulatory limit:

Applying this effects test to the vessel fuel rules, we conclude that there are genuine issues of material fact with respect to both the effects of the fuel use governed by California’s regulations on the health and well-being of the state’s residents as well as the actual impact of these regulations on maritime and foreign commerce.

Accordingly, the court remanded the case back to the trial court for further proceedings.

For the full story, click here.

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Thorn v. Pierson, No. CA10-229.

In 2002, Noble Vance Pierson was a woman in her seventies with a sizable estate and three children, Dale, Leslie, and Sandra. One of the brothers, Leslie, lived in a trailer on Mrs. Pierson’s three-acre home property, and she intended that he should receive that property upon her death. Mrs. Pierson told her daughter, Sandra Thorn, that she wished to have her real property settled and divided. Sandra suggested that she purchase the land for $100,000, which would constitute Dale’s share of the property. Mrs. Pierson agreed and later signed a deed to that effect. The purchase price of $100,000 was placed in a certificate of deposit to be given to Dale upon Mrs. Pierson’s death.

At some point later, Mrs. Pierson sued Sandra to have the deed cancelled. At trial, Mrs. Pierson testified that she did not have a good understanding of legal issues and relied upon her daughter to help her with them. The trial court found that Sandra was the dominant party in a confidential relationship with her mother. Under Arkansas law, this gave rise to a rebuttable presumption that Sandra had used undue influence to procure the deed. The trial court then found that there was insufficient evidence to overcome the rebuttable presumption and cancelled the transaction.

On appeal, the Arkansas Court of Appeals noted that Mrs. Pierson testified at trial that (1) she was an independent woman, (2) she handled her own affairs, (3) she negotiated the purchase of her SUV, and (4) she was familiar with real estate transactions, easements, and leases of mineral rights. The court further noted that Mrs. Pierson corrected an attorney regarding a bequest in her will. She noted the bequest was not merely to her son, but also to “the heirs of his body.” That court stated that this understanding showed Mrs. Pierson was not compelled to rely on her daughter in legal matters.

Accordingly, the court held that (1) Sandra was not the dominant party in a confidential relationship and (3) she did not procure the deed by the exercise of undue influence.

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Tim McCollough sued Johnson, Rodenburg & Lauinger, a debt-collection law firm, for pursuing his credit card bet after the statute of limitations had expired. McCollough claimed that he and his wife fell behind in paying their credit card bills after he suffered a brain injury while working as a school custodian and his wife underwent surgery. He stopped making payments on his account with Chase Manhattan Bank in 1999 when there was an unpaid balance of about $3,000. In 2005, another debt-collection agency sued McCollough, but the lawsuit was dismissed because the five-year statute of limitations had already expired.

Johnson, Rodenburg & Lauinger then became involved and were incorrectly informed that McCollough had paid $75 on his account in 2004, effectively resetting the clock to run through 2009. The 2004 activity was not a payment; however, it was the return of court costs to the other debt-collection agency for an earlier attempt to pursue McCullough’s debt. No one at Johnson, Rodenburg & Lauinger requested documentation of the activity. Instead, the firm simply sued McCullough in 2007 for about $10,000. In his pro se answer to the complaint, McCullough again wrote that the statute of limitations had expired:

FORGIVE MY SPELLING I HAVE A HEAD INJURY AND WRITING DOSE NOT COME EASY. THE STACUT OF LIMITACION’S IS UP, I HAVE NOT HAD ANY DEALINGS WITH ANY CREDITED CARD IN WELL OVER 8½ YEARS.

McCullough eventually retained a lawyer, and Johnson, Rodenburg & Lauinger dismissed the suit with prejudice. He then filed suit against the firm, claiming it had violated the federal and state fair debt laws, as well as state torts of malicious prosecution and abuse of process. A Montana jury ordered Johnson, Rodenburg & Lauinger to pay Tim McCollough $250,000 in damages for emotional distress. The trial court refused to reduce the award or give Johnson, Rodenburg & Lauinger a new trial.

On appeal, the Ninth Circuit Court of Appeals found that Johnson, Rodenburg & Lauinger filed an average of five collection lawsuits a day in Montana between January 2007 and July 2008, which amounted to about 2,700 total. On one day, the North Dakota firm filed 40 lawsuits. About 90% of the firm’s suits end in a default judgment. The court affirmed the trial court’s ruling, noting that the
firm’s error was its own to prevent.

For the full story, click here.

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