General

Court Resolves Discovery and Evidentiary Issues in Case Involving Construction at Arkansas State University

The Eastern District of Arkansas issued two decisions in a construction case involving work at Arkansas State University. Building Construction Enterprises, Inc. v. Meadows. BCE claims certain work was part of the contract; Meadows claims this work was not part of the contract.

Meadows submitted untimely discovery requests to BCE on June 26, 2007. BCE responded with blanket objections and claimed it did not have sufficient knowledge to admit or deny the requests for admission. Frustrated with both parties, the court ordered BCE to provide 125,000 pages of documents and to make a reasonable investigation into the matters addressed in the requests for admission. The court will decide later if the requests for admission should be deemed admitted. See 2007 WL 2570514 (E.D. Ark. 8/31/07).

BCE filed two motions in limine to exclude (1) parole evidence regarding the contract; and (2) statements by BCE’s on-site superintendents. The court denied both motions, finding the contract is ambiguous and that statements by BCE’s superintendents are admissions of BCE. See 2007 WL 2695493 (E.D. Ark. 9/10/07).

General

Arkansas Supreme Court Upholds Electronic Games Gambling Law

The law at issue is codified at A.C.A. § 23-113-101, et seq. This law sets forth procedures for permitting gambling on electronic games of skill. Any city or county that already has horse racing or greyhound racing can hold a local election. Presently only Oaklawn Jockey Club in Hot Springs and Southland Racing Corporation in West Memphis have such legal operations in Arkansas. The racetrack itself chooses whether the election is submitted to the city or county, but the racetrack must pay all expenses associated with the election. The Arkansas Racing Commission (ARC) determines what games qualify as electronic games of skill.

Plaintiffs are residents of Garland County but not of the city of Hot Springs. They challenged the law on three main grounds: (1) delegation of legislative authority to the racetracks; (2) delegation of legislative authority to the ARC; and (3) the law had no rational basis. The trial court rejected these arguments and held the law is constitutional. The supreme court agreed and affirmed.

General

Sometimes More is Less, 225-Page Securities Fraud Claim is Dismissed

McAdams and others filed suit against various directors and officers of UCAP, a mortgage lender and brokerage company, including Moore Stephens Frost. Plaintiffs claimed a conspiracy to defraud them of $10 million. The court dismissed much of the complaint in a prior order. McAdams v. McCord, 2007 WL 951829 (W.D. Ark. 3/27/07).

Plaintiffs filed an amended complaint seeking to meet the heightened pleading requirements of the Private Securities Litigation Reform Act (PSLRA). Although the amended complaint ballooned to 225 pages, the court found that the amended complaint failed to sufficiently state a claim under the PSLRA. The court dismissed the amended complaint except for a claim for breach of fiduciary duty against one of the individual directors.

General

U.S. Bank Not Liable for Railroad Bonds Issued in 1919

In 1974, Wilkins purchased a trunk at an estate sale. When he opened the trunk, he found bearer bonds with a face value of nearly $400,000. The bonds were secured by a mortgage and deed of trust which, because of various mergers throughout the years, eventually became the responsibility of U.S. Bank. The trust assets were liquidated in a bankruptcy proceeding in 1941. Wilkins brought various causes of action that U.S. Bank and its predecessors should have preserved the trust assets.

The court’s opinion turned on Wilkins’ actions. After discovering the bonds in 1974, he first contacted U.S. Bank’s predecessor in 1984. He called them a few times a year for 5 years. Then he filed this action in 2003. The court found that Wilkins could not maintain any of his causes of action and granted summary judgment to U.S. Bank.