Trump Swings His Wrecking Ball at Social Security

NEIL H. BUCHANAN

Neil H. Buchanan—UF law professor and economist—dispels some common misunderstandings about the future of Social Security but explains why President Trump’s recent comments are cause for concern. Buchanan explains why, contrary to claims by reporters and politicians, Social Security is not at the brink of insolvency, but points out that if Trump were to permanently eliminate payroll taxes, that would doom the program on which tens of millions of retirees depend.

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In Re: Plavix Marketing, Sales Practices and Products Liability Litigation

Court: US Court of Appeals for the Third Circuit

Docket: 18-2472

Opinion Date: September 1, 2020

Judge: Bibas

Areas of Law: Business Law, Civil Procedure

Two doctors and a former pharmaceutical sales representative formed a partnership, JKJ, to sue several pharmaceutical companies as a qui tam relator under the False Claims Act with respect to the marketing of the anti-clotting drug, Plavix. When one of them left the partnership and was replaced, that change amounted to forming a new partnership. The defendant’s moved to dismiss because the Act’s first-to-file bar stops a new “person” from “interven[ing] or bring[ing] a related action based on the [same] facts,” 31 U.S.C. 3730(b)(5). The Third Circuit vacated the dismissal, after noting responses by the Delaware Supreme Court to certified questions indicating that the two partnerships were distinct. The verb “intervene” means to inject oneself between two existing parties, as under Federal Rule of Civil Procedure 24. The new partnership did not do that but instead came in as the relator. The district court ruling was based mainly on a dictum from a Supreme Court case on a very different issue and never considered the issue here. The Act’s plain text bars only intervention or bringing a related suit.

Continental Vineyard LLC v. Dzierzawski

Court: US Court of Appeals for the Seventh Circuit

Dockets: 19-2089, 19-2173

Opinion Date: September 2, 2020

Judge: Diane Pamela Wood

Areas of Law: Business Law, Commercial Law

Dzierzawski was vice-president of Forsyth's vineyard company. When Forsythe declined an opportunity to produce a custom wine for the Meijer grocery chain, Dzierzawski formed Vinifera and began doing business with Meijer, while continuing to work for Forsythe. Forsythe eventually became aware of the scope of Dzierzawski’s operation and filed suit. The district court granted summary judgment in favor of Dzierzawski on the corporate opportunity theory. A jury found Dzierzawski liable on the unfair competition contention but rejected unjust enrichment, fiduciary duty, and breach of the duty of good faith theories. The jury left the damages section on the verdict form blank. The court polled the jurors, who unanimously responded that it was their intention to award no damages. Forsyth did not object to the verdict at that time but later moved for a new trial. The court denied that motion but granted Forsyth’s request for disgorgement as alternative relief, and ordered Dzierzawski to pay $285,731, reasoning that “the jury’s verdict is merely advisory on the issue of equitable disgorgement, as it is an equitable remedy to be imposed by the Court.” The Seventh Circuit affirmed. The evidence does not support that Dzierzawski stole a corporate opportunity from his company and there was no reversible error in the disgorgement order.

Plank v. Cherneski

Court: Maryland Court of Appeals

Docket: 3m/19

Opinion Date: August 5, 2020

Judge: Booth

Areas of Law: Business Law, Personal Injury

The Court of Appeals answered certified questions asking whether Maryland recognizes an independent cause of action for breach of fiduciary duty, holding that this Court recognizes an independent cause of action for breach of fiduciary duty and outlining its scope and parameters. The Court of Special appeals filed a certification pursuant to Maryland Rule 8-304 requesting that the Court of Appeals provide guidance concerning whether an independent cause of action exists for breach of fiduciary duty. The Court of Appeals answered (1) Maryland does recognize such a cause of action, and to establish a breach of fiduciary duty a plaintiff must demonstrate the existence of a fiduciary relationship, breach of the duty owed by the fiduciary to the beneficiary, and harm to the beneficiary; and (2) a court should consider the nature of the fiduciary relationship and possible remedies afforded for a breach on a case by case basis, and the remedy will depend upon the specific law applicable to the specific fiduciary relationship at issue.

Waste Management of Mississippi Inc. v. Jackson Ramelli Waste LLC

Court: Supreme Court of Mississippi

Citation: 2018-CT-00164-SCT

Opinion Date: September 3, 2020

Judge: Griffis

Areas of Law: Business Law, Contracts

The issue this case presented for the Mississippi Supreme Court was whether Jackson Ramelli Waste LLC was entitled to additional compensation “over and above [the] amounts agreed upon by the parties, invoiced by [Jackson Ramelli], and accepted as payment by [Jackson Ramelli], in the absence of a contract, but under a quantum meruit theory[.]” From October 2009 to September 2015, Waste Management contracted with the City of Jackson to collect solid waste from all residential units and light commercial entities in the city. The contract required Waste Management to subcontract 35.802 percent of the work to minority-owned or women-owned businesses and to adhere to the requirements of the City’s equal business opportunity (EBO) plan. Waste Management entered a subcontract with Jackson Ramelli and Metro Waste Disposal to perform certain portions of the waste-collection services and to fulfill this obligation. Jackson Ramelli’s payment rate would be adjusted annually in accordance with any increase or decrease in the Consumer Price Index (CPI). Both parties were prohibited from the assignment of the subcontract without the other party’s consent. Unbeknownst to Waste Management, after entering into the subcontract with Waste Management, Jackson Ramelli subcontracted all of its work to RKC LLC, a Louisiana company that was neither a minority- nor women-owned company. It is undisputed that RKC performed all of the residential waste-collection services that Waste Management hired Jackson Ramelli to perform. The subcontract between Waste Management and Jackson Ramelli expired at the end of September 2010; the parties continued services on a month-to-month basis. In January 2012, Jackson Ramelli purchased the right to assume Metro Waste’s routes related to the contract. As a result, Jackson Ramelli increased the amount it invoiced Waste Management to reflect the additional houses it acquired through its acquisition of Metro Waste’s routes. While Jackson Ramelli submitted monthly invoices to Waste Management for services rendered, it did not invoice Waste Management for any CPI adjustments or for any further houses serviced. But during this time, Jackson Ramelli raised the possibility of additional compensation to reflect (1) the changes in the CPI and (2) the increase in the number of houses Jackson Ramelli claimed to be servicing. Jackson Ramelli filed a complaint against Waste Management in July 2015 claiming Waste Management’s: (1) nonpayment of CPI increases between 2012 and 2015; (2) nonpayment of waste-collection services for additional houses between 2012 and 2015; and (3) nonpayment of work performed in March 2015. Because the record established that the additional work claimed by Jackson Ramelli was contemplated by its contract and because Jackson Ramelli did not have a reasonable expectation of additional compensation, the Supreme Court reversed its quantum meruit claim, and final judgment was entered in favor of Waste Management.