In this patent and trade-secret dispute between Safe Haven Wildlife Removal and Property Management Experts and Meridian Wildlife Services, the defendant tried to raise the stakes by inserting a number of business torts (including breach of fiduciary duty, tortious interference with contract and business expectancies, and business conspiracy) but the court dismissed these claims as time-barred and ordered that the case proceed only on the patent and trade-secret claims.

Those of you preparing for the Great Backyard Bird Count (which starts tomorrow!) and who spend much of your leisure time doing everything in your power to attract birds to your property may be surprised to hear that “bird removal” is big business. The plaintiff in this case, Safe Haven, “specializes in the safe, effective, and humane bird and wildlife removal solutions for facilities.” (See para. 19 of its Amended Complaint). Meridian, the defendant, describes itself as “an innovator and industry leader in [bird removal and wildlife management] services with extensive experience assisting commercial clients throughout the United States with interior bird removal, exterior bird population reduction, wildlife relocation, nest removal and full facility inspection services.” (See para. 9 of Meridian’s Answer). I guess it’s safe to assume these companies won’t be participating in the popular annual birding event.

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Declaratory judgments are court decisions that clarify the legal relationship between parties and their rights in a situation. Unlike traditional judgments, which might involve the awarding of damages or the enforcement of rights, declaratory judgments simply declare the rights, duties, or obligations of each party. (See Virginia Code § 8.01-184, giving the courts the power to make “binding adjudications of right” in “cases of actual controversy”). This type of judgment is often sought when a party seeks an official determination of the legal status or interpretation of a law or contractual obligation. As the Fairfax Circuit Court recently held, however, declaratory judgments are not appropriate in all circumstances. They are designed to help parties understand legal rights and obligations without engaging in full-blown litigation. The key aspect of declaratory judgments is that they are preventive and aim to resolve legal uncertainty rather than to provide a remedy for a wrong already done.

Prior to the Declaratory Judgment Act (Virginia Code §§ 8.01-184 to -191), the common law usually precluded judicial resolution of contractual disputes unless they encompassed a fully formed, prima facie claim (consisting of an enforceable contract, an unexcused breach, and resulting damages). The Declaratory Judgment Act introduced a nuanced judicial approach, creating an intermediary tier between fully matured claims and those deemed insufficient under traditional common law. (See Ames Ctr., L.C. v. Soho Arlington, LLC, 301 Va. 246, 253 (2022)). Declaratory judgments cannot be used as a means of issuing advisory opinions or deciding moot or speculative matters, but they can be used to adjudicate actual conflicting assertions of rights, even absent immediate consequential harm. The Act’s purpose “is to afford relief from the uncertainty and insecurity attendant upon controversies over legal rights, without requiring one of the parties interested so to invade the rights asserted by the other as to entitle him to maintain an ordinary action therefor.” (See Va. Code 8.01-191).

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In Virginia, a defendant can file a “plea in bar” if a single issue or state of facts creates a bar to the plaintiff’s recovery. A defendant who raises a plea in bar has the burden of proof to prove that particular issue or state of facts. An evidentiary hearing–with or without a jury–may be permitted to allow the defendant to present that evidence. (See Hawthorne v. VanMarter, 279 Va. 566, 577–78 (2010)). Virginia practice previously allowed defendants to file a “plea of the general issue,” which was a general denial of the plaintiff’s whole declaration or an attack upon some fact the plaintiff would be required to prove in order to prevail on the merits. Such pleas are no longer permitted. (See Va. Sup. Ct. R. 3:8(a)). If a defendant files a pleading labeled as a “plea in bar” but which essentially just challenges the plaintiff to prove his case at trial, the court may find that the issue should be resolved at trial rather than at the outset of the case.

The most common applications of the plea in bar are to raise affirmative defenses like the statute of limitations, statute of frauds, res judicata, collateral estoppel, and accord and satisfaction. Another common application, however, has recently come under attack as potentially invalid as a disguised plea of the general issue. For the past ten years, Virginia courts have seen a lot of pleas in bar being raised by litigants defending against non-compete and non-solicitation clauses. Restrictive covenants like these are enforceable in Virginia only if “narrowly drawn to protect the employer’s legitimate business interest,…not unduly burdensome on the employee’s ability to earn a living, and…not against public policy.” (See Home Paramount Pest Control Companies, Inc. v. Shaffer, 282 Va. 412, 415 (2011)). Defendants used to try to get out of their non-competes by filing demurrers, claiming their noncompetes were unenforceable as a matter of law. Since the Virginia Supreme Court’s decision in Assurance Data, Inc. v. Malyevac, 286 Va. 137 (2013), defendants have been asserting pleas in bar instead. This is because the court held in Assurance Data that a factual inquiry was necessary to determine reasonableness. Defendants can present evidence on a plea in bar; they cannot on a demurrer.

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The right to have disputed facts determined by a jury, rather than a judge, is protected by both the United States Constitution as well as the Virginia Constitution. Litigants retain the option, however, of submitting their dispute to a judge, in what we call a “bench trial.” The court will schedule a jury trial if either party requests one. But should you? There’s no one-size-fits-all answer to this question. Some cases are better suited to juries and others better suited to experienced judges. Below are some of the relevant considerations as you decide whether to seek a jury in your case.

1. Does the case have emotional appeal?

Juries aren’t supposed to make decisions based on passion, prejudice, or gut feelings, but they often do. Perhaps the law is not entirely on your side but you have a very sympathetic case. Although judges are human, too, judges are more likely than juries to be able to dispassionately apply the law and not rely on raw emotion as a basis for making a decision. Juries may do what they feel is right regardless of what the jury instructions direct them to do based on the applicable law.

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So you got sued for breach of contract. There’s no need to panic. Your legal rights may include a number of valid defenses to the claim, some of which may not be readily obvious. Knowing when to assert these defenses can make the difference between losing a large monetary judgment and getting the case dismissed at the outset. Before you write the plaintiff a check in whatever amount is being demanded in the lawsuit, consider whether one or more of these contract defenses may apply to your situation. There may be perfectly valid reasons why you don’t actually owe that money.

Void or Voidable Contract

A void contract is considered a nullity and has no legal effect. A contract made in violation of a Virginia statute, for example, would be illegal and therefore void. For example, contracts for the payment of interest on a loan will be deemed void if the interest rate is unlawfully high. (See Va. Code § 6.2-303). A plaintiff who brings an action based on a void contract is not entitled to recover damages, even if that contract was breached. A void contract can’t be validated or ratified. A voidable contract is one that starts off as a valid, legal contract, but which permits one or both of the parties to disaffirm or otherwise avoid the obligations created by the contract.

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Due to rules governing subject-matter jurisdiction, plaintiffs often don’t have a choice between filing their lawsuit in Virginia state court or federal court. Federal courts possess exclusive jurisdiction over certain types of claims and often lack jurisdiction to hear cases involving claims arising under state law. In many situations, though, plaintiffs have the option to pursue their claims in either state court or federal court. Neither forum is necessarily more advantageous than the other. To help prospective litigants weigh the pros and cons of state court vs. federal court, I’ve summarized some of the key differences below.

1. For fast-paced litigation, choose federal court.

The Eastern District of Virginia is known around the country as the “Rocket Docket” due to how quickly the proceedings move. The average Rocket Docket case is scheduled for trial just 8-10 months after the filing of the complaint. By comparison, trials in Fairfax Circuit Court typically are scheduled close to a year after filing. Litigants in federal court may only have 90 days in which to complete discovery, something unheard of in state court. Continuances are rarely granted in either court, but are even more difficult to get in federal court, where you should just assume the trial date is carved in stone. Basically, if you file your lawsuit in federal court, at least up here in Northern Virginia, expect a whirlwind of litigation from beginning to end.  This may be overwhelming to some, but desirable to others. Continue reading

Noncompete agreements generally prohibit former employees from joining a competing organization for some specified length of time after the employment relationship ends. Some agreements restrict competitive activity even before the relationship ends. In the absence of such an agreement, many employees might assume that they are free to start competing with their employers at any time they wish. This isn’t necessarily true. Under Virginia law, employees owe a fiduciary duty of loyalty to their employer which prohibits competitive acts during employment. This duty exists irrespective of any contractual agreement. Employees may generally make certain arrangements during their employment to compete in the future (i.e., after they resign) but are prohibited from taking action that would cause competitive harm to the employer.

There are no precise rules regarding exactly what steps an employee can take to prepare for termination without actually engaging in direct competition. Each case is decided on its own facts. “This right, based on a policy of free competition, must be balanced with the importance of the integrity and fairness attaching to the relationship between employer and employee….Under certain circumstances, the exercise of the right may constitute a breach of fiduciary duty….Whether specific conduct taken prior to resignation breaches a fiduciary duty requires a case by case analysis.” (See Feddeman & Co. v. Langan Assoc., 260 Va. 35, 42 (2000)).

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In business litigation, it’s often necessary to determine whether the litigants are shareholders in a corporation. To bring a lawsuit against an officer or director of a corporation for breaching a fiduciary duty owed to the corporation, for example, the plaintiff must be a shareholder and bring the suit derivatively on behalf of the corporation. (See Va. Code. § 13.1-672.1). In small, closely held corporations, it can be unclear who the shareholders actually are. If an entire corporation is owned and managed by only two or three people, those people may not run the corporation with the same level of formality as a larger company. Board “meetings” may happen in line at Starbucks or not at all. Stock ledgers acquired during the formation of the business may not actually get used. Small corporations often aren’t good about documentation and record-keeping, so when the time comes to issue shares to their stockholders, they may not get around to actually issuing formal stock certificates. Sometimes the only evidence of stock ownership is in the form of a text message or email. This can be a problem when litigation arises because the parties may not agree on how many shares each shareholder owns or who the shareholders even are.

What’s important to note here is that while it’s always preferable to follow corporate formalities and maintain accurate records, shareholders don’t actually need to produce paper stock certificates to prove their status as the owner of corporate stock. Stock is intangible property: it represents ownership in a corporation but does not have a physical form. Stock certificates have physical form but stock certificates are not stock; they are merely evidence of stock ownership. In many cases, stock ownership can be proven without the existence of a stock certificate. Courts look to the totality of the circumstances.

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I wish I could help everyone who comes to me with a problem, but I can’t. People get scammed all the time, then want to hire a lawyer to sue the scammer for damages. Is that ever possible? Sure, but most scams these days occur online and are specifically designed to leave the victim without a remedy. Typically, the scammer communicates through technology that conceals his identity, making it impossible to locate his whereabouts to serve him with suit papers. If you are able to trace the scammer, he’s often found in a foreign country outside the jurisdiction of U.S. courts. Money sent to scammers is often wired to overseas accounts in irreversible transactions. In short, most scam victims will never be able to obtain justice, no matter how many high-priced lawyers are retained to seek it. The best way to protect yourself is to not get scammed in the first place. No one is immune from a clever scam but there are lots of tell-tale signs that everyone should know to minimize the likelihood of falling victim to one. So here I present the top ten ways to know when someone is trying to scam you.

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No employer likes to see a large number of its employees band together and leave en masse to form a competing business. A large number of employees leaving at once can lead to a loss of institutional knowledge and experience, not to mention customers and revenues. Mass departures hurt morale and can lead to increased costs for recruitment and training. A company’s reputation can be irreparably damaged once word gets out that a mass resignation has taken place, making it more difficult for the business to attract new talent. Depending on the circumstances, litigation against the former employees, as well as against the company that hired them, may or may not be warranted.

Possible legal claims include breach of fiduciary duty, breach of non-compete and/or non-solicitation agreement, tortious interference, business conspiracy, misappropriation of trade secrets, and more. Let’s take a quick look at how a Hampton Roads body-piercing business dealt with the sudden resignation of seven employees who went on to form their own body-piercing business in the same region. In the case of Chanah, Inc. v. Summers, currently pending in the Chesapeake Circuit Court, the plaintiff pursued a number of business torts against the departing employees. Most of the counts survived demurrer.

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