Justia Business Law Opinion Summaries

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

In 2017, Sibanye Gold Ltd. (“Sibanye”) acquired Stillwater Mining Co. (“Stillwater”) through a reverse triangular merger. Under the terms of the merger agreement, each Stillwater share at closing was converted into the right to receive $18 of merger consideration. Between the signing and the closing of the merger, the commodity price for palladium (which Stillwater mined) increased by nine percent, improving Stillwater’s value. Certain former Stillwater stockholders dissented to the merger, perfected their statutory appraisal rights, and pursued this litigation. During the appraisal trial, petitioners argued the flawed deal process made the deal price an unreliable indicator of fair value and that increased commodity prices raised Stillwater’s fair value substantially between the signing and closing of the merger. In 2019, the Delaware Court of Chancery issued an opinion, holding that the $18 per share deal price was the most persuasive indicator of Stillwater’s fair value at the time of the merger. The court did not award an upward adjustment for the increased commodity prices. Petitioners appealed the Court of Chancery’s decision, arguing that the court abused its discretion when it ignored the flawed sale process and petitioners’ argument for an upward adjustment to the merger consideration. After review of the parties’ briefs and the record on appeal, and after oral argument, the Delaware Supreme Court found no reversible error and affirmed the Court of Chancery. View "Brigade Leveraged Capital Structures Fund Ltd v. Stillwater Mining Co." on Justia Law

The Supreme Court of Texas answered the Fifth Circuit's question and held that a transferee on inquiry notice of fraud cannot shield itself from the Texas Uniform Fraudulent Transfer Act's (TUFTA) clawback provision without diligently investigating its initial suspicions of fraud—irrespective of whether a hypothetical investigation would reveal fraudulent conduct. Having received the answer from the Supreme Court of Texas, the court once again held that defendants' good faith defense must fail.The court reversed the district court's judgment in favor of the Magness Parties, holding that the record does not show that they accepted the fraudulent transfers in good faith; neither of the cited statements at issue demonstrate that the Parties diligently investigated their initial suspicions of the Stanford International Bank's Ponzi scheme on inquiry notice; the Parties have not shown that the Seventh Amendment or due process requires the court to remand for another jury trial; and the Parties have not demonstrated that, as a matter of law, the court cannot render a decision in favor of the Receiver based on the existing record. View "Janvey v. GMAG, LLC" on Justia Law

Ezaki, a Japanese confectionery company, makes and sells “Pocky,” thin, stick-shaped cookies that are partly coated with chocolate or flavored cream. The end of each is left partly uncoated to serve as a handle. In 1978, Ezaki started selling Pocky in the U.S. and began registering U.S. trademarks and patents. It has two Pocky product configurations registered as trade dresses and has a patent for a “Stick Shaped Snack and Method for Producing the Same.” In 1983, the Lotte confectionery company started making Pepero stick-shaped cookies partly coated in chocolate or flavored cream. Pepero “looks remarkably like Pocky.”In 1993-1995, Ezaki sent letters, notifying Lotte of its registered trade dress and asking it to cease and desist. Ezaki took no further action until 2015, when it sued, alleging trademark infringement and unfair competition, under the Lanham Act, 15 U.S.C. 1114, 1125(a)(1)(A). Under New Jersey law, it alleged trademark infringement and unfair competition. The Third Circuit affirmed summary judgment in favor of Lotte, holding that because Pocky’s product configuration is functional, it is not protected as trade dress. Trade dress is limited to features that identify a product’s source. Patent law protects useful inventions, but trademark law does not. View "Ezaki Gliko Kabushiki Kaisha v. Lotte International America Corp." on Justia Law

Yelp publishes crowdsourced business reviews and allows businesses to advertise on its Website and mobile app. Yelp employs over 2,000 sales representatives to solicit advertising sales. Gruber, a solo attorney practitioner, was contacted by phone several times by Yelp sales representatives. During these calls, in which the sales representatives’ voices were recorded, Gruber discussed confidential and financial information regarding his law firm. When conversing with one representative, who happened to be his friend, Gruber sometimes joked, discussed private topics, and used profanity. Gruber did not recall that any Yelp sales representative notified him that the conversations were being recorded. Gruber sued under the California Invasion of Privacy Act (CIPA) Pen. Code 630, alleging unlawful recording and intercepting of communications; unlawful recording of and eavesdropping upon confidential communications; and unlawful wiretapping.The trial court granted Yelp summary judgment. The court of appeal reversed. While Gruber was not recorded during any calls (only Yelp’s representatives were recorded), CIPA is violated if a defendant records any portion of a conversation between two or more individuals. When the Yelp salespeople spoke during the one-sided recordings of their conversations with Gruber, the recordings revealed firsthand and in real-time their understanding of or reaction to Gruber’s words. Yelp failed to meet its burden of production regarding whether its use of VoIP technology precludes CIPA's application. View "Gruber v. Yelp Inc." on Justia Law

Two months before trial, appellant Reales Investment, LLC’s attorney moved to withdraw from the case. Reales did not retain counsel until a few days before trial began, and it did not participate in any of the pretrial proceedings mandated by Riverside County Superior Court Local Rule 3401. On the morning of the first day of trial, Reales’ new attorney orally requested a continuance. The trial court denied the request, and also excluded all documents and witnesses Reales did not disclose in pretrial exchanges between the parties as required by Rule 3401. Because Reales did not disclose anything under Rule 3401, it was precluded from offering any evidence or testimony at trial, so the trial court granted a nonsuit for respondent Thomas Johnson. On appeal, Reales argued the trial court’s pretrial rulings were an abuse of discretion. After review, the Court of Appeal found no abuse of discretion and affirmed the judgment. View "Reales Investment, LLC v. Johnson" on Justia Law

Plaintiffs John Oswald and Nancy Poore appealed a district court judgment granting summary judgment in favor of defendant Costco Wholesale Corporation ("Costco"). In February 2017, Oswald and Poore were walking on that walkway when an elderly driver drove onto a pedestrian walkway that bisected two perpendicular rows of ADA-accessible parking spaces, striking Oswald and pinning him against a vehicle parked on the opposite side, causing Oswald to suffer significant injuries. Plaintiffs sued Costco alleging: (1) premises liability; (2) negligence and willful wanton conduct; (3) negligent infliction of emotional distress; and (4) intentional infliction of emotional distress. After the district court resolved a discovery dispute in Costco’s favor, Costco moved for summary judgment. In granting the motion, the district court ruled that Costco had no notice that its walkway was a dangerous condition and, therefore, owed no duty to redesign it or warn pedestrians about it. The district court entered judgment dismissing the Plaintiffs’ claims with prejudice. After review, the Idaho Supreme Court determined the district court's decision improperly focused on the duty to maintain safe premises to the exclusion of the duty to use reasonable care. Furthermore, the Court found Plaintiffs put forward sufficient evidence to create a disputed issue of material fact on foreseeability and causation, thereby precluding the award of summary judgment. Judgment was reversed and the matter remanded for further proceedings. View "Oswald v. Costco" on Justia Law

Following two operation-disabling accidents, Noranda Aluminum Holding Corporation, an insured aluminum-products manufacturer, whose “all-risks” property-insurance policy included business- interruption coverage, did not rebuild its damaged facility and consequently did not resume operations. Noranda and its insurers agreed that the failure to rebuild and resume operations did not negate the business-interruption coverage. But when Noranda submitted its business-interruption claim, the parties could not agree on how to calculate the Noranda's gross-earnings loss, which was the measure of the insurers’ liability under the relevant policy. After a seven-day trial, a jury found in favor of Noranda, and the insurers appealed. At trial, Noranda's damages expert employed a model that measured the insured’s gross-earnings loss by comparing the value of the insured’s production had the accident not occurred with the value of its production after the accidents had it repaired and resumed operations with due diligence. Although the parties disputed whether the insurers took issue with this methodology at trial in this appeal, the insurers contended that the model was inconsistent with the policy’s formula for calculating gross-earnings loss and that it grossly exaggerated the amount of the Noranda's claim. The insurers also challenged Noranda's expert’s factual assumptions and claimed he improperly included amounts that the insured had waived in an earlier property-damage settlement. The Delaware Supreme Court concluded Noranda's expert's damages model was consistent with the relevant policy provisions, and that the trial court's determination that the factual assumptions made by the expert were sufficiently reliable for the jury to consider was not an abuse of discretion. Likewise, the Court held the insurers' claim that the earlier property-damage settlement precluded a portion of Noranda's recovery was without merit. Therefore, the Supreme Court affirmed. View "XL Insurance America, Inc., et al. v. Noranda Aluminum Holding Corporation" on Justia Law

After plaintiffs were unable to collect on a $55 million judgment against Dynex Commercial, Inc., plaintiffs filed a lawsuit against Dynex Commercial, Inc. and Dynex Capital, Inc., alleging fraudulent-transfer and alter-ego claims.The Fifth Circuit affirmed the district court's dismissal of plaintiffs' second amended complaint with prejudice based on the grounds that the fraudulent transfer claim is time-barred and the alter ego claim is barred by res judicata. In this case, plaintiffs knew of or reasonably could have discovered the transfers at least by February 2004, if not earlier, and plaintiffs reasonably could have discovered the allegedly fraudulent nature long before April 2016. Furthermore, plaintiffs' failure to raise an alter-ego claim against Dynex Capital during the state-court litigation does not mean that they can raise such a claim now. The court also stated that the district court appropriately used judicial notice of the Form 10-K and state court record. View "Basic Capital Management, Inc., v. Dynex Capital, Inc." on Justia Law