Bernstein Shur Business and Commercial Litigation Newsletter #50

By Paul McDonald and Dan Murphy

March 2015 | Issue 50

We are pleased to present the 50^th edition of the Bernstein Shur Business and Commercial Litigation Newsletter. This month, we highlight recent cases that address waiver of appeal rights, Constitutional standing, and the statute of limitations for foreclosure actions, which will have an impact on business and commercial litigation. We hope you enjoy the newsletter.

In the News:

The Second Circuit Court of Appeals holds that AT&T failed to demonstrate excusable neglect to cure a missed deadline to appeal a $40 million patent judgment entered against the company. At the trial court level, Two-Way Media LLC obtained judgment against AT&T based on patent infringement, resulting in an award totaling $27 million in damages, along with $7 million in statutory interest. AT&T intended to appeal this judgment, but failed to do so within the 30-day appeal period. Following the expiration of the appeal period, AT&T sought relief from the court, arguing that it was misled by the court’s apparent failure to send Notice of Electronic Filings (NEFs) by electronic mail on its CM/ECF (Case Management/Electronic Case Files) system. Rejecting AT&T’s argument, the Second Circuit determined that even a complete failure to receive NEFs could not qualify as excusable neglect without some additional showing. In particular, the court underscored counsel’s obligation to monitor the docket rather than rely upon email notices. The court also noted that counsel for AT&T failed to sufficiently analyze related orders that demonstrated that a final judgment had entered.

Read more about this development here and the court’s opion here.

Lack of standing dooms false advertising suit directed at Nestlé, S. A.’s Poland Spring water products. ME Springs, LLC, a seller of bulk water that aspired to enter the bottled water market, brought an action against Nestlé claiming that Nestlé’s use of the term Poland Spring on its bottled water constituted false advertising under the Lanham Act, inasmuch as the water contained in its Poland Spring product was not extracted from the actual Poland Spring. The United States District Court for the District of ME dismissed ME Springs’ claim because it lacked Article III standing, finding that “ME Springs plans of eventually marketing and selling bottled water are too speculative to constitute an injury-in-fact for its Lanham Act claim.”

Read the court’s opinion here.

A conflict has emerged in Florida courts regarding the effect of the dismissal of foreclosure actions – without prejudice – and whether any subsequent foreclosure action can be barred by the running of the statute of limitations. Most residential loan agreements provide that following default, all amounts owed to the lender are accelerated and due. Where a foreclosure action is commenced against a defaulting borrower, but is dismissed without prejudice by the lender, courts have allowed the lender to commence a new foreclosure action based on the borrower’s “continuing default.” Under this theory, courts effectively disregard the lender’s first acceleration of debt, allowing for the commencement of a new suit without the risk of expiration of the statute of limitations. Recently, several other courts have held that a subsequent foreclosure action can be time-barred if the lender’s acceleration of debt continues unabated and the loan is not reinstated following the first suit. The Florida Supreme Court is currently in the process of analyzing this split among its courts.

Read more about this development here.

Access representative cases here and here.