Justia Business Law Opinion Summaries

Plaintiff and her companies, Tri-Serve and Capital Concepts, brought a claim for improper use of trade name and false designation of origin under the Lanham Act, 15 U.S.C. 1125, against Sheakley Entity Defendants on the basis of e-mails and mailings Angelia Strunk-Zwick, a manager for plaintiffs and a consultant for Defendant Sheakley HR Solutions, sent to Tri-Serve clients. The court concluded that plaintiffs have stated a claim for improper use of trade name and false designation of origin for which the Sheakley Entity Defendants may be held vicariously liable. Taken together, the representations at issue could not only sow confusion but also strongly imply affiliation - and affiliation not endorsed by plaintiffs. Because the Sheakley Entity Defendants may be held vicariously liable for Strunk-Zwick’s e-mail, plaintiffs have stated a claim for false advertising against Strunk-Zwick and the Sheakley Entity Defendants. Plaintiffs further allege that Strunk-Zwick and all Sheakley Defendants violated the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. 1962, for failure to state a claim. The court concluded that plaintiffs’ RICO conspiracy claim fails because plaintiffs failed to allege a substantive RICO violation in the first place. Accordingly, the court reversed the district court's dismissal of plaintiffs' Lanham Act claims for failure to state a claim; affirmed the dismissal of plaintiffs' RICO claims; and remanded for further proceedings where the district court may, in its discretion, reexamine whether to reinstate any of plaintiffs' state law claims. View "Grubbs v. Sheakley Group, Inc." on Justia Law

For some time, Broad Street Energy has owned many Ohio oil-and-gas leases. The market has changed to use of shale-drilling (fracking) to extract oil and gas from shale formations deeper than the formations from which Broad Street has extracted oil. Fracking requires leases of at least 640 acres, as opposed to the 20-to-40-acre leases that Broad Street required for conventional wells. Endeavor agreed to pay $35 million for many of Broad Street’s leases, plus wells, pipelines, and related property. Endeavor put $3.5 million in escrow. Broad Street delivered a list of assets and title limitations. Before closing, Endeavor conducted due diligence and told Broad Street that it found title defects affecting 40% of the leases and reducing the value of the assets by 55%. Endeavor did not seek more information or invoke the agreement’s dispute-resolution process, but terminated on the ground that the title defects reduced value by at least 30%. Broad Street responded several times, disputing those statements and insisting on at least implementing dispute-resolution procedures With no response, it sued. A jury awarded Broad Street the $3.5 million escrow, plus interest. The Sixth Circuit affirmed, noting the relative sophistication of the parties and that the contract did not permit Endeavor to terminate unilaterally based on its own assessment of title defects and their value. View "Broad St. Energy Co. v. Endeavor Ohio, LLC" on Justia Law

Exel, a shipping broker, sued SRT, an interstate motor carrier, after SRT lost a shipment of pharmaceutical products it had agreed to transport for Exel on behalf of Exel’s client, Sandoz. On summary judgment, the district court awarded Exel the replacement value of the lost goods pursuant to the transportation contract between Exel and SRT, rejecting SRT’s argument that its liability was limited under the Carmack Amendment to the Interstate Commerce Act, 49 U.S.C. 14706. The Sixth Circuit reversed. Whether SRT had limited its liability was a question of fact for a jury. To limit its liability under the Carmack Amendment, a carrier must: provide the shipper with a fair opportunity to choose between two or more levels of liability obtain the shipper’s written agreement as to its choice of liability; and issue a receipt or bill of lading prior to moving the shipment. SRT did not meet its burden on summary judgment of establishing that it provided Sandoz with the opportunity to choose between two or more levels of liability. SRT did not explain what “classification or tariff . . . govern[ed]” the shipment, nor indicate whether it made this information available to Sandoz. View "Exel, Inc. v. S. Refrigerated Transp., Inc." on Justia Law

Allied, founded in 1973 by Ramun, competes with Genesis in the field of industrial dismantling and scrap processing, including the design, development, and manufacture of related specialized equipment. From 1992-2001, Ramun’s son Mark worked at Allied. By 1999, Allied developed innovative multi-use demolition machine attachments, called MT. Various sizes and types of jawsets, including a steel beam cutter and a concrete crusher, were available, allowing the MT operator to perform different tasks with just one tool. The jawset could be changed without removing the main pin, saving time and enhancing productivity. Mark had detailed information regarding the design and function of the attachment, which was highly confidential. In 2001 Mark left Allied, taking a laptop containing 15,000 pages of Allied documents, including detailed technical information about the MT. Mark joined Genesis in 2003. Genesis later released its own multiuse tool. Genesis brought trade secret claims, based on similarity to the MT. A jury rendered a verdict in favor of Allied. The court awarded damages but refused to enter an injunction. The Sixth Circuit affirmed dismissal of a subsequent suit under the Ohio Uniform Trade Secrets Act, alleging misappropriation after that verdict, citing issue preclusion. View "Allied Erecting & Dismantling Co. Inc. v. Genesis Equip. & Mfg., Inc." on Justia Law