Justia Business Law Opinion Summaries

EnvTech, Inc., a company specializing in cleaning products and services for hydrofluoric acid alkylation (HF alky) units in oil refineries, alleges that Patrick DeBusk, CEO of USA DeBusk LLC (USAD), orchestrated the theft of its proprietary neutral pH chelation cleaning formula and process. EnvTech claims that DeBusk directed the hiring of key former EnvTech employees, who were privy to EnvTech’s trade secrets, and used their knowledge to allow USAD to enter and compete in the specialized market for HF alky unit cleaning. EnvTech further asserts that this conduct was part of a broader pattern, with USAD hiring competitors’ employees to misappropriate trade secrets under DeBusk’s direction.The United States District Court for the Southern District of Texas dismissed EnvTech’s amended complaint under Federal Rule of Civil Procedure 12(b)(6). The district court found that EnvTech had not plausibly alleged that DeBusk personally engaged in trade secret theft with the necessary mental state or that a pattern of racketeering activity under the Racketeer Influenced and Corrupt Organizations Act (RICO) was sufficiently pleaded. The court dismissed the case with prejudice after EnvTech’s amended complaint did not cure the perceived deficiencies.The United States Court of Appeals for the Fifth Circuit reviewed the dismissal de novo and found that EnvTech plausibly alleged DeBusk’s knowing direction and participation in the theft and use of EnvTech’s trade secrets, as well as a broader pattern of similar conduct involving other competitors. The Fifth Circuit held that EnvTech’s allegations were sufficient to state a RICO claim based on a pattern of trade secret theft and conspiracy, and that the continuity and relatedness requirements for a RICO pattern were satisfied. The Fifth Circuit reversed the district court’s dismissal and remanded the case for further proceedings. View "EnvTech v. DeBusk" on Justia Law

A nonprofit religious corporation, incorporated under Missouri law, sought to restore its governance authority over a university in Texas that was established as an agency of the church. The university, although separately incorporated, was subject to church governance under its charter and bylaws. In 2022, the university’s regents unilaterally amended their governing documents to reject the church’s authority. The church’s internal adjudicatory body declared these amendments void, and the church’s convention directed action to restore church control. The university refused to recognize church-appointed regents as its governing body.Litigation ensued in the United States District Court for the Western District of Texas. The church, through its corporate body, sued the university and its leaders in federal court, asserting diversity jurisdiction. The university counter-sued in Texas state court, naming the church as an unincorporated association. The federal actions were consolidated. The district court, adopting a magistrate judge’s report, held that the church was an unincorporated association and the real party in interest, and that joining the church as a plaintiff destroyed diversity jurisdiction because its members included Texas citizens. The court dismissed the federal suit and remanded the state suit to state court.The United States Court of Appeals for the Fifth Circuit reversed the district court’s dismissal. The appellate court held that the district court’s approach violated the church autonomy doctrine under the First Amendment by imposing secular interpretations on the church’s governance structure and disregarding the church’s own description of its internal polity. The court found that the nonprofit corporation is the appropriate party for civil litigation and that diversity jurisdiction exists. The case was remanded for further proceedings. View "Lutheran Church v. Christian" on Justia Law

Branch Metrics, Inc. brought an antitrust action against Google, LLC, alleging violations of the Sherman Act based on documents uncovered in earlier litigation brought by the United States against Google. Branch Metrics claimed Google maintained monopoly power in online search and search advertising markets, using exclusive agreements that caused anticompetitive harm. The suit was filed in the Eastern District of Texas, although most relevant witnesses and evidence were located in California.Google responded by requesting a transfer of venue to the Northern District of California under 28 U.S.C. § 1404(a), arguing that it was clearly more convenient for parties and witnesses and that the sources of proof were located there. The United States District Court for the Eastern District of Texas permitted venue discovery but ultimately denied Google’s motion to transfer. The court found that certain private interest factors slightly favored transfer, while one public interest factor—administrative difficulties stemming from court congestion—weighed against transfer, and the rest of the factors were neutral.On mandamus review, the United States Court of Appeals for the Fifth Circuit found that the district court misapplied the law by placing undue weight on the court congestion factor, which Fifth Circuit precedent considers speculative and non-dispositive. The appellate court held that the district court erred by allowing that single factor to override all other factors, contrary to circuit authority. The Fifth Circuit also rejected Branch Metrics’ argument that the Clayton Act insulated its choice of venue from transfer. The court granted Google’s petition for a writ of mandamus and ordered the case transferred to the Northern District of California. View "In Re: Google" on Justia Law

Two development companies owned land in Johnson County, Texas, within the extraterritorial jurisdiction of the City of Mansfield but outside the city’s corporate boundaries. To develop this land, the companies needed access to retail water services, which, under state law, could be provided only by the Johnson County Special Utility District (“JCSUD”) because it held the exclusive certificate of convenience and necessity (CCN) for the area. However, a contract between JCSUD and the City of Mansfield required JCSUD to secure Mansfield’s written consent, which could be withheld at the City’s discretion, before providing water services within the city’s extraterritorial jurisdiction. The developers’ efforts to obtain water service were unsuccessful, as Mansfield demanded annexation and additional fees, ultimately refusing to formalize an agreement.After unsuccessful negotiations and attempts to compel service through the Texas Public Utility Commission, the developers sued the City of Mansfield in the United States District Court for the Northern District of Texas. They alleged violations of the Sherman Act and brought state-law claims. The district court, adopting a magistrate judge’s recommendation, dismissed the antitrust claims with prejudice, holding that Mansfield was entitled to state-action antitrust immunity under Texas law, and declined to exercise supplemental jurisdiction over the state-law claims.The United States Court of Appeals for the Fifth Circuit reviewed whether Mansfield was entitled to state-action immunity. The Fifth Circuit held that, although Texas law authorizes monopolies for water utilities through CCNs, it does not clearly articulate or authorize the City of Mansfield to act anticompetitively concerning the area in question, since the CCN belonged to JCSUD. Therefore, the court reversed the district court’s grant of state-action immunity and remanded the case for further proceedings. View "Megatel v. Mansfield" on Justia Law

The Securities and Exchange Commission initiated an enforcement action against Timothy Barton and related entities, alleging violations of federal securities laws. The district court subsequently appointed a receiver to manage properties allegedly acquired with funds from Barton’s fraudulent activities. Certain properties and entities, including TC Hall, LLC (owner of the Hall Street property), Goldmark Hospitality LLC (owner of Amerigold Suites), BM318, LLC, and JMJ Development, LLC, were placed within the receivership because they had received or benefitted from assets traceable to the alleged misconduct.The United States District Court for the Northern District of Texas oversaw the receivership and issued several orders approving property sales and settlements. Barton previously appealed the appointment of the receivership and its scope. The United States Court of Appeals for the Fifth Circuit, in an earlier decision (SEC v. Barton, 79 F.4th 573 (5th Cir. 2023)), vacated and remanded for reconsideration; on remand, the district court narrowed and reappointed the receivership. The Fifth Circuit later affirmed the new receivership order in SEC v. Barton, 135 F.4th 206 (5th Cir. 2025). While appeals were pending, the district court issued orders related to the sale of Amerigold Suites, settlements involving JMJ and BM318, and the sale of the Hall Street property.In the current appeal, the United States Court of Appeals for the Fifth Circuit concluded it lacked appellate jurisdiction to review the cancelled Amerigold Suites sale and the two settlement agreements, dismissing those portions of the appeal. The court found jurisdiction to review the approval of the Hall Street property sale and affirmed the district court’s order, holding that the district court did not abuse its discretion in approving the sale, which complied with statutory requirements and was in the best interest of the receivership estate. View "Securities and Exchange Commission v. Barton" on Justia Law

Corelle, a company that sold Instapot multifunction cookers, entered into a 2016 master supply agreement (MSA) with Midea, the manufacturer. Under this arrangement, individual purchase orders (POs) were used for each transaction, detailing specific terms such as price and quantity. Each PO typically included Corelle’s own terms, including indemnity provisions. In 2023, Corelle filed for Chapter 11 bankruptcy and, as part of its reorganization plan, sold its appliances business and assigned the MSA to the buyer. However, Corelle sought to retain its indemnification rights for products purchased under completed POs made before the assignment.The United States Bankruptcy Court for the Southern District of Texas denied Midea’s objection to this arrangement, finding that the POs were severable contracts distinct from the MSA. This meant the indemnification rights related to completed POs remained with Corelle. Midea appealed, contending that the MSA and all related POs formed a single, indivisible contract that should have been assigned in its entirety. The United States District Court for the Southern District of Texas affirmed the bankruptcy court’s decision, emphasizing that the structure of the MSA and the parties’ course of dealing supported the divisibility of the POs from the MSA.On further appeal, the United States Court of Appeals for the Fifth Circuit reviewed the standards applied by the lower courts, the interpretation of the contracts, and the application of 11 U.S.C. § 365(f). The appellate court held that the bankruptcy court did not err in finding the POs were divisible from the MSA, that Corelle’s retention of indemnification rights did not violate bankruptcy law, and that the lower courts applied the correct standards of review. Accordingly, the Fifth Circuit affirmed the district court’s judgment. View "GuangDong Midea v. Unsecured Creditors" on Justia Law

An environmental remediation company and an oil corporation entered into a Master Services Contract in 2008, which included a Texas choice-of-law and venue provision and an indemnification clause requiring the remediation company to defend and indemnify the oil corporation for claims arising from violations of applicable laws. In 2012, it was discovered that the remediation company’s then-president, along with subcontractors, had engaged in fraudulent overbilling for work performed for the oil corporation. Upon discovery, ownership of the remediation company changed hands, and litigation ensued in Louisiana state court. The remediation company’s new owner alleged that the oil corporation’s employee was complicit in the fraud, making the corporation vicariously liable.The oil corporation then filed suit in the United States District Court for the Southern District of Texas seeking a declaratory judgment that the remediation company had a duty to defend and indemnify it in the Louisiana litigation, and also sought attorney’s fees as damages for breach of contract. The district court granted summary judgment for the oil corporation, holding that Texas law applied, the remediation company owed both a duty to defend and to indemnify, and awarding attorney’s fees for both the Texas and Louisiana lawsuits.On appeal, the United States Court of Appeals for the Fifth Circuit reviewed the district court’s rulings de novo regarding summary judgment and attorney’s fees. The appellate court held that Texas law governed under the contract’s choice-of-law clause since Louisiana did not have a more significant relationship or materially greater interest, and applying Texas law did not contravene Louisiana public policy. The indemnity provision was not void as against public policy or for illegality. The court affirmed the duty to defend and to indemnify, but vacated the judgment to the extent it would require indemnification for punitive and exemplary damages, and remanded for modification. It also vacated attorney’s fees awarded for the underlying Louisiana litigation, affirming only those fees related to the declaratory judgment action. View "Anadarko v. Alternative Environmental Solutions" on Justia Law

A Mississippi retail pharmacy, Rx Solutions, Inc., sought to join the pharmacy benefit management (PBM) network operated by Caremark, LLC, which is associated with CVS Pharmacy, Inc. Caremark denied Rx Solutions’ application, citing inconsistencies in ownership information and affiliations with Quest Pharmacy, owned by Harold Ted Cain, who Caremark claimed was previously found guilty of violating the False Claims Act. Rx Solutions disputed these reasons, noting acceptance by other PBM networks and asserting that Harold Ted Cain lacked operational control over Rx Solutions and had not been convicted of any relevant criminal offense.Rx Solutions filed suit in the United States District Court for the Southern District of Mississippi, alleging two federal antitrust violations under the Sherman Act and three state law claims: violation of Mississippi’s “any willing provider” statute, violation of the state antitrust statute, and tortious interference with business relations. The district court dismissed the federal antitrust and state statutory claims, concluding that Rx Solutions failed to adequately define relevant product and geographic markets and did not allege antitrust injury. The court also determined there was no diversity jurisdiction to support the remaining state law claims and declined to exercise supplemental jurisdiction.The United States Court of Appeals for the Fifth Circuit affirmed the district court’s dismissal of the federal antitrust and Mississippi state antitrust claims, holding that Rx Solutions did not sufficiently plead a relevant market or antitrust injury. However, the Fifth Circuit reversed the district court’s finding regarding diversity jurisdiction, based on admissions by Caremark and CVS establishing complete diversity between the parties. The appellate court affirmed the dismissal of the state antitrust claim and remanded the claims under Mississippi’s “any willing provider” statute and for tortious interference with business relations for further proceedings. View "Rx Solutions v. Caremark" on Justia Law

Endure Industries, Inc., a seller of disposable medical supplies, sought to participate as a supplier in Vizient’s group purchasing organization (GPO), which negotiates bulk purchasing contracts for healthcare providers. Vizient is the largest GPO in the United States, serving a majority of general acute care centers and academic medical centers. After Vizient rejected Endure’s bid to supply medical tape in favor of another supplier, Endure filed an antitrust suit against Vizient and related entities, alleging monopolization and anticompetitive conduct in two proposed markets for disposable medical supplies.The United States District Court for the Northern District of Texas granted summary judgment to Vizient, finding that Endure failed to define a legally sufficient relevant market under antitrust law. The district court reasoned that Endure’s expert’s market definitions—(1) the sale of disposable medical supplies through GPOs to acute care centers, and (2) sales to Vizient member hospitals—excluded significant alternative sources of supply. Specifically, evidence showed that many hospitals purchase substantial amounts of supplies outside GPO contracts, demonstrating that reasonable substitutes exist and undermining Endure’s theory of market foreclosure.On appeal, the United States Court of Appeals for the Fifth Circuit reviewed only the issue of market definition. The Fifth Circuit held that Endure did not raise a genuine dispute of material fact regarding its proposed markets, as its definitions failed to account for all commodities reasonably interchangeable by consumers. The court found that significant hospital purchasing occurs outside GPOs and that Vizient members are not “locked in” to buying exclusively through Vizient. The Fifth Circuit affirmed the district court’s summary judgment in favor of Vizient, concluding that neither of Endure’s proposed antitrust markets was legally sufficient. View "Endure Industries v. Vizient" on Justia Law

A group of individuals with large social media followings was charged with securities fraud and conspiracy to commit securities fraud. The government alleged that these individuals engaged in a “pump and dump” scheme: they would purchase securities, then use their social media platforms to post false or misleading information about those securities to induce their followers to buy, thereby artificially inflating the price. After the price increased, the defendants would sell their holdings for a profit. The indictment claimed that the defendants collectively profited $114 million from this scheme.After indictment in the United States District Court for the Southern District of Texas, one defendant pleaded guilty while the others moved to dismiss the indictment. The district court granted the motion to dismiss, reasoning that the indictment failed to allege a scheme to deprive victims of a traditional property interest, instead only alleging deprivation of valuable economic information. The district court relied on the Supreme Court’s decision in Ciminelli v. United States, which held that deprivation of economic information alone does not constitute fraud under federal law.On appeal, the United States Court of Appeals for the Fifth Circuit reviewed the sufficiency of the indictment de novo. The Fifth Circuit concluded that the indictment adequately alleged both a scheme to defraud and an intent to defraud, as required by the securities fraud statute. The court distinguished the case from Ciminelli, finding that the indictment alleged a fraudulent-inducement theory—whereby the defendants used misrepresentations to induce followers to part with money by purchasing securities—not merely a deprivation of information. The court also held that the fraud statutes do not require proof that the defendants intended to cause economic harm, only that they intended to obtain money or property by deceit. The Fifth Circuit reversed the district court’s dismissal of the indictment and remanded the case for further proceedings. View "USA v. Constantinescu" on Justia Law