Justia Business Law Opinion Summaries

George Russell, doing business as Carl's Country, appealed a circuit court order dismissing his declaratory-judgment action, pursuant to Rule 12(b)(6), Ala. R. Civ. P., because the action did not state a justiciable controversy. Carl's Country was a bar operated under a Class 1 lounge liquor license in Autauga County, issued by the Alabama Alcoholic Beverage Control Board (ABC Board). The bar was located in Autauga County, outside the corporate limits of the City of Prattville ("the City") but within the City's police jurisdiction. At the time of Russell's declaratory-judgment action, there was no no law or ordinance in effect authorizing the sale of draft beer in Autauga County. In 2013, the State legislature enacted a statute pertaining to the City's authority to regulate the sale and distribution of draft beer. In turn, the City enacted an ordinance allowing for on-premises consumption of draft beer sold by licensees of the ABC Board within the City's corporate limits and police jurisdiction. In May 2020, after the enactment of Ordinance, the sheriff of Autauga County ordered Russell to cease and desist selling draft beer at his bar; Russell did not comply. The ABC Board also contacted Russell's draft-beer distributors and ordered them to cease delivering draft beer to the bar. Thereafter, an attorney for the Autauga County Commission, an attorney for the ABC Board, and the "City of Prattville- Police Committee" discussed whether the City could enact an ordinance authorizing the City to regulate the sale and distribution of draft beer within its police jurisdiction in Autauga County. It was determined that the City did not have the authority to regulate the sale and distribution of draft beer in the portions of Autauga County outside the City's corporate limits because such authority was reserved for the local governing body of Autauga County, i.e., the County Commission, and not the City. Russell, acting pro se, filed suit seeking a declaration the City had the authority to enact an ordinance extending the sale of draft beer to its police jurisdiction and, specifically, a judgment declaring the legality of draft-beer sales at his bar. The Alabama Supreme Court affirmed, finding that Russell did not claim the ordinance at issue was either invalid or unreasonable. There was, therefore, no bona fide justiciable controversy to be settled between Russell and the defendants. View "Russell d/b/a Carl's Country v. Sedinger, et al." on Justia Law

In 2017, a third-party entity acquired Authentix Acquisition Company, Inc. (“Authentix”). The cash from the merger was distributed to the stockholders pursuant to a waterfall provision. The Authentix common stockholders received little to no consideration. A group of common stockholders filed a petition for appraisal to the Court of Chancery under Section 262 of the Delaware General Corporation Law (“DGCL”). Authentix moved to dismiss the petition, arguing that the petitioners had waived their appraisal rights under a stockholders agreement that bound the corporation and all of its stockholders. The Court of Chancery granted the motion to dismiss, holding that the petitioners had agreed to a clear provision requiring that they “refrain” from exercising their appraisal rights with respect to the merger. The court awarded the petitioners equitable interest on the merger consideration and declined to award Authentix pre-judgment interest under a fee-shifting provision. All parties appealed the Court of Chancery’s decisions. Pointing to Delaware’s "strong policy favoring private ordering," Authentix argued stockholders were free to set the terms that will govern their corporation so long as such alteration was not prohibited by statute or otherwise contrary to Delaware law. Authentix contended a waiver of the right to seek appraisal was not prohibited by the DGCL, and was not otherwise contrary to Delaware Law. "As a matter of public policy, there are certain fundamental features of a corporation that are essential to that entity’s identity and cannot be waived." Nonetheless, the Delaware Supreme Court determined the individual right of a stockholder to seek a judicial appraisal was not among those fundamental features that could not be waived. Accordingly, the Court held that Section 262 did not prohibit sophisticated and informed stockholders, who were represented by counsel and had bargaining power, from voluntarily agreeing to waive their appraisal rights in exchange for valuable consideration. Further, the Court found the Court of Chancery did not abuse its discretion by awarding the petitioners equitable interest on the merger consideration; nor did the court abuse its discretion by declining to award Authentix pre-judgment interest under a fee-shifting provision. Accordingly, the Court of Chancery’s judgment was affirmed. View "Manti Holdings, LLC et al. v. Authentix Acquisition Company, Inc." on Justia Law

The Supreme Court affirmed the judgment of the circuit court dismissing Defendants' 2013 motion to enforce a purported settlement agreement and to compel arbitration and dismissing Defendants' claim for unjust enrichment after a trial, holding that the circuit court did not err.Plaintiff brought suit against Defendants, his brothers, to dissolve their family partnership and asserting claims for breach of contract and breach of fiduciary duty. Defendants asserted multiple counterclaims based on Plaintiff's alleged misappropriation of partnership assets. This appeal concerned only the circuit court's denial of Defendants' motion to enforce the settlement agreement and to compel arbitration and the dismissal of Defendants' claim for unjust enrichment. The Supreme Court affirmed, holding that the circuit court (1) did not err in denying Defendants' motion to enforce the purported settlement agreement and to compel arbitration; and (2) did not err in denying Defendants relief on their claim for unjust enrichment. View "Paweltzki v. Paweltzki" on Justia Law

The Supreme Court reversed the judgment of the appellate court concluding that Conn. Gen. Stat. 14-55 was not repealed by a sequence of contradictory public acts relating to that statute, holding that section 14-55 has not been repealed.Plaintiff filed an administrative appeal challenging the decision of the Zoning Board of Appeals of the City of Stamford to grant a certificate of approval of the location for Defendants' used car dealership. The trial court denied the administrative appeal, but the appellate court reversed. At issue was whether the suitability analysis mandated by section 14-55 was still required in order to obtain a certificate of approval for the location of a used car dealership, despite subsequent revisions of the General Statutes listing that provision as having been repealed. The Supreme Court reversed, holding that the appellate court erred in concluding that section 14-55 had been repealed. View "One Elmcroft Stamford, LLC v. Zoning Board of Appeals" on Justia Law

SMI, a supermarket retailer, and XPO, a logistics company, both appeal the district court's orders and judgment in a breach of contract and tort dispute arising out of the parties' business relationship.The Eighth Circuit concluded that the parties' agreement bars SMI from recovering non-direct damages from XPO; the Limitation of Liability Provision contractually limits both parties' liability to each other, but does not exonerate them, and is therefore not contrary to Missouri public policy; the Limitation of Liability Provision does not violate Missouri public policy simply because it prevents SMI from recovering its mitigation damages; there was no error in the district court's determination at summary judgment that three categories of SMI's claimed damages were consequential damages; there was no error in granting judgment as a matter of law on SMI's negligence counterclaim where SMI has not provided sufficient evidence to show that XPO breached a duty of care other than its contractual duty under the agreement; there was no error in the district court's determination that two emails SMI sought to exclude were protected by the attorney-client privilege; and there was no error in awarding statutory prejudgment interest to XPO.In regard to XPO's arguments on appeal, the court concluded that there was no error in the district court's denial of judgment as a matter of law on SMI's breach of contract counterclaim, and there was no error in the district court's determination that XPO was not entitled to attorney's fees under the agreement. View "Jacobson Warehouse Co., Inc. v. Schnuck Markets, Inc." on Justia Law

When Seminole Nursing Home, Inc. failed to pay $61,916.19 in federal employment taxes due for 2013, the IRS provided notice to Seminole of its intent to issue a levy to collect these unpaid taxes plus penalties and interest. Seminole challenged the validity of a Tax Code regulation that restricts economic hardship to individual taxpayers who fail to pay delinquent taxes after notice and demand. Seminole contended the economic-hardship exception should be applied to all taxpayers, including corporations. The United States Tax Court rejected the contention on the ground that the regulation was a reasonable interpretation of an ambiguous statute. The Home appealed, but agreeing with the Tax Court, the Tenth Circuit Court of Appeals affirmed. View "Seminole Nursing Home v. Comm'r of Internal Revenue" on Justia Law

The San Antonio Symphony contracts to perform most of its shows at the Tobin Center. After the Tobin Center barred the Symphony’s musicians from distributing leaflets on the premises, the musicians’ union filed an unfair labor practices charge. The leaflets informed patrons attending a ballet performance that they would not hear a live symphony and encouraged them to insist on live music. The National Labor Relations Board revised its approach and concluded that a property owner has the right to exclude from its property off-duty contractor employees seeking access to the property to engage in Section 7 activity unless those employees work both regularly and exclusively on the property and the property owner fails to show that they have one or more reasonable non-trespassory alternative means to communicate their message.The D.C. Circuit remanded. In aiming to identify those contractor employees with a sufficiently strong connection to the property to warrant the grant of access rights, the Board’s approach was arbitrary, both as to the condition that contractor employees work “regularly” on the property and as to the condition that they also work “exclusively” on the property. On remand, the Board may decide whether to proceed with a version of the test it announced and sought to apply in this case or to develop a new test. View "Local 23, American Federation of Musicians v. National Labor Relations Board" on Justia Law

Swenberg sued Dmarcian, Draegen, and Groeneweg, alleging claims related to his ownership interest in and employment with the company. Dmarcian was incorporated in Delaware and, in 2017, registered with the California Secretary of State as a foreign corporation with its “principal executive office” in Burlingame. Groeneweg, who resides in the Netherlands, is alleged to be a chief executive of, and have an ownership interest in, “a company whose true name is unknown to Swenberg, but which was a European affiliate entity of” Dmarcian (Dmarcian EU). The complaint alleges on information and belief that Groeneweg is presently a shareholder or beneficial owner of Dmarcian.The trial court granted Groeneweg’s motion to quash service for lack of personal jurisdiction. The court of appeal reversed. By publicly presenting himself as a leader of Dmarcian, having Dmarcian EU’s web address automatically route to Dmarcian’s Web site, administered in California, and receiving prospective customers directed to Dmarcian EU by a Dmarcian employee in California, Groeneweg “purposely availed himself " of forum benefits and purposefully derived benefit from his activities in the forum. There is no unfairness in requiring him to subject himself to the jurisdiction of California courts in litigation involving his relationship with that California company and its employees. View "Swenberg v. Dmarcian" on Justia Law

Picard was appointed as the trustee for the liquidation of Bernard L. Madoff Investment Securities LLC (BLMIS) pursuant to the Securities Investor Protection Act, 15 U.S.C. 78aaa, to recover funds for victims of Bernard Madoff’s Ponzi scheme. SIPA empowers trustees to recover property transferred by the debtor where the transfers are void or voidable under the Bankruptcy Code, 11 U.S.C. 548, 550, to the extent those provisions are consistent with SIPA. Under Sections 548 and 550, a transferee may retain transfers it took “for value” and “in good faith.” Picard sued to recover payments the defendants received either directly or indirectly from BLMIS. The district court held that a lack of good faith in a SIPA liquidation requires that the defendant-transferee has acted with “willful blindness” and that the trustee bears the burden of pleading the transferee’s lack of good faith. Relying on the district court’s legal conclusions, the bankruptcy court dismissed the actions, finding Picard did not plausibly allege the defendants were willfully blind to the fraud at BLMIS.The Second Circuit vacated. Nothing in SIPA compels departure from the well-established rule that the defendant bears the burden of pleading an affirmative defense. The district court erred by holding that the trustee bears the burden of pleading a lack of good faith under Sections 548(c) and 550(b)(1). View "In Re Bernard L. Madoff Investment Securities, LLC" on Justia Law

Competitors BladeRoom and Emerson began negotiating a sale of BladeRoom to Emerson. They signed a non-disclosure agreement (NDA). The negotiations fell through. Facebook selected Emerson’s proposal for a data center. BladeRoom sued. Emerson proposed a jury instruction that would have excluded information disclosed or used after August 17, 2013, from its liability for breach of contract, which Emerson argued was the date of the contract’s expiration. The district court agreed that the NDA’s confidentiality obligations did not expire under paragraph 12 of the NDA. The jury found that Emerson breached the NDA and willfully and maliciously misappropriated BladeRoom’s trade secrets and awarded $10 million in lost profits and $20 million in unjust enrichment. The district court later awarded BladeRoom $30 million in punitive damages.The Ninth Circuit reversed. Paragraph 12’s natural meaning unambiguously terminated the NDA and its confidentiality obligations two years after it was signed. The court treated the district court’s error as an error of jury instruction and addressed issues for consideration on the awards of damages and prejudgment interest should they be determined after a new trial. Under California law, a party cannot collect punitive damages for breach of contract awards. On remand, the district court must take several steps to allocate damages and should consider adopting a more detailed special verdict form. View "BladeRoom Group Ltd. v. Emerson Electric Co." on Justia Law