Justia Business Law Opinion Summaries
Carnegie Technologies. v. Triller
Triller Inc., a social media company was being sold to a group of owners, including Carnegie Technologies, Inc. Prior to the sale, Triller executed a promissory note in favor of Carnegie and then immediately assigned the note to a group of “legacy” owners—including Carnegie—as part of the deal’s closing. After the note was defaulted, Carnegie sued Triller to collect the amounts due. Triller claimed that it had no obligations under the note because it had been assigned, resulting in novation. The district court rejected Triller's novation defense and Triller appealed.The Fifth Circuit affirmed, finding that the plain meaning of the agreement was silent on the extinction of any obligation between Triller and Carnegie. The laws of both California and Texas require clear evidence illustrating the parties' intent to replace an earlier agreement, and the agreement's merger clause precludes evidence of a contemporaneous or earlier agreement. Thus, the court held that Triller failed to raise an issue of material fact regarding whether its obligations under the note were extinguished. View "Carnegie Technologies. v. Triller" on Justia Law
GeoMetWatch, et al. v. Behunin, et al.
Plaintiff-Appellant GeoMetWatch Corporation, (“GMW”) appealed several district court orders granting summary judgment to Defendant-Appellees Alan Hall, Erin Housley, Brent Keller, Mark Hurst, Debbie Wade, Island Park Investments, and Tempus Global Data, Inc. (collectively, the “Hall Defendants”); Utah State University Advanced Weather Systems Foundation (“AWSF”) and Scott Jensen (collectively, the “AWSF Defendants”); and Utah State University Research Foundation (“USURF”), Robert Behunin, and Curtis Roberts (collectively, the “USURF Defendants”). The underlying suit arose from the collapse of a venture GMW entered into, created for the purpose of constructing and deploying a satellite-hosted weather sensor system. GMW alleged that all Defendants, led by Hall, conspired to drive GMW out of business on the eve of the venture by stealing its confidential and trade secret information, forming a competing business, and pulling out of agreements that Hall made with GMW. The district court granted summary judgment to the Hall Defendants primarily because of an overarching deficiency in GMW’s case, and in particular, a lack of non-speculative and sufficiently probative evidence of a causal nexus between Defendants’ alleged bad acts and GMW’s asserted damages. The court also granted summary judgment in favor of USURF, AWSF, and Roberts because they were allegedly immune from lawsuit under the Utah Governmental Immunity Act (“UGIA”). The district court granted summary judgment to Jensen and Behunin on all claims, concluding generally that GMW’s showing of causation also was deficient as to them. The court likewise awarded partial summary judgment to AWSF on its breach-of-contract counterclaim against GMW, effectively denying GMW’s cross-motion for summary judgment and affirmative defenses. GMW avers that the district court’s decisions were all made in error. Finding no error, however, the Tenth Circuit affirmed the grants of summary judgment. View "GeoMetWatch, et al. v. Behunin, et al." on Justia Law
Diep v. Trimaran Pollo Partners, L.L.C.
Kevin Diep, a stockholder of El Pollo Loco Holdings, Inc. (“EPL”), filed derivative claims against some members of EPL’s board of directors and management, as well as a private investment firm. The suit focused on two acts of alleged wrongdoing: concealing the negative impact of price increases during an earnings call and selling EPL stock while in possession of material non-public financial information. After the Delaware Court of Chancery denied the defendants’ motion to dismiss, the EPL board of directors designated a special litigation committee of the board (“SLC”) with exclusive authority to investigate the derivative claims and to take whatever action was in EPL’s best interests. After a lengthy investigation and extensive report, the SLC moved to terminate the derivative claims. All defendants but the private investment firm settled with Diep while the dismissal motion was pending. The Court of Chancery granted the SLC’s motion after applying the two-step review under Zapata Corp. v. Maldonado, 430 A.2d 779 (Del. 1981). Diep appealed, but after its review of the record, including the SLC’s report, and the Court of Chancery’s decision, the Delaware Supreme Court found that the court properly evaluated the SLC’s independence, investigation, and conclusions, and affirm the judgment of dismissal. View "Diep v. Trimaran Pollo Partners, L.L.C." on Justia Law
Turo v. Superior Court of the City and County of San Francisco
Turo, an Internet-based platform, allows vehicle owners to list, and customers to rent, specific passenger vehicles, processes reservations and payments and retains a percentage of the proceeds of each rental transaction. Turo provides a liability insurance policy through a third-party insurer. Turo competes with traditional on-airport and off-airport rental car companies and has used phrases like “rent” and “rental car” in its advertisements.The government sued Turo under the Unfair Competition Law (Bus. & Prof. Code 17200) for operating a rental car business at SFO without the required permit, engaging in prohibited curbside transactions at SFO, and using airport roadways and offering services on airport property without permission. Turo sought a declaratory judgment that it is not a rental car company and alleged that SFO had unlawfully demanded that Turo obtain an off-airport rental car company permit, and pay fees that SFO is authorized to charge only “rental car companies” under Government Code 50474.1(a).The court of appeal held that Turo is not a rental car company. That term is not defined in the Government Code but is defined in nearly identical language in three separate California statutes to mean a person or entity in the business of renting passenger vehicles to the public. A rental car company has control over the vehicles in its fleet in a way Turo does not View "Turo v. Superior Court of the City and County of San Francisco" on Justia Law
DM Trans, LLC v. Scott
Arrive and Tech, compete to help customers coordinate shipments. Six employees at Arrive departed for Tech despite restrictive covenants. Arrive sued the six individuals and Tech for injunctive relief under the Defend Trade Secrets Act, 18 U.S.C. 1836(b)(3), claiming irreparable harm because the individuals had breached their restrictive covenants and misappropriated trade secrets.The Seventh Circuit affirmed the denial of a preliminary injunction. Arrive has an adequate remedy at law for each of its claimed injuries, and faces no irreparable harm. Even if its argument were not forfeited, lost opportunities cannot support a showing of irreparable harm under these circumstances. The type of harm Arrive alleges would ultimately translate into lost profits, albeit indirectly, as in the end there is no economic value to opportunities that are not converted to sales. Given the balance of harms, the district court was within its discretion to deny injunctive relief. The court noted that the expiration of the time period of a former employee’s restrictive covenants does not render moot an employer’s request for an injunction to prevent the former employee from violating those restrictive covenants. A court could still grant Arrive effectual relief in the form of an injunction, even though certain individual defendants no longer work for Traffic Tech. View "DM Trans, LLC v. Scott" on Justia Law
JJD-HOV Elk Grove, LLC v. Jo-Ann Stores
The co-tenancy provision in the parties’ lease required a shopping center to have either: (1) three anchor tenants; or (2) 60 percent of the space leased, and, if it did not, Tenant-respondent JoAnn Stores, LLC was permitted to pay “Substitute Rent.” In 2018, Jo-Ann informed JJD it intended to start paying Substitute Rent effective July 1, 2018, because the co-tenancy provision was not met after two anchor tenants closed. Landlord-appellant JJD-HOV Elk Grove, LLC (JJD) responded that the co-tenancy provision was an unenforceable penalty under the holding in Grand Prospect Partners, L.P. v. Ross Dress for Less, Inc., 232 Cal.App.4th 1332 (2015). Jo-Ann contended Grand Prospect was distinguishable and the co-tenancy provision was enforceable. JJD and Jo-Ann filed competing complaints for declaratory relief and cross-motions for summary judgment. The trial court found the co-tenancy provision was enforceable, and thus granted Jo- Ann’s motion, denied JJD’s, and entered judgment accordingly. JJD appealed. The Court of Appeal declined to follow the rule announced in Grand Prospect here, and instead held that this case was governed by the general rule that courts enforce contracts as written. The Court therefore agreed with the trial court’s conclusion that the co-tenancy provision at issue in this case was enforceable, and affirmed the judgment. View "JJD-HOV Elk Grove, LLC v. Jo-Ann Stores" on Justia Law
Chan v. HEI Resources, Inc.
Between 2004 and 2008, respondents HEI Resources, Inc. (“HEI”), and the Heartland Development Corporation (“HEDC”), both corporations whose principal place of business is Colorado, formed, capitalized, and operated eight separate joint ventures related to the exploration and drilling of oil and gas wells. They solicited investors for what they called Los Ojuelos Joint Ventures by cold calling thousands of individuals from all over the country. Those who joined the ventures became parties to an agreement organized as a general partnership under the Texas Revised Partnership Act. In 2009, the Securities Commissioner for the State of Colorado (“the Commissioner”) initiated this enforcement action, alleging that respondents had violated the Colorado Securities Act (CSA) by, among other things, offering and selling unregistered securities to investors nationwide through the use of unlicensed sales representatives and in the guise of general partnerships. The Commissioner alleged that HEDC and HEI used the general partnership form deliberately in order to avoid regulation. Each of the Commissioner’s claims required that the Commissioner prove that the general partnerships were securities, so the trial was bifurcated to permit resolution of that threshold question. THe Colorado Supreme Court granted review in this matter to determine how courts should evaluate whether an interest in a “general partnership” is an “investment contract” under the CSA. The Court concluded that when faced with an assertion that an interest in a general partnership is an investment contract and thus within the CSA’s definition of a “security,” the plaintiff bears the burden of proving this claim by a preponderance of the evidence. No presumption beyond that burden applies. Accordingly, the Court reversed the court of appeals’ judgment on the question of whether courts should apply a “strong presumption,” and the Court remanded the case to the trial court for further findings. View "Chan v. HEI Resources, Inc." on Justia Law
Gabriel Invst v. Texas Alcoholic
In this case involving a dispute related to Texas liquor laws, the court previously certified the following two questions to the Supreme Court of Texas:1.) Does Texas Alcoholic Beverage Code Section 22.16(f) “continue to exempt a public corporation if that corporation sells some or all its shares to a non-exempt corporation, and, if so,2.) Whether the exempt corporation can acquire additional package store permits.The Supreme Court of Texas affirmatively answered both questions, resolving the appeal. Thus, the court reversed the district court's judgment and remanded for further proceedings. View "Gabriel Invst v. Texas Alcoholic" on Justia Law
Larew v. Hope Law Firm, P.L.C.
The Supreme Court affirmed in part and reversed in part the judgment entered by the district court in this action involving former co-counsel on a contingent-fee case, holding that the district court erred in finding insufficient evidence that the Hope Law Firm's new entity, Hope Law Firm & Associates, P.C., was a successor entity to Hope Law Firm, P.L.C.Lawyer James Larew had an of-counsel arrangement with the Hope Law Firm and agreed to work on a particular client's case in exchange for a portion of the firm's fee. Larew and the firm later ended the of-counsel arrangement, and Larew ultimately won a large judgment at trial. This litigation concerned the disposition of the fee. On appeal, Larew appealed the district court's determination on the terms of an implied-in-fact contract, quantum meruit calculation, successor liability, and other causes of action. The Supreme Court reversed the district court's ruling as to successor liability and otherwise affirmed, holding that Larew showed that Hope Law Firm & Associates, P.C. was a successor entity to Hope Law Firm, P.L.C. View "Larew v. Hope Law Firm, P.L.C." on Justia Law
Choice Homes v. Donner
The Supreme Court affirmed the judgment of the district court finding that the Nebraska Real Estate License Act, Neb. Rev. Stat. 81-885.01 to 81-885.55, barred Choice Homes, LLC's claims regarding a failed purchase agreement, holding that the district court did not err.Choice attempted to buy certain real estate from Owners in order to sell it to Buyers, but after the closing failed, Buyers purchased the property directly from Owners. Choice brought this action seeking damages related the purchase claims. Choice also asserted a defamation claim stemming from an online review posted by Buyers. The district court granted summary judgment against Choice. The Supreme Court affirmed, holding (1) the Act barred Choice's nondefamation claims; and (2) Choice was not defamed by the review at issue because it did not state or imply a false statement of fact. View "Choice Homes v. Donner" on Justia Law