652 F.3d 1145
9th Cir.2011Background
- M.C. Mojave Construction, operated by Partington with a Nevada B-2 license but no Chapter 645D inspection license, inspected homes in a Del Webb Nevada development and arranged payment through Chapter 40 claims.
- Wilson ran the Chapter 40 Claims Division for Mojave; neither held an inspector or contractor license. The division sought damages for construction defects under NRS 40.647.
- Mojave advertised inspections as free and affiliated with the builder; it prepared inspection reports used to support Chapter 40 claims and arranged for law firms to engage homeowners.
- Engagement letters and payments to Mojave were tied to homeowners obtaining repairs through Del Webb; the contracts allowed Mojave to recover fees from the builder if homeowners could not pay.
- Del Webb sued Mojave and Wilson in federal court, seeking damages and an injunction; the district court found licensing violations, champerty, deception in advertising, and interference with Del Webb’s warranties, issuing a broad injunction.
- The district court’s injunction barred soliciting or performing inspections in Del Webb developments by ‘illegal, unlicensed and false practices,’ including misrepresentations about licensing and Del Webb affiliation.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Vagueness of the general injunction | Del Webb | Mojave | General prohibition vacated; severed from specific prohibitions |
| Whether Mojave could misrepresent licensing | Del Webb | Mojave | Chapter 645D license required; misrepresentation barred |
| Standing of Del Webb to challenge practices | Del Webb | Mojave | Del Webb has standing to challenge consumer-fraud-like practices |
| Champerty/maintenance as basis for injunctive relief | Del Webb | Mojave | Champerty/maintenance not recognized as a Tort under Nevada law to justify the injunction; injunction affirmed only in part on other grounds |
Key Cases Cited
- Reno Air Racing Ass'n, Inc. v. McCord, 452 F.3d 1126 (9th Cir. 2006) (specificity required in injunctions to avoid vagueness)
- Schmidt v. Lessard, 414 U.S. 473 (U.S. Supreme Court 1974) (Rule 65(d) specificity concerns and notice)
- Prosky v. Clark, 109 P. 793 (Nev. 1910) (champerty defense limitations in Nevada; narrow relief only)
- Gruber v. Baker, 23 P. 858 (Nev. 1890) (early recognition that champerty may be limited in modern context)
- Lum v. Stinnett, 488 P.2d 347 (Nev. 1971) (limitations and scope of champerty discussed in Nevada context)