Justia Business Law Opinion Summaries

Subcontractor Ehmcke Sheet Metal Company (Ehmcke) recorded a mechanic’s lien to recoup payment due for sheet metal fabrication and installation work done on a luxury hotel project in downtown San Diego. Project owner RGC Gaslamp, LLC (RGC) secured a bond to release the lien. Thereafter Ehmcke filed three successive mechanic’s liens, each identical to the first, prompting RGC to sue it for quiet title, slander of title, and declaratory and injunctive relief. The trial court granted Ehmke’s special motion to strike under the anti-SLAPP statute. The trial court found that Ehmcke met its moving burden because the filing of even an invalid lien was protected petitioning activity. Thereafter, the court found that RGC failed to make a prima facie showing that its sole remaining cause of action for slander of title could withstand application of the litigation privilege. RGC appeals both findings, arguing that the duplicative filing of mechanic’s liens after the posting of a bond was not protected activity. The Court of Appeal concluded after review that RGC erroneously imported substantive requirements of the litigation privilege into the first step of the anti-SLAPP inquiry. Ehmcke met that moving burden once its erroneously excluded reply declarations were considered. With the burden shifted on prong two, RGC failed to make a prima facie showing that the litigation privilege did not bar its slander-of-title cause of action. The anti-SLAPP motion was thus properly granted, and Court likewise affirmed the subsequent attorney’s fees and costs award. View "RGC Gaslamp v. Ehmcke Sheet Metal Co." on Justia Law

Plaintiff Gerriann Fagan appealed a circuit court order granting defendant Warren Averett Companies, LLC's motion to compel arbitration. Fagan was the owner of The Prism Group, LLC, a human-resources consulting firm. In February 2015, Warren Averett approached her and asked her to join Warren Averett and to build a human-resources consulting practice for it. In February 2015, she agreed to join Warren Averett, entering into a "Transaction Agreement" which provided that: Fagan would wind down the operations of The Prism Group; Fagan would become a member of Warren Averett; Warren Averett would purchase The Prism Group's equipment and furniture; Warren Averett would assume responsibility for The Prism Group's leases; and that Warren Averett would assume The Prism Group's membership in Career Partners International, LLC. The Transaction Agreement further provided that Fagan would enter into a "Standard Personal Service Agreement" ("the PSA") with Warren Averett; that Fagan's title would be president of Warren Averett Workplace; and that Fagan would be paid in accordance with the compensation schedule outlined in the PSA. Fagan alleged that she subsequently resigned from Warren Averett when she was unable to resolve a claim that Warren Averett had failed to properly compensate her in accordance with the PSA. On or about February 28, 2019, Fagan filed a demand for arbitration with the American Arbitration Association ("AAA"). The employment-filing team of the AAA sent a letter dated March 4, 2019, to the parties informing them of the conduct of the arbitration proceedings. On April 18, 2019, the employment-filing team notified the parties that Warren Averett had failed to submit the requested filing fee and that it was administratively closing the file in the matter. On April 30, 2019, Fagan sued Warren Averett in circuit court. The Alabama Supreme Court determined Warren Averett's failure to pay the filing fee constituted a default under the arbitration provision of the PSA. Accordingly, the trial court erred when it granted Warren Averett's motion to compel arbitration. View "Fagan v. Warren Averett Companies, LLC" on Justia Law

The state brought a civil enforcement action against Uber and Lyft, alleging that the companies improperly misclassify drivers using their ride-hailing platforms as independent contractors rather than employees, depriving them of benefits to which employees are entitled. This misclassification, the state alleged, also gives the defendants an unfair advantage against competitors, while costing the public significant sums in lost tax revenues and increased social-safety-net expenditures.The court of appeal affirmed the entry of a preliminary injunction that restrains the companies from classifying their drivers as independent contractors. Based on the breadth of the term “hiring entity” and the absence of an exemption for ride-sharing companies in Labor Code section 2775, there is little doubt the Legislature contemplated that rideshare drivers would be treated as employees. While the defendants’ business models are different from traditional employment, particularly with regard to drivers’ freedom to work as many hours as they wish, when and where they choose, and their ability to work on multiple apps at the same time, the mode in which the drivers are used met the elements of employment. The companies solicit riders, screen drivers, set standards for drivers' vehicles, track information on drivers using the apps, and may use negative ratings to deactivate drivers. Riders request rides and pay for them through defendants’ apps. The remuneration may be seen as flowing from riders to the defendants, then from defendants to drivers, less any fee associated with the ride. View "People v. Uber Technologies, Inc." on Justia Law

Shawn Kluver and Little Knife Disposal, LLC, appeal from a district court judgment ordering them to pay $140,042.83 to Titan Machinery, Inc., and $100,731.62 to Renewable Resources, LLC. In 2016, Kluver was the general manager of Renewable Resources, which was in the business of oilfield waste disposal. “At Kluver’s request and direction,” Renewable Resources leased a Case excavator and other equipment from Titan. The rental agreement for the Case excavator showed an estimated return date of June 28, 2016. Kluver also executed a credit application and personal guaranty with Titan to ensure Renewable Resources’ payment obligations under the rental agreement. Renewable Resources made all payments under the rental agreement from June 21, 2016, to December 6, 2016. No additional rental payments were made. In February 2017, while still employed by Renewable Resources, Kluver executed the operating agreement of Little Knife Disposal, LLC, as its sole member. Little Knife was also in the business of oilfield waste disposal. After Renewable Resources failed to make rental payments, Titan retrieved the Case excavator in October 2017. The excavator was damaged during the lease, and the excavator’s bucket was missing. In November 2017, Titan sued Renewable Resources for damaging the equipment and failing to pay the balance due under the rental agreement. In January 2018, Renewable Resources filed a third-party complaint against Kluver and Little Knife, claiming they wrongfully used the equipment leased from Titan and did not reimburse Renewable Resources. Renewable Resources requested that Kluver and Little Knife indemnify Renewable Resources for their use of the equipment. In October 2018, Titan obtained a $140,042.83 money judgment against Renewable Resources. In January 2019, Titan sued Kluver, claiming that under the personal guaranty he was liable for Renewable Resources’ debt to Titan. Kluver denied Titan’s allegations and brought a third-party complaint against Renewable Resources, asserting Renewable Resources should indemnify him for any amounts he was required to pay to Titan. Kluver and Little Knife argued the district court erred in finding they benefited from the equipment leased by Renewable Resources. They claimed there was no evidence they received a benefit from the Case excavator leased by Renewable Resources and the court erred in ordering them to indemnify Renewable Resources. Finding no reversible error in the district court's judgment, the North Dakota Supreme Court affirmed the order in favor of Titan Machinery and Renewable Resources. View "Titan Machinery v. Kluver" on Justia Law

Applecars is a member of a network of Wisconsin used-car dealerships. McCormick owned a majority share in each dealership. Each dealership received management services from Capital M, which McCormick also owned. Capital M tracked shared dealership inventory, held employee records, and issued identical employee handbooks for each dealership; Capital M’s operations manager hired and fired each dealership’s general manager. The employees of each dealership gathered as one for events several times per year. The dealerships advertised on a single website, which included some language suggesting a single entity and some indicators that each dealership is a separate entity. Each dealership properly maintained corporate formalities and records. Capital M billed each dealership separately. Each dealership had a distinct general manager, bank accounts, and financial reports. The dealerships separately filed and paid taxes, paid employees, and entered into contracts.Prince worked at Applecars for several months before he was fired. Prince claims his firing was retaliatory and sued Applecars and its affiliates for racial discrimination under Title VII of the 1964 Civil Rights Act. The court granted the defendants summary judgment, noting that Applecars had fewer than 15 employees and was not subject to Title VII. The Seventh Circuit affirmed. There is insufficient evidence to support Prince’s theory that the court should pierce the corporate veil of the network, aggregating the number of employees such that Title VII would apply. View "Prince v. Appleton Auto LLC" on Justia Law

Bismarck Financial Group, LLC, and its individual members (together “BFG”) appeal from an order granting James Caldwell’s Rule 12(b)(6) motion to dismiss their complaint. According to BFG’s complaint, Bismarck Financial Group, LLC, was formed in 2009 as a limited liability company. After Caldwell became a member, the parties executed various governing documents, including an operating agreement. While Caldwell was a member, the company entered into a 10-year office lease. The company also had one salaried employee. In 2019, Caldwell informed the other members he was dissociating from the company. BFG subsequently brought this lawsuit requesting a declaration that Caldwell’s dissociation was wrongful and damages in excess of $137,879.55 based on Caldwell’s pro rata share of the company’s debt obligations, employee salary, office overhead, and other expenses. Caldwell moved to dismiss for failure to state a claim upon which relief could be granted. Caldwell argued that he could not be held personally liable for company expenses and obligations under principles of corporate law. Caldwell also asserted BFG had not incurred any damages caused by his dissociation because, according to the terms of the operating agreement, the members have no obligation to contribute capital to cover company expenditures. The district court granted Caldwell’s motion. The court assumed Caldwell wrongfully dissociated from the company, but concluded BFG had not pleaded a cognizable claim for damages because Caldwell could not be held liable for future company expenses and obligations. Finding only that the district court erred in dismissing BFG's complaint as a matter of law in its entirety, the North Dakota Supreme Court reversed in part, "BFG’s allegation that Caldwell’s withdrawal caused additional, currently-unidentifiable damages, if proven, is sufficient to support recovery against Caldwell." The Court affirmed in all other respects, and remanded for further proceedings. View "Bismarck Financial Group, et al. v. Caldwell" on Justia Law

J-B Weld filed suit against Gorilla Glue, alleging claims for trade dress infringement under the Lanham Act, Georgia law, and the common law of unfair competition; trade dress dilution under Georgia law; and false advertising under the Lanham Act and Georgia law.The Eleventh Circuit affirmed the district court's grant of summary judgment for Gorilla Glue as to the false advertising claims, agreeing with the district court that J-B Weld has not shown that the inclusion of "steel bond epoxy" on GorillaWeld's packaging is material to consumers. However, the court reversed and remanded with respect to the trade dress infringement and trade dress dilution claims. In regard to the trade dress infringement claims, the court held that, although the posture of the case required the district court to view the evidence in the light most favorable to J-B Weld, the district court failed to do so in analyzing the "likelihood of confusion" between J.B. Weld Original's trade dress and GorillaWeld's trade dress. In regard to the trade dress dilution claims, the court held that the district court's abbreviated treatment of this claim leaves it with serious doubt that it applied the correct standard in concluding that J-B Weld was unable to show trade dress dilution. In this case, the district court's remarks about the indistinguishability of the applicable standards indicates that it applied the elements of the trade dress infringement claims to the trade dress dilution claim, thus conflating the two different sets of requirements. View "J-B Weld Co., LLC v. The Gorilla Glue Co." on Justia Law

In this litigation in which Altaba, Inc. (the Company) sought dissolution under the framework established by Sections 280 and 281(a) of the Delaware General Corporation Law the Court of Chancery held that the Company may make an interim distribution using its proposed amounts of security on the condition that it reserve funds for lawsuits pending in Canada resulting from data breaches that the Company disclosed in 2016 (the Canadian Actions Claim).As to all but two claims, in which the Company agreed to hold back the full amount of security requested by respective claimants, the Court of Chancery held that there was no obstacle to an interim distribution based on the amounts of security. For two claims, however, the Company sought to hold back less than the full amount of security requested by the claimants. The Court of Chancery held (1) as to the Canadian Actions Claim, if the Company wished to make an interim distribution to its stockholders it must reserve $1.05 billion Canadian; and (2) as to the second claim, the Company made a convincing showing that the amount it proposed to reserve was likely to be sufficient to provide compensation for claims that had not been made known to the Company or that had not yet arisen. View "In re Altaba, Inc." on Justia Law

The Ninth Circuit reversed the district court's grant of summary judgment for ETC in an action brought by InteliClear, alleging that ETC misused its securities trading database. InteliClear alleged claims for trade secret misappropriations under the federal Defend Trade Secrets Act (DTSA) and the California Uniform Trade Secrets Act.The panel held that: (1) there is a triable issue of fact as to whether (a) InteliClear described its alleged trade secrets with sufficient particularity and (b) InteliClear has shown that parts of the InteliClear System are secret; and (2) the district court abused its discretion under Federal Rule of Civil Procedure 56(d) by issuing its summary judgment ruling before discovery occurred. View "InteliClear, LLC v. ETC Global Holdings, Inc." on Justia Law

In 2016, plaintiff-appellee Isaac Sutton went shopping for a vehicle at the defendant-appellant David Stanley Chevrolet, Inc.'s (hereafter DSC) car dealership. He agreed to purchase a 2016 Chevy Silverado on credit and he agreed to trade-in his 2013 Challenger. He was informed by DSC that his credit was approved. In addition, he was given $22,800.00 for the Challenger for which he still owed $25,400.00. The documents for the purchase of the vehicle amounted to approximately eighty-six pages, which included a purchase agreement and a retail installment sale contract (RISC). He left the dealership that evening with the Silverado and left his Challenger. Several days later he was informed by DSC that his financing was not approved and he would need a co-signor to purchase the Silverado. Sutton visited DSC but was then told he did not need a co-signor and there was no need to return the vehicle. At the end of June his lender for his 2013 Challenger contacted him about late payments. Sutton contacted DSC who said it was not their responsibility to make those payments since they did not own the Challenger he traded-in. A few days later, he was notified by DSC that his Challenger had been stolen and the matter was not the responsibility of DSC. Sutton had to make an insurance claim on his Challenger and DSC took back the Silverado. In the meantime, Sutton continued to make payments on the Challenger. Plaintiff and his wife Celeste Sutton sued DSC over the whole transaction involving the Challenger. DSC moved to compel arbitration. Plaintiffs alleged they were fraudulently induced into entering the arbitration agreement. The trial court found there was fraudulent inducement and overruled the motion to compel arbitration. The Oklahoma Court of Civil Appeals reversed the trial court and remanded for further proceedings concerning the unconscionability of the arbitration agreement. The Oklahoma Supreme Court granted certiorari, and found the trial court's order was fully supported by the evidence. The opinion of the Oklahoma Court of Civil Appeals was therefore vacated and the matter remanded to the trial court for further proceedings. View "Sutton v. David Stanley Chevrolet" on Justia Law