by
Total Wine challenged provisions of Connecticut’s Liquor Control Act and regulations as preempted by the Sherman Act, 15 U.S.C. 1. Connecticut’s “post and hold” provisions require state-licensed manufacturers, wholesalers, and out-of-state permittees to post a “bottle price” or “can price” and a “case price” each month with the Department of Consumer Protection for each alcoholic product that the wholesaler intends to sell during the following month; they may “amend” their posted prices to “match” competitors’ lower prices but are obligated to “hold” their prices at the posted price (amended or not) for a month. Connecticut’s minimum-retail-price provisions require that retailers sell to customers at or above a statutorily defined “[c]ost,” which is not defined as the retailer’s actual cost. The post-and-hold number supplies the central component of “[c]ost” and largely dictates the price at which Connecticut retailers must sell their alcoholic products. The Second Circuit affirmed dismissal of the complaint. Connecticut’s minimum-retail-price provisions, compelling only vertical pricing arrangements among private actors, are not preempted. The post-and-hold provisions were not preempted because they “do not compel any agreement” among wholesalers, but only individual action. The court also upheld a price discrimination prohibition as falling outside the scope of the Sherman Act. View "Connecticut Fine Wine and Spirits LLC v. Seagull" on Justia Law

by
This appeal arose in the context of Safeguard Business Systems, Inc.’s (“SBS”) alleged breach of its distributorship agreement with Thurston Enterprises, Inc. (“Thurston”). After a jury trial Thurston was awarded approximately $6.8 million in damages. SBS filed a motion for post-judgment relief, which the district court denied. The Idaho Supreme Court determined the district court correctly decided that SBS breached Thurston’s account protection rights under the Agreement as a matter of law. Furthermore, the district court properly denied SBS’s motions for post-judgment relief on Thurston’s claim for fraud in the inducement of the March 2014 agreement, on Thurston’s claim that SBS breached the pricing guarantee in the Agreement, and on Thurston's claim for good faith and fair dealing because the jury’s findings were supported by substantial evidence. The Supreme Court, therefore, affirmed the district court's judgment. View "Thurston and T3 v. Safeguard" on Justia Law

by
ARC, a distributor of compressed gases, sold its assets to American. Because ARC leased asset cylinders to customers, it was not immediately able to identify the number of cylinders included in the purchase; the Agreement estimated 6,500 cylinders and provided that American would hold back $150,000 for 180 days to protect against a shortage of up to 1,200 cylinders, at $125 per cylinder. When American began billing the customers it acquired, it learned that many of them paid only to have cylinders refilled but did not pay rent on the cylinders they used. An audit revealed that ARC owned and transferred 4,663 asset cylinders--1,837 cylinders short of the 6,500 promised. In an ensuing breach of contract suit, ARC argued that American breached the contract because it did not complete its audit within the specified 180-day period. The district court disagreed, concluding that ARC extended that deadline and that, because only 4,663 cylinders were delivered, ARC was never entitled to receive any portion of the Cylinder Deferred Payment. The court granted American’s counterclaim for breach of contract, holding that American was entitled to the entire $150,000 and to recover $125 for each cylinder it failed to receive under the threshold of 5,300. The Seventh Circuit affirmed. Because ARC was not entitled to any of the Cylinder Deferred Payment in that it provided less than the 5,300 cylinders, it could not have been damaged by the delay in completing the audit. View "ARC Welding Supply, Co. Inc. v. American Welding & Gas, Inc." on Justia Law

by
Plaintiffs, 39 former employees of Infinium Capital, voluntarily converted loans they had made to their employer under the company’s Employee Capital Pool program into equity in the company. A year later their redemption rights were suspended; six months after that, they were told their investments were worthless. Plaintiffs filed suit against Infinium, the holding company that owned Infinium, and members of senior management, asserting claims for federal securities fraud and state law claims for breach of fiduciary duty and fraud. The Seventh Circuit affirmed the dismissal, with prejudice, of their fifth amended complaint for failure to state a claim. Reliance is an element of fraud and each plaintiff entered into a written agreement that contained ample cautionary language about the risks associated with the investment. Federal Rule of Civil Procedure 9(b) provides that a party alleging fraud or mistake “must state with particularity the circumstances constituting fraud or mistake,” although “[m]alice, intent, knowledge, and other conditions of a person’s mind may be alleged generally.” Plaintiffs failed to identify the speakers of alleged misrepresentations with adequate particularity, failed to adequately plead scienter, and failed to plead a duty to speak. View "Cornielsen v. Infinium Capital Management, LLC" on Justia Law

by
In December 2016, the J.R. Simplot Company (Simplot) filed suit in Washington state relating to the dissolution of a business relationship between Simplot and two entities Simplot co-owned with Frank Tiegs (Tiegs). Dickinson Frozen Foods (DFF), also operated by Tiegs, was not named as a party in the Washington litigation; however, the complaint contained allegedly defamatory statements about DFF. In March 2017, DFF filed suit in Idaho district court alleging defamation per se against Simplot and its Food Group President Mark McKellar (McKellar), as well as the two law firms who represented Simplot in the Washington litigation: Yarmuth Wilsdon, PLLC (Yarmuth) and Thompson Coburn, LLP (Thompson). DFF also claimed breach of contract against Simplot, claiming Simplot had breached a non-disclosure agreement (NDA). Counsel for Yarmuth and Thompson made special appearances so that they could contest personal jurisdiction, and simultaneously moved for dismissal on that basis. Yarmuth, Thompson, McKellar, and Simplot also sought dismissal or partial summary judgment on the basis of the litigation privilege. The district court dismissed DFF’s claims for defamation per se against all defendants, determining the statements were protected by the litigation privilege. However, the district court declined to rule on Yarmuth and Thompson’s motions to dismiss for lack of jurisdiction in light of its rulings on the merits. Later, the district court granted Simplot’s motion for summary judgment on DFF’s breach of contract claim. DFF appealed. The Idaho Supreme Court determined it lacked personal jurisdiction over Yarmuth and Thompson; the Court affirmed the district court in all other respects. View "Dickinson Foods v. J.R.Simplot" on Justia Law

by
Before selling their business, Page Printing, the Pettinatis followed the tax strategy suggested by their attorney and formed BASR, a general partnership. BASR assumed Treasury Note obligations, which increased its cost basis; each of the partners contributed all their Page shares to BASR in 1999. Two months later, BASR sold 100% of its Page stock for $6,898,245. When offset against its overstated cost basis, BASR realized a gain of only $263,934. The Pettinati partners reported their shares on their 1999 individual returns. In 2010, the IRS issued a final partnership administrative adjustment (FPAA), disallowing the tax benefits generated from BASR’s 1999 tax filing. Pettinati challenged the FPAA as untimely under I.R.C. 6501(a)’s three-year statute of limitations. BASR had “zero assets,” and had filed its last partnership return in 1999. BASR offered the government $1.00 to settle; the government refused. In 2013, the Claims Court granted BASR summary judgment. The Federal Circuit affirmed. In 2016, BASR sought litigation costs under 26 U.S.C. 7430(c)(4)(E). The Federal Circuit affirmed an award of $314,710.69, rejecting the government’s arguments: that BASR does not qualify for lcosts under section 7430(a) because a partnership is not a prevailing “party,” that BASR did not pay or incur costs because a partnership has no legal obligation, that the amount of individual tax liability was not “in issue” during the Tax Equity and Fiscal Responsibility Act (TEFRA) partnership-level court proceeding, and that the qualified offer rule did not apply. View "BASR Partnership v. United States" on Justia Law

by
Trana, a developer of technology that could help find new drugs to treat HIV, filed suit against Southern, a contract research organization, for fraud and negligent representation. Trana alleged that Southern failed to identify certain promising compounds as potential HIV treatments (false negatives results) and Southern falsely identified other compounds as potential treatments when in fact they were not (false positives results). The Fourth Circuit affirmed the district court's grant of summary judgment for Southern, holding that Trana's false negatives theory represented an attempt to shoehorn a claim for professional negligence or breach of contract into one for negligent misrepresentation. Furthermore, in regard to the false positives theory, Trana has not presented any theory that explains the reasonableness of pursuing patents on compounds that it knew had no commercial value. Therefore, Trana's reliance on the false positives was unreasonable. View "Trana Discovery, Inc. v. Southern Research Institute" on Justia Law

by
US Bank appealed the district court's dismissal of its second amended consolidated complaint as untimely. The Second Circuit affirmed and held that ACE Secs. Corp. v. DB Structured Prods., Inc., 25 N.Y.3d 581 (2015), and Deutsche Bank Nat'l Tr. Co. v. Quicken Loans Inc., 810 F.3d 861, 868 n.8 (2d Cir. 2015), governed U.S. Bank's contractual claims in this case. The court held that the district court properly granted summary judgment to GreenPoint where the first two causes of action for breach of contract were untimely under settled New York law, because they were filed over six years after the statute of limitations began running. The court also held that the district court properly dismissed the third cause of action for indemnification under section 9 of the Flow Mortgage Loan Purchase and Warranties Agreement, because U.S. Bank's claim was in reality a repackaged version of its breach of contract claims. Finally, the court held that the fourth cause of action for breach of the indemnification agreements did relate back to the original filing for claims based on any of the Trusts, and was therefore untimely asserted. View "Lehman XS Trust v. Greenpoint Mortgage Funding, Inc." on Justia Law

by
The Anthem Companies, Inc. and Richard Andrews appeal the grant of spoliation sanctions issued against them, arguing that the trial court erred in finding spoliation in the first instance and in sanctioning them with an adverse jury instruction. The underlying suit arose when an Anthem employee allegedly found a bug in her lunch bought from a cafeteria vendor. The employee took pictures, sending copies via email to a building superintendent, and having the images printed at a local drug store. The vendor had been removed as a company cafeteria vendor. This news was posted by someone to Facebook, and the story grew virally. The manager for the vendor, Cheryl Willis, considered the statements in the emails from the superintendent to the company were libelous, asking her attorney to demand the company retract its statements. Wills claimed that, as a result of the wide distribution of the email, the business closed, she and her then-husband filed for bankruptcy, and they lost their home, cars, and savings. Between the time of the original email and the time of trial in 2017, the printed versions of the images were lost. Wills asserted she did not know that the lost drug store prints existed until depositions were scheduled in early 2017. The Georgia Supreme Court determined that under the circumstances of this case, the trial court abused its discretion in awarding spoliation sanctions, and reversed the spoliation sanction. View "The Anthem Companies, Inc. v. Willis" on Justia Law

by
The Georgia Supreme Court granted writs of certiorari in two cases involving the liquidation of an insurance company to review the Court of Appeals’ decision in State of Georgia v. International Indemnity Company, 809 SE2d 64 (2017). The dispositive issue presented was whether the official immunity provision in OCGA 33-37-8.1 applied to claims for a “surcharge” and attorney fees against the State Insurance Commissioner and two other state employees, all in their official capacities as the liquidator and his deputies, and against a private company involved in the liquidation. The Court determined the Court of Appeals incorrectly concluded that section 33-37-8.1 would be applicable to these parties, and reversed that part of the Court of Appeals’ judgment allowing the claims to proceed against the state officer and employees in their official capacities. The Court affirmed in all other respects, meaning the case could proceed against the private company. View "Georgia v. International Indemnity Co." on Justia Law