Justia U.S. Federal Circuit Court of Appeals Opinion Summaries

Plaintiff, a U.S. citizen employed in international disaster relief assistance, returned from an overseas business trip and was detained by Immigration and Customs Enforcement at Dulles International Airport. An agent seized his laptop and two flash drives after permitting him to copy and retain one computer file and providing Customs Form 6051D indicating that the equipment would be detained for up to 30 days. While the laptop was detained, its hard drive failed, destroying much of its business software. A Customs representative sent a letter seeking to assure plaintiff that a prompt resolution of the issue would be addressed. About 10 weeks after its seizure, the laptop was returned. Plaintiff’s suit alleged breach of an implied-in-fact contract and a taking, with damages totaling $469,480.00 due to lost contracts resulting from inability to access files as well as replacement hardware, software, and warranty costs. The Claims Court dismissed, finding that the complaint did not sufficiently allege a bailment contract and that the property was not taken for a public use within the context of the Fifth Amendment Takings Clause. The Federal Circuit affirmed. View "Kam-Almaz v. United States" on Justia Law

Normally, if a partner contributes property, his basis in the partnership increases, and, when the partnership assumes a partner’s liability, his basis decreases. A Son-of-BOSS transaction recognizes acquisition (here, short-sale proceeds) and disregards acquisition of offsetting liability (obligation to close out the short-sale), to generate tax loss or reduce gain from sale of an asset. In their first such transaction, plaintiffs used partnerships to convert $66 million in taxable gain anticipated from stock sales into capital losses. Their partnership interests were held by tax-exempt charitable remainder unitrusts at the time of sale so that gain would escape taxation. The CRUTs terminated thereafter and assets were distributed to plaintiffs, purportedly tax free. The IRS determined that transfers to the CRUTs were shams to be disregarded; imposed basis and capital gain/loss adjustments, and alternative penalties; and asserted that the transactions did not increase amounts at risk under I.R.C. 465. Plaintiffs conceded capital gain and loss adjustments, but otherwise challenged the determinations. The Claims Court dismissed the determination that trust transfers were shams, believing it lacked jurisdiction; entered summary judgment in favor of plaintiffs on the ground that their concession to adjustments rendered valuation misstatement penalties moot; granted the government summary judgment on penalties for negligence, substantial under-statement, and failure to act in good faith; and imposed a penalty. The Federal Circuit reversed the dismissal, vacated summary judgment for plaintiff, and held that plaintiffs’ appeal was premature. View "Alpha I, L.P. v. United States" on Justia Law

Reeves served as a heavy mortar crewman during combat offensives, 1942-1945, and was awarded three Bronze Stars. In 1981, Reeves filed a claim seeking service-connected disability benefits, with a medical opinion, stating that Reeves had bilateral, nerve-type hearing loss in 1962, attributable to noise exposure or to treatment with quinine for malaria. He also submitted records of an audiogram and statements from officers with whom he had served. The board denied the claim, stating that hearing loss documented in 1962 was too remote from active service. Reeves did not appeal. In 2004, the board granted an application to re-open, citing new evidence of treatment from 1946 to 1954, and awarded him service-connected disability benefits, effective 2002. In 2006, Reeves sought revision to an earlier effective date. The board denied the motion. The Veterans Court affirmed, rejecting an assertion that the evidence of record in 1983 was such that the board had no choice but to resolve in his favor that his hearing disability was incurred in service. Reeves died in 2011; the Federal Circuit substituted his widow and reversed. The Veterans Court misinterpreted 38 U.S.C. 1154(b) in rejecting the clear and unmistakeable error claim. View "Reeves v. Shinseki" on Justia Law

Heinzelman, born in 1971, received a flu vaccine in 2003, and within 30 days, was hospitalized for Guillain-Barre syndrome, a disorder affecting the peripheral nervous system. She was previously employed full-time as a hairstylist earning $49,888 per year. Due to her injury, Heinzelman will never be able to work again and is eligible to receive SSDI benefits of approximately $20,000 per year. In 2007, she sought compensation under the National Childhood Vaccine Injury Act of 1986, 42 U.S.C. 300aa-1 to 300aa-34. A special master rejected the government’s argument that her eligibility for SSDI benefits should be considered in determining compensation under the Vaccine Act, finding that SSDI is not a "federal . . . health benefits program" within the meaning of section 300aa-15(g), and awarded $1,133,046.08, plus an annuity to cover future medical expenses. According to the government, Heinzelman's lost earnings award would have been roughly $316,000 less had the special master taken her anticipated SSDI benefits into account. The Claims Court and the Federal Circuit affirmed. View "Heinzelman v. Sec'y Health & Human Servs." on Justia Law

In 1983, the Nuclear Waste Policy Act, 42 U.S.C. 10101-10270, authorized the Department of Energy to contract with nuclear facilities for disposal of spent nuclear fuel and high level radioactive waste. The Standard Contract provided that rights and duties may be assignable with transfer of SNF title. Plaintiff entered into the Standard Contract in 1983 and sold its operation and SNF to ENVY in 2002, including assignment of the Standard Contract, except one payment obligation. Plaintiff transferred claims related to DOE defaults. As a result of DOE’s breach, ENVY built on-site dry-storage facilities. The Claims Court consolidated ENVY’s suit with plaintiff’s suit. The government admitted breach; the Claims Court awarded ENVY $34,895,467 (undisputed damages) and certain disputed damages. The Federal Circuit affirmed in part. Plaintiff validly assigned pre-existing claims; while partial assignment of rights and duties under the contract was not valid, the government waived objection. The assignment encompassed claims against the government. Legal and lobbying fees to secure Vermont approval for mitigation were foreseeable, but other expenses were not recoverable. ENVY failed to prove costs of disposing of contaminated material discovered due to the breach and its characterization of spent fuel moved to dry storage. ENVY is not entitled to recover cost of capital for funding mitigation, or Resource Code 19 payroll loader overhead costs, but may recover capital suspense loader overhead costs,.View "VT Yankee Nuclear Power Corp. v. United States" on Justia Law

Once a user records all of the data on the DVD, the user may choose to "finalize" the DVD. A recordable DVD can be played in the drive in which it was recorded without finalization, but not on other recorders or conventional DVD players. A finalized DVD can be played on any standardized DVD player or drive. Toshiba accused defendants of infringing claims patents related to optical disc technology. The district court granted summary judgment for defendants, concluding that the use of unfinalized DVDs was a substantial non-infringing use and that both theories of indirect infringement – contributory and inducing infringement – fail if there are any substantial non-infringing uses. The Federal Circuit affirmed in part and vacated in part. The district court correctly granted summary judgment of non-infringement as to contributory infringement of the asserted claims of one patent, but erred in granting summary judgment of non-infringement as to induced infringement of the asserted claims of that patent and in granting summary judgment of non-infringement of the other patent based on an erroneous claim construction. View "Toshiba Corp. v. Imation Corp." on Justia Law

R+L, owns a patent relating to the less-than-a-load trucking industry and uses the patented method in its business. Carriers in the industry pick up freight from several different customers, often destined for different locations around the country. Freight is taken to a terminal where it is unloaded from the truck and consolidated with other freight headed in the same direction, then reloaded. The patent claims a method that “automates the process of receiving transportation documentation and producing advance loading manifests therefrom to optimize load planning and dynamic product shipment and delivery control.” The patented method enables shipping documents to be sent directly from the truck driver to a common point, such as a terminal, so billing and load planning can occur while the driver is en route with the freight. In 2008, R+L sent cease-and-desist letters to defendants, suspecting infringement. Defendants sought declaratory judgments of invalidity and non-infringement; R+L counterclaimed. The district court ruled against R+L. The Federal Circuit affirmed in part and reversed in part. R+L failed to state a claim of contributory infringement, but adequately stated a claim of induced infringement View "R&L Carriers, Inc. v. Drivertech, LLC" on Justia Law

Harari's 880 application, filed in 1999, is a continuation of the 708 application, which was a continuation of the 838 application, which was a divisional of the 566 application, filed in 1989 on the same day as Harari's 579 application. An incorporation statement from the 566 application, referring to copending applications, was copied into the subsequent applications. The 880 application included a photocopy of 566, a transmittal sheet identifying the filing as a continuation, and a preliminary amendment. During interference proceedings, Hollmer argued that Harari's claims were unpatentable under 35 U.S.C. 112, because the 579 application was not properly identified in the 880 application because 579 was not filed "on the same day" as the 880 application. The Board agreed. On remand, the Board found that continuity between the 566 and 880 applications was maintained; the intervening 838 and 768 applications contain incorporation language copied from the 566 application but, unlike the 880 application, were never amended to refer to 579 by serial number and filing date. The Board found that a reasonable examiner would have had access to all filing papers, including transmittal sheets and would have understood that the incorporation language in those applications referred to the 579 application. The Federal Circuit reversed. View "Hollmer v. Harari" on Justia Law

In 1996, Dominion, a power company, replaced coal burners in two of its plants, temporarily removing the units from service for two to three months. During that time, Dominion incurred interest on debt unrelated to the improvements. On its tax returns, Dominion deducted some of that interest. The IRS disagreed, citing Treasury Regulation 1.263A-11(e)(1)(ii)(B), as requiring Dominion to capitalize half ($3.3 million) of that interest over several years, instead of deducting it in a single tax year. The Claims Court granted summary judgment to the IRS. The Federal Circuit reversed. The associated property rule in Treasury Regulation 1.263A-11(e)(1)(ii)(B), as applied to property temporarily withdrawn from service, is not a reasonable interpretation of the Tax Reform Act of 1986, I.R.C. 263A (Capitalization and Inclusion in Inventory Costs of Certain Expenses). Treasury acted contrary to 5 U.S.C. 706(2) in failing to provide a reasoned explanation when it promulgated that regulation. View "Dominon Res., Inc. v. United States" on Justia Law

In February, 2002, the Navy awarded GM&W a contract for floor coating at a military base. GM&W subcontracted with FloorPro, which completed the work on February 27, 2002 and billed GM&W. On March 8, the Navy informed GM&W that the work was completed satisfactorily. On April 17, FloorPro informed the Navy’s contracting officer that it had not been paid. GM&W had claims pending and was not sure whether funds that the Navy directly deposited would be available to FloorPro. In April 2002, the Navy and GM&W entered into contract modification providing for mailing to FloorPro of a check payable to GM&W and Floor-Pro. The Navy paid GM&W directly by electronic transfer and informed FloorPro that its recourse was to sue GM&W. In December 2002, FloorPro submitted a claim to the Navy’s contracting officer. On March 27, 2003, FloorPro filed at the Armed Services Board of Contract Appeals, which awarded $37,500. The Federal Circuit reversed, holding that under the Contract Disputes Act, 41 U.S.C. 7101, ASBCA has no jurisdiction over a claim by a subcontractor. In 2009, FloorPro filed in the Court of Claims, which ruled in favor of FloorPro. The Federal Circuit vacated, ordering dismissal under the six-year limitations period of 28 U.S.C. 2501. View "FloorPro, Inc. v. United States" on Justia Law