Justia Business Law Opinion Summaries

The Supreme Court reversed the judgment of the circuit court opining on the constitutionality of the Governor's 2021 COVID-19 legislation and enjoining the Governor from interfering with Plaintiffs' business operations, holding that Plaintiff lacked standing to bring this action.In its 2021 regular session, the General Assembly passed three bills amending the Governor's emergency powers under Ky. Rev. Stat. 39A. Plaintiff, a business, sought to enjoin the Governor from any action contrary to the 2021 legislation. The circuit court entered an amended judgment declaring the constitutionality of the 2021 COVID-19 legislation, holding any orders to the contrary imposed by the Governor unconstitutional, and prohibiting the three named defendants from enforcing any emergency order, decree or regulation in conflict with the 2021 legislation. The Supreme Court reversed, holding that Plaintiff plainly had no standing to bring this action, and the circuit court had no jurisdiction. View "Beshear v. Ridgeway Properties, LLC" on Justia Law

The Supreme Court held that when a member of the original panel of the court of appeals leaves the bench the departing judge may be replaced by a new judge on the panel that reconsiders its original decision.In this litigation centering around a soured business relationship between Plaintiff and Defendant the trial court issued a decision appointing a receiver to manage the dissolution of the business and ordering that the business be sold to Plaintiff. The court of appeals reversed and ordered the receiver to entertain offers from all interested bidders. After the case was argued but before the decision issued, Judge Horton announced his impending resignation, which became effective before Defendant filed his application for reconsideration. Judge Frederick Nelson was appointed to fill Judge Horton's seat. Defendant opposed reconsideration, arguing that Judge Nelson should not participate in the reconsideration decision because he did not sit on the original panel. The court of appeals disagreed and entered a new decision affirming the judgment of the trial court. The Supreme Court affirmed, holding that the court of appeals acted within the bounds of the law when Judge Nelson replaced Judge Horton on the panel considering Plaintiff's application for reconsideration. View "Jezerinac v. Dioun" on Justia Law

Boor and Edson owned Brava, which had intellectual property and technical knowledge related to composite roofing. Wildhawk inquired about purchasing Brava. Boor proposed “an exclusive license for manufacturing current roofing products” with “a right of first refusal on all new product [d]evelopments.” The parties executed asset purchase and license agreements. Wildhawk paid $4 million and obtained an automatic license to “any Improvements” to the technology, whether patentable or not. Before executing the agreement, the parties removed a “New Product” section as required by Wildhawk’s lender but entered into an oral agreement for a right of first refusal. Wildhawk retained Boor and Edson as paid consultants, with non-compete agreements.Boor notified Wildhawk: “As per our handshake agreement” we offer you first right of refusal “on the below products.” The parties entered into a confidentiality and nondisclosure agreement regarding “possible R&D ‘new or enhanced product’ agreements.” They negotiated but failed to reach an agreement. Boor and Edson formed Paragon while Boor was still employed by Wildhawk. Paragon began producing the new products.Wildhawk sued. The district court granted Wildhawk a preliminary injunction, prohibiting Paragon from manufacturing or selling composite roofing. The Eighth Circuit vacated. Wildhawk had a fair chance of proving the defendants violated the agreement but the district court erred in rejecting an equitable estoppel defense. Wildhawk waited until Paragon had been producing the products for 10 months before making its claim, failing to show either reasonable diligence or harm that cannot be compensated by damages. View "Wildhawk Investments, LLC v. Brava I.P., LLC" on Justia Law

The Enterprises, Fannie Mae and Freddie Mac, suffered financial losses in 2008 when the housing market collapsed. The Housing and Economic Recovery Act of 2008 (HERA), created the Federal Housing Finance Agency (FHFA), an independent agency tasked with regulating the Enterprises, including stepping in as conservator, 12 U.S.C. 4511.With the consent of the Enterprises’ boards of directors, FHFA placed the Enterprises into conservatorship, then negotiated preferred stock purchase agreements (PSPAs) with the Treasury Department to allow the Enterprises to draw up to $100 billion in exchange for senior preferred non-voting stock having quarterly fixed-rate dividends. A “net worth sweep” under the PSPAs replaced the fixed-rate dividend formula with a variable one that required the Enterprises to make quarterly payments equal to their entire net worth, minus a small capital reserve amount, causing the Enterprises to transfer most of their equity to Treasury, leaving no residual value for shareholders.Shareholders challenged the net worth sweep. Barrett, an individual shareholder, separately asserted derivative claims on behalf of the Enterprises. The Claims Court dismissed the shareholders’ direct Fifth Amendment takings and illegal exaction claims for lack of standing; dismissed for lack of subject matter jurisdiction the shareholders’ direct claims for breach of fiduciary duty, and breach of implied-in-fact contract; and found that Barrett had standing to bring his derivative claims, notwithstanding HERA. The Federal Circuit affirmed the dismissal of shareholders’ direct claims but concluded that the shareholders’ derivatively pled allegations should also be dismissed. View "Fairholme Funds, Inc. v, United States" on Justia Law

Heather operated a health-coaching business called Constitution Nutrition. She started her business in California, which did not require a license. After moving to Florida in 2015, she continued to run her business—meeting online with most of her clients and meeting in person with two clients who lived in Florida. She described herself as a “holistic health coach” and not as a dietician. Heather tailored her health coaching to each client, which included dietary advice. After a complaint was filed against her and she paid $500.00 in fines and $254.09 in investigatory fees, Heather sued, claiming that Florida’s Dietetics and Nutrition Practice Act, which requires a license to practice as a dietician or nutritionist, violated her First Amendment free speech rights to communicate her opinions and advice on diet and nutrition to her clients. The district court granted the Florida Department of Health summary judgment.The Eleventh Circuit affirmed, after considering the Supreme Court’s decision in National Institute of Family & Life Advocates v. Becerra (2018). The Act “is a professional regulation with a merely incidental effect on protected speech,” and is constitutional under the First Amendment. View "Del Castillo v. Secretary, Florida Department of Health" on Justia Law

An online promotions team posted thousands of videos to persuade people to buy BitConnect Coin, a new cryptocurrency. BitConnect coin was not a sound investment; it was a Ponzi scheme. BitConnect’s original investors received “returns” from the money paid by new investors. The promoters were siphoning off money. At one point, BitConnect was bringing in around $10 million per week in investments from the United States.Two victims of the BitConnect collapse filed a putative class action, alleging that the promoters were liable under section 12 of the Securities Act for selling unregistered securities through their BitConnect videos, 15 U.S.C. 77l(a)(1); 77e(a)(1). The district court dismissed because the plaintiffs based their case on interactions with the promoters’ “publicly available content,” the plaintiffs had never received a “personal solicitation” from the promoters. The Eleventh Circuit reversed. Neither the Securities Act nor precedent imposes that kind of limitation. Solicitation has long occurred through mass communications, and online videos are merely a new way of doing an old thing. The Securities Act provides no free pass for online solicitations. View "Parks v. BitConnect International PLC" on Justia Law

Plaintiff Graphnet, Inc. and defendant Retarus, Inc. were considered industry competitors -- they each provided, among other things, cloud-based facsimile services. In 2014, Retarus published a brochure containing allegedly defamatory statements about Graphnet. Graphnet representatives received a copy of the brochure at a May 2016 event. In August 2016, Graphnet filed a complaint against Retarus. Throughout discovery, Graphnet failed to produce requested documents and took no depositions. Based on Graphnet’s failure to present supporting evidence, the trial court dismissed all claims except for the defamation and slander claims. The trial court and the parties agreed that the court would charge the jury pursuant to Model Civil Jury Charge 8.46, “Defamation Damages (Private or Public),” which instructed a jury on the elements of defamation. The trial court’s instructions tracked the model charge closely, including Section D, which is devoted to “Nominal Damages for Slander Per Se or Libel.” In this appeal, the issue presented for the New Jersey Supreme Court's consideration was whether a new trial on all damages was required when the jury was improperly instructed on nominal damages and a plaintiff opposes remittitur. Graphnet argued the trial court erred as a matter of law by ordering remittitur without Graphnet’s consent. The Appellate Division affirmed in part, reversed in part, recognizing the jury’s $800,000 nominal damages award was “shockingly excessive and cannot stand” but concluded that the trial court improperly awarded Graphnet $500 in nominal damages in violation of the doctrine of remittitur. The appellate court remanded for a new trial on nominal damages only. As the Appellate Division found, the Supreme Court found remittitur was improper without Graphnet’s consent. But this matter required a new trial on all damages in which the jury was properly instructed on actual and nominal damages. The Supreme Court also referred Model Civil Jury Charge 8.46D to the Committee on Model Civil Jury Charges to be amended. View "Graphnet, Inc. v. Retarus, Inc." on Justia Law

This case involved Google LLC’s application of internet search algorithms, which it used to auction off search terms for profit to advertisers, and the interests of Edible IP, LLC, which sought to exercise control over the profit generated from its trade name and associated goodwill. In 2018, Edible IP brought an action against Google arising from Google’s monetization of the name “Edible Arrangements” without permission in its keyword advertising program. Google moved to dismiss the complaint, or in the alternative, to compel arbitration. The trial court granted the motion, dismissing the complaint on several grounds, including that it failed to state a claim, and alternatively compelling the parties to arbitration. Edible IP appealed that order, and the Georgia Court of Appeals affirmed the dismissal for failure to state a claim. The Georgia Supreme Court granted certiorari to address whether the trial court properly granted Google’s motion to dismiss, and after review, affirmed, finding Edible IP did not state a cognizable claim for relief. View "Edible IP, LLC v. Google, LLC" on Justia Law

In this case arising from the internal breakdown and judicial dissolution of H&N Holdings, LLC the Supreme Court reversed the orders of the district court ordering, sua sponte, the dissolution of H&N, holding that the district court erred.H&N was owned by Dianne Nelson and formerly managed by Vicki's husband, Burke Hills. Dianne filed a lawsuit seeking the dissolution of H&N and the removal of Burke as manager. In lieu of dissolution, H&N and Vicki filed elections to purchase Dianne's membership interest in H&N. The district court dismissed the elections and ordered H&N's dissolution, the removal of Burke as manager, and the appointment of a receiver to liquidate H&N's assets. The Supreme Court reversed, holding (1) H&N made its election as a matter of right, and the district court lacked the power to dismiss the election and order the dissolution of H&N; and (2) the district court violated Vicki's due process rights by ordering H&N's dissolution and Burke's removal as manager without notice or an opportunity to be heard. View "Nelson v. Hills" on Justia Law

MDK, a Bolivian entity, filed suit against Proplant, a Texas-based corporation under both breach of contract and tort theories. The Fifth Circuit affirmed the district court's grant of summary judgment in favor of Proplant, concluding that MDK did not meet the Federal Rule of Civil Procedure 56(d) standard for deferring summary judgment, and thus the district court did not err by ruling on Proplant's summary judgment motion before the parties had completed discovery. In this case, MDK's opening brief failed to adequately present its arguments that Proplant's summary judgment motion and the district court's summary judgment order were "legally deficient." Therefore, MDK has waived these issues.Finally, the court rejected MDK's contention that the district court erred in granting summary judgment on MDK's two breach of contract claims. In regard to the first claim, the court concluded that MDK has not pointed to any evidence suggesting that it did in fact execute the October Document. In regard to the second claim, the court concluded that MDK failed to meet its burden of demonstrating by competent evidence that there is a dispute of material fact as to whether YPFB awarded Proplant the O&M contract. View "MDK Sociedad de Responsabilidad Limitada v. Proplant Inc." on Justia Law