Justia Business Law Opinion Summaries

The Supreme Court reversed in part the judgment of the trial court awarding damages in favor of Plaintiff in this action seeking compensatory and punitive damages for breach of a partnership agreement, breach of fiduciary duty, and libel per se, holding that the trial court erred with respect to the libel claim.A jury found in favor of Plaintiff on all three counts and awarded him both compensatory and punitive damages. On appeal, Defendant argued that the trial court erred by denying his motions to set aside the verdict and for judgment notwithstanding the verdict. The Supreme Court reversed in part, holding (1) Plaintiff's claims were not barred by the compulsory counterclaim rule set forth in Fed. R. Civ. P. 13(a)(1); (2) Plaintiff's breach of partnership agreement and breach of fiduciary duty claims did not fail as a matter of law under Karanian v. Maulucci, 440 A.2d 959 (Conn. 1981); and (3) with respect to the libel claim, the trial court erred by admitting the testimony of Plaintiff's expert witness on damages because there was no evidence to support the testimony. View "Chugh v. Kalra" on Justia Law

Pursuant to the Ownership Interest Purchase Agreement dated April 23, 2014 (the “Agreement”), Appellant North American Leasing, Inc. purchased Appellant NASDI, LLC, and Appellant Yankee Environmental Services, LLC. NASDI was in the business of providing demolition and site redevelopment services throughout the United States. The seller was Appellee NASDI Holdings, LLC, which before the sale, possessed all ownership interests in NASDI and Yankee. Great Lakes Dredge and Dock Corporation (“Great Lakes”), the parent company of NASDI Holdings, agreed that performance and payment bonds on existing projects being performed by NASDI and Yankee at the time of the sale would remain in place for the duration of each project. The Agreement also provided that North American Leasing, NASDI, Yankee, and Appellant Dore & Associates Contracting, Inc. (“Dore”), would indemnify NASDI Holdings and its affiliates for any losses arising from those bonds that Great Lakes agreed would remain in place on existing projects. After the sale of NASDI and Yankee was completed, Great Lakes incurred losses from performance and payment bonds on a project known as the Bayonne Bridge project. The Defendants have taken the position throughout this litigation that they have no obligation to indemnify the Plaintiffs because the Plaintiffs’ claims notices were untimely under the Agreement. The Court of Chancery rejected the Defendants’ contention and entered judgment against the Defendants for the total amount of the Plaintiffs’ claim. Finding no reversible error in this judgment, the Delaware Supreme Court affirmed. View "North American Leasing, Inc. v. NASDI Holdings, LLC" on Justia Law

The Ninth Circuit panel held that defendant was not required to disgorge to CytoDyn his short-swing profits from exercising options and warrants granted by CytoDyn, entitling him to purchase and later sell CytoDyn shares. The panel held that the short-swing transaction fell within an exemption, set forth in SEC Rule 16b-3(d)(1) because the option and warrant award was “approved by the board of directors” of CytoDyn. The circuit court concluded that the affirmative votes of three of CytoDyn’s five board members, at a meeting where only four board members were present, were sufficient, and a unanimous decision was not required under either the plain text of Rule 16-3(d)(1), Delaware corporate law, or CytoDyn’s bylaws.The court left the determination of what a corporate board must do to approve insider-issuer acquisitions to the laws of the state where the corporation is incorporated. Reasoning that federal securities law defers to—and does not displace—the state laws governing corporate boards. Thus, the circuit court affirmed the district court’s ruling. View "ALPHA VENTURE CAPITAL PARTNERS V. NADER POURHASSAN" on Justia Law

Petitioner Tradz, LLC, appealed a New Hampshire Department of Safety, Bureau of Hearings (bureau) decision affirming the New Hampshire Division of Motor Vehicles (DMV) decision to deny petitioner’s applications for title to ten motor vehicles. Petitioner argued the bureau erred by concluding that New Hampshire’s abandoned vehicle statute, RSA 262:40-a (2014), did not provide a basis for it to obtain title to the vehicles. Finding no reversible error, the New Hampshire Supreme Court affirmed. View "Appeal of Tradz, LLC" on Justia Law

Following the merger of Centene Corporation ("Centene") and Health Net, Inc. ("Health Net)," certain shareholders of Centene (collectively, Plaintiffs) brought five claims on behalf of the corporation against certain of its former and then-current directors and officers and nominal defendant Centene (collectively, Defendants). Plaintiffs did not make a pre-suit demand on Centene's Board of Directors (the Board). The district court dismissed their complaint with prejudice, finding that the plaintiffs failed to plead particularized facts demonstrating that a demand would have been futile.The Eighth Circuit found that the plaintiffs failed to plead facts showing the relevant documents contained a material misrepresentation. Further, the court did not consider the second or third claims because the plaintiffs made no argument contesting the district court's finding that a majority of the Board faces a substantial likelihood of liability. Next, the circuit court held that the plaintiffs' futility argument was patently insufficient. Finally, the circuit court found that at least half of the Board does not face a substantial likelihood of liability under the plaintiffs' insider trading claim. As such, the circuit court found the same as to plaintiffs' unjust enrichment claim pertaining to alleged insider trading. The circuit court affirmed the district court's decisions. View "Carpenters' Pension Fund of IL v. Michael Neidorff" on Justia Law

Leslie Murphy, a former shareholder of Covisint Corporation, brought an action against Samuel Inman, III and other former Covisint directors, alleging they breached their statutory and common-law fiduciary duties owed to plaintiff when Covisint entered into a cash-out merger agreement with OpenText Corporation in 2017. Defendants moved for summary judgment, arguing plaintiff lacked standing because his claim was derivative in nature and he did not satisfy the requirements for bringing a derivative shareholder action under MCL 450.1493a. Plaintiff responded that he was permitted to bring a direct shareholder action under MCL 450.1541a, and that defendants owed common-law fiduciary duties to plaintiff as a shareholder. The trial court granted defendants’ motion, ruling that plaintiff lacked standing to bring a direct shareholder action because he could not demonstrate an injury to himself without showing injury to the corporation, nor could he show harm separate and distinct from that of other Covisint shareholders. The court also rejected plaintiff’s common-law theory because it arose out of the same alleged injury as his statutory claim. The Court of Appeals affirmed. The Michigan Supreme Court reversed, however, finding that a shareholder who alleges the directors of the target corporation breached their fiduciary duties owed to the shareholder in handling a cash-out merger could bring that claim as a direct shareholder action. The Court of Appeals erred by concluding that plaintiff’s claim was derivative. View "Murphy v. Inman" on Justia Law

The Supreme Court affirmed the judgment of the circuit court reducing the jury's punitive damages award against HALO Branded Solutions, Inc., holding that the circuit court's application of the punitive damages cap in Mo. Rev. Stat. 510.265 did not violate All Star Awards & Ad Specialities Inc.'s right to a jury trial, and the reduced award did not violate HALO's due process rights.All Star brought this action against HALO and All Star's employee, Doug Ford. A jury found HALO tortiously interfered with All Star's business expectancy, that Ford breached his duty of loyalty to All Star, and that HALO conspired with Ford to breach this duty of loyalty. The jury awarded All Star $525,542 in actual damages and assessed $5.5 million in punitive damages against HALO. The circuit court applied section 510.265 and capped the punitive damages award at five times All Star's actual damages - or $2,627,709 - and entered final judgment in accordance with the jury's verdicts. The Supreme Court affirmed, holding (1) the circuit court properly reduced All Star's award of punitive damages; and (2) the reduced award was within the constitutional parameters of due process. View "All Star Awards & Ad Specialties, Inc. v. HALO Branded Solutions, Inc." on Justia Law

Corporate taxpayer Raytheon Company's 2012 income tax return was due on March 15, 2013. Raytheon filed its return on September 27, 2013, after securing an authorized extension of the deadline. Raytheon later discovered that the return overstated the company's annual income based upon the inadvertent inclusion of Arizona property sales. The company filed an amended 2012 return on September 27, 2016, claiming a refund of $321,444.00. The Oklahoma Tax Commission denied the refund claim, reasoning taxpayer submitted its demand more than three years after paying the taxes. An administrative law judge found the claimed refund was time barred under 68 O.S.2011, section 2373, and the Commissioners affirmed this finding. The company appealed, and after review the Oklahoma Supreme Court reversed, finding the taxpayer timely brought the claim for refund, having paid taxes to the Oklahoma Tax Commission upon filing its amended original return with a proper extension. View "In the matter of the Income Tax Protest of Raytheon Company" on Justia Law

This decision held that an irrevocable proxy did not run with majority shares and that a transfer restriction applied to any sale to an affiliate but not to a sale to a third party.A Delaware limited partnership (Partnership) dissolved in 2021. At issue was the seventy-five percent shares (Majority Shares) that the Partnership owned of the issued and outstanding equity of a corporation. More than two decades ago, the previous owner of the Majority Shares executed an irrevocable proxy granting three individuals the authority to vote the Majority Shares (the Irrevocable Proxy), and when the Partnership acquired the Majority Shares, it bound itself to the Irrevocable Proxy. Plaintiff sought a declaratory judgment that the Irrevocable Proxy, from which Defendants benefitted, did not run with the Majority Shares and that the Partnership can sell the shares clear of the Irrevocable Proxy. The Court of Chancery held (1) the Irrevocable Proxy did not run with the Majority Shares; (2) a transfer restriction in the addendum to the Irrevocable Party applied to any sale to an affiliate, but not to a sale to a third party; and (3) any judicial declaration at this stage would constitute an advisory opinion. View "Hawkins v. Daniel" on Justia Law

In 2006 Pierre opened a credit card account. She accumulated consumer debt and defaulted. Midland Funding bought the debt and sued Pierre in Illinois state court in 2010 but voluntarily dismissed the lawsuit. In 2015. Midland Credit sent Pierre a letter seeking payment, listing multiple payment plans, stating that the offer would expire in 30 days. The letter stated that because of the age of the debt, Midland would neither sue nor report to a credit agency and that her credit score would be unaffected by either payment or nonpayment. The statute of limitations had run. Pierre sued Midland under the Fair Debt Collection Practices Act, 15 U.S.C. 1692e(2). Asking for payment of a time-barred debt is not unlawful, but Pierre contended that the letter was a deceptive, unfair, and unconscionable method of debt collection. She sought to represent a class of Illinois residents who had received similar letters from Midland.The district court certified the class and granted it summary judgment on the merits. A jury awarded statutory damages totaling $350,000. The Seventh Circuit vacated and remanded with instructions to dismiss the suit. The letter might have created a risk that Pierre would suffer harm, such as paying the time-barred debt; that risk alone is not enough to establish an Article III injury in a suit for money damages, as the Supreme Court held in “TransUnion" (2021). View "Pierre v. Midland Credit Management, Inc." on Justia Law