October 21, 2018

Archives for August 13, 2014

DBA’s Davis Award Nominations Sought—Deadline is Monday, September 1

The Denver Bar Association is seeking nominations for the 2014 Richard Marden Davis Award. The prestigious Davis Award is given to attorneys in Denver who are under 40 years of age and exhibit exemplary civic, cultural, educational, and charitable leadership. It is presented jointly by the Davis family, Davis Graham & Stubbs LLP, and the Denver Bar Association. Past recipients of the award include Colorado Supreme Court Justice Monica Marquez, Colorado Court of Appeals Judge Richard Gabriel, and former governor Bill Ritter. The 2013 recipient of the Davis Award was Shannon Stevenson.

Nominations for the 2014 Award are due September 1, 2014. Nomination forms are available for download here, and more information on the award is available here. Questions? Email Margee Fawley or call her at 303-892-7528.

Tenth Circuit: ERISA Preemption Necessitated Removal to Federal Court

The Tenth Circuit Court of Appeals issued its opinion in Salzer v. SSM Health Care of Oklahoma, Inc. on Wednesday, August 6, 2014.

Richard Salzer received medical care at an SSM facility following an accident. At the time, he was covered by a health insurance plan, and he entered into a contract with SSM in which he authorized his health insurance company to pay for his care. SSM had a provider agreement with Salzer’s health insurance company in which it agreed to accept payment from the insurance company at a discounted rate. Although the provider agreement prohibited SSM from seeking payment for covered charges from the insured, SSM billed Salzer for the non-discounted amount.

Salzer filed suit against SSM in Oklahoma state court, alleging breach of contract, violation of the Oklahoma Consumer Protection Act, deceit, and tortious interference with contract. He purported to represent a putative class of Oklahoma residents who received treatment at SSM facilities and were similarly billed in violation of provider agreements with insurance companies. Salzer sought damages and specific performance of the provider agreement. SSM removed the case to federal district court. In its notice of removal, SSM alleged that Salzer was a beneficiary of his wife’s employer-provided health plan operated by Aetna and governed by ERISA. SSM further alleged Salzer’s claims were preempted because they can be characterized as seeking to enforce rights under ERISA. Salzer moved to remove the case back to state court, but the district court denied his motion, ruling that his claims were completely preempted by ERISA.

Salzer then filed an amended complaint that reasserted his original claims and added other state law claims. SSM moved to dismiss for failure to state any ERISA claims. The district court dismissed Salzer’s complaint with prejudice, concluding that Salzer disregarded the court’s prior orders by failing to allege any ERISA claims and by continuing to argue that ERISA did not preempt the lawsuit. Salzer appealed to the Tenth Circuit.

The Tenth Circuit examined first the district court’s denial of Salzer’s motion to remand based on ERISA preemption. The Tenth Circuit looked at each of Salzer’s six claims and decided that the first five claims did not implicate ERISA and could have been remanded to state court. However, the sixth claim was indeed an ERISA claim, and the district court correctly refused to remand to the state court for determination of the ERISA claim. The Tenth Circuit found federal jurisdiction over one claim is sufficient to support removal. Because Salzer did not argue on appeal that the district court incorrectly dismissed his claims with prejudice, the Tenth Circuit affirmed the district court.

Tenth Circuit: Case Involving Interpretation of License Agreement was Contract Dispute, Not Patent Resolution Claim

The Tenth Circuit Court of Appeals issued its opinion in Cellport Systems, Inc. v. Peiker Acoustic GMBH & Co. KG on Tuesday, August 5, 2014.

Cellport, a Colorado corporation, designs technology to allow vehicle owners to connect different cell phone models to a single hands-free system through specialized “pockets.” In August 2001, Cellport entered into an agreement with Peiker, a German corporation, granting Peiker a non-exclusive license to Cellport’s intellectual property. After Cellport filed a lawsuit alleging breach of the 2001 agreement, the parties came to terms on a second license agreement in October 2004. The 2004 agreement provided that Peiker would pay Cellport royalties on products that use Cellport’s intellectual property. In 2009, Cellport filed suit in the district court in Boulder County, alleging breach of the 2004 agreement and seeking royalties for seven Peiker products. Peiker removed the case to federal district court. The district court found that Peiker owed royalties on only two products, interpreting a provision in the license agreement as a “rebuttable presumption,” and awarded Cellport prejudgment interest at the statutory rate rather than the 1.5% monthly interest proscribed in the license agreement. The district court declined to award costs, determining that neither party was a “prevailing party” as defined in the license agreement. Cellport appealed and Peiker cross-appealed.

Peiker first asserted that the Tenth Circuit lacked jurisdiction to hear the appeal, moving instead to transfer the appeal to the United States Court of Appeals for the Federal Circuit, which has exclusive jurisdiction over patent claims. The Tenth Circuit analyzed the exclusive jurisdiction provisions of 28 U.S.C. §§ 1295 and 1338 and found that they did not apply because the claims could be analyzed under contract law, not patent law. The parties’ dispute involved the language of sections 1.17(i) and 3.5 of their license agreement, which the Tenth Circuit interpreted as involving acknowledgments of the parties requiring Peiker to pay royalties on any products included in sections 1.17(i) and 3.5.

Following its analysis that section 1.17(i) requires royalties regardless of whether Cellport’s patents were infringed, the Tenth Circuit reversed the judgment of the district court and determined Peiker owed royalties on two additional products, since Peiker conceded that section 1.17(i) applied to those products. Because the district court did not rule on whether section 1.17(i) applied to the remaining product, the Tenth Circuit remanded for the district court to make further findings concerning the applicability of section 1.17(i) to that product.

Regarding its BT-PSC product, Cellport argued that royalties were due under section 1.17(i) or (iii). The contractual provisions were ambiguous, and the district court resolved the ambiguity by determining no royalties were due. The Tenth Circuit could not find clear error in the district court’s factual findings and affirmed as to the BT-PSC product.

Cellport also argued that it was due royalties for the BT-PSC product due to its ‘456 patent. Because the district court only briefly addressed the relationship between the BT-PSC product and the ‘456 patent, the Tenth Circuit remanded for further findings on that issue. Turning to Cellport’s contention of entitlement to royalties on the SIAB product, the Tenth Circuit could find no clear error in the district court’s determination that no royalties were owed.

Cellport next argued that it was due interest at the contractual rate rather than the statutory rate. The placement of the interest provision in the contract indicated that the interest rate would apply only to royalties due as a result of audits. The Tenth Circuit found the district court’s application of the statutory interest rate appropriate. As to Cellport’s contention that it was owed costs as the “prevailing party,” the Tenth Circuit noted that on remand the balance would shift and the cost provision should be reassessed.

Turning to Peiker’s cross-appeal, the Tenth Circuit addressed Peiker’s contention that since the ‘456 patent had been revoked, it owed no further royalties. Cellport appealed the revocation and that appeal is pending. Cellport argued that Peiker’s cross-appeal is not yet ripe because Cellport’s revocation appeal is still pending. The Tenth Circuit agreed with Cellport that the issue is not ripe and vacated the district court’s judgment on the issue.

The judgment of the district court was affirmed in part, reversed in part, and remanded for further proceedings consistent with the Tenth Circuit’s opinion.

Tenth Circuit: Unpublished Opinions, 8/12/2014

On Tuesday, August 12, 2014, the Tenth Circuit Court of Appeals issued five published opinions and seven unpublished opinions.

United States v. Angulo-Lopez

United States v. West

Peel v. Joint Commission, State Survey Oklahoma Department of Health

Eldridge v. Berkebile

United States v. Walker

United States v. Angulo-Lopez

Ruiz-Giel v. Holder

Case summaries are not provided for unpublished opinions. However, published opinions are summarized and provided by Legal Connection.