Justia Business Law Opinion Summaries

After the tax court determined that petitioners failed to report approximately $41.2 million of compensation income that they realized when certain restricted stockholdings that they owned became substantially vested in January 2004, the tax court upheld the Commissioner's decision to impose accuracy-related penalties for negligence and substantial understatement of tax liability, and denied petitioners' post-trial attempt to offset their underreported income with various net operating loss carrybacks.The Fourth Circuit affirmed the tax court, holding that the tax court did not err in holding that petitioners each realized and were required to report $45.7 million of taxable income when their UMLIC S-Corp. stock substantially vested in taxable year 2004. In this case, even if the Surrender Transactions could somehow be seen as rescinding petitioners' employment and compensation agreements with UMLIC S-Corp., the court agreed with the tax court's conclusion that those transactions were totally devoid of economic substance and must be disregarded for federal income tax purposes. The court also held that the tax court did not err in upholding the accuracy-related penalties imposed by the Commissioner. Finally, the court rejected petitioner's claim that the tax court erred in refusing to consider their net operating losses (NOL) carryback claim during post-trial computation proceedings conducted pursuant to Tax Court Rule 155. View "Estate of Arthur E. Kechijian v. Commissioner" on Justia Law

In 2015, the Government filed a civil action against Neldon Johnson, Gregory Shepard, and Johnson’s three companies: RaPower-3 LLC (“RaPower”), International Automated Systems, Inc. (“IAS”), and LTB1, LLC (“LTB”) (collectively, Defendants). The Government alleged Defendants promoted an abusive tax scheme. Following a bench trial, the district court found for the Government, enjoined the Defendants from further promoting their scheme, and ordered disgorgement of ill-gotten gains. In 2018, the district court appointed a receiver (Appellee) to take control of Defendants' assets and to investigate whether their affiliated entities possessed proceeds from the illicit tax scheme. On the Receiver’s recommendation, the court added 13 nonparty affiliated entities to the Receivership. Six of the added entities (“Appellant Entities”) appeals, arguing the district court included them in the Receivership without providing sufficient due process. Finding the "Receivership Expansion Order" was not immediately appealable because the Appellant Entities did not show the order was final, the Tenth Circuit dismissed the appeal for lack of jurisdiction. View "United States v. RaPower-3" on Justia Law

Warren, a manufacturer of unitary electric (UE) heaters for HVAC systems, filed suit against its competitor, Tutco and against a Nationally Recognized Testing Laboratory (NRTL), UL. Warren's claims are based on its allegations that, UL certified Tutco's UE heaters as compliant, even though the heaters are not actually compliant. Warren sought damages and injunctive relief under the Lanham Act for false advertising and contributory false advertising, damages under the common law of unfair competition, and declaratory and injunctive relief under the Florida Deceptive and Unfair Trade Practices Act (FDUTPA).The Second Circuit affirmed the district court's grant of Tutco's and UL's joint motion to dismiss. In this case, Warren calls UL's authorization to Tutco to use UL's mark, and Tutco's advertisements to that effect, "misrepresentations," but it really means nothing more than (by its lights) a "misinterpretation" of UL 1995. However, it does not follow, that even a misinterpretation of UL 1995 is a falsity -- or a "deceptive act" within the meaning of the Lanham Act -- rather than a matter of opinion, provided it was made in good faith and in accordance with OSHA's criteria for independence, procedural regularity, etc. The court held that, because all of Warren's claims against UL and Tutco are based upon the same allegation of falsity, they fail for want of a misrepresentation or a deceptive act. View "Warren Technology, Inc. v. UL LLC" on Justia Law

This case case arising out of the breakup of a limited partnership created to produce and market a new cement product the Supreme Court reversed in part the judgment of the court of appeals largely affirming the judgment of the trial court in favor of the limited partnership and a technology-supplying partner, holding that Plaintiffs failed to present legally sufficient evidence of damages and that the technology-supplying partner was not entitled to a permanent injunction for misappropriation of trade secrets.The partnership, its general partner, and the limited partner that supplied the cement-making technology sued the limited partners responsible for funding, the general manager of the partnership, and the companies that foreclosed on and purchased the partnership's assets. Defendants asserted counterclaims. The court of appeals largely affirmed. The Supreme Court reversed in part and affirmed in part, holding (1) the damage awards were not supported by legally sufficient evidence; (2) the technology-supplying partner was not entitled to a permanent injunction for misappropriation of trade secrets; and (3) the company that purchased the partnership's assets and promissory note did not prove it was entitled to judgment as a matter of law on its counterclaim for the partnership's failure to pay a deficiency balance on the note. View "Pike v. Texas EMC Management, LLC" on Justia Law

Inline filed suit against its competitor, Graphic, alleging antitrust and tortious interference claims related to the susceptor-packaging market. The Eighth Circuit affirmed the district court's grant of summary judgment in favor of Graphic, holding that the district court did not err concluding that there was no genuine dispute of material fact regarding whether Graphic fraudulently procured patents on packaging concepts and designs through false claims of inventorship of the asserted patents and fraudulently concealed prior sales of drawing sample sleeves. In this case, Inline cannot establish that Graphic committed knowing and willful fraud and thus his monopolization claim under 15 U.S.C. 2 failed. Because Inline did not evidence fraud related to Graphic's procurement of the asserted patents and its prior sales of drawing sample sleeves 50019D/F, it has not established why the same set of facts and evidence would render Graphic's patent-infringement litigation objectively baseless. Therefore, the court affirmed the district court's dismissal of the sham-litigation claim.The court affirmed the district court's dismissal of the discount-bundling claim because Inline failed to show that Graphic held sufficient monopoly or market power, and the district court adequately assessed the record and did not abuse its discretion in dismissing Inline's economic expert's untimely market opinion. Finally, the court held that the district court did not abuse its discretion in rejecting Inline's exclusive dealing claim and tortious interference claim. View "Inline Packaging, LLC v. Graphic Packaging International, LLC" on Justia Law

Plaintiff TOMRA of North America, Inc., brought two separate actions in the Court of Claims against the Michigan Department of Treasury, seeking a refund for use tax and sales tax that plaintiff had paid on the basis that plaintiff’s sales of container-recycling machines and repair parts were exempt from taxation under the General Sales Tax Act, and the Use Tax Act. Plaintiff moved for summary judgment, seeking a ruling on the question whether plaintiff’s container-recycling machines and repair parts performed, or were used in, an industrial-processing activity. The Court of Claims denied plaintiff’s motion and instead granted summary disposition in favor of defendant, holding that plaintiff’s container-recycling machines and repair parts were not used in an industrial-processing activity and that plaintiff therefore was not entitled to exemption from sales and use tax for the sale and lease of the machines and their repair parts. The Court of Claims found that the tasks that plaintiff’s machines performed occurred before the industrial process began, reasoning that the activities listed in MCL 205.54t(3) and MCL 205.94o(3) were only industrial-processing activities when they occurred between the start and end of the industrial process as defined by MCL 205.54t(7)(a) and MCL 205.94o(7)(a), respectively. Plaintiff appealed, and the Court of Appeals reversed, declining to interpret MCL 205.54t(7)(a) and MCL 205.94o(7)(a) as placing a temporal limitation on the activities listed in MCL 205.54t(3) and MCL 205.94o(3), respectively. To this, the Michigan Supreme Court concurred and affirmed the Court of Appeals. The matter was remanded to the Court of Claims for further proceedings. View "TOMRA of North America, Inc. v. Dept. of Treasury" on Justia Law

Apple owns Madison, Wisconsin vitamin stores. Knott, a former Apple employee, was fired in 2017. Knott founded his own vitamin shop, Embrace Wellness, in Middleton, Wisconsin. Embrace allegedly shared design features and a similar layout with Apple’s locations and carried comparable products. Apple sued, alleging infringement of its trademark, trade dress, and copyrights. The defendants filed counterclaims for tortious interference and retaliation. Apple sought a preliminary injunction on the trademark and trade dress claims, which the court denied, explaining that Apple had failed to show a likelihood of irreparable harm. Apple then moved to dismiss its own claims without prejudice. Because the defendants had already expended resources litigating an injunction, the court ordered Apple to withdraw its motion or accept dismissal with prejudice, expressing its opinion that no party’s claim was strong. Apple agreed to dismiss its claims with prejudice.The court subsequently denied defendants’ motion for fees; they appealed with respect to the copyright claims. The Seventh Circuit affirmed. Apple’s copyright claims were frivolous—common-law copyright was abolished in 1976—but the totality of the circumstances did not warrant fees. There was no evidence that Apple had filed suit with an improper motive, and no need to deter future frivolous filings. The case was primarily about trademark and trade dress. no motions were filed related to copyright. Apple dismissed the copyright claims voluntarily before defendants had to argue against them. View "Timothy B. O'Brien LLC v. Knott" on Justia Law

In this appeal by allowance, a covenant not to compete was executed by an employee after the first day of employment. The issue presented for the Pennsylvania Supreme Court's review was whether the employer could enforce that provision in the post-employment timeframe although no new consideration was supplied in connection with its execution. The Supreme Court concluded the trial court properly denied a motion for a preliminary injunction: there was no evidence suggesting that, as of the commencement of the employment relationship, there was a meeting of the minds as to the noncompete agreement (NCA), or that the employee otherwise manifested his assent to provisions of the NCA that he was given, or an intent to be bound by them. View "Rullex Co., LLC. v. Tel-Stream, Inc." on Justia Law

Plaintiff Signature Leasing, LLC requested a declaratory judgment regarding a contract containing an arbitration clause which Plaintiff alleged that Defendants Buyer's Group, LLC and Williams & Williams Marketing Services, Inc. had fraudulently induced Plaintiff to sign. Defendants filed motions to dismiss and motions to compel arbitration which the district court granted. The Court of Civil Appeals reversed and remanded to the district court. The underlying question presented for the Oklahoma Supreme Court's review was whether the district court or the arbitrator determined challenges of fraudulent inducement to the entirety of a contract which contains an arbitration clause under the Oklahoma Uniform Arbitration Act (OUAA). The Court determined the arbitrator makes that determination, and affirmed the judgment of the district court compelling the matter to arbitration. View "Signature Leasing, LLC v. Buyer's Group, LLC" on Justia Law

HP filed suit against Quanta for illegally fixing the prices of optical disk drives. In this appeal, Quanta claims that the evidence was insufficient to justify the $438.65 million award against it and that the district court's orders enforcing the judgment should be set aside.The Fifth Circuit affirmed in part, holding that the district court properly denied Quanta's motion for judgment as a matter of law and that Quanta has not made a clear showing of an absolute absence of evidence to support the jury's verdict. The court also held that the Turnover Orders are final and that review is proper under 28 U.S.C. 1291. Finally, the court held that Quanta needs more time to complete the procedural steps required for turning over Taiwanese property. Accordingly, the court vacated in part and remanded for further proceedings. View "Hewlett-Packard Co. v. Toshiba Corp." on Justia Law