Justia Business Law Opinion Summaries

Articles Posted in US Court of Appeals for the Tenth Circuit
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Plaintiff XMission, L.C. appealed a district court's dismissal of its claims against Fluent, LLC for lack of personal jurisdiction over Fluent in Utah. Fluent was a Delaware limited liability company with its principal place of business in New York. It described its service as digital marketing; its business model was apparently based on supplying consumer data to businesses. XMission was a Utah limited liability company with its principal place of business in Salt Lake City. As an internet service provider (ISP), it used servers and other hardware that it owned and operated in Utah to provide internet access for its commercial and residential customers. It also provided email hosting and other internet-related services. Any email sent to a domain hosted by XMission would arrive on XMission’s email servers in Utah. XMission’s complaint against Fluent was based on more than 10,000 emails sent from 2015 to early 2018 to more than 1,100 XMission customers in Utah through its servers, allegedly in violation of the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 (CAN-SPAM Act). The emails at issue instructed recipients to follow links that offered to rewards. By clicking the link, the recipient is taken to a Fluent-controlled data-gathering domain that prompts the recipient to enter personal information such as name, age and date of birth, gender, email address, social media activity, zip code, and street address. Fluent apparently collects and aggregates the consumer information and sells this personal data to others to assist them in developing targeted marketing campaigns. The record does not disclose whether the email recipients actually obtain any rewards from the named companies or whether Fluent is compensated in any way by those companies for these emails. After review, the Tenth Circuit remained unpersuaded the offending emails created personal jurisdiction over Fluent in Utah, and thus affirmed the district court's dismissal. View "XMission, L.C. v. Fluent, LLC" on Justia Law

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The IRS conducted a civil audit of Peter Hermes, Kevin Desilet, Samantha Murphy, and John Murphy (collectively, the “Taxpayers”) to verify their tax liabilities for their medical- marijuana dispensary, Standing Akimbo, LLC. The IRS was investigating whether the Taxpayers had taken improper deductions for business expenses arising from a “trade or business” that “consists of trafficking in controlled substances.” Claiming to fear criminal prosecution, the Taxpayers declined to provide the audit information to the IRS. This left the IRS to seek the information elsewhere—it issued four summonses for plant reports, gross-sales reports and license information to the Colorado Department of Revenue’s Marijuana Enforcement Division (the “Enforcement Division”), which is the state entity responsible for regulating licensed marijuana sales. In Colorado federal district court, the Taxpayers filed a petition to quash the summonses. The government moved to dismiss the petition and to enforce the summonses. The district court granted the motion to dismiss and ordered the summonses enforced. After review, the Tenth Circuit concluded the Taxpayers failed to overcome the IRS' showing of good faith, and failed to establish that enforcing the summonses would constitute an abuse of process. View "Standing Akimbo, LLC v. United States" on Justia Law

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Plaintiff, Steve Strauss, brought claims against Defendant, Angie’s List, Inc., alleging violations of the Lanham Act. Strauss owned a tree trimming/removal business called Classic Tree Care (“Classic”). Defendant Angie’s List was an internet-based consumer ratings forum on which fee-paying members could view and share reviews of local businesses. According to Strauss, the membership agreement between Angie’s List and its members lead members to believe that businesses were ranked by Angie’s List according to unedited consumer commentaries and endorsements when, in reality, the order in which businesses were ranked was actually based on the amount of advertising the business bought from Angie’s List. He alleged businesses were told they will be ranked more favorably on the website if they paid advertising and referral fees to Angie’s List. According to Strauss, from 2005 to 2016 he paid $200,000 in advertising services fees and coupon retention percentages to Angie’s List “in an effort to appear higher” in search results. The business relationship between Strauss and Angie’s List, however, began to sour in 2013. Strauss alleged he failed to appear in search results for a three-month period and then was “buried” in search-result listings even though he had numerous favorable reviews and a high rating from consumers. In September 2017, Strauss filed a putative class action lawsuit against Angie’s List, raising allegations that Angie’s List engaged in false advertising in violation of section 45(a) of the Lanham Act, as well as the Kansas Consumer Protection Act (KCPA). Strauss appealed when the district court dismissed his complaint on the basis that it failed to identify any statements made by Angie’s List that qualified as commercial advertising or promotion within the meaning of the Lanham Act’s false advertising provision. Strauss contended the district court erred by analyzing his claims under the test adopted by the Tenth Circuit in Proctor & Gamble Co. v. Haugen, 222 F.3d 1262 (10th Cir. 2000) (adopting a four-part test for determining what constitutes commercial advertising or promotion). Finding no reversible error, however, the Tenth Circuit affirmed dismissal of Strauss’ case. View "Strauss v. Angie's List" on Justia Law

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After John Worthen amassed over eighteen million dollars in unpaid tax liabilities, the federal government placed liens on properties it claimed belonged to his alter egos or nominees. Following a court- ordered sale of the properties, Worthen sought to exercise a statutory right to redeem under Utah state law. The district court concluded there were no redemption rights following sales under 26 U.S.C. 7403. The Tenth Circuit concurred, finding neither section 7403 nor 28 U.S.C. 2001, which governed the sale of realty under court order, explicitly provided for redemption rights. Moreover, federal tax proceedings provided sufficient protection for taxpayers and third parties. View "Arlin Geophysical Company v. United States" on Justia Law

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At issue in this case was whether a federal court sitting in Oklahoma had specific jurisdiction over Dr. Scott Jolly, a dentist and Arkansas resident, and his Limited Liability practice, Jolly Dental Group, LLC. Dental Dynamics, LLC argued that three isolated business transactions and an allegedly fraudulent contract were sufficient to establish federal court jurisdiction over its breach of contract and fraud claims. The Tenth Circuit disagreed, finding Jolly Dental's contacts with Oklahoma were "too random, fortuitous, and attenuated" to establish personal jurisdiction there. With respect to Denta; Dynamics' fraud claim, the Court concluded Dental Dynamics failed to show conduct sufficiently targeted to Oklahoma to establish personal jurisdiction there. View "Dental Dynamics v. Jolly Dental Group" on Justia Law

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At issue in this appeal was Mountain Dude’s claims brought under Utah’s Fraudulent Transfer Act (“UFTA”). Mountain Dudes was the creditor to Split Rock, Inc. (“SRI”). Mountain Dudes obtained a $1.75 million judgment against SRI as the result of a dispute over a home Mountain Dudes purchased from SRI. At the same time of the Mountain Dude/SRI dispute, a land developer in St. George, Utah went over $50 million in debt during the 2008 recession. SRI transferred all of its remaining assets to a newly formed business, Split Rock Holdings, LLC (“SR Holdings”). Though the transaction occurred between two entities, many of the same individuals were involved on both sides of that deal. Mountain Dudes, as SRI’s creditor, had hoped to levy periodic payments that SR Holdings agreed to make to SRI on a $2.7 million obligation. Before any such payments were due, however, SRI and SR Holdings modified the original Sale of Asset Agreement. Ultimately, SR Holdings paid SRI a total of $188,000 under the Modification’s terms. Over approximately the same time period, SR Holdings disbursed $1.1 million to three of the individual Defendants—Platt, Bylund and Manning. Mountain Dudes filed suit relating to the Modification pursuant to the UFTA. Resolution of this appeal turned primarily on a procedural matter involving how the sufficiency of evidence presented at a civil jury trial could be challenged. The Tenth Circuit determined the district court deprived Mountain Dudes LLC of that opportunity. Instead, after the jury was unable to reach a verdict on Mountain Dudes’ UFTA claims, the district court invoked Rule 50(b) to grant Defendants judgment as a matter of law on grounds the court raised sua sponte after the jury deadlocked. That, the Tenth Circuit held, It therefore reversed the judgment the district court entered sua sponte in Defendants’ favor. However, the Court affirmed the district court’s other rulings rejecting the grounds the various parties did raise seeking judgment as a matter of law. View "Mountain Dudes v. Split Rock Holdings" on Justia Law

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Plaintiffs and counterclaim-defendants Mrs. Fields Famous Brands, LLC (Famous Brands) and Mrs. Fields Franchising, LLC (Fields Franchising) appealed a district court order granting a preliminary injunction in favor of defendant and counterclaim-plaintiff MFGPC Inc. (MFGPC). The sole member of Famous Brands is Mrs. Fields Original Cookies, Inc. (MFOC). MFOC entered into a Trademark License Agreement (License Agreement) with LHF, Inc. (LHF), an affiliate of MFGPC. In 2003, LHF assigned all rights under the License Agreement to MFGPC, and MFGPC agreed to be bound by and perform in accordance with the License Agreement. The License Agreement granted MFGPC a license to develop, manufacture, package, distribute and sell prepackaged popcorn products bearing the “Mrs. Fields” trademark through all areas of general retail distribution. A dispute arose after Fields Franchising allowed MFGPC to be late with a royalty payment because of a fire that destroyed some of MFGPC’s operations. The franchisor sought to terminate the licensing agreement and collect the royalties owed. Fields Franchising filed suit against MFGPC. In August 2018, the district court entered partial summary judgment in favor of MFGPC on its counterclaim for breach of a trademark license agreement that afforded MFGPC the exclusive use of the “Mrs. Fields” trademark on popcorn products. The district court’s summary judgment order left only the question of remedy to be decided at trial. MFGPC then moved for a preliminary injunction, arguing that there was a substantial likelihood that it would prevail at trial on the remedy of specific performance. After conducting a hearing, the district court granted MFGPC’s motion and ordered Fields Franchising to terminate any licenses it had entered into with other companies for the use of the Mrs. Fields trademark on popcorn products, and to instead comply with the terms of the licensing agreement it had previously entered into with MFGPC. Famous Brands and Fields Franchising argued in this appeal that the district court erred in a number of respects in granting MFGPC’s motion for preliminary injunction. The Tenth Circuit agreed with appellants, and consequently reversed the district court’s grant of a preliminary injunction in favor of MFGPC. View "Mrs. Fields Famous Brands v. MFGPC" on Justia Law

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Affliction Holdings, LLC (“Affliction”) sued Utah Vap or Smoke, LLC (“Utah Vap”) alleging trademark infringement. The district court granted Utah Vap’s motion for summary judgment, holding there was no likelihood of confusion between the parties’ marks. The Tenth Circuit concluded after review of the marks that Utah Vap did not meet its burden of showing that "no reasonable juror could find [a] likelihood of confusion." Because a genuine issue of material fact exists as to the likelihood of initial interest and post-sale confusion between the marks, the Court reversed the district court’s grant of summary judgment. View "Affliction Holdings v. Utah Vap Or Smoke" on Justia Law

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Antero Resources Company and South Jersey Gas Company entered into an eight-year contract for Antero to deliver natural gas from the Marcellus Shale formation to gas meters located on the Columbia Pipeline in West Virginia. The parties tied gas pricing to the Columbia Appalachia Index.During performance of the contract, the price of natural gas linked to the Index increased. South Jersey contested the higher prices, arguing that modifications to the Index materially changed the pricing methodology, and that the Index should be replaced with one that reflected the original agreement. Antero disagreed. South Jersey then sued Antero in New Jersey state court for failing to negotiate a replacement index, and began paying a lower price based on a different index. Antero then sued South Jersey in federal district court in Colorado, where its principal place of business was located, for breach of contract for its failure to pay the Index price. The lawsuits were consolidated in Colorado and the case proceeded to trial. The jury rejected South Jersey’s claims, finding South Jersey breached the contract and Antero was entitled to $60 million damages. South Jersey argued on appeal the district court erred in denying its motion for judgment in its favor as a matter of law, or, alternatively, that the court erred in instructing the jury. After review, the Tenth Circuit affirmed, finding a reasonable jury could find South Jersey breached its contract with Antero because the Index was not discontinued nor did it materially change. Furthermore, the Court found no defects in the jury instructions. View "Antero Resources Corp. v. South Jersey Resources Group" on Justia Law

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This appeal grew out of Brent Sloan’s participation in two transactions: (1) a merger between Advanced Recovery Systems, LLC and Kinum, Inc.; and (2) the sale of software from Kinum to Sajax Software, LLC. American Agencies, LLC alleged harm from these transactions and sued Sloan for damages and restitution. After the close of evidence, Sloan filed a motion for judgment as a matter of law. Following the denial of this motion, a jury found Sloan liable on American Agencies’ claims of tortious interference with business relations, conspiracy to interfere with business relations, tortious interference with contract, copyright infringement, unjust enrichment, and misappropriation of trade secrets. Sloan unsuccessfully renewed his motion for judgment as a matter of law. After the district court denied this motion, Sloan appealed. The Tenth Circuit affirmed in part and reversed in part finding Sloan did not preserve his arguments as to tortious interference with business relations, conspiracy to interfere with business relations, and tortious interference with contract. The Tenth Circuit agreed the district court erred in instructing the jury on improper means, and the Court concurred with Sloan that on the claim of unjust enrichment, the jury could not have reasonably inferred the value of a benefit to him. View "Sloan v. American Agencies, LLC" on Justia Law