This case was the second round of appeals arising from Dalia Rojas’s lawsuit against HSBC Card Services, Inc. and HSBC Technology & Services (USA) Inc. (together, HSBC) for violations of the California Invasion of Privacy Act . Rojas received hundreds of personal calls from her daughter Alejandra, an employee at an HSBC call center, which were recorded by HSBC’s full-time recording system. Rojas alleged HSBC intentionally recorded confidential calls without her consent. She also alleged HSBC intentionally recorded calls to her cellular and cordless phones without her consent. The trial court granted summary judgment to HSBC, and Rojas appealed. The Court of Appeal reversed, concluding HSBC had not met its initial burden to show there was no triable issue of material fact on intent. On remand, HSBC made a Code of Civil Procedure section 998 offer, which Rojas did not accept. The case proceeded to a bench trial, where HSBC relied, in part, on workplace policies that purportedly barred call center agents from making personal calls at their desks to show it did not intend to record the calls. The trial court ultimately entered judgment for HSBC. Pertinent here, the court found Rojas did not prove HSBC’s intent to record. The court also found Rojas impliedly consented to being recorded, and did not prove lack of consent. Rojas appealed that judgment, contending the trial court made several errors in determining she did not prove her Privacy Act claims and that the evidence did not support its findings. The Court of Appeal concluded the trial court applied correct legal standards in assessing lack of consent and substantial evidence supports its finding that Rojas impliedly consented to being recorded. Although the Court determined the record did not support the court’s finding that HSBC did not intend to record the calls between Rojas and her daughter, that determination did not require reversal. "What it underscores, however, is that a business’s full-time recording of calls without adequate notice creates conditions ripe for potential liability under the Privacy Act, and workplace policies prohibiting personal calls may not mitigate that risk." View "Rojas v. HSBC Card Services Inc." on Justia Law

Defendant Living Essentials, LLC, sold its 5-hour Energy drink to the Costco Wholesale Corporation and also to the plaintiff wholesalers, who alleged that Living Essentials offered them less favorable pricing, discounts, and reimbursements in violation of the Robinson-Patman Act. On summary judgment, the district court found that the wholesalers had proved the first three elements of their section 2(a) claim for secondary-line price discrimination. At a jury trial on the fourth element of section 2(a), whether there was a competitive injury, the jury found in favor of Defendants. At a bench trial on the wholesalers’ section 2(d) claim for injunctive relief, the court ruled in favor of Defendants.   The Ninth Circuit affirmed in part and vacated and reversed in part the district court’s judgment after a jury trial and a bench trial in favor of Defendants. The panel held that the district court did not abuse its discretion in finding that there was some factual foundation for instructing the jury that section 2(a) required the wholesalers to show, as part of their prima facie case, that Living Essentials made “reasonably contemporaneous” sales to them and to Costco at different prices. The panel further held that the district court did not abuse its discretion in instructing the jury that the wholesalers had to prove that any difference in prices could not be justified as “functional discounts” to compensate Costco for marketing or promotional functions. The panel concluded that the functional discount doctrine was legally available to Defendants. View "U.S. WHOLESALE OUTLET & DISTR., ET AL V. INNOVATION VENTURES, LLC, ET AL" on Justia Law

The Supreme Court vacated the sanctions order entered by the trial court against Joseph Monroe for pursuing a shareholder-derivative suit against his wife, Lisa Monroe, the majority shareholder of a closely held corporation, holding that the sections order violated Rule 1:1.Lisa and Joseph were the married co-owners of MEPCO Materials, Inc. One week after Joseph, as the then-sole director, filed for divorce he caused MEPCO to filed a civil action against Lisa for conversion and breach of fiduciary duty. After Joseph resigned his position at MEPCO he sought to convert the action to a shareholder-derivative action. The granted the motions, converted the suit to a derivative action, and then dismissed the complaint with prejudice. Thereafter, the trial court granted Lisa's motion for sanctions and ordered Joseph to pay $70,097 to MEPCO and Lisa. The Supreme Court vacated the order granting sanctions, holding (1) Joseph had standing to appeal the sanctions award; but (2) the sanctions order violated Rule 1:1 because it was not timely entered. View "Monroe v. Monroe" on Justia Law

The corporate charter of a bank holding company capped at 10% the stock that could be voted by a “person” in any stockholder vote. During a proxy contest for three seats of a staggered board, the CCSB board of directors instructed the inspector of elections not to count 37,175 shares voted in favor of a dissident slate of directors. According to the board, the 37,175 shares exceeded the 10% voting limitation because certain stockholders were acting in concert with each other. If the votes had been counted, the dissident slate of directors would have been elected. The CCSB corporate charter also provided that the board’s “acting in concert” determination, if made in good faith and on information reasonably available, “shall be conclusive and binding on the Corporation and its stockholders.” In a summary proceeding brought by the plaintiffs, the Court of Chancery found: (1) the “conclusive and binding” charter provision invalid under Delaware corporate law; (2) the board’s instruction to the inspector of elections invalid because the individuals identified by the board were not acting in concert; and (3) the board’s election interference did not withstand enhanced scrutiny review. The court also awarded the plaintiffs attorneys’ fees for having conferred a benefit on CCSB. CCSB argued the Court of Chancery erred when it invalidated the charter provision and reinstated the excluded votes. The Delaware Supreme Court affirmed the Court of Chancery: plaintiffs proved that the board breached its duty of loyalty by instructing the inspector of elections to disregard the 37,175 votes. "The charter provision cannot be used to exculpate the CCSB directors from a breach of the duty of loyalty. Further, the court’s legal conclusion and factual findings that the stockholders did not act in concert withstand appellate review." View "CCSB Financial Corp. v. Totta" on Justia Law

Esplanade Productions, Inc. sued The Walt Disney Company and affiliated entities (collectively Disney) for breach of an implied-in-fact contract, breach of confidence and unfair competition, alleging Disney had used the creative ideas of Esplanade’s principal, Gary Goldman, in Disney’s animated motion picture Zootopia without compensating Esplanade. The trial court sustained without leave to amend the demurrer of Disney regarding the individual elements of the works and the works as a whole, finding they were not substantially similar as a matter of law. The court overruled Disney’s demurrer as to the title “Zootopia.” The court granted the motion for summary judgment filed by Disney, ruling there was no evidence the creators of Disney’s Zootopia had access to Goldman’s work and, even if there was evidence of access, any inference of copying was rebutted by the undisputed evidence a Disney employee had independently created the title “Zootopia.” On appeal from the judgment entered in favor of Disney, Esplanade challenged the trial court’s demurrer ruling and the grant of summary judgment.   The Second Appellate District affirmed. The court explained that there is simply no evidence that Disney producers would have had reason to discuss an animation project, nor is there evidence that they would have occasion to share that information with those working on Zootopia. Esplanade’s access argument relies solely on speculation and conjecture arising from the fact that some of the individuals involved occasionally provided feedback on one another’s work. That is insufficient as a matter of law to establish access. View "Esplanade Productions v. The Walt Disney Co." on Justia Law

The Court of Chancery granted Petitioner's petition to hold Respondents - Hone Capital LLC and CSC Upshot Ventures I, L.P. - in contempt for failing to comply with an order to advance expenses (the advancement order), holding that coercive contempt sanctions can be used to enforce an advancement right.At issue before the Court of Chancery was whether contempt sanctions could be used to enforce the advancement order in this case where contempt is not generally available to enforce a money judgment. The Court of Chancery held (1) due to the harm that a covered person faces, the holder of an advancement right is not relegated to collection mechanisms; and (2) Petitioner was entitled to relief on her request of a daily fine to coerce compliance until Respondents comply with the advancement order. View "Gandhi-Kapoor v. Hone Capital LLC" on Justia Law

Mimi Investors, LLC (“Mimi Investors”) sued Paul Tufano, David Crocker, Dennis Cronin, and Neil Matheson (“ORCA Officers”), the directors and officers of ORCA Steel, LLC (“ORCA Steel”), a now-defunct data storage company, alleging that ORCA Officers made material misrepresentations of fact in violation of the Pennsylvania common law and Section 1- 401(b) of the Pennsylvania Securities Act ("PSA"). Mimi Investors described a meeting held in February of 2014 during which ORCA Officers allegedly represented to Mimi Investors that they had received 400 orders for computer data storage space (“CDS Orders”) for ORCA Steel’s new data storage facility. To secure financing for the purpose of servicing the CDS Orders, ORCA Officers sought promissory notes to increase capital. In October 2014, ORCA Steel ceased making interest payments on the loan. ORCA Steel did not respond to Mimi Investors’ demand letter, sent in August 2015, which sought to cure the default. Mimi Investors asserted that neither “construction financing nor the fulfillment of the new orders materialized.” It also averred that, on October 21, 2014, ORCA Officers told Mimi Investors that they “had known for months that the loan to fund new construction was not viable” because the CDS Orders were “not investment grade.” Mimi Investors claimed that “these misrepresentations regarding available construction financing and committed orders, as well as other statements by” ORCA Officers, “were material and untrue within the meaning of the” PSA, and that Mimi Investors “relied on these misrepresentations in deciding to make the [l]oan[.]” In a matter of first impression, the Pennsylvania Supreme Court addressed whether a plaintiff must plead and prove scienter as an element of 70 P.S. § 1-401(b) of the PSA. After careful review, the Court held that under the plain language of its text, Section 1-401(b) of the PSA did not contain a scienter element. However, the PSA provided a defense to civil liability under Section 1-401(b) if the defendant could show they “did not know and in the exercise of reasonable care could not have known of the untruth or omission[.]” View "Mimi Investors, LLC v. Tufano, P., et al." on Justia Law

The Bert Company, dba Northwest Insurance Services (“Northwest”), was an insurance brokerage firm with clientele in northwestern Pennsylvania and western New York. From 2005 to 2017, Matthew Turk (“Turk”) was employed as an insurance broker with Northwest. First National Insurance Agency, LLC (“FNIA” or "First National") was an insurance brokerage firm. To grow its business in that region, First National developed a plan to takeover Northwest, initially by convincing key Northwest employees to leave Northwest for FNIA and to bring their clients with them. Through the fall and winter of 2016, Turk repeatedly met with First National about the plan with the hope that First National could gut Northwest by hiring the bulk of its highest producers, acquiring their clients, and ultimately forcing that company to sell its remaining book of clients. Pursuant to the plan, Turk remained at Northwest to convince the company to sell its remaining business to First National. Northwest refused, choosing instead to fire Turk and initiate legal action. In this appeal by permission, the Pennsylvania Supreme Court opined on the jurisprudence of the United State Supreme Court addressing the constitutionality of an award of punitive damages by a civil jury in the Commonwealth. The Pennsylvania Court's grant of allowance addressed the narrow issue of the appropriate ratio calculation measuring the relationship between the amount of punitive damages awarded against multiple defendants who are joint tortfeasors and the compensatory damages awarded. The superior court calculated the punitive to compensatory damages ratio using a per-defendant approach, rather than a per-judgment approach. The Pennsylvania Supreme Court generally endorsed the per-defendant approach as consistent with federal constitutional principles that require consideration of a defendant’s due process rights. Further, the Court concluded that under the facts and circumstances of this case, it was appropriate to consider the potential harm that was likely to occur from the concerted conduct of the defendants in determining whether the measure of punishment was both reasonable and proportionate. View "The Bert Company v. Turk, et al." on Justia Law

Mingtel, a Texas-based company, ordered two batches of computer tablets from Shenzen Synergy Digital, a Chinese company, hoping to resell them through the Home Shopping Network (“HSN”). The first batch bombed on HSN, with customers complaining about slow speeds and flawed screens. Mingtel then rejected the second batch out of hand. Synergy sued for breach of contract; Mingtel countersued, alleging Synergy provided nonconforming goods. The district court sided with Synergy.   The Fifth Circuit affirmed. The court explained that the district court found Mingtel did not examine the tablets as soon as practicable because it failed to inspect them when they arrived in the United States. Instead of testing those capabilities upon the tablets’ arrival in the United States, Mingtel shipped them directly to HSN’s warehouse and examined them only after they were sold and returned by customers. The court explained that it agreed with the district court that, given those facts, Mingtel did not timely inspect the tablets. It follows that Mingtel did not provide Synergy with a notice of nonconformity within a reasonable time. The court wrote that Mingtel was obligated to pay for the tablets and take delivery of them. Because it failed to do so, the district court properly found Mingtel liable. View "Shenzen Synergy Digital v. Mingtel" on Justia Law

An employee alleged that her employer, White Castle, introduced a system that required its employees to scan their fingerprints to access their pay stubs and computers. A third-party vendor then verified each scan and authorized the employee’s access. In a suit under the Biometric Information Privacy Act, 740 ILCS 14/15(b), (d), White Castle argued that the action was untimely because her claim accrued in 2008 when White Castle first obtained her biometric data after the Act’s effective date.The Seventh Circuit certified the question to the Illinois Supreme Court, which held that section 15(b) and 15(d) claims accrue each time a private entity scans a person’s biometric identifier and each time a private entity transmits such a scan to a third party, respectively, rather than only upon the first scan and first transmission. The court “respectfully suggested” that the legislature address the policy concerns inherent in the possibility of awards of substantial damages. View "Cothron v. White Castle System, Inc." on Justia Law