Employers Council on Flexible Compensation v. Feltman (4th Cir.)

Filed: June 21, 2010
Per curiam opinion

Held: Statutory damages may be awarded for violations of the Anticybersquatting Consumer Protection Act (the “ACPA”).

Facts: The Employers Council on Flexible Compensation (“ECFC”) registered the domain name “ecfc.org.” The Employers Council on Flexible Compensation, Ltd. (“ECFC Ltd”), an entity whose owners were involved in litigation with ECFC, registered the domain name “ecfc.com” and maintained a website that was nearly identical to “ecfc.org.”

ECFC filed a lawsuit against ECFC Ltd alleging, among other things, violation of the ACPA. The trial court awarded $20,000 in statutory damages on the ACPA claim. ECFC Ltd appealed, arguing that the trial court abused its discretion in awarding the damages.

Analysis: On appeal, the Fourth Circuit held that the trial court did not abuse its discretion in awarding the damages. Under the ACPA, an owner of a protected mark may bring an action against any person who has a bad faith intent to profit from that mark and registers a domain name that is confusingly similar to that mark. The owner may recover statutory damages (instead of actual damages) in the amount of not less than $1,000 and not more than $100,000 per domain name, as the court considers just.

The Fourth Circuit discussed several factors that shape the analysis of whether statutory damages may be awarded. These factors include exploitation of a close working relationship with the owner of a protected mark and conducting insufficient research as to whether the owner abandoned its rights in the marks.

The full opinion is available in pdf.

Catalyst Health Solutions, Inc. v. Magill (Ct. of Appeals)

Filed: June 2, 2010

Opinion by Judge Lynne A. Battaglia

Held: Unvested stock options are not protected wages under the Maryland Wage Payment and Collection Law.

Facts: A salesman was entitled to certain unvested stock options granted by his employer. The salesman tendered his resignation with the employer, because he accepted employment with a competitor company. He signed a separation and release agreement, which terminated his employment, eleven days before his stock options were scheduled to vest.

The employer filed a declaratory judgment action to, among other things, determine whether the employee had any claim with respect to the stock options. The trial judge entered judgment in favor of the employee in the amount of almost $850,000, stating that the employer granted the stock options for goals already achieved by the employee (even though the options had not vested).

Analysis: The Court of Appeals reversed. The Wage Payment and Collection Law (the “Act”) requires that employers pay all wages to employees for work performed before termination of employment. Maryland case law makes clear that the Act only protects wages if all conditions precedent to earning the wages have been satisfied. In the case at hand, a condition to earning the stock options was employment for a specific duration. Because the employee did not satisfy the condition, the Act did not protect the unvested stock options.

The full opinion is available in pdf.

Potomac Group West, Inc. v. Potomac Insurance Marketing Group, Inc. (Cir. Ct. Mont. Cnty)

Filed: April 28, 2010
Opinion by: Durke G. Thompson

Held: A trial court has discretion to allow a judgment creditor holding funds garnished to satisfy a judgment to retain the funds pending a retrial, even though the judgment was vacated on appeal.

Facts: A judgment creditor obtained a large award against a judgment debtor for fees and costs following a trial. The judgment creditor then garnished funds belonging to the judgment debtor while an appeal of the judgment was pending. The Court of Special Appeals subsequently reversed part of the judgment and vacated the award of fees and costs. The Court reasoned that the trial court should re-examine the issue of fees and costs after a trial on the remand issues.

The judgment debtor moved for release of the attached sums. He argued that, with no judgment, the attachments made to satisfy the judgment are void. The judgment debtor also argued that holding the sums would deprive him of property without due process of law.

The judgment creditor argued that the attachments in place could continue as an attachment before judgment on the basis that the judgment debtor was a non-resident and had committed fraud. The judgment creditor also argued that, if the sums were returned, they would never again be available for attachment. The judgment creditor emphasized that it was likely to prevail on the merits in the retrial, and, in any case, the economic consequence of the remanded portion of the case was dwarfed by the already-decided portion of the case. Therefore, the result of the overall case, even if the remaining portion were adjudicated in favor of the judgment debtor, would warrant an award of fees in excess of the amounts attached.

Analysis: The court agreed that the sums, if returned to the judgment debtor, would likely be dissipated. The court also agreed that the judgment creditor was likely to be entitled eventually to collect the sums based on the issues already decided and not appealed.

The court found that the judgment debtor was a non-resident of Maryland. Based on this, the court held that it had discretion to issue an attachment before judgment. The court opined that failing to preserve the status quo would result in harm or the ultimate loss of the monies attached. Because the monies were being held by the judgment creditor in escrow, the court found it "difficult to see why they should be released back to the [judgment debtor] to the presumed prejudice of the [judgment creditor]."

The court acknowledged that the judgment debtor made a powerful argument about due process. Nonetheless, the court opined that the argument did not withstand the foregoing logic and the express language of Maryland Rule 2-643 (c) which states, “Upon motion of the judgment debtor, the court may release some or all of the property from a levy if it finds that (1) the judgment has been vacated. . . ."

The court noted that the quoted language of the rule is discretionary in form and allowed a denial of the motion. The language of the rule drafters implies that an attachment may be maintained even though the underlying judgment is vacated. Gracefully acknowledging the precarious footing afforded by the facts, the court admitted, "It is upon this thin ice of logic and inference that this Court rests its decision and denies the Motion to Release Garnished Funds . . .."

The full opinion is available in PDF.