Northern California Daily Digest

In Ignacio v. IRS, "Tevis R. Ignacio, also known as John Jacob Jingleheimer Schmidt [I know, that's my name too], proceeding pro se, filed a complaint" alleging the defendant's "abuse of power" for charging him penalties and interest for filing a fraudulent tax return.  Judge Jeremy Fogel dismissed the claim without prejudice for failure to state a claim upon which relief can be granted.

Fortinet v. Palo Alto Networks is a patent infringement case.  Fortinet filed a declaratory judgment action seeking to declare it was not infringing on Palo Alto's patent for managing communication.  The order seems to combine a Markman hearing and a summary judgment hearing where the court interprets the claims and makes a determination on infringement.  Judge Ronald M. Whyte interpreted the patent to cover "a communication [with] an unknown destination." Fortinet claims and Palo Alto does not dispute that Fortinent's systems do not know how to route a communication with an unspecified destination.  Since the claims do not cover a known destination there is no infringement.  Judge Whyte granted summary judgment for Fortinet.

In re Bare Escentuals Security Litigation is a class action securities case where the plaintiffs accuse Bare Escentuals (along with its officers and directors) of making a series of misstatements about its products profitability and "cannibalizing" profitable channels. Additionally, Bare Escentuals engaged in the "club" sales practice of billing many consumers monthly for products delivered monthly.  Consumers asked it to take the products back and refund their money resulting in a sales adjustment of $9M.  This blog has covered the difficulties of pleading securities fraud.  Here, the plaintiffs did not do themselves any favors by failing to respond to the company's assertion that it did not make any false statements.

In opposition, however, plaintiffs do not substantively respond to the majority of defendants' arguments. Rather, plaintiffs merely counter that it would be "impossible to meaningfully summarize the 100+ page complaint here in order to outline every class period misstatement." See Op. Br. at 10-16. By failing to at least meaningfully summarize and combat the various categories of statements highlighted by defendants, however, plaintiffs have essentially abdicated their responsibility to rebut defendants' dismissal arguments, and conceded the point.

Judge Phyllis J. Hamilton dismissed the case with leave to amend.

Jordan v. Paul Financial is a class action Truth in Lending Act action about payment Option Adjustable Rate Mortgages.  As this blog has explained before, these products are a frequent subject of litigation.  Royal Bank of Scotland (RBS) purchased the mortgages and Judge Susan Illston dismissed RBS from the lawsuit as the statute of limitations had expired on the TILA claims against it.  However, the plaintiffs did successfully plead a fraud claim against Paul Financial which will go into discovery.