Justia Business Law Opinion Summaries

The case revolves around a dispute between Zimmer Biomet, a medical-device manufacturer, and six of its former sales distributors. The dispute arose from a compensation agreement that guaranteed the distributors a lifetime of long-term commissions on all sales made within their distributorship after retirement. As the company grew and acquired competitors, a disagreement emerged over which product categories fell within the distributorship and were thus subject to the long-term commission agreement.The district court found the agreement ambiguous and sent the case to trial. The jury returned a split verdict, finding that Biomet owed long-term commissions on some products but not others. Biomet appealed the denials of its motions for summary judgment and judgment as a matter of law, and the distributors cross-appealed the dismissal of two counts of their complaint.The United States Court of Appeals for the Seventh Circuit affirmed the district court's decisions. The appellate court agreed that the distributorship agreement was ambiguous regarding the specific categories of products it covered. It also found that the trial record supported the jury’s verdict in favor of the distributors on their Indiana breach-of-contract claim. The court rejected Biomet's argument that the agreement unambiguously limited long-term commissions to reconstructive products, finding that the agreement did not provide clear guidance on which product categories were covered. The court also upheld the dismissal of two counts in the distributors’ complaint, finding that they either lacked a contractual basis or were duplicative of another count. View "Hess v. Biomet, Inc." on Justia Law

In 2020 and 2021, two plaintiffs, identified as Jane Doe WHBE 3 and Jane Doe LSA 35, filed separate lawsuits against Uber Technologies, Inc. and its subsidiary, Raiser, LLC, alleging they were sexually assaulted by their Uber drivers in Hawaii and Texas, respectively. These cases, along with hundreds of others, were coordinated before a single judge of the San Francisco Superior Court. Uber moved to stay the cases on the ground of forum non conveniens, arguing that the cases should be heard in the jurisdictions where the alleged incidents occurred. The trial court granted Uber's motions, staying the cases and providing for tolling of the statute of limitations.The trial court's decision was based on a comprehensive 21-page order that considered whether the alternate forums (Hawaii and Texas) were suitable for trial, the private interests of the litigants, and the public interest in retaining the action for trial in California. The court concluded that the alternate forums were suitable, and that the public interest factors weighed heavily in favor of transfer. The court also found that the cases should be viewed as individual sexual assault/misconduct cases in which the plaintiffs claimed Uber was vicariously liable due to its deficient safety practices, rather than as corporate misconduct cases.The plaintiffs appealed both the trial court’s forum non conveniens order and the agreed-upon order applying it to the non-California cases. They argued that the trial court erred in failing to ensure that a suitable alternative forum existed for all the affected cases, failing to require Uber to demonstrate that California was a “seriously inconvenient” forum, and failing to “accord the coordination order proper deference.” The Court of Appeal rejected all of these arguments and affirmed the trial court's decision. View "Doe v. Uber Technologies, Inc." on Justia Law

The case involves the United States Department of Labor (DOL) and Ascent Construction, Inc., its CEO Bradley Knowlton, and the Ascent Construction, Inc. Employee Stock Ownership Plan (the Plan). The DOL investigated Ascent and Knowlton for potential breaches of their fiduciary duties under the Employee Retirement Income Security Act (ERISA). The DOL found that Knowlton had deposited over $311,000 of the Plan’s cash into Ascent’s checking accounts and used it to pay Ascent’s business expenses. The DOL also discovered that a former Ascent employee had requested a distribution from his retirement account but never received it, even though the Plan’s custodian had issued a distribution check at Knowlton’s request.The DOL filed a lawsuit alleging that Knowlton and Ascent had violated ERISA’s fiduciary-duty standard and prohibited-transaction rules. The DOL sought a preliminary injunction to remove Knowlton and Ascent as Plan fiduciaries and appoint an independent fiduciary to prevent further ERISA violations and dissipation of the Plan’s assets. The district court granted the DOL’s motion, and the defendants filed an interlocutory appeal.While the appeal was pending, the case proceeded in the lower court. The DOL filed an amended complaint and discovery commenced. The district court later entered a default judgment against the defendants due to their willful failure to engage in the litigation process and comply with the court’s orders. The court also issued a permanent injunction that superseded the preliminary injunction, permanently barring Knowlton and Ascent from serving as trustee and administrator of the Plan.The United States Court of Appeals for the Tenth Circuit dismissed the defendants' appeal as moot. The court reasoned that the preliminary injunction dissolved automatically with the entry of the final judgment, regardless of whether the final judgment was issued on the merits or by way of default judgment. The court concluded that granting the defendants’ requested relief—vacatur of the preliminary injunction—would have no “effect in the real world.” View "Su v. Ascent Construction" on Justia Law

The case revolves around Brad Packer, a shareholder of 1-800-Flowers.com, Inc. (FLWS), who alleged that Raging Capital Management, LLC, Raging Capital Master Fund, Ltd., and William C. Martin (collectively, the Appellees) violated Section 16(b) of the Securities Exchange Act of 1934. This section requires owners of more than 10% of a company's stock to disgorge profits made from buying and selling the company's stock within a six-month window. Packer claimed that the Appellees, as 10% beneficial owners of FLWS, engaged in such "short-swing" trading and failed to disgorge their profits. After FLWS declined to sue the Appellees, Packer filed a shareholder derivative suit on behalf of FLWS.The United States District Court for the Eastern District of New York dismissed Packer's suit, reasoning that he lacked constitutional standing because he did not allege a concrete injury. The District Court concluded that the Supreme Court's decision in TransUnion LLC v. Ramirez, which elaborated on the "concrete injury" requirement of constitutional standing, abrogated the Second Circuit's previous decision in Donoghue v. Bulldog Investors General Partnership. In Donoghue, the Second Circuit held that a violation of Section 16(b) inflicts an injury that confers constitutional standing.The United States Court of Appeals for the Second Circuit disagreed with the District Court's interpretation. The Appeals Court held that TransUnion did not abrogate Donoghue, and the District Court erred in holding that it did. The Appeals Court emphasized that a District Court must follow controlling precedent, even if it believes that the precedent may eventually be overturned. The Appeals Court found that nothing in TransUnion undermines Donoghue, and thus, the District Court erred in dismissing Packer's Section 16(b) suit. The Appeals Court reversed the District Court's judgment and remanded the case for further proceedings. View "Packer v. Raging Capital Management, LLC" on Justia Law

The case revolves around Windstream Holdings, Inc. ("Windstream"), a telecommunications provider that filed for Chapter 11 reorganization. During Windstream's bankruptcy, Charter Communications Inc. and Charter Communications Operating, LLC (collectively, "Charter"), a competitor, launched an advertising campaign targeting Windstream's customers. Windstream alleged that Charter's advertising campaign was an attempt to exercise control over Windstream's customer contracts and goodwill, thereby violating the automatic stay provision of the Bankruptcy Code.The United States Bankruptcy Court for the Southern District of New York agreed with Windstream, holding Charter in civil contempt for its actions and imposing sanctions against Charter. However, the United States District Court for the Southern District of New York reversed the bankruptcy court's decision, finding that a fair ground of doubt existed as to whether Charter violated the automatic stay.The United States Court of Appeals for the Second Circuit affirmed the district court's judgment. The court found that while Windstream's customer contracts and goodwill were property of the estate, Charter's advertising campaign did not exercise control over those assets. The court concluded that there was a fair ground of doubt as to whether Charter's actions violated the automatic stay, and therefore, the district court did not err by refraining from holding Charter in civil contempt. View "In re: Windstream Holdings, Inc." on Justia Law

Family Health Physical Medicine, LLC, an Ohio-based company, filed a lawsuit against Pulse8, LLC and Pulse8, Inc., Maryland-based companies. The dispute arose when Pulse8 sent a fax to Family Health inviting it to a free webinar on medical coding technology, a product that Pulse8 sells. Family Health claimed that this fax was an unsolicited advertisement and thus violated the federal Telephone Consumer Protection Act (TCPA). Pulse8 argued that the fax did not qualify as an advertisement under the TCPA because the webinar was free.The United States District Court for the District of Maryland granted Pulse8's motion to dismiss the case, agreeing with Pulse8's argument that the fax did not qualify as an advertisement under the TCPA. Family Health appealed this decision to the United States Court of Appeals for the Fourth Circuit.The Fourth Circuit Court disagreed with the lower court's decision. The court found that the fax did have a commercial component, as it was sent by a company that sells a product related to the subject of the webinar. The court concluded that the fax was being used to market Pulse8's product. The court also found that Family Health had plausibly alleged that accepting the invitation to the webinar would trigger future advertising. However, the court rejected Family Health's argument that the fax was an advertisement because it offered a chance to win a gift card in exchange for completing a survey. The court reversed the district court's judgment and remanded the case for further proceedings. View "Family Health Physical Medicine, LLC v. Pulse8, LLC" on Justia Law

This case involves TRC Operating Co., Inc. and TRC Cypress Group, LLC (collectively TRC) and Chevron U.S.A., Inc. (Chevron), oil producers operating adjacent well fields in Kern County, California. Both companies pump from a shared underground oil reservoir and engage in a process known as “cyclic steaming” to make oil extraction more efficient. In 1999, a “surface expression” formed near a Chevron well, which occurs when the steaming process causes a lateral fracture from the wellbore, allowing oil and other effluent to escape to the surface. Despite Chevron’s attempts at remediation, in 2011, an eruption occurred in the area of the well, causing a sinkhole to form, which killed a Chevron employee. The state oil and gas regulator issued various orders preventing steaming in the area, which lasted four years. TRC sued Chevron, claiming Chevron’s negligent maintenance and operation of its property led to dangerous conditions which made it unsafe to perform cyclic steaming operations. These conditions led to the regulator's shut-down orders, and to TRC’s harm and damages. Chevron countersued, claiming TRC’s failure to adequately maintain its own wells was the cause of the surface expression, the eruptions, and damages suffered by Chevron. The jury found in favor of TRC, awarding approximately $120 million in damages against Chevron. Nothing was awarded to Chevron. Chevron filed motions for a new trial and for judgment notwithstanding the verdict (JNOV). The trial court denied the JNOV, but granted a new trial based on misconduct by a juror. TRC appealed the granting of this motion. The Court of Appeal reversed the grant of a new trial, finding that the juror was not ineligible and no prejudice resulted from the juror’s failure to disclose his prior criminal conviction or the previous civil lawsuit. Chevron also filed a protective cross-appeal, in the event the Court of Appeal found against it on TRC’s appeal. Chevron appealed the denial of its JNOV, arguing that the regulator's orders to stop steaming were the superseding cause of any harm suffered by TRC and precludes it from bearing any liability. The Court of Appeal concluded sufficient evidence was introduced to sustain the verdict, demonstrating TRC did not stop any of its steaming operations solely because of the regulator's orders, which were therefore not a superseding cause. The Court of Appeal reversed the trial court’s order granting a new trial, and remanded with instructions to reinstate the judgment against Chevron. View "TRC Operating Co. v. Chevron USA, Inc." on Justia Law

This case involves a contractual dispute between Alabama Plating Technology, LLC (APT) and Georgia Plating Technology, LLC (GPT), DVEST, LLC, and Jin Kim. The dispute arose from an asset-purchase agreement for a brake-plating plant. After the purchase, APT claimed indemnity from the sellers for environmental issues, unpaid accounts payable, and certain inoperable assets, alleging these were retained liabilities or breaches of warranties by the sellers. The sellers sued APT for breach of contract due to setoff of losses against annual installment payments.The trial court found in favor of APT regarding the environmental issues and unpaid accounts payable, but sided with the sellers on the inoperable-assets claim. It also rejected APT's claim for attorneys' fees and legal expenses. Both parties appealed.The Supreme Court of Alabama reversed the trial court's judgment denying APT relief on its inoperable-assets claim and its claim for attorneys' fees and legal expenses. It affirmed the trial court's judgment granting APT relief on its environmental-issues and unpaid-accounts-payable claims, and the denial of the sellers' request to accelerate the remaining installment payments owed to them by APT. View "Alabama Plating Technology, LLC v. Georgia Plating Technology, LLC" on Justia Law

The case involves Katherine Cassell (Kathy) and William Cassell (Bill), who were married in 1991 and separated in 2021. Prior to their marriage, Bill and his siblings inherited land in Mississippi from their mother and formed Waterloo Farms, Inc. (Waterloo), which held title to the inherited land. Waterloo also owned two tracts of land in Claiborne County. During their marriage, Bill began farming as Valley of the Moon Farms, LLC (VOM), which was owned 50% by Bill and 50% by Moon Planting Company, Inc. (MPC). MPC was formed by Bill’s father, who transferred 99% of MPC’s ownership to Kathy and 1% to Bill. Kathy and Bill maintained two bank accounts—one personal joint account and one account for VOM. Revenue from VOM was deposited into the VOM account and from there, money would be transferred into Kathy and Bill’s joint personal account for monthly expenses.The couple separated in 2021, and Kathy filed for divorce on the grounds of uncondoned adultery and, alternatively, habitual cruel and inhuman treatment and irreconcilable differences. Kathy sought an equitable division of the marital estate, permanent periodic alimony, lump sum alimony and for Bill to maintain her medical and dental insurance and his own life insurance for which she was the sole beneficiary. Kathy also requested reasonable attorneys’ fees. The chancery court entered a final judgment of divorce and his findings of fact and conclusions of law. The chancellor granted the divorce on the ground of uncondoned adultery. Among other assets, the chancellor classified Tract Two and the Turley Property as Bill’s separate property, and classified the Thompson Property and the VOM account as marital property. In total, Bill’s separate property was valued at $5,341,640.14. After classifying and equitably dividing the various marital assets applying the Ferguson factors, the chancellor considered Kathy’s alimony request weighing the Armstrong factors and awarded her permanent periodic alimony in the amount of $7,500 per month. In total, Kathy was awarded permanent periodic alimony and 40 percent of the marital estate, and the court ordered Bill to maintain life insurance for which Kathy was the sole beneficiary in the amount of $500,000 and to maintain Kathy’s health insurance until she turned sixty-five or was able to obtain Medicare. Kathy’s portion of the marital estate amounted to a lump sum payment of $667,557, whereas Bill’s portion of the marital estate was valued by the chancellor at $1,861,629.53. From this final judgment and findings of fact and conclusions of law, Kathy appeals.The Supreme Court of Mississippi affirmed the chancery court's decision. The court held that the burden of proof to rebut the presumption of marital property is by a preponderance of the evidence. Furthermore, the party claiming property excluded from marital property has been commingled and transformed into marital property bears the burden of proof, likewise by a preponderance of the evidence. Finally, the court overruled Cheatham insofar as it has any bearing on a chancellor’s decision to award alimony and reaffirmed the factors enumerated in Ferguson—awarding alimony during the division of the estate—and Armstrong—awarding alimony subsequent to the division of the estate—as the appropriate factors to be considered. View "Cassell v. Cassell" on Justia Law

The case involves Jennifer Sugg, a student who was dismissed from her Certified Registered Nurse Anesthesiology (CRNA) program at Midwestern University after failing several required courses. Sugg sued Midwestern University and EmergencHealth (EH), alleging breach of contract and fraud. The United States District Court for the Southern District of Texas granted summary judgment in favor of the defendants on all causes of action, and Sugg appealed.Sugg enrolled in Midwestern's CRNA program in 2016. She failed a course in her first semester and was placed on academic leave. After retaking the course and receiving a passing grade, she was placed on academic probation due to her low GPA. Sugg later failed her first clinical rotation course and was dismissed from the program. She appealed the decision, and the dismissal was overturned so she could retake the course. However, after failing another course, she was dismissed again. Sugg appealed this decision as well, but it was upheld by the university's Promotion and Graduation Committee and the Dean of the College of Health Sciences.The United States Court of Appeals for the Fifth Circuit affirmed the lower court's decision. The court found that Midwestern University did not breach the contract as it followed its guidelines and dismissed Sugg based on her academic performance. The court also found that Sugg failed to show that the university's decision was a substantial departure from accepted academic norms. Regarding the claims against EH, the court found that EH did not interfere with Sugg's contract with Midwestern University and did not make any false or misleading statements. Therefore, the court affirmed the summary judgment in favor of the defendants. View "Sugg v. Midwestern University" on Justia Law