Justia Business Law Opinion Summaries

VFS Leasing Co. ("VFS") leased trucks to Time Definite Leasing, LLC ("TDL"), which insured the trucks with Markel American Insurance Company ("Markel American"). Markel American issued joint checks to VFS and TDL for insurance claims, but TDL cashed the checks without VFS's endorsement and kept the proceeds. VFS sued Markel American for breach of contract, claiming it was owed the funds from the joint checks.The United States District Court for the Middle District of Florida granted summary judgment in favor of VFS, holding that Markel American breached the insurance contract by failing to ensure VFS received the funds. The court found that under Florida's Uniform Commercial Code (UCC), Markel American's obligation was not discharged because the checks were not properly endorsed by both co-payees.On appeal, the United States Court of Appeals for the Eleventh Circuit reviewed whether Markel American's obligation to VFS was discharged when the drawee bank improperly accepted the joint checks. The court concluded that under Florida Statute § 673.4141(3), a drawer's obligation is discharged when a bank accepts a jointly issued check, regardless of whether both co-payees endorsed it. The court noted that while VFS could pursue a conversion claim against the bank, Markel American's obligation was discharged upon the bank's acceptance of the checks.The Eleventh Circuit reversed the district court's summary judgment in favor of VFS and remanded the case for further proceedings consistent with its opinion. View "VFS Leasing Co. v. Markel Insurance Company" on Justia Law

The case involves Havana Docks Corporation, which held a 99-year usufructuary concession at the Port of Havana, Cuba. This concession, granted in 1905, allowed Havana Docks to build and operate piers at the port. The Cuban Government expropriated this concession in 1960, and Havana Docks has not received compensation for this expropriation. The concession was set to expire in 2004. Havana Docks filed a claim with the Foreign Claims Settlement Commission, which certified its loss at $9.179 million.The United States District Court for the Southern District of Florida ruled in favor of Havana Docks, awarding over $100 million in judgments against four cruise lines—Royal Caribbean Cruises, Norwegian Cruise Line Holdings, Carnival Corporation, and MSC Cruises—for trafficking in the confiscated property from 2016 to 2019. The court found that the cruise lines had engaged in trafficking by docking their ships at the terminal, using the property to embark and disembark passengers, and using it as a starting and ending point for shore excursions.The United States Court of Appeals for the Eleventh Circuit reviewed the case. The court held that Havana Docks' limited property interest had expired in 2004, and therefore, the cruise lines did not traffic in the confiscated property from 2016 to 2019. The court affirmed the district court's ruling that Havana Docks is a U.S. national under Title III of the Helms-Burton Act but reversed the judgments against the cruise lines for the 2016-2019 period. The case was remanded for further proceedings regarding Havana Docks' claims against Carnival for alleged trafficking from 1996 to 2001. View "Havana Docks Corporation v. Royal Caribbean Cruises, Ltd." on Justia Law

Taxinet Corporation sued Santiago Leon, alleging various claims stemming from a joint effort to secure a government concession for a taxi-hailing app in Mexico City. The district court granted summary judgment for Leon on all claims except for a Florida-law unjust enrichment claim, which went to trial along with Leon’s counterclaims for fraudulent and negligent misrepresentation. The jury awarded Taxinet $300 million for unjust enrichment and Leon $15,000 for negligent misrepresentation. However, the district court granted Leon’s Rule 50(b) motion for judgment as a matter of law, ruling that the damages award was based on inadmissible hearsay and was speculative.The United States District Court for the Southern District of Florida initially allowed testimony regarding a $2.4 billion valuation by Goldman Sachs, which was later deemed inadmissible hearsay. The court concluded that without this evidence, there was insufficient support for the jury’s $300 million award. The court also noted that the valuation was speculative and not directly tied to the benefit conferred by Taxinet in 2015.The United States Court of Appeals for the Eleventh Circuit affirmed the district court’s Rule 50(b) order, agreeing that the valuation evidence was inadmissible hearsay and that the remaining evidence was insufficient to support the $300 million award. However, the appellate court exercised its discretion to remand for a new trial on the unjust enrichment claim. The court found that Taxinet had presented enough evidence to show that it conferred a benefit on Leon, which he accepted, and that it would be inequitable for him to retain the benefit without payment. The court also noted that Taxinet could potentially present other evidence of damages in a new trial.The appellate court affirmed the district court’s summary judgment on Taxinet’s other claims, ruling that the alleged joint venture agreement was subject to Florida’s statute of frauds, as it could not be completed within a year. Thus, any claims based on the existence of the joint venture agreement were barred. View "Taxinet Corp. v. Leon" on Justia Law

Yorktown Systems Group Inc. and Threat Tec LLC, both defense contractors, entered into a mentor-protégé relationship under the Small Business Administration’s program to jointly pursue government contracts. They formed a joint venture (JV) and were awarded a $165 million contract with the U.S. Army. The JV agreement allocated specific work shares to each company. However, the relationship soured, and Threat Tec attempted to terminate Yorktown’s subcontract, effectively cutting Yorktown out of its share of the contract.The United States District Court for the Northern District of Alabama granted Yorktown a preliminary injunction, preventing Threat Tec from terminating the subcontract and depriving Yorktown of its rights under the JV agreement. The court found that Yorktown had shown a substantial likelihood of success on its breach of contract and breach of fiduciary duty claims and faced irreparable harm. The court noted that Threat Tec’s CEO had made false statements and lacked candor, leading to the belief that Threat Tec’s motives were unethical.The United States Court of Appeals for the Eleventh Circuit reviewed the case and affirmed the district court’s decision. The appellate court found no clear error in the district court’s factfindings and concluded that the district court acted within its discretion. The court held that Threat Tec, as the managing member of the JV, owed fiduciary duties of loyalty and care to Yorktown and likely breached those duties by attempting to cut Yorktown out of its contractually specified workshare. The court also agreed that Yorktown faced irreparable harm, including potential damage to its business reputation and the loss of highly skilled employees, which could not be remedied by monetary damages alone. View "Yorktown Systems Group Inc. v. Threat TEC LLC" on Justia Law

The case involves two Georgia non-profit organizations, New Georgia Project and New Georgia Project Action Fund (collectively referred to as "New Georgia"), and the Georgia Government Transparency and Campaign Finance Commission. New Georgia was accused of violating the Georgia Government Transparency and Campaign Finance Act by failing to register with the Commission and disclose their campaign expenditures and sources. The Commission initiated an investigation and found "reasonable grounds" to conclude that New Georgia had violated the Act.New Georgia then filed a federal lawsuit claiming that the Act violated the First and Fourteenth Amendments. The district court granted a preliminary injunction preventing the state from enforcing the Act against New Georgia. The state appealed, arguing that the district court should have abstained from exercising its jurisdiction under the doctrine established in Younger v. Harris.The United States Court of Appeals for the Eleventh Circuit held that the district court should have abstained under the Younger doctrine. The court found that the state's enforcement action against New Georgia was ongoing and implicated important state interests, and that New Georgia had an adequate opportunity in the state proceeding to raise constitutional challenges. The court vacated the district court's decision and remanded with instructions to dismiss New Georgia's action. View "New Georgia Project, Inc. v. Attorney General" on Justia Law

The case involves PB Legacy, Inc., a Texas-based shrimp breeding company, and American Mariculture, Inc., a Florida-based company that operated a shrimp breeding facility. PB Legacy had a contract with American Mariculture to breed shrimp. However, PB Legacy failed to fulfill its contractual obligations, including removing its shrimp from the facility on time. When American Mariculture threatened to harvest the abandoned shrimp, PB Legacy sued in state court. After a failed attempt to resolve the dispute, American Mariculture used the shrimp to launch a competing company, American Penaeid, Inc. PB Legacy then sued American Mariculture, Penaeid, and their CEO, Robin Pearl, in federal court, alleging conversion, defamation, trade secret misappropriation, breach of contract, unfair competition, and unjust enrichment.The case proceeded to a jury trial in the United States District Court for the Middle District of Florida. During the trial, the district judge had to leave before the jury returned its verdict. The parties agreed to have a magistrate judge receive the verdict. However, the magistrate judge also responded to several jury questions and rejected a request for clarification about the verdict. The jury awarded $4.95 million in damages to PB Legacy on each of their federal and state trade secret claims. Post-trial motions were filed and denied.The case was appealed to the United States Court of Appeals for the Eleventh Circuit. The defendants argued that the magistrate judge lacked authority to preside over the last three days of trial because the parties did not consent to the magistrate judge’s exercise of Article III authority. The court agreed, stating that while the parties had consented to the magistrate judge receiving the verdict, they had not consented to the magistrate judge performing non-ministerial duties such as responding to jury questions and rejecting a request for clarification about the verdict. The court vacated the judgment, remanded for a new trial, and dismissed the cross-appeal as moot. View "TB Foods USA, LLC v. American Mariculture, Inc." on Justia Law

The case revolves around Justin Keener, who operated under the name JMJ Financial. Keener's business model involved purchasing convertible notes from microcap issuers, converting those notes into common stock, and selling that stock in the public market at a profit. This practice, known as "toxic" or "death spiral" financing, can harm microcap companies and existing investors by causing the stock price to drop significantly. Keener made over $7.7 million in profits from this practice. However, he never registered as a dealer with the Securities and Exchange Commission (SEC).The SEC filed a civil enforcement action against Keener, alleging that he operated as an unregistered dealer in violation of the Securities Exchange Act of 1934. The United States District Court for the Southern District of Florida granted summary judgment for the SEC, enjoining Keener from future securities transactions as an unregistered dealer and ordering him to disgorge the profits from his convertible-note business.In the United States Court of Appeals for the Eleventh Circuit, Keener appealed the district court's decision. He argued that he did not violate the Securities Exchange Act because he never effectuated securities orders for customers. He also claimed that the SEC violated his rights to due process and equal protection.The Court of Appeals affirmed the district court's decision. It held that Keener operated as an unregistered dealer in violation of the Securities Exchange Act. The court rejected Keener's argument that he could not have been a dealer because he never effectuated securities orders for customers. It also dismissed Keener's claims that the SEC violated his rights to due process and equal protection. The court upheld the district court's imposition of a permanent injunction and its order for Keener to disgorge his profits. View "Securities and Exchange Commission v. Keener" on Justia Law

The case revolves around W.P. Productions, Inc. (WPP), a company owned by Sydney Silverman, and Sam's West, Inc. WPP, which sold kitchen products under the Wolfgang Puck brand to Sam's Club, owed significant debt to Sam's West. Despite this, WPP initiated a tort lawsuit against Tramontina U.S.A., Inc. and Sam's West. After a final judgment was entered against WPP, Sam's West filed a supplemental lawsuit to pierce WPP's corporate veil and hold Silverman personally liable for WPP's unpaid judgments. Silverman, who used a shared bank account for his personal and WPP's corporate funds, allegedly spent over $3 million from the shared account on personal expenses and transfers to himself and his relatives.The United States District Court for the Southern District of Florida granted summary judgment in favor of Sam's West, piercing the corporate veil and holding Silverman personally liable for the judgments against WPP. The court adopted a Report and Recommendation (R&R) that determined Silverman was the alter ego of WPP, but did not establish the remaining elements of improper conduct or causing an injury. Both parties then moved for summary judgment regarding these elements. The court adopted a second R&R stating that the undisputed facts showed Sam's West was entitled to judgment as a matter of law on its veil piercing claim.In the United States Court of Appeals for the Eleventh Circuit, Silverman appealed the district court's decision, alleging that the court improperly pierced the corporate veil on summary judgment. After reviewing the case, the appellate court affirmed the district court's decision. The court found no genuine dispute of material fact regarding the three elements for piercing the corporate veil in Florida: Silverman was the alter ego of WPP; Silverman used WPP for the improper purpose of evading Florida's Rule of Priorities; and this improper use of WPP's corporate form caused injury to Sam's West. Therefore, the court held that the district court correctly granted summary judgment in favor of Sam's West and pierced the corporate veil. View "Sam's West, Inc. v. Silverman" on Justia Law

The case involves a dispute between J.C. Penney Corporation, Inc. and Oxford Mall, LLC. Oxford Mall purchased a shopping center in a 2017 foreclosure sale and began a significant redevelopment plan. J.C. Penney, a tenant at the mall since 1968, had a lease that included the right to approve certain changes to the mall’s site plan. When J.C. Penney sought to exercise one of its remaining contractual options, Oxford denied the request, claiming that J.C. Penney was out of extension options. This led to a lawsuit filed by J.C. Penney in 2019, invoking the district court’s diversity jurisdiction.The case proceeded for two years under the assumption that diversity jurisdiction existed. However, in 2020, Oxford discovered that it was a citizen of Delaware, the same as J.C. Penney, which destroyed the court’s diversity jurisdiction. Despite this, Oxford continued to litigate in federal court and did not inform the court of the lack of jurisdiction until April 2021, after several unfavorable rulings.The United States Court of Appeals for the Eleventh Circuit affirmed the district court's decision to impose sanctions on Oxford Mall, LLC for its bad faith conduct. The court found that Oxford had actual knowledge that it was a citizen of Delaware, which destroyed the court’s diversity jurisdiction, and that Oxford's delay in disclosing the lack of diversity jurisdiction was strategic. The court also concluded that the district court did not abuse its discretion in determining the amount of fees owed to J.C. Penney and in refusing to consider an irrelevant and untimely affidavit from Oxford's attorney. View "J.C. Penney Corporation, Inc. v. Oxford Mall, LLC" on Justia Law

The case involves a challenge to the United States Securities and Exchange Commission's (SEC) denial of a whistleblower award. The petitioner, John Meisel, reported his suspicions about his former tenant's involvement in a Ponzi scheme, which he read about in a newspaper, to the SEC. After the SEC's successful enforcement action against the scheme's perpetrators, Meisel applied for a whistleblower award. The SEC denied his application, reasoning that Meisel's information did not contribute to the enforcement action. Furthermore, his assistance to a court-appointed receiver, who was tasked with recovering funds related to the scheme, did not qualify him for an award as the receiver was not a representative of the Commission. Meisel appealed the denial, claiming it was arbitrary and unsupported by substantial evidence.The United States Court of Appeals for the Eleventh Circuit denied Meisel’s petition for review. The court held that the SEC's denial of the whistleblower award was neither arbitrary nor capricious, nor was it unsupported by substantial evidence. The court found that the SEC had not used Meisel’s information in its enforcement action, and therefore, his information did not lead to its success. The court also held that Meisel's assistance to the receiver did not qualify him for an award because the receiver was an independent court officer, not a representative of the SEC. Lastly, the court determined that Meisel could not qualify for an award in any related actions because he did not qualify for an award in the covered action. View "Meisel v. Securities and Exchange Commission" on Justia Law