Justia Business Law Opinion Summaries

After Uber’s founding in 2009, its valuation soared, with some investors assigning a valuation as high as $68 billion by mid-2016. Between June 2014 and May 2016, Kalanick, Uber’s founder, and Uber completed four preferred stock offerings, raising more than $10 billion in additional capital through limited partnerships and other entities. Irving Firemen’s Relief & Retirement Fund acquired Uber securities on February 16, 2016. In 2017, several alleged corporate scandals surfaced. By early 2018, investors estimated a nearly 30% decline in Uber’s valuation. Irving filed a putative class action against Uber and Kalanick alleging securities fraud under California Corporations Code sections 25400(d) and 25500. The Ninth Circuit affirmed the dismissal of the complaint, upholding the use of the federal standard for loss causation rather than the “less-rigid state law standard.” Irving did not state a claim because it did not adequately allege that Uber and Kalanick’s alleged fraudulent misstatements and omissions caused its alleged losses. Even assuming actionable misstatements by Uber and Kalanick and that news articles, a lawsuit, and government investigations revealed the truth to the market, Irving did not adequately and with particularity allege that these revelations caused the resulting drop in Uber’s valuation. View "Irving Firemen’s Relief & Retirement Fund v. Uber Technologies, Inc." on Justia Law

The Eighth Circuit affirmed the district court's dismissal of a complaint brought by plaintiff against Employers Mutual and Defendant Kelley, asserting a claim for breach of fiduciary duty. Plaintiff was a minority shareholder of EMC, a spin-off from Employers Mutual. Defendant Kelley was the CEO and director of both EMCI and Employers Mutual. Plaintiff alleges that Employers Mutual structured EMCI as a shell company, preventing it from becoming a valuable company or acting independently from Employers Mutual. Plaintiff alleged in the complaint that, in the years leading up to the squeeze-out merger initiated by Employers to purchase EMCI's remaining shares, defendants breached fiduciary duties owed to him as a minority shareholder of EMCI.The court concluded that plaintiff's claim did not arise in the context of a contractual relationship; his alleged injury arose only from his status as a shareholder of EMCI; and this was insufficient under Iowa law to plausibly plead a special duty arising out of a contractual relationship. Furthermore, plaintiff did not adequately plead that his injury arose from a special duty. The court also concluded that plaintiff did not allege that his voting rights were ever affected by Employers Mutual and Kelley's alleged mismanagement. Even if this were Iowa law, plaintiff would not meet this exception.Accordingly, because plaintiff's claim is derivative in nature, he must satisfy federal and Iowa requirements for a filing a derivative action, which he has failed to do so. In this case, the complaint did not state with particularity plaintiff's efforts to enforce minority shareholder rights in the years leading up to the squeeze out. Furthermore, the complaint did not allege that he petitioned the directors or other shareholders in writing, or that 90 days have expired since delivery of the demand and EMCI rejected his request, or irreparable injury would result by waiting for the expiration of the ninety days. View "Shepard v. Employers Mutual Casualty Co." on Justia Law

AAAPC and UAS filed suit against Quest for conspiring to force them out of the market of providing allergy and asthma testing. The district court dismissed plaintiffs' claims under Federal Rule of Civil Procedure 12(b)(6).The Fifth Circuit concluded that plaintiffs' claims alleging that Quest violated sections 1 and 2 of the Sherman Act and the Texas antitrust law are not time-barred. The court explained that plaintiffs' allegations about Phadia and Quest's continued meetings with providers and payors do not restart the statute of limitations; plaintiffs' allegations regarding the June 2015 policy change does not suffice to restart the statute of limitations; but plaintiffs have sufficiently alleged that Phadia and Quest were involved in the alleged conspiracy and that the allegation regarding Phadia's May 2014 email reset the statute of limitations. Therefore, the court reversed the district court's dismissal as to the state and federal antitrust claims. The court also reversed the dismissal of plaintiffs' misappropriation of trade secrets claim, concluding that plaintiffs have sufficiently pled they could not have discovered their misappropriation injury using reasonable diligence. Moreover, nothing in the complaint forecloses their potential rejoinder to the statute of limitations defense. The court affirmed the district court's dismissal of the civil conspiracy and tortious interference claims. Finally, the court affirmed the district court's denial of plaintiffs' request for leave to amend their complaint. View "Academy of Allergy & Asthma in Primary Care v. Quest Diagnostics, Inc." on Justia Law

The Supreme Court affirmed in part and reversed in part the judgment of the district court decreeing dissolution of a limited liability company (LLC), holding that, for the most part, the district court properly adjudicated the parties' rights but erred in ordering dissolution of the LLC.Plaintiffs filed suit seeking an order expelling three individuals as members of the LLC, an order dissolving the LLC, an order appointing a receiver for the LLC, and damages for breach of contract, breach of fiduciary duty, economic duress, and civil conspiracy. After a nonjury trial, the district court adjudicated the parties' rights and granted the request to dissolve the LLC based on the impracticability of continuing business. The Supreme Court reversed in part, holding that judicial dissolution should not have been ordered under Iowa Code 489.701(d)(2). View "Barkalow v. Clark" on Justia Law

In 2012, Bishop Lawrence sought to disaffiliate his South Carolina-based diocese from the Episcopal “Mother Church”. Some parishes followed suit. The Mother Church purported to remove Lawrence and selected a new bishop. The Disassociated Diocese and Parishes sued the Mother Church to clarify their property rights in diocesan. The Mother Church filed counterclaims and separately filed trademark and false-advertising claims. Both cases are ongoing.The Church Insurance Company, wholly owned by the Church Pension Fund, is a freestanding nonprofit affiliated with the Mother Church. Captive insurance companies may only cover the risks of their parent companies and related entities. Before the schism, the Company issued a Diocesan Program Master Policy, listing as “named insured” the Episcopal diocese and listing 56 participant parishes, including the now-Disassociated Parishes, in its declarations. Each parish has a separate, individualized insurance policy and paid premiums directly to the Company. The policies provide liability coverage for injuries arising out of “infringement of copyright, title, slogan, trademark, or trade name” and include a broad duty to defend. The Company has reimbursed the Disassociated Parishes’ defense costs in connection with both lawsuits.The Associated Diocese sued the Company, alleging breach of contract, bad faith, breach of fiduciary duty, and aiding and abetting breach of fiduciary duty. The Fourth Circuit affirmed the dismissal of that suit for lack of standing. The Company has not strayed beyond its limitations as a captive insurer or breached its obligations under the policies, so there is no injury traceable to such conduct. View "Episcopal Church in South Carolina v. Church Insurance Company of Vermont" on Justia Law

The issue presented for the New Mexico Supreme Court’s review centered on the executive branch’s authority to impose business restrictions during a pandemic. Specifically, the Court was asked to address: (1) whether Petitioners were authorized to restrict or close businesses when necessary for the protection of public health; and (2) whether the renewed temporary closure of indoor dining at restaurants and breweries, mandated by a July 13, 2020, emergency public health order (July Order), was arbitrary and capricious. With respect to the first question the Supreme Court held, consistent with its opinion in Grisham v. Reeb, 2020-NMSC-___, (S-1-SC-38336, Nov. 5, 2020), that Petitioners were so authorized. With respect to the second question, the Court held that the July Order’s temporary closure of indoor dining was not arbitrary and capricious. View "Lujan Grisham v. Romero" on Justia Law

In 2014, ALADS filed suit against defendants for breaches of their fiduciary duty to ALADS as members of its board of directors. ALADS obtained a temporary restraining order requiring the return of $100,000, and several weeks later a preliminary injunction preventing Defendant Macias from claiming to be a director. In 2018, the trial court entered judgment for ALADS, awarding damages sustained by ALADS and a permanent injunction, but found ALADS did not have standing to recover monetary compensation for its members. Afterwards, ALADs sought cost-of-proof sanctions, which the trial court denied. Both parties appealed.The Court of Appeal concluded that the trial court did not err in its conclusion that defendants breached their fiduciary duties to ALADS, or in its award of damages for harm to ALADS (except in one very minor respect), or in its award of a permanent injunction. However, the trial court did err when it concluded that ALADS did not have standing to seek the $7.8 million in damages on behalf of its members. The court explained that ALADS proved those damages without objection from defendants and had standing to do so. The court further concluded that ALADS was entitled to cost-of-proof sanctions. Accordingly, the court amended the judgment to include the $7.8 million in damages to ALADS's members, affirmed the judgment as amended, and remanded for the trial court to determine the appropriate amount of cost-of-proof sanctions. View "Association for Los Angeles Deputy Sheriffs v. Macias" on Justia Law

Edward Wrenn ("Edward") and David Wrenn ("David") petitioned the Alabama Supreme Court for a writ of mandamus to direct a circuit court to vacate an order requiring Edward and David to disclose their personal income-tax returns to plaintiff Jeffrey Wright, and to enter a protective order shielding the tax returns from production. Wright alleged he contracted with A-1 Exterminating Company, Inc. ("A-1 Exterminating"), for periodic termite treatments of his house. Over the course of several decades of treatments, Wright says, A-1 Exterminating used a "watered-down pesticide so weak that it may only kill ants and 'maybe' spiders." A-1 Exterminating allegedly concealed this practice from him. As a result, Wright contended his house was infected with and damaged by termites. Wright sued Edward, David, A-1 Exterminating, A-1 Insulating Company, Inc., and Wrenn Enterprises, Inc., alleging breach of warranty, breach of contract, negligence and wantonness. Wright sought to represent a class consisting of himself and other A-1 Exterminating customers allegedly harmed by defendants' actions. In support of his request to certify a class, Wright alleged that a "limited fund" existed that would support a class action under Rule 23(b)(1)(B), Ala. R. Civ. P. The Supreme Court held that for tax returns to be discoverable, they must be highly relevant, the litigant seeking their disclosure must show a compelling need for them, and their disclosure must be clearly required in the interests of justice, and that those standards have not been met in this case. Accordingly, the Court granted the petition and issued the writ to direct the trial court vacate its order requiring disclosure of the tax records. View "Ex parte Edward Wrenn & David Wrenn." on Justia Law

The Supreme Court reversed the judgment of the court of appeals denying Defendants' motion to dismiss under the Texas Citizens Participation Act (TCPA), Tex. Civ. Proc. & Rem. Code 27.001-.011, as untimely, holding that because Plaintiff's amended petition in this case asserted new legal claims, Defendants' motion to dismiss those claims was timely.In his original petition, Plaintiff asserted claims for deceptive trade practice, negligence, and negligent misrepresentation. Plaintiff subsequently filed an amended petition reasserting the same claims, adding new claims for fraud, conspiracy to commit fraud, fraudulent concealment, and breach of contract, and alleging the same essential facts alleged in the original petition and requesting the same relief. The trial court denied Defendants' TCPA dismissal motion, concluding that the motion was untimely. The court of appeals affirmed. The Supreme Court reversed, holding that the court of appeals erred in holding that Defendant's motion to dismiss the new claims was untimely because the amended petition asserted new legal actions and thus triggered new sixty-day period for Defendants to file a motion to dismiss those new claims. View "Monteglongo v. Abrea" on Justia Law

Plaintiff, cross-defendant and appellant Nissan Motor Acceptance Corporation (NMAC) was a subsidiary of nonparty Nissan Motors of North America. NMAC was a specialty lender that loaned money to Nissan automobile dealers. Defendants, cross-complainants and appellants, Michael A. Kahn (Kahn) and his wife Tami L. Kahn, plus a group of now defunct limited liability company auto dealerships they owned, were NMAC borrowers (collectively, “Superior”). This appeal and cross-appeal stemmed from the retrial of Superior’s cross-claims against NMAC. The jury awarded Superior $256.45 million in compensatory and punitive damages based on two promissory fraud theories: negligent misrepresentation and fraudulent concealment. The trial court granted NMAC’s motion for new trial based on juror misconduct, but denied NMAC’s motion for judgment notwithstanding the verdict (JNOV). Superior contended NMAC forfeited its right to complain about juror misconduct. It also challenged the sufficiency of the evidence to support the trial court’s discretionary decision to grant NMAC’s new trial motion. After review, the Court of Appeal concluded NMAC did not forfeit the basis for its new trial motion and substantial evidence supported the court’s juror misconduct findings. And contrary to Superior’s claim, the Court found nothing arbitrary or capricious in its prejudice ruling. Accordingly, the Court affirmed the new trial order. View "Nissan Motor Acceptance Cases" on Justia Law