Justia Business Law Opinion Summaries

This case stemmed from a distributor agreement (Agreement) granting Southern Wine & Spirits of Nevada (Southern) "the exclusive right to sell and distribute" bottled water products supplied by Mountain Valley Spring Company (Mountain Valley) within a seventeen-county region around Las Vegas, Nevada. The parties appealed in part the district court's judgment. The court held that the district court did not err when it determined that the Agreement was for a perpetual term where the parties contemplated the duration of their relationship and agreed to a term that ended only by mutual consent or specific acts of default and when it denied Mountain Valley's renewed motion for judgment as a matter of law on Southern's implied covenant of good faith and fair dealing claim. The court held, however, that the district court erred when it set aside the jury's verdict on Mountain Valley's claim for breach of the implied covenant of good faith and fair dealing. Accordingly, the court affirmed in part and reversed in part.

Lead plaintiff in this consolidated, but uncertified, class action securities lawsuit sued defendants alleging violations of section 10(b) and 20(a) of the Securities and Exchange Act of 1934, 15 U.S.C. 78j(b) and 78t(a). At issue was whether the district court properly dismissed plaintiff's lawsuit, reasoning that defendants did not have a duty to announce production failures to defendant's investors immediately and, in any event, plaintiff failed to allege "facts giving rise to a strong inference" of scienter as required by section 21D(b) of the Private Securities Litigation Reform Act of 1995, 15 U.S.C. 78u-4(b)(2). The court held that plaintiff did not sufficiently allege an actionable omission or scienter for his claim and therefore, the complaint must be dismissed. The court also held that, because it affirmed the district court's dismissal of plaintiff's section 10(b)/Rule 10b-5 claim, the court affirmed the district court's dismissal of plaintiff's section 20(a) claim. The court further held that the district court did not abuse its discretion in denying plaintiff's motion to amend. Accordingly, the court affirmed the judgment of the district court.