Justia Business Law Opinion Summaries

The Supreme Court modified and affirmed the decision of the Business Court dismissing Defendant's crossclaims against a co-defendant, holding that the Business Court correctly dismissed the crossclaims.This appeal arose from litigation between Kenneth Nelson, Alliance Hospitality Management, LLC, and Orlando Residence, Ltd. Orlando filed this lawsuit against Alliance and Nelson seeking recovery of funds that Alliance allegedly wrongfully transferred. Nelson, appearing pro se, filed a document in which he asserted eighteen crossclaims against Alliance seeking damages and various forms of equitable relief. The Business Court dismissed the claims asserted by Orlando and all of Nelson's crossclaims. Nelson appealed, arguing that the Business Court incorrectly ruled that a crossclaim asserted by one defendant against a co-defendant automatically ceases to be viable once the plaintiff's original claims against the defendants are dismissed. The Supreme Court agreed, holding (1) with the exception of certain crossclaims, the dismissal of the original action does not, by itself, mandate the dismissal of a crossclaim so long as the crossclaim meets the Rule 13(g) prerequisites for bringing such a claim; and (2) because res judicata barred Nelson's "qualifying claims," the dismissal of Nelson's remaining fifteen crossclaims was proper. View "Orlando Residence, Ltd. v. Alliance Hospitality Management, LLC" on Justia Law

The Supreme Court affirmed the decision of the Business Court in this action brought by Global Textile Alliance, Inc. (GTA) alleging that Defendants engaged in several improper acts during the formation and operation of Dolven Enterprises, Inc., holding that the Business Court did not abuse its discretion either by ordering production of the relevant communications or by conducting a limited review of those communications.When it was discovered that GTA had withheld confidential correspondence between GTA and its outside counsel and Haspeslagh conveying legal advice regarding the matters giving rise to the instant litigation Defendant filed a motion to compel GTA to produce the communications. Defendant argued that GTA waived the attorney-client privilege by including Stefaan Haspeslagh on communications with GTA's counsel. The Business Court granted the motion to compel. The Supreme Court affirmed, holding that the Business Court (1) did not abuse its discretion by determining that communications involving Haspeslagh were not privileged under the attorney-client privilege; (2) did not err in determining that communications involving Haspeslagh were not protected under the work-product doctrine; and (3) did not err by not conducting an exhaustive in camera review of all communications involving Haspeslagh. View "Global Textile Alliance, Inc. v. TDI Worldwide, LLC" on Justia Law

MPAY, a Massachusetts corporation that develops and owns payroll-processing software that it licenses to its customers, appealed the district court's denial of its motion for a preliminary injunction against appellees. MPAY claimed that it was entitled to such relief based on its copyright-infringement and trade-secrets-misappropriation claims.The Eighth Circuit affirmed in part and vacated in part, holding that appellees demonstrated that their copying, disclosure, and possession of the source code were authorized by the Software Development and License Agreement that MPAY signed with its business partner. Therefore, MPAY has not shown a likelihood of success on the merits of its copyright infringement or trade-secrets-misappropriation claims, and the district court did not err in so concluding. The court also held that MPAY's assertion, that the district court erroneously concluded MPAY's harms were compensable with money damages and so were not irreparable, lacked merit. Furthermore, the balance of the equities and the public interest do not favor an injunction. The court remanded for further proceedings on the question of whether the contractors wrongfully sublicensed use of the software. View "MPAY Inc. v. Erie Custom Computer Applications, Inc." on Justia Law

The Supreme Court affirmed the order of the district court granting summary judgment against a real estate agency on its complaint against the seller and buyers of certain property for breach of an exclusive listing agreement and tortious interference with a contract, business relationship, or expectation, holding that summary judgment was properly granted.The sale of the property occurred after the listing period and after the protection period of the agreement, and no commission was paid. The negotiations for the sale were conducted directly between the seller and buyers, with the real estate agent's knowledge. The district court granted Defendants' motions for summary judgment. On appeal, the real estate agency argued that summary judgment was inappropriate because the district court held the summary judgment hearing before the real estate company had conducted depositions. The Supreme Court affirmed, holding (1) the district court did not prematurely address Defendants' motions for summary judgment; and (2) the district court erred in awarding attorney fees. View "George Clift Enterprises, Inc. v. Oshkosh Feedyard Corp." on Justia Law

The Court of Chancery granted Plaintiff JUUL Labs, Inc.'s motion for judgment on the pleadings in this action regarding Defendant Daniel Grove's right to inspect Plaintiff's books and records, holding that Defendant did not waive his right to seek an inspection of books and records under California law but that, under the internal affairs doctrine, Defendant did not have the right to seek an inspection of books and records under California law.Plaintiff was a privately held Delaware corporation with its principal place of business in San Francisco, California. Defendant stated that he might sue Plaintiff in California state court to enforce his right to inspect Plaintiff's books and records under Cal. Corp. Code 1601. Plaintiff filed this action, arguing that Defendant waived his inspection rights and that, to the extent that Defendant did not waive all of his inspection rights, Defendant could not seek inspection under California law. The Court of Chancery held (1) Delaware law governed Plaintiff's internal affairs, and because the scope of Defendant's inspection rights was a matter of internal affairs, Delaware law applied and Defendant could not rely on section 1601 to obtain books and records; and (2) because Defendant did not make a demand for inspection under Delaware law, this decision did not address whether he validly waived his inspection rights. View "JUUL Labs, Inc. v. Grove" on Justia Law

At issue in this appeal was the computation of the broadband credit limits that a taxpayer may use against its franchise-tax and income-tax liabilities. During the tax periods at issue, AT&T Mobility II, LLC, and BellSouth Telecommunications operated telecommunications enterprises and made significant investments in broadband technology developments throughout Mississippi, generating Broadband Investment Credits (Broadband Credits) under Mississippi Code Section 57-87-5. BellSouth Mobile Data, SBC Alloy Holdings, New BellSouth Cannular Holdings, New Cingular Wireless Services, SBC Telecom, and Centennial were all direct or indirect corporate owners of AT&T Mobility II. The taxpayers here each filed a separate franchise-tax return and were included as affiliated group members in the combined corporate income-tax return filed on behalf of the affiliated group. The Mississippi Department of Revenue (MDOR) determined that the broadband credits the taxpayers had claimed had been improperly applied to an amount greater than the credit cap of 50 percent of the taxpayers’ tax liabilities according to Mississippi Code Section 57-87- 5(3) (Rev. 2014). The MDR disallowed portions of the broadband credits claimed by the taxpayers and assessed additional franchise taxes, interest and penalties to the taxpayers separately on several dates between December 22, 2014, and May 20, 2015. The taxpayers argue that each taxpayer is jointly and severally liable for the total combined income-tax liability of the affiliated group, therefore making the income-tax liability of each taxpayer the same as the total combined income-tax liability of the affiliated group. The chancellor granted summary judgment in favor of the taxpayers and ruled that the taxpayer’s tax liabilities under Chapters 7 and 13 of Title 271 of the Mississippi Code was the aggregate of the taxpayer’s separate franchise-tax liability and the total combined income-tax liability of the affiliated group. The Mississippi Supreme Court affirmed the chancellor's ruling on the credit-computation issue. "The plain and unambiguous language of Section 57-87-5 clearly limits broadband credits that a taxpayer may take in any given year to 50 percent of the aggregate of the taxpayers’ franchise-tax liability and the total combined income-tax liability of the affiliated group." View "Mississippi Dept. of Revenue v. SBC Telecom, Inc. et al." on Justia Law

Six Dimensions filed suit against a former employee and a competitor, Perficient, alleging claims for breach of contracts, unfair competition, and misappropriation of trade secrets.The Fifth Circuit reversed the part of the judgment holding that the employee breached an employment contract and owed damages to Six Dimensions. The court held that the district court abused its discretion in denying the employee an opportunity to extend the arguments she had already made about the 2014 Agreement and have them apply to the 2015 Agreement. However, the court held that the district court did not reversibly err in interpreting California law and concluding that California's strict antipathy towards restraint of trade of any kind in California Business and Professions Code section 16600 voids the nonsolicitation provision here. The court also found no error in the district court's refusal to apply California's Unfair Competition Law, and held that the district court did not abuse its discretion in refusing to find the jury's verdict contrary to the weight of the great evidence as to the misappropriation claim. Therefore, the court otherwise affirmed the district court's judgment. View "Six Dimensions, Inc. v. Perficient, Inc." on Justia Law

After ATOM filed for bankruptcy, plaintiff and ATOM initiated an adversarial proceeding against Petroleum Analyzer, alleging claims of misappropriation of trade secrets, unfair competition, and civil theft. On the bankruptcy court's recommendation, the district court withdrew the reference to the bankruptcy court and asserted jurisdiction under 28 U.S.C. 1334, and entered partial summary judgment for plaintiff and ATOM. Four years later, the district court held a bench trial and entered judgment in favor of Petroleum Analyzer and later awarded attorneys' fees to Petroleum Analyzer.The Fifth Circuit held that the district court did not clearly err by finding that Petroleum Analyzer did not use plaintiff's trade secrets in Petroleum Analyzer's sulfur-detecting excimer lamp called a MultiTek. Furthermore, the district court did not ignore the "law of the case" doctrine. The court also held that the district court did not err by awarding Petroleum Analyzer attorneys' fees under the Texas Theft Liability Act. The court remanded to allow the district court to make the initial determination and award of appellate attorneys' fees to Petroleum Analyzer. View "ATOM Instrument Corp. v. Petroleum Analyzer Co., LP" on Justia Law

In May 2018, appellants Green Mountain Fireworks, LLC and its owner Matthew Lavigne, began selling fireworks from a retail store in Colchester, Vermont. As described in their complaint, the “intended purpose” for the store was “to sell retail fireworks to consumers.” In relation to the retail store, appellants obtained a license from the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) as a “Type 53 - Dealer of Explosives.” They also got a building permit and a certificate of occupancy from the Town Zoning Administrator. These zoning permits were the only two permit applications appellants submitted to the Town. The issue this appeal presented for the Vermont Supreme Court's review centered on whether 20 V.S.A. 3132(a)(1) authorized municipalities to grant permits for the general retail sale of fireworks to consumers who do not hold valid permits to display those fireworks. Appellants appealed the superior court's dismissal of two actions: (1) their appeal of the Town of Colchester selectboard’s denial of their application for a permit to sell fireworks pursuant to 20 V.S.A. 3132(a)(1); and (2) their request for a declaratory judgment that, even without that distinct permit, they had “all possible and applicable permits” and were permitted under section 3132 to sell fireworks in the manner described in their complaint. The Supreme Court concluded that section 3132(a)(1) required a distinct permit for the sale of fireworks, but did not authorize a permit for the general retail sale of fireworks along the lines proposed by appellants. The only fireworks sales authorized by statute were sales to the holder of a display permit for the purpose of the permitted display. Therefore, the Supreme Court affirmed the trial court's judgments. View "Green Mountain Fireworks, LLC, et al. v. Town of Colchester et al." on Justia Law

Granny Purps grows and provides medical marijuana to its 20,000 members, in compliance with state laws governing the production and distribution of marijuana for medical purposes. Santa Cruz County’s ordinance prohibits any medical cannabis operation from cultivating more than 99 plants; Granny’s dispensary was growing thousands of marijuana plants. The sheriff’s office went to the dispensary in June 2015, seized about 1,800 plants, and issued a notice of ordinance violation. Several months later, officers again went to the dispensary and took about 400 more marijuana plants. Granny sued, alleging conversion, trespass, and inverse condemnation and sought an order requiring the county to return the seized cannabis plants, The trial court dismissed.The court of appeal reversed. A government entity does not have to return seized property if the property itself is illegal but the Santa Cruz ordinance ultimately regulates land use within the county; it does not (nor could it) render illegal a substance that is legal under state law. View "Granny Purps, Inc. v. County of Santa Cruz" on Justia Law