Robert Madden Hill

This case concerns Silco, Inc.'s suit for a refund of 1972 federal corporate income taxes based on a net capital loss carryback from its 1975 sale of LTV preferred stock. Silco purchased the shares after the dividend record date but before the ex-dividend date, received the dividends via due bills from the sellers, claimed a dividends-received deduction under IRC §243, and sold the stock shortly thereafter at a loss. The court denied the refund, holding that Silco failed to satisfy the minimum holding-period requirements of IRC §246(c) for the preferred dividends (particularly the 90-day rule for dividends in arrears exceeding 366 days), which prevented allowance of the deduction and the resulting capital loss treatment.

taxesbusiness & regulatory

Celia Lage, an Hispanic female EEOC employee, sued her supervisors and other agency officials alleging retaliation and discrimination under Title VII of the Civil Rights Act of 1964 (42 U.S.C. § 2000e-16) after she testified in a coworker's employment discrimination suit, along with a common law assault claim based on verbal abuse and physical intimidation by her supervisor. The court granted the defendants' motion to dismiss, holding that only the head of the agency (Clarence Thomas, in his official capacity) is a proper defendant under § 717, so all other individual defendants were dismissed from the Title VII claim. It further ruled that the assault claim could not be joined in federal court because Title VII provides the exclusive remedy for federal employment discrimination claims, preempting pendent state tort claims under Brown v. General Services Administration, but dismissed the assault claim without prejudice to refiling in state court. The court also struck Lage's jury demand, as there is no right to a jury trial under Title VII.

civil rightslabor & employmenttorts & liabilityprocedure

In this case, Freddie Fuddruckers, Inc. sought a preliminary injunction against Ridgeline, Inc. (doing business as Purdy’s) to stop the use of a similar restaurant trade dress featuring elements like exposed butcher shops, bakeries, condiment islands, white tile, checkerboard flooring, and neon signs. The court granted the injunction after finding that Fuddruckers’ overall design was non-functional, had acquired secondary meaning identifying it with the source, and that Purdy’s had intentionally copied it after visiting Fuddruckers locations, creating a likelihood of consumer confusion. The decision rested on conclusions that Fuddruckers showed irreparable harm, a substantial likelihood of success on trade dress infringement and unfair competition claims, that the balance of harms favored Fuddruckers, and that the public interest supported preventing confusion.

business & regulatoryprocedure

The case involved a civil antitrust action by the United States against American Airlines and its CEO Robert Crandall under Section 4 of the Sherman Act, seeking to enjoin alleged violations of Section 2. The complaint alleged that Crandall attempted to monopolize airline passenger service out of Dallas/Fort Worth by suggesting in a recorded phone call that Braniff Airways raise its fares, with American promising to follow, though Braniff's CEO refused to discuss pricing. The court granted the defendants' motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim. It reasoned that the alleged conduct amounted only to a rebuked solicitation without any agreement, which cannot support a claim for attempted joint monopolization under Section 2, and that price-fixing claims of this type require a plurality of actors and proof of a conspiracy under Section 1 rather than an attempt under Section 2.

business & regulatory

This case arose from a 1979 lawsuit by D. Vinson Marley against Drexel Burnham Lambert and others over an agreement for commodities futures contracts, asserting claims under the federal Commodity Exchange Act and pendent state claims under the Texas Deceptive Trade Practices Act (DTPA). After the court ordered all claims to arbitration under the parties' agreement, the arbitration dismissed Marley's claims, and the defendants sought confirmation of the award while Marley moved to amend the arbitration order. The court denied the motion to amend and granted confirmation of the award, holding that the federal Arbitration Act preempts the DTPA's non-waiver provision under the Supremacy Clause because the state rule conflicts with the federal statute's policy of enforcing arbitration agreements in interstate commerce.

business & regulatoryfederal powerprocedure

This case involves the United States seeking to enforce Section 504 of the Rehabilitation Act of 1973 against Baylor University Medical Center to investigate complaints that the hospital failed to provide effective services for hearing-impaired patients. Baylor, which receives Medicare and Medicaid reimbursements placed in its general operating fund, refused to allow the investigation, arguing that such payments do not constitute federal financial assistance and that it is therefore not subject to the statute. The court granted the government's motion for summary judgment, holding that Medicare and Medicaid payments qualify as federal financial assistance, that Baylor is a recipient, and that Section 504 applies on a program-specific basis to the hospital's in-patient and emergency room services benefited by those funds. The core reasoning was that the statute's coverage extends to any program or activity receiving such assistance, permitting HHS to investigate compliance regardless of whether the complainant is a direct beneficiary of Medicare or Medicaid.

civil rightshealthcarefederal power

The case involved a buyer who sued a mobile home manufacturer and seller in state court, alleging violations of the Texas Manufactured Housing Standards Act, including failure to provide required notices about formaldehyde gas, noncompliance with warranty provisions, shipping a home without meeting federal safety standards, and operating without state registration; these were tied to claims under the Texas Deceptive Trade Practices Act plus state-law theories of breach of warranty, unconscionable practices, strict liability, and negligence. The manufacturer removed the case to federal court on the ground that one claim incorporated the National Manufactured Home Construction and Safety Standards Act and therefore arose under federal law. The district court granted the buyer's motion to remand, ruling that the complaint did not present a federal question because the causes of action were created by state law that merely referenced federal standards as a measure of compliance, and Congress had not provided a private federal right of action for individual purchasers. The court further noted that not all defendants had joined the removal petition and that the federal standards did not transform the state claims into ones arising under federal law.

procedurefederal power

The case involved the United States seeking a preliminary injunction against defendant Gordon Stephen Buttorff under 26 U.S.C. § 7408 for promoting and selling "Constitutional Pure Equity Trust" packages through Constitutional Trust Associates. These packages were marketed with claims that they could significantly reduce or eliminate federal income tax liability, avoid probate, and provide financial privacy. After an evidentiary hearing, the court granted the injunction, finding that Buttorff had engaged in conduct penalized under § 6700 by making statements about tax benefits that he knew or had reason to know were false or fraudulent as to material matters. The court determined that injunctive relief was appropriate to prevent recurrence, noting that the commercial speech at issue was misleading and thus unprotected by the First Amendment, and that the public interest supported the order prohibiting sales, promotions, representations, and related services involving the trusts.

taxesbusiness & regulatory

This case involves claims by USLIFE Corporation and its subsidiaries against U.S. Life Insurance Company for service mark infringement and unfair competition under the Lanham Act and state common law, based on the defendant's use of a similar name for its Texas insurance business. The defendant moved to dismiss, contending that the plaintiffs were judicially estopped from asserting likelihood of confusion due to their contrary position in prior state insurance board and court proceedings, that the McCarran-Ferguson Act precluded the federal claims, and that Burford abstention was appropriate. The court denied the motions to dismiss and to preclude testimony, reasoning that judicial estoppel did not apply on these facts, the McCarran-Ferguson Act did not bar the Lanham Act claims, and abstention was unwarranted.

business & regulatoryfederal power

In Hoffman v. Burroughs Corp., plaintiffs (partners in a Texas accounting firm) sued Burroughs and Computax in the Northern District of Texas after purchasing a computer system that allegedly malfunctioned, asserting claims under the Texas Deceptive Trade Practices Act, fraudulent inducement, and breach of implied warranties. Defendants moved to transfer the case to the Southern District of California based on a forum selection clause in the software license agreements with Computax specifying that disputes must be litigated in San Diego County courts, with Burroughs consenting to the transfer. The court granted the motion under 28 U.S.C. § 1406(a), holding that the clause was enforceable under federal common law as established in The Bremen v. Zapata Off-Shore Co., that the claims were related to the agreements, that filing a counterclaim did not waive the venue objection, and that the clause rendered venue improper in Texas from the outset.

procedure

The case involved Happy Manufacturing Co., a Texas corporation, suing Southern Air & Hydraulics, Inc., an Arkansas corporation, and its president in the Northern District of Texas for breach of a confidential and fiduciary relationship and violations of the Lanham Trade-Mark Act arising from the development of a hydraulic power unit prototype. After the court dismissed the action without prejudice for lack of venue under 28 U.S.C. § 1391(b), Happy moved under Fed. R. Civ. P. 59 for a new trial or to alter the judgment, arguing that the defendant did business in Texas, waived its venue objection, or that the case should be transferred rather than dismissed. The court denied the motions, holding that venue was improper because the defendant did not reside or do business in the Northern District and the claim did not arise there, that no waiver occurred under Fed. R. Civ. P. 12(h)(1) despite filing counterclaims and other actions, and that transfer was not required in the interest of justice under 28 U.S.C. § 1406(a) given the lack of demonstrated hardship.

procedurebusiness & regulatory

This case involved the North Texas Operating Engineers Health Benefit Fund and related trusts suing Dixie Masonry, Inc. and its officer Robert J. Dudley to recover unpaid employee benefit contributions required under collective bargaining agreements, plus claims that Dudley personally misapplied trust funds received on two construction projects under Texas Article 5472e. Dixie Masonry admitted owing $5,585.39 in contributions for 1979 work hours. The court ruled that Dixie Masonry was liable for those amounts plus $2,500 in attorney fees, but Dudley had no personal liability because the projects showed no net trust funds available after deducting reasonable general administration overhead allocated proportionally to job billings. The reasoning centered on findings that overhead expenses, even if not directly traceable to each job, were directly related and reasonable under the statute, leaving no misapplied amounts for which Dudley could be held accountable as a trustee.

labor & employmentbusiness & regulatory

This case involved a breach of contract claim by tennis professional Donald Budge against resort owner Troy Post over Post's termination of Budge's employment at the Cambridge Towers Tennis & Racquet Club in Las Vegas. A jury had awarded Budge $455,041 in damages under an employment contract that served as partial settlement of an earlier dispute over a prior contract at Post's Mexican resort, and that judgment was affirmed on appeal with a remand for present-value adjustments. Post moved for relief from the judgment under Fed. R. Civ. P. 60(b)(5) after discovering that Budge had entered a separate 1979 settlement with the Mexican bankruptcy trustee for the prior resort, which Post argued violated the terms of the 1978 settlement agreement and constituted an accord and satisfaction. The court granted the motion for relief, amended the judgment accordingly, and denied the related stay motion as moot, reasoning that the newly discovered settlement undermined the foundational basis of the Cambridge Towers contract on which the jury verdict rested.

labor & employmentprocedure

The case involved the United States seeking condemnation of Neo-Terramycin, a combination animal antibiotic drug, under the Federal Food, Drug, and Cosmetic Act on grounds that it was not generally recognized as safe and effective. Pfizer, the claimant, moved for interim marketing authority under 21 CFR § 558.15, while the government moved for summary judgment after a prior jury verdict was set aside. The court denied Pfizer's motion and granted summary judgment to the United States, holding that the FDA had properly excluded water-soluble products like Neo-Terramycin from the interim marketing regulation and that no adequate and well-controlled studies established general recognition of the drug's safety and effectiveness.

business & regulatoryhealthcare

This case involves multiple plaintiffs who are former American Airlines flight deck crew members suing under the Age Discrimination in Employment Act (ADEA) after being involuntarily retired upon turning 60; they allege the airline unlawfully refused to allow them to continue working as flight engineers. The plaintiffs moved for court authorization to send notice to other similarly situated individuals so they could opt into the lawsuit under the ADEA's incorporation of the Fair Labor Standards Act's opt-in class action procedures. The court granted the motion, holding that federal courts have the power to authorize such notice in appropriate ADEA cases even though due process does not require it. The decision relied on the statutory language permitting collective actions by employees who consent in writing, the absence of any prohibition on notice, and precedent from the Second Circuit recognizing that notice facilitates the opt-in mechanism without constituting improper solicitation.

labor & employmentcivil rightsprocedure

This case involved a shareholder derivative suit brought under Section 16(b) of the Securities Exchange Act of 1934, in which plaintiff Harry Lewis sought to recover short-swing profits realized by defendant Rayland O. Wilson, a former executive vice-president of Pirvest, Inc., from his purchase and sale of company stock within a six-month period. Wilson did not dispute the timing or profit amount but argued that the transaction fell outside the statute's strict liability because he lacked access to material nonpublic information about a pending tender offer and asset sale. After a hearing on cross-motions for summary judgment and trial on stipulated facts, the court held that the defense recognized in Kern County Land Co. v. Occidental Petroleum Corp. applied, so Wilson was not required to disgorge the approximately $45,000 in profits. The core reasoning was that Wilson had no involvement in or knowledge of the tender offer negotiations, faced pressure from the company president to tender his shares, and had no opportunity for speculative abuse of inside information. The ruling also resolved related counterclaims.

business & regulatory

The case was an in rem forfeiture action brought by the United States under the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. § 334, to seize and condemn a shipment of Pfizer's animal drug Neo-Terramycin on the ground that it was not generally recognized as safe and effective. After a jury trial found the product was generally recognized as safe and effective, judgment was entered ordering return of the drug to Pfizer; the government then moved for a new trial, but Pfizer removed the res from the district and sought dismissal, arguing that the absence of the res destroyed in rem jurisdiction and mooted the case. The court denied the motion to dismiss, holding that in rem jurisdiction is preserved because the res was present in the district when the action was filed, that the controversy is not moot since the issues are capable of repetition yet evading review, and that Pfizer's voluntary removal of the res does not divest the court of jurisdiction.

business & regulatoryhealthcareprocedure

This case was an eminent domain proceeding in which the United States condemned about 50 acres of land owned by the City of Duncanville that had been used as a sanitary landfill. The court decided to award compensation based on the jury's finding of the property's fair market value of $225,000 plus interest, rather than the higher cost of a substitute facility. The core reasoning was that fair market value is the normal and appropriate measure of just compensation under the Fifth Amendment unless it cannot be ascertained or would be inadequate, which was not established here because a market for the land existed, the city purchased a larger substitute tract at a premium without evidence of reasonable alternatives, and the property was not the type of unique public infrastructure with no market value.

propertyfederal powerprocedure

This case was a federal civil rights suit brought by an inmate at the Dallas County jail under 42 U.S.C. § 1983 against two sheriff's deputies and the sheriff, alleging an unprovoked assault that violated the Eighth and Fourteenth Amendments, together with a pendent state-law claim for assault and battery. After dismissing the claims against the sheriff, a jury found in special interrogatories that one deputy (Bolt) used excessive force and committed an assault and battery but acted in good faith and without malice, awarded no damages on the § 1983 claim, and awarded $500 on the state claim. The court entered judgment against Bolt for that amount plus $2,500 in attorney's fees and costs, holding that the good-faith finding barred recovery under § 1983 but not under state tort law and that Texas statutes do not impose absolute vicarious liability on a sheriff absent negligence or ratification. The court also addressed the reasonableness of the fee award by considering hours worked, results obtained, and the defendant's likely ability to pay.

civil rightscriminal lawproceduretorts & liability

This case involved former airline pilots over age 60 who sued American Airlines under the Age Discrimination in Employment Act (ADEA) after the airline refused their requests to continue working as flight engineers. The defendant raised an affirmative defense in its answer asserting that the plaintiffs had failed to exhaust remedies under their collective bargaining agreement and the Railway Labor Act before filing suit. The court granted the plaintiffs' motion to strike that portion of the answer. It held that exhaustion of union grievance procedures is not a prerequisite to an ADEA lawsuit, drawing on Supreme Court precedent under Title VII that preserves access to a judicial forum for resolving employment discrimination claims.

labor & employmentcivil rightsprocedure