Comments on Recent Cases: September 2023

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Part of my work involves reading court decisions to keep abreast of how judges decide the types of cases I handle. Below, I share some thoughts on recent decisions.

Court Grants Plaintiff Interest Even During a Delay in Bringing Lawsuit

In addition to awarding the amount due on a contract in litigation, a court can award interest that runs from the date the amount was due.  In many jurisdictions, the interest rate can be high.  In New York, for example, it is nine percent.  In Massachusetts, it is twelve percent.  Not only does this provide an incentive for defendants to avoid breaching contracts, but it also provides an incentive to resolve litigation quickly.

It may, however, provide an incentive for plaintiffs to delay so they can possibly receive more interest.  For example, in a recent case before the state appellate court in Manhattan, a bank waited a long time before suing to collect on a debt.  The defendant claimed that he should not have to pay interest for the length of the delay.  But the appeals court held that the interest still applied since the defendant did not show “unexplained lengthy delay of the action” or that the bank “committed any wrongdoing.”

Cases like this illustrate how difficult it is to avoid a high interest payment on a contract claim.

Court Holds No Personal Jurisdiction Over Principals of Company Subject to Jurisdiction

A court may decide it has personal jurisdiction over a company, but not the people who act on the company’s behalf.  This may sound strange, since a company is made up of people, but courts in litigation regularly distinguish between a business entity and its owners and workers.

For example, in a recent case before the state appellate court in Manhattan, the court affirmed the denial of a motion to dismiss claim against a Pennsylvania company that agreed to ship products to New York.  But it held that there was no personal jurisdiction in New York over the two principals of the company because all of their actions were out of state and their only contacts with the defendant were in their capacity as representatives of the company.

Decisions like this illustrate how courts treat individuals and business entities as distinct.

Court Dismisses Claim For Damages Arising From Use of Stolen Image to Promote Non-Infringing Artwork

It is not enough for a plaintiff to prove that she suffered damages.  She must also prove that the defendant’s conduct was the proximate cause of her damages.  And even if she articulates a connection between the defendant’s conduct and her damages, a court may find the link to be too tenuous.

For example, in a recent case before the federal district court in Manhattan, a plaintiff claimed the defendants’ art infringed on the copyright to his photograph.  He claimed that the defendants made over a million dollars in an art sale that featured the stolen photograph, even though a lot of the art did not include the stolen image.  He argued the stolen image was used to promote the unrelated art.  But the court granted summary judgment and did not let the claims arising from the unrelated art go to trial since the infringement did not involve the unrelated art.

Cases like this illustrate the standards by which plaintiffs must connect misconduct to damages.

Plaintiff Fails to Meet Test for Single Employer Doctrine

In employment discrimination cases, a plaintiff may want to sue a different entity than the one that technically served as her employer.  It could be because the other entity has more money or, because of its size or location, is subject to stricter rules than the nominal employer.

In New York, a plaintiff can cite the “single employer doctrine” to argue that another entity was her employer in addition to the one that claims to be her employer.  A major component of this doctrine is that the other entity needs to have “centralized control” over the management of her work.

This issue arose in a recent case in the state appellate court in Brooklyn.  An employee of CBS Radio sued the parent company, CBS, for sexual discrimination.  The court dismissed the case against CBS because there was no evidence that CBS actually managed her employment, even though the plaintiff generally alleged that it did.

Cases like this illustrate the standards employees need to meet when invoking the single employer doctrine.