Coast filed suit against Memorial, a medical group seeking to buy Coast, after negotiations between the parties failed and Memorial hired people who were already working for Coast. The trial court ultimately granted summary judgment against Coast.In regard to the two trade secret claims, the Court of Appeal concluded that the trial court properly disposed of the medical codes secret claim, but remanded as to the physician productivity secret claim because Coast succeeded in generating a genuine factual dispute in this case. In regard to the claims for tortious interference with economic relations, the court concluded that the trial court was correct to summarily dispose of both of Coast's interference claims, because Coast offered no proof Memorial had engaged in wrongful conduct. Finally, the court concluded that the trial court correctly granted Memorial summary relief from Coast's cause of action for unfair competition. Accordingly, the court reversed the trial court's grant of summary judgment; directed the summary adjudication of all claims in Memorial's favor, with the exception of the claim for misappropriation on the physician productivity secret. The court remanded that claim for further proceedings. View "Coast Hematology-Oncology Associates Medical Group, Inc. v. Long Beach Memorial Medical Center" on Justia Law

The Supreme Court affirmed the order of the district court providing for the dissolution of the Johns Brothers Farms partnership, accounting of the partners' capital accounts, and settlement and distribution of partnership assets, holding that the district court did not err.Brothers Jerry Johns and Jule Nathan "Butch" Johns began farming together as a partnership in 1980. In 1994, the brothers each formed a corporation to hold their individual interests, and the corporations became the partners in Johns Brothers Farms. In 2013, the brothers agreed to dissolve the partnership and distribute the assets between the partners. The next year, Jerry commenced this action to dissolve Johns Brothers Farms, for settlement of capital accounts, and for distribution of partnership assets. In 2020, the district court issued its findings of fact, conclusions of law, and judgment. Butch appealed. The Supreme Court affirmed, holding that the district court (1) did not err by concluding that Jerry did not breach his fiduciary duty to Butch and the partnership; (2) did not err in its calculation of the capital account balances for Jerry and Butch; and (3) did not err by awarding Jerry the forty-acre parcel in its distribution of partnership assets. View "Jackpot Farms, Inc. v. Johns Farms, Inc." on Justia Law

The Supreme Judicial Court affirmed the business and consumer docket's entry of final judgment reaffirming a partial summary judgment on the complaint filed by Michael Zelman and a counterclaim filed by Andrew and Zelman Family Business Holdings, LLC (ZFBH), holding that the business and consumer court had subject matter jurisdiction.Michael brought this action both individually and as personal representative of the Estate of Estelle Betty Zelman asking the superior court to dissolve and liquidate ZFBH. Andrew and ZFBH filed an answer and counterclaim. The court entered a final judgment concluding that Andrew was not a manager of ZFBH and that the sole remaining manager of ZFBH had died and declining to dissolve ZFBH. The Supreme Judicial Court affirmed, holding (1) the business and consumer court had subject matter jurisdiction and personal jurisdiction; and (2) the court correctly concluded that William did not have the authority to appoint Andrew as a manager of ZFBH. View "Zelman v. Zelman" on Justia Law

The Court of Chancery issued a memorandum opinion in an action brought under Delaware's Corporation Law, section 220 (the "DGCL"). The opinion ordered AmerisourceBergen Corporation to produce certain books and records to Lebanon County Employees Retirement Fund and Teamsters Local 443 Health Services & Insurance Plan (“Plaintiffs”) and granting Plaintiffs leave to take a Rule 30(b)(6) deposition “to explore what types of books and records exist and who has them.” The Company claimed Plaintiffs’ inspection demand, which, among other things, was aimed at investigating possible breaches of fiduciary duty, mismanagement, and other wrongdoing, was fatally deficient because it did not disclose Plaintiffs’ ultimate objective, which was what they intended to do with the books and records in the event that they confirmed their suspicion of wrongdoing. The Company also contended the Court of Chancery erred by holding Plaintiffs were not required to establish a credible basis to suspect actionable wrongdoing. And finally, the Company argued the Court of Chancery erred as a matter of law when it allowed Plaintiffs to take a post-trial Rule 30(b)(6) deposition. After review, the Delaware Supreme Court held that when a Section 220 inspection demand stated a proper investigatory purpose, it did not need to identify the particular course of action the stockholder will take if the books and records confirm the stockholder’s suspicion of wrongdoing. In addition, the Court held that, although the actionability of wrongdoing can be a relevant factor for the Court of Chancery to consider when assessing the legitimacy of a stockholder’s stated purpose, an investigating stockholder was not required in all cases to establish the wrongdoing under investigation was actionable. Finally, the Court found the Court of Chancery’s allowance of the post-trial deposition was not an abuse of discretion. View "Amerisourcebergen Corp v. Lebanon County Employees' Retirement Fund" on Justia Law

Plaintiffs-appellants were two of three founding owners, investors, and directors of Energy Efficient Equity, Inc. (“E3” or the “Corporation”), a Delaware corporation operating in the property-assessed, clean-energy financing industry. After a series of financing transactions with WR Capital Partners, LLC (“WR Capital”), plaintiffs filed suit against WR Capital and its representatives. Among other claims, plaintiffs alleged that defendants breached their fiduciary duties and were unjustly enriched when they negotiated and approved the financing transactions that allowed them to take control of E3 from the founders. During the litigation, plaintiffs entered into a settlement agreement and two stock repurchase agreements. Plaintiffs settled with some of the defendants in exchange for payments and the sale of the plaintiffs’ stock to E3. The Settlement Agreement contained a release, but carved out claims that the plaintiffs wanted to continue to pursue against the non-settling WR Capital and its representatives. An inconsistency between the agreements arose, however, because the Stock Repurchase Agreements transferred “all of Seller’s right, title, and interest” in E3 stock while only the Settlement Agreement contained a carve out for claims against the non-settling defendants (the “Release Carve Out”). After the partial settlement, the Court of Chancery granted defendants’ motion to dismiss, finding plaintiffs could not import the Settlement Agreement’s Release Carve Out into the Stock Repurchase Agreements; plaintiffs lost standing to pursue their direct breach of fiduciary duty claims when they sold their E3 stock; and plaintiffs’ unjust enrichment claims were duplicative of their breach of fiduciary duty claims and traveled with the sale of E3 stock. On appeal, plaintiffs argued the Court of Chancery should have found that the Stock Repurchase Agreements incorporated by reference the Settlement Agreement. If that was the case, plaintiffs claimed they could preserve their claims against the remaining defendants. In the alternative, plaintiffs fell back on the argument that their breach of fiduciary duty claims were personal and did not attach to the stock sold as part of the settlement. In addition, they argued the unjust enrichment claims were independent of the breach of fiduciary duty claims. The Delaware Supreme Court affirmed the Court of Chancery: while plaintiffs had an argument that the parties intended to treat the three agreements as a unitary transaction through incorporation by reference, the Settlement Agreement’s Release Carve Out confilcted with the complete transfer of all right, title, and interest in the plaintiffs’ E3 stock under the Stock Repurchase Agreements. In the event of a conflict, the Stock Repurchase Agreements plainly stated their terms controlled. Plaintiffs’ remaining claims were also part of the rights accompanying the E3 stock sale, and the unjust enrichment claim traveled with the E3 stock when repurchased by E3. View "Urdan v. WR Capital Partners, LLC" on Justia Law

The Court of Chancery granted Defendants' motion to dismiss Harley Franco's action filed under 6 Del. C. 18-110 and 6 Del. C. 18-111 seeking a declaration that because Franco no longer agreed to Doug Houghton's continued service on the Avalon Freight Services LLC Board of Directors, Houghton must be removed from the Board, holding that section 3.1 of the Avalon LLC Agreement did not empower Franco to unilaterally remove Houghton from the Board.Franco interpreted section 3.1's requirement that the fifth director of the Avalon Board - Houghton - be mutually agreement upon and appointed by Franco and one other director to mean that if Franco no longer agreed to houghton's continued service, Houghton must be removed from the Board. The Court of Chancery dismissed the action, holding that that Franco may not unilaterally remove Houghton from the Avalon Board. View "Franco v. Avalon Freight Services LLC" on Justia Law

The defendants sell shaker tubes in grocery stores across the country, with labels advertising “100% Grated Parmesan Cheese.” The products are not 100 percent cheese but contain four to nine percent added cellulose powder and potassium sorbate, as indicated on the ingredient list on the back of the package. Plaintiffs claim that these ingredient lists show that the prominent “100%” labeling is deceptive under state consumer-protection laws. The Judicial Panel on Multidistrict Litigation transferred numerous similar actions to the Northern District of Illinois for consolidated pretrial proceedings. That court ultimately dismissed the plaintiffs’ deceptive labeling claims (100% claims) with prejudice.The Seventh Circuit reversed in part. Plaintiffs have plausibly alleged that the prominent “100%” labeling deceives a substantial portion of reasonable consumers, and their claims are not preempted by federal law. An accurate fine-print list of ingredients does not foreclose as a matter of law a claim that an ambiguous front label deceives reasonable consumers. Many reasonable consumers do not instinctively parse every front label or read every back label before purchasing groceries. For reasons specific to multidistrict litigation, the court concluded that it lacked appellate jurisdiction to review the dismissal of the 100% claims in two complaints because the appeals were filed too late. View "Bell v. Albertson Companies, Inc." on Justia Law

In this case involving the proper scope of the litigation privilege in Ohio the Supreme Court reversed the judgment of the court of appeals affirming the judgment of the trial court granting judgment on the pleadings concluding that certain actions of the Certified Steel Stud Association's directors were protected by the litigation privilege, holding that judgment on the pleadings was inappropriate.ClarkDietrich previously sued the Association alleging that the Association made defamatory statements about ClarkDietrich's products. William Gardner and Edward Slish (together, Appellees) were members of the Association's board of directors at that time. The jury returned a verdict in favor of ClarkDietrich. John Reister, who was subsequently appointed as a receiver on behalf of the Association, filed this action claiming that Appellees breached their fiduciary duties by mishandling the ClarkDietrich litigation. The court of appeals affirmed, concluding that Appellees' actions were protected under the litigation privilege rule. The Supreme Court reversed, holding (1) the litigation privilege protects statements, not actions; and (2) the decision to grant judgment on the pleadings was improper in this case. View "Reister v. Gardner" on Justia Law

Siemens shipped two electrical transformers from Germany to Kentucky. K+N arranged the shipping, retaining Blue Anchor Line. Blue Anchor issued a bill of lading, in which Siemens agreed not to sue downstream Blue Anchor subcontractors for any problems arising out of the transport from Germany to Kentucky. K+N subcontracted with K-Line to complete the ocean leg of the transportation. Siemens contracted with another K+N entity, K+N Inc., to complete the land leg of the trip from Baltimore to Ghent. K+N Inc. contacted Progressive, a rail logistics coordinator, to identify a rail carrier. They settled on CSX. During the rail leg from Maryland to Kentucky, one transformer was damaged, allegedly costing Siemens $1,500,000 to fix.Progressive sued CSX, seeking to limit its liability for these costs. Siemens sued CSX, seeking recovery for the damage to the transformer. The actions were consolidated in the Kentucky federal district court, which granted CSX summary judgment because the rail carrier qualified as a subcontractor under the Blue Anchor bill and could invoke its liability-shielding provisions. The Sixth Circuit affirmed. A maritime contract, like the Blue Anchor bill of lading, may set the liability rules for an entire trip, including any land-leg part of the trip, and it may exempt downstream subcontractors, regardless of the method of payment. The Blue Anchor contract states that it covers “Multimodal Transport.” It makes no difference that the downstream carrier was not in privity of contract with Siemens. View "Progressive Rail Inc. v. CSX Transportation, Inc." on Justia Law

In 2009, the president of the International Congress for Joint Reconstruction, Inc. (ICJR) retained Mark Sacaris, part owner of the Center for Healthcare Education and Research, Inc. (CHE), to assist ICJR in producing medical education conferences on the subject of joint-reconstruction surgery. Their agreement was unwritten, and there was no discussion of the rates ICJR would be charged. Sacaris was given full control over ICJR’s money accounts as part of the arrangement. Sacaris used ICJR’s money accounts to pay CHE’s invoices without notifying ICJR’s board members of the amounts ICJR was being charged. Over time, and also without informing the board of ICJR, he increased the scope of CHE’s services, thereby creating additional sources of profit for CHE, and indirectly for himself, but he did not disclose his interest in these arrangements to ICJR. Eventually the ICJR board was informed by Sacaris that ICJR had amassed a $2 million to CHE. ICJR terminated its relationship with Sacaris and CHE. CHE filed suit to recover amounts it claimed it was owed by ICJR under the agreement. ICJR cross-sued Sacaris and CHE, asserting Sacaris secretly profited from his relationship with ICJR. After a bench trial, the court found ICJR liable to CHE for breach of contract. Although the court also found that CHE and Sacaris breached their fiduciary duties to ICJR in earning all four categories of the profits ICJR sought to disgorge, the court awarded ICJR recovery only as to categories two and four. On appeal, ICJR contended the trial court erred in determining that ICJR could not recover disgorgement of CHE and Sacaris’s profits from their undisclosed charges for management services without proof their breach of fiduciary duties caused ICJR to suffer monetary damages. The Court of Appeal agreed ICJR was not required to show it suffered monetary harm to establish a right to disgorgement of CHE and Sacaris' profits from undisclosed charges for event management services. The Court of Appeal reversed that portion of the judgment affected by the error and remanded for the trial court to determine the appropriate amount of the award of disgorgement. However, the Court rejected ICJR’s claim that the court erred in determining that running symposia for pharmaceutical companies was not a corporate opportunity of ICJR. View "Center Healthcare Ed. & Res. v. Internat. Cong. Joint Reconst." on Justia Law