4th Circuit Contract Law News - U.S. Fourth Circuit
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Do consumers have to dispute debts in writing in order to avail themselves of the protections of the Fair Debt Collection Practices Act (FDCPA)?

The Second, Ninth, and now Fourth Circuits all agree: the plain text of the FDCPA, even when the result is a wee bit odd, controls. Oral is okay, but written brings more protection. And then, there's the Third Circuit, which is willing to read things into the text that aren't there, for the sake of making the statute make sense.

What's got the circuits split? It's a question we see all too often: sloppy statutory drafting or intended as written?

A bit of background for all of you non-gamers out there. Epic Games is the creator of the Unreal Engine (and the criminally-underrated Jazz Jackrabbit), industry-standard software used by many developers to make video games. To date, there have been three versions of the engine released, with a fourth planned for release soon.

Silicon Knights licensed Unreal Engine 3 for use in creating video games for the seventh-generation of PC hardware and consoles (Playstation 3 and Xbox 360), but was unsatisfied with the engine and Epic's support and documentation. They sued, but were slapped with a countersuit for failure to pay royalties, theft of trade secrets, copyright infringement, and breach of contract.

Virginia has this pretty onerous rule. If a medical service provider wishes to open a facility in a Virginia market, it has to first obtain a certificate of need. Not only does the certificate cost significant money, but it requires navigating a maze of bureaucratic processes to complete the approximately seven-month process. And if any person (including competing existing businesses) requests an "informal fact-finding" session, the process can take years.

Does it violate the dormant interstate commerce clause? It seems likely that it does -- it places a hefty burden on new operations, one if its purposes is to protect "existing" (by definition, in state) businesses, etc. And while the district court dismissed two plaintiff medical companies' claims, the Fourth Circuit, in an unusually direct reversal, all but killed the law.

Ever wonder why insurance policies include 10,983,267 exclusions and are 3,423 pages long?

This is why.

Richard Johnson had an Accidental Death & Dismemberment policy through his employer. He also had a few too many drinks before his car veered off the highway, through a sign, and flipped multiple times. The cause of death was internal injuries from a motor vehicle accident. The toxicology report measured his BAC at 0.289 percent.

Samuel Muriithi drove an airport shuttle for Shuttle Express. He did so not as an employee, but as a franchisee. Of course, he alleges that the arrangement was a misclassification and that he was entitled to more pay, overtime, etc. under the Fair Labor Standards Act.

Alas, the parties haven't even reached that important question yet. You see, their agreement included an arbitration clause. Shuttle Express pushed for enforcement of the clause but the district court ruled that it was unconscionable due to three provisions in the contract: the class action waiver, the requirement that the parties "split" arbitration fees, and the one-year limitations period for asserting claims.

The Fourth Circuit vacated the district court's opinion, citing AT&T Mobility LLC v. Concepcion, and kicked the case to arbitration.

Conversion Exclusion Doesn't Completely Bar Arson Recovery

A reasonable person might think, "If I intentionally set my trucks on fire, my insurance policy won't cover it. Because, yeah. Arson."

That reasonable person might be wrong.

In an unpublished opinion, the Fourth Circuit Court of Appeals ruled this week that State Farm was required to pay Wells Fargo for two torched trucks because the insurance policy's conversion exclusion did not unambiguously bar coverage.

Beneficiary Can Seek Equitable Relief Remedies Under ERISA

The Fourth Circuit Court of Appeals ruled this week that equitable relief remedies are available to a life insurance beneficiary to redress violations of Employee Retirement Income Security Act (ERISA) or ERISA plans.

The Fourth Circuit panel vacated its earlier stance this week after rehearing the case.

Class Actions, Loan Servicing, Acceleration Dates, Oh My!

While public opinion has favored borrowers since the mortgage meltdown, the federal courts occasionally side with the mortgage industry.

Last week, the Fourth Circuit Court of Appeals issued an opinion siding with a loan servicer in a fee dispute involving acceleration dates.

Crash and Burn: NASCAR Lawsuit Barred by Indemnity Agreement

Lawsuits are a tough sell when a plaintiff has specifically agreed to not sue the defendant.

Take NASCAR driver Jeremy Mayfield, for example. In May 2009, Mayfield was suspended from the NASCAR circuit after failing a random drug test. NASCAR announced the reason for the suspension, and Mayfield filed a lawsuit.

This week, the Fourth Circuit Court of Appeals ruled that Mayfield had no case because he signed two contracts waiving his right to a NASCAR lawsuit, The Associated Press reports.

4th Cir: Attorneys Fees Need Not Be Specified in Rule 68 Offers

While the case of Bosley v. Mineral County Commission presents a series of unfortunate events, the actual case before the Fourth Circuit Court of Appeals is not nearly as dramatic.

The Fourth Circuit Court of Appeals affirmed a lower court ruling that the settlement offer in a case involving several state law and federal constitution claims did not include the attorneys fees and costs.