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JOSEPH E. SEAGRAM & SONS, Inc. et al.
Rehearing Denied Sept. 10, 1951.
Shields M. Goodwin, Little Rock, Ark., for appellants Joseph E. Seagrams & Sons Inc.
Longstreet Heiskell, Memphis, Tenn. and DuVal L. Purkins, Warren, Ark. (John Baxter, Dermott, Ark., on the briefs), for appellees Bynum et al.
The appellees in No. 14,213, appellants in No. 14,214, hereinafter referred to as the Bynums, brought suit in the district court against Joseph E. Seagram & Sons, Inc., and one of its affiliates, hereinafter referred to as Seagram, for specific performance of a contract of lease conveying a stave and heading mill to the lessees for a period of two years from August 1, 1945 (afterwards extended through July 31, 1950), for damages and an accounting; for a decree requiring the mill to be operated at its reasonable capacity for the entire term of the lease; for damages for the alleged breach and for an accounting under a contract for the manufacture of staves by a mill near Gleason, Tennessee; and for damages for an alleged breach of contracts of employment with three of the Bynums.
The lease of the plant at Dermott, Arkansas, provided for a fixed rental of $3,000 a month (afterwards reduced to $2,750 a month) and for 'additional' rentals for staves and heading produced during the month above a fixed minimum. The court granted judgment to the plaintiffs for such additional rentals accruing at the Dermott plant after May 31, 1947, and for other items in the amount of $173,201.77, with interest to April 5, 1950, in the amount of $22,549.46, or a total of $195,751.23, less credits in the amount of $88,752.92.
The court also found for the plaintiffs on their claim for additional rentals on the staves and heading produced or 'to be manufactured from the Gleason tract' and on the price of red oak timber sold from the tract in the amount of $31,821.70, with interest to April 5, 1950, in the amount of $2,892.74, or a total of $34,714.44.
For the alleged breach of the contracts of employment of three of the Bynums judgment was entered against the defendants for the total amount of $34,818.58.
The court denied the Bynums' claim that Seagram should operate the Dermott plant to its reasonable capacity for the full five-year term of the lease.
In No. 14,213 Seagram appealed from the judgments against it, and in No. 14,214, the Bynums filed a cross appeal from the denial of their claim that the Dermott plant was required to be operated at its reasonable capacity to the end of the five-year term of the lease.
The opinion of the district court is reported in 89 F.Supp. 780.
The two appeals were consolidated for submission to this court, and they may be disposed of in one opinion.
The leased plant at Dermott, Arkansas, was used for the manufacture of staves and heading for barrels. The term 'bourbon staves' means standard staves for use in making whiskey barrels. 'Oil staves' means all other staves 30 inches or more in length. A 'set' of staves means a sufficient number (18 to 28) of finished staves to make a barrel, and a 'set' of heading consists of one head for the top and one for the bottom of a barrel. A 'matched set' means the staves and heading necessary to make a complete barrel.
Seagram's first contention is that the court erred in fixing the amount of the judgment for 'additional' rentals and some other items in the amount of $195,751.23 for staves and heading manufactured at the Dermott plant after May 31, 1947. That plant was operated at capacity until June 27, 1947, after which date operations were curtailed, and the plant was finally closed on February 26, 1958, and it was not operated thereafter. Seagram contends that the correct amount due the plaintiffs for additional rentals and other items is only $39,145.88.
As observed, supra, the rentals reserved under the lease consisted of two elements, a fixed rental of $3,000 a month until June 28, 1946, and $2,750 a month thereafter until the end of the term. The fixed rentals were paid until the end of the term and are not in dispute.
'1. A sum equal to twenty per centum (20%) of the market price of all oil staves which during the term of this lease are manufactured and made ready for shipment at said plant.
'3. In the event the Lessee shall cause to be removed or shipped from the premises air dried and listed staves, such staves shall be included in determining the number of staves produced during each twelve months of the terms of this lease, and the Lessee shall pay to the Lessors sums equal to the percentages of the market price of such staves on the same basis and in the same manner as is provided in Paragraph 2 hereof.
'23. The fair average price at Louisville, Kentucky, for the monthly periods subsequent to May 31, 1947, after deducting cost of transportation in carload lots from Dermott, Arkansas, is $15.00 per set for finished bourbon staves; $5.00 per set for finished bourbon heading;. $2.80 per set for the finished oil staves, and $1.15 per set for finished oil heading.
It will be observed that the prices fixed by the court following May 31, 1947, were the same prices agreed upon by the parties at their conference on December 10, 1946, for the period prior to May 31, 1947. Seagram contends that in so finding the court erred.
While there was no current over-the-counter market for staves and heading at Louisville, Kentucky, nor anywhere else in the United States, after May 31, 1947, there were occasional sales of staves and heading and also of whiskey barrels at Louisville and elsewhere. This situation was due to the fact that after the war in Europe ended conditions affecting the market changed radically. One reason for this was the difficulty of the distillers to procure grain for making whiskey due to the 'Marshall Plan' which became effective and under which large quantities of grain were shipped to Europe. Another was the fact that during the war distillers had leased or purchased many stave and heading mills in which they manufactured a large part of their needed supply. Seagram had at one time 35 such mills.
In the circumstances, Seagram contends that market price should be based upon the prices for which staves and heading actually sold in several instances; that from a compilation of those prices an average could be found.
On the other hand the Bynums contend that the 'market price' should be computed upon the basis of the 'average' cost of production in the mills owned and operated by Seagram.
In its opinion the trial court did not discuss findings 23 and 24, supra. Therefore, we do not know upon what considerations such findings are based.
In this situation it is our duty to determine the correct rule of law to be applied to the evidence and then to decide whether the court applied the rule to attain the result found.
Clearly the sales relied upon by Seagram, and the cost of production of staves and heading after May 31, 1947, until the mill ceased operation on February 26, 1948, relied upon by the Bynums, are proper elements to be considered, but they are not the only factors or influences to be considered. Neither the law of supply and demand nor the cost of production may be ignored. All the elements entering into the concept of fairness must also be considered, because they must be assumed to have been the guiding rule in the minds of both parties when the contract was written. Tureman v. Altman, Mo. Sup., 239 S.W.2d 304, 309. Here no fraud had been charged, but the lessors have sought to obtain the highest rentals possible while the lessees have sought with equal stubbornness to obtain as low rentals as possible.
Judge Parker in United States ex rel. Tennessee Valley Authority v. Powelson, 4 Cir., 138 F.2d 343, 345, said: ' * * * Market value is nothing but a hypothetical concept based upon what, in the opinion of those who know, a willing buyer would have to pay a willing seller of property in order to purchase it.' See, also, Huber v. Moran, 8 Cir., 140 F.2d 823, 824; Shamrock Oil & Gas Corporation v. Coffee, 5 Cir., 140 F.2d 409.
Basing their arguments upon actual sales of staves and barrels during the period following May 31, 1947, appellants reached the conclusion that the fair market price of a set of unfinished bourbon staves was $10.70 and of a set of heading was $3.91. During this period finished bourbon barrels sold for prices ranging from $18 to $20 per barrel, and it was undisputed that the fair percentage of the total cost of a finished bourbon barrel attributable to the staves and heading required to make it is between 75 and 80 per cent. Upon the same theory appellants contend that for the same period the fair average value of air-dried and listed staves and heading was $9.90 and $2.75 per set respectively.
These estimates fail, we think, properly to consider the cost of production as an element of a fair price. They are too low. A fair and equitable appraisal of all the factors properly to be considered will result in a price somewhere between the price contended for by the lessors and found by the court and the price contended for by the lessees.
After May 31, 1947, and prior to February 26, 1948, when operations were suspended, there was shipped from the Dermott plant 20,749 sets of finished bourbon staves, on which the court awarded additional rentals based on the price of $15 a set in the amount of $55,047. The appellants, basing their computation on the price of $10.70, contend that the correct rentals should be $39,266.86. During the same period 11,568 sets of finished or 'circled' bourbon heading were shipped for which the court allowed rentals based upon the price of $5 a set in the amount of $11,568. Appellants, computing the rentals on the price of $3.91 per set, contend that the rentals should be only $9,046.18. In view of the conclusion we have reached above the court should reconsider the evidence and the factors affecting these prices and recompute the rentals accordingly.
Another item in dispute relates to additional rentals based on the sale of certain miscellaneous finished stock in storage at the plant in Dermott when operations finally ceased, which stock was later shipped and sold by Seagram on the open market. The total value of this stock was fixed by the Bynums at $15,401.77 and the total amount received by Seagram was $11,854.45. It was error to attribute a higher value to this stock than that which was received for it. The parties agree that the rate to be applied is 20%. The correct additional rental is, therefore, 20% of $11,854.35 or $2,370.89, instead of $3,081.35 as found by the court. The difference is $710.46 for which amount Seagram should be given credit on the judgment rendered.
At the time the Dermott mill suspended operations on February 26, 1948, large quantities of rough unfinished stock were on the yard consisting of bourbon staves, bourbon heading and oil staves and oil heading. It is agreed that 7401 sets of such rough or unfinished bourbon staves and heading were shipped from the Dermott plant during the lease year ending May 31, 1948. At the time of such shipments such rough stock was selling for $9.90 per set. The Bynums contended that had the mill not suspended operations all of such stock could have been finished at the plant and that, therefore, additional rentals should have been estimated on the theory that such stock had been finished at the mill and shipped out prior to May 31, 1948, and that it should take the price of $15 per set. On the other hand Seagram contended that it should take the market price prevailing in 1948 when it was shipped. The court fixed the market price at $12 per set and allowed a rental of 20% thereon amounting to $17,762.40 which in effect allocated the shipments to the year beginning May 31, 1947. Had the rental been estimated on the basis of the year beginning May 31, 1948, when the stock was actually shipped the rental would have been estimated at 15% on the basis of $9.90 per set instead of 20% at $12 per set. We find no explanation of this either in the opinion or in the findings of the court. We have considered the arguments of counsel for the Bynums, but we are convinced that the court erred in this regard. The rental under the terms of the contract and the interpretation placed upon it by the parties in the years preceding 1948 are convincing that the 15% rental rate should be applied to the selling price. The judgment should be corrected accordingly. A similar error occurred in estimating the rental on the item of 2,265 sets of oil staves on the yard. The correct basis is 15% and not 20%.
The same situation exists in the record in reference to the computation of additional rentals for rought bourbon heading on the yard when operations at the plant terminated. It is agreed that there were at that time 30,114 sets of such heading which the court valued at $4 per set for the purpose of estimating rentals. Seagram contends that the correct value of all such heading was $2.75 per set. The court should also reconsider this finding, giving due consideration to the price for which such rough heading could be purchased at the time it was shipped and as the market was thus influenced by the operation of the law of supply and demand.
Another item in dispute consisted of an estimated recovery of 10% of borubon staves and heading in the yard. Seagram contends that there was no evidence to support a finding that such recovery was possible. The evidence on this point was in conflict. The finding of the trial court cannot, therefore, be said to be clearly erroneous.
Seagram's objection is that the court estimated the market price of all this rough stock at the price of finished stock, that is at.$2.80 per set for rough bourbon staves and $1.15 and $1.00 for rough bourbon heading, whereas its market value in its rough unfinished condition did not exceed $4,938.65. On this basis the court's allowance was excessive in the amount of $16,446.87.
'4. A sum equal to twenty percentum (20%) of the market price of all heading for barrels which, during the term of this lease, is manufactured and made ready for shipment at said plant.' And they point to the fact that the lease makes no provision for shipping rough oil staves and heading from the plant.
The fact stands out clearly, however, that these rough staves and heading were not 'manufactured and made ready for shipment at said plant', and the finding of the court is inconsistent with its holding that the lessee was not required to operate the plant during the entire term of the lease. The undisputed evidence of Seagram that the market value of these staves and heading was no more than $4,938.65 should have been sustained, and the court erred in estimating their value on the basis of finished stock.
On the issue of the amount of Seagram's indebtedness to the Bynums as additional rentals upon stock produced at the Dermott plant after May 31, 1947, the judgment of the court is reversed and the case remanded with instructions to reconsider and recompute the amount thereof in accordance with the foregoing opinion.
The second question presented on the appeal is whether the lessees are liable to the lessors on account of additional rentals upon staves and heading produced by the lessees from timber near Gleason, Tennessee. The court entered judgment against the defendants on this issue in the amount of $34,714.44 as of April 5, 1950. The defendants contend that they are not liable to the plaintiffs in any amount on this claim.
The circumstances involved on this feature of the controversy may be briefly stated. In August, 1945, R. T. Wilkie, Seagram's agent, and W. W. Bynum, at Wilkie's request, met at Brownsville, Tennessee, to inspect a tract of timber. At Bynum's suggestion while there they inspected a tract owned by one Nants. Bynum claimed to be responsible for the discovery of the timber and claimed it as 'his proposition.' Seagram thereafter purchased the timber for $50,000, receiving a deed therefor November 26, 1945.
'1. That the contact was peculiarly yours.
'2. That the equipment other than motor transportation is being furnished from the leased property, and the supervision will be by the Bynum Brothers.
The 'equipment' referred to in paragraph 2 consisted of a portable stave mill at the plant at Dermott but not in use.
The Bynums rely upon this letter as a statement of the terms of the contract; and W. W. Bynum testified that he orally accepted its terms on two occasions thereafter.
The tract of timberland so acquired was wet and swampy, and there was no suitable place on it to locate the stave mill. Therefore, Wilkie on September 26, 1945, obtained for Seagram a two-year lease on eight acres of land near the timber tract to provide a place on which to locate the portable stave mill to be brought from Dermott.
The testimony shows that the timber purchased could not be logged during the winter months because the ground was too wet. Seagram's witnesses testified that they frequently urged Bynum during the winter and spring of 1945-6 to move the mill to the location near Gleason, Tennessee, and to put it in operation as soon as possible; but Bynum testified that Seagram's officers prevented them from moving at all times, although they insisted on doing so in June, 1946, and thereafter.
In January, 1946, Seagram acquired a stave mill at Jackson, Tennessee, not far from the Gleason tract of timber.
Thereafter the white oak timber from the Nants tract at Gleason, Tennessee, was manufactured into staves and heading at Jackson, Tennessee.
First, that the contract was void for want of mutuality because the Bynums neither as employees of Seagram nor as lessors were ever obligated to supervise the cutting of the Gleason timber; that the contract relied upon differed from the contract alleged in the complaint; that the Bynum brothers did nothing which they were not bound to do by their contracts of employment; and that they did not bind themselves to do anything more than they chose to do.
The evidence, however, warranted the court in finding that the contract was reduced to writing by Seagram's agent and accepted orally by the Bynums. Thus there were mutual promises imposing obligations upon both parties. This is sufficient to constitute a binding contract under the authority cited and relied upon by Seagram. Grayling Lumber Co. v. Hemingway, 124 Ark. 354, 187 S.W. 327.
The second contention is that even if valid, Seagram was warranted in rescinding the contract by reason of the lessor's abandonment and refusal to perform. Here, again, the evidence is in conflict. It is true that two witnesses testified that Seagram's officers urged the Bynums for 13 months to move the portable stave mill to the Gleason location and to begin operations there and they neglected and refused to do so, while only one witness, W. Wy. Bynum, testified to the contrary. But the veracity of the witnesses and the weight of the evidence were questions primarily for the trial court and this court cannot say that its finding is clearly erroneous. Rule 52(a), Rules of Civil Procedure, 28 U.S.C.A.
There remains for consideration on this issue the holding of the court that Seagram should pay an additional rental of 15% of $25,000, or $3,750, based on the sale of the timber other than white oak on the Gleason tract.
Appellants' third contention is that the court erred in finding and holding that Seagram was liable to the three Bynums for their salaries as employees of Seagram subsequent to their discharge on November 1, 1948.
The court held that there was no justification for the discharge of the Bynums; that they were wrongfully discharged; and that each of them was entitled to his salary from November 1, 1948, to July 31, 1950, the date of the termination of the employment contracts, less the amounts required to be deducted for social security and federal income taxes. Judgment was accordingly entered in favor of W. H. Bynum for $14,376.20; in favor of W. W. Bynum for $12,233.20; and in favor of W. B. Bynum, Jr., for $8,209.12, all of said judgments to bear interest at six per cent per annum from April 5, 1950.
1. That the staves were not jointly counted.
2. That the staves were not inspected to determine the percentage of 30 inch bourbon staves suitable for that purpose.
The directive to deliver these cull staves was neither unreasonable nor trivial. The cull staves had been sold by Seagram for $1,000; and the refusal of its employees to deliver them constituted a breach of contract, rendering Seagram liable for such breach. A servant is bound to obey all reasonable orders of his employer; and his refusal to do so justifies his discharge. 35 Am.Jur., Master and Servant, Sec. 36, p. 471; Development Co. of America v. King, 2 Cir., 161 F. 91, 24 L.R.A., N.S., 812; S. Unterberger & Co. v. Wiley, 170 Ark. 976, 281 S.W. 899; Rife v. Mote, 210 Ark. 629, 197 S.W.2d 277; Von Heyne v. Tompkins, 89 Minn. 77, 93 N.W. 901, 5 L.R.A., N.S., 524; Compania Constructora Bechtel-McCone, S.A. v. McDonald, 9 Cir., 157 F.2d 749; United Autographic Co. v. Wight, 8 Cir., 272 F. 545, 552.
The case of Griffin Grocery Co. v. Thaxton, 178 Ark. 736, 11 S.W.2d 473, cited and relied upon by the court has no application here. In that case the employee was not only a servant, but a stockholder, director, vice-president, and manager of a branch house. To the extent of his holdings Thaxton was as interested in the company's business as Griffin, the president and owner of the controlling interest in the company. Here the Bynums had no financial interest in Seagram as stockholders. As lessors to Seagram of the mill property they were interested in the payment of rentals only. On the other hand their employment contracts, while entered into at the same time, were entirely distinct from and independent of the mill lease. These contracts were specific and unambiguous in their terms. The three Bynums as employees of the lessee were bound by their contracts of employment to obey the directives of their employer; and the record discloses no legal justification for their refusal to obey in the instance under consideration.
The judgment awarding W. H. Bynum, W. W. Bynum, and W. B. Bynum, Jr. their salaries subsequent to November 1, 1948, is erroneous.
On the direct appeal in No. 14,213 the judgment is reversed, and the case is remanded to the district court for further proceedings consistent with this opinion.
Upon this cross appeal the Bynums urge four points: 1. That the court erred in entering the judgment referred to in the preceding paragraph; (2) that the court erred in admitting testimony as to the discussion referred to in the court's opinion when the parties and their attorneys met to amend the lease October 19, 1945; 3. That the court erred in striking paragraphs 8 and 9 of the complaint and in excluding the testimony offered in support thereof; and 4. The court erred in excluding from the testimony exhibits 10 and 11, being certain government publications.
The Bynums do not contend that the lease expressly provides that the lessee shall operate the plant at its reasonable capacity to the end of the term or at all. Their contention is that the lease and the contracts of employment with three of the lessors must be read together as different writings executed at the same time between the same parties and relating to the same subject matter and that so construed there is an implied covenant on the part of the lessee so to operate the mill at capacity to the end of the term.
The controversy on this cross appeal involves only the amount of the 'additional' or percentage rentals provided for in the lease based upon the number of staves and heading produced in a lease year, that is, for each year beginning on August 1st. The 'fixed' rentals were paid to the end of the term, and the salaries of the three Bynums employed by Segram were paid until they were discharged for cause.
The first amendment to the lease under date of October 19, 1945, relieved Seagram from the obligation not to operate another plant within a radius of 100 miles of Dermott, Arkansas, as provided in the original lease; extended the term of the lease three years to July 31, 1950; and obligated Seagram and its affiliates not to divert any of its timber from the Dermott plant; to allocate to the Dermott plant one-third of its timber suitable for making tight cooperage within 100 miles of Dermott contracted after January 1, 1946, until the extended lease should terminate; and reduced the fixed monthly rental from $3,000 per month to $2,750 per month.
The three employment contracts were extended on the same date to July 31, 1950.
It is the lessors' contention that Seagram's obligation under the lease and employment contracts was to have operated the plant for the full term of the lease at its reasonable capacity to produce further additional rentals in the amount of $481,181.75, or at least in the amount of $165,966.95. These sums are in addition to the fixed rentals of $167,750 and $205,014.02 additional rentals which were paid on stock produced prior to the closing of the mill in 1948.
Seagram's contention is that, subject only to the obligation imposed upon it by the allocation-of-timber provision of the amendment of October 19, 1945, it had full power to operate the mill or not, as it might determine, the Bynum's protection against the possibility of the non-operation of the plant consisting of the unconditional obligation to pay a fixed rental for the full five-year term.
'21. Neither the original lease nor the amendments thereto contained any express covenant obligating Seagram to operate the Dermott plant at its reasonable productive capacity or to any extent.
To support their contention the Bynums point primarily to the additional percentage rentals provided for in the lease and the clauses in the employment contracts providing that each of the three Bynums was employed as a 'supervising operator for employer' of the leased stave mill; that each Bynum was to devote his entire time to such employment and to use his best efforts to operate the mill to capacity.
Here, however, the parties were not the same. The lease was executed by all the owners of the leased property, whereas the three employees owned only 45% of the leased property. Further, the purpose of the contracts was different. One was a lease; the others were employment contracts. The latter contracts were in no way dependent upon the lease. Nothing in the employment contracts depended upon the ownership of the leased property. None of the parties contended that the discharge of the Bynums on November 1, 1948, in any way affected their respective rights under the lease. See Phillips Peetroleum Co. v. Skinner, 140 Kan. 413, 36 P.2d 968, 969; Sinclair Refining Co. v. Stevens, 8 Cir., 123 F.2d 186, certiorari denied 315 U.S. 804, 62 S.Ct. 632, 86 L.Ed. 1203. It will be observed, also that the compensation of the Bynums as employees was not included in the rentals received. They were paid salaries personally and distinctly for their services as employees. Any one of them might have been discharged at any time for good cause.
The Bynums contend that additional or percentage rentals provided for in the lease obligated the lessee to operate the plant at capacity during the term of the lease. On this point the court in its opinion said: ' * * * the monthly rental which was unconditionally enjoined upon Seagram, whether it operated the mill or not, was inserted in the lease as a substitute for a covenant to operate except to the extent required by the allocation-of-timber provisions of the Amendment of October 19, 1945.' Further, it is clear that had Seagram been required to operate the plant at capacity during the term of the lease a fixed rental might easily have been agreed upon. A sliding scale of rentals in addition to a fixed rental would have been unnecessary. Or, assume that after the lease as written was executed necessary timber for operating the plant at capacity could not have been procured, could any one say that additional rentals should none-the-less be paid on the basis of capacity operation? We think the court correctly construed the lease in this regard. The expressed provisions of the lease alone must control. Industrial Products Mfg. Co. v. Jewett Lumber Co., 8 Cir., 185 F.2d 866, 869.
This testimony was admitted over the Bynums' objection that it was incompetent, but it was not denied. The argument is that such evidence is admissible only when necessary to show the construction which the parties have placed on an ambiguous contract; that the lease in this case is not ambiguous; and that the right to suspend operations under such a contract must be set out in the instrument itself to be available. As authority for this contention the case of Mayfair Operating Coproration v. Bessemer Properties, 150 Fla. 132, 7 So.2d 342, 343, is cited, in which opinion it is said: 'The nicety observed in constructing such leases in this Country would require that the right to suspend operating in the manner shown should be set out in the instrument to become available.' Reference to the opinion in that case discloses that it involved a lease for moving picture theatre, and that in addition to a fixed monthly rental the lessee agreed to pay 10% of the gross income in excess of $3,000 a year. But the lease also provided that the lessee should 'use its best efforts to obtain and maintain the highest volume of business on the premises.' There is no such provision in the lease here.
See, also, Asling v. McAllister-Fitzgerald Lumber Company, 120 Kan. 455, 244 P. 16, 46 A.L.R. 1127.
In the present case we do not think the lease is ambiguous. The court's decision on this point was right even though the testimony objected to as incompetent was not considered at all.
The Bynums next contend that the court erred in striking paragraphs 6 and 9 of the complaint. Paragraph 6 alleged that for many years prior to August 1, 1945, the date of the lease, the Bynum Cooperage Company operated the leased plant successfully and profitably; that it owned considerable timber; that its capital investment was $275,000; and that it paid its managing agents $9,000, $5,500 and $5,000 a year respectively. Paragraph 9 alleged that $3,000 rental per month, after taking into account taxes, insurance, depreciation and the loss of valuable timber rights is not sufficient to give lessors any return on their valuable property.
The court sustained a motion to strike these paragraphs, holding that both parties were precluded because the written agreement fixed the rental and that the value and earnings of the property were not in issue. Counsel say the theory of the court might be a true except for the fact that Seagram's emphasis was that the fixed monthly rental was inserted as the basic agreement of earnings anticipated by lessors. The court's theory is consistent, however, with the theory of the lessors at the time the lessee took the deposition of W. W. Bynum on February 26, 1949. Counsel for Seagram inquired and the witness testified to the cost of the plant and other matters relevant under paragraphs 6 and 9 of the complaint. At the conclusion of the direct examination counsel for Bynums moved to exclude all of the questions and answers of the witness, saying among other things: 'The contract fixed the rental and that speaks for itself and the rights of the parties were concluded by that agreement. Whether or not a good or bad trade was made for either Seagram or Bynums is not a matter at issue.' No argument of counsel could render the allegations of paragraphs 6 and 9 competent. The court did not err in striking them.
Exhibit 11 was entitled 'Report of the Federal Trade Commission on the Merger Movement', published in 1948, from which an excerpt beginning at the bottom of page 63 and continuing through page 69 was offered in evidence, together with charts of Seagram's Distilleries, National Distillers, Schenley's and others.
These exhibits were excluded on the ground that they consisted of opinions of some one who was stating his views on the subject and that they were immaterial.
It is true, of course, that statements in official documents are admissible in evidence in court when material to the issue on trial. However, it is difficult to perceive the materiality or relevance of these documents on the question whether the lease contract required Seagram to operate the leased stave mill at capacity to the end of the term of the lease.
The court did not err in excluding exhibits 10 and 11.
In appeal No. 14,214, Bynum, et al. v. Segram, et al., the judgment is affirmed.

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SAN FRANCISCO — A California federal judge on April 5 denied and granted motions to dismiss claims for violations of California’s unfair competition law (UCL) and other causes of action against cosmetic companies, ordering jurisdictional evidentiary discovery to determine whether one entity was mistakenly listed on another company’s website (Kari Miller, et al. v. Peter Thomas Roth, LLC, et al., No. 19-00698, N.D. Calif., 2019 U.S. Dist. LEXIS 59420).
OKLAHOMA CITY — A pharmacist accused of submitting fraudulent bills to Medicare for prescriptions filled at two pharmacies he owned and operated was enjoined by a federal judge in Oklahoma March 26 from transferring or dissipating the more than $1 million he earned from the scheme (United States v. Jeffrey Scott Terry, No. 19-cv-250, W.D. Okla.).
BALTIMORE — In an April 8 ruling, a Maryland federal magistrate judge granted in part two discovery motions by the owner of an apartment building at the center of an insurance coverage dispute, limiting the scope of an insurer’s subpoenas on the building owner’s engineering and accounting firms, deeming certain tax information and communications sought to be privileged and private (Jowite Ltd. Partnership v. Federal Insurance Co., No. 1:18-cv-02413, D. Md. 2019 U.S. Dist. LEXIS 59726).
OCALA, Fla. — An auto insurer’s communications with its insured regarding a potential settlement of a suit filed against the insured following an auto accident are relevant to a bad faith claim alleged against the auto insurer by the underlying plaintiffs, a Florida federal magistrate judge said April 5 in partially granting the plaintiffs’ motion to compel (Yolanda Aldana, et al. v. Progressive American Insurance Co., No. 18-157, M.D. Fla., 2019 U.S. Dist. LEXIS 59015).
WASHINGTON, D.C. — In its April 5 merits reply brief, a food retailer trade association asks the U.S. Supreme Court to find that a Freedom of Information Act (FOIA) exemption for confidential trade secret and financial information permits the U.S. Department of Agriculture (USDA) to withhold store-specific data from a FOIA request without having to establish that “substantial competitive harm” would occur from disclosure (Food Marketing Institute v. Argus Leader Media, No. 18-481, U.S. Sup.).
WILMINGTON, Del. — At a March 11 discovery hearing, a Delaware judge granted in part a defendant’s motion to compel an Irish medical imaging company to produce performance audit data from its Dublin, Ireland, plant, while declining to order discovery of similar data from other third-party plants and suppliers, deeming it irrelevant to the parties’ contractual dispute (Guerbet Ireland Unlimited Co., et al. v. SpecGX LLC, No. N18C-05-159, Del. Super.).
MONTGOMERY, Ala. —A majority of the Alabama Supreme Court on April 5 held that a lower court exceeded its discretion when it disregarded the attorney-client privilege in a discovery dispute, vacating the lower court’s orders that denied an errors and omissions insurer’s motion for a protective order and directed the insurer to produce the materials for in camera inspection or discovery (Ex parte Alfa Insurance Corporation, et al., No. 1170804, Ala. Sup., 2019 Ala. LEXIS 30).
LAS VEGAS — At an April 4 hearing, a Nevada federal magistrate judge granted a motion by Oracle USA Inc. to conduct limited discovery into whether Rimini Street Inc. is complying with an injunction in a long-running software copyright infringement lawsuit (Oracle USA Inc., et al. v. Rimini Street Inc., et al., No. 2:10-cv-00106, D. Nev.).
SCRANTON, Pa. — A federal judge in Pennsylvania on March 25 denied a defendant’s motion to suppress the admission of a thumb drive that contains the identifying information of more than 400 people for the purpose of filing federal income tax returns, finding that federal law applies to the charges of insurance fraud and tax fraud against the man and that the warrant that was executed to obtain the drive was not overbroad (United States v. Frank J. Capozzi, No. 16cr347, M.D. Pa., 2019 U.S. Dist. LEXIS 55075).
CHICAGO — An Illinois federal judge on April 3 denied a managed care organization errors and omissions liability excess insurer’s motion to compel production of an insured’s settlement with its primary insurer in a coverage dispute arising from underlying putative antitrust class actions brought against the insured, finding that the settlement agreement’s relevance is “speculative” (Homeland Insurance Company Of New York v. Health Care Service Corporation, et al., No. 18-6306, N.D. Ill., 2019 U.S. Dist. LEXIS 56877).
NEW YORK — A consumer talc company is entitled to perform additional testing on the same samples used by plaintiff’s expert William Longo when he found the presence of asbestos, a New York justice confirmed March 20 in adopting a special master’s recommendation (Kim Young v. Avon Products Inc., et al., No. 190383/2016, N.Y. Sup., New York Co., 2019 N.Y. Misc. LEXIS 1046).
DETROIT — In an insurer’s breach of contract case against a reinsurer over reinsurance billings for asbestos claims, a Michigan federal judge on April 1 issued a stipulated confidentiality agreement and protective order regarding confidential proprietary or trade secret information and information about insureds, including health in connection with their alleged asbestos exposure (Amerisure Mutual Insurance Co. v. Transatlantic Reinsurance Co., No. 18-11966, E.D. Mich.).
WASHINGTON, D.C. — The U.S. Supreme Court on April 1 granted a motion by the U.S. solicitor general to participate in upcoming oral arguments over the trade secrets and confidential information exemption to the Freedom of Information Act (FOIA), giving the government 10 minutes to argue as amicus curiae in support of a food retailer trade group opposing the release of certain store-specific data in response to an FOIA request (Food Marketing Institute v. Argus Leader Media, No. 18-481, U.S. Sup.).

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Pailla T, Miller KJ, Gilja V. Autoencoders for learning template spectrograms in electrocorticographic signals. J Neural Eng. 2019 Feb; 16(1):016025. PMID: 30524070.
Alasfour A, Gabriel P, Jiang X, Shamie I, Melloni L, Thesen T, Dugan P, Friedman D, Doyle W, Devinsky O, Gonda D, Sattar S, Wang S, Halgren E, Gilja V. Coarse behavioral context decoding. J Neural Eng. 2019 Feb; 16(1):016021. PMID: 30523860.
Chen K, Gabriel P, Alasfour A, Gong C, Doyle WK, Devinsky O, Friedman D, Dugan P, Melloni L, Thesen T, Gonda D, Sattar S, Wang S, Gilja V. Patient-Specific Pose Estimation in Clinical Environments. IEEE J Transl Eng Health Med. 2018; 6:2101111. PMID: 30483453.
Wang K, Parekh U, Pailla T, Garudadri H, Gilja V, Ng TN. Stretchable Dry Electrodes with Concentric Ring Geometry for Enhancing Spatial Resolution in Electrophysiology. Adv Healthc Mater. 2017 Oct; 6(19). PMID: 28714587.
Rogers N, Gilja V, Kuzum D. Graphene neural interfaces for artifact free optogenetics. Conf Proc IEEE Eng Med Biol Soc. 2016 08; 2016:4204-4207. PMID: 28269210.
Hermiz J, Rogers N, Kaestner E, Ganji M, Cleary D, Snider J, Barba D, Dayeh S, Halgren E, Gilja V. A clinic compatible, open source electrophysiology system. Conf Proc IEEE Eng Med Biol Soc. 2016 08; 2016:4511-4514. PMID: 28325009.
Jiang W, Pailla T, Dichter B, Chang EF, Gilja V. Decoding speech using the timing of neural signal modulation. Conf Proc IEEE Eng Med Biol Soc. 2016 08; 2016:1532-1535. PMID: 28268618.
Omigbodun A, Doyle WK, Devinsky O, Friedman D, Thesen T, Gilja V. Hidden-Markov Factor analysis as a spatiotemporal model for electrocorticography. Conf Proc IEEE Eng Med Biol Soc. 2016 08; 2016:1632-1635. PMID: 28268642.
Gabriel P, Doyle WK, Devinsky O, Friedman D, Thesen T, Gilja V. Neural correlates to automatic behavior estimations from RGB-D video in epilepsy unit. Conf Proc IEEE Eng Med Biol Soc. 2016 08; 2016:3402-3405. PMID: 28269034.
Pailla T, Jiang W, Dichter B, Chang EF, Gilja V. ECoG data analyses to inform closed-loop BCI experiments for speech-based prosthetic applications. Conf Proc IEEE Eng Med Biol Soc. 2016 08; 2016:5713-5716. PMID: 28269552.
Jarosiewicz B, Sarma AA, Bacher D, Masse NY, Simeral JD, Sorice B, Oakley EM, Blabe C, Pandarinath C, Gilja V, Cash SS, Eskandar EN, Friehs G, Henderson JM, Shenoy KV, Donoghue JP, Hochberg LR. Virtual typing by people with tetraplegia using a self-calibrating intracortical brain-computer interface. Sci Transl Med. 2015 Nov 11; 7(313):313ra179. PMID: 26560357.
Gilja V, Pandarinath C, Blabe CH, Nuyujukian P, Simeral JD, Sarma AA, Sorice BL, Perge JA, Jarosiewicz B, Hochberg LR, Shenoy KV, Henderson JM. Clinical translation of a high-performance neural prosthesis. Nat Med. 2015 Oct; 21(10):1142-5. PMID: 26413781; PMCID: PMC4805425.
Blabe CH, Gilja V, Chestek CA, Shenoy KV, Anderson KD, Henderson JM. Assessment of brain-machine interfaces from the perspective of people with paralysis. J Neural Eng. 2015 Aug; 12(4):043002. PMID: 26169880; PMCID: PMC4761228.
Pandarinath C, Gilja V, Blabe CH, Nuyujukian P, Sarma AA, Sorice BL, Eskandar EN, Hochberg LR, Henderson JM, Shenoy KV. Neural population dynamics in human motor cortex during movements in people with ALS. Elife. 2015 Jun 23; 4:e07436. PMID: 26099302; PMCID: PMC4475900.
Christie BP, Tat DM, Irwin ZT, Gilja V, Nuyujukian P, Foster JD, Ryu SI, Shenoy KV, Thompson DE, Chestek CA. Comparison of spike sorting and thresholding of voltage waveforms for intracortical brain-machine interface performance. J Neural Eng. 2015 Feb; 12(1):016009. PMID: 25504690; PMCID: PMC4332592.
Bishop W, Chestek CC, Gilja V, Nuyujukian P, Foster JD, Ryu SI, Shenoy KV, Yu BM. Self-recalibrating classifiers for intracortical brain-computer interfaces. J Neural Eng. 2014 Apr; 11(2):026001. PMID: 24503597; PMCID: PMC4393645.
Chestek CA, Gilja V, Blabe CH, Foster BL, Shenoy KV, Parvizi J, Henderson JM. Hand posture classification using electrocorticography signals in the gamma band over human sensorimotor brain areas. J Neural Eng. 2013 Apr; 10(2):026002. PMID: 23369953; PMCID: PMC3670711.
Gilja V, Nuyujukian P, Chestek CA, Cunningham JP, Yu BM, Fan JM, Churchland MM, Kaufman MT, Kao JC, Ryu SI, Shenoy KV. A high-performance neural prosthesis enabled by control algorithm design. Nat Neurosci. 2012 Dec; 15(12):1752-7. PMID: 23160043; PMCID: PMC3638087.
Gilja V, Nuyujukian P, Chestek CA, Cunningham JP, Yu BM, Fan JM, Ryu SI, Shenoy KV. A brain machine interface control algorithm designed from a feedback control perspective. Conf Proc IEEE Eng Med Biol Soc. 2012; 2012:1318-22. PMID: 23366141.
Chestek CA, Gilja V, Nuyujukian P, Foster JD, Fan JM, Kaufman MT, Churchland MM, Rivera-Alvidrez Z, Cunningham JP, Ryu SI, Shenoy KV. Long-term stability of neural prosthetic control signals from silicon cortical arrays in rhesus macaque motor cortex. J Neural Eng. 2011 Aug; 8(4):045005. PMID: 21775782; PMCID: PMC3644617.
Gilja V, Chestek CA, Diester I, Henderson JM, Deisseroth K, Shenoy KV. Challenges and opportunities for next-generation intracortically based neural prostheses. IEEE Trans Biomed Eng. 2011 Jul; 58(7):1891-9. PMID: 21257365; PMCID: PMC3150197.
Nuyujukian P, Fan JM, Gilja V, Kalanithi PS, Chestek CA, Shenoy KV. Monkey models for brain-machine interfaces: the need for maintaining diversity. Conf Proc IEEE Eng Med Biol Soc. 2011; 2011:1301-5. PMID: 22254555.
Dethier J, Gilja V, Nuyujukian P, Elassaad SA, Shenoy KV, Boahen K. Spiking Neural Network Decoder for Brain-Machine Interfaces. Int IEEE EMBS Conf Neural Eng. 2011. PMID: 24352611.
Cunningham JP, Nuyujukian P, Gilja V, Chestek CA, Ryu SI, Shenoy KV. A closed-loop human simulator for investigating the role of feedback control in brain-machine interfaces. J Neurophysiol. 2011 Apr; 105(4):1932-49. PMID: 20943945; PMCID: PMC3075301.
Gilja V, Chestek CA, Nuyujukian P, Foster J, Shenoy KV. Autonomous head-mounted electrophysiology systems for freely behaving primates. Curr Opin Neurobiol. 2010 Oct; 20(5):676-86. PMID: 20655733; PMCID: PMC3401169.
Miranda H, Gilja V, Chestek CA, Shenoy KV, Meng TH. HermesD: A High-Rate Long-Range Wireless Transmission System for Simultaneous Multichannel Neural Recording Applications. IEEE Trans Biomed Circuits Syst. 2010 Jun; 4(3):181-91. PMID: 23853342.
Chestek CA, Gilja V, Nuyujukian P, Kier RJ, Solzbacher F, Ryu SI, Harrison RR, Shenoy KV. HermesC: low-power wireless neural recording system for freely moving primates. IEEE Trans Neural Syst Rehabil Eng. 2009 Aug; 17(4):330-8. PMID: 19497829.
Harrison RR, Kier RJ, Chestek CA, Gilja V, Nuyujukian P, Ryu S, Greger B, Solzbacher F, Shenoy KV. Wireless neural recording with single low-power integrated circuit. IEEE Trans Neural Syst Rehabil Eng. 2009 Aug; 17(4):322-9. PMID: 19497825; PMCID: PMC2941647.
Santhanam G, Yu BM, Gilja V, Ryu SI, Afshar A, Sahani M, Shenoy KV. Factor-analysis methods for higher-performance neural prostheses. J Neurophysiol. 2009 Aug; 102(2):1315-30. PMID: 19297518; PMCID: PMC2724333.
Cunningham JP, Gilja V, Ryu SI, Shenoy KV. Methods for estimating neural firing rates, and their application to brain-machine interfaces. Neural Netw. 2009 Nov; 22(9):1235-46. PMID: 19349143; PMCID: PMC2783748.
Chestek CA, Cunningham JP, Gilja V, Nuyujukian P, Ryu SI, Shenoy KV. Neural prosthetic systems: current problems and future directions. Conf Proc IEEE Eng Med Biol Soc. 2009; 2009:3369-75. PMID: 19963796.
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Santhanam G, Linderman MD, Gilja V, Afshar A, Ryu SI, Meng TH, Shenoy KV. HermesB: a continuous neural recording system for freely behaving primates. IEEE Trans Biomed Eng. 2007 Nov; 54(11):2037-50. PMID: 18018699.
Chestek CA, Batista AP, Santhanam G, Yu BM, Afshar A, Cunningham JP, Gilja V, Ryu SI, Churchland MM, Shenoy KV. Single-neuron stability during repeated reaching in macaque premotor cortex. J Neurosci. 2007 Oct 03; 27(40):10742-50. PMID: 17913908.
Gilja V, Moore T. Electrical signals propagate unbiased in cortex. Neuron. 2007 Sep 06; 55(5):684-6. PMID: 17785175.
Shenoy KV, Santhanam G, Ryu SI, Afshar A, Yu BM, Gilja V, Linderman MD, Kalmar RS, Cunningham JP, Kemere CT, Batista AP, Churchland MM, Meng TH. Increasing the performance of cortically-controlled prostheses. Conf Proc IEEE Eng Med Biol Soc. 2006; Suppl:6652-6. PMID: 17959477.
Linderman MD, Gilja V, Santhanam G, Afshar A, Ryu S, Meng TH, Shenoy KV. An autonomous, broadband, multi-channel neural recording system for freely behaving primates. Conf Proc IEEE Eng Med Biol Soc. 2006; 1:1212-5. PMID: 17946450.
Gilja V, Linderman MD, Santhanam G, Afshar A, Ryu S, Meng TH, Shenoy KV. Multiday electrophysiological recordings from freely behaving primates. Conf Proc IEEE Eng Med Biol Soc. 2006; 1:5643-6. PMID: 17947159.
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ADAMS INSULATION COMPANY, and Fremont Indemnity Company, Petitioners, v. The INDUSTRIAL COMMISSION OF ARIZONA, Respondent, Steve Lopez, Respondent Employee.
No. CV-88-0390-PR.Supreme Court of Arizona.
Appeal from the Industrial Commission, ICA Claim No. 526-65-8986.
Jones, Skelton Hochuli by Mr. Calvin Harris, Phoenix, for petitioners.
Industrial Com’n by Anita R. Valainis, Chief Counsel, Phoenix, for respondent.
Tretschok, McNamara Clymer by Dale D. Tretschok, Tucson, for respondent employee.
Claimant Steve Lopez (Lopez) seeks review of a Court of Appeals opinion setting aside his worker’s compensation award. The court vacated the award based on the reasoning in its prior opinion Miller v. Industrial Comm’n, 122 Ariz. 493, 595 P.2d 1038 (App. 1979), that an innate low intellectual capacity can never be the result of an industrial injury. Adams Insulation Co. v. Industrial Comm’n, 158 Ariz. 451, 763 P.2d 271 (App. 1988). We have jurisdiction under Ariz. Const., art. 6, § 5(3); A.R.S. §§12-120.24 and 23-948. We granted review pursuant to Ariz.R.Civ. App.P. 23, 17B A.R.S.
Lopez injured his knee while working for Adams Insulation Company. On August 26, 1985, he fell off a ladder at work, tearing the anterior cruciate ligament of his right knee. Adams’ insurance carrier, Fremont Indemnity Company (Fremont), accepted the claim for benefits and closed it finding no permanent disability after Lopez underwent arthroscopic surgery.
Lopez timely protested the termination and a series of hearings was held. The orthopedic evidence established that his right knee rated a 15% permanent disability. The disability’s classification as scheduled or unscheduled, however, was disputed. The administrative law judge (ALJ) issued an award classifying the disability as an unscheduled injury. He based his decision on testimony that Lopez had an IQ of 76, representing borderline intelligence, and testimony that Lopez’ low intellectual capacity and his knee injury would limit his ability to compete for any but unskilled jobs. He also found that Lopez’ preexisting intellectual limitations and learning disorder caused some loss of earning capacity as of the time of the knee injury. The Court of Appeals set the award aside, holding that Lopez’ preexisting low intellectual capacity constituted a non-cognizable status, rather than a cognizable disability, and therefore could not serve to convert his otherwise scheduled leg disability to an unscheduled disability.
benefits to be paid for a specified number of months based upon the injury in question. Compensation is based, not on claimant’s actual loss of earning capacity, but rather on the presumption that the injuries result in a specified percentage of permanent partial loss of earning capacity. Yanez v. Industrial Comm’n, 21 Ariz. App. 367, 369, 519 P.2d 220, 222 (1974).
Permanent partial loss of earning capacity as a result of an injury not listed in the scheduled compensation established by A.R.S. § 23-1044(B) is compensated in accordance with A.R.S. §23-1044(C) as an unscheduled injury. Compensation for unscheduled injuries is based on a percentage of the claimant’s actual loss of earning capacity for the period during which the disability continues.
In certain circumstances, an injury that would normally be compensated as scheduled under A.R.S. § 23-1044(B) is required to be compensated as unscheduled. A.R.S. § 23-1044(E). This occurs when the claimant is already suffering from an earning capacity disability when the scheduled injury occurs. Alsbrooks v. Industrial Comm’n, 118 Ariz. 480, 483, 578 P.2d 159, 162 (1978) (Struckmeyer, J., dissenting in part).
When the claimant suffers more than one disability, whether or not occasioned by an injury contemporaneous with the subsequent injury, the result may be a total earning capacity disability greater than the sum of the individual disabilities. Accordingly, A.R.S. § 23-1044(E) converts an otherwise scheduled subsequent disability award into an unscheduled one. Fremont Indem. Co. v. Industrial Comm’n, 144 Ariz. 339, 697 P.2d 1089 (1985). This conversion recognizes that the claimant’s total disability may be more severe than the sum of his individual disabilities. Id 2 A. Larson, Workmen’s Compensation Law § 59.00 (1987).
If the prior non-industrial disability would have supported a scheduled award “had it been industrially related, there is a presumption that the prior injury had an effect on the earning capacity of the workman at the time of the second injury although this presumption can be overcome.” Ronquillo v. Industrial Comm’n, 107 Ariz. 542, 544, 490 P.2d 423, 425 (1971). No such presumption of lost earning capacity applies if the prior disability is unscheduled. Borsh v. Industrial Comm’n, 127 Ariz. 303, 305, 620 P.2d 218, 220 (1980). However, if a claimant proves an actual loss of earning capacity at the time of the second injury as a result of the prior disability, the second scheduled disability is converted into an unscheduled disability. See Yanez.
In its opinion, the Court of Appeals correctly stated that “there is no requirement that the claimant’s preexisting disability be the result of an accident before it can serve as the basis for converting a subsequent otherwise scheduled disability to an unscheduled one.” 158 Ariz. at 453, 763 P.2d at 273. The opinion then holds that because the ALJ could not state that Lopez’ low intelligence was clearly the result of an injury, the court had to assume that it was an innate condition. The court then found its decision in Miller controlling.
In Miller, the claimant, who was black, illiterate, and of marginal intelligence, asserted that his status constituted a preexisting disability that could be the basis for converting his scheduled leg injury to an unscheduled disability. The court rejected the claim because “[t]he status type of disability claimed by petitioner can never be the result of an industrial injury.” 122 Ariz. at 494, 595 P.2d at 1039. The court applied the Miller rationale to Lopez and held that his low intellectual capacity was a non-cognizable status. We disagree.
(1955), we discussed a prior version of § 23-1044(E) [A.C.A. Supp. 1954, § 56-957(e)] and stated: “The thought is advanced that possibly when the statute speaks of prior disability, prior industrial accident disability only is meant. We cannot agree with this. We cannot read the word `industrial’ into the statute which merely mentions previous disability.” By the same reasoning, we do not believe that the word “injury” can be read into A.R.S. § 23-1044(E). We approve of the reasoning i Lewis v. Industrial Comm’n, 126 Ariz. 266, 614 P.2d 347 (App. 1980) (degenerative arthritic disease) and Leon v. Industrial Comm’n, 10 Ariz. App. 470, 459 P.2d 749 (1969) (congenital deafness) and hold that a claimant’s preexisting disability does not have to be the result of an accident or industrial injury to satisfy § 23-1044(E). Lopez’ borderline intellectual capacity constitutes a prior disability for purposes of that section.
“[W]hen the statute says `disability,’ it means earning capacity disability even though the effect upon the workman’s earning capacity may be minimal.” Alsbrooks, 118 Ariz. at 484, 578 P.2d at 163. The burden is on claimant to show a loss of earning capacity. Felker v. Industrial Comm’n, 134 Ariz. 19, 653 P.2d 369 (App. 1982).
Lopez introduced testimony from Ron Baker, a certified rehabilitation counselor and labor market consultant, to the effect that Lopez had suffered some loss of earning capacity as a result of his preexisting intellectual limitations and learning disorder as of the date of his knee injury. Fremont argued below that, in spite of Mr. Baker’s testimony, there was no evidence that Lopez’ intellectual limitations detracted from his efficiency in ordinary employment or in any way diminished his ability to function in the ordinary pursuits of life.
As we stated in Pullins v. Industrial Comm’n, 132 Ariz. 292, 645 P.2d 807 (1982), certain disabilities are so severe that they must be considered as an earning capacity disability. There we spoke of the loss of an arm, a leg or an eye. Likewise, a borderline IQ may be considered disabling and “a severe disadvantage in acquiring a dependable new means of livelihood.”A. Larson. § 57.51(d). A rehabilitation psychologist testified that Lopez’ IQ of 76 fell in the borderline range of intellectual functioning at about the 7th percentile. Thus, if 100 people in Lopez’ age group were tested, 93 would score higher than he. That Lopez had adapted to his intellectual disability does not rebut the presumption that he had suffered an earning capacity loss at the time of the subsequent injury. To paraphrase what we held i Pullins, even though Lopez had adapted to his marginal IQ to the point that he was able to function adequately and even competitively, the record supports the ALJ’s conclusion that his mental disability detracted from his earning efficiency in ordinary employment.
To the extent that it classifies marginal intelligence or low intelligence as a non-cognizable status, Miller is overruled.
The opinion of the Court of Appeals is vacated and the award is affirmed.
GORDON, C.J., FELDMAN, V.C.J., and CAMERON and CORCORAN, JJ., concur.
MOELLER, J., did not participate in the determination of this matter.
HATHAWAY, J., was appointed to sit in his stead pursuant to Article VI, Section 3 of the Arizona Constitution.
 For a discussion of this case see comment, Workmen’s Compensation Law, 21 Ariz.L.Rev. 255 (1979).


text: The State also relied on Snyder v. State, 361 Md. 580 (2000), which contained dicta discussing motive evidence under Rule 5-404(b), the admissibility of which “does not depend on the defendant first offering evidence to trigger the State’s ability to introduce” that evidence “and does not concern rebuttal evidence.” Id. The State relied on Terry v. State, 332 Md. 329 (1993), Martin v. State, 364 Md. 692 (2001), and Johnson v. State, 408 Md. 204 (2009) as well. Each case involved the doctrine of curative admissibility, but none concluded that the doctrine “applied generally to character evidence under Maryland Rule 5-404(a) or specifically to rebuttal character evidence of a victim’s trait of peacefulness under Maryland Rule 5-404(a)(2)(C).” Slip Op. at 37. Finally, the State also relied on Anderson v. State, 420 Md. 554 (2011) and Thomas v. State, 429 Md. 85 (2012), each of which addressed whether opening statements could open the door for the admission of prior consistent statements under Rule 5-616(c) and 5-802.1(b). But, as the Court noted, “neither Maryland Rule 5-616(c) nor Maryland Rule 5-802.1(b) ties the triggering of admission of evidence to ‘evidence’ having already been admitted, as Maryland Rule 5-404(a)(2)(C) does.” Id. at 35 n.2. Thus, the Court was “unpersuaded” by the State’s reliance on those decisions. Id. at 34, 35.

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Federal courts are not bound by the decisions of state court in matters regarding general commercial law, since those decisions do not rise to the level of new law.
Swift took a bill of exchange as payment of a promissory note that was due to him by Norton & Keith. The bill was issued in Maine, but Tyson had accepted the bill in New York and was responsible in that capacity for paying the amount of $1,540.30 to Swift. When the bill was dishonored after it came due, Swift sought to compel payment from Tyson. Recognizing that Swift was a bone fide holder of the bill who was unaware of any problems with it, Tyson responded that he had originally accepted the bill from Norton & Keith as partial consideration for buying property in Maine to which Norton & Keith had fraudulently and falsely claimed title.
Tyson claimed that there was no consideration for the obligation to Swift, that New York state law governed the case because the bill had been accepted in New York, and that these laws, as interpreted by state courts, provide that a pre-existing debt generally does not constitute consideration of value that is applicable to negotiable instruments. The lower federal courts were uncertain about how to rule on these issues, so they certified the question to the Supreme Court.
State laws can be defined as rules and enactments created by the state legislatures or long-standing local customs in a state that have the same effect as law. Under the 34th section of the Judiciary Act of 1789, federal courts are bound to follow only state statutes and their interpretations by state courts, as well as rules on rights and titles to real estate or other things that have a permanent locality. They are not conclusively bound with regard to general issues like the interpretation of contracts, even though they should give some respect to state court decisions. These do not create laws that a federal court is bound to follow, instead offering only evidence of what the law may be. State court decisions often are reversed or wrongly decided, so deference to them must be limited.
This case can be viewed as a precursor to the Erie doctrine, under which the Supreme Court resolved that federal courts sitting in diversity jurisdiction needed to apply state substantive law and federal procedural law.
Action in the Circuit Court of New York on a bill of Exchange accepted in New York, instituted by the holder, a citizen of the state of Maine. The Acceptance and endorsement of the bill were admitted, and the defence was rested on allegations that the bill had been received in payment of a preexistent debt, and that the acceptance had been given for lands which the acceptor had purchased from the drawer of the bill, to which lands the drawer had no title, and that the quality of the lands had been misrepresented, and the purchaser imposed upon by the fraud of the drawer, and those who were co-owners of the land and cooperators in the sale. The bill accepted had been received bona fide, and before it was due.
There is no doubt that a bona fide holder of a negotiable instrument for valuable consideration, without any notice of the facts which implicate its validity as between the antecedent parties, if he takes it under an endorsement made before the same becomes due, holds the title unaffected by those facts, and may recover thereon although, as between the antecedent parties, the transaction may be without any legal validity.
The holder of negotiable paper, before it is due, is not bound to prove that he is a bona fide holder for valuable consideration, without notice, for the law will presume that in the absence of all rebutting proof, and therefore it is incumbent of a defendant to establish by way of defence satisfactory proofs of the contrary, and thus to overcome the prima facie title of the plaintiff.
"[t]hat the laws of the several states, except where the Constitution, treaties, or statutes of the United States shall otherwise recognise or provide, shall be regarded as rules of decision in trials at common law in the Courts of the United States in cases where they apply,"
things having a permanent locality, such as the rights and titles to real estate and other matter immovable and intraterritorial in their nature and character. The section does not extend to contracts or other instruments of a commercial nature, the true interpretation and effect whereof are to be sought not in the decisions of the local tribunals, but in the general principles and doctrines of commercial jurisprudence.
On a certificate of division from the Circuit Court for the Southern District of New York.
This action was instituted in the circuit court upon a bill of exchange dated at Portland, in the state of Maine, on the first day of May 1836, for $1,536.30, payable six months after date, drawn by Nathaniel Narton and Jairus S. Keith upon and accepted by the defendant, the bill having been drawn to the order of Nathaniel Norton, and by him indorsed to the plaintiff. The principal and interest on the bill, up to the time of trial, amounted to $1,862.06. The defense to the action rested on the answers to a bill of discovery filed by the defendant against the plaintiff, by which it appeared that the bill had been received by him from Nathaniel Norton, with another draft of the same amount, in payment of a protested note made by Norton & Keith, and which had been paid by him to the Maine Bank. When the draft was received by the plaintiff, it had been accepted by the defendant, who resided in New York. The plaintiff had no knowledge of the consideration which had been received for the acceptance, and had no other transaction with the defendant. He had received the drafts and acceptances in payment of the protested note, with a full belief that the same were justly due, according to their tenor, and he had no other security for the payment of the protested note except the drafts, nor had he any knowledge of any contract or dealing between the defendant and Norton out of which the said draft arose.
of them which were warranted by them to be correct, and also contracted to convey a good title to the land, all of which representations were in every respect fraudulent and false, and that said Keith & Norton had never been able to make a title to the land; whereupon, the plaintiff, by his counsel, objected to the admission of said testimony, or any testimony, as against the plaintiff, impeaching or showing the failure of the consideration on which said bill was accepted, under the facts aforesaid admitted by the defendant, and those proved by him, by reading said answers in equity of the plaintiff in evidence. And the judges of the court divided in opinion on the point or question of law, whether, under the facts last mentioned, the defendant was entitled to the same defence to the action, as if the suit was between the original parties to the bill, that is to say, the said Norton, or the said Norton & Keith, and the defendant? And whether the evidence so offered in defence, and objected to, was admissible as against the plaintiffs in this action.
And thereupon, the said point or question of law was, at the request of the counsel for the said plaintiff, stated as above, under the direction of the judges of the court, to be certified under the seal of the court to the supreme court of the United States at the next session thereof to be held thereafter, to be finally decided by the said last-mentioned court.
The case was submitted to the court, on printed arguments, by Fessenden for the plaintiff and by Dana for the defendant.
became due, in payment of a promissory note due to him by Norton & Keith; that he understood that the bill was accepted in part payment of some lands sold by Norton to a company in New York; that Swift was a bona fide holder of the bill, not having any notice of anything in the sale or title to the lands or otherwise impeaching the transaction, and with the full belief that the bill was justly due. The particular circumstances are fully set forth in the answer in the record, but it does not seem necessary further to state them. The defendant then offered to prove that the bill was accepted by the defendant, as part consideration for the purchase of certain lands in the state of Maine which Norton & Keith represented themselves to be the owners of, and also represented to be of great value, and contracted to convey a good title thereto, and that the representations were in every respect fraudulent and false, and Norton & Keith had no title to the lands, and that the same were of little or no value. The plaintiff objected to the admission of such testimony, or of any testimony, as against him, impeaching or showing a failure of the consideration, on which the bill was accepted, under the facts admitted by the defendant, and those proved by him, by reading the answer of plaintiff to the bill of discovery. The judges of the circuit court thereupon divided in opinion upon the following point or question of law: whether, under the facts last mentioned, the defendant was entitled to the same defence to the action as if the suit was between the original parties to the bill, that is to say, Norton, or Norton & Keith, and the defendant. and whether the evidence so offered was admissible as against the plaintiff in the action. And this is the question certified to us for our decision.
in its support. As little doubt is there that the holder of any negotiable paper, before it is due, is not bound to prove that he is a bona fide holder for a valuable consideration, without notice, for the law will presume that in the absence of all rebutting proofs, and therefore, it is incumbent upon the defendant to establish, by way of defence, satisfactory proofs of the contrary, and thus to overcome the prima facie title of the plaintiff.
that the court of errors have not pronounced any positive opinion upon it.
"that the laws of the several states, except where the constitution, treaties or statutes of the United States shall otherwise require or provide, shall be regarded as rules of decision, in trials at common law, in the courts of the United States, in cases where they apply."
local usages of a fixed and permanent operation, as, for example, to the construction of ordinary contracts or other written instruments, and especially to questions of general commercial law, where the state tribunals are called upon to perform the like functions as ourselves that is, to ascertain, upon general reasoning and legal analogies, what is the true exposition of the contract or instrument, or what is the just rule furnished by the principles of commercial law to govern the case. And we have not now the slightest difficulty in holding that this section, upon its true intendment and construction, is strictly limited to local statutes and local usages of the character before stated, and does not extend to contracts and other instruments of a commercial nature, the true interpretation and effect whereof are to be sought not in the decisions of the local tribunals, but in the general principles and doctrines of commercial jurisprudence. Undoubtedly the decisions of the local tribunals upon such subjects are entitled to, and will receive, the most deliberate attention and respect of this court, but they cannot furnish positive rules or conclusive authority by which our own judgments are to be bound up and governed. The law respecting negotiable instruments may be truly declared in the languages of Cicero, adopted by Lord Mansfield in Luke v. Lyde, 2 Burr. 883, 887, to be in a great measure not the law of a single country only, but of the commercial world. Non erit alia lex Romae, alia Athenis, alia nunc, alia posthac, sed et apud omnes gentes, et omni tempore una eademque lex obtinebit.
is according to the known usual course of trade and business. And why, upon principle, should not a preexisting debt be deemed such a valuable consideration? It is for the benefit and convenience of the commercial world to give as wide an extent as practicable to the credit and circulation of negotiable paper that it may pass not only as security for new purchases and advances, made upon the transfer thereof, but also in payment of, and as security for, preexisting debts. The creditor is thereby enabled to realize or to secure his debt, and thus may safely give a prolonged credit, or forbear from taking any legal steps to enforce his rights. The debtor also has the advantage of making his negotiable securities of equivalent value to cash. But establish the opposite conclusion that negotiable paper cannot be applied in payment of, or as security for, preexisting debts, without letting in all the equities between the original and antecedent parties, and the value and circulation of such securities must be essentially diminished, and the debtor driven to the embarrassment of making a sale thereof, often at a ruinous discount, to some third person, and then, by circuity, to apply the proceeds to the payment of his debts. What, indeed, upon such a doctrine, would become of that large class of cases where new notes are given by the same or by other parties, by way of renewal or security to banks, in lieu of old securities discounted by them, which have arrived at maturity? Probably more than one-half of all bank transactions in our country, as well as those of other countries, are of this nature. The doctrine would strike a fatal blow at all discounts of negotiable securities for preexisting debts.
than the one now before us, for the bill of exchange, there drawn in discharge of a preexisting debt, was held to bind the party as acceptor upon a mere promise made by him to accept, before the bill was actually drawn. Upon that occasion, Lord Mansfield, likening the case to that of a letter of credit, said that a letter of credit may be given for money already advanced, as well as for money to be advanced in future, and the whole court held the plaintiff entitled to recover. From that period downward, there is not a single case to be found in England in which it has ever been held by the court that a preexisting debt was not a valuable consideration, sufficient to protect the holder, within the meaning of the general rule, although incidental dicta have been sometimes relied on to establish the contrary, such as the dictum of Lord Chief Justice Abbott in Smith v. De Witt, 6 Dow. & Ryl. 120, and De la Chaumette v. Bank of England, 9 Barn. & Cres. 209, where, however, the decision turned upon very different considerations.
"in toto or in part cannot be insisted on if the plaintiff, or any intermediate party between him and the defendant, took the bill or note bona fide and upon a valid consideration."
Bayley on Bills, p. 499-500 (5th Lond. edit. 1830). It is observable that he here uses the words "valid consideration," obviously intended to make the distinction that it is not intended to apply solely to cases where a present consideration for advances of money, on goods or otherwise, takes place at the time of the transfer and upon the credit thereof. And in this he is fully borne out by the authorities. They go further and establish that a transfer as security for past, and even for future, responsibilities will, for this purpose, be a sufficient, valid and valuable consideration. Thus, in the case of Bosanquet v. Dudman, 1 Stark. 1, it was held by Lord Ellenborough that, if a banker be under acceptances to an amount beyond the cash balance in his hands, every bill he holds of that customer's, bona fide, he is to be considered as holding for value, and it makes no difference though he hold other collateral securities more than sufficient to cover the excess of his acceptances.
The same doctrine was affirmed by Lord Eldon in Ex parte Bloxham, 8 Ves. 531, as equally applicable to past and to future acceptances. The subsequent cases of Heywood v. Watson, 4 Bing. 496, and Bramah v. Roberts, 1 Bing.New Ca. (N.C.) 469, and Percival v. Frampton, 2 Cromp.Mees. & Rose 180, are to the same effect. They directly establish that a bona fide holder, taking a negotiable note in payment of or as security for a preexisting debt, is a holder for a valuable consideration, entitled to protection against all the equities between the antecedent parties. And these are the latest decisions which our researches have enabled us to ascertain to have been made in the English courts upon the subject.
In the American courts, so far as we have been able to trace the decisions, the same doctrine seems generally, but not universally, to prevail. In Brush v. Scribner, 11 Conn.R. 388, the supreme court of Connecticut, after an elaborate review of the English and New York adjudications, held, upon general principles of commercial law, that a preexisting debt was a valuable consideration, sufficient to convey a valid title to a bona fide holder against all the antecedent parties to a negotiable note. There is no reason to doubt that the same rule has been adopted and constantly adhered to in Massachusetts, and certainly, there is no trace to be found to the contrary. In truth, in the silence of any adjudications upon the subject, in a case of such frequent and almost daily occurrence in the commercial states, it may fairly be presumed that whatever constitutes a valid and valuable consideration in other cases of contract to support titles of the most solemn nature is held a fortiori to be sufficient in cases of negotiable instruments, as indispensable to the security of holders and the facility and safety of their circulation. Be this as it may, we entertain no doubt that a bona fide holder, for a preexisting debt, of a negotiable instrument is not affected by any equities between the antecedent parties where he has received the same before it became due, without notice of any such equities. We are all, therefore, of opinion that the question on this point propounded by the circuit court for our consideration ought to be answered in the negative, and we shall accordingly direct it so to be certified to the circuit court.
Upon the point of difference between the judges below, I concur that the extinguishment of a debt, and the giving a post consideration, such as the record presents, will protect the purchaser and assignee of a negotiable note from the infirmity affecting the instrument before it was negotiated. But I am unwilling to sanction the introduction into the opinion of this court a doctrine aside from the case made by the record, or argued by the counsel, assuming to maintain that a negotiable note or bill, pledged as collateral security for a previous debt, is taken by the creditor in the due course of trade, and that he stands on the foot of him who purchases in the market for money or takes the instrument in extinguishment of a previous debt. State courts of high authority on commercial questions have held otherwise, and that they will yield to a mere expression of opinion of this court, or change their course of decision in conformity to the recent English cases referred to in the principal opinion, is improbable, whereas, if the question was permitted to rest until it fairly arose, the decision of it either way by this court probably would, and I think ought to, settle it. As such a result is not to be expected from the opinion in this cause, I am unwilling to embarrass myself with so much of it as treats of negotiable instruments taken as a pledge. I never heard this question spoken of as belonging to the case until the principal opinion was presented last evening, and therefore I am not prepared to give any opinion, even was it called for by the record.
offered in defence, and objected to, was not admissible as against the plaintiff in this action. Whereupon, it is now here ordered and adjudged by this court that an answer in the negative be certified to the said circuit court.

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Way back in June 2016, the United States Supreme Court invited the Solicitor General to file a brief in two cases – Docket No. 15-1039 and Docket No. 15-1195 – expressing the views of the United States as to two provisions of the Biologics Price Competition and Innovation Act of 2009 (“BPCIA”): (1) PHS Act § 351(l)(8)(A) (42 U.S.C. § 262(l)(8)(A)), which states that a biosimilar (or aBLA or subsection (k)) “applicant shall provide notice to the reference product sponsor not later than 180 days before the date of the first commercial marketing of the biological product licensed under subsection (k);” and (2) PHS Act § 351(l)(2)(A) (42 U.S.C. § 262(l)(2)(A)), which governs the information exchange procedures under the BPCIA’s patent dance provisions and states that an aBLA applicant “shall provide to” the reference product sponsor a copy of the biosimilar application and information about the product’s manufacturing processes.
The questions presented in the [Sandoz] certiorari petition are (a) whether notice of commercial marketing under Subsection (l )(8)(A) is legally effective if it is given before Food and Drug Administration (FDA) approval of the biosimilar application, and, if not, (b) whether Subsection (l )(8)(A) is a stand-alone requirement that may be enforced by means of an injunction that delays the marketing of the biosimilar until 180 days after FDA approval.
The question presented in the [Amgen] conditional cross-petition is whether Subsection (l )(2)(A) creates a binding disclosure obligation that a court may enforce by injunction, or whether the sponsor’s sole recourse for the applicant’s failure to disclose the information is the right, prescribed elsewhere in the BPCIA, to commence an immediate action for patent infringement.
On December 7, 2016, the Acting Solicitor General of the United States responded to the Supreme Court’s request and filed a brief urging the Court to grant a writ of certiorari with respect to Sandoz’s petition and Amgen’s conditional cross-petition. According to the Big Molecule Watch Blog, “[t]he Court will consider the petition at its private conference on January 6, [2017,] and a cert grant could be announced as soon as that afternoon.” If certiorari is granted, then we may see a decision by June 2017.
Whereas the Federal Circuit ruled that the notice of commercial marketing under PHS Act § 351(l)(8)(A) can be provided only after aBLA licensure, and that the patent dance process initiated under PHS Act § 351(l)(2)(A) is optional; the government says that the Federal Circuit “erred in interpreting Subsection (l )(8)(A), but it correctly construed Subsection (l )(2)(A),” thus coming out in favor of the interpretations advocated by Sandoz.
allows the applicant to give the requisite 180-day advance notice of the first commercial marketing of its biosimilar before FDA has approved the applicant’s biosimilar application. But in any event, no federal cause of action exists under which a sponsor could obtain injunctive relief if the applicant fails to give notice as specified in Section 262(l )(8)(A).
The text and purpose of Section 262(l )(8)(A)’s notice provision and the BPCIA’s broader statutory context demonstrate that the provision permits an applicant to give advance notice of the first commercial marketing of its biosimilar before FDA has licensed the biosimilar. . . .
Respondents’ conditional cross-petition argues that the Federal Circuit erred in concluding that Section 262(l )(2)(A)’s use of “shall” “does not mean ‘must.’ ” The government agrees that the Federal Circuit misconceived the relevant inquiry in that respect. But Section 262(l )(2)(A) may properly be understood as imposing a mandatory condition for invoking Subsection (l )’s patent-dispute framework without concluding that an injunction is available to compel compliance with that condition.
Even if the term “shall” is understood as mandatory, the only consequences for failing to satisfy that condition are those expressly set forth by Congress in the BPCIA. That conclusion flows logically from essentially the same reasons discussed above in connection with Section 262(l )(8)(A). And as petitioner explains, a sponsor can, after conducting a diligent investigation, file an infringement suit as contemplated by the BPCIA based on any patent it reasonably believes has been infringed, and it may seek additional information regarding that patent claim through discovery.


text:
The Complainant is Toyota Motor Sales, U.S.A., Inc., Torrance, California 90509-2991, United States of America, represented by Shaw Pittman LLP of United States of America.
The Respondent is John Zuccarini, Cupcake Patrol, Nassau, N.P., Bahamas.
The disputed domain name<toyoto.com> is registered with CSL Computer Service Langenbach GmbH dba Joker.com, Duesseldorf, Germany.
The Complaint was filed with the WIPO Arbitration and Mediation Center (the "Center") on October 15, 2002, at which date the Center transmitted by email to CSL Computer Service Langenbach GmbH dba Joker.com a request for registrar verification in connection with the domain name at issue.
On October 17, 2002, CSL Computer Service Langenbach GmbH dba Joker.com verified that the Respondent is listed as the registrant and providing the contact details for the administrative, billing, and technical contact.
In accordance with the Rules, paragraphs 2(a) and 4(a), the Center formally notified the Respondent of the Complaint, and the proceedings commenced on October 18, 2002. The Complaint notification was sent to the Respondent in accordance with the prescribed measures in the Rules, paragraphs 2(a), via e-mail and registered mail to the contact addresses shown in the disputed domain names registration data in the Registrars Whois database.
In accordance with the Rules, paragraph 5(a), the due date for Response was November 7, 2002. The Respondent did not submit any response. Accordingly, the Center notified the Respondent�s default on November 8, 2002.
On November 8, 2002, the Respondent, via e-mail, contacted the Center stating he had not received the Complaint or any of its appendixes or any information whatsoever before the notification of Respondents default. On November 12, 2002, the Center confirmed that they had indeed notified the Respondent in accordance with the Rules to the correct e-mail address and the registered postal address and also resent the Complaint to the Respondents e-mail address.
On November 12, 2002, the Respondent, via e-mail, confirmed that he had received the Complaint "for the first time". Furthermore the Respondent on November 13, 2002, via e-mail, alleged that the Complainant had breached the Centers regulation by providing the Complaint in Adobe PDF-format instead of MS Word format and also alleged that this was a deliberate action to make it impossible for him to receive the Complaint as the large filesize would not be accepted by his mail account. The Respondent furthermore demanded that he should receive another 20 days to answer the Complaint.
On November 14, 2002, the Complainant commented on the Respondents communications.
The Center appointed Anders Janson as the sole panelist in this matter on November 19, 2002. 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 Panel independently determines and agrees with the assessment of the Center that the Complaint is in formal compliance with the applicable requirements. The Center has issued a notification of Complaint in accordance with the prescribed measures in the Rules, paragraphs 2(a), via e-mail and registered mail to the contact addresses shown in the disputed domain names registration data in the Registrars Whois database having performed this is an acceptable measure to notify a Respondent according to the Rules, which the Respondent has agreed to follow when registering the disputed domain name. Though these facts alone are enough to constitute a correct commencement of the proceedings the Panel would like to mention the following facts; The Respondent would be aware of any e-mail messages bouncing due to their size as notices of such e-mails are normally forwarded to the owner of the e-mail account with a message containing the sender of the refused e-mail and the subject line. Furthermore there is no obligation under the Rules to file a complaint in a Word-file format but merely a guideline. As long as the format used is a format easily accessible to the Respondent it is acceptable. Whether this format actually is Word, PDF, plain ascii text or other commonly used formats is not relevant. It is furthermore a fact that the Respondent has refused to accept the delivery of a letter from the Complainant sent via FedEx before the proceedings began. In all it is this Panels opinion that the Respondent seem to have actively avoided communication regarding the disputed domain name.
In conclusion no exceptional circumstances, which would enable the Panel to prolong the time span for the Respondent to produce a Response in accordance to the Rules, exist. As the Response from the Respondent was issued too late the Respondent is to be considered in Default. The Panel however takes arbitral notice, where applicable, of the Respondent contentions.
The Center transmitted to the parties on November 19, 2002, a Notification of Appointment of Panel and Projected Decision Date as of December 3, 2002. The Panel finds that it was properly constituted and appointed in accordance with the Policy, the Rules and the WIPO Supplemental Rules.
Complainant is a wholly owned subsidiary of Toyota Motor Corporation (a Japanese corporation) and is the exclusive importer and distributor of TOYOTA automobiles throughout the United States except the State of Hawaii. Complainant is the owner of the domain name <toyota.com>. An existing Importer Agreement grants Complainant this right of distribution and also grants it a License to use Toyota�s trademarks, including the mark TOYOTA, in the distribution territory. Complainant has continuously used the name and mark TOYOTA in the United States since 1958.
Registration No. 1,888,870 of the mark TOYOTA, for repair and maintenance services for automotive vehicles, which issued April 11, 1995.
The Panel notes that the registration dates of all of the above referenced registrations predate the date of registration of the Domain Name by the Respondent.
The Respondent is an individual with a stated contact address in Bahamas, operating under the name Cupcake Patrol.
The disputed Domain Name <toyoto.com> was registered by the Respondent with the Core Internet Council of Registrars, on May 3, 2000. On May 4, 2002, Respondent renewed its registration of the disputed domain name with the CSL Computer Service Langenbach GmbH dba Joker.com.
The disputed Domain Name is connected to a website called <yes-yes-yes.com> which contains a large amount of links to several other sites including MP3 downloading software, online gambling sites etc. The website also includes popup-windows which automatically opens up new browser windows with links to MP3 downloading sites and a site advertising prescription drugs.
The Panel takes arbitral notice of the multiple successful proceedings initiated against Respondent and his related companies in the past, under the Policy. See inter alia, Encyclopedia Britannica Inc. v. Zuccarini, WIPO Case No. D2000-0330 (June 7, 2000); Spiegel Catalog, Inc. v. Zuccarini, eResolution Case No. AF-0237 a-d (July 28, 2000); Diageo P.L.C. v. Zuccarini, WIPO Case No. D2000-0541 (August 22, 2000); Dow Jones & Co., Inc. v. Zuccarini, WIPO Case No. D2000-0578 (August 28, 2000); Yahoo!, Inc. v. Cupcake Patrol, WIPO Case No. D2000-0928 (Sept. 29, 2000); Shields v. Zuccarini, 89 F. Supp. 2d 634 (E.D. Pa. 2000); Electronics Boutique Holdings v. Zuccarini, 2000 WL 1622760 (E.D. Pa. Oct. 30, 2000); Abercrombie & Fitch Stores, Inc. v. Zuccarini, WIPO Case No. D2000-1004 (November 1, 2000); Minolta Co. v. Cupcake City, Case No. D2000-1291 (January 18, 2001); Kidman v. Zuccarini, WIPO Case No. D2000-1415 (January 23, 2001), AT&T Corp. v. John Zuccarini d/b/a Music Wave and RaveClub Berlin, WIPO Case No. D2002-0440 (August 28, 2002).
- the Domain Name <toyoto.com> should be transferred to the Complainant.
Respondent has not submitted any viable Response and is to be considered in Default.
The domain name at issue is <toyoto.com>. Complainant is the holder of several registered trademarks of the word "TOYOTA". The Complainant has provided statements to support the supposition that the disputed domain name and the name and marks of the Complainant are confusingly similar. The Respondent does not contest this supposition.
The fact that the disputed domain name includes a misspelling of the registered trademark does not necessarily mean that it is confusingly similar to the trademark. In this case however, the Panel regards it obvious that the disputed domain name and trademark, which differ in only one letter, is confusingly similar both visually and phonetically. This is particularly the case regarding such a famous and well-known trademark as "TOYOTA". The Panel therefore holds that the Complainant has established element (i) of the Policy's Paragraph 4(a).
As mentioned above the Respondent has not filed a Response in accordance with the Rules, Paragraph 5. In those circumstances when Respondent clearly has no obvious connection with the disputed domain name the mere assertion from Complainant that the Respondent has no right or legitimate interest is enough to shift the burden of proof to the Respondent to demonstrate that such a right or legitimate interest exists.
Though the Respondent has not filed a viable Response in accordance with the Rules he has claimed that the disputed domain name is a generic term, but not further elaborated in what way or in what language the disputed domain name would constitute a generic term. To the Panels knowledge the disputed domain name is not a generic term. Even if this were the case there is still no discernable right or legitimate interest for the Respondent to the disputed domain name. Indeed the web-sites connected to the disputed domain name does not in any way identify any product, person or service or any other obvious connection to the disputed domain name.
In conclusion the Respondent has not presented any evidence of rights or legitimate interests in using the disputed Domain Name and has no obvious connection to it. The Panel therefore holds that the Complainant has established element (ii) of the Policy's Paragraph 4(a).
Paragraph 4(b) states four (non-exclusive) circumstances which, if found to be present, are deemed to provide evidence of bad faith in registering and using the Domain Name. Paragraph 4(b)(iv) states that a circumstance indicating bad faith is using of a domain to intentionally attempt to attract, for commercial gain, internet users by creating a likelihood of confusion with complainants mark.
The Respondent is the registered owner of several hundred domain names, the majority of which is typos of various more or less famous trademarks, movie titles, game titles or generic word. The Respondent is obvious engaged in what has been named "typosquatting" a practice that in similar cases under the Policy has been considered registered and used in bad faith especially if the websites connected to the disputed domain is used for advertising or other commercial means (inter alia Time Warner Entertainment Company LP and Hanna-Barbera Productions Inc v. John Zuccarini, Cupcake Patrol, WIPO Case No. D2001-0184; Autosales Inc dba Summit Racing Equipment v. John Zuccarini dba Cupcake Patrol, WIPO Case No. D2001-0230; General Electric Company v. Fisher Zvieli, a/k/a Zvieli Fisher, WIPO Case No. D2000-0377).
Furthermore the Respondent has not presented any viable reasons or evidence or arguments of a legitimate interest in using the disputed Domain Name. It is not possible to conceive an obvious reason in which the Respondent could legitimately use the domain name.
In view of the circumstances and facts discussed above, the Panel decides that the disputed domain name is identical and confusingly similar to the registered trademark in which the Complainant has rights, that the Respondent has no rights or legitimate interests in respect of the domain name, and that the domain name has been registered and is being used in bad faith.
Consequently the Panel decides that the Domain Name <toyoto.com> shall be transferred to the Complainant.

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