4th Circuit Contract Law News - U.S. Fourth Circuit
U.S. Fourth Circuit - The FindLaw 4th Circuit Court of Appeals Opinion Summaries Blog

Recently in Contract Law Category

Insurance Won't Cover Injury Due to 'Playing Around' With Gun

In a decision that probably won't surprise many, the Fourth Circuit found that an employer-insurer was under no duty to indemnify a gunshot wound to a third party after the employee "play[ed] around" with his gun. The decision is important because it gives a little bit more clarity to both employers and employees as to what actions are covered under the "work related" language of insurance policies.

Practitioners should note, however, that the ruling is unpublished and does not yet have precedential effect. Nonetheless, the cases cited within appear to be strong and good law for those within the Fourth Circuit. And it appears that shooting your friend in your apartment is not work related.

4th Cir.'s Decision Will Allow W. Virginia Nurses to Unionize

Registered nurses employed by West Virginia’s Greenbrier Valley Medical Center and Bluefield Regional Medical Center will be allowed to unionize after suit against their employers, according to the Charleston Gazette-Mail.

The decision will allow the National Nurses Organizing Committee (NNOC) to move forward on the nurses behalf.

Payday loans tend to be exploitative. Tribal payday loans tend to be really exploitative, since those quick cash advances can be made outside the restrictions placed on non-tribal lenders. That means payday loans with annual percentage rates of over 500 percent in some of the worst cases.

This case isn't about the legality of the usurious loans themselves, however. It's about the allegedly illegal practices used to collect on borrowers' debts. And those borrowers are finally getting some good news -- their ability to bring suit challenging debt collection practices is not limited by their loan agreements' arbitration clause, the Fourth Circuit ruled last Tuesday, holding that arbitration agreements cannot categorically reject the "requirements of state and federal law."

The government cannot search extended cell phone location records without a warrant, the Fourth Circuit ruled last Wednesday. Cell phone service providers routinely collect and record cell site location information, creating detailed reports of where a phone was and when. Should the government wish to look at that information over an extended time frame -- a phone's location over a 221-day period, for example -- it must obtain a valid warrant, the Fourth ruled.

The ruling, which has been praised by privacy advocates and civil liberties groups, creates a split with several other circuit courts. As commentators note, the issue raised is primed to end up before the Supreme Court in short order.

Courts must fully resolve issues around the existence of an arbitration agreement, including conducting an evidentiary hearing if there are factual disputes, the Fourth Circuit ruled last Friday.

In a case involving online payday loans, a district court ruled that several banks had failed to meet their burden in showing the existence of an arbitration agreement. When the banks provided further evidence, the court refused to reconsider, finding the issue was already decided. That was wrong, according to the Fourth, who ruled that the court must determine whether arbitration was required.

Yelp Doesn't Have to Turn Over Reviewers' Identities

Back in October, the Virginia Supreme Court held oral arguments in a case about the limits of anonymous speech. Hadeed Carpet Cleaning wanted to sue the authors of several anonymous Yelp reviews, claiming that had never even been to the business.

The state appellate could said Yelp had to turn over the identities of the reviewers, but last week, the Virginia Supreme Court said no dice to the disclosure -- though not for the fun reasons.

Bankruptcy Trumps Arbitration in Indian Payday Loan Agreement

There's no end to the creativity payday lenders will go to extract huge interest rates out of desperate people. When states started to regulate them, payday lenders ingeniously contracted with Indian tribes, who were more than happy to share a cut of the money so that payday lenders could be exempt from state usury laws.

And thanks to binding arbitration agreements, disputes won't go to court. But what happens when a debtor challenges a payday loan's validity in a bankruptcy proceeding? The Fourth Circuit is here to find out.

No Need to Dispute Debt to Receive FDCPA Protections

Dianne Russell owned $501 for an unpaid hospital debt. The hospital sicced Absolute Debt Collection Services on her. They sent a threatening letter. She paid the hospital directly. ADC continued to bug her, even after she told them about her payment to the hospital.

She, predictably, sued under the Fair Debt Collection Practices Act, as well as state law. ADC argued that the FDCPA didn't apply, as she never disputed the debt under § 1692g.

The problem is, § 1692g (debt validation) is an optional tool for debtors, not a prerequisite to protection against abusive debt collection practices.

Fourth Circuit Reads FDCPA's Plain Text, Joins Circuit Split

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?

Epic's Victory Over Silicon Knights in Video Game Dispute Affirmed

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.