Woodrow Wilson Jones

In this diversity action, First Investors Corporation and its insurer Liberty Mutual sued Citizens Bank and its parent company for negligence and conversion, alleging that the bank improperly allowed their former agent Dorcas Anne Brooks to open accounts and deposit checks with fraudulent endorsements, resulting in over $639,000 in losses from unauthorized mutual fund sales. The defendants moved for summary judgment, arguing among other things that the claims were barred by North Carolina's three-year statute of limitations for conversion. The court treated the motion as one for summary judgment due to extraneous materials submitted and held that the action was time-barred. It reasoned that under N.C. Gen. Stat. § 1-52(4), a conversion claim accrues at the time of the conversion rather than upon discovery, that the legislature had not incorporated a discovery rule into this provision unlike the fraud statute, and that the separate discovery provision in § 1-52(16) for physical damage to property did not apply to this integrated statutory scheme governing commercial paper.

business & regulatorytorts & liabilityprocedure

In this case, plaintiffs brought a nationwide class action against Volkswagen alleging breach of implied warranty of merchantability under the federal Magnuson-Moss Act and unfair or deceptive practices under various state "Little FTC Acts," claiming damages from defective valve stem seals in certain Rabbit models. After a jury verdict for Volkswagen that was affirmed on appeal, the district court considered the defendant's motion for attorney fees under the laws of ten states. The court awarded $42,350.98 in fees for work by local counsel in Alaska, Florida, Hawaii, Mississippi, and Montana, where state statutes authorized or required fees to prevailing parties, but denied fees for Colorado, Illinois, Indiana, Kentucky, and Missouri after examining each statute's text, case law, and practices and exercising its discretion without a finding that the claims were frivolous. The reasoning emphasized following the plain language of the state statutes rather than federal standards like Christiansburg Garment, while assessing necessity and similarity to state-court outcomes.

business & regulatoryprocedure

This case involved Trilogy Communications suing Comm Scope and affiliated companies for allegedly infringing three patents on methods, apparatus, and products for manufacturing coaxial cables with foam cellular polyolefin insulation. The defendants denied infringement and sought declaratory judgments of invalidity and non-infringement. The court held that the asserted claims of all three patents were invalid, had not been infringed by any of the defendants' products or processes, and were unenforceable because they were obtained in violation of the duty of disclosure and candor. It further concluded there was no willful infringement and dismissed claims against the parent or acquiring companies due to insufficient evidence of direct involvement or alter ego liability. These rulings rested on the trial evidence, prior art comparisons, and patent prosecution history.

business & regulatoryprocedure

Shell Oil Company sued Commercial Petroleum, Inc. for trademark infringement and unfair competition under the Lanham Act and North Carolina law, alleging that Commercial sold bulk Shell Rotella T lubricating oil using Shell's trademarks without authorization or adherence to quality control standards. The court, after a bench trial, found that Commercial infringed Shell's trademarks "Shell," "Rotella," and "Shell Rotella T" by marketing the oil without complying with Shell's required handling, storage, and transportation procedures, which are essential to prevent contamination and maintain product quality. The decision rested on the principle that unauthorized use without quality control deprives the trademark owner of the right to ensure the product's integrity, leading to a likelihood of consumer confusion. The court granted injunctive relief prohibiting such sales without authorization but awarded no damages, as Shell suffered no proven losses.

business & regulatoryproperty

The case involved a dispute arising from a 1984 joint venture agreement between Atlanta-Tomberlin, Inc. (ATI) and the Eastern Band of Cherokee Indians to operate a cable converter repair business on the Cherokee Reservation. After the parties ended operations in 1985, the Tribe initiated arbitration, resulting in a 1987 award that found ATI had breached the contract by failing to make required capital contributions and had breached its fiduciary duty, ordering ATI to pay the Tribe over $100,000 plus penalties. ATI petitioned the federal district court to vacate the award under the Federal Arbitration Act (9 U.S.C. §§ 10-12), arguing that the arbitrators exceeded their authority by considering matters outside the submitted issues and that the award lacked a clear factual basis. The Tribe cross-petitioned to confirm the award. The court denied the petition to vacate and confirmed the award, holding that judicial review is narrowly limited to whether arbitrators exceeded their powers, that the Tribe's broad claims in the arbitration demand encompassed the issues litigated, and that no evident material miscalculation existed to justify modification.

business & regulatoryprocedure

The case involved William F. Flippo, Jr. suing the United States for damages under 26 U.S.C. § 7431, claiming that an IRS revenue officer improperly disclosed his tax return information while attempting to collect unpaid taxes. The court decided that the plaintiff could not recover, finding no unauthorized disclosure in a knowing or negligent manner and that the good faith defense under the statute applied. The reasoning centered on the officer's routine collection efforts, including filing liens and levies based on incomplete records, which were authorized by other code sections like §§ 6303 and 6331, and similar to precedents where such actions did not violate § 6103.

taxes

This case involved a dispute over trademark rights between Ithaca Industries, a manufacturer of pantyhose under the brand SHEER ESSENCE, and Essence Communications, the owner of ESSENCE marks for a women's magazine, T-shirts, and mail-order services. Ithaca sought a declaratory judgment that its mark did not infringe and that certain of the defendants' registrations were invalid, while the defendants counterclaimed for infringement. The court held that the defendants' trademarks were valid and infringed by Ithaca's use due to a likelihood of confusion and the defendants' prior use in related fields, leading to an injunction against Ithaca's continued use of ESSENCE in its pantyhose branding, though no damages were awarded.

business & regulatoryproperty

The case concerned Vera H. Johnson’s suit to recover $2,000 in federal employment taxes she paid after the IRS assessed her as a partner in H&J Lumber Company, with the United States counterclaiming for the unpaid balance of the assessment. The court granted the government’s motion for partial summary judgment on the partnership issue. It determined there was no genuine factual dispute that Johnson was a partner because she contributed capital, filed partnership tax returns, deducted half the business losses on her personal returns, represented herself as a partner to the IRS, and worked full-time in the sawmill operation. The court applied the multi-factor test from Culbertson and related cases focusing on intent to share profits and losses, and alternatively held she was estopped from denying partnership status.

taxesbusiness & regulatory

This case involved employment discrimination claims brought by three former employees against Milliken & Company under Title VII of the Civil Rights Act of 1964 and the Age Discrimination in Employment Act (ADEA), along with pendent state-law breach of contract claims. The plaintiffs sought individual and class relief alleging discrimination based on age, sex, and national origin, but the defendant moved to dismiss the Title VII claims for failure to file EEOC charges or obtain right-to-sue letters, to strike the Rule 23 class claims under the ADEA, and to dismiss the state claims for lack of pendent jurisdiction. After an evidentiary hearing, the court granted the motions and dismissed the Title VII claims because the plaintiffs had not exhausted administrative remedies and no waiver, estoppel, or equitable tolling applied; dismissed the ADEA class claims because the statute incorporates the opt-in procedures of the Fair Labor Standards Act rather than Rule 23; and declined to exercise jurisdiction over the state contract claims due to potential jury confusion and unresolved questions of North Carolina at-will employment law. The case was allowed to proceed solely on the individual ADEA claims.

labor & employmentcivil rightsprocedure

This case involved a challenge by female employees of Olin Corporation to the company's fetal vulnerability policy, which restricted women of childbearing age from certain jobs involving exposure to chemicals that could harm unborn fetuses, under Title VII of the Civil Rights Act. The court determined that the policy did not violate Title VII. The core reasoning was that Olin had established a business necessity defense through scientific evidence showing substantial risks of fetal harm from substances like toluene and lead, and that the policy was applied only where evidence of harm existed, with no less discriminatory alternatives available.

civil rightslabor & employmentbusiness & regulatory

The case involved a taxpayer who filed a 1982 income tax return reporting $33,228 in wages but claiming a $29,808 business loss with no gross receipts on an attached Schedule C, resulting in a large refund claim. The IRS assessed a $500 penalty under I.R.C. §6702 for filing a frivolous return, which the plaintiff challenged by paying 15% and suing for abatement and refund while also contesting the statute's constitutionality. The court granted summary judgment to the United States, dismissing the action, after finding the return frivolous as a matter of law under §6702 because it contained information on its face indicating the self-assessment was substantially incorrect due to a frivolous position. The court also rejected constitutional challenges to the penalty provision, noting that the statute provides for refund claims and access to courts, and awarded attorney fees based on bad faith filing.

taxesprocedure

The case involved Edward W. Naylor, a former probationary employee at a Veterans Administration Medical Center, who sued his union, American Federation of Government Employees Local 446, and its president for breaching the duty of fair representation during his termination for misconduct. The plaintiff alleged inadequate representation at his termination hearing and arbitration, including failure to inform him of grievance rights and mishandling the arbitration process. The court denied motions to dismiss for lack of jurisdiction and failure to state a claim but granted summary judgment to the defendants, finding no genuine issue of material fact. The core reasoning was that under Vaca v. Sipes, the union's actions were not arbitrary, discriminatory, or in bad faith, as the record showed proper representation at both hearings.

labor & employment

This diversity case involved a North Carolina hosiery company suing a Virginia competitor for tortious interference with a contract and violation of the state's unfair trade practices statute after the defendant allegedly threatened a third-party knitter to prevent it from fulfilling a sock production agreement. The jury found that a contract existed, the defendant made coercive threats affecting commerce, and the plaintiff suffered $150,000 in damages as a result. The court upheld the verdict as unanimous and supported by the evidence, rejecting challenges to jury polling, jury instructions, and damage calculations. It denied the plaintiff's requests for treble damages and attorney fees, however, because the conduct did not constitute a violation of N.C. Gen. Stat. 75-1.1 as a matter of law and there was no showing of an unwarranted refusal to settle the claim.

business & regulatoryproceduretorts & liability

The case involves a state prisoner seeking federal habeas corpus relief under 28 U.S.C. Section 2254 after his conviction for first-degree burglary and life sentence, alleging incompetence to assist in his defense, ineffective assistance of counsel, drug influence at trial, conviction by an all-white jury, insufficient proof of guilt, and improper grand jury indictment. The court noted incomplete exhaustion of state remedies but proceeded to the merits following the state's waiver, reviewing the trial record to find adequate evidence of a breaking and entry with intent to commit larceny, as well as no merit to the other claims. The petition was denied.

criminal lawprocedure

The case involved a medical malpractice claim by Pennsylvania residents against a North Carolina doctor and hospital arising from injuries allegedly sustained during the obstetrical delivery of their son in 1976 at Grace Hospital. The plaintiffs had filed suit in federal court in 1979, voluntarily dismissed it without prejudice, then refiled in state court where it was dismissed as barred by North Carolina's statute of limitations; they subsequently refiled the same claims in federal court in 1981. The court granted the defendants' motion for summary judgment, ruling that the state court judgment was res judicata and that the action was time-barred. The court reasoned that in diversity cases, federal courts must apply state substantive law and procedural rules that affect the outcome to prevent forum shopping and inequitable administration of the laws, and that North Carolina's one-year saving provision under Rule 41 did not apply to a prior federal filing.

proceduretorts & liabilityhealthcare

This case involved wrongful death claims brought by the administrators of two women killed in a car accident against Litton Systems, Inc., the employer of the intoxicated driver George Beck. The accident occurred after Beck consumed alcohol at Litton's company Christmas party on its premises, where punch was spiked and whiskey was brought in, despite company policy against alcohol; Beck clocked out and later caused the fatal collision. The plaintiffs alleged negligence by Litton in allowing alcohol and intoxication on site, violations of liquor laws constituting negligence per se, and liability under respondeat superior. The court granted summary judgment to Litton, holding that under North Carolina common law (absent a dramshop statute), furnishing alcohol to an able-bodied adult is not the proximate cause of injuries caused by the drinker, and the employer is not vicariously liable for an employee's acts after clocking out and leaving the premises outside the scope of employment.

torts & liabilitybusiness & regulatory

Larry Pope, a black police officer employed by the City of Hickory from 1976 to 1979, sued the city under Title VII and 42 U.S.C. § 1981, claiming racial discrimination in job discipline and denial of a requested shift transfer, including harsher penalties than white officers for similar conduct and bias linked to his interracial marriage. After a bench trial, the court found that Pope had violated specific city personnel policies and police department rules in each disciplinary incident, that the sanctions imposed were reasonable and based on legitimate nondiscriminatory grounds, and that the department head's discretion was constrained by written standards. The court further concluded that Pope failed to prove either disparate treatment or disparate impact, noting insufficient statistical evidence of racial disparities in hiring or discipline during the relevant period and no proof that white officers committing comparable offenses received lesser penalties. The action was therefore dismissed.

civil rightslabor & employment

The Eastern Band of Cherokee Indians sued several enrolled tribal members who refused to vacate their possessory holdings within a highway right-of-way easement granted by the Tribe and the United States as trustee to the North Carolina Department of Transportation. The defendants challenged the easement's validity, arguing it amounted to an unconstitutional taking without due process, and moved to dismiss for lack of jurisdiction and failure to join necessary parties. The court denied the motions to dismiss, granted the plaintiff's summary judgment motion, and issued a permanent injunction requiring the defendants to vacate the area within 60 days. It reasoned that federal statutes governing Indian lands authorized the conveyance of the easement, which complied with statutory procedures for compensation and notice, and that the defendants' due process rights under the Indian Civil Rights Act had not been violated.

federal powerpropertycivil rights

The plaintiff, an enrolled member of the Eastern Band of Cherokee Indians, sued federal officials and tribal council members and officials, alleging they conspired to deprive her of possessory rights in tribal lands by assigning part of her land to another tribal member without due process and seeking mandamus, declaratory, and injunctive relief under 42 U.S.C. §§ 1983 and 1985(3) and other statutes. The Indian defendants moved to dismiss for lack of jurisdiction and failure to state a claim. The court dismissed the claims against the Indian defendants, holding that it lacked jurisdiction because the Supreme Court's decision in Santa Clara Pueblo v. Martinez limits federal review of Indian Civil Rights Act violations to habeas corpus petitions under 25 U.S.C. § 1303, and the plaintiff's attempt to reframe the action under §§ 1983 and 1985(3) does not create a cause of action or establish state action by the tribe. The court reasoned that Congress has not authorized additional private suits for declaratory or injunctive relief against tribes or their officers, and precedent from the Fourth Circuit in Crowe v. Eastern Band of Cherokee Indians confirmed the lack of jurisdiction over such claims.

civil rightsfederal powerproperty

The case concerned a motion by third-party defendant Celotex under Federal Rule of Civil Procedure 60(b)(6) to modify an indemnity judgment so that execution would be allowed only after Edwards made actual payment to Dickerson on its larger indemnity obligation. In the underlying litigation, Walker obtained a $194,000 judgment against Dickerson, Dickerson obtained full indemnity against Edwards, and Edwards obtained partial indemnity of $97,000 against Celotex; Edwards then assigned its judgment against Celotex to Dickerson in partial satisfaction of the $194,000 judgment. The court denied the motion, holding that the assignment constituted an actual loss or damage to Edwards under North Carolina indemnity law, which permits the assignee to execute on the judgment.

proceduretorts & liability