Justia Business Law Opinion Summaries

In 2011, Richmond issued the city's first medical marijuana collective permit to RCCC. Other permits were later issued to the defendants. The ordinance governing the permits was amended in 2014, to reduce the number of dispensary permits from six to three, and to provide that if a permitted dispensary did not open within six months after the issuance of a permit, the permit would become void. RCCC lost its permit. RCCC sued, claiming that defendants, acting in concert, encouraged and paid for community opposition to RCCC’s applications and purchased a favorably zoned property. Defendants filed an anti-SLAPP motion to strike, Code of Civil Procedure section 425.16, which provides that a claim 'arising from any act of that person in furtherance of the person’s right of petition or free speech ... in connection with a public issue shall be subject to a special motion to strike," unless the court determines that the plaintiff has established a probability of success on the merits. One defendant admitted: “Our group declared war on RCCC. We conspired to prevent RCCC from getting any property in Richmond.“ The court ultimately determined that the defendants failed to show how the allegations were protected activity and denied the anti-SLAPP motion. The court of appeal affirmed, stating that the appeal had no merit and will delay the plaintiff’s case and cause him to incur unnecessary attorney fees. View "Richmond Compassionate Care Collective v. 7 Stars Holistic Foundation, Inc." on Justia Law

The Court of Appeal held that recording secret business conversations and using the recordings in an arbitration were not in connection with a judicial or official proceeding authorized by law, and therefore they were not protected activities under Code of Civil Procedure section 425.16 (the anti-SLAPP statute).In this case, after defendant, the president of Tang Energy Corp., secretly recorded conversations with Sherman Xuming Zhang, president of AVIC International USA, defendant introduced the recordings as evidence in contractual arbitration. When the arbitrators decided the issue in favor of Tang Energy, Zhang and AVIC filed suit against defendant for invasion of privacy and eavesdropping on or recording confidential communications in violation of Penal Code sections 632 and 637.2. The court affirmed the trial court's denial of defendant's special motion to strike under section 425.16. View "Zhang v. Jenevein" on Justia Law

When O'Gara Coach moved to disqualify Richie Litigation from representing its former senior executive, Joseph Ra, in litigation, O'Gara Coach argued that Darren Richie had been a client contact for outside counsel investigating the charges of fraudulent conduct that ultimately led to an action alleging that O'Gara Coach and Ra had committed fraud in connection with Marcelo Caraveo's acquisition of luxury vehicles from O'Gara Coach.The Court of Appeal reversed the trial court's order denying the motion to disqualify Richie Litigation. The court held that Darren Richie could not act as Ra's counsel because he obtained privileged information relating to the pending litigation as O'Gara Coach's President and CEO. Furthermore, Richie Litigation, not just Richie, must be disqualified under established rules for vicarious disqualification. View "O'Gara Coach Co. v. Ra" on Justia Law

1st Century was a Delaware corporation headquartered in Los Angeles; its shares were publicly traded on the NASDAQ. 1st Century and Midland announced merger plans. Midland was to acquire 1st Century for $11.22 in cash per share, a 36.3 percent premium over 1st Century’s closing share price on March 10, 2016. The merger was subject to approval by the holders of a majority of 1st Century’s outstanding shares. A shareholder vote on the proposed merger was scheduled. 1st Century’s certificate of incorporation authorized its directors “to adopt, alter, amend or repeal” the company’s bylaws, “subject to the power of the stockholders of the Corporation to alter or repeal any Bylaws whether adopted by them or otherwise.” 1st Century’s board of directors exercised that power when it approved the merger agreement, adding a forum selection bylaw providing that, absent the corporation’s written consent, Delaware is “the sole and exclusive forum for” intra-corporate disputes, including any action asserting a breach of fiduciary duty claim. The trial court stayed a putative shareholder class action, concluding that the bylaw’s forum selection clause was enforceable. The court of appeal affirmed, holding that a forum selection bylaw adopted by a Delaware corporation without stockholder consent is enforceable in California. View "Drulias v. 1st Century Bancshares, Inc." on Justia Law

The Court of Appeal affirmed the trial court's judgment denying Acco's petition for writ of mandamus seeking review of an administrative decision adopted by the Registrar, finding Acco in violation of Business and Professions Code section 7110 for failing to obtain a building permit before replacing a boiler. The court held that the Legislature's use of the term "willful" in section 7110 only requires a showing of general intent. The court also held that there was substantial evidence to support the Administrative Judge's determination that Acco willfully violated the applicable building laws. The court noted that the fact that an individual employee may not have been aware of a specific local permit requirement does not excuse a corporate licensee from complying with the building laws. View "Acco Engineered Systems v. Contractors' State License Board" on Justia Law

Plaintiffs Travelers Property Casualty Company of America, the Travelers Indemnity Company of Connecticut, and St. Paul Fire and Marine Insurance Company (collectively, Travelers) filed this action against certain subcontractors to recover attorneys’ fees and costs Travelers incurred in defending developers Westlake Villas, LLC and Meer Capital Partners, LLC (collectively, Westlake) in a prior construction defect action. Travelers' claims were based on alleged subrogation to the rights of its additional insured, Westlake. The Westlake entities were suspended corporations under Revenue and Taxation Code section 23301, and could not assert these claims on their own behalf. Defendant Engel Insulation, Inc. moved for judgment on the pleadings on the basis that Travelers was also barred under this statute from prosecuting these claims. On appeal, Travelers contended the trial court erred in granting Engel’s motion without leave to amend. The Court of Appeal disagreed: an insurer could not file its own action to assert claims solely as a subrogee of a suspended corporation. View "Travelers Property Casualty Co. of Amer. v. Engel Insulation, Inc." on Justia Law

Finance Holding Company, LLC (Finance) obtained a judgment against Dominque Molina for about $50,000 plus interest and attorney fees. In judgment enforcement proceedings, Finance sought documents from Molina's employer, The American Institute of Certified Tax Coaches, Inc. (Institute). Finance requested numerous categories of business, tax, and bank records, without limiting the request to information relevant to Molina. The court overruled the Institute's objections and ordered the Institute "to produce for inspection and copying all the demanded documents." On appeal, the Institute argued the document production order was overbroad under the statute governing third party discovery in judgment enforcement proceedings. The Court of Appeal determined the order was appealable, and statutorily overbroad: the court did not have the authority to order the expansive document production that went far beyond the statutory guidelines. The Court remanded for the trial court to narrow the order to require production only of those documents pertaining to Molina's compensation, property, or services, and/or the Institute's debts owed to Molina. View "Finance Holding Co., LLC v. The American Inst. of Certified etc." on Justia Law

SI 59 appealed from a judgment of dismissal following a demurrer to its second amended complaint against defendants, as well as the post judgment award of attorney fees. The Court of Appeal affirmed, holding that Civil Code section 1668 negates a contractual clause exempting a party from responsibility for fraud or a statutory violation only when all or some of the elements of the tort are concurrent or future events at the time the contract is signed. The court also held that section 1668 does not negate such a clause when all the elements are past events. The court explained that, regarding the element of damages, which is necessary for tort liability, this means that at least some form of economic or physical damage has occurred. In this case, the negligence claim was barred by the general release and the negligent misrepresentation claim was not pleaded with the requisite specificity. The court rejected the remaining arguments and held that the issue of attorney fees was moot. View "SI 59 LLC v. Variel Warner Ventures, LLC" on Justia Law

Plaintiff AMN Healthcare, Inc. (AMN) appealed a judgment in favor of defendants Kylie Stein, Robin Wallace, Katherine Hernandez, Alexis Ogilvie and Aya Healthcare, Inc. (Aya) and an injunction preventing AMN from enforcing its nonsolicitation of employee provision against individual defendants and its other former employees. AMN and Aya are competitors in the business of providing on a temporary basis healthcare professionals, in particular "travel nurses," to medical care facilities throughout the country. Individual defendants were former "travel nurse recruiters" of AMN who, for different reasons and at different times, left AMN and joined Aya, where they also worked as travel nurse recruiters. AMN sued defendants, asserting various causes of action including breach of contract and misappropriation of confidential information, including trade secrets as set forth in the Uniform Trade Secrets Act, Civil Code sections 3426 et seq. (UTSA). Defendants filed a cross-complaint for declaratory relief and unfair business competition. The trial court agreed with defendants, granted summary judgment against AMN, and granted summary adjudication of defendants' declaratory relief cause of action in their cross-complaint. After granting such relief, the court subsequently enjoined AMN from enforcing the nonsolicitation of employee provision in their Confidentiality and Non-Disclosure Agreement (CNDA) as to any former (California) AMN employee and awarded defendants attorney fees. Finding no reversible error in the trial court's judgment, the Court of Appeal affirmed. View "AMN Healthcare, Inc. v. Aya Healthcare Services, Inc." on Justia Law

Plaintiff MCI Communications Services, Inc. (MCI) appealed the dismissal of its action for a state tax refund after the trial court sustained California Department of Tax and Fee Administration's (CDTFA) demurrer to MCI's first amended complaint without leave to amend. Certain categories of property are excluded from the definition of tangible personal property and therefore are not subject to sales and use taxation. This appeal required the Court of Appeal to decide whether the tax exclusion in Rev. & Tax. Code section 6016.5 extended to the pre-installation component parts that may one day be incorporated into completed telephone and telegraph systems. The Court held that section 6016.5 excluded only fully installed and completed telephone and telegraph lines from sales and use taxation, not the pre-installation component parts of such lines. Accordingly, the Court affirmed the judgment. View "MCI Communications etc. v. Cal. Dept. of Tax and Fee Admin." on Justia Law