Justia Business Law Opinion Summaries

The Supreme Court affirmed the judgment of the court of appeals affirming the district court's judgment concluding that Tennis Sanitation, LLC breached the contract between the parties and that, as a result of the breach, Vermillion State Bank suffered $1.92 million in damages, holding that the court of appeals did not err.Tennis repudiated an alleged oral contract it negotiated with Vermillion for its purchase of certain assets, including garbage trucks and customer routes, of a trash collection business in bankruptcy. After Tennis's repudiation, Vermillion sold the assets to another company at a significantly lower price. Vermillion then sued Tennis for breach of contract. The district court entered judgment for Vermillion. The court of appeals affirmed. The Supreme Court affirmed, holding that hybrid contract involving goods and non-goods should be interpreted based on the predominant purpose of the contract. View "Vermillion State Bank v. Tennis Sanitation, LLC" on Justia Law

The Court of Chancery denied the petition filed by Synergy management Group LLC seeking to have its president appointed as a custodian for Forum Mobile, Inc., a defunct Delaware corporation, holding that Synergy was not entitled to the petition.Synergy sought to revive Forum as a blank check company and, through a reverse merger, begin a new business that could access the public markets. In its petition, Synergy relied on section 226(a)(3) of the Delaware General Corporation Law providing that the Court of Chancery may, upon the application of any stockholder, appoint a custodian for a corporation when the corporation has abandoned its business and failed to take timely steps to dissolve, liquidate, or distribute its assets. The Court of Chancery denied the petition, holding that section 226(b) does not contemplate that a custodian appointed under section 226(a)(3) could revivify the corporation. View "In re Forum Mobile, Inc." on Justia Law

McDonald filed a putative class action, alleging that her former employer, Bronzeville, collected, used, and stored sensitive biometric data from employees in a fingerprint timekeeping system, violating the Biometric Information Privacy Act,740 ILCS 14/1. McDonald alleged that she was never provided with nor signed a release and had never been informed of the purposes or length of time for which her biometric information was stored. Bronzeville argued that the claims were barred by the Workers’ Compensation Act, 820 ILCS 305/1, the exclusive remedy for accidental injuries transpiring in the workplace, and that an employee has no common-law or statutory right to recover civil damages from an employer for injuries incurred in the course of her employment.The circuit court rejected Bronzeville’s argument, reasoning that privacy rights are neither a psychological nor physical injury and not compensable under the Compensation Act. The appellate court and Illinois Supreme Court concluded that an employee's claim against an employer for liquidated damages under the Privacy Act, available without further compensable actual damages being alleged or sustained and intended to have a preventative and deterrent effect, is not the type of injury that categorically fits within the purview of the Compensation Act, a remedial statute designed to provide financial protection for workers that have sustained an actual injury. View "McDonald v. Symphony Bronzeville Park, LLC" on Justia Law

In this appeal concerning the conditions under which a member of a manager-managed limited liability company (LLC) is permitted to inspect the LLC's books and records the Supreme Court affirmed the judgment of the trial court concluding that Defendant's refusal to disclose certain information to Plaintiffs violated both Conn. Gen. Stat. 34-255i and Defendant's operating agreement, holding that there was no error.At issue was whether a member seeking information for the purpose of ascertaining whether mismanagement occurred must produce credible proof that mismanagement may have occurred as a condition for exercising that member's statutory inspection right. The Supreme Court affirmed the trial court's ruling in favor of the substitute plaintiffs in this case, holding that the court did not err in (1) concluding that there is no credible proof of mismanagement requirement in section 34-255i; and (2) failing to apply other statutory requirements. View "Benjamin v. Island Management, LLC" on Justia Law

ATC purchased a commercial general liability insurance policy from Westchester, which provided coverage against liability incurred because of “advertising,” a defined term that included trade dress infringement. BizBox sued ATC for breach of contract and interference with its business expectancies, alleging that ATC manufactured and sold a knock-off trailer using BizBox’s design. ATC sought a declaratory judgment that Westchester owed it a duty to defend and a duty to indemnify. Westchester argued that BizBox’s underlying suit was not covered under the insurance policy because BizBox did not allege, in that litigation, an infringement of its trade dress in ATC’s advertising.The Seventh Circuit affirmed the dismissal of the suit. BizBox’s complaint never alleged a trade dress infringement claim against ATC nor an advertising injury and could not be construed to plausibly allege a trade dress infringement claim against ATC. BizBox alleged no facts that can plausibly be construed to show that it asserted that an advertising injury occurred. Westchester, therefore, has no duty to defend or indemnify ATC under the “personal and advertising injury” provision of the Policy. View "Aluminum Trailer Co. v. Westchester Fire Insurance Co" on Justia Law

Owen transferred his ownership interests in real estate and construction-related firms he had founded to a new entity, Blue Mountain, as part of a joint venture with Acolyte. Acolyte acquired a 50 percent ownership interest in Blue Mountain; Owen became the company’s CEO. In his employment contract, Owen agreed to a covenant barring him from soliciting Blue Mountain’s customers for a three-year period following the termination of his employment. Years later, Owen was terminated for cause. Months later, Owen established a new construction company to compete with Blue Mountain. He sent letters to building and construction companies, including Blue Mountain customers. describing this new venture. Blue Mountain obtained injunctions, prohibiting Owen from soliciting Blue Mountain’s customers, and summary adjudication of its breach of contract claim.The court of appeal affirmed, rejecting Owen’s arguments that the nonsolicitation covenant was unenforceable because it did not meet the requirements of Business and Professions Code section 16601, an exemption to section 16600’s general ban on non-competition covenants and that his communications with Blue Mountain’s customers were not solicitations as a matter of law. Under section 16601, Owen disposed of all of his ownership interest while concurrently agreeing to refrain from carrying on a similar business within a specified geographic area in which the business sold. The court upheld an award to Blue Mountain of approximately $600,000 in attorney fees as the prevailing party. View "Blue Mountain Enterprises, LLC v. Owen" on Justia Law

Yelp filed suit seeking an injunction under the unfair competition law and the false advertising law to prevent Yelp from touting the accuracy and efficacy of its filter. The trial court excluded Multiversal's principal, James Demetriades, from a portion of the trial and denied Multiversal's motion to compel access to Yelp's source code.The Court of Appeal affirmed, concluding that the trial court was within its discretion to find that although Yelp's source code might be helpful in analyzing the challenged statements, it was not necessary. In this case, Multiversal offers no explanation as to why this data is relevant or would have been used to establish the falsity of the challenged statements. The court also concluded that Multiversal was represented by counsel and afforded the right to have its expert present during the portion of trial from which Demetriades was excluded, accommodations the Supreme Court has deemed sufficient in civil proceedings. Furthermore, the trial court could reasonably have found that excluding Demetriades from a limited portion of the trial while safeguarding Multiversal's right to have other representatives present, measures similar to the protective order entered during discovery, gave Multiversal notice and opportunity for hearing appropriate to the nature of the case. The court stated that due process required no more, and that Multiversal identifies no prejudice resulting from this exclusion. View "Multiversal Enterprises-Mammoth Properties, LLC v. Yelp, Inc." on Justia Law

Melendez purchased a used 2015 Toyota from Southgate under a retail installment sales contract. Southgate assigned the contract to Westlake. Weeks later, Melendez sent a notice alleging Southgate violated the Consumer Legal Remedies Act (CLRA) and demanded rescission, restitution, and an injunction. Melendez later sued Southgate and Westlake, alleging violations of the CLRA, the Song-Beverly Consumer Warranty Act, Civil Code 1632 (requiring translation of contracts negotiated primarily in Spanish), the unfair competition law, fraud, and negligent misrepresentation. Westlake assigned the contract back to Southgate. Default was entered against Southgate. Westlake agreed to pay $6,204.68 ($2,500 down payment and $3,704.68 Melendez paid in monthly payments). Melendez would have no further obligations under the contract.The parties agreed Melendez could seek attorney fees, costs, expenses, and prejudgment interest. Westlake was entitled to assert all available defenses, “including the defense that no fees at all should be awarded against it as a Holder” The FTC’s “holder rule” makes the holder of a consumer credit contract subject to all claims the debtor could assert against the seller of the goods or services but caps the debtor’s recovery from the holder to the amount paid by the debtor under the contract. The trial court awarded attorney fees ($115,987.50), prejudgment interest ($2,956.62), and costs ($14,295.63) jointly and severally against Westlake, Southgate, and other defendants. The court of appeal affirmed. The limitation does not preclude the recovery of attorney fees, costs, nonstatutory costs, or prejudgment interest. View "Melendez v. Westlake Services, Inc." on Justia Law

The Louisiana Supreme Court granted certiorari to consider whether waste tire processors were prohibited from charging waste tire generators a transportation fee above the fees statutorily provided by Louisiana’s waste tire laws. Finding there were no provisions prohibiting such a transportation fee, the Court concluded that Defendants, waste tire processors, were not prohibited from charging Plaintiffs, waste tire generators, a fee for the transportation of waste tires from the waste tire generators’ location to the processing facilities. Therefore, the lower courts’ judgments were reversed. View "Winmill Tire, LLC et al. v. Colt, Inc., et al." on Justia Law

This appeal grew out of a dispute over a program (“The Trial Lawyers College”) to train trial lawyers. The College’s board of directors splintered into two factions, known as the “Spence Group” and the “Sloan Group.” The two groups sued each other: The Spence Group sued in state court for dissolution of the College and a declaratory judgment recognizing the Spence Group’s control of the Board; the Sloan Group then sued in federal court, claiming trademark infringement under the Lanham Act. Both groups sought relief in the federal case. The federal district court decided both requests in favor of the Sloan Group: The court denied the Spence Group’s request for a stay and granted the Sloan Group’s request for a preliminary injunction. The Spence Group appealed both rulings. The Tenth Circuit Court of Appeals determined it lacked jurisdiction to review the district court’s denial of a stay. After the Spence Group appealed the federal district court’s ruling, the state court resolved the dispute over Board control. So this part of the requested stay became moot. The remainder of the federal district court’s ruling on a stay did not constitute a reviewable final order. The Court determined it had jurisdiction to review the grant of a preliminary injunction. In granting the preliminary injunction, the district court found irreparable injury, restricting what the Spence Group could say about its own training program and ordering removal of sculptures bearing the College’s logo. The Spence Group challenged the finding of irreparable harm, the scope of the preliminary injunction, and the consideration of additional evidence after the evidentiary hearing. In the Tenth Circuit's view, the district court had the discretion to consider the new evidence and grant a preliminary injunction. "But the court went too far by requiring the Spence Group to remove the sculptures." View "Trial Lawyers College v. Gerry Spences Trial Lawyers, et al." on Justia Law