Justia Business Law Opinion Summaries

In early 2020, Robert Goodrich liquidated his stock portfolio due to concerns about the financial market's reaction to the COVID-19 pandemic, resulting in significant financial losses. Goodrich had an investment account with U.S. Trust Bank of America Private Wealth Management, managed by Matthew Lettinga. Despite advice from Lettinga to avoid liquidation, Goodrich insisted on selling his portfolio. Goodrich later sued Lettinga and Bank of America, claiming gross negligence, breach of fiduciary duty, and violations of the D.C. Securities Act, arguing that he was not adequately informed of the risks involved in liquidating his portfolio.The U.S. District Court for the District of Columbia dismissed Goodrich's claims of gross negligence and violations of the D.C. Securities Act, finding them implausibly pleaded. The court allowed the breach of fiduciary duty claim to proceed but later granted summary judgment in favor of the defendants, concluding that Goodrich had explicitly instructed the sale of his portfolio, which precluded liability under the terms of the investment agreement.The United States Court of Appeals for the District of Columbia Circuit reviewed the case and affirmed the District Court's decisions. The appellate court held that the investment agreement's exculpatory clauses were enforceable and that Goodrich's explicit instruction to liquidate his portfolio shielded the defendants from liability. The court also agreed that Goodrich failed to plausibly allege scienter, a necessary element for his claims under the D.C. Securities Act, and found no abuse of discretion in the District Court's limitation of discovery to the dispositive issue of whether Goodrich instructed the sale. View "Goodrich v. Bank of America N.A." on Justia Law

Advocacy Holdings, a company that helps clients influence public policy through its online platform OneClickPolitics, sued its former CEO, Chazz Clevinger, for breaching a noncompete agreement. Clevinger, who resigned in 2023, allegedly stole Advocacy’s customer list, started competing businesses, solicited Advocacy’s customers, and created a near duplicate of Advocacy’s platform. Advocacy sought a preliminary injunction to stop Clevinger’s actions, claiming irreparable harm.The United States District Court for the District of Columbia partially denied Advocacy’s motion for a preliminary injunction, ruling that Advocacy had not demonstrated a likelihood of irreparable harm. The court did, however, enjoin Clevinger from using Advocacy’s platform design and interface but allowed him to continue operating his competing businesses and soliciting Advocacy’s customers. Advocacy appealed the partial denial of the preliminary injunction.The United States Court of Appeals for the District of Columbia Circuit reviewed the case. The court affirmed the district court’s decision, holding that Advocacy had not shown irreparable harm. The court noted that financial injuries, such as loss of customers, are typically remediable through monetary damages and do not constitute irreparable harm. Additionally, the court found that Advocacy’s claims of reputational harm were unsubstantiated and that the stipulation of irreparable harm in the noncompete agreement was forfeited because Advocacy did not raise it in its initial motion. The court also declined to consider Advocacy’s sliding-scale argument for evaluating preliminary injunction factors, as it was raised too late. The court concluded that without a showing of irreparable harm, a preliminary injunction was not warranted. View "Clevinger v. Advocacy Holdings, Inc." on Justia Law

Rothe filed suit alleging that the statutory basis of the Small Business Administration’s (SBA) 8(a) business development program, Amendments to the Small Business Act, 15 U.S.C. 637, violates its right to equal protection under the Due Process Clause of the Fifth Amendment. Rothe is a small business that bids on Defense Department contracts, including the types of subcontracts that the SBA awards to economically and socially disadvantaged businesses through the 8(a) program. The court rejected Rothe's claim that the statute contains an unconstitutional racial classification that prevents Rothe from competing for Department of Defense contracts on an equal footing with minority-owned businesses. The court concluded that the provisions of the Small Business Act that Rothe challenges do not on their face classify individuals by race. In contrast to the statute, the SBA’s regulation implementing the 8(a) program does contain a racial classification in the form of a presumption that an individual who is a member of one of five designated racial groups (and within them, 37 subgroups) is socially disadvantaged. Because the statute lacks a racial classification, and because Rothe has not alleged that the statute is otherwise subject to strict scrutiny, the court applied rational-basis review. Under rational-basis review, the court concluded that the statutory scheme is rationally related to the legitimate, and in some instances compelling, interest of counteracting discrimination. Finally, Rothe's evidentiary and nondelegation challenges failed. Accordingly, the court affirmed the district court's judgment granting summary judgment to the SBA and DOD. View "Rothe Development v. DOD" on Justia Law

The Government sought to recover a $1.3 million judgment debt pursuant to the Federal Debt Collect Procedures Act (FDCPA), 28 U.S.C. 3001 et seq., by garnishing funds owed to WDG, a company T. Conrad Monts and his wife owned as tenants by the entireties. The court reversed the district court's holding that Monts had a sufficient property interest in WDG’s assets to permit garnishing them under the FDCPA in satisfaction of his debts. The court remanded for the district court to evaluate the Government’s alternative argument that it may garnish WDG’s assets by piercing the corporate veil between WDG and Monts. View "United States v. TDC Mgmt. Corp." on Justia Law