Justia Business Law Opinion Summaries

The Supreme Court issued a writ of mandamus directing the district court to vacate its order waiving the obligation of the real party in interest stockholders (RPIs) to provide consents from their stockholders of record until step four of the four-step process outlined in Nev. Rev. Stat. 92A.410-.440 and after petitioner corporation's merger vote was held, holding that the district court erred.At issue was the statutory process by which a stockholder who objects to a proposed merger may seek the fair value of the stockholder's shares from the corporation if the stockholder believes the proposed price for those shares is inadequate. In the event stockholders own their shares indirectly, the beneficial stockholders must obtain the stockholder of record's consent before dissenting from the merger. The Supreme Court held (1) Nev. Rev. Stat. 92A.400(2)(a), when read in conjunction with the four-step process outlined in sections 92A.410-.440, unambiguously requires a beneficial holder to obtain the record holder's consent at step two before the vote on the merger is held; and (2) therefore, the district court here erred in construing the statutes as permitting RPIs to submit their consents after the merger vote was taken and in waiving RPIs statutory obligation to obtain those consents. View "Aerogrow International, Inc. v. District Court" on Justia Law

In consolidated appeals filed by Greenville County, South Carolina, the issue central to the cases involved a zoning dispute between the County and Greenville Bistro, LLC, d/b/a Bucks Racks & Ribs. Greenville Bistro filed suit against the County to enjoin the County from enforcing an ordinance to deny Greenville Bistro's desired method of operating Bucks Racks & Ribs. Citing other ordinances, the County counterclaimed and moved to enjoin Greenville Bistro from operating Bucks as a sexually oriented business. Both appeals concerned the legality of Greenville Bistro operating Bucks as a restaurant with the added feature of scantily clad exotic dancers. The circuit court granted Greenville Bistro's motion for a temporary injunction, and the County appealed. While the County's appeal was pending, another circuit court denied the County's motion for temporary injunctive relief, ruling that in light of the County's appeal it did not have jurisdiction to consider the County's motion. The South Carolina Supreme Court reversed both rulings, dissolved the injunction granted to Greenville Bistro, and held the County was entitled to injunctive relief. The case was remanded to the circuit court for further proceedings. View "Greenville Bistro, LLC. v. Greenville County" on Justia Law

Uber’s wholly-owned Dutch subsidiaries retained Rattagan, an Argentinian attorney, to serve as their legal representative in Buenos Aires in connection with a new Uber subsidiary in Argentina. Uber representatives from San Francisco allegedly assumed responsibility for communicating with Rattagan. According to Rattagan, Uber launched its platform in Argentina before its subsidiary was registered with the proper tax authority, despite knowing that Rattagan, as the entities’ legal representative, could be subject to personal liability for Uber’s violations of Argentine law. Law enforcement authorities raided Rattagan’s office and the homes of his business colleagues; his offices were surrounded by protestors and he received negative press. Rattagan later was charged with aggravated tax evasion for his perceived involvement with the Uber launch.Rattagan sued for negligence, breach of the implied covenant of good faith and fair dealing, fraudulent concealment, and aiding and abetting fraudulent concealment. Applying California law, the district court dismissed, as time-barred, Rattagan’s negligence and breach of the implied covenant claims, and held that the fraudulent concealment claims were foreclosed by the economic loss rule, which prevents a party to a contract from recovering economic damages resulting from breach of contract under tort theories. The Ninth Circuit noted that Rattagan’s appeal hinges on whether fraudulent concealment claims are exempt from California’s economic loss rule and certified that question to the California Supreme Court. View "Rattagan v. Uber Technologies, Inc." on Justia Law

Bruce, Phillip, and Judith are siblings and co-equal general partners of the Guttman Family Limited Partnership, which owns Los Angeles County real estate. Bruce sued to dissolve the partnership, Corporations Code 15908.02(a). Phillip and Judith initiated a statutory procedure to buy out Bruce’s interest in the partnership. Court-appointed appraisers submitted valuations of the partnership’s properties. One appraiser concluded that the value of the partnership properties was $37,180,000, another appraiser established the value at $38,300,000, and the third at $39,037,000. The court agreed with Bruce that the buyout procedure did not require a consensus among the appraisers, or among two of them.Bruce, believing the appraisals undervalued the properties, dismissed his complaint without prejudice. The court then granted Phillip and Judith’s motion to vacate the dismissal. The court of appeal dismissed Bruce’s petition for review. In addition to the commencement of trial limitation on a plaintiff’s right to dismiss, a plaintiff may not dismiss an action when a defendant seeks affirmative relief in the case. Because Phillip and Judith were pursuing the affirmative relief available under the buyout provision at the time Bruce filed his request to dismiss the action, the entry of dismissal was improper. View "Guttman v. Guttman" on Justia Law

The Supreme Court affirmed in part and reversed in part the special master's determination in the district court that resolved a dispute between PF2 Leasing, LLC and Jim Galipeau, the receiver for Black Gold Enterprises, LLC, holding that the special master exceeded the scope of his authority when he granted Galipeau immunity for actions Galipeau took regarding PF2's personal property.Specifically, the Supreme Court held that the special master (1) correctly concluded that a court-appointed receiver is protected by judicial immunity from liability; (2) properly determined that it was not necessary for Galipeau to require a release or indemnification agreement to return PF2's personal property; but (3) exceeded the scope of his authority in further granting Galipeau immunity for the actions Galipeau took regarding PF2's personal property. View "PF2 Leasing, LLC v. Galipeau" on Justia Law

Blizzard invested in a tire pyrolysis project in Kansas and subsequently sued Schaefers. A Kansas jury returned a $3.825 million fraud judgment, which was entered in California. The California court added a judgment debtor (BKS) pursuant to the “outside reverse veil piercing” doctrine, which arises when the request for piercing comes from a third party outside the targeted business entity. The targeted entity was BKS. Schaefers owns a 50 percent interest in that LLC. Schaefers’ wife, Karin, owns the other 50 percent. Neither Karin nor BKS was a defendant in the Kansas action. The California court found that BKS is Schaefers’ alter ego.The court of appeal affirmed in part. The evidence is sufficient to support the finding that BKS is Schaefers’ alter ego. The court remanded for further proceedings so that the trial court may weigh competing equities that bear on the veil-piercing issue. Blizzard is entitled to recover the damages awarded by the Kansas judgment, but Karin may be an innocent third party who would suffer substantial harm if recovery is accomplished through the reverse veil piercing; there is no indication that she was involved in the fraud committed by Schaefers. Karin may not be responsible for debts incurred by Schaefers after their separation in 1996. View "Blizzard Energy, Inc. v. Schaefers" on Justia Law

Eric Christiansen filed a nine-count complaint against respondents, Michael Moser and Potlatch #1 Financial Credit Union (“P1FCU”), following a decision by the Lewiston Roundup Association (“LRA”) to discontinue contracting with Christiansen to produce motorsport events at the LRA’s facility. The complaint alleged that Moser, a P1FCU employee and LRA member, improperly accessed information from Christiansen’s P1FCU account and shared it with the LRA so that it could recreate his business model and produce motorsport events without him. The district court granted summary judgment in the Respondents’ favor on each of Christiansen’s claims. Christiansen appealed, arguing that the district court erred in granting summary judgment because it failed to rule on Christiansen’s motion to compel discovery, failed to grant Christiansen more time to complete discovery, and failed to conclude that genuine issues of material fact precluded dismissal of four of Christiansen’s claims. The Idaho Supreme Court concluded after review that the district court abused its discretion by failing to decide Christiansen’s motion to compel discovery before considering the Respondents’ motions for summary judgment. Accordingly, judgment was reversed and the matter remanded for further proceedings. View "Christiansen v. Potlatch #1 FCU" on Justia Law

This appeal presented an issue of first impression for the Court of Appeals: does a commercial property insurance policy provide coverage for a business’s lost income due to the COVID-19 pandemic? After review of the specific insurance policy that California Mutual Insurance Company (California Mutual) issued to The Inns by the Sea (Inns) for its five lodging facilities, the Court determined Inns could not recover from California Mutual for its lost business income resulting from the COVID-19 pandemic. Further, Inns did not identify any manner in which it could amend its complaint to state a claim for coverage. Accordingly, the Court affirmed the trial court’s order sustaining California Mutual’s demurrer without leave to amend. View "The Inns by the Sea v. Cal. Mutual Ins. Co." on Justia Law

The appellants were two of a group of plaintiffs who sued eBay and PayPal, challenging provisions in their respective user agreements. Plaintiffs’ second amended complaint alleged 23 causes of action, 13 against eBay, seven against PayPal, and three against both defendants. The trial court dismissed, without leave to amend, 20 of the causes of action, including 14 claims against eBay. Three causes of action proceeded: breach of contract against both defendants and violation of the covenant of good faith and fair dealing against eBay. More than three years later, the appellants opted out of the case against eBay, and voluntarily dismissed the two claims against it. Judgment of dismissal was entered against them.The appellants appealed, contending the trial court got it wrong as to 11 of the dismissed causes of action. The court of appeal affirmed, noting that this was the third appeal of the case. The trial court properly dismissed the claims and did not abuse its discretion in doing so without leave to amend. All of the alleged causes of action failed to state a claim. The court stated that “counsel for appellants has apparently been urging the same contentions for some nine years, all without success. This is enough.” View "George v. eBay, Inc." on Justia Law

One beverage distributorship sued another and ultimately narrowed its lawsuit to a single tort claim for intentional interference with prospective economic advantage premised solely on the theory that the defendant had engaged in independently wrongful conduct by breaching a nondisclosure and non-circumvention agreement. This is an invalid theory as a matter of law under California Supreme Court precedent; an actor’s breach of contract, without more, is not “wrongful conduct” capable of supporting a tort, including the tort of intentional interference with prospective economic advantage. No one caught the error until the jury returned a special verdict in the plaintiff’s favor that was premised solely on the breach of the agreement.The court of appeal reversed. A jury’s special verdict for the plaintiff, based on conduct that does not constitute an actionable tort, cannot stand. Just as a trial court lacks subject matter jurisdiction to enter judgment for conduct that does not violate a criminal or civil statute, a trial court also lacks subject matter jurisdiction to enter judgment for allegedly tortious conduct, fashioned by common law, that the state’s highest court has determined is not tortious. A party’s conduct cannot confer subject matter jurisdiction upon a court, so the defendant’s delay in objecting is irrelevant. View "Drink Tank Ventures LLC v. Real Soda in Real Bottles, Ltd." on Justia Law