May 13, 2013 United States Supreme Court opinions

Bowman v Monsanto Co.

Bowman used Monsanto Roundup resistant seed, purchased some intended for consumption and kept some of the resulting soybeans for future use. After Monsanto discovered this, it sued for patent infringement. The district court rejected Bowman’s patent exhaustion defense and granted judgment to Monsanto. The Federal Circuit affirmed. The Court unanimously affirmed. It held that Bowman made copies of the seed by planting it and patent exhaustion does not apply in these circumstances. Otherwise, patent protection would last only one sale rather than the 20year period Congress established.

Bullock v BankChampaign, NA

Bullock borrowed and paid back funds in a trust he was trustee of. Eventually, he filed bankruptcy and discharge was denied based on a finding of defalcation under 11 USC 523. The district court and 11th Circuit affirmed. Resolving a split of authority over the terms meaning, the Court unanimously vacated and remanded. It held that, consistent with Court’s 1878 treatment of “fraud’ in the bankruptcy code, intentional misconduct is required. The Court adopted a recklessness standard with gross deviations from standards of conduct and willful blindness as ways this recklessness can be proved. The Court noted that this definition is consistent with the meaning of embezzlement, larceny and fraud in the statute, allows defalcation to serve an independent purpose in the statute, and will provide uniformity. It also noted that courts using this standard have not encountered any particular difficulties in applying it. As the 11th Circuit used a different standard, the case was remanded to apply the correct standard.

Dan’s City Used Cars, Inc. v Pelkey

Dan’s towed Pelkey’s car at his landlord’s request. Pelkey’s attorney contact Dan’s before it was scheduled to sell the car to pay storage fees and offered to pay all the outstanding fees in order to get the car back. Dan’s disposed of the car without notice to Pelkey or his attorney. Pelkey sued in state court alleging violation of consumer protection and storage company statues. The New Hampshire Supreme Court held that 49 USC 14501(c) did nto preempt this suit. The Court, resolving a split of authority among state supreme courts affirmed. It held 14501(c) preempts state law in regards to the transportation of property and that all transportation activity had ceased by the time Dan’s disposed of the car. The Court reasoned that storage of vehicles is far removed form the state law regulation of ground transportation Congress declared was interfering with the free flow of commerce. Additionally, Dan’s argument would eliminate the sales process to obtain payment for its services which would be an absurd result.

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