Taser International, Inc. v. Ward (CA1 5/13/10)

We’re sure that our appellate-court judges, like all judges, work hard and put much effort into their work. Yes. But sometimes you do read an opinion that seems to have been churned out for the sake of churning it out.

Ward was Taser’s marketing VP. Before resigning he started working on an invention, the sort of thing Taser sells to law enforcement; after resigning he started marketing it. Taser sued, among other things, for breach of fiduciary duty and breach of the “duty of loyalty.” Taser moved for summary judgment on them; the trial court granted it. How that’s Rule 54(b) when the other causes of action, based on the same facts, are misappropriation of trade secrets, tortious interference with contract, breach of contract, conversion, and unjust enrichment isn’t clear, nor is it clear that anybody paid any attention.

An employee may not compete with his employer. Ward argued that he didn’t actively compete with Taser until he left it. Before then, he was merely preparing to do so – developing  a business plan, hiring attorneys, researching patents, and doing preliminary investigation of another invention that turned out to have been patented already so Ward had to start developing a slightly different one. The Court of Appeals agreed. These, the court says, are “qualitatively different” from competition. How so? Your guess is as good as ours. Since the opinion doesn’t attempt to define “competition,” it’s hard to figure that one out. But the court says there was a question of fact about the extent to which Ward had been working, pre-resignation, with the company that later manufactured his product. That, it seems, is qualitatively the same as competition.

Taser argued that Ward had emailed his lawyers on company time. But the times of the emails weren’t in the record. Well, actually, they were but the document was a summary of a log sheet and the judges of the appellate court “decline . . . to consider it.” Why? They don’t say. Did the trial court consider it? They don’t say. If so, why was that wrong? They don’t say.

Taser argued that Ward had deprived it of a business opportunity by selling something it would have – and later did – develop. The court says that business opportunity means a “concrete opportunity to purchase goods, services, or property, or to enter into some contract or other business transaction” and that, besides, Taser did eventually sell a similar product, which “belies its argument.” This must all be original stuff, since no authority is cited.

There’s more of the same. The opinion is fact-heavy and law-light. Its organization apparently follows that of the briefs. That can work when the briefs are well done but not when they’re mediocre. We haven’t read them but we have to hope, for the sake of those hard-working judges, that they’re at least part of the excuse.

The opinion does in passing make one interesting point that we mentioned a few weeks ago: summary judgment can be granted for either side.

The Planning Group of Scottsdale v. Lake Mathews Mineral Properties (CA1 5/6/10)

THIS OPINION HAS BEEN VACATED

 

A personal-jurisdiction opinion, long (33 pages) but not of earth-shattering importance.

TPG is an investment outfit that sells insurance on the side, or vice versa. One of its insurance clients found out about its investment activities and sent it, with his brother’s permission, a report about the brother’s California mining property. TPG ended up investing in the mine. There was a falling-out and TPG sued.

The problem was that the brother and other defendants were California residents. They moved to dismiss, arguing that they did not have minimum contacts with Arizona. The trial court granted the motion; the Court of Appeals affirmed.

If you’ve read other personal-jurisdiction cases, you’ve pretty much read this one. Who sent what where, who called whom, World-Wide Volkswagen and Burger King and G.T. Helicopters and Uberti, the whole nine yards. This is one of those cases that will be cited because it is a shiny, new source for the same, old stuff.

The court apparently feels that its contribution is to discuss the distinction between purposefully availing oneself of the privileges of the forum and purposefully directing one’s activities toward it. The difference, the opinion tells us, is that the former applies to contracts while the latter applies to torts and is subdivided into a three-part test involving (1) intentional acts (2) aimed at the forum, which (3) caused harm the defendants should have known could happen there.

The court says that the distinction is “a major crux” of the appeal. (Usage notes: “Major crux” is painfully redundant. And there is only one crux.) That might be right if jurisdiction were proper under one analysis but not the other. All the court really means is that TPG argued the case in those terms.

Personal jurisdiction cases tend to get this sort of over-analyzed, death-by-a-thousand-citations treatment. Judging by the facts in the opinion, it wasn’t actually a very hard case. But this is one to throw into your bag of cites for when you next have the issue.

Saguaro Highlands v. Biltis (CA1 5/6/10)

Another in our why-was-this-published series.

Defendants put up a swing set in their backyard without asking the Homeowners Association’s approval. When it sued them they moved to enforce the arbitration agreement in the CC&Rs. The trial court denied it, finding that the provision was intended to apply to claims with the builder, not to this sort of dispute with the HOA.

After reviewing the language of the CC&Rs, the Court of Appeals agrees. No cases are cited except a few at the beginning, for basic, black-letter propositions about arbitration.

(The only interesting question here might have been whether the arbitration provision gave the arbitrator enough power that Defendants should have proceeded with arbitration themselves, and moved for a stay, rather than to move to compel it, which the arbitration types think can be a shoot-yourself-in-the-foot maneuver. The opinion doesn’t tell us enough to answer it.)

Those of you with swing-set cases in Saguaro Highlands should pay close attention.