Justia Business Law Opinion Summaries

In this appeal, plaintiffs, an individual and his limited liability towing company, entered into a contract for the purchase of a customized medium-duty 4x4 truck with autoloader tow unit. Ultimately, the truck did not perform as expected and plaintiffs filed suit. The issue this case presented for the New Jersey Supreme Court's review centered on whether determine whether New Jersey’s Consumer Fraud Act (CFA or the Act) covered the transaction as a sale of “merchandise.” The New Jersey Supreme Court agreed with the Appellate Division that the trial court took too narrow an approach in assessing what constituted "merchandise" under the remedial CFA. The customized tow truck and rig fit within the CFA’s expansive definition of “merchandise” and, therefore, plaintiff’s CFA claim should not have foundered based on an application of that term. Furthermore, the Court agreed with the appellate panel’s remand to the trial court for a determination of whether defendants’ other bases for seeking summary judgment were meritorious. View "All The Way Towing, LLC v. Bucks County International, Inc." on Justia Law

The Court of Appeal held that recording secret business conversations and using the recordings in an arbitration were not in connection with a judicial or official proceeding authorized by law, and therefore they were not protected activities under Code of Civil Procedure section 425.16 (the anti-SLAPP statute).In this case, after defendant, the president of Tang Energy Corp., secretly recorded conversations with Sherman Xuming Zhang, president of AVIC International USA, defendant introduced the recordings as evidence in contractual arbitration. When the arbitrators decided the issue in favor of Tang Energy, Zhang and AVIC filed suit against defendant for invasion of privacy and eavesdropping on or recording confidential communications in violation of Penal Code sections 632 and 637.2. The court affirmed the trial court's denial of defendant's special motion to strike under section 425.16. View "Zhang v. Jenevein" on Justia Law

Harmoni, the only zero-duty rate importer of Chinese garlic, filed suit alleging that other importers, jealous of Harmoni's competitive edge, conspired to eliminate or reduce that advantage through two separate unlawful schemes in violation of the Racketeer Influenced and Corrupt Organizations Act (RICO). The first scheme alleged that Chinese competitors submitted fraudulent documents to U.S. customs officials in order to evade applicable anti-dumping duties and then sold garlic in the United States at less than fair value. The second scheme alleged that Chinese competitors recruited domestic garlic growers to file sham administrative review requests with the U.S. Department of Commerce to determine whether plaintiffs were being subjected to appropriate antidumping duties.The Ninth Circuit held that Harmoni has not adequately alleged proximate cause with respect to the first scheme because the relationship between the importers' conduct and Harmoni's injury were too attenuated. However, Harmoni has adequately alleged proximate cause in the second scheme in regard to damages for expenses incurred in responding to the Department of Commerce's administrative review. The panel held that the district court should have granted leave to amend for the loss sales and harm to business reputation claims, as well as the claims against Huamei Consulting. View "Harmoni International Spice, Inc. v. Hume" on Justia Law

Land Holdings I, LLC, d/b/a Scarlet Pearl, LLC (“Casino”), sought to expunge a lien filed by GSI Services, LLC (“GSI”). The chancellor denied the Casino’s petition to expunge the lien because GSI performed work at the Casino within ninety days of filing its lien. Finding no error, the Mississippi Supreme Court affirmed the chancellor’s order. View "Land Holdings I, LLC d/b/a Scarlet Pearl, LLC v. GSI Services, LLC" on Justia Law

Two of Oxbow Carbon LLC’s minority Members, Crestview Partners, L.P. and Load Line Capital LLC, attempted to force a sale of Oxbow over the objection of Oxbow’s majority Members, William Koch and his affiliates (the “Koch Parties”). This dispute centered on the proper interpretation of the governing Third Amended and Restated Limited Liability Company Agreement (the “LLC Agreement”). Although the Court of Chancery found that the minority investors affiliated with Koch, Ingraham Investments LLC and Oxbow Carbon Investment Company LLC (collectively, the “Small Holders”), could block the sale unless it met certain payment conditions, the court nonetheless found a contractual gap in the LLC Agreement because the Board did not specify the terms and conditions under which the Small Holders acquired their units. Using the implied covenant of good faith and fair dealing, the Court of Chancery filled that gap by implying a “Top-Off” option for the Small Holders’ units, effectively stripping them of the right to block the proposed transaction. On appeal, Oxbow claimed that: (1) the trial court improperly applied the implied covenant; (2) there was no contractual gap; (3) Oxbow did not breach the LLC Agreement; and (4) the court’s rulings on remedies were made in error. The Delaware Supreme Court determined the Court of Chancery correctly interpreted the LLC Agreement’s plain language, but erred by finding a contractual gap concerning the admission of the Small Holders. Thus, the Court affirmed in part, reversed in part, and remanded the Court of Chancery’s February 12, 2018, decision, and vacated its August 1, 2018, decision on remedies. View "Oxbow Carbon & Minerals Holdings, Inc., et al. v. Crestview-Oxbow Acquisition, LLC, et al." on Justia Law

The parties entered into an overlapping series of agreements regarding management and revenue of a YouTube channel -- YouTube.com/VideoGames, featuring reviews of video games and digital recordings of players' screens. Plaintiffs filed suit against defendants, alleging various claims stemming from the agreements. The Fifth Circuit held that the district court had subject-matter jurisdiction to try the case and did not err in dismissing a nondiverse partnership as dispensable, nor err in its entry of judgment upon the jury's verdict. Accordingly, the court affirmed the judgment and remanded to the district court for the sole purpose of fashioning any appropriate protective measures to prevent duplicative litigation. View "Moss v. Princip" on Justia Law

The Supreme Court affirmed the order of the district court awarding punitive damages against Farmers State Financial Corporation for fraudulent stock conversion, holding that there was no error.Specifically, the Court held (1) the district court order restoring John Cote, Jr.’s converted stock constituted an award of compensatory damages, which enabled the district court to consider punitive damages against Farmers; (2) the district court did not err in awarding punitive damages against Farmers and did not abuse its discretion in determining the amount of the award; and (3) the award of punitive damages was not excessive and fell within acceptable constitutional and statutory parameters. View "In re Estate of Cote" on Justia Law

The receiver filed suit against Associated Bank, which provided banking services to some of the scammers' entities, accusing the bank of aiding and abetting the Ponzi scheme. The Eighth Circuit affirmed the district court's conclusion that there was insufficient evidence to reasonably infer the bank knew about and assisted the scammers' tortious conduct. The court held that a conclusion that the bank aided and abetted the Ponzi scheme could only be reached through considerable conjecture and speculation. In this case, the receiver failed to show that the bank had actual or constructive knowledge of the fraud or that it provided substantial assistance to the tortious conduct. View "Zayed v. Associated Bank, N.A." on Justia Law

The Supreme Court reversed the judgment of the circuit court finding that laches barred Plaintiff’s motion for a temporary injunction, sustaining a special plea in bar, and entering judgment in favor of a Corporation, holding that the circuit court erred in its interpretation of Va. Code. 13.1-724.Plaintiff sought a declaratory judgment that a letter of intent to sell assets of the Corporation to a third party buyer for $10 million were null and void because they violated section 13.1-724, which requires more than two-thirds shareholder approval for a disposition of of corporate assets that leaves a corporation without a significant continuing business. Plaintiff also sought a temporary injunction to stop the proposed sale until the circuit court could address the merits of the complaint. The Corporation responded by filing a special plea in bar. The circuit court denied Plaintiff’s emergency motion for an injunction, granting the plea in bar, and entered judgment in favor of the Corporation. The Supreme Court reversed, holding (1) the circuit court erred in its interpretation of section 13.1-724 and thus erred in entering judgment in favor of the Corporation; and (2) the circuit court abused its discretion when it found that laches barred Plaintiff’s request for a temporary injunction. View "May v. R.A. Yancey Lumber Corp." on Justia Law

BankDirect and Capital make loans to finance insurance premiums. In 2010, Capital, having exhausted the line of credit, approached BankDirect, which was willing to purchase Capital's loans and pay Capital to service those loans. BankDirect had a right to purchase Capital’s business after five years. If BankDirect did not purchase Capital, either party could extend the term by notice before January 4, 2016; otherwise, the agreement would terminate on January 31, 2016. Any extension could not go beyond June 1, 2018. BankDirect exercised the option in November 2015, but Capital refused to honor it. BankDirect sued. Capital sought an injunction to require BankDirect to continue purchasing loans and paying it to service them. BankDirect continued the arrangement through May 1, 2017, when it seized several Capital accounts and stated that it would no longer buy Capital's loans. BankDirect withdrew its request for specific performance. The district court concluded that Capital was entitled to a preliminary injunction so that the purchase‐and‐service arrangement would continue pending a judgment but did not address the 2018 terminal date or other disputes; failed to enter an injunction as a separate document under Fed. R. Civ. P. 65(d)(1)(C); and did not require Capital to post a bond (Rule 65(c)). The Seventh Circuit declined to address the merits or Rules 65(c) and (d), stating that the “injunction” should have contained a terminal date: June 1, 2018, and remanded for a determination of whether damages are available. View "Bankdirect Capital Finance, Inc. v. Texas Capital Bank National LLC" on Justia Law