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September 2013 Archives

Superior Court Mostly Denies Motions to Dismiss By 38 Studios Defendants

In a far-ranging and lengthy decision (almost 100 pages), the Superior Court has mostly denied defendants' motions to dismiss the claims against them arising from the guarantees given by the State of Rhode Island for $75 million of bonds issued to finance the relocation to Rhode Island and further operations of former major league pitcher Curt Schillings' video game company "38 Studios." That company has gone bankrupt.  The Court's opinion provides a comprehensive overview of much law related to the obligations of individuals and companies in such a situation, some of which is a matter of first impression in Rhode Island.

First Circuit Upholds Finding of Jurisdiction over the Republic of Ukraine Under the Foreign Sovereign Immunities Act

The First Circuit has upheld a finding by the Massachusetts federal district court that it may assert jurisdiction over the Republic of Ukraine under the Foreign Sovereign Immunities Act ("FSIA") where the Republic engaged in activity of a commercial nature that had a direct impact in the United States.

First Circuit Holds That Property Owner Impliedly Consented to Defendants' Trespass On Its Property

The First Circuit upheld a finding in a bankruptcy adversary proceeding that plaintiff property owners had impliedly consented to a trespass on their property by defendants. However, the Court remanded for a determination of whether the implied consent gave rise to an implied obligation to pay for the fair market value of the use of the land.

First Circuit Holds Bankruptcy Debtor May Be Subject To Fraud Discharge Exception Through Agency

The First Circuit has held that a bankruptcy debtor may be subject through agency to a discharge exception for money procured through a materially false financial statement. 11 U.S.C. 523(a)(2)(B). Further, the Circuit Court said that reckless indifference to the accuracy of the financial statement was sufficient culpability to apply the exception.

Federal Magistrate Judge Applies Wilton/Brillhart Abstention Doctrine and Recommends Denial of Motion to Stay in Insurance Declaratory Judgment Action

A federal magistrate judge has applied the federal Wilton/Brillhart abstention doctrine under which federal courts can decline to exercise federal jurisdiction in an insurance coverage declaratory judgment action when there is a parallel state court proceeding. After considering five factors the magistrate judge recommended that the court deny the insured's motion to stay and retain federal jurisdiction.

Federal Court Supplemental Jurisdiction Over Claims By Third-Party Plaintiffs

The First Circuit has held the federal district court in Rhode Island did not abuse its jurisdiction when it exercised supplemental jurisdiction over claims between non-diverse parties after the claims between diverse parties had been dismissed. 

Superior Court Finds "Routine" Destruction of Evidence Is Not Spoliation

The Superior Court has held that the "routine" destruction of samples by a testing laboratory is not spoliation that would preclude the admission of the results of tests on the samples. The Court said the destruction of evidence was subject to sanctions only when it was intentional or in bad faith. The Court said the defendant was not prejudiced where it did not request an opportunity to test the samples independently.

Superior Court Holds Corporation Entitled To Seek Attorney's Fees Under Equal Access To Justice Act

The Superior Court has held that a successful litigant in administrative proceedings before the Department of Environmental Management is not required to have a net worth under $500,000 to qualify for an award of attorney's fees under Rhode Island's Equal Access to Justice Act, R.I.G.L. 42-92-1, et seq. ("the EAJA"). The corporation did have to meet other requirements set forth in the Act: it is "independently owned and operated," it is not dominant in its field, and it employs 100 or fewer people at the time the administrative adjudication was initiated.