Justia Business Law Opinion Summaries

The People filed a complaint charging defendants with causing, aiding, and abetting the illegal delivery of marijuana. The trial court granted an injunction barring defendants from further developing or marketing their marijuana delivery app. At issue on appeal is whether Proposition D, L.A. Mun. Code, 45.19.6, which City voters enacted in 2013 to regulate medical marijuana businesses, generally prohibits the delivery of marijuana by vehicles. The court concluded that the City established a likelihood of proving defendants’ app caused, aided, or abetted the violation of Proposition D because, outside of the narrow exception for designated primary caregivers, it prohibits the vehicular delivery of medical marijuana to qualified participants, identification card holders, or primary caregivers in the City. Further, defendants’ opposition to the City’s unfair competition allegations necessarily fails because the City has demonstrated a likelihood of success on its claim that defendants facilitated a violation of Proposition D. In this case, defendants made no showing at all concerning the balance of hardships, much less that the balance tipped sharply in their favor. Accordingly, the court affirmed the trial court's judgment. View "People v. Nestdrop, LLC" on Justia Law

This case was Appellants' fifth unsuccessful attempt to recoup damages arising out of FedEx's termination of their linehaul contracts. They appealed a superior court judgment granting judgment on the pleadings and awarding sanctions under Code of Civil Procedure section 128.72 against them and their attorney. After review, the Court of Appeal affirmed and granted defendant-respondent Mirza Ahmad's motion for additional section 128.7 sanctions on appeal against Appellants and their trial counsel. View "Bucur v. Ahmad" on Justia Law

Plaintiffs held warrants to buy common stock issued by defendant BlueFire Ethanol Fuels, Inc. The warrants included an anti-dilution provision, requiring BlueFire to adjust the exercise price set in the warrants “to equal the consideration paid” by a subsequent investor for equity interests in BlueFire. The anti-dilution provision did not apply to certain issuances of securities, as specified in a list of five categories of exceptions. A few years after issuance of the warrants, BlueFire entered into an agreement with non-party Lincoln Park Capital Fund, LLC, creating an “equity line of credit” or a “standby equity distribution agreement.” Lincoln promised to make up to $10 million available to BlueFire to be accessed at the option of BlueFire over a set period of time. In exchange, BlueFire issued common stock and warrants to Lincoln at the time the agreement was executed, and promised to issue additional common stock in exchange for any future cash received from Lincoln. Plaintiffs sued BlueFire for breach of contract and declaratory relief when BlueFire refused to apply the warrants’ anti-dilution provision to the Lincoln agreement. Plaintiffs also sued individual defendants Arnold Klann and Christopher Scott for breach of fiduciary duty. After a bench trial, the court rejected the breach of fiduciary duty claim against Klann and Scott. But the court ruled the anti-dilution provision applied to the Lincoln transaction and that BlueFire had breached the warrants. The court also reduced the exercise price for the warrants from $2.90 per share to $0 per share, and authorized plaintiffs to immediately exercise the warrants. The court did not award monetary damages to plaintiffs. The parties appealed aspects of the judgment adverse to their respective interests. After review, the Court of Appeal agreed that a corporation’s officers did not have a fiduciary duty to warrant holders. The Court also agreed with the court’s interpretation of plaintiffs’ warrants. The anti-dilution provision applies to the Lincoln agreement and stock issuances to Lincoln resulting from that agreement. But substantial evidence did not support the court’s decision to reduce plaintiffs’ exercise price to $0. The Court therefore reversed the judgment and remanded for retrial solely on the proper remedy for BlueFire’s breach of contract. View "Speirs v. Bluefire Ethanol Fuels, Inc." on Justia Law

Samuel Heckart brought this action against A-1 Self Storage, Inc., Caster Properties, Inc., Caster Family Enterprises, Inc., Caster Group LP, and Deans & Homer (together, Defendants) for violations of the Unfair Competition Law, violations of the Consumers Legal Remedies Act, negligent misrepresentation, and civil conspiracy. Heckart alleged A-1's sale of a Customer Goods Protection Plan (the Protection Plan) in connection with its rental of storage space constituted unlicensed sale of insurance. The form Protection Plan required the tenant to either initial to accept or decline participation in the plan. Heckart declined participation by initialing that option, which provided: "No, I decline participation in the . . . Protection Plan. I am currently covered by an insurance plan that covers my belongings in the storage facility. I understand that I need to provide the policy information in writing to the facility Owner within 30 days or I will automatically be enrolled in the . . . Protection Plan until I do provide such information to the Owner." Heckart "inadvertently" purchased the Protection Plan and was enrolled in it, presumably because he failed to provide proof of insurance within 30 days. In April 2013, Heckart, on behalf of himself and other similarly situated California residents, sued A-1 and Caster Group. The trial court sustained Defendants' demurrer to Heckart's first amended complaint without leave to amend, concluding the Protection Plan was not insurance. Heckart appealed, contending his allegations were sufficient to state the asserted causes of action because the Protection Plan was insurance that must comply with the Insurance Code. The Court of Appeal found his arguments unavailing and affirmed. View "Heckart v. A-1 Self Storage" on Justia Law

WAC owns and operates 10 “luxury” health and fitness clubs in the San Francisco Bay Area and a sports resort in San Diego. WAC offers a range of membership levels, providing various privileges at one or more of its locations. WAC also offers reduced-cost memberships, including corporate employee discounts, senior discounts, and family memberships. The Young Professional program offers a reduced-cost membership for individuals ages 18 to 29. Due to capacity constraints, Young Professional members do not have access to two WAC clubs during specified “peak” hours. In 2013, a Young Professional membership at the Bay Club San Francisco cost approximately $140 per month—$55 less than a standard membership. Javorsky filed a purported class action, alleging that the Young Professional discount constituted illegal age discrimination and violated the Unruh Civil Rights Act, the Consumers Legal Remedies Act, and the unfair competition law. The court of appeal affirmed summary judgment in favor of WAC, finding no arbitrary, unreasonable, or invidious discrimination. View "Javorsky v. Western Athletic Clubs, Inc." on Justia Law

Defendant-appellant Ramon Soto appealed an order denying his motions to: (1) vacate entry of default and default judgment; and (2) quash service of summons and dismiss. Defendant filed the motions in connection with an action brought by plaintiff-respondent Diana Buchanan to set aside a fraudulent transfer. Plaintiff claimed that defendant Maria Soto transferred certain real property to her husband Ramon as a fraudulent conveyance to prevent Buchanan from executing an anticipated judgment on the property. Plaintiff eventually obtained the underlying judgment when she sued Maria for failing to pay money owed by Maria to plaintiff in connection with Maria's purchase of plaintiff's bridal business. Defendant argued the court erred in denying his motions because, at the time of entry of default and judgment thereon, the court allegedly did not have personal jurisdiction over him and he was not properly served with process. Finding no reversible error, the Court of Appeal affirmed. View "Buchanan v. Soto" on Justia Law