It don’t mean a thing if it ain’t got that swing.
On 06/28/10, the Supreme Court of the United States decided Bilski v. Kappos, a case about what subject matter (including software and business method patents) is eligible for patent protection under US law.
Unfortunately, the Supremes blew it. Here’s why. Bear with me, this will take some time to explain.
0. Definitions, 35 U.S.C. §100, 35 U.S.C. §273(a)(3).
1. Subject Matter, 35 U.S.C. §101.
2. Novelty (statutory bars), 35 U.S.C. §102.
3. Utility, 35 U.S.C. §101, 35 U.S.C. §112 (first paragraph).
4. Nonobviousness, 35 U.S.C. §103.
5. Specification (written description, enablement, best mode), 35 U.S.C. §112 (first paragraph).
D. Summary: You may ask yourself, where does that highway lead to?
1. 1952 Patent Act (Congress).
2. 1972, Benson (US Supreme Court) (“§101 Trilogy” 1 of 3). Laws of Nature, natural/physical phenomena, and Abstract Ideas Fail §101.
3. 1978, Flook (US Supreme Court) (“§101 Trilogy” 2 of 3).
4. 1980, Chakrabarty (US Supreme Court).
5. 1981, Diehr (US Supreme Court) (“§101 Trilogy” 3 of 3).
8. 1998, State Street (CAFC) – Useful, Concrete, and Tangible Result.
9. 2010, Bilski (US Supreme Court).
There are three branches of government in the United States. Each branch has a defined role. Two of the three branches are supposed to be able to overrule the other so that no one branch has absolute power. All of this was decided by the people in the form of the US Constitution.
The Legislative branch (the Senate and the House of Representatives, collectively and informally called Congress) writes the laws.
The Executive branch (the President and agencies such as the Department of Commerce) executes the law.
The Judicial branch (trial courts, appeals courts, and the Supreme Court) explains the laws.
I am reminded of a political cartoon from the 1980s showing a king shouting from a balcony to his rioting subjects below: “You have to do what I say or I can’t be king anymore!” Exactly.
Explaining laws is hard. As the only unelected branch of government, the judicial branch derives its legitimacy and authority from and in proportion to its ability to do its job well, to explain the law.
The Supreme Court must explain the law or it is not the supreme court anymore.
The following drawing and explanation are excerpted from my Drawing That Explains Patent Laws article.
So patent rights and copyright rights come from the same clause in the Constitution. Oddly, the Constitution says nothing about trademark rights. And in our government, the Patent Office and the Trademark Office are combined (in the United States Patent and Trademark Office (USPTO)), but the Copyright Office is separate. So Congress doesn’t always do things the way the drafters of the Constitution thought that they would.
Next in the pyramid (working top to bottom) is the Patent Act. When our lawmakers in Congress (the Senate and the House of Representatives) want to make a new law, they write it, debate on it, and, if they agree on it, then the new law becomes part of the United States Code. The United States Code is divided into smaller pieces called titles, parts, chapters, and sections. The Patent Act is the short name for our patent laws, which exist in Title 35 of the United States Code (35 USC for short). The version of the Patent Act that I use is about 88 pages long.
Next in the pyramid is the Patent Rules (also called patent regulations). Congress writes the laws, but different agencies of the government have to carry out those laws. The Federal Rules are the rules that the agencies write to help explain the laws and how they’ll be carried out. For patent laws, the USPTO writes the Patent Rules, and those appear in Title 37 of the Code of Federal Regulations (37 CFR for short). The version of the Patent Rules that I use is about 336 pages long.
The bottom of the pyramid is the Manual of Patent Examining Procedure (MPEP). The MPEP was written by the USPTO for patent examiners to help them do their jobs. Most patent examiners are not lawyers. So the MPEP is designed to help them understand and apply patent law (the Constitution, the Patent Act, and the Patent Rules). The MPEP is the most frequently used reference book for patent examiners. So it is helpful for patent lawyers like me to know the MPEP. The version of the MPEP that I use is about 3000 pages long.
So we’ve gone from one sentence (Constitution) to 88 pages (Patent Act) to 336 pages (Patent Rules) to 3000 pages (MPEP).
The fun part about the patent laws is that they are constantly changing. The job of the courts (and ultimately the Supreme Court) is to determine what the law is – what it means. So whenever there is a patent dispute that ends up in court, the courts will be interpreting what the patent laws (the Constitution and the Patent Act) mean. Congress can also change the Patent Act, but that is harder to do. And the people of the United States can change the Constitution, but that is even harder to do.
At the same time, the USPTO is constantly revising the Patent Rules and the MPEP. And sometimes the way the USPTO thinks the patent laws should be applied differs from how the courts think the patent laws should be applied.
(b) The term “process” means process, art, or method, and includes a new use of a known process, machine, manufacture, composition of matter, or material.
Note the definition of “method” for defenses to infringement.
35 U.S.C. 273. Defense to infringement based on earlier inventor.
35 U.S.C. 101 Inventions patentable.
35 U.S.C. 102 Conditions for patentability; novelty and loss of right to patent.
The term “useful” appears in 35 35 U.S.C. §101 and “use” appears in 35 U.S.C. §112.
35 U.S.C. 103 Conditions for patentability; non-obvious subject matter.
(a) A patent may not be obtained though the invention is not identically disclosed or described as set forth in section 102 of this title, if the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art to which said subject matter pertains….
The specification shall contain a written description of the invention, and of the manner and process of making and using it, in such full, clear, concise, and exact terms as to enable any person skilled in the art to which it pertains, or with which it is most nearly connected, to make and use the same, and shall set forth the best mode contemplated by the inventor of carrying out his invention.
The legal meaning of words in laws frequently differs from the literal meaning. This problem is compounded by the fact that language itself evolves. That’s why we have courts: to explain what the law means.
The Constitution places no limitations on what “Discoveries” may be entitled to patents.
As you can probably guess, “art” in this context does not mean “works of visual art” such as paintings and sculptures. Similarly, “process” and “method” do not mean what mere mortals think they mean.
Explain to us, o courts of law, what these terms mean.
These judicially-created exceptions to 35 U.S.C. §101 would come back to haunt the Supreme Court in its 2010 Bilski decision. More on this below.
In 1982, Congress created the Court of Appeals for the Federal Circuit (CAFC). Unlike the other federal circuit courts (1st Circuit through 11th Circuit), the CAFC’s jurisdiction is based on subject matter (including patents) rather than geography. So while the CAFC’s creation eliminated any issue of conflicting opinions between the various federal circuit courts on patent-related cases, it also reduced the necessity of having any such conflicting circuit court cases appealed to the Supreme Court. As a result, the Supreme Court has had fewer opportunities to rule on patent law post-CAFC.
Which is why every single patent law case that the Supreme Court does rule on is supremely important.
In 1994, the CAFC restated the Benson-Flook-Diehr (Supreme Court §101 trilogy) rule that (1) laws of nature, (2) natural/physical phenomena, and (3) abstract ideas are not patentable subject matter. In re Alappat, 33 F.3d 1526 (Fed. Cir. 1994).
The State Street case has been interpreted to stand for the notion that business methods are patentable. From the table below, you can see why it lends itself to this interpretation, even though the subject matter at issue in State Street was a computerized invention that was ruled to be a machine.
In 1999, in response to the CAFC’s controversial State Street decision, Congress amended the Patent Act by passing the American Inventors Protection Act (commonly referred to as the First Inventor Defense Act) to provide a defense to those sued for infringing business method patents. See 35 U.S.C. §273(a)(3) above.
In 2008, the CAFC issued a decision (nine to three in 132 pages of concurring and dissenting opinions; Chief Judge Michel wrote the majority opinion) that interpreted the Supreme Court’s Benson case and other Supreme Court cases to mean that a claimed process is patent-eligible under 35 U.S.C. §101 only if (1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state or thing. In re Bilski, 545 F. 3d 943 (Fed. Cir. 2008). This so-called “machine-or-transformation” test was used to uphold the rejection of Bilski’s patent application, which had previously been rejected by both the USPTO examiner and the USPTO Board of Patent Appeals and Interferences (BPAI). The CAFC Bilski majority specifically rejected the State Street “useful, concrete and tangible result” test in favor of the “machine-or-transformation” test.
In a concurring opinion, Judges Dyk and Linn reviewed the history of the 1793 Patent Act and the 1952 Patent Act to support the conclusion that Bilski’s claim did not recite patentable subject matter.
In a dissenting opinion, Judge Mayer wrote that State Street should be overturned because business method patents do not promote the “useful arts” (citing the Constitution).
In a dissenting opinion, Judge Rader wrote that the Bilski patent should have been rejected as being an “abstract idea” (citing the Supreme Court’s §101 trilogy).
Bilski appealed to the Supreme Court.
On 06/28/10, the Supreme Court ruled (in 71 pages of concurring and dissenting opinions), answering both of the questions above in the affirmative.
Justice Kennedy wrote the 16-page majority opinion, which was joined by Justices Roberts, Thomas, Alito, and Scalia (except that Justice Scalia did not join parts II-B-2 and II-C-2).
Justices Stevens, Ginsburg, Breyer, and Sotomayor wrote a 47-page concurring opinion.
Justice Breyer and Scalia wrote a 4-page concurring opinion.
So that’s 4.5 justices for the Kennedy “majority,” 3.5 for the Stevens concurrence, and 1.0 for the Breyer concurrence (since Bryer joined the Stevens concurrence and Scalia joined the Kennedy opinion in part). Hurray for clarity.
Kennedy then reviews the Supreme Court’s §101 trilogy and concludes that the judicially created exceptions to 35 U.S.C. §101 are consistent with the notion that a patentable process must be “new and useful.” While 35 U.S.C. §101 does include the words “new and useful,” the concepts of “novelty” and “usefulness” are defined elsewhere in the Patent Act, namely 35 U.S.C §102 (novelty) and 35 U.S.C. §112 (utility). A well-reasoned §101 determination should not be made based on terms primarily defined elsewhere in the Patent Act.
I have a better idea. Throw out all of the judicially-created §101 exceptions. Because §101 is, and always has been, a red herring. I have not yet met a patent claim for a law if nature, a natural/physical phenomenon, or an abstract idea that would pass scrutiny under the Patent Act’s requirements of novelty, utility, and non-obviousness. Gravity? Not new. E = mc2? Not new. Bilski’s hedging? Obvious. And so on.
Kennedy then states that “[t]he machine-or-transformation test is not the sole test for deciding whether an invention is a patent-eligible ‘process.'” In other words, if a claimed invention passes the machine-or-transformation test, then it is patent-eligible under §101, but if it fails the machine-or-transformation test, then that is not the end of the §101 inquiry.
Kennedy discusses software patents in Section II-B-2, which is not joined by Scalia. With only four justices concurring on this section, the court’s musings on software patents are, effectively, dicta. Kennedy states that “the machine-or-transformation test would create uncertainly as to the patentability of software…” and that “the Court today is not commenting on the patentability of any particular invention, let alone holding that any … technologies from the Information Age should or should not receive protection.” In other words, a minority of the Justices are not saying that software is or is not patentable. This section concludes with what I like to call the “good luck to you all” clause: “[T]he patent law faces a great challenge in striking the balance between protecting inventors and not granting monopolies over procedures that others would discover by independent, creative application of general principles.” Translation: patent law is challenging, but we the Court choose not to give y’all the guidance you are desperately seeking.
Then, Kennedy either confuses §101 with §102, §103, and §112 or acknowledges that §101 is a red herring: “Finally, even if a particular business method fits into the statutory definition of a ‘process,’ that does not mean that the method should be granted. In order to receive patent protection, any claimed invention must be novel, §101, nonobvious, §103, and fully and particularly described, §112.” So close to reason, yet so far.
Which part of claim 1 is the “abstract idea” part? If Kennedy is hanging his hat on this peg, then he should have pointed this out. And if this claim is inadequate, then shouldn’t that be addressed under §112 or other provisions of the Patent Act?
Stevens relies heavily on Judges Dyk’s concurring opinion in the CAFC’s Bilski decision. But that decision, as pointed out by the (better reasoned) dissenting opinion of Judge Newman, presents a selective history of U.S. and English patent law that is both out of context and inapplicable (since the patent laws of the new United States were already diverging from English common law when the 1793 Patent Act was enacted).
In Section II, Stevens generously refers to the Court’s opinion as “less than pellucid in more than one respect…” On this point, I agree. Stevens correctly points out that specificity objections should be raised under §112 and novelty under §102. In his most well-reasoned argument, he states: “The Court essentially asserts its conclusion that petitioner’s application claims an abstract idea. This mode of analysis (or lack thereof) may have led to the correct outcome in this case, but it also means that the Court’s musings on this issue stand for very little.” In other words, assertion is a poor substitute for reasoned analysis. Unfortunately, in footnote 9, Stevens makes the same assersion-ain’t-analysis mistake that he criticizes the majority for making when he states that “many processes that would make for absurd patents are not abstract ideas. Nor can the requirements of novelty, nonobviousness, and particular description pick up the slack.” Really? Why not. I think that novelty, nonobviousness, and particular description can pick up the slack and that §101 is a red herring.
Stevens goes off on a tangent, criticizing imagined patents on “training a dog” (for example) while ignoring the fact that passing a §101 test is only one step towards getting a patent granted. The Court loses credibility when it criticizes any particular subject matter as “absurd” or “comical.” One man’s junk is another’s fortune. And besides, novelty, nonobviousness, and particular description can pick up the slack.
Regarding the lack of a historical basis for business method patents, Steven cites a 1778 business method patent, which actually supports the opposite conclusion.
If, tomorrow, Congress were to conclude that patents on business methods are so important that the special infringement defense in Sec. 273 ought to be abolished, and thus repealed that provision, this could paradoxically strengthen the case against such patents because there would no longer be a Sec. 273 that ‘acknowledges … business method patents,’ [citation omitted]. That is not a sound method of statutory interpretation.
In the so-close-but-so-far category, Stevens then writes: “Section 273 is a red herring; we should be focusing our attention on §101 itself.” But §101 is also a red herring.
Stevens later asserts that “patents on methods of conducting business generally are composed largely or entirely of intangible steps.” Really? I’ve never seen an issued patent claim containing a single intangible step.
Breyer agrees with Stevens that a “business method” is not a “method” under 35 U.S.C. §101. Bryer wrote separately to highlight the points on which the court “agrees” (since the other 67 pages of opinion do a poor job of this).
First, that §101 is not limited. My response: we already knew this from the judicially-created exceptions (laws of nature, natural/physical phenomena, abstract ideas).
Third, the machine-or-transformation test has never been the sole test for determining patentability. My response: agreed. There’s also §102, §103, §112.
Fourth, “[t]o the extent that the Federal Circuit’s decision in this case rejected [the State Street ‘useful, concrete, and tangible result’] approach, nothing in today’s decision should be taken of disapproving of that determination. Translation: In other words, we the Supreme Court were not asked to overrule State Street but would love to do so.
In other words, 2010 looks a lot like 1982.
In so doing, the Supreme Court failed to define a new §101 test and failed to define key terms (including “abstract idea,” “software patent,” and “business method”) upon which it bases its decision.
The worst part of Bilski is that no single decision is consistently well-reasoned. The judicial branch is the only branch which must explain its actions, and it derives its authority from and in proportion to its ability to do so. A weak decision like Bilski weakens the Court. The patent community waited nearly a year and a half for this decision yet did not get the certainly, reasoning, and guidance that it deserves. We waited for answers, we got nothing but questions.
As a practitioner, I do not now look to the 2010 Supreme Court for patent law guidance. I do not look to the CAFC. I look instead to the 1982 Supreme Court.
Paraphrasing William Shakespeare’s Macbeth, Bilski is a tale full of sound and fury, signifying nothing.
Besides, §101 is a red herring.
Apple vs. Google, Bilski, Recession Ending?
Technology, Law, Baseball, Rock ‘n’ Roll, Etc.
Death, taxes, and uncertain patent laws.
Expect to pay more for, wait longer for, and get less from your patent application.
From Chief Justice to the patent examiner.
Draft to the rule, don’t draft to the exception.
It is possible for independent inventors and small businesses to acquire patents and protect their ideas without going broke in the process.
From the fourth annual Law and Technology Conference at the Technology Law Center of the University of Maine School of Law.
The advantages and disadvantages of protecting business ideas with patents and trade secrets.
Except where stated otherwise, the text below is excerpted from the USPTO’s 10/16/05 and 11/22/05 subject matter patentability (35 U.S.C. §101) guidelines.
“Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.” 35 U.S.C. §101.
“The term ‘process’ means process, art, or method, and includes a new use of a known process, machine, manufacture, composition of matter, or material.” 35 U.S.C. §100(b).
One may not patent every “substantial practical application” of an idea, law of nature or natural/physical phenomena because such a patent “in practical effect be a patent on the [idea, law of nature or natural/physical phenomena] itself.” Gottschalk v. Benson, 409 U.S. 63, 71-72, 175 USPQ 673, 676 (1972) (finding a machine-implemented method of converting binary-coded decimal numbers into pure binary numbers unpatentable).
Thus, a claim that recites a computer that solely calculates a mathematical formula (see Benson), a computer disk that solely stores a mathematical formula, or a electromagnetic carrier signal that carries solely a mathematical formula is not statutory.
Parker v. Flook, 437 U.S. 584, 589, 198 USPQ 193, 197 (1978).
Thus, “a new mineral discovered in the earth or a new plant found in the wild is not patentable subject matter” under Section 101. Diamond v. Chakrabarty, 447 U.S. 303, 309 (1980), 206 USPQ at 197.
“In determining the eligibility of respondents’ claimed process for patent protection under §101, their claims must be considered as a whole. It is inappropriate to dissect the claims into old and new elements and then to ignore the presence of the old elements in the analysis. This is particularly true in a process claim because a new combination of steps in a process may be patentable even though all the constituents of the combination were well known and in common use before the combination was made.” Diamond v. Diehr, 450 U.S. 175, 188-89, 209 USPQ 1, 9 (1981).
“It is now commonplace that an application of a law of nature or mathematical formula to a known structure or process may well be deserving of patent protection.” Diehr, 450 U.S. at 187, 209 USPQ at 8 (emphasis in original).
“While a scientific truth, or the mathematical expression of it, is not a patentable invention, a novel and useful structure created with the aid of knowledge of scientific truth may be.” Diehr, 450 U.S. at 188, 209 USPQ at 8-9 (quoting Mackay, 306 U.S. at 94).
Two en banc decisions of the Federal Circuit have made clear that the USPTO is to interpret means plus function language according to 35 U.S.C. §112, sixth paragraph. In re Donaldson, 16 F.3d 1189, 1193, 29 USPQ2d 1845, 1848 (Fed. Cir. 1994) (in banc); In re Alappat, 33 F.3d 1526, 1540, 31 USPQ2d 1545, 1554 (Fed. Cir. 1994) (in banc).
The plain and unambiguous meaning of section 101 is that any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may be patented if it meets the requirements for patentability set forth in Title 35, such as those found in sections 102, 103, and 112. The use of the expansive term “any” in section 101 represents Congress’s intent not to place any restrictions on the subject matter for which a patent may be obtained beyond those specifically recited in section 101 and the other parts of Title 35…. Thus, it is improper to read into section 101 limitations as to the subject matter that may be patented where the legislative history does not indicate that Congress clearly intended such limitations. Alappat, 33 F.3d at 1542, 31 USPQ2d at 1556.
The Court of Appeals for the Federal Circuit issued opinions in State Street Bank & Trust Co. v. Signature Financial Group Inc., 149 F. 3d 1368, 47 USPQ2d 1596 (Fed. Cir. 1998) and AT&T Corp. v. Excel Communications, Inc., 172 F.3d 1352, 50 USPQ2d 1447 (Fed. Cir. 1999). These decisions explained that, to be eligible for patent protection, the claimed invention as a whole must accomplish a practical application. That is, it must produce a “useful, concrete and tangible result.” State Street, 149 F.3d at 1373-74, 47 USPQ2d at 160102.
Erik J. Heels writes about technology, law, baseball, and rock ‘n’ roll. He is @ErikJHeels on Twitter and is a mere mortal.
Previous PostPrevious * Will SCOTUS Break Patent Law With Bilski Case?


13-13a45. Limitations on university while receiving grants. The university shall be eligible to receive payments of state grants from the state general fund to continue and further its traditional program of operating a liberal arts college, a school of business, a school of law, a school of nursing and a school of applied studies. While receiving payments from the state general fund, the university shall be limited to associates, bachelors, masters, doctor of nursing practice and juris doctor degree work and shall not establish specialized schools such as journalism, medicine, pharmacy and engineering, or other new educational schools unless authorized by act of the legislature.
History: L. 1961, ch. 365, § 8; L. 1972, ch. 264, § 1; L. 1974, ch. 306, § 1; L. 1982, ch. 296, § 1; L. 1983, ch. 240, §1; L. 1991, ch. 225, § 5; L. 1992, ch. 24, § 2; L. 1999, ch. 147, § 65; L. 2012, ch. 4, § 1; July 1.


text:
The Complainant is Skyscanner Limited of London, United Kingdom represented by Keltie LLP, United Kingdom.
The Respondent is Ivan, Home of Moscow, the Russian Federation.
The disputed domain name <skaiscaner.com> (the “Disputed Domain Name”) is registered with PDR Ltd. d/b/a PublicDomainRegistry.com (the “Registrar”).
The Complaint was filed with the WIPO Arbitration and Mediation Center (the “Center”) on January 15, 2019. On January 15, 2019, the Center transmitted by email to the Registrar a request for registrar verification in connection with the Disputed Domain Name. On January 15, 2019, the Registrar transmitted by email to the Center its verification response confirming that the Respondent is listed as the registrant and providing the contact details.
The Center appointed Lynda M. Braun as the sole panelist in this matter on February 14, 2019. The Panel finds that it was properly constituted. The Panel has submitted the Statement of Acceptance and Declaration of Impartiality and Independence, as required by the Center to ensure compliance with the Rules, paragraph 7.
The Complainant, a company incorporated in the United Kingdom, is the owner of a travel search and price comparison website, “skyscanner.com”, hosted in various jurisdictions worldwide. The Complainant’s website currently attracts approximately 60 million visits per month and its online app has been downloaded 70 million times to date. Further, the Complainant’s services are available in over 30 languages and in 70 currencies.
- European Union designation of International Trademark Registration No. 1030086 for SKYSCANNER, registered on December 1, 2009 in, inter alia, Armenia, Australia, Azerbaijan, Bosnia and Herzegovina, Belarus, Switzerland, China, the European Union, Japan, Norway, the Russian Federation, Singapore, Turkey and the Ukraine in International Classes 35, 38, 39 and 42.
The Complainant’s trademarks will hereinafter be referred to as the SKYSCANNER Marks.
The Disputed Domain Name was registered on January 3, 2019. At that time and until January 9, 2019, the Disputed Domain Name resolved to a website claiming to provide travel information services to consumers, and displayed the Complainant’s SKYSCANNER Marks. As of the writing of this decision, the Disputed Domain Name resolves to a parking page containing pay-per-click sponsored links.
- The Complainant requests that the Disputed Domain Name be transferred from the Respondent to the Complainant in accordance with paragraph 4(i) of the Policy.
This element consists of two parts: first, does the Complainant have rights in a relevant trademark or trademarks and, second, is the Disputed Domain Name identical or confusingly similar to those trademarks.
The Panel concludes that the Disputed Domain Name is confusingly similar to the SKYSCANNER Marks.
First, the Complainant is the owner of numerous trademark registrations worldwide for SKYSCANNER, including in the Russian Federation, where the Respondent resides. The general rule is that “registration of a mark is prima facie evidence of validity, which creates a rebuttable presumption that the mark is inherently distinctive”. See CWI, Inc. v. Domain Administrator c/o Dynadot, WIPO Case No. D2015-1734. The Respondent has not rebutted this presumption, and therefore the Panel finds that the Complainant has enforceable rights in the SKYSCANNER Marks.
Second, the Disputed Domain Name <skaiscaner.com> consists of a phonetic variation of the SKYSCANNER Mark followed by the generic Top-Level Domain (“gTLD”) “.com”. The Disputed Domain Name is virtually identical in sound to the SKYSCANNER Mark, with the letters “ai” replacing the letter “y”. Domain names comprising phonetic variations of trademarks have been held to be confusingly similar. See, e.g. Xerox Corp. v. Stonybrook Investments, Ltd., WIPO Case No. D2001-0380; Microsoft Corporation v. Mike Rushton, WIPO Case No. D2004-0123.
In addition, the Disputed Domain Name <skaiscaner> consists of a misspelling of the SKYSCANNER Mark, with the single letter “n” replaced by the letters “nn”. This is an example of typosquatting in which a domain name includes a misspelled trademark. Here, the replacement of the letters “nn” with the single letter “n” does not operate to prevent a finding of confusing similarity between the SKYSCANNER Mark and the Disputed Domain Name. See Sanofi v. Cimpress Schweiz GmbH, WIPO Case No. D2017-1342.
Under the Policy, a complainant is required to make out a prima facie case that the respondent lacks rights or legitimate interests in the domain name at issue. Once such a prima facie case is made, the respondent carries the burden of demonstrating rights or legitimate interests in the domain name. If the respondent fails to do so, the complainant is deemed to have satisfied paragraph 4(a)(ii) of the Policy. See WIPO Overview of WIPO Panel Views on Selected UDRP Questions Third Edition (“WIPO Overview 3.0”), section 2.1.
In this case, the Panel finds that the Complainant has made out a prima facie case. The Respondent has not submitted any arguments or evidence to rebut the Complainant’s prima facie case. The Respondent’s lack of reply notwithstanding, there is no evidence in the record that the Respondent is in any way associated with the Complainant.
Further, the Respondent does not appear to be commonly known by the name “skaiscaner” or by any similar name. The Respondent has no connection or affiliation with the Complainant, and the Complainant has not licensed or otherwise authorized the Respondent to use or register any domain name incorporating the SKYSCANNER Marks. The Respondent does not appear to make any legitimate noncommercial or fair use of the Disputed Domain Name, nor any use in connection with a bona fide offering of goods or services. In fact, it appears that the Disputed Domain Name was apparently used to provide advertising services relating to travel information using the SKYSCANNER Marks, which services competed with those of the Complainant. The Respondent has not come forward with any explanation that demonstrates any rights or legitimate interests in the Disputed Domain Name. The Respondent has not formally replied to the Complainant’s contentions, claiming any rights or legitimate interests in the Disputed Domain Name.
This Panel finds that, based on the record, the Complainant has demonstrated the existence of the Respondent’s bad faith registration and use pursuant to paragraph 4(b) of the Policy.
First, bad faith may be found where the Respondent knew or should have known of the registration and use of the Complainant’s SKYSCANNER Marks prior to registering the Disputed Domain Name. See Façonnable SAS v. Names4sale, WIPO Case No. D2001-1365. Such is true in the present case in which the Respondent registered the Disputed Domain Name years after the Complainant first used the SKYSCANNER Marks.
The Complainant’s continuous and public use of the SKYSCANNER Marks would make it disingenuous for the Respondent to claim that it was unaware that the registration of the Disputed Domain Name would violate the Complainant’s rights. See Expedia, Inc. v. European Travel Network, WIPO Case No. D2000-0137 (finding bad faith where the respondent registered the domain name after the complainant established rights and publicity in the complainant’s trademarks). This is especially true where, as here, the Complainant owns dozens of well-known trademarks in the transportation industry in many jurisdictions worldwide. The Respondent’s initial registration and use of the Disputed Domain Name to host a transportation website using the Complainant’s well-known trademarks indicates bad faith registration and use. See Ebay Inc. v. Wangming, WIPO Case No. D2006-1107; Veuve Clicquot Ponsardin, Maison Fondée en 1772 v. The Polygenix Group Co., WIPO Case No. D2000-0163 (use of a name connected with such a well-known service and product by someone with no connection to the service and product suggests bad faith). Further, the use of the SKYSCANNER Marks to create a pay-per-click landing page with sponsored links is also evidence of bad faith.
Second, the use of a domain name to intentionally attempt to attract Internet users to a respondent’s website by creating a likelihood of confusion with a complainant’s mark as to the source, sponsorship, affiliation or endorsement of the respondent’s website for commercial gain demonstrates registration and use in bad faith. This was the case when the Complainant drafted the Complaint and attached a screenshot of the Respondent’s website, since at that time the Disputed Domain Name resolved to a website which offered transportation services similar to those offered by the Complainant and prominently displayed the SKYSCANNER Marks. Thus, the Respondent registered and used the Disputed Domain Name in bad faith to target the Complainant’s SKYSCANNER Marks and to drive Internet traffic seeking the Complainant’s services to the Respondent’s website for commercial gain. See paragraph 4(b)(iv) of the Policy.
Third, the Panel notes that the Disputed Domain Name is no longer redirected to the Respondent’s website as submitted in the Complaint, but instead, at the writing of this Decision, now resolves to a parking page containing pay-per-click sponsored links. When the links on pay-per-click pages are based on the trademark value of a complainant’s domain name, the trend in UDRP decisions is to recognize that such practices constitute bad faith. See, e.g., Champagne Lanson v. Development Services/MailPlanet.com, Inc., WIPO Case No. D2006-0006 (pay-per-click landing page not legitimate where ads are keyed to the trademark value of the domain name); The Knot, Inc. v. In Knot We Trust LTD, WIPO Case No. D2006-0340 (same).
For the foregoing reasons, in accordance with paragraphs 4(i) of the Policy and 15 of the Rules, the Panel orders that the Disputed Domain Name <skaiscaner.com> be transferred to the Complainant.

matches: v. v. v. v. v. v. v. v. v. v.


Two Years. Cal. Code Civ. Proc. § 335.1.
Does discovery rule apply? Yes. Fox v. Ethicon Endo-Surgery, Inc., 35 Cal.4th 797, 110 P.3d 914, (Cal., 2005.) Norgart v. Upjohn Co., 21 Cal.4th 383, 405 (1999).
Two Years. Cal. Code Civ. Proc. § 335.1 (2002).
Yes. Fox v. Ethicon Endo-Surgery, Inc., 35 Cal.4th 797, 110 P.3d 914, Cal., 2005. Norgart v. Upjohn Co., 21 Cal.4th 383, 405 (1999).
(1) Within one year after the date the plaintiff first suffered disability.
(2) Within one year after the date the plaintiff either knew, or through the exercise of reasonable diligence should have known, that such disability was caused or contributed to by such exposure.
(b) “Disability” as used in subdivision (a) means the loss of time from work as a result of such exposure which precludes the performance of the employee's regular occupation.
Determining when the statute of limitations begins to run for asbestos claims in California is a two step process. First, you must determine whether the client is“disabled” under Cal. Civ. Proc. §340.2(b). If the client is not disabled as defined by subsection (b), then the statute has not yet begun to run and the client’s claims are not time-barred.
•Individuals who retired from work for reasons unrelated to any asbestos-related illness the person may have.
•An employee who took some time off from work due to an asbestos-related condition, but later returned to work at his or her regular occupation.
•Students, homemakers, and others who have never been employed.
•Anyone who is still working in his or her regular occupation.
•An employee who retires in part due to medical advice regarding his or her asbestos-related illness, but was still medically able to continue working when he or she retired.
If the client is disabled, you must next determine when the client either knew, or should have known that the cause of his or her disability was exposure to asbestos.


Does Pennsylvania Law Permit Contractors and Owners to Extend the Six-Month Filing Deadline By Agreement?
It is not uncommon for a subcontractor, for example, to call his or her attorney regarding filing a lawsuit against the prime contractor, 13 months after the dispute arose, only to learn that buried deep within the 50 page, single spaced, 8-point font contract, lurks a clause that shortened the statute of limitations to bring the lawsuit.
An action, proceeding or appeal must be commenced within the time specified in or pursuant to this chapter [Limitation of Time] unless, in the case of a civil action or proceeding, a different time is provided by this title or another statute or a shorter time which is not manifestly unreasonable is prescribed by written agreement.
As construction contracts continue to become even more burdensome to contractors and subcontractors, it is inevitable that an owner or prime contractor will (or has already) attempted to shorten the time to file a mechanics’ lien. Under the Pennsylvania Mechanics’ Lien of 1963 (the “Lien Law”), contractors and subcontractors must file their lien claim within six (6) months after the “completion of work.” 49 P.S. § 1502(a)(1). “Completion of Work” is defined by the Lien Law as the “performance of the last of the materials required by the terms of the claimant’s contract or agreement, whichever last occurs.” Id. § 1201(8).
Pennsylvania courts have not been confronted with the issue of whether parties may contractually modify the six-month limitations period for filing a mechanics’ lien. Recently, however, the Missouri Court of Appeals was confronted with the issue in Manning Constr. Co., Inc. v. MCI Partners, LLC, 419 S.W.3d 134 (Mo. Ct. App. W.D. 2013).
In Manning, MCI Partners, LLC (the “Owner”) was the owner of a condominium project in Kanas City (the “Project”). The Owner’s Construction Manager (the “CM”) contracted with Manning Construction Company (the “Contractor”) to construct three buildings on the Project, in two phases, on a cost-plus basis. The Contractor ultimately only built one building (Building #2) before the Project was stopped due to the Owner’s inability to obtain additional financing. A certificate of substantial completion for Building #2 was issued in August 2007.
During the Project, the Contractor submitted twelve (12) pay applications for its work between January 25, 2007, and April 14, 2008. The Contractor received full payment on the first nine (9) pay applications, but received only partial payment on applications ten, eleven, and twelve. According to the Contractor, the total value of its work was in excess of $3.3 million, but that it was paid slightly more than $3.1 million.
Sometime in December 2008, in an attempt to work things out without resorting to litigation, the Contractor’s principal met with a representative of the CM to discuss payment for the unpaid invoices. In addition, the Contractor told the CM that the time to file a mechanics’ lien was quickly approaching. Under Missouri law (like Pennsylvania) the lien claim must be filed within six (6) months after the performance of the last of the labor or delivery of the last of the materials required by the contract. See Mo. Rev. State. § 429.080.
Using the substantial completion date of August 2007 as the date of the last of the labor performed under the contract, the Contractor told the CM it had to file the lien by February 2008. The CM requested that the Contractor not file a mechanics’ lien, because doing so would interfere with the Developer’s efforts to sell the condominium units, and to obtain financing for further construction.
Understandably, the Contractor was likely worried about obtaining additional work from the CM and Owner. Thus, rather than immediately filing a mechanics’ lien, the Contractor accepted the CM’s offer to perform landscaping work on the Project in exchange to extend Contractor’s lien rights. The Contractor performed the work and issued Change Work Order # 10, which was approved by the CM on December 17, 2008. Then in June 2009, the CM and Contractor agreed to Change of Work # 11, which authorized the Contractor to perform additional landscaping, to further extend Contractor’s lien filing deadline.
Finally, after still not being paid, the Contractor gave-up and filed its mechanics’ lien on November 19, 2009. The lien filing claimed that “Contractor last furnished labor, materials and services to the Project on June 1, 2009” Thereafter, Contractor brought suit to foreclose on its mechanics’ lien.
Following a two-day bench trial, the court held that Contractor’s November 2009 lien filing was untimely because it failed to comply with the six-month limitations period. The court rejected Contractor’s claim that the landscaping work performed under Change of Work Orders 10 and 11 extended the six-month lien-filing period. More specifically, the court found that the work was done solely for the purpose of attempting to extend the mechanics’ lien filing deadline. Further, none of the work was directly related to or improved the building on which the Contractor sought to establish its lien. Therefore, the Contractor’s failure to file the lien within six months of substantial completion (i.e., February 2008) barred a mechanics’ lien from being imposed on the completed structure.
The Contractor appealed to the Missouri Court of Appeals. The court affirmed the trial court’s ruling. Specifically, the court held that a contractor and property owner cannot extend the six-month filing deadline by agreement. The court reasoned that “the requirement of filing the lien on time is not something which defendant can enlarge - A mechanics’ lien is a creature of statute, and not of contract.” Consistent with this principle, explained the court, a contractor cannot perform additional work simply to extend or revive a mechanics’ lien.
Similar to Missouri, Pennsylvania courts may not permit a contractor to extend the time for filing a lien under certain circumstances. For example, a contractor cannot “unilaterally” extend the time for filing a mechanics’ lien by “purposely” failing to complete his work under the contract by omitting a small item and performing it later in time to toll the statute. South Hills Co. v. Kelly, 85 Pa.D&C. 495 (C.P. Allegheny 1953). More recently, the Pennsylvania Superior Court held that a contractor’s performance of “corrective work” will not extend the date of completion. Neelu Enterprises, Inc. v. Agarwal, 58 A.3d 828 (Pa. Super. 2012).
Unlike Missouri, Pennsylvania has not addressed whether the parties to a written contract may modify the Lien Law’s six month limitation period. Even though Pennsylvania courts have consistently held over the past century that the Lien Law must be strictly construed because it is a derogation of common law the Pennsylvania Supreme Court’s recent opinion in Bricklayers of Western Pennsylvania Combined Funds v. Scott’s Development Co. potentially opens the door for a lient claimant to argue that the statute should be liberally construed to effect its remedial purpose. In conclusion, the take away here is you should not assume that you are able to contractually agree to extend the time file a mechanic’s lien claim.


text:
Where a decedent's executors had invited sealed bids for the purchase of certain real property of the estate on terms such that any bid received would constitute an offer which the executors would be at liberty to accept or reject, and the executors had stated that all bids would be considered at the time appointed for the bid opening, acceptance of the highest bid was manifested by evidence that, at the opening, one of the executors, choosing not to consider the bids further, pronounced the highest bid the winner and thereafter deposited the highest bidders' deposit in a bank and returned the other bidders' deposits and papers to them, where, in the circumstances, the precise terms of the sale were never in doubt and where, in addition, both executors later signed the purchase and sale agreement submitted by the highest bidder. [627-629] BROWN, J., concurring.
Language in an invitation for sealed bids for the purchase of certain real property, which contemplated signature and delivery of a purchase and sale agreement, described, in the circumstances, a mere formality and did not establish delivery of the agreement as a condition precedent to the sellers' binding acceptance of the highest bid. [629-630] BROWN, J., concurring.
the signed agreement, but, rather, rested upon their offer and deposit and the sellers' acceptance of both. [630-631] BROWN, J., concurring.
The requirements of the Statute of Frauds, as applicable to sellers' acceptance of prospective buyers' sealed bid for the purchase of certain real estate, were satisfied by the sellers' endorsements on the buyers' deposit checks, when considered with the other bid papers, and, additionally, were satisfied by the sellers' signatures on a fully executed, but undelivered, purchase and sale agreement. [631-633] BROWN, J., concurring.
Where a decedent's two executors had invited sealed bids for the purchase of certain real property of the estate, the absence of one of the executors from the opening of the bids was without significance, where that executor, by later signing a purchase and sale agreement, ratified his coexecutor's acceptance of the successful bid.  BROWN, J., concurring.
At the trial of an action seeking conveyance of certain real property, a letter from the plaintiffs' counsel, purporting to show that after litigation was commenced the plaintiffs had offered to pay the defendants an additional $25,000 for the property was properly excluded from the evidence as an offer to compromise the litigation.  BROWN, J., concurring.
A judge's findings in a civil action bore sufficient indicia of his exercise of independent judgment, although the findings followed closely the sequence, text, and references to authority contained in suggested findings submitted by counsel for the prevailing parties. [633-634] BROWN, J., concurring.
CIVIL ACTION commenced in the Superior Court Department on December 21, 1984.
Richard W. Renehan (Bruce E. Falby, William F. Kehoe, Stanley H. Rudman & Dana F. Rodin with him) for the defendants.
John D. Donovan, Jr. (R. K. Gad, III, with him) for the plaintiffs.
KASS, J. Among the assets left by Amelia Peabody upon her death was a choice forty-acre property, "Mill Farm," in Dover. Her executors elected to sell it by inviting sealed bids from interested parties whom the executors had previously approved. Robert B. and Katherine L. Hunt submitted the highest sealed bid. The question before us is whether the executors' response to the Hunt bid produced an enforceable contract. We hold that it did and affirm the judgment below.
Before inviting bids, the executors had the property appraised. On the basis of that appraisal, the detailed bid kits which the executors sent out established a minimum price of $975,000. Included in the kits were: the form of purchase and sale agreement to be executed; the form of deed which would be delivered (it spelled out significant easements and a conservation restriction to which the land was subject); an escrow agreement; a map of the premises; and a letter of instructions to the prospective bidders.
What was required of a bidder was simple and precise. A bidder needed to: (1) fill in the name and address of the party designated "Buyer" in paragraph 1 of both copies of the purchase and sale agreement in the bid kit (the proffered agreement was on a 1978 edition of a form published by the Greater Boston Real Estate Board); (2) fill in the price bid, the ten percent deposit on that price, and the balance to be paid at closing; and (3) sign both copies of the agreement in the spaces designated for Buyer in the signature block. Finally, a bidder was to deliver the completed agreements with a certified check for the deposit no later than 1:00 P.M., November 30, 1984, at the office of the executors of the will, Harry F. Rice and Lloyd B. Waring.
The Hunts executed the prescribed dance step faithfully. Their bid was $1,200,000. Lesser bids of $1,180,000 and $1,176,000 were tendered by others. Rice, who pulled the laboring oar for the executors so far as real property of the estate was concerned, received the sealed bids in an outer office and retired with his lawyer to an inner chamber to examine them. Waring, the coexecutor, was elsewhere.
which, in our sole judgment, we deem to be in the best interests of the Estate, whether or not such offer is in the highest dollar amount.
If an offer is acceptable to us, both copies of the Purchase and Sale Agreement will be executed by us and one such fully executed copy will be mailed or delivered to the successful bidder no later than Tuesday, December 4, 1984.
The bids and certified deposit checks of all unsuccessful bidders will be mailed or returned to them on Tuesday, December 4, 1984."
After some twenty minutes, Rice and his lawyer emerged and Rice, turning to Mrs. Hunt, said: "Congratulations, you've bought the farm." [Note 3] To the rest of the persons in the room, Rice pronounced, "Mrs. Hunt is the high bidder with a bid of $1.2 million." Jean and Nicholas Vinios, disappointed bidders (they were the lowest of the three), gallantly congratulated Mrs. Hunt. Rice returned to the Vinioses their bid package, including their certified check. By messenger, Rice returned to a third bidder his bid kit, including deposit check. Gesturing with the Hunt papers, Rice said, "I have to keep this." He retained, promptly endorsed, and deposited the Hunts' certified deposit checks (there were two checks, totalling $120,000) to the account of the estate of Amelia Peabody.
In further conversation with Mrs. Hunt, Rice suggested an appointment to discuss the purchase of personal property on Mill Farm (agricultural machinery, tools, and furnishings). To that end, later in the afternoon of the bid opening, Rice notified the housekeeper at the Mill Farm that the Hunts had been the successful bidders.
on one of the two signed counterparts of the purchase and sale agreement which the Hunts had tendered with their bid. Rice then passed the document to his coexecutor, Waring, who also signed it. With an appended note that said, "For Buyers," Rice delivered the executed copy to counsel for a last review and, thereafter, delivery to the Hunts. Monday was December 3d, and delivery of an executed copy "to the successful bidder" had been promised for December 4th in the invitation to bid.
Later on December 3, 1984, Rice received a letter from new counsel [Note 4] for the Vinioses addressed to the executors. Enclosed with the letter were purchase and sale agreements conforming to the bid kit model and signed by the Vinioses. The price filled in on the agreement was $1,225,000, thus raising the previous Vinios bid by $49,000, and offering to trump the Hunt bid by $25,000. Certified checks for the required deposit were included. The accompanying transmittal letter said: "Mr. Vinios does not feel that the bidding procedures were such as to assure that the best interests of the estate would be advanced."
1. Manifestation of acceptance. It is possible to conduct an auction sale "without reserve," i.e., to declare that the property up for sale shall go to the highest bidder. The terms of sale in such a case will have been published and the only variable for the seller to consider is the amount of the bid. See Curtis v. Aspinwall, 114 Mass. 187, 191-192 (1873); Weinstein v. Green, 347 Mass. 580, 582 (1964); Restatement (Second) of Contracts Section 28(1)(b) (1979); 1 Williston, Contracts Section 29 (3d ed. 1957). That, however, is not the auction method which the executors chose in this case. They elected to invite bids, each of which would constitute an offer which the executors, as sellers, were at liberty to accept or reject. Weinstein v. Green, 347 Mass. at 582. Restatement (Second) of Contracts Section 28(1)(a) (1979). See 1 Corbin, Contracts Section 24 (1963). By reserving the right to reject any and all offers, the executors did no more than make express what the structure of their invitation to bid signified as matter of law, that they were conducting an auction "with reserve." See Restatement (Second) of Contracts Section 28 comment b (1979). Each of the bidders and the seller were entitled to withdraw until the seller signified acceptance of a bid. See Outpost Cafe, Inc. v. Fairhaven Sav. Bank, 3 Mass. App. Ct. 1, 3 (1975); 1 Corbin, Contracts Section 108 (1963). See also G. L. c. 106, Section 2-328.
The trial judge correctly concluded that the executors manifested their acceptance of the Hunt offer at the bid opening and reinforced their manifestations of acceptance thereafter. Acceptance may be manifested by conduct or words, or a combination of the two which are reasonable in the circumstances. Restatement (Second) of Contracts Section 30 (1979). Farnsworth, Contracts Section 3.13 (1982). See also G. L. c. 106, Sections 2-204 and 2-206. The content of the conduct or words should include: (1) an expression of commitment; (2) which is unconditional, i.e., does not vary the terms of the offer; and (3) which is not conditioned on a further step. Farnsworth, supra. What we examine are the parties' overt acts. See Hotchkiss v. National City Bank, 200 F. 287, 293 (S.D. N.Y. 1911) (L. Hand, J.), affd., 201 F. 664 (2d Cir. 1912), affd., 231 U.S. 50 (1913); Holmes. The Common Law 307 (1881).
There was no absence of expression of commitment. By the terms of their invitation for bids, the executors had declared that offers would be considered at the time of the opening. [Note 6] Rice did so. To be sure, the executors had reserved the right to reject all the bids or to embark on a course of negotiations with any of the three offerors. That Rice did not do. He did not, upon returning from his perusal of the bids, announce that they would be further considered or that the executors would negotiate with one of the offerors. Rather he pronounced the Hunts as the winners. "Congratulations, you've bought the farm." [Note 7] In addition he banked the Hunts' deposit, suggested to Mrs. Hunt that she might want to buy equipment and furnishings, and, pointedly, returned to the other bidders their papers and deposit checks.
As to the terms of the purchase, there was no doubt or attempt to vary. Those terms had been spelled out in meticulous detail by the sellers. All the offeror had to do was name the price. See Conway Sav. Bank v. Vinick, 287 Mass. 448, 453 (1934). Compare those cases recently reviewed in Goren v. Royal Invs., Inc., ante 137 (1987), and Blomendale v. Imbrescia, ante 144 (1987), in which the terms of sale were uncertain.
terms of acceptance were not met or expressed conditions necessary to acceptance did not materialize: Callanan v. Chapin, 158 Mass. 113, 119-120 (1893); Diebold Safe & Lock Co. v. Morse, 226 Mass. 342, 344 (1917), S.C., 234 Mass. 17 (1919); Taylor v. Haverhill, 316 Mass. 380, 382 (1944); Kerwin v. Donaghy, 317 Mass. 559, 568 n.2 (1945); Howland v. Plymouth, 319 Mass. 321, 324 (1946).
2. Requirement of delivery of the written contract. Did the executors' bid instructions condition acceptance of a responsive bid on a defined further step? The executors urge that the language of the invitation for bids establishes delivery of a signed agreement as the decisive act to make a contract. To lapse into the argot of the law, the executors claim to have set up delivery as a condition precedent to a binding acceptance.
It will be recalled that the bid kit provided, "If an offer is acceptable to us, both copies of the Purchase and Sale Agreement will be executed by us and one such fully executed copy will be mailed or delivered to the successful bidder no later than Tuesday, December 4, 1984." The quoted language has the ring of administrative follow-up rather than condition precedent. One would expect a condition precedent to be expressed with more precision, particularly within so precise a document. A condition precedent might be expressed, for example by: "No bid is to be regarded as accepted, and we shall not be bound to any bidder, until we have delivered a fully executed purchase and sale agreement to the successful bidder."
Our opinion that the clause upon which the executors rely was a timetable guideline, not a contract term, finds support in the sentence which immediately follows it, which reads: "The bids and certified deposit checks of all unsuccessful bidders will be mailed or returned to them on Tuesday, December 4, 1984." The executors, in fact, returned checks and papers to the lower bidders immediately after the bid opening, i.e., on November 30th, demonstrating that they regarded date points for paper handling as something less than of the essence.
If, as a number of cases hold, agreement may so mature that execution of a formal instrument is only ceremonial, [Note 9] the language concerning delivery of the executed agreements in the bid document is properly read, in the absence of express language to the contrary, as describing a formality.
When, as here, a written contract is in the picture, the executors urge that commerce and the legal system would be better served by embracing delivery of the written contract as a "bright line" test for contract formation. Undeniably, stitching together a contract on the basis of conflicting testimony and scraps of memoranda is second best to delivery of an executed, integrated written instrument. It is, however, an exercise in which courts are frequently obliged to engage. Imposition of a bright line on ragged commercial facts often does not illuminate, but distorts, what the parties have done. If bright lines are to be applied in a context such as this, the drafters of the instrument must first paint them.
the seal was unnecessary and the rights of the parties did not depend on the fact that the contract was under seal); Stern v. Lieberman, 307 Mass. 77, 79 (1940) (a seal may be disregarded where the substantive rights of the parties are not impaired); Johnson-Foster Co. v. D'Amore Constr. Co., 314 Mass. 416, 421 (1943) (where there was ample consideration, seal may be treated as surplusage). If, in the absence of consideration or reliance, one looked solely to the ritualistic force of the seal to claim contractual rights, then it might not be unreasonable that the talismanic paper should be delivered into the hands of the person who purported to have rights under it.
Although the form of purchase and sale agreement in the bid kit was, by its terms, "to take effect as a sealed instrument," the Hunts were not depending on that characteristic to assert contractual rights. They were resting on their offer and deposit, and the acceptance of both.
Below the surface of the various points which the executors advance in favor of delivery of a signed contract as the necessary event is the idea that they require running room to assure that they, as executors, obtain the highest price for estate property. See Forester v. O'Connell & Lee Mfg. Co., 328 Mass. 377, 380 (1952); Onanian v. Leggat, 2 Mass. App. Ct. 623, 625 (1974); Newhall, Settlement of Estates Section 120 (4th ed. 1958). That duty, as the Onanian case calls to attention at 625-626, does not absolve fiduciaries from adherence to usual contract standards in relation to third parties. When, as here, the executors have arranged for a sealed bid auction, starting with a minimum price based on professional appraisal, it is scarcely to be thought that they have not acted to the advantage of the estate when they accept the highest sealed bid.
-- and the memorandum required to prove what the contract is. Jacobson v. Perman, 238 Mass. 445, 448-449 (1921). A.B.C. Auto Parts, Inc. v. Moran, 359 Mass. 327, 330 (1971). See Michelson v. Sherman, 310 Mass. 774, 777 (1942). Two documents constituted evidence of the contract. First, there were the deposit checks which the executors had endorsed. See A.B.C. Auto Parts, Inc. v. Moran, 359 Mass. at 329. Read with the bid papers, the endorsed checks spelled out all the elements of the transaction. Nickerson v. Weld, 204 Mass. 346, 356 (1910). Second, the fully executed purchase and sale agreement which the executors had signed, but not delivered, was received in evidence. It, too, described the transaction in full detail. Only a new closing date needed to be supplied by the court, the closing date set in the agreement (January 25, 1985) having passed by as the Hunts and the executors dug into their respective positions.
295 Mass. 517, 518-519 (1936); Silbert v. Equitable Life Assur. Soc., 314 Mass. 406, 408-410 (1943); Frankowich v. Szczuka, 321 Mass. 75, 77 (1947); Eckstrom v. Eckstrom, 327 Mass. 140, 142-143 (1951).
4. Ratification of Rice's action. Generally, multiple fiduciaries must act together in major decisions. Newhall, Settlement of Estates Section 60 (4th ed. 1958). See Talbot v. Bush, 251 Mass. 27, 29 (1925). So far as appears from the record, Rice and Waring acted jointly in deciding upon the best method for selling Mill Farm, having the property appraised, and formulating the terms of the invitation for bids. The terms of bidding having been carefully established, presiding over the bid opening was a ministerial task which one executor might reasonably assign to the other. In any event, the question of the actual or apparent authority of Rice to act on behalf of himself and Waring at the bid opening was rendered academic by the finding of the judge that Waring had ratified Rice's entering into a contract with the Hunts for the purchase of Mill Farm. The evidence which supported that finding was Waring's signing of the purchase and sale agreement. See Lenfest v. Boston & Me. Corp., 537 F. Supp. 324, 334 (D. Mass. 1982); Restatement (Second) of Agency Section 84(1) (1957).
5. Exclusion of higher offer. No error attended the exclusion of a letter from the Hunts' counsel, proffered by the executors, purporting to show that after litigation began, the Hunts had offered to raise their bid by $25,000. The executors offered the evidence to show that the Hunts could have availed themselves of the opportunity to increase their bid or participate in a new auction of the Mill Farm. That, the executors argue, bears on the Hunts' entitlement to the extraordinary equitable remedy of specific performance by rebutting the impression that the executors were freezing the Hunts out. The letter in question was an offer to compromise the litigation. As such it was properly excluded. See Liacos, Massachusetts Evidence 277-278 (5th ed. 1981); Proposed Mass.R.Evid. 408.
the executors protest that there has been a default of independent judicial fact finding, citing Cormier v. Carty, 381 Mass. 234, 236-237 (1980), and its progeny. Our examination shows sufficient deletions from, additions to, and editing of the offered findings to assure us that the judge applied his independent judgment. We reviewed the ground recently in Makino, U.S.A., Inc. v. Metlife Capital Credit Corp., ante 302, 314-315 (1988).
BROWN, J. (concurring). I join fully in the result reached by the majority. It is the conduct of the attorneys in the opening phase of this saga, i.e., those who counseled the executors to reject the Hunts' bid and those who first encouraged the Vinioses to attack the outcome of the auction [Note Concur-1] which, once again, compels me to comment. Cf. Energy Resources Corp. v. Porter, 14 Mass. App. Ct. 296, 303-304 (1982); Kennedy v. Kennedy, 20 Mass. App. Ct. 559, 564-565 (1985); Petitions of Catholic Charitable Bureau to Dispense with Consent to Adoption, 22 Mass. App. Ct. 48, 60-61 (1986); Pinkowitz v. Edinburg, 22 Mass. App. Ct. 180, 191 (1986); Edinburg v. Massachusetts Mut. Life Ins. Co., 22 Mass. App. Ct. 923, 925-926 (1986).
This case presents a question of offer and acceptance, a subject covered comprehensively in the first-year contracts course in every law school. The correct answer -- that the Hunts' offer was accepted by the executors twenty minutes after they examined the bids -- should likewise be apparent to every first-year law student.
I think double costs of the appeal and substantial counsel fees are certainly warranted here. See Farm Constr. Serv., Inc. v. Robinson, 21 Mass. App. Ct. 955, 956 (1986), and cases cited. The Hunts and their attorneys acted responsibly and should not be penalized.
assets of the estate. It is because the Vinioses, and not the estate, would be burdened that I favor double costs pursuant to Mass.R.A.P. 25 and the award of counsel fees. [Note Concur-6] Also, I suggest that the probate judge who is requested to approve the executors' account look very closely at fees and litigation expenses attributable to this matter that may have been unnecessary or generated by improvident judgment.
[Note 1] Katherine L. Hunt.
[Note 2] Lloyd B. Waring.
[Note 3] We do not know if irony was intended. The phrase "bought the farm," is slang for death, usually accidental. Roots of the expression are variously traced to military and early aviation usage. See Morris, Morris Dictionary of Word & Phrase Origins 80 (1977); Chapman, New Dictionary of American Slang 57 (1986).
[Note 4] The lawyer who had counseled the Vinioses about making a bid and had accompanied them to the bid opening withdrew because of a potential conflict of interest.
[Note 5] In the meantime (on April 12, 1985) the executors have conveyed the Mill Farm to the Vinioses for a price of $1,300,000, subject to an agreement which requires the Vinioses to assume the burden of the litigation with the Hunts and to disgorge the property to the Hunts, should they prevail, for a price of $1,200,000 and otherwise in accordance with the agreement which the Hunts had signed.
[Note 6] "At that time, all bids will be considered. . . ."
[Note 7] Rice did not recall saying that, but the trial judge found that he did and there was evidence to support the finding. There is no dispute by Rice that he announced the Hunts as the high and successful bidders.
[Note 8] In their briefs, the parties engage in a lively debate as to who controlled the mode of acceptance of the Hunts' offer. See David J. Tierney, Jr., Inc. v. T. Wellington Carpets, Inc., 8 Mass. App. Ct. 237, 240 (1979). In the context of the case, it is a sterile controversy, as the executors' objective manifestations of acceptance are decisive.
[Note 9] See Coan v. Holbrook, 327 Mass. 221, 224 (1951); Sands v. Arruda, 359 Mass. 591, 596 (1971); Bridge Enterprises, Inc. v. Futurity Thread Co., 2 Mass. App. Ct. 243, 248 (1974); David J. Tierney, Jr., Inc. v. T. Wellington Carpets, Inc., 8 Mass. App. Ct. 237, 241 (1979); Cataldo v. Zuckerman, 20 Mass. App. Ct. 731, 737 (1985); Goren v. Royal Invs., Inc., ante 137, 141-142 (1987); Rand-Whitney Packaging Corp. v. Robertson Group, Inc., 651 F. Supp. 520, 535-537 (D. Mass. 1986).
[Note 10] As to the erosion of the significance of the seal, see Nalbandian v. Hanson Restaurant & Lounge, Inc., 369 Mass. 150, 154-157 (1975).
[Note Concur-1] None of the lawyers named in the heading to the court's opinion participated in the giving of that advice and my criticism is not directed against any of them.
[Note Concur-2] In descriptive vernacular, the agreement was "bullet-proof."
[Note Concur-3] I pass over the question whether the Vinioses have standing to assert "`the best interests of the estate'" (see the majority opinion, ante at 626).
[Note Concur-4] It is my view that in these circumstances, nothing in Onanian v. Leggat, 2 Mass. App. Ct. 623 (1974), provides justification for such a reversal of position.
[Note Concur-5] It is no small irony that the executors' decision to rescind their acceptance of the Hunts' offer, and eventually to sell the farm to the Vinioses subject to the outcome of this litigation (see the majority opinion at note 5, supra), might actually have benefited the estate. One wonders, however, how much of that additional $100,000 may have been offset by additional legal or executors' fees chargeable to the estate.
[Note Concur-6] The decedent desired that much of her estate go to eleemosynary activities and causes and not be chewed up in needless litigation.

matches: v. v. v. v. v. v. v. v. v. v. v. v. v. v. v. v. v. v. v. v. v. v. v. v. v. v. v. v. v. v. v. v. v. v. v. v. v. v. v. v. v. v. v. v.


text:
Ninth Circuit Decision in Sternberg v. Johnston : Ellett Law Offices, P.C.
The Ninth Circuit’s decision in Sternberg v. Johnston has often been criticized. The panel reached its controversial conclusion by straying far from the actual briefing provided by either party. Here’s the Motion for Reconsideration that was granted only in small part.
3) consideration by the full court is necessary to maintain uniformity of the Court’s decisions.
Regarding the first ground, the panel’s decision reached a novel interpretation of 11 U.S.C. (k)(1) that was directly contrary to all prior published decisions spanning more than 20 years by numerous lower courts as well as the Third Circuit, the Ninth Circuit, the Fourth Circuit, the Fifth Circuit and the Bankruptcy Appellate Panels of the First and Ninth Circuits. The panel’s innovative analysis of 11 U.S.C. 362(k)(1) was neither anticipated, nor briefed by either party. Lacking the benefit of briefing, the panel failed to consider that the statutory section in question, 11 U.S.C. 362(h), was first enacted in 1984 and was then re-enacted in April 2005 as 11 U.S.C. 362(k)(1). From 1984 to 2005, this statutory provision was uniformly interpreted by all Courts as mandating an award of attorney fees incurred in stay violation actions to any injured individual. Therefore, upon the re-enactment of this provision in 2005, Congress is deemed to have been aware of, and adopted, the judicial interpretations of that statutory section. Forrest Grove School District at 2490. Accordingly, the panel’s novel contrary interpretation of 11 U.S.C 362(h) was foreclosed by the 2005 re-enactment of the same statutory provision now known as 11 U.S.C. 362(k)(1).
As for the need for national uniformity, the automatic bankruptcy stay is one of the most important and fundamental protections afforded under the uniform federal bankruptcy laws and automatically issues in every bankruptcy case filed in our country, currently numbering more than one million and five hundred thousand cases per year. (1,500,000 cases). Accordingly, there is an overriding need for national uniformity. However, the panel’s novel interpretation destroys the uniformity and certainty that previously existed in interpreting 11 U.S.C. 362(h), now known as 11 U.S.C. 362(k)(1). It is respectfully suggested that before this Circuit unleash the Pandora’s box of uncertainty and its attendant costs of litigation upon our nation’s bankruptcy judges and debtors, that an en banc rehearing is appropriate.
Regarding the second ground, the panel’s published opinion admits to creating a split of authority with the Fifth Circuit case of Young v. Repine, 536 F.3d 512 (5th Cir. 2008) and, as set forth in the preceding paragraph, there is an overriding need for national uniformity. If this split is not resolved, it will continue to spawn years of litigation in our nation’s bankruptcy courts. If our arguments are correct, then all of this is unnecessary because the panel’s novel analysis is fatally flawed and therefore should not be adopted by this Circuit.
Regarding the third ground, the panel’s opinion admits that it is reaching a contrary conclusion from prior 9th Circuit decisions. Indeed, the panel noted that the 9th Circuit had previously “affirmed awards under 362(k) that appear to have contained attorney fees incurred in prosecuting a 362(k) damages action.” slip opinion at 14113 citing In re Dawson, 390 F. 3d 1139, 1152-1153 (9th Cir. 2004); In re Bloom 875 F. 2d 224, 227 (9th Cir. 1989); and Havelock v. Taxel (In re Pace), 67 F. 3d 187, 192 (9th Cir. 1995). In addition to these decisions, the panel’s decision is also at odds with prior 9th Circuit decisions that held that, notwithstanding 11 U.S.C. 362(h), bankruptcy courts retain their traditional inherent civil contempt power that allows them to award the victim’s attorney fees incurred in stay violation actions. See for example, In re Dryer 322 F. 3de 1178 (9th Cir. 2003); Calif. Equipment Dev. Dep’t v. Taxel (In re Del Mission) 98 F. 3d 1147, 1152 (9th Cir. 1996). The panel’s opinion does not allow the possibility of awarding attorney fees under the court’s established civil contempt power, but fails to explain why this well-established basis for awarding attorney fees to stay violation victims has been foreclosed by its decision. It is respectfully submitted that this issue will also result in years of unnecessary litigation in this circuit.
Upon receipt of the State Court Order, Johnston requested his bankruptcy counsel’s assistance. On that day, July 16, 2009, Johnston’s counsel sent Sternberg a fax pointing out that the State Court’s Minute-Entry Order violated the stay and providing a copy of the bankruptcy petition. (ER 180-184) Receiving no response from Sternberg, counsel sent another fax on July 17, 2001 informing Sternberg of his stay violation and asking Sternberg to take remedial measures to cure the stay violation. (ER 178-9) The letter stated, in pertinent part, “My overwhelming preference is that you and [your client] bring yourselves into compliance with federal bankruptcy law voluntarily.” (ER 178-9) Sternberg took no remedial measures but instead took the opposite tack. For example, when Johnston filed a request with the Appellate Court to obtain a Stay of the State Court’s Minute-Entry Order, Sternberg filed an opposition requesting that the petition be denied. (ER 187 ).
Meanwhile, Johnston’s bankruptcy counsel brought the stay violation action and obtained an emergency hearing. At the emergency hearing, the Bankruptcy Court ruled that the State Court Minute-Entry Order violated the stay because “the Minute Entry dictated that the Debtor immediately satisfy a large Judgment or face incarceration; all without the State Court focusing on the non-estate property…or requesting the Bankruptcy Court’s prior determination of whether the automatic stay applied…” In re Johnston, 308 B.R. 469, 474 (Bankr. D.Ariz. 2003).
Q(by Mr. Volquardsen): Given the way 362(h) operates with its fee shifting provision, why didn’t you file more than one motion?
A (by Mr. Ellett): “We were adopting an approach trying to keep the fees to a minimum because of the burden that this case in general has placed on our small firm. During this period and up to today, I’m owed, or our firm is owed $200,000.00 from this case as a total, $90,000 of which has been in the stay violation and during that time my personal gross income from the practice of law has been below $60,000 each year. Half of my salary has been postponed because of this case and I had no incentive to see any more fees go into this case than were absolutely necessary in this action because it was coming directly off of what I needed to support my family and to pay my bills.
On appeal the District Court affirmed the Bankruptcy Court’s award in all respects. Sternberg appealed again. The 9th Circuit upheld the finding of a stay violation and the amounts for missed work and emotional distress, but held that 11 U.S.C. 362(k)(1) prohibited the bankruptcy court from awarding attorney fees for the amounts incurred in proving Johnston’s damages.
I. The panel erred by failing to apply the basic rule of statutory construction that Congress is deemed to have adopted the existing administrative or judicial interpretation of a statutory provision when it re-enacts that provision.
In Forrest Grove School District v. T.A., 129 S.Ct. 2482 (2009), the Supreme Court again utilized the basic rule of statutory construction that “Congress is presumed to be aware of an administrative or a judicial interpretation of statute and to adopt that interpretation when it re-enacts a statute without change” id. at 2450 citing Lorillard v. Pons, 434 U.S. 575,580 (1978). In Forrest Grove School District, the Supreme Court noted that there had been amendments in 1997 to the act in question, but that the particular provision of the act in question had not been changed by the amendments. The Court then applied the long-standing rule of statutory construction that Congress is deemed to be in agreement with and adopt those judicial interpretations of the reenacted statutory provision.
Applying the Supreme Court’s holding to the case at bar requires the conclusion that in 2005 Congress adopted the existing judicial interpretations of 11 U.S.C. (h) when it reenacted that provision as 11 U.S.C. (k)(1). By 2005, the Courts had repeatedly held that 11 U.S.C. 362(h) allowed an award to an individual for the attorney fees incurred during the stay violation action. see for example In re Dawson, 390 F. 3d 1139, 1152-1153 (9th Cir. 2004); In re Bloom 875 F. 2d 224, 227 (9th Cir. 1989); and Havelock v. Taxel (In re Pace), 67 F. 3d 187, 192 (9th Cir. 1995). Cuffee v. Atlantic Business and Community Corporation, 901 F.2d 325, (3rd Cir. 1990); In re Peralta, 317 B.R. 381, (9th Cir. BAP 2004); Mitchell v. BankIllinois, 316 B.R. 891, 901-04 (S.D.Tex. 2004), In re Henry, 266 B.R. 457(C.D. Cal. 2001); In re Still, 117 B.R. 251, 254-55 (Bankr. E.D. Texas 1990).
The list could go on and on but there is a strict page limit for this petition. The point is that by 2005 there was an existing consensus that 11 U.S.C. 362(h) mandated an award of an individual’s attorney fees incurred in litigating the stay violation. Congress is deemed to have been aware of this and adopted those interpretations when it re-enacted 11 U.S.C.(h) as 11 U.S.C. 362 (k)(1). It is now too late to adopt a new interpretation. Moreover for the reason discussed below we believe the panel’s interpretation to be incorrect.
II. The Panel’s decision incorrectly assumed that the American Rule is a universal rule instead of a general rule with recognized exceptions and then the panel improperly ignored the long-established exceptions of the rule.
While it is important to consider a context for a statute’s enactment it is even more important to consider the correct context. The panel incorrectly assumed that the American Rule was the correct “backdrop” and then concluded that “backdrop” was controlling absent clear language that Congress intended to deviate from it. However, preceding the 1984 enactment of 11 U.S.C. 362(h), the correct history is that the American Rule was never applied to stay violation actions. There is not a single instance of this ever happening. The real history is that stay violation actions have always been held to be subject to a court’s inherent civil contempt power which is a long-recognized and established exception of the American Rule. Indeed, the Supreme Court in Aleyska Pipline Svc. Co v. Wilderness Soc’y, 421 U.S. 240, (1975) and again in Chambers v. Nasco, 501 U.S. 32, (1991) plainly pronounced that there are three well-established exceptions to the American Rule: “the common fund exception”; a court’s discretion under its inherent civil contempt power to award fees for the “willful disobedience of a court order”; and the Court’s sanctioning authority to punish bad faith or vexatious conduct. Chambers, 501 U.S. at 47. These exceptions are as venerable and even more ancient than the American Rule itself and entitled to no less respect. As explained by Chambers, “In Alyeska we determined that ‘Congress ha[d] not repudiated the judicially fashioned exceptions’ to the American Rule, which were founded in the inherent power of the courts.” Id. at 47 quoting Alyeska, 421 U.S., at 260, 95 S. Ct., at 1623.
The Chambers Court further explained that “‘we do not lightly assume that Congress has intended to depart from established principles’ such as the scope of the court’s inherent power.” Id. at 47 quoting Weinberger v. Romero-Barcelo, 465 U.S. 305, 313,(1982); and citing Link, 370 U.S., at 631-632.
History plainly teaches us that prior to 1984, the bankruptcy stay was always and universally enforced through the court’s inherent civil contempt power. By way of one of many examples, immediately prior to the enactment of the Bankruptcy Act in 1978, the 2nd Circuit in Fidelity Mortgage Investors V. Camelia Builders (In Re Fidelity Mortgage Investors), 550 F.2d 47 (2nd Cir. 1976) upheld the District Court’s affirmation of the Bankruptcy Judge’s contempt award for a willful violation of the bankruptcy stay. There the stay violator, just like Sternberg here, continued in State Court after the filing of the bankruptcy and the 2nd Circuit upheld the award of “reasonable attorney fees for the defense of the (state) action and for the prosecution of the contempt proceeding.” Fidelity Mortgage, 550 F. 2d at 50.
The 1978 Bankruptcy Act enacted many changes but it continued, until 1984, to rely solely on the court’s inherent civil contempt power to enforce the automatic bankruptcy stay. Indeed from 1978 until 1984, all courts universally held that the bankruptcy stay was enforceable through their inherent civil contempt power and conversely, no courts ever held that the American Rule applied to stay violation actions. See for example Depoy v. Kipp (in re Depoy) 29 B.R. 471 (Bankr. Indiana 1983) In re Pierson, 33 B.R. 743 (Bankr. W.D. N.Y. 1983); In re Thacher, 24 B.R. 835, (Bankr. S.D. Ohio1982);In re Eisenberg, 7 B.R. (Bankr. E.D. N.Y.1980). While the cases up to 1984 universally recognized the Court’s civil contempt power, most Courts held this power did not include the power to award punitive damages. In re Depoy at 478-479.
This is the true context in which Congress enacted 11 U.S.C. 362(h) which provided: “An individual injured by any willful violation of a stay provided by this section shall recover actual damages, including costs and attorneys’ fees, and, in appropriate circumstances, may recover punitive damages.” The effect of the 1984 enactment of 11 U.S.C. 362(h) was hardly earth-shaking. Indeed, the 9th Circuit long ago had already recognized that “ the contempt remedy is nearly identical to the remedy available under 11 U.S.C. 362(h), except for the permissive nature of the contempt authority.” Dyer, 322 F.3d at 1190 citing Del Mission, 98 F. 3d at 1152. In other words, the primary effect of 11 U.S.C. 362(h), when interpreted in its true historical context, was to make an award of damages and reasonable attorney’s fees mandatory instead of discretionary for an “individual injured by the willful stay violation.” An additional effect also noted by Dryer was 362(h) allowed an award “in appropriate circumstances” of punitive damages to an individual injured by a stay violation which was generally unavailable under the court’s civil contempt power. This is the true background behind the enactment of 11 U.S.C. 362(h). The panel’s assumption of that the American Rule was the real background is mistaken as is its resulting conclusion that the 11 U.S.C. 362(h) was intended by Congress to adopt the American Rule. Unfortunately, if this petition is not granted, then years of litigation will ensue throughout the Circuit and the country over a ruling that is based on an obviously mistaken assumption reached without the benefit of briefing by either party. This Circuit has previously developed a coherent and well-reasoned body of law interpreting 11 U.S.C. 362(h) and the Court’s civil contempt power. The recent Johnston decision, through its incorrect assumption, needlessly destroys the years of coherent wisdom embodied in those prior cases and renders them incoherent and contradictory.
III. The policy concerns stated in the panel’s opinion are to narrow.
The panel expressed some policy concerns about this case but overlooked the effect its ruling will have on the million of bankruptcy cases field every year. For over 25 years, 11 U.S.C. 362(h) and the Court’s inherent contempt powers have proved to be a workable and effective means of enforcing the automatic bankruptcy stay. The threat of the imposition of attorney fees is an effective deterrent to most would-be stay violators. Indeed, the great majority of stay violations are resolved by a simple letter from debtors’ counsel reminding the stay violator of the possibility for an award of attorney fees. That letter just didn’t work with this defendant.
Unfortunately, once in a blue moon a man comes along who is not like the other men. He is undaunted by the possibility of the award of attorneys’ fees and obstinately believes the stay does not apply to his conduct. Unfortunately, for Mr. Johnston such a man crossed his path in the form of the attorney hand-picked by his ex-wife to pursue him. That man was Mr. Sternberg and he vigorously and vehemently opposed Johnston every step of the way. Now, Sternberg complains it is unfair to have him pay for the fees caused by his own actions. Who then should pay for these fees? The debtor, in disregard of his fresh start? Or perhaps debtors’ counsel should instead go uncompensated although victorious in protecting his client’s stay rights and keeping him from being incarcerated?
The panel surely cannot intend either of these results. Instead, its opinion seems to imply that the debtor should have settled with Sternberg at the outset. The record reflects this was possible, at trial it was established that Sternberg through co-counsel, offered to vacate the State Court Order in exchange for a lien against the debtor’s homestead property. (Er 100) In light of the panel’s novel interpretation, there can be no doubt that Johnston would have been better off granting this concessionary lien to the stay violator rather than the face years of litigation and appeals from the more wealthy Sternberg. However, this is the very harm warned against by the Eskanos decision. Absent the protections of a fee shifting statute, the more wealthy stay violator can use their own stay violation as leverage against the debtor. Meanwhile the law-abiding creditors and the debtor will be harmed by the concessions exacted from the debtor. Simply put, adopting the American Rule de-incentivizes the defense of the stay and incentivizes its violation.
Moreover, there is little real danger of run away debtor’s attorney fees. The Bankruptcy Court indisputably was meticulous and careful in awarding only those fees for actions it deemed reasonable and necessary. The Bankruptcy Court’s lengthy and thorough review of the fees was sufficient to ensure that the fees were reasonable. The trial courts can be counted upon to properly police the reasonableness of the fees and it is not necessary for this Circuit to deprive the trial courts of the ability to compensate the victims of stay violations.
For the foregoing reasons, Appellee requests that his petition for a rehearing en banc be granted.

matches: v. v. v. v. v. v. v. v. v. v. v. v. v. V. v.


text:
Post-employment restrictive covenants are private contracts that can restrict individuals’ business activities when they later leave their employment in return for wages, access to information, or some other type of tangible benefit. They often are presented to prospective employees in an offer letter or employment agreement as “a condition of employment” without any additional consideration beyond normal base wages and benefits.
Automobile dealerships and their sales staff are no strangers to restrictive covenants. An automobile dealership might ask its finance, sales staff, or general managers to sign a post-employment non-disclosure, non-competition or non-solicitation agreement because they are granted access to important customer information, dealership vehicle pricing, margins and inventory, or other legitimate protectable business interests. See, e.g., Autonation, Inc. v. O’Brien (S.D. Fla. 2004); Brentlinger Enterprises v. Curran (Ohio Ct. App. 2001); Boch Toyota, Inc. v. Klimoski (Mass. Super. Ct. 2004); In re Autonation, Inc. (Texas 2007); Asbury MS Gray-Daniels LLC v. Daniels (S.D. Miss. 2011); Granite Buick GMC, Inc. v. Ray (S.D. 2015); Sonic Automotive, Inc. v. Younis (C.D. Cal. 2015); Navarre Chevrolet, Inc. v. Begnaud (La. Ct. App. 2016); Autonation, Inc. v. Peters (S.D. Fla. 2016); and McKie Ford Lincoln, Inc. v. Hanna (S.D. 2018).
In many states (including Delaware, Massachusetts, New Jersey, New York and Pennsylvania), an offer of “at-will” employment (i.e., the employment relationship can be terminated by employer or employee at any time, for any lawful reason, with or without notice) at the beginning of the employment relationship is considered “adequate consideration” for entering into a legally binding restrictive covenant. So, that same car salesman who sold you your vehicle, might have been asked to sign a non-compete agreement on a take-it-or-leave-it basis, with no haggling as an option with his or her employer. Ironic? Fair? Reasonable?
Not all states agree with this approach. For example, in Illinois, a restrictive covenant is supported by adequate consideration only if, after signing the covenant, the employee remains employed for a “substantial period” of time beyond the threat of discharge. Some Illinois courts have determined that two years is a substantial period. These courts find that the employee’s continued employment is evidence that the employer’s forbearance from firing the employee was not illusory when the covenant was signed.
Continued Employment – You Want Me to Sign What?
What if the car salesman was not asked to sign a non-compete at the inception of employment, but rather after two years of employment? One of the more frequently litigated non-compete issues is whether continued at-will employment, alone, with no additional promises or money, is adequate consideration. This is where states, and even courts within the same state, diverge in opinion and outcome. See Jordan Liebman & Richard Nathan, The Enforceability of Post–Employment Noncompetition Agreements Formed After At–Will Employment Has Commenced: The “Afterthought” Agreement, 60 S. Cal. L. Rev. 1465 (1987).
Some states, such as Missouri, find that an employer’s promise of continued at-will employment, standing alone, is adequate consideration to support a post-employment restrictive covenant. JumboSack Corp. v. Buyck (Mo. Ct. App. 2013) (“Missouri courts have recognized that continued at-will employment constitutes consideration for a non-compete agreement where the employer allows the employee by virtue of the employment to have continued access to its protectable assets and relationships.”). A few years ago, in Runzheimer Int’l v. Friedlen (2015), the Wisconsin Supreme Court held that a former employer’s promise not to fire an at-will employee immediately if he signed a restrictive covenant constituted lawful consideration, even though this employee had worked at the company for 15 years.
In contrast, other courts, like in North Carolina, have found that keeping one’s existing job is not sufficient consideration for the signing of a covenant not to compete. Same in Washington and Colorado. Likewise, in Pennsylvania, if the restrictive covenant is requested during employment, it is enforceable only if the employee receives new and valuable consideration beyond simply a promise of continued at-will employment. There are many interesting variations on what courts have found constitutes “adequate” consideration during midstream of employment. Some examples of what may suffice as sufficient additional consideration in states that require it include increased wages, a promotion, additional training, a bonus, a fixed term of employment, or perhaps new access to proprietary business information.
Forfeiture for Competition and Garden Leave Provisions – Show Me the Money!
What if the car salesman was the top seller at the dealership for three years straight, and the dealership wanted to discourage him or her from jumping ship to another competitor? Subject to the state law applicable to this situation, two potential options for the employer might be a “garden leave” provision or a “forfeiture-for-competition” clause.
Garden leave is where an employer places an employee on paid leave, typically for a period of thirty to ninety days, during which the employee continues to receive full compensation but is relieved of their day-to-day job duties. In some situations, the dealership might allow the salesman to continue to participate in commission, bonus or stock option programs, particularly if it constitutes a significant part of their overall compensation package. Salesman on garden leave continue to owe a duty of loyalty to the dealership and therefore cannot join or assist a competitor during this period without significant risk of legal exposure.
Another option that might dissuade a salesman from leaving and increase the dealership’s likelihood of enforcing post-employment restrictions is a forfeiture-for-competition clause. As one federal judge in Connecticut recently described it, “[a] non-compete agreement outright bars an employee from going to work for the competition. Sometimes employers use a less restrictive alternative: to allow an employee to jump ship to the competition but discourage this by docking them with a loss of certain company benefits.” Datto, Inc. v. Falk (D. Conn. Mar. 13, 2018). In New York, this type of agreement is referred to as the “employee choice doctrine.” See, e.g., Lucente v. Int’l Bus. Machines Corp. (S.D.N.Y. 1999) (“New York has long recognized what has become known as the ‘employee choice doctrine,’ which provides that ‘an employee who receives benefits conditioned on not competing with the conferring employer has the choice of preserving his benefits by refraining from competition or risking forfeiture of such benefits by exercising his right to compete.’”); see also Fraser v. Nationwide Mut. Ins. Co. (E.D. Pa. 2004) (holding forfeiture-for-competition provision in insurance agent’s employment agreement, which called for forfeiture of deferred compensation if agent entered into competition with employer within 25-mile radius within one year of termination, was valid and enforceable under Pennsylvania law). Courts typically do not scrutinize closely forfeiture-for-compensation clauses for “reasonableness” because such agreements leave it up to the employee on whether to join a competitor and “forfeit” the compensation offered by the former employer.
As courts and legislatures around the country continue to scrutinize and challenge the viability of restrictive covenants, employers with valid legitimate business interests to protect should consider creative ways to enhance the likelihood that necessary, reasonable restrictive covenants will be honored and enforced.
The goal of this Series is to provide a brief overview and some interesting insights and practical pointers when dealing with unique issues that might arise in the context of restrictive covenants. It is not intended to provide and should not be construed as providing legal advice. Each situation is different including the governing state law, and if legal advice is needed, you should seek the services of a qualified attorney who is knowledgeable and experienced in this area of the law to address your specific issues or needs. Stay tuned for future articles in this Series, which will discuss the restrictive covenant landscape for many other occupations and industries including realtors, recruiters, repair technicians and more.

matches: v. v. v. v. v. v. v. v. v. v. v. v. v. v.