Roszel Cathcart Thomsen

This case is an appeal from two orders in related Chapter XI bankruptcy proceedings involving Exten Associates, Inc. and the Exten individuals: one removing a trustee under a mortgage created by the confirmed plan of arrangement and substituting new representatives for unsecured creditors, and the other adjudicating the corporate debtor bankrupt. The district court affirmed the adjudication order, which was based on the debtors' default in making required annual interest payments to creditors under the modified plan and the bankruptcy court's retained jurisdiction to address such defaults. The court held that this affirmance rendered the trustee removal order moot, as the plan explicitly allowed conversion to straight bankruptcy upon nonperformance after confirmation.

business & regulatoryprocedure

In Bundy v. Cannon, three inmates at the Maryland Correctional Institution filed a pro se motion to intervene in a prior case, alleging that correctional officials were not complying with court-approved Adjustment Procedures for handling prison rule violations and that they were being denied due process. The parties, through appointed counsel, reached agreement on revised procedures that replaced the prior three-person Adjustment Team with a single hearing officer to address concerns about impartiality. The court approved the revised Adjustment Procedures, which include detailed pre-hearing, hearing, and post-hearing steps such as notice requirements, opportunities to present evidence and question witnesses, and appeal processes to the Warden. The court noted that the revisions comply with minimum due process requirements as established in prior decisions but made no finding that they are constitutionally mandated, and the inmates voluntarily dismissed their motion.

criminal lawcivil rightsprocedure

The case involved Crown Central Petroleum's termination of its franchise agreement with Day Enterprises, Inc., which operated one of Crown's retail gasoline stations, on the grounds that the company's principal, Richard Day, violated the agreement's 'substantial full time' provision by devoting significant time to other business interests instead of the station. Day Enterprises sued under the Petroleum Marketing Practices Act (PMPA), seeking to enjoin the termination, a declaratory judgment that it violated the statute, and related relief, while Crown counterclaimed for a declaration that the termination was lawful and for possession of the station. The court consolidated the preliminary injunction hearing with a trial on the merits and considered cross-motions for summary judgment based on stipulated facts and limited testimony. It held that the termination complied with PMPA sections 2802(b)(2)(A) and (B) because the franchise provision was unambiguous, Day Enterprises had notice of and failed to meet the full-time requirement, and the other business activities constituted an event justifying nonrenewal without any improper waiver by Crown.

business & regulatory

The case involved a cargo owner and insurer seeking to enforce a maritime lien against a vessel owned by Chile's government merchant marine for damages from a collision in international waters. The defendants moved to dismiss for lack of subject matter and personal jurisdiction under the Foreign Sovereign Immunities Act of 1976. The court denied the motion, holding that jurisdiction existed under 28 U.S.C. § 1605(b) because the lien arose from the vessel's commercial activity of carrying cargo, the required notices to the vessel's possessor and the foreign state were timely given, and the legislative history confirmed that such admiralty claims against foreign states fall within the statutory exception to immunity.

procedurefederal powertorts & liability

This case involves a copyright infringement lawsuit brought by Broadcast Music, Inc. against Dici Naz Velleggia, Inc., alleging unauthorized use of eleven copyrighted works and seeking statutory damages of $250 per claim along with injunctive relief. The defendant answered and requested a jury trial, prompting the plaintiff to move to strike that demand. The court analyzed whether the Seventh Amendment guarantees a jury trial in this statutory copyright action by applying tests from Supreme Court precedents, including whether the rights resemble common-law claims and whether the remedies are legal or equitable. It determined that the relief sought, limited to statutory damages, is essentially equitable in nature. Accordingly, the court denied the defendant's demand for a jury trial.

procedureproperty

The case involved a former Army officer discharged after twice being passed over for promotion to Major, who sued the Secretary of the Army alleging violations of due process and equal protection because promotion boards met in secret without recorded deliberations or hearings and allegedly favored West Point graduates. After staying the case for review by the Army Board for Correction of Military Records, which denied the claim, the court considered the defendant's motion for summary judgment. The court found the claim justiciable due to the constitutional allegations and exhaustion of remedies but determined after weighing the Mindes v. Seaman factors that review was not warranted given the high degree of interference with military functions, the expertise involved in promotions, and the lack of any fundamental right to promotion. It concluded there was no equal protection violation, as any distinction favoring West Point graduates satisfied rational basis review, and granted summary judgment to the defendant.

civil rightsfederal powerprocedure

This diversity case involved a contract dispute under the Uniform Commercial Code between Environmental Elements Corporation and Mayer Pollock Steel Corporation over a subcontract for fabricating and welding large steel columns for installation in a precipitator structure. Plaintiff alleged multiple breaches, including failure to follow drawings, defective workmanship, noncompliance with welding codes, and inadequate quality control, which the court found proven except for one claim regarding welder qualifications. Defendant raised defenses based on plaintiff's own quality control duties and failure to provide timely notice of breach under UCC § 2-607, but these were rejected. The court also addressed but did not fully credit a claimed post-breach agreement for defendant to cover repair costs. Ultimately, the court awarded plaintiff $210,506.12 in damages based on the proven contract breaches, without prejudgment interest.

business & regulatory

The case involved a dispute over whether a rental agreement with an option to purchase a television set constituted a credit sale under the Truth-in-Lending Act, requiring specific disclosures about the terms of credit. Plaintiff sought statutory damages and fees, alleging the defendant failed to provide required information under the Act and Regulation Z, while defendant moved to dismiss on grounds that the agreement was a true lease terminable at will and thus outside the Act's scope. The court denied the motion to dismiss, holding that the agreement was in substance a credit sale because it obligated the plaintiff to make payments substantially equivalent to or exceeding the property's value with an option to own for nominal consideration upon full compliance. The reasoning emphasized that termination clauses allowing forfeiture of built-up equity did not alter the essential nature of the contract as a disguised sale, drawing on the Act's legislative history, the UCC definition of security interests, and Maryland commercial law precedents that prioritize substance over form in such arrangements.

business & regulatory

In this case, inmates at the Maryland Correctional Institution filed a class action lawsuit against state officials alleging unconstitutional prison conditions including overcrowding, inadequate medical care, and poor food service, seeking injunctive relief. After negotiations, the parties presented a proposed consent decree to address these issues, which the court considered after providing notice to class members and holding a hearing. A third party, taxpayer Justin Scharf, moved to intervene as a defendant, arguing that the decree would impose unnecessary costs and risks, that state officials had inadequately represented public interests in a "sweetheart deal," and that Bell v. Wolfish permitted double-celling. The court denied intervention, finding that Scharf failed to overcome the presumption of adequate representation by government defendants and that the decree was a reasonable resolution given the risks of litigation and operational needs. The court approved the consent decree and certified the class of current and future MCI inmates.

criminal lawcivil rightsprocedure

The plaintiff sought to enforce an unpaid judgment obtained in the Superior Court of the District of Columbia by moving for judgment on the pleadings in federal district court. The defendants opposed the motion by attempting to challenge the underlying merits of the D.C. judgment, claiming it rested on false statements. The court granted the motion, holding that 28 U.S.C. § 1738 requires federal courts to give full faith and credit to the D.C. Superior Court judgment and bars relitigation of its merits. The reasoning relied on precedents treating D.C. courts as equivalent to state or territorial courts for this purpose, along with Congress's plenary legislative authority over the District under the Constitution, which supports the application of the full faith and credit statute to D.C. judgments.

procedurefederal power

This case involves a lawsuit by Harbor Towing Corp. against defendants for damages to its tug from a collision with floating timbers due to negligence in dismantling a pier and obstructing navigable waters under 33 U.S.C. 407, along with a request for injunctive relief. The plaintiff filed in Maryland state court, but defendants removed the case to federal district court. With all parties being Maryland citizens and no independent basis for federal jurisdiction, the court addressed whether admiralty jurisdiction under the saving to suitors clause of 28 U.S.C. 1333 allowed removal. The court granted the motion to remand, adopting the view that saving clause admiralty cases may not be removed absent diversity of citizenship or another ground for federal jurisdiction.

procedurefederal powertorts & liability

This case concerns the modification of adjustment procedures for handling inmate disciplinary violations in Maryland's Division of Correction, originally approved in a 1971 opinion. The defendants petitioned in 1977 to modify the prior order, but the court dismissed the petition after counsel for both sides agreed on revised procedures to take effect in September 1978 that they viewed as meeting the minimum due process standards from the earlier ruling. The opinion incorporates the full text of the updated procedures, which detail processes for minor and major violations, including notice, hearing timelines, team composition, possible sanctions, and reviews, along with rules for escapes and disciplinary transfers. The court emphasized that the revisions resulted from party agreement rather than a judicial determination that every provision is required by the Fourteenth Amendment.

criminal lawcivil rights

In Willis v. United States, the plaintiff sought recovery of gift taxes paid on 1971 and 1972 transfers of interests in an unproductive real estate partnership to a trust for the benefit of seventeen family members, claiming that the income interests qualified for the $3,000 annual per-donee exclusion under IRC section 2503(b) and should be valued using the IRS actuarial tables. The government contested the exclusions, citing the assets' history of generating losses and the trustees' unrestricted power to retain or invest in nonproductive property. The court found that these facts constituted extraordinary circumstances rendering the tables inapplicable and the income interests without sufficient value to support the claimed exclusions, while the remainder interests were conceded to be future interests ineligible for exclusion. Judgment was therefore entered for the defendant.

taxes

This diversity jurisdiction case concerned a claim by La Salle Machine Tool against Maher Terminals for damage to a large crate of machinery caused by Maher employees' negligent unloading at the Dundalk Marine Terminal in Baltimore prior to ocean shipment to the Soviet Union. Maher conceded negligence but sought to cap its liability at $500 under either an ocean bill of lading issued after the incident for other crates or a tariff filed with the Federal Maritime Commission by the Baltimore Marine Terminal Association of which Maher was a member. The court reviewed the facts showing that no receipt or documentation referencing any liability limit was provided for the damaged crate, the crate was never included on an ocean bill of lading, and neither La Salle nor its agents had notice or agreed to the tariff terms. Applying Maryland law with a maritime flavor, the court analyzed whether the bill of lading clauses or the tariff's $500 package limitation could extend to this independent terminal operator's pre-loading services.

torts & liabilitybusiness & regulatory

The case involved a yacht owner's claim against his insurer for damage from the vessel partially sinking due to freezing water in the sea cooling system filters, which cracked because the owner failed to close the sea valves or drain the lines during winter layup. The court found that the sinking resulted from the owner's negligence and lack of due diligence in preparing the boat for winter, which was not covered under the policy's "all risks" hull insurance or the Inchmaree clause covering negligence of masters. The policy excluded losses from want of due diligence by the owner and the court interpreted the negligence provision to apply only to operational negligence at sea, not shoreside maintenance failures. Therefore, judgment was entered in favor of the insurer.

business & regulatoryproperty

This case involved the United States seeking to recover VA pension benefits paid to a deceased World War I veteran whose estate escheated under Maryland law. After the veteran's guardian transferred the remaining funds to his personal representative, the net amount of $4,737.32 was paid to the Baltimore City Board of School Commissioners pursuant to Md. Code, Estates & Trusts § 3-105, which directs such estates to local school boards. The United States sued under 38 U.S.C. § 3202(e), which provides that VA-derived funds that would escheat to a state instead escheat to the United States. The court held that the Maryland statute effectuates the state's escheat right and therefore triggers the federal provision for the VA-derived portion of the estate, awarding the United States $4,278.50 after excluding $458.82 in non-VA funds and related expenses that could not be traced to benefits.

federal powerproperty

In this bankruptcy case, the trustee sought an award of $20,000 in attorney's fees against the IRS under 42 U.S.C. § 1988 after prevailing on the government's claim that certain private foundation excise taxes were allowable against the estate. The district court denied the fee request, holding that the 1976 amendment to § 1988 permits such awards only when the government has acted in bad faith, frivolously, vexatiously, or for harassment. The court reasoned that the legislative history of the amendment preserved the traditional bad-faith standard rather than creating a broader fee-shifting rule, and that the government's litigation position did not meet that standard because no binding precedent existed and another district court had reached the opposite conclusion on similar facts.

taxesprocedure

The case concerned an existing Maryland dialysis provider's challenge to the federal Department of Health, Education, and Welfare's approval of a new competing facility for Medicare reimbursement under the End Stage Renal Disease program, as well as related state health planning agency processes. The plaintiff sought to block the new clinic's opening and federal funding, claiming the approval violated interim ESRD regulations on need, patient sourcing, and planning review, along with constitutional due process and equal protection rights. After a hearing with extensive evidence, the court issued a preliminary injunction barring Medicare payments to the new facility while allowing it to open. The core reasoning focused on whether the new facility satisfied regulatory exceptions to the approval freeze, including documented patient need and proper certificate-of-need review by state agencies, with jurisdiction analyzed under the APA and federal question statutes.

healthcarebusiness & regulatoryfederal power

In United States v. Agnew, the court considered a motion filed by a private plaintiff in a related civil damages action to revoke former Vice President Spiro Agnew's unsupervised three-year probation, imposed in 1973 after his nolo contendere plea to one count of federal income tax evasion under 26 U.S.C. § 7201. The motion was based on allegations that Agnew had violated the Foreign Agents Registration Act by failing to register in connection with Education for Democracy, Inc., and had violated the Foreign Gifts and Decorations Act by delaying delivery of foreign gifts to the State Department. Following an investigation, the Department of Justice reported no evidence supporting a violation of the Foreign Agents Registration Act and concluded that any technical violations of the Foreign Gifts Act were administrative in nature and did not justify the quasi-criminal sanction of probation revocation under 18 U.S.C. § 3653. The court therefore declined to issue a warrant or take further action on the probation, determining that the unsubstantiated allegations from the civil suit provided insufficient grounds.

criminal lawproceduretaxes

The case involved a dispute between a customer and his stock brokerage firm over an allegedly unauthorized purchase of shares in a new public offering, which led to a loss that the firm charged against the customer's margin account after selling the shares. The customer sued in state court on six counts alleging conversion, fraud, and negligence, then added three counts in federal court claiming violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5. The court granted summary judgment dismissing the federal securities counts, holding that the allegations did not show any material misrepresentation or reliance by the plaintiff that would support a 10b-5 claim. It ordered arbitration of the remaining six counts under the arbitration clause in the customer's agreement and stayed further proceedings pending arbitration.

business & regulatoryprocedure