Justia Business Law Opinion Summaries

Plaintiffs Jay and Siv Bennett, along with their corporation Kesha Marketing, Inc., were long-time associates of Isagenix International LLC, a multi-level marketing company. In May 2023, Isagenix informed the Bennetts that it would not renew their accounts, which were set to expire in June 2023. The Bennetts, whose sole income came from Isagenix commissions, sued the company and obtained a preliminary injunction to prevent the termination of their business relationship.The United States District Court for the District of Arizona granted the preliminary injunction, finding that the Bennetts were likely to succeed on the merits of their claims. The court concluded that the contracts between the Bennetts and Isagenix were likely bilateral and that the modifications allowing Isagenix to terminate the contracts at will were not valid under Arizona law. The district court also found that the Bennetts would suffer irreparable harm due to the contractual limitation on consequential damages.The United States Court of Appeals for the Ninth Circuit reviewed the case and agreed with the district court that the Bennetts had shown a likelihood of success on the merits. The Ninth Circuit held that the contracts were likely bilateral and that the modifications were not validly executed under Arizona law. However, the Ninth Circuit found that the district court erred in its analysis of irreparable harm. The appellate court held that a contractual limitation on consequential damages does not constitute irreparable harm for purposes of equity. Consequently, the Ninth Circuit vacated the preliminary injunction and remanded the case for further proceedings to address the Bennetts' other theories of irreparable injury. View "BENNETT V. ISAGENIX INTERNATIONAL LLC" on Justia Law

The case involves International Petroleum Products and Additives Company (IPAC), a California-based company, which entered into sales and distribution agreements with Black Gold S.A.R.L., a Monaco-based company. Black Gold breached these agreements by using IPAC’s confidential information to develop competing products. IPAC won an arbitration award of over $1 million against Black Gold. However, Black Gold declared bankruptcy in Monaco, complicating IPAC’s efforts to collect the award.The United States District Court for the Northern District of California confirmed the arbitration award and entered judgment against Black Gold. During post-judgment discovery, Black Gold engaged in misconduct, leading the district court to sanction Black Gold and add Lorenzo and Sofia Napoleoni, Black Gold’s owners, as judgment debtors on the grounds that they were Black Gold’s alter egos. Black Gold’s petition for recognition of its Monaco bankruptcy proceedings was initially denied by the bankruptcy court, but this decision was later reversed by the Bankruptcy Appellate Panel (BAP), which mandated recognition of the Monaco proceedings.The United States Court of Appeals for the Ninth Circuit reviewed the case. The court held that the automatic bankruptcy stay under 11 U.S.C. § 1520 did not retroactively apply to the date of the bankruptcy court’s initial denial of Black Gold’s petition. The court also held that the automatic stay did not extend to IPAC’s alter ego claim against the Napoleonis. The court affirmed the district court’s judgment and the award of attorneys’ fees and costs in favor of IPAC, concluding that the alter ego claim was not the property of Black Gold’s estate under California law. View "International Petroleum Products and Additives Co, Inc. v. Black Gold S.A.R.L." on Justia Law

Gasoline consumers alleged that various oil producers colluded with the U.S. government, including then-President Trump, to negotiate with Russia and Saudi Arabia to cut oil production, limit future oil exploration, and end a price war on oil. Plaintiffs claimed this agreement fixed gas prices in violation of Sherman Act § 1, suppressed competition in violation of Sherman Act § 2, and involved anticompetitive mergers in violation of Clayton Act § 7.The United States District Court for the Northern District of California dismissed the case, finding it lacked subject-matter jurisdiction under the political question and act of state doctrines. The court also found that Plaintiffs failed to adequately plead an antitrust conspiracy. Additionally, the court dismissed Defendant Energy Transfer for lack of personal jurisdiction and denied Plaintiffs leave to amend their complaint, as well as requests for additional discovery and oral argument.The United States Court of Appeals for the Ninth Circuit affirmed the district court’s dismissal. The court held that the political question doctrine barred judicial review of the President’s foreign policy decisions, as these decisions are committed to the political branches of government. The court also found no judicially manageable standards to resolve the claims under antitrust laws. Additionally, the act of state doctrine barred the claims because they involved evaluating the petroleum policies of foreign nations. The court further held that Plaintiffs failed to state a plausible antitrust conspiracy claim regarding Defendants’ private conduct. Finally, the court found no abuse of discretion in the district court’s procedural rulings. View "D'Augusta v. American Petroleum Institute" on Justia Law

Plaintiffs, property developers owning three hotels, alleged that Defendants, rival developers operating the Hollywood Athletic Club, abused the California Environmental Quality Act (CEQA) processes to extort funds in violation of the Racketeer Influenced and Corrupt Organizations Act (RICO). Defendants challenged several of Plaintiffs' hotel projects through CEQA objections and lawsuits, which Plaintiffs claimed were baseless and intended to obstruct their developments.The United States District Court for the Central District of California granted summary judgment in favor of Defendants, holding that the Noerr-Pennington doctrine protected Defendants' petitioning activities from statutory liability under the First Amendment. The district court found that Defendants' actions were not objectively baseless and thus did not fall within the sham litigation exception to the Noerr-Pennington doctrine. The case was transferred from Judge Wright to Judge Gutierrez, who reconsidered and reversed the prior denial of summary judgment, concluding that the previous decision was clearly erroneous and would result in manifest injustice.The United States Court of Appeals for the Ninth Circuit affirmed the district court's summary judgment. The court held that the district court did not abuse its discretion in reconsidering the prior judge's ruling. It also agreed that Defendants' CEQA challenges were not objectively baseless, as the actions had some merit and were not brought solely for an improper purpose. The court emphasized that the Noerr-Pennington doctrine provides broad protection to petitioning activities to avoid chilling First Amendment rights. Consequently, the court did not need to address Defendants' additional arguments regarding the applicability of RICO to litigation activities. View "RELEVANT GROUP, LLC V. NOURMAND" on Justia Law

The case involves EPD Investment Co., LLC (EPD) and its owner, Jerrold S. Pressman, who were found to have operated a Ponzi scheme. EPD was forced into Chapter 7 bankruptcy by its creditors, and the Trustee, Jason M. Rund, filed an adversary proceeding against Poshow Ann Kirkland and her husband, John Kirkland, seeking to avoid fraudulent transfers made by EPD to John. John had assigned his interest in EPD to the Bright Conscience Trust, for which Ann is the trustee.The United States District Court for the Central District of California bifurcated the trial, separating the claims against John and Ann. A jury trial was conducted for the claims against John, resulting in a verdict that EPD was a Ponzi scheme but that John received payments in good faith and for reasonably equivalent value. The bankruptcy court ruled that the jury's findings would be binding in the Trustee's claims against Ann. Ann appealed the judgment, particularly challenging the jury's finding that EPD was a Ponzi scheme.The United States Court of Appeals for the Ninth Circuit reviewed the case. The court held that Ann had standing to appeal due to her significant involvement in the case and her interest in the issues presented. The court rejected Ann's argument that the district court erred by not including a mens rea instruction requiring the jury to find that Pressman knew he was operating a Ponzi scheme that would eventually collapse. The court held that fraudulent intent could be inferred from the existence of a Ponzi scheme established through objective criteria. The court also rejected Ann's argument that the district court erred by instructing the jury that lenders are investors for purposes of a Ponzi scheme.The Ninth Circuit affirmed the district court's order affirming the judgment of the bankruptcy court and remanded the case for further proceedings. View "In re: EPD INVESTMENT COMPANY V. KIRKLAND" on Justia Law

Ryan Cox filed a class action lawsuit alleging that the defendants manipulated the price of a cryptocurrency called HEX by artificially lowering its ranking on CoinMarketCap.com. The defendants include two domestic companies, a foreign company, and three individual officers of the foreign company. Cox claimed that the manipulation caused HEX to trade at lower prices, benefiting the defendants financially.The United States District Court for the District of Arizona dismissed the case for lack of personal jurisdiction, concluding that Cox needed to show the defendants had sufficient contacts with Arizona before invoking the Commodity Exchange Act's nationwide service of process provision. The court found that none of the defendants had sufficient contacts with Arizona.The United States Court of Appeals for the Ninth Circuit reviewed the case and held that the Commodity Exchange Act authorizes nationwide service of process independent of its venue requirement. The court concluded that the district court had personal jurisdiction over the U.S. defendants, CoinMarketCap and Binance.US, because they had sufficient contacts with the United States. The court also found that Cox's claims against these defendants were colorable under the Commodity Exchange Act. Therefore, the court reversed the district court's dismissal of the claims against the U.S. defendants and remanded for further proceedings.However, the Ninth Circuit affirmed the district court's dismissal of the claims against the foreign defendants, Binance Capital and its officers, due to their lack of sufficient contacts with the United States. The court vacated the dismissal "with prejudice" and remanded with instructions to dismiss the complaint against the foreign defendants without prejudice. View "COX V. COINMARKETCAP OPCO, LLC" on Justia Law

Children’s Health Defense (CHD), a nonprofit organization, alleged that Meta Platforms, Inc. (Meta) censored its Facebook posts about vaccine safety and efficacy. CHD claimed that Meta’s actions were directed by the federal government, violating the First and Fifth Amendments. CHD also asserted violations of the Lanham Act and the Racketeer Influenced and Corrupt Organizations Act (RICO). Meta, Mark Zuckerberg, the Poynter Institute, and Science Feedback were named as defendants.The United States District Court for the Northern District of California dismissed CHD’s complaint. The court found that CHD failed to establish that Meta’s actions constituted state action, a necessary element for First Amendment claims. The court also dismissed the Lanham Act claim, ruling that Meta’s fact-checking labels did not constitute commercial advertising. Additionally, the court rejected the RICO claim, stating that CHD did not adequately allege a fraudulent scheme to obtain money or property.The United States Court of Appeals for the Ninth Circuit affirmed the district court’s dismissal. The Ninth Circuit held that CHD did not meet the requirements to treat Meta as a state actor. The court found that Meta’s content moderation policies were independently developed and not compelled by federal law. CHD’s allegations of government coercion and joint action were deemed insufficient. The court also upheld the dismissal of the Lanham Act claim, concluding that Meta’s fact-checking labels were not commercial speech. The RICO claim was dismissed due to a lack of proximate cause between the alleged fraud and CHD’s injury.Judge Collins partially dissented, arguing that CHD could plausibly allege a First Amendment claim for injunctive relief against Meta. However, he agreed with the dismissal of the other claims. The Ninth Circuit’s decision affirmed the district court’s judgment in favor of Meta. View "Children's Health Defense v. Meta Platforms, Inc." on Justia Law

Plaintiff-investors brought a securities fraud class action against Atieva, Inc., d/b/a Lucid Motors, and its CEO, Peter Rawlinson. They alleged that Rawlinson made misrepresentations about Lucid's production capabilities, which affected the stock price of Churchill Capital Corp. IV (CCIV), a special purpose acquisition company (SPAC) in which the plaintiffs were shareholders. These misrepresentations were made before Lucid was acquired by CCIV. Plaintiffs purchased CCIV stock based on these statements but did not own any Lucid stock, as Lucid was privately held at the time.The United States District Court for the Northern District of California initially held that the plaintiffs had statutory standing but dismissed the action for failure to allege a material misrepresentation. The court allowed plaintiffs to amend their complaint, but ultimately denied the amendments as futile and dismissed the case with prejudice, concluding that the plaintiffs had not plausibly alleged materiality.The United States Court of Appeals for the Ninth Circuit reviewed the case and affirmed the district court’s dismissal on an alternative ground. The Ninth Circuit held that the plaintiffs lacked standing under Section 10(b) of the Exchange Act, following the Birnbaum Rule, which limits standing to purchasers or sellers of the stock in question. The court agreed with the Second Circuit's precedent in Menora Mivtachim Ins. Ltd. v. Frutarom Indus. Ltd., holding that purchasers of a security of an acquiring company (CCIV) do not have standing to sue the target company (Lucid) for alleged misstatements made prior to the merger. Consequently, the Ninth Circuit affirmed the dismissal of the suit on the ground that the plaintiffs lacked standing. View "MAX ROYAL LLC V. ATIEVA, INC." on Justia Law

Hedge funds Walleye Opportunities Master Fund Ltd. and Walleye Manager Opportunities LLC sued large shareholders of Intelsat S.A., alleging that the shareholders engaged in insider trading by using material non-public information obtained from a meeting between Intelsat and the Federal Communications Commission (FCC). The plaintiffs claimed that the shareholders sold Intelsat stock during an after-hours block sale based on this information, which was not disclosed to the public.The United States District Court for the Northern District of California dismissed the complaint, finding that Walleye failed to adequately plead that the defendants possessed material non-public information and acted with scienter. The court also held that Walleye had statutory standing under Section 20A of the Securities Exchange Act, which requires that plaintiff-buyers trade contemporaneously with defendant-sellers. Walleye amended the complaint, but the district court dismissed the second amended complaint on similar grounds.The United States Court of Appeals for the Ninth Circuit affirmed the district court’s dismissal. The Ninth Circuit held that Walleye had Article III standing to sue because it sufficiently pleaded both injury and causation by alleging that it bought Intelsat stock at a price inflated due to the defendants’ failure to disclose material information. The court also held that Walleye had statutory standing under Section 20A, even though it traded on the public market and did not buy the Intelsat shares sold during the after-hours block trade.However, the Ninth Circuit concluded that Walleye failed to adequately plead that the defendants possessed material non-public information. The court found that Walleye did not specifically allege how Silver Lake, BC Partners, or David McGlade learned of the FCC meeting or what material non-public information they possessed. The court also held that the alleged information was not material, as it did not significantly alter the total mix of information available to the public. The judgment of the district court was affirmed. View "WALLEYE OPPORTUNITIES MASTER FUND LTD. V. SILVER LAKE GROUP, L.L.C." on Justia Law

The case involves two separate actions brought by B&L Productions, Inc., an operator of gun shows in California, against state officeholders tasked with enforcing various California statutes that bar the sale of guns on state property. B&L argued that these statutes violated its rights under the First and Second Amendments. In the first case, B&L challenged a ban on firearm sales at the Del Mar Fairgrounds. In the second case, B&L challenged bans on firearm sales at the Orange County Fairgrounds and on all state property.In the first case, the district court dismissed B&L’s lawsuit, holding that B&L had failed to state a claim that the ban violates its constitutional rights. In the second case, the district court granted B&L’s motion for a preliminary injunction, holding that B&L was likely to succeed on the merits of all its claims.The United States Court of Appeals for the Ninth Circuit affirmed the district court’s dismissal of B&L’s claims in the first case and vacated the district court’s order granting B&L’s motion for a preliminary injunction in the second case. The court held that the challenged statutes do not infringe on B&L’s constitutional rights. The court found that the statutes solely restrict nonexpressive conduct—contracting for the sale of firearms—and are not subject to First Amendment scrutiny. Furthermore, the court determined that the plain text of the Second Amendment does not cover B&L’s proposed conduct—namely, contracting for the sale of firearms and ammunition on state property. View "B & L PRODUCTIONS, INC. V. NEWSOM" on Justia Law