Justia Business Law Opinion Summaries

Hooked developed an app for mobile devices. Hooked’s CEO and investors later wanted to sell the business. Apple showed interest. After two meetings, it was clear that Apple was not interested in buying Hooked for its technology or market share but might want to acquire Hooked so certain engineers would become Apple employees. Hooked declined but, short on cash, suggested to Apple that it “sell” three engineers to Apple and continue operating the less technical advertising aspect of its business, and provided the engineers’ resumes. Apple responded that it might consider paying a “finder’s fee” but instead contacted the engineers directly and hired them. Hooked demanded that its chief technical officer (CTO) return all Hooked confidential technical information. Hooked emailed Apple’s general counsel. Apple responded that it had no desire to use another company’s trade secrets and would facilitate the return of all confidential information.Hooked sued, alleging fraud, misappropriation of trade secrets, interference with contract and prospective economic advantage, aiding and abetting breach of fiduciary duty, unfair business practices, and unjust enrichment. The court of appeal affirmed summary judgment for Apple. No legal wrong is committed when a company solicits and hires away its competitor’s employees; absent some independent illegal act, the interests of the employee in his own mobility and betterment are paramount to the competitive business interests of the employers. Hooked cannot show Apple did something that transformed ordinary free-market competition into an actionable legal wrong. View "Hooked Media Group, Inc. v. Apple Inc." on Justia Law

Plaintiffs filed suit alleging that defendants entered into an illegal referral and kickback scheme in which USC paid below-market rates for hospitalist services from Concord, and Concord self-referred patients to Elevate, which shared ownership with Concord. Plaintiffs further alleged that when Plaintiff Alborzi complained to management at Verdugo Hills Hospital about the illegal scheme, the hospital stopped referring patients to him and eventually dissolved the on-call panel in retaliation.The Court of Appeal held that the trial court erred by sustaining the demurrer because plaintiffs were not required to exhaust judicial remedies before asserting the causes of action they have alleged here. The court also found that plaintiffs' complaint alleged sufficient facts to support causes of action for violations of Health and Safety Code section 1278.5 and Business and Professions Code section 17200, et seq., and therefore the demurrer should have been overruled as to those claims. The court further found that plaintiffs' cause of action for violation of Government Code section 12653 failed to allege sufficient facts to state a cause of action, but leave to amend was warranted. Finally, the court found that plaintiffs have abandoned the three causes of action they did not address on appeal. Accordingly, the court reversed the judgment and remanded the action with directions. View "Alborzi v. University of Southern California" on Justia Law

The Court of Appeal affirmed the trial court's order amending the judgment to add alter egos as judgment debtors. In this case, the trial court ordered that Craig Garrick individually and the Garrick entities be added to a judgment Butler America has against AFS.The court held that the release clause in the settlement agreement does not release Garrick and the Garrick entities because the express terms of the release clause excludes the release of any action to enforce the settlement agreement; AFS's breach of the settlement agreement terminated the agreement, including the releases; when the stipulated judgment was entered on the settlement agreement, it terminated all of AFS's and its third party beneficiaries' rights in the agreement, including the releases; and the trial court's finding of fraud are supported by substantial evidence. The court also held that the trial court did not err in finding that Garrick and the Garrick entities are alter egos of AFS. In this case, AFS was nothing but a shell; it had no substantial business activity and no income with which to pay its debts; and its only function was to act as a screen for Garrick and the Garrick entities. Finally, Butler is not equitably estopped from denying the separate existence of AFS and the Garrick entities, and the authority of the trial court to add alter egos as judgment debtors has long been recognized. View "Butler America v. Aviation Assurance Co., LLC" on Justia Law

Dr. My Tran and Dr. Ian Murray were dentists who owned a dental practice known as Bird Rock Dental. Dr. Murray worked at the practice and Dr. Tran handled the business operations through his own separate entity. About two years after they formed the practice, they had financial disputes. In the midst of these disputes, Dr. Tran accused Dr. Murray of substandard work and published his claims to several individuals and groups, mainly to people working for Dr. Tran, but also to Dr. Murray’s new employer and to one retired dentist. Both parties sued the other, and the lawsuits were consolidated. Dr. Murray’s second amended complaint asserted 22 causes of action, two of which were at issue in this appeal: defamation per se and defamation. Dr. Tran moved to dismiss the causes of action under the anti-SLAPP statute. The trial court found the defamation claims were governed by this statute, and Dr. Murray did not meet his burden to show a probability of prevailing. The court thus struck the two causes of action from the complaint. Dr. Murray appealed. After review, the Court of Appeal reversed in part. The Court found Dr. Murray alleged five separate defamation claims for purposes of anti-SLAPP analysis, and Dr. Tran met his burden to show only one of those claims alleged speech protected under the anti-SLAPP statute: the alleged defamatory statements to Dr. Murray’s new employer. As to that claim, Dr. Murray did not meet his burden to show a probability of prevailing because he did not present evidence that Dr. Tran in fact made these statements. The Court determined the alleged statements in four of the five asserted categories of defamatory statements were not made in connection with a public conversation or discussion of issues, and thus not protected by the anti-SLAPP statute. The trial court was instructed to vacate its order granting the anti-SLAPP motion and to issue another order denying the motion on all defamatory claims, except for claims listed in paragraphs 319 and 335 of Dr. Murray's second amended complaint. View "Murray v. Tran" on Justia Law

Plaintiffs' second amended complaint alleged derivative causes of action on behalf of ALI against AIG for conspiracy to commit fraud, fraud by concealment, breach of fiduciary duty, declaratory relief, conversion, and accounting.The Court of Appeal affirmed the trial court's order of dismissal entered as to the AIG defendants after the trial court sustained without leave to amend the AIG defendants' demurrer to plaintiffs' second amended complaint. The court held that, although plaintiffs' appeal is timely, their derivative claims are barred by the compulsory cross-complaint rule under Code of Civil Procedure section 426.30, subdivision (a). In this case, ALI may not assert against AIG the related causes of action not pleaded in the AIG v. Mahdavi action. Because ALI is barred from asserting the related causes of action against AIG, so are plaintiffs. The court explained that, because plaintiffs stand in the shoes of ALI in seeking redress for ALI's injuries, they are generally subject to the procedural rules that would apply to ALI as plaintiff in a direct action. The court stated that it would be inequitable to AIG to allow plaintiffs to assert claims ALI failed to assert by compulsory cross-complaint in the earlier-filed action, subjecting AIG to the precise piecemeal litigation section 426.30 was designed to prevent. View "Heshejin v. Rostami" on Justia Law

Porter Scott, P.C. (hereafter, “Porter Scott”) defended The Johnson Group Staffing Company, Inc. (hereafter, “TJG” or “Johnson Group”) through two rounds of litigation with its chief competitor, Aerotek, Inc. (hereafter, “Aerotek”). Aerotek first sued TJG after TJG’s founder, Chris Johnson, left Aerotek to form TJG. In the lawsuit, Aerotek alleged that TJG and Johnson, among other things, misappropriated trade secrets by soliciting Aerotek’s customers. TJG and Johnson settled with Aerotek a little over a year later. The issue presented for the Court of Appeal's review concerned the ownership of fees awarded under Civil Code 3426.4, and whether the prevailing litigant (here, The Johnson Group Staffing Company, Inc.) or the prevailing litigant’s attorney (here, Porter Scott, P.C.) were entitled to the fees awarded to the “prevailing party.” The Court concluded that, absent an enforceable agreement to the contrary, these fees belonged to the attorney to the extent they exceeded the fees the litigant already paid. Furthermore, the Court concluded that, although the parties here entered into a fee agreement, that agreement did not alter the default disposition of fees in favor of the attorney. Because the trial court reached the same conclusion, the Court of Appeal affirmed its judgment. View "Aerotek v. Johnson Group Staffing Co." on Justia Law

California’s automatic renewal law, Bus. & Prof. Code 17600, requires a consumer’s affirmative consent to any subscription agreement automatically renewed for a new term when the initial term ends and requires “clear and conspicuous” disclosure of the offer terms, and an “easy-to-use mechanism for cancellation.” Mayron sued Google on behalf of a putative class, alleging that Google’s subscription data storage plan violates the automatic renewal law: “Google Drive” allows users (those registered for a Google account) to remotely store electronic data that can be accessed from any computer, smartphone, or similar device. There is no charge for 15 gigabytes of storage capacity. For a $1.99 monthly fee, users can upgrade to 100 gigabytes of storage. Plaintiff alleged Google did not provide the required clear and conspicuous disclosures nor obtain his affirmative consent to commence a recurring monthly subscription agreement and did not adequately explain how to cancel, and alleged unfair competition, Bus. & Prof. Code 17200.The court of appeal affirmed the dismissal of the complaint. There is no private right of action for violation of the automatic renewal law and, because Mayron has not alleged an injury caused by Google’s conduct, he has no standing to sue under the unfair competition statute. View "Mayron v. Google LLC" on Justia Law

Mohamed Aljabban appeals from an adverse judgment after a bench trial in the lawsuit that he and his wife, Jacqueline Carrasco, filed against defendants Fontana Indoor Swap Meet, Inc. (FISM), Jonathan Shapiro and Victor Ramirez. Aljabban and Carrasco operated a beauty salon on the premises of an indoor swap meet managed by FISM and its president, Shapiro. Aljabban contended: (1) the trial court erred in concluding that he and Carrasco were not permitted to remove a sink/cabinet unit, a water heater and some decorative molding when vacating the premises of the beauty salon; (2) FISM and Shapiro improperly withheld $680.00 of the security deposit to cover expenses it incurred to repair damage to the premises; (3) the trial court should have found that FISM and Shapiro breached the parties’ agreement under which Aljabban and Carrasco occupied the premises because they wrongfully failed to renew it; and (4) he did not receive a fair trial because of alleged misbehavior during trial by Shapiro. After review, the Court of Appeal determined only one of Aljabban’s contentions had merit: FISM was not entitled to withhold $680.00 of the security deposit to cover the expense of repairing damage to the premises, as the parties did not specifically agree that the security deposit could be used to cover repairs. Accordingly, the Court reversed in part the trial court's judgment with respect to this contention, but affirmed in all other respects. The matter was remanded for further proceedings on the issue of attorney fees and costs. View "Aljabban v. Fontana Indoor Swap Meet, Inc." on Justia Law

Plaintiffs Cheryl Thurston and Luis Licea (collectively Thurston) were California residents who purchased items from defendant Fairfield Collectibles of Georgia, LLC (Fairfield), a Georgia limited liability company, through the company's website. Thurston alleged Fairfield’s website was not fully accessible by the blind and the visually impaired, in violation of the Unruh Civil Rights Act. The trial court granted Fairfield’s motion to quash service of summons, ruling that California could not obtain personal jurisdiction over Fairfield, because Fairfield did not have sufficient minimum contacts with California. The Court of Appeal reversed, finding the evidence showed that Fairfield made some eight to ten percent of its sales to Californians. "Hence, its website is the equivalent of a physical store in California. Moreover, this case arises out of the operation of that website." The trial court therefore could properly exercise personal jurisdiction over Fairfield. View "Thurston v. Fairfield Collectibles of Georgia, LLC" on Justia Law

Granny Purps grows and provides medical marijuana to its 20,000 members, in compliance with state laws governing the production and distribution of marijuana for medical purposes. Santa Cruz County’s ordinance prohibits any medical cannabis operation from cultivating more than 99 plants; Granny’s dispensary was growing thousands of marijuana plants. The sheriff’s office went to the dispensary in June 2015, seized about 1,800 plants, and issued a notice of ordinance violation. Several months later, officers again went to the dispensary and took about 400 more marijuana plants. Granny sued, alleging conversion, trespass, and inverse condemnation and sought an order requiring the county to return the seized cannabis plants, The trial court dismissed.The court of appeal reversed. A government entity does not have to return seized property if the property itself is illegal but the Santa Cruz ordinance ultimately regulates land use within the county; it does not (nor could it) render illegal a substance that is legal under state law. View "Granny Purps, Inc. v. County of Santa Cruz" on Justia Law