Justia Business Law Opinion Summaries

Articles Posted in Oregon Supreme Court
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HotChalk, LLC filed a lawsuit against the Lutheran Church—Missouri Synod and 22 other defendants, alleging breach of contract and fraud in relation to the closure of Concordia University - Portland. HotChalk claimed that the Synod orchestrated the university’s closure to financially benefit itself and its affiliates while leaving the university’s creditors out in the cold. During discovery, the Synod sought a protective order to prevent the disclosure of certain documents related to internal religious matters. The trial court granted the protective order, effectively denying a motion to compel discovery of those documents. HotChalk then filed a petition for mandamus.The trial court's decision to grant the protective order was based on an in-camera review of the documents in question. The court equated the Synod's motion to a motion to restrict discovery to protect a party from embarrassment. After completing its final in-camera review, the trial court granted the Synod's motion for a protective order. HotChalk then filed a timely petition for mandamus in the Supreme Court of the State of Oregon.The Supreme Court of the State of Oregon issued an alternative writ of mandamus, directing the trial court to either vacate its order or show cause why it should not do so. The trial court declined to vacate its order, leading to arguments in the Supreme Court. The Synod argued that the writ should be dismissed because HotChalk has a plain, speedy, and adequate remedy in the ordinary course of the law. The Supreme Court agreed with the Synod, stating that HotChalk had not established that the normal appellate process would not constitute a plain, speedy, and adequate remedy in this case. Therefore, the Supreme Court dismissed the alternative writ as improvidently allowed. View "Hotchalk, Inc. v. Lutheran Church--Missouri Synod" on Justia Law

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The United States Court of Appeals for the Ninth Circuit certified a question of law to the Oregon Supreme Court. Defendants Eddie Bauer LLC and Eddie Bauer Parent, LLC, operate the Eddie Bauer Outlet chain of stores, where they sell branded clothing. More than 90 percent of the products offered at the outlet stores are manufactured solely for sale at the outlet stores and were not sold elsewhere. Defendants advertised clothing at the Eddie Bauer Outlet stores as being sold at a substantial discount; with limited exceptions, the clothing was never sold at the “list” price. In 2017, plaintiff Susan Clark purchased two articles of clothing from one of defendants’ outlet stores in Oregon. Plaintiff filed a complaint in federal district court, alleging that defendants had violated multiple provisions of the UTPA, including, among others, ORS 646.608(1)(j) (making false or misleading representations of fact concerning the reasons for, existence of, or amounts of price reductions), and ORS 646.608(1)(ee) (advertising price comparisons without conspicuously identifying the origin of the price the seller is comparing to the current price). Plaintiff alleged she had been fraudulently induced to buy those garments by defendants’ false representation that she was buying them at a bargain price. Defendants moved to dismiss plaintiff’s complaint on the ground that it failed to allege an “ascertainable loss of money or property,” as required of a complainant pursuing a private right of action under the UTPA. The federal appellate court asked the Supreme Court whether a consumer suffered an "ascertainable loss" when the consumer purchased a product that the consumer would not have purchased at the price that the consumer paid but for a violation of [ORS] 646.608(1)(e), (i), (j), (ee), or (u), if the violation arose from a representation about the product’s price, comparative price, or price history, but not about the character or quality of the product itself. The Oregon Court answered the Ninth Circuit's question in the affirmative. View "Clark v. Eddie Bauer LLC" on Justia Law

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The Ninth Circuit Court of Appeals certified a question of law to the Oregon Supreme Court. Under Oregon’s Unlawful Trade Practices Act (UTPA), a person who suffers an “ascertainable loss of money or property” as a result of another person’s violation of the UTPA may maintain a private action against that person. The Ninth Circuit's question required a determination of whether a consumer could suffer an “ascertainable loss” under the UTPA based on a retailer’s misrepresentation about price history or comparative prices. More specifically, the Oregon Court had to consider whether a consumer suffered a cognizable “ascertainable loss” under ORS 646.638(1) when she buys items at an outlet store that have been advertised as being sold at a substantial discount but that have never been sold at that or any other location at the “list,” or non-sale price. To this, the Oregon Court responded in the affirmative. View "Clark v. Eddie Bauer LLC" on Justia Law

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Elkside Development, LLC (Elkside) owned and operated the Osprey Point RV Resort in Lakeside, Oregon. Part of Elkside’s business model involved selling membership contracts that conferred free use of the campground, among other benefits. In April 2017, Barnett Resorts LLC, an Oregon limited liability company operated by member-managers Stefani and Chris Barnett, purchased Elkside. Shortly after the purchase, the Barnetts sent a letter to all campground members, identifying them as “owners” of the resort, and indicating that they would not honor Elkside’s membership contracts. Plaintiffs, a group of 71 people who, collectively, were party to 39 membership contracts with Elkside, brought suit alleging a variety of claims against Stefani and Chris Barnett individually, and against the company, Barnett Resorts LLC. On appeal, this case raised three issues relating to: (1) a breach of contract claim; (2) an intentional interference with contract claim; and (3) a statutory claim of elder abuse, based on the fact that the majority of the membership contracts had been held by plaintiffs over the age of 65. As to the claims against the Barnetts individually, the trial court granted summary judgment for defendants, relying on ORS 63.165 and Cortez v. Nacco Materials Handling Group, 337 P3d 111 (2014). Plaintiffs argued, in part, that whether ORS 63.165 shielded the Barnetts from liability required considering whether their actions were entirely in support of the LLC, or whether they were, instead, in furtherance of a non-LLC individual motive. The Court of Appeals affirmed without opinion. The Oregon Supreme Court allowed review and reversed in part the Court of Appeals and the trial court. Specifically, the Supreme Court reversed as to the elder abuse claim, affirmed as to the breach of contract claim, and affirmed the intentional interference claim by an equally divided court. View "Adelsperger v. Elkside Development LLC" on Justia Law

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The Oregon Attorney General brought this action against defendants, Living Essentials, LLC and Innovation Ventures, LLC, alleging that they had made representations about their products that violated two different provisions of the Oregon Unlawful Trade Practices Act (UTPA). The trial court ruled for defendants, explaining that the relevant provisions of the UTPA required the State to prove that the misrepresentations were “material to consumer purchasing decisions,” and that the State had not done so. The Court of Appeals affirmed that decision. The Oregon Supreme Court granted the State’s petition for review to consider whether the lower courts correctly construed the statute. After such review, the Supreme Court concluded, contrary to the trial court and the Court of Appeals, that the UTPA provisions at issue contained no “material to consumer purchasing decisions” requirement. The Supreme Court also rejected defendants’ argument that, without such a requirement, the provisions facially violated the free speech provisions of the State and federal constitutions. Accordingly, the Supreme Court reversed the decision of the Court of Appeals and remanded to that court for further proceedings. View "State ex rel Rosenblum v. Living Essentials, LLC" on Justia Law

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Plaintiff Lindsay Buero brought a class action against defendants Amazon.Com Services, Inc. and Amazon.com, Inc. in Oregon state court, alleging, among other things, that defendants had violated Oregon’s wage laws by failing to pay employees for time spent in mandatory security screenings at the end of their work shifts. Defendants removed the case to federal court and moved for judgment on the pleadings, asserting that the time spent in the security screenings was not compensable. In support of that argument, defendants cited Integrity Staffing Solutions, Inc. v. Busk, (574 US 27), a case involving a similar claim against defendants, in which the United States Supreme Court held that, under federal law, time spent in the security screenings at issue in that case was not compensable. The district court agreed with defendants, noting the similarities between Oregon administrative rules enacted by the state’s Bureau of Labor and Industries (BOLI) and federal law. Plaintiff appealed to the Ninth Circuit and filed a motion asking that court to certify a question to the Oregon Supreme Court on whether time spent in security screenings is compensable under Oregon law. The Ninth Circuit granted the motion. The Oregon Supreme Court concluded Oregon law aligned with federal law regarding what activities were compensable. Therefore, under Oregon law, as under federal law, time that employees spend on the employer’s premises waiting for and undergoing mandatory security screenings before or after their work shifts is compensable only if the screenings are either: (1) an integral and indispensable part of the employees’ principal activities or (2) compensable as a matter of contract, custom, or practice. View "Buero v. Amazon.com Services, Inc." on Justia Law

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Plaintiff’s libel per se claim was based on a Google review, written by the manager of plaintiff’s business competitor, that subsequently was removed from the internet without a trace. The Oregon Court of Appeals reversed a grant of summary judgment to defendants. The issues this case presented for the Oregon Supreme Court were: (1) whether plaintiff could reach a jury on his libel claim when the text was no longer available; (2) whether the First Amendment’s public comment defense was available in these circumstances and, relatedly, whether a defendant speaker’s identity or motive was part of the court’s inquiry on the defense’s availability; and (3) whether Oregon should require a plaintiff claiming defamation to prove that the defendant acted with a heightened culpable mental state, “actual malice,” in all cases when the speech was on a “matter of public concern” protected under the First Amendment, abolishing the distinction that requires such proof only when the defendant is a member of the media. The Court of Appeals concluded the trial court had erred because plaintiff’s evidence of the allegedly defamatory statements sufficed to create a question of fact for trial on his claim and the lack of the review’s printed text did not affect the analysis of defendants’ First Amendment defense. The Supreme Court concurred with the appellate court's conclusion that the lack of a copy of the review was not fatal to plaintiff’s libel claim and that two of the three allegedly defamatory statements in the review were actionable. The Court thus affirmed the decision of the Court of Appeals in part and remanded the case to the trial court for further proceedings. View "Lowell v. Wright" on Justia Law

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Rami Khalaf (“taxpayer”) was in the business of buying products for customers in the United Arab Emirates, primarily all-terrain vehicles (ATVs). He sought to claim certain business deductions on his 2013 income tax return. As relevant here, those included travel expenses that taxpayer had incurred on trips to the Emirates, and the cost of a dune buggy that taxpayer had purchased for use as a demonstration model. The Department of Revenue rejected those deductions. The Tax Court agreed with the department on those points, holding that the travel expenses were not deductible, because they were not sufficiently documented, and that the dune buggy was not deductible because it counted as inventory. Taxpayer appealed, but finding no reversible error, the Oregon Supreme Court affirmed the Tax Court's judgment. View "Khalaf v. Dept. of Rev." on Justia Law

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In a shareholder derivative action, two issues were presented for the Oregon Supreme Court's review: (1) whether the breach of fiduciary duty claims brought by shareholders-plaintiffs Joseph LaChapelle and James Field on behalf of Deep Photonics Corporation (DPC) against DPC directors Dong Kwan Kim, Roy Knoth, and Bruce Juhola (defendants) were properly tried to a jury, rather than to the court; and (2) whether the trial court erred in denying defendants’ motion, made during trial, to amend their answer to assert an affirmative defense against one of the claims in the complaint based on an “exculpation” provision in DPC’s certificate of incorporation. The Oregon Supreme Court concluded the case was properly tried to the jury and that the trial court did not err in denying defendants’ motion to assert the exculpation defense. Therefore the Court of Appeals and the limited judgment of the trial court were affirmed. View "Deep Photonics Corp. v. LaChapelle" on Justia Law

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In 2017, the Oregon legislature enacted a law that imposed a tax imposed on each vehicle dealer "for the privilege of engaging in the business of selling taxable motor vehicles at retail in this state.” The issue in this case was whether that tax was subject to Article IX, section 3a, of the Oregon Constitution. As relevant here, Article IX, section 3a, provided that taxes “on the ownership, operation or use of motor vehicles” “shall be used exclusively for the construction, reconstruction, improvement, repair, maintenance, operation and use of public highways, roads, streets and roadside rest areas in this state.” Petitioners AAA Oregon/Idaho Auto Source, LLC (Auto Source), AAA Oregon/Idaho, and Oregon Trucking Associations, Inc. argued the Section 90 tax fell within paragraph (1)(b) because it was a tax “on the owner- ship *** of motor vehicles.” Specifically, petitioners contended that taxes “on the ownership *** of motor vehicles” included taxes levied on the exercise of any of the rights of ownership, including the rights to sell and use. Petitioners posited that the voters would have understood “the concept of ownership” to include “multiple segregable rights or incidents, principal among which were the rights to sell and to use,” and, therefore, it is likely that the voters would have understood taxes levied “on the ownership *** of motor vehicles” to include taxes levied on the sale or use of motor vehicles. The Oregon Supreme Court disagreed with petitioners' contention: the Section 90 and Section 91 taxes worked together, so that the Section 91 privilege tax could be imposed on in-state vehicle dealers without placing them at a competitive disadvantage to out-of-state vehicle dealers, which supported the conclusion that the Section 90 tax was a business privilege tax. Therefore, the Court held the Section 90 tax was not a tax “on the ownership, operation or use of motor vehicles,” as that phrase is used in Article IX, section 3a. View "AAA Oregon/Idaho Auto Source v. Dept. of Rev." on Justia Law