Justia Business Law Opinion Summaries

A company that services and repairs surgical instruments entered into an arrangement to reset the use counters on certain robotic surgical instrument components, allowing hospitals to reuse these components beyond the manufacturer’s programmed limits. The manufacturer of the surgical robots and the associated instruments, which holds more than 99% of the market for the robots and 100% of the market for the instruments, responded by warning hospitals that the use of unauthorized repairs would violate their agreements and that such use could result in the manufacturer refusing service calls. Following these warnings, all hospitals ceased using the servicer’s offerings.The servicer filed suit in the United States District Court for the Northern District of California, alleging that the manufacturer engaged in unlawful tying, exclusive dealing, monopolization, and attempted monopolization under the Sherman Act. The dispute at trial centered on the proper standard for defining a relevant antitrust market. The district court instructed the jury that the servicer was required to prove the so-called “Kodak/Epic factors” to establish the existence of a single-brand aftermarket. The servicer conceded it had not presented evidence on these factors and stipulated to judgment in favor of the manufacturer.On appeal, the United States Court of Appeals for the Ninth Circuit addressed whether the district court erred in requiring proof of the Kodak/Epic factors. The Ninth Circuit held that these factors apply only when a plaintiff cannot show the defendant possesses market power in the foremarket and instead relies solely on aftermarket power. Because the servicer presented evidence that the manufacturer had near-total market power in both the foremarket (surgical robots) and the aftermarket (robotic instruments), proof of the Kodak/Epic factors was not required. The court further held that there was sufficient evidence supporting the servicer’s claims and reversed the district court’s judgment, remanding for further proceedings. View "SURGICAL INSTRUMENT SERVICE COMPANY, INC. V. INTUITIVE SURGICAL, INC." on Justia Law

A technology-focused real estate brokerage entered the Utah residential property market in 2015, offering lower commissions to disrupt traditional pricing structures. Initially, the company achieved significant success, becoming one of the largest brokerages by market share in Utah. However, it alleged that its growth was stymied by an organized boycott from local real estate brokers and agents who, dissatisfied with the lower commissions it offered, began “steering” clients away from its listings. The brokerage attributed this behavior to rules set by a national real estate trade association, which it claimed enabled brokers to filter and avoid displaying properties based on commission rates.The company filed suit in 2024 in the United States District Court for the District of Utah, asserting violations of the Sherman Antitrust Act, the Utah Antitrust Act, and tortious interference with economic relations. The defendants—comprised of the national association and several large brokerages—moved to dismiss the case, arguing that the claims were time-barred under applicable statutes of limitations and that the plaintiff had not sufficiently alleged an antitrust injury. The district court granted the motion, holding that the claims were untimely and that the plaintiff failed to demonstrate both antitrust injury and intentional interference with business relationships.On appeal, the United States Court of Appeals for the Tenth Circuit affirmed the district court’s dismissal. The court ruled that the antitrust claims were time-barred because the challenged rules had been adopted more than four years before the suit was filed and the plaintiff was not entitled to the continuing conspiracy exception. The court found that the rules themselves did not plausibly constitute a conspiracy to exclude competitors, and actions by unidentified brokers did not extend the limitations period. As a result, the case could not proceed. View "Homie Technology v. National Association of Realtors" on Justia Law

In this case, the plaintiff alleged that he was sexually assaulted by a Catholic priest in 1968, when he was nine years old and attended St. Mary’s Catholic School and Church in Moscow, Idaho, which are part of the Roman Catholic Diocese of Boise. The priest, who died in 1993, allegedly abused the plaintiff while babysitting him at the plaintiff’s home. The plaintiff did not disclose the abuse for over fifty years, first telling his therapist in 2019. In 2021, he filed suit against the Diocese and St. Mary’s, asserting a claim for constructive fraud. He alleged that the Diocese presented priests as trustworthy spiritual authorities while concealing known dangers of pedophilic priests, which he claimed created a power dynamic that enabled the abuse.The case was heard in the District Court of the Second Judicial District of Idaho, Latah County. The Diocese denied the allegations and moved for summary judgment, arguing that the plaintiff could not establish the elements of constructive fraud. The district court granted summary judgment to the Diocese, finding that the plaintiff had not shown a relationship of trust and confidence beyond that of a general parishioner and that a finding to the contrary would require improper inquiry into church doctrine. The district court also held that there was no evidence the Diocese had knowledge of the priest’s alleged misconduct or of pedophilic priests in the Diocese at the relevant time.On appeal, the Supreme Court of the State of Idaho affirmed the district court’s decision. The Idaho Supreme Court held that the plaintiff failed to establish a relationship of trust and confidence necessary for a constructive fraud claim and that there was no evidence the Diocese made a false representation or omission regarding known dangers. The court found summary judgment appropriate and did not reach constitutional or alternative grounds raised below. View "LERIGET v. THE ROMAN CATHOLIC DIOCESE OF BOISE" on Justia Law

The petitioner, a former project manager at a large corporation, raised internal compliance concerns in 2018. In April 2019, he was notified that he would be subject to a reduction in force and laid off, effective June 21, 2019. He subsequently filed several internal complaints alleging that his layoff and the company’s refusal to rehire him for numerous positions were retaliatory acts in response to his whistleblowing. After his layoff, he was placed on short-term disability and given a period during which he could apply for other positions within the company, but his applications were unsuccessful.Following these events, the petitioner filed a whistleblower-retaliation complaint under the Sarbanes–Oxley Act (SOX) with the Occupational Safety and Health Administration in December 2020. OSHA dismissed the complaint as untimely. The petitioner then sought review before an administrative law judge (ALJ), who held a hearing and dismissed the claims as untimely, also finding that equitable tolling was not warranted. The petitioner appealed, and the Administrative Review Board (ARB) affirmed the ALJ’s dismissal.On review, the United States Court of Appeals for the Second Circuit determined that the ARB did not err in finding the claims untimely. The court held that the SOX 180-day filing window begins when the employee is notified of the adverse action or when the refusal to rehire becomes apparent, not the last date of employment or the date of final application rejection. The court also found no basis for equitable tolling, as the petitioner knew or should have known of the alleged retaliation well before the statutory deadline. Accordingly, the Second Circuit denied the petition for review. View "Mehrotra v. U.S. Dep't of Lab." on Justia Law

The case involves civil actions brought by the Securities and Exchange Commission (SEC) against Adam P. Rogas, arising from his fraudulent conduct between January 2018 and June 2020 while serving as CEO of NS8, Inc., a technology company. Rogas falsified NS8’s bank statements to inflate revenue and customer numbers, which were then used in financial statements provided to investors. This deception enabled NS8 to raise approximately $149 million in securities offerings, with Rogas personally profiting over $17.5 million. Despite internal whistleblower reports and federal subpoenas, Rogas continued his fraudulent activities until his resignation in September 2020.After the fraud was uncovered, the SEC initiated a civil action in the United States District Court for the Southern District of New York, obtaining a temporary restraining order and subsequent asset freeze covering Rogas’s assets, including funds held for his benefit. Rogas was also criminally prosecuted and convicted of securities fraud. In the civil proceeding, an interim consent judgment was entered, holding Rogas liable for disgorgement and permanently enjoining him from violating securities laws. Rogas and his attorneys at Pillsbury Winthrop Shaw Pittman LLP (Pillsbury) disputed the application of the asset freeze to a $4 million retainer Pillsbury received from Rogas.The United States Court of Appeals for the Second Circuit reviewed two appeals: Rogas’s challenge to a lifetime bar from serving as an officer or director of a public company, and Rogas and Pillsbury’s challenge to the asset freeze covering the retainer. The Court affirmed both district court orders, holding that the lifetime bar was warranted given Rogas’s egregious, systematic fraud and likelihood of recidivism, and that Pillsbury was required to turn over the retainer funds, as they were held for Rogas’s benefit and covered by the asset freeze. View "SEC v. Rogas" on Justia Law

The dispute centers on a closely held pharmaceutical company owned by members of the Evenstad family. In 2017, the family sold part of the business and reorganized the remaining assets into a new entity, ACOVA, Inc. Serene Warren, a beneficial owner of shares through family trusts, alleged that her interests were unfairly prejudiced during this process and subsequent redemption of shares. She sought a buyout of her interests in ACOVA under Minnesota Statutes section 302A.751, which provides relief in actions by shareholders against a corporation.The case began in Hennepin County District Court, where Warren filed multiple claims against ACOVA, her family members, and the family trustee. After a lengthy trial, the district court found unfairly prejudicial conduct by the respondents and ordered redemption payments to Warren’s trusts, along with final distributions to shareholders. Respondents later asserted that Warren lacked “statutory standing” under section 302A.751, arguing she was a beneficial owner, not a shareholder. The district court declined to address this argument, reasoning that the relief granted did not implicate the cited precedent.On appeal, the Minnesota Court of Appeals concluded that Warren lacked standing to pursue claims under section 302A.751 as she was not a shareholder, and held that this issue could not be waived because standing is jurisdictional. The court reversed the district court’s award of relief under section 302A.751 and remanded for further proceedings on alternative grounds for Warren’s standing.The Minnesota Supreme Court reviewed whether Warren’s status as a beneficial owner affected her standing and whether the respondents’ challenge was waived. The Court held that Warren had injury-in-fact standing, and her status as a shareholder only affected the legal sufficiency of her claims, which could be forfeited by respondents if not timely raised. The Court concluded respondents had forfeited their challenge, reversed the Court of Appeals’ decision, and remanded for further proceedings. View "Warren vs. ACOVA, Inc." on Justia Law

The case concerns two individuals who owned a car loan business in Virginia. Their business, Total Auto Financing, LLC, borrowed significant sums from American Credit Acceptance, LLC, with the loans personally guaranteed by the owners. After a series of renewals and a final short-term extension with restrictive terms, Total Auto defaulted on its debt. Following the default, American Credit replaced Total Auto as the servicer of its loan portfolio with Peritus Portfolio Services II, LLC. The new servicer’s management coincided with a sharp decline in the value and performance of the loan portfolio. The business was eventually forced into bankruptcy, and its main asset was sold at auction for much less than its previous value, leaving the owners personally liable for a large deficiency due to their guarantees.After the bankruptcy filing, the owners, acting in their personal capacities, filed complaints against American Credit and the new servicer (and related parties), alleging a range of claims including breach of fiduciary duty, negligence, unjust enrichment, conspiracy, and others. The United States Bankruptcy Court for the Eastern District of Virginia dismissed both complaints, finding that the claims belonged to the LLC, not the individual owners. The United States District Court for the Eastern District of Virginia affirmed the dismissals.The United States Court of Appeals for the Fourth Circuit reviewed the case de novo. It held that the principle determining who owns a claim—whether the business or its equity holders—means that owners cannot personally sue for injuries suffered by the business, even if they are financially harmed as a result. The court concluded that all claims asserted were either direct claims belonging to the LLC or failed to allege a personal injury distinct from the LLC’s injury. The Fourth Circuit affirmed the district court’s judgment, holding that the individual owners could not bring these claims in their own names. View "Bayramov v. American Credit Acceptance" on Justia Law

In 2018, BAPTKO, Inc., wholly owned by Robert Kupper, agreed to sell two car dealerships in North Dakota to Foundation Automotive Corp. The agreement included provisions regarding inventory management prior to closing, contingent earnout payments based on dealership performance, and an attorney’s fees clause for prevailing parties in disputes. Foundation Automotive Corp. later assigned its interests to two LLCs connected to each dealership. After the sale, relations deteriorated: the LLCs sued Kupper and related entities for breach of non-compete and tortious interference, while BAPTKO counterclaimed for unpaid earnout payments, asserting the performance targets had been met.The United States District Court for the District of North Dakota consolidated the actions. It granted partial summary judgment for the Kupper parties, holding that the Foundation parties were obligated to make the earnout payments. The district court denied summary judgment on the amount of damages, finding factual disputes. The Foundation parties conceded nonpayment but argued they were excused due to BAPTKO’s alleged prior breaches, particularly regarding inventory management. The district court rejected this argument, determining that any such breaches did not excuse performance but might affect the damages offset. At trial, the jury found BAPTKO had not breached the agreement. The district court also awarded attorney’s fees to BAPTKO, including amounts spent defending Kupper personally, and denied the Foundation parties’ post-trial motions.The United States Court of Appeals for the Eighth Circuit affirmed the district court’s rulings. The appellate court held that the district court properly granted partial summary judgment, concluding that no reasonable jury could find BAPTKO’s alleged breaches defeated the object of the agreement. The appellate court also held that limitations on expert testimony and jury instructions were not abuses of discretion, and that the attorney’s fee award, including amounts for Kupper’s defense, was supported by the agreement and not an abuse of discretion. View "FA ND Chev, LLC v. BAPTKO, Inc." on Justia Law

A shareholder of a Delaware corporation with its principal place of business in San Francisco sought to inspect a range of corporate records pursuant to California Corporations Code sections 1600 and 1601. The shareholder, a California resident, held over 11% of the company’s voting shares and had not received financial records for several years. After his written demand for inspection was denied by the corporation, which cited a lack of applicability of California law, he petitioned the San Francisco Superior Court for a writ of mandate to compel inspection. Meanwhile, the corporation initiated a separate action in the Delaware Court of Chancery seeking a declaration that Delaware law governed inspection rights.The San Francisco Superior Court granted the corporation’s motion to stay the California action, relying on a forum selection clause in the corporation’s bylaws that designated the Delaware Court of Chancery as the exclusive forum for internal affairs claims. The trial court concluded that, under Delaware law, a shareholder’s inspection rights were matters of internal corporate affairs and thus fell within the scope of the forum selection clause. The court also determined that enforcing the clause did not violate California public policy, reasoning that Delaware law provided shareholders inspection rights for a proper purpose.The California Court of Appeal, First Appellate District, Division Two, reviewed the decision. It held that while the forum selection clause did apply to the shareholder’s claims, enforcement of the clause would violate California public policy because California law provides unwaivable statutory rights to inspect corporate records that cannot be limited by bylaws or articles. The court found the corporation had not met its burden to show that Delaware law would provide the same or greater rights as California. Accordingly, the appellate court reversed the stay order and remanded with directions to deny the corporation’s motion to stay. View "Salamon v. Orchid Global, Inc." on Justia Law

A retail brokerage firm and registered broker-dealer sought to challenge a regulation requiring broker-dealers to comply with certain reporting and record-retention requirements under the Bank Secrecy Act (BSA). The Securities and Exchange Commission (SEC) enforces compliance with these requirements pursuant to Exchange Act Rule 17a-8, which incorporates BSA obligations for brokers and dealers. The plaintiff argued that the SEC violated the Administrative Procedure Act (APA) by applying BSA requirements through Rule 17a-8 without promulgating its own regulations via notice-and-comment procedures. The plaintiff’s legal challenge was prompted by the SEC’s filing of an enforcement action in a New York federal court against a related entity, Alpine Securities Corporation, alleging numerous violations of Rule 17a-8.In the United States District Court for the District of Utah, the SEC moved to dismiss the plaintiff’s amended complaint, arguing that the plaintiff had not identified a reviewable “final agency action” as required by the APA. The district court agreed and dismissed the case, finding that the SEC’s decision to file an enforcement action was not a final agency action and that the plaintiff therefore lacked statutory standing. The court also noted, but did not reach, other grounds raised by the SEC, such as Article III standing and timeliness.The United States Court of Appeals for the Tenth Circuit reviewed the dismissal de novo. The court held that the SEC’s filing of a federal court enforcement action did not constitute final agency action under the APA, as it did not itself determine rights or obligations or give rise to legal consequences beyond the burden of litigation. The Tenth Circuit therefore affirmed the district court’s dismissal for lack of statutory standing. View "Scottsdale Capital Advisors v. USSEC" on Justia Law