Justia Business Law Opinion Summaries

Dr. Igor DeCastro, a neurosurgeon, worked at the Hot Springs Neurosurgery Clinic for seven years. He claimed that after his initial 18-month salary period, he was supposed to receive compensation based on the net proceeds of his production, less 33% of the clinic's overhead. However, he alleged that he never received more than his base salary because Dr. James Arthur, the clinic's owner, diverted the funds into a "secret account." DeCastro also sued Bank OZK, where the account was held, leading the bank to request the court to determine the rightful owner of the funds.The United States District Court for the Western District of Arkansas dismissed DeCastro's amended complaint for failing to include essential facts, such as specific amounts received, production details, and overhead costs. The court also disbursed the funds to Arthur and denied DeCastro's motions for reconsideration, discovery, and leave to file a second amended complaint. DeCastro's subsequent attempts to revive the case, including a counterclaim in an unrelated contribution action, were dismissed based on res judicata.The United States Court of Appeals for the Eighth Circuit reviewed the case and affirmed the district court's decision. The appellate court agreed that DeCastro's amended complaint lacked sufficient factual matter to state a plausible claim for relief. The court noted that the complaint was filled with legal conclusions rather than specific facts about the alleged breach. Additionally, the court found no abuse of discretion in the district court's denial of DeCastro's post-dismissal motions, as the employment agreement he later produced did not support his original claims. The court also upheld the dismissal of DeCastro's counterclaim based on res judicata, as it was identical to the previously adjudicated claims. View "DeCastro v. Arthur" on Justia Law

During the early stages of the COVID-19 pandemic, American Screening, LLC, a Louisiana company, promised buyers that it would ship personal protective equipment (PPE) more quickly than it actually did. The Federal Trade Commission (FTC) sued American Screening, alleging that its shipping policies and practices violated the FTC Act and the Mail, Internet, or Telephone Order Merchandise Rule (MITOR). The company's website contained a shipping policy that stated orders would be processed and shipped within 24-48 hours. However, in practice, it took about six weeks for PPE to be shipped after the customer had purchased it.The district court granted the FTC summary judgment and ordered American Screening to return almost $14.7 million to consumers and permanently enjoined it from advertising or selling PPE. American Screening challenged the district court's ordered remedies on appeal.The United States Court of Appeals for the Eighth Circuit affirmed the district court's decision. The court rejected American Screening's contention that the court should have considered whether each individual consumer had relied on American Screening's shipping representations and had sustained an injury as a result. The court also disagreed with American Screening's argument that the district court's equitable monetary relief went beyond what was necessary to redress consumers and so amounts to an award of exemplary or punitive damages. The court found that the relief was tailored to ensure that dissatisfied consumers are made whole while also ensuring that American Screening does not have to pay unharmed customers as punishment.Finally, the court rejected American Screening's challenge to the scope of the permanent injunction barring it from advertising or selling PPE. The court agreed with the district court that the egregiousness of American Screening's conduct weighed in favor of the injunction. The court also found that the injunction's effect on American Screening was more modest than its breadth might suggest. View "FTC v. American Screening, LLC" on Justia Law

The case revolves around an insurance dispute between the Bradshaw Family Trust Inc., operating as Hunton Office Supply Inc. (Hunton), and Twin City Fire Insurance Company (Twin City). In June 2019, Hunton renewed a business owner’s policy on its office supply store building, which included a building replacement cost of $1,378,000. In April 2020, the building sustained wind damage from a storm. Hunton sought an insurance payout for the building’s repairs, but Twin City only paid a fraction of what was expected. A dispute arose surrounding the effective date of proposed policy changes, leading Hunton to sue Twin City.Twin City moved for summary judgment in the United States District Court for the Eastern District of Arkansas, arguing that it did not breach the insurance contract. The district court granted Twin City’s motion for summary judgment. Hunton appealed the decision, arguing that the policy endorsement was invalid because there was no meeting of the minds, the endorsement was never delivered to him, and the extent of the insurance agent's authority was a material fact question precluding summary judgment.The United States Court of Appeals for the Eighth Circuit affirmed the district court's decision. The court found that the insurance agent had apparent authority to bind Hunton to the policy endorsement. It also concluded that based on the record, the only reasonable conclusion was that Hunton intended the policy changes to take effect immediately. Lastly, the court ruled that under Arkansas law, Hunton did not have to receive or sign the endorsement because it had requested the policy change. View "Bradshaw Family Trust Inc. v. Twin City Fire Insurance Co." on Justia Law

Kevin Erikson, an employee of Wilbur-Ellis Company, LLC, left his job to work for a competitor, J.R. Simplot Company. Erikson had signed an employment agreement with Wilbur-Ellis in 2015, which included a non-competition and non-solicitation provision, preventing him from working with or soliciting from Wilbur-Ellis's customers or employees within a 100-mile radius of McCook County for two years after his employment was terminated. The agreement was set to terminate on March 31, 2019. Nearly four years after the termination of the agreement, Erikson resigned from Wilbur-Ellis and began working for Simplot, a competitor located in the restricted region.Wilbur-Ellis filed a lawsuit against Erikson, arguing that he had breached the agreement by violating the non-competition and non-solicitation provisions. The district court granted Wilbur-Ellis's motion for a preliminary injunction, holding that Wilbur-Ellis was likely to succeed on the merits of its breach of contract claim against Erikson. The court concluded that the non-competition and non-solicitation provisions survived the termination of the agreement and remained enforceable against Erikson at the time of his resignation in 2023.On appeal to the United States Court of Appeals for the Eighth Circuit, Erikson argued that the non-competition and non-solicitation provisions were not enforceable against him because the agreement terminated on March 31, 2019, and the provisions did not survive the termination date. The appellate court agreed with Erikson, stating that the provisions did not contain express language sufficient to extend their application beyond the agreement's termination date. Therefore, the provisions expired at the same time as the agreement. The court reversed the district court's decision and vacated the preliminary injunction. View "Wilbur-Ellis Company v. Erikson" on Justia Law

Five employees of The Mayo Clinic, a Minnesota non-profit corporation, filed a lawsuit alleging that the organization failed to accommodate their religious beliefs under Title VII and the Minnesota Human Rights Act (MHRA). The employees claimed that they were terminated for refusing to comply with Mayo's Covid-19 vaccination or testing policies. The plaintiffs sought religious accommodations for the vaccination requirement, citing their Christian religious beliefs. Mayo denied the accommodations for three plaintiffs who refused to get the vaccine. It granted vaccination exemptions to two plaintiffs, but required them to test for Covid-19 weekly, which they refused.The district court dismissed the claims, ruling that two plaintiffs did not exhaust their administrative remedies under Title VII, the other plaintiffs failed to plausibly plead religious beliefs that conflict with Mayo’s Covid-19 policies, and the MHRA fails to provide relief for not accommodating religious beliefs.The United States Court of Appeals for the Eighth Circuit reversed the district court's decision and remanded the case. The appellate court found that the district court erred in finding that two plaintiffs did not exhaust their administrative remedies under Title VII. The court also found that all plaintiffs adequately pled a conflict between their Christian religious beliefs and Mayo Clinic’s Covid-19 policy. Furthermore, the appellate court disagreed with the district court's finding that the MHRA does not provide a cause of action for failure to accommodate religious beliefs. The appellate court held that the MHRA, being a remedial act, should be construed liberally to secure freedom from discrimination for persons in Minnesota, and thus provides protection against failures to accommodate religious beliefs. View "Ringhofer v. Mayo Clinic Ambulance" on Justia Law

This case involves a dispute between Jacam Chemical Company 2013, LLC (Jacam) and its competitor GeoChemicals, LLC, along with Arthur Shepard Jr., a former Jacam employee who later worked for GeoChemicals. Jacam sued both Shepard and GeoChemicals, alleging breach of contract, misappropriation of trade secrets, and tortious interference with contracts. Shepard and GeoChemicals countersued Jacam. The district court granted a declaratory judgment to Shepard, concluding that he owed no contractual obligations to Jacam, and dismissed the remaining claims of Jacam and GeoChemicals.The district court had previously reviewed the case and granted summary judgment to Shepard, holding that he had no enforceable agreements with Jacam. The court also dismissed all of Jacam’s and GeoChemicals’s other claims against each other. Both Jacam and GeoChemicals appealed aspects of the summary judgment order.The United States Court of Appeals for the Eighth Circuit affirmed the district court's decision. The court found that neither the HCS Agreement nor the 2015 version of CES’s Conduct Code created an enforceable contract between Jacam and Shepard. The court also held that Jacam did not make reasonable efforts to keep its pricing information secret, which means the pricing information documents were not trade secrets which Shepard could misappropriate. Finally, the court agreed with the district court that Jacam’s tortious-interference claim fails. The court also dismissed GeoChemicals’s cross-appeal, holding that Jacam did not commit an independently tortious act that interfered with GeoChemicals’s relationship with Continental. View "Jacam Chemical Co. 2013, LLC v. Shepard" on Justia Law

The case involves a group of grocery store owner-operators and their related company, Anchor Mobile Food Markets, Inc. (AMFM), who sued Onex Partners IV, Onex Corporation, Anthony Munk, and Matthew Ross (collectively, Onex) for violations of Missouri common law and the Racketeer Influenced and Corrupt Organizations Act (RICO). The owner-operators had invested in the discount grocery chain Save-A-Lot and its independent licensee program, which turned out to be a disastrous investment. They alleged that Onex, which had acquired Save-A-Lot, had fraudulently induced them into the investment.The United States District Court for the Eastern District of Missouri had granted summary judgment to Onex. The court found that the owner-operators had signed multiple contractual releases and anti-reliance disclaimers before opening their stores, which barred their claims. The owner-operators and AMFM argued that these releases and disclaimers were fraudulently induced.The United States Court of Appeals for the Eighth Circuit affirmed the district court's decision. The court found that the owner-operators failed to raise a genuine dispute of material fact that they were fraudulently induced to enter the releases. The court also found that the releases were valid and barred the owner-operators' claims. The court further found that AMFM's claims against Onex failed, as neither Save-A-Lot nor Onex had contracted with AMFM. Finally, the court affirmed the district court's denial of the owner-operators and AMFM's request for leave to amend their complaint. View "SBFO Operator No. 3, LLC v. Onex Corporation" on Justia Law

KOKO Development, LLC, a real estate developer, contracted with Phillips & Jordan, Inc., DW Excavating, Inc., and Thomas Dean & Hoskins, Inc. (TD&H) to develop a 180-acre tract of land in North Dakota. However, the project faced numerous issues, leading KOKO to sue the defendants for breach of contract and negligence. KOKO did not disclose any expert witnesses before the trial, leading the district court to rule that none of its witnesses could give expert testimony. Consequently, the district court granted the defendants' motion for summary judgment, finding that without expert witnesses, KOKO could not establish its claims.The district court's decision was based on the complexity of the issues involved in the case, which required expert testimony. The court found that KOKO's negligence and breach of contract claims required complex infrastructure and engineering analysis, which was beyond the common knowledge or lay comprehension. KOKO appealed the decision, arguing that the district court erred in finding that it did not properly disclose witnesses providing expert testimony and that expert testimony was necessary for the case.The United States Court of Appeals for the Eighth Circuit affirmed the district court's decision. The appellate court found that KOKO did not identify the witnesses that would provide expert testimony and did not meet the requirements of Rule 26(a)(2). The court also agreed with the district court that the negligence and breach of contract claims required expert testimony due to the complexity of the issues in the case. The court concluded that the district court did not abuse its discretion by excluding the three witnesses' expert testimony and requiring expert testimony for the negligence and breach of contract claims. View "KOKO Development, LLC v. Phillips & Jordan, Inc." on Justia Law

Bader Farms, Inc. sued Monsanto Company and BASF Corporation, alleging that its peach orchards were damaged by dicamba drift between 2015 and 2019 due to the defendants' negligent design and failure to warn. The jury awarded $250 million in punitive damages against both Monsanto and BASF based on Monsanto’s acts in 2015-16, which the district court later reduced to $60 million. The defendants appealed the decision.The United States Court of Appeals for the Eighth Circuit affirmed the lower court's decision except for punitive damages, holding BASF and Monsanto liable as co-conspirators in a civil conspiracy. The court remanded the case to separately assess punitive damages against Monsanto and BASF. However, before the new trial, Monsanto settled with Bader Farms. The district court did not conduct a new trial and instead ruled that BASF could not be liable for any punitive damages, dismissing all claims against BASF.Bader Farms appealed, arguing that the district court ignored the appellate court’s mandate and its holding that BASF could be assessed punitive damages for its acts in furtherance of the conspiracy. The appellate court reviewed the district court’s interpretation of its mandate de novo and found that the district court did not comply with the appellate mandate. The appellate court held that BASF is vicariously liable for Monsanto’s actions and remanded the case for a trier of fact to apportion the punitive damages award. The court reversed the judgment and remanded with instructions to hold a new trial on the single issue of punitive damages. View "Bader Farms, Inc. v. BASF Corporation" on Justia Law

In 2011, James Buchl and Doren Chatinover, electrical engineers with experience in oil fields, entered into an oral contract with Gascoyne Materials Handling & Recycling to work as project managers for a division of Gascoyne. After five years, Gascoyne stopped making monthly payments under the contract, leading the plaintiffs to end the relationship and file a lawsuit. The plaintiffs' initial complaint alleged eleven causes of action, including fraud and deceit, which were dismissed by the district court. The case proceeded to a bench trial on the remaining claims for breach of contract and conversion, and on Gascoyne’s counterclaims.The district court found that Gascoyne had underpaid the plaintiffs by $822,199 and entered judgment in their favor for that amount, plus prejudgment and post-judgment interest. The court dismissed Gascoyne’s counterclaims. Gascoyne filed a post-trial motion to alter or amend, raising the issues now presented on appeal. The district court modified the award of post-judgment interest but otherwise denied the motion.On appeal, the United States Court of Appeals for the Eighth Circuit affirmed all but $14,650 of the award of contract damages and the award of costs, reversed the grant of prejudgment interest, and remanded for entry of an amended judgment. The court found that the district court had not made a clear error in calculating the profits due to the plaintiffs, except for failing to include $29,300 in expenses for a particular project, which would reduce the plaintiffs' share of the profits by $14,650. The court also held that the plaintiffs' contract damages were not certain and were not capable of being made certain by calculation, so the district court erred in awarding prejudgment interest. View "Buchl v. Gascoyne Materials" on Justia Law