Articles Posted in Contracts

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There is a critical federal statute that all insurance litigators should be aware of when their case is “removed” from a State trial court to a federal court. Insurance companies often remove State court cases to the federal system to take advantage of what they apparently believe is a strategic advantage. Although this perceived advantage may or may not exist, all aggressive insurance attorneys should know how to fight back.

First, you should know that there is a presumption against federal court jurisdiction. By statute, a federal district court must send any case that lacks subject-matter jurisdiction back to State court. 28 U.S.C. §1447(c). And although a plaintiff usually has only thirty days to object to a defendant’s “removal” of a State case to federal court, an objection based on the federal Court’s lack of subject matter jurisdiction can be raised at any time before final judgment, even in the middle of a trial. 28 U.S.C. §1447(c). Federal courts routinely make thorough examinations of subject matter jurisdiction early in a case in order to avoid wasting resources on a case that ultimately needs to be sent back to State court.
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The processes of setting and communicating prices are two of the most fundamental roles of a business. Price affects a business’s sales, revenue, investment returns, and ultimately profit. As a result, the term “price fixing” has a strong negative connotation, and deservedly so. Restrictions on price competition represent actual threats to the economy, and they carry the possibility of harsh penalties. However, the term sometimes may be misused in reference to pro-competitive, legal conduct, which actually may be beneficial for businesses and consumers.

In a recent decision, an administrative law judge dismissed three illegal price-fixing charges brought against McWane, Inc. by the Federal Trade Commission, but upheld four charges alleging that it illegally excluded competitors from the market.

The privately-owned McWane, Inc. is the nation’s largest manufacturer of iron pipe and other products used in water distribution and wastewater treatment. In January 2012, the FTC Complaint accused McWane of orchestrating a complex scheme in which it worked with competitors Star Pipe Products Limited and Sigma Corporation to raise and stabilize prices. The FTC also alleged that a trade group was created to assist in this illegal scheme by serving as a clearinghouse through which the companies could exchange pricing information.

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To the surprise of many commercial litigators, Maryland does not recognize an independent breach of fiduciary duty claim. The Court of Special Appeals recently stated “In a claim for monetary damages at law … an alleged breach of fiduciary duty may give rise to a cause of action, but it does not, standing alone, constitute a cause of action.” Wasserman v. Kay, 197 Md. App. 586, 631 (2011).

In other words the proper count is a breach of contract or negligence claim which follows what is commonly referred to as a breach of fiduciary duty. For additional information, please contact the commercial litigation practice group of Silverman, Thompson, Slutkin & White, LLC for more information.