New Decisions from the Ninth Circuit, Arizona Court of Appeals

A 9th Circuit decision published earlier this week addressed the awarding of “just costs” in a case in which there was not a prevailing party.  In Otay Land Company v. United Enterprises, LTD, United filed a motion for summary judgment which was granted by the district court, dismissing federal environmental claims and declining jurisdiction over the state law claims.  United then submitted its costs, and the district court awarded costs for court reporter, witness, and service fees under 28 USC § 1920.  The 9th Circuit then vacated the judgment and remanded with an order to dismiss because the case was not yet ripe for judicial review.  The Court instructed the district court to determine whether United was entitled to costs under 28 USC § 1919 (under which a cost award does not turn on “prevailing party” status) and the district court again awarded costs to United.  The Court stated that, in determining “just costs” under 1919, the district court should consider “what is most fair and equitable under the totality of the circumstances” and that a two-step analysis is necessary – whether an award of costs is just and equitable, and, if so, the appropriate amount of costs.  The Court then went on to offer a non-exclusive list of factors to consider in determining the issue of whether the costs are just.  The Court determined that, though the district court’s award of costs could have been appropriate, the amount of costs was left to the district court’s discretion.  But since an award cannot be presumed because a party “prevailed” on a threshold ground, it remanded for the district court to consider the “just cost” issue under the analysis and factors laid out here.

The Arizona Court of Appeals recently published Best v. Miranda in which summary judgment was awarded to Miranda following Best’s pursuit of specific performance on an option contract to purchase property even though Best did not tender the full purchase price in accordance with the express terms of the contract (he also opened escrow, but did not deposit any funds into the escrow account).  Best also claimed that Miranda breached the covenant of good faith and fair dealing in failing to respond to Best’s two written notices indicating his intent to exercise the option.  The Court stated that option contracts are construed narrowly and “strictly according to the terms and conditions in the option.”  The option here contained no notice provision and stated plainly that the total purchase price was to be paid to Miranda by a specific date and time or else the option would expire.  Regarding Best’s claim that Miranda breached the duty of good faith and fair dealing, the Court held that the duty does not require a party to accept a purported exercise of an option to purchase that does not comply with the terms of the option contract.  Best further asserted that if his notice letters were insufficient, Miranda was required under Rest. 2d Contracts § 205 to alert him of deficiencies and allow a cure period.  The Court did not find any support in 205 for that argument.  The Court then affirmed the trial court’s grant of summary judgment.

Finally, a recent commentary on JURIST discussed the Supreme Court’s decision in AT&T Mobility v. Concepcion regarding pre-dispute arbitration agreements.  The full text can be found here.  Of note, the author points out that Senators Al Franken and Richard Blumenthal and Congressman Hank Johnson recently introduced the Arbitration Fairness Act of 2011. If passed by Congress and signed into law by President Obama, the act would invalidate all pre-dispute arbitration agreements. Therefore, all consumer, employment and civil rights arbitration agreements that are signed before a dispute arises would be invalid. Consumers and employees could still agree to arbitrate their claims after a dispute arises.  Previously in 2009 and 2007, Congressman Johnson introduced bills that contained language similar to the Arbitration Fairness Act.  Both efforts failed.  In a sign that perhaps this legislation will meet the same fate as its predecessors, Senators Franken and Blumenthal also introduced the Mobile Fairness Act of 2011 that applies only to arbitration agreements that involve wireless devices.

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