Justia Business Law Opinion Summaries

Insulet Corp. and EOFlow are medical device manufacturers that produce insulin pump patches. Insulet began developing its OmniPod product in the early 2000s, and EOFlow started developing its EOPatch product after its founding in 2011. Around the same time, four former Insulet employees joined EOFlow. In 2023, reports surfaced that Medtronic had started a process to acquire EOFlow. Soon after, Insulet sued EOFlow for violations of the Defend Trade Secrets Act (DTSA), seeking a temporary restraining order and a preliminary injunction to enjoin all technical communications between EOFlow and Medtronic in view of its trade secrets claims.The U.S. District Court for the District of Massachusetts temporarily restrained EOFlow from disclosing products or manufacturing technical information related to the EOPatch or OmniPod products. The court then granted Insulet’s request for a preliminary injunction, finding strong evidence that Insulet is likely to succeed on the merits of its trade secrets claim, strong evidence of misappropriation, and that irreparable harm to Insulet crystallized when EOFlow announced an intended acquisition by Medtronic. The injunction enjoined EOFlow from manufacturing, marketing, or selling any product that was designed, developed, or manufactured, in whole or in part, using or relying on alleged trade secrets of Insulet.The United States Court of Appeals for the Federal Circuit reversed the district court’s order. The court found that the district court had failed to address the statute of limitations, lacked a tailored analysis as to what specific information actually constituted a trade secret, and found it hard to tell what subset of that information was likely to have been misappropriated by EOFlow. The court also found that the district court had failed to meaningfully engage with the public interest prong. The court concluded that Insulet had not shown a likelihood of success on the merits and other factors for a preliminary injunction. The case was remanded for further proceedings consistent with the opinion. View "INSULET CORP. v. EOFLOW, CO. LTD. " on Justia Law

The case revolves around a sexual harassment claim brought by Nicole Harris against her former employer, Fossil Group, Inc. Harris alleged that she was sexually harassed by an assistant store manager, Leland Brown, during her employment at a Fossil store in Frisco, Texas. The harassment primarily occurred through social media and included obscene and sexually explicit videos, photos, and messages. Harris claimed that she sent an email reporting the harassment through Fossil's anonymous reporting system in late April 2019, but received no response. She resigned from her position in early May 2019.The trial court granted Fossil's motion for summary judgment, ruling in favor of the company. The court found that there was no evidence that Fossil knew or should have known about the harassment but failed to remedy the situation. Harris appealed this decision.The Court of Appeals reversed the trial court's judgment. The appellate court held that Harris's testimony about her email was some evidence that Fossil knew or should have known about Brown's misconduct. The court also stated that Fossil took no remedial action after Harris sent the email.The Supreme Court of Texas disagreed with the Court of Appeals' decision. The court held that even if Fossil had received Harris's email, there was no evidence that its subsequent actions were not prompt and remedial. The court noted that mere days after Harris sent the email, she voluntarily resigned, and she did not identify any instances of interim harassment. The following week, the store manager reported the matter to human resources after learning about the harassment from another source. By the end of the month, Fossil had fired Brown. The court also held that Harris did not raise a fact issue that Fossil knew or should have known about the harassment before the date of the email. Therefore, the Supreme Court of Texas reversed the Court of Appeals' judgment and reinstated the trial court's judgment in favor of Fossil. View "Fossil Group, Inc. v. Harris" on Justia Law

The case involves a dispute over the rights of parties holding certain revenue bonds issued by the Puerto Rico Electric Power Authority ("PREPA") before it entered reorganization proceedings under Title III of the Puerto Rico Oversight, Management, and Economic Stability Act ("PROMESA"). The Financial Oversight and Management Board for Puerto Rico ("the Board") filed an adversary proceeding within the Title III restructuring proceeding to define the rights and remedies that bondholders had against PREPA. The United States District Court for the District of Puerto Rico held that the bondholders only had a secured claim on moneys deposited into the Sinking and Subordinate Funds, and that the bondholders had an unsecured claim on PREPA's Net Revenues.The United States Court of Appeals for the First Circuit disagreed with the district court's findings. The appellate court held that the bondholders have a lien on PREPA's present and future Net Revenues, and that the bondholders' lien is not avoidable. The court also held that the proper amount of the bondholders' claim is the face value (i.e., principal plus matured interest) of the Revenue Bonds. The court affirmed the district court's dismissal of the bondholders' breach of trust claim, but reversed the dismissal of the bondholders' accounting claim. The case was remanded for further proceedings consistent with the appellate court's opinion. View "Financial Oversight and Management Board v. U.S. Bank National Assn." on Justia Law

The case involves Dr. Peter Bolos, who was convicted of mail fraud, conspiracy to commit healthcare fraud, and felony misbranding as part of a complex scheme. Bolos purchased an interest in Florida-based pharmacy Synergy Pharmacy Services in 2013 and became the managing partner. Synergy signed an agreement with HealthRight, a telemarketing firm, to generate business. HealthRight used social media advertisements and large phone banks to generate potential clients for Synergy. The information collected from potential clients was forwarded to a licensed doctor in the patient’s home state for review. Most of these decisions were made without the doctor ever seeing or speaking to the patient. The doctors then sent the prescriptions to Synergy for filling.The District Court for the Eastern District of Tennessee convicted Bolos on all counts after a four-week trial. Bolos appealed, arguing that his actions were not unlawful and that he was being unfairly held criminally culpable for contractual violations and others’ misconduct.The United States Court of Appeals for the Sixth Circuit disagreed with Bolos and affirmed the lower court's decision. The court found that Bolos and Synergy leadership knew of the deficiencies in their business practices and either actively facilitated and furthered them or turned a blind eye, all in an effort to induce Pharmacy Benefit Managers (PBMs) to pay Synergy. The court also held that the federal healthcare-fraud statute requires the government to prove that Bolos knowingly devised a scheme or artifice to defraud a health care benefit program in connection with the delivery of or payment for health care benefits, items, or services. The court found ample evidence in the record to support the jury’s finding that Bolos conspired to create a scheme with the intent to defraud the PBMs of their money. View "United States v. Bolos" on Justia Law

The case involves Illinois Casualty Company (ICC) and thirty-three models who contested whether arbitration was appropriate based on the assignment of several business insurance policies that ICC issued to B&S of Fort Wayne, Inc., Showgirl III, Inc., and Reba Enterprises, LLC (collectively, "Insured Clubs"). The models alleged that the Insured Clubs used their images for social media advertisements without their consent. The Insured Clubs had insurance policies with ICC, which they tendered for defense and indemnification. ICC denied coverage, leading to a settlement agreement between the Insured Clubs and the models, assigning the Insured Clubs’ rights against ICC to the models.The trial court compelled arbitration between ICC and the models. On appeal, the Indiana Court of Appeals reversed, finding that none of the models’ claims fell within the provision of the arbitration agreement. The models sought transfer to the Indiana Supreme Court.The Indiana Supreme Court held that an agreement to arbitrate in accordance with American Arbitration Association (AAA) rules constitutes “clear and unmistakable” intent to delegate arbitrability to an arbitrator. However, the court found that because no agreement to arbitrate existed between ICC and the Insured Clubs before 2016, the models could not compel arbitration for claims deriving from this period. The court affirmed in part and reversed in part, ruling that models with claims from 2016 and later could compel arbitration, but those with pre-2016 claims could not. View "Illinois Casualty Co. v. Burciaga" on Justia Law

Carlos Ramirez, an employee, filed a class action lawsuit against his former employer, Golden Queen Mining Company, alleging various violations of the Labor Code and unfair competition. The employer moved to compel arbitration, but the trial court denied the motion, stating that the employer failed to demonstrate the existence of an executed arbitration agreement. The employer appealed, arguing that it had made a prima facie showing that a written arbitration agreement existed and that Ramirez’s statements that he did not recall being presented with or signing an arbitration agreement were insufficient to rebut its initial showing.The Superior Court of Kern County had initially denied the employer's motion to compel arbitration on the grounds that the employer failed to demonstrate the existence of an executed arbitration agreement. The court found that the employer's evidence, which included an unsigned arbitration agreement and a handbook acknowledgement purportedly signed by Ramirez, was insufficient to establish the existence of an arbitration agreement.The Court of Appeal of the State of California Fifth Appellate District reversed the lower court's decision. The appellate court concluded that Ramirez did not provide sufficient evidence to rebut the employer’s initial showing that an arbitration agreement existed. The court found that Ramirez's failure to recall signing the document did not create a factual dispute about the signature’s authenticity. The court also noted that Ramirez’s declaration did not state whether he had reviewed the arbitration agreement or other documents purportedly signed by him, nor did it address whether he recalled signing the handbook acknowledgement, which included a statement that he agreed to the terms of the arbitration agreement. The court therefore reversed the order denying the motion to compel arbitration and remanded the case for further proceedings to address Ramirez’s unconscionability defense. View "Ramirez v. Golden Queen Mining Co." on Justia Law

The case involves two separate actions brought by B&L Productions, Inc., an operator of gun shows in California, against state officeholders tasked with enforcing various California statutes that bar the sale of guns on state property. B&L argued that these statutes violated its rights under the First and Second Amendments. In the first case, B&L challenged a ban on firearm sales at the Del Mar Fairgrounds. In the second case, B&L challenged bans on firearm sales at the Orange County Fairgrounds and on all state property.In the first case, the district court dismissed B&L’s lawsuit, holding that B&L had failed to state a claim that the ban violates its constitutional rights. In the second case, the district court granted B&L’s motion for a preliminary injunction, holding that B&L was likely to succeed on the merits of all its claims.The United States Court of Appeals for the Ninth Circuit affirmed the district court’s dismissal of B&L’s claims in the first case and vacated the district court’s order granting B&L’s motion for a preliminary injunction in the second case. The court held that the challenged statutes do not infringe on B&L’s constitutional rights. The court found that the statutes solely restrict nonexpressive conduct—contracting for the sale of firearms—and are not subject to First Amendment scrutiny. Furthermore, the court determined that the plain text of the Second Amendment does not cover B&L’s proposed conduct—namely, contracting for the sale of firearms and ammunition on state property. View "B & L PRODUCTIONS, INC. V. NEWSOM" on Justia Law

The case revolves around EIG, an American investment fund, which lost $221 million after investing in a project to exploit newly discovered oil reserves off the coast of Brazil. The project was led by Petróleo Brasileiro, S.A. (Petrobras), Brazil’s state-owned oil company. A criminal investigation later revealed that Petrobras executives were accepting bribes from contractors and sharing the proceeds among themselves and Brazilian politicians. When this corruption was exposed, the project's lenders withdrew, causing the project to collapse and EIG’s investment to become worthless.The District Court for the District of Columbia had previously denied Petrobras' motion to dismiss the case, arguing that it was immune from liability under the Foreign Sovereign Immunities Act (FSIA). The court held that EIG had sufficiently alleged that Petrobras’ fraud had a "direct effect in the United States" and therefore fell within the direct-effect exception to the FSIA.The United States Court of Appeals for the District of Columbia Circuit affirmed the lower court's decision. The court concluded that Petrobras had caused a direct effect in the United States because it had engaged with EIG in a sustained course of dealing over many months that conveyed its desire to obtain an investment from EIG. The court also found that the direct effect in the United States was not the result of happenstance or coincidence. It was wholly foreseeable, given that Petrobras had contemplated and tried to attract U.S. investment. The court therefore affirmed the district court’s denial of Petrobras’ assertion of foreign sovereign immunity at this stage and remanded for further proceedings. View "EIG Energy Fund XIV, L.P. v. Petroleo Brasileiro, S.A." on Justia Law

In October 2022, Starship Enterprises of Atlanta, Inc. filed a lawsuit against Gwinnett County, challenging a 2015 county ordinance regulating "Adult Establishments." Starship, which owns two stores in Gwinnett County, had previously filed a similar lawsuit in 2017, which it voluntarily dismissed. The county, however, maintained its counterclaim, and the trial court granted the county a permanent injunction restraining Starship from "regularly making more than 100 sexual devices available for sale" at each of its locations. Starship appealed the decision, but the Court of Appeals affirmed the trial court’s grant of a permanent injunction against Starship.In the second lawsuit, Starship invoked a constitutional amendment that waives sovereign immunity for certain lawsuits, including lawsuits against a county for declaratory judgment and related injunctive relief. The trial court dismissed Starship’s lawsuit, holding that it was barred by sovereign immunity and by res judicata. Starship appealed to the Court of Appeals, which transferred the case to the Supreme Court of Georgia due to the novel constitutional question involved.The Supreme Court of Georgia concluded that although the constitutional waiver of sovereign immunity applied to Starship’s lawsuit, the suit was barred by res judicata. The court found that Starship's lawsuit sought relief from the county's prospective acts of enforcement, which will occur after January 1, 2021, and therefore the county’s sovereign immunity was waived under the constitutional amendment. However, the court also found that the lawsuit was barred by res judicata because the constitutional matters Starship now sought to raise could have been raised in the previous lawsuit. Therefore, the court affirmed the trial court’s order dismissing the lawsuit. View "STARSHIP ENTERPRISES OF ATLANTA, INC. v. GWINNETT COUNTY" on Justia Law

The case involves Scott Johnson, Harlene Hoyt, and Covey Find Kennel, LLC, who challenged the constitutionality of a Kansas statute that allows warrantless inspections of their homestead, where Mr. Johnson operates a business that houses and trains bird dogs. They also claimed that their constitutional right to travel was infringed by a statutory requirement that they make the premises available for inspection within 30 minutes of the arrival of an inspector. The United States District Court for the District of Kansas dismissed their complaint for failure to state a claim.The United States Court of Appeals for the Tenth Circuit affirmed the dismissal of their right-to-travel claim but remanded for further proceedings to determine whether Mr. Johnson’s business is closely regulated and, if so, whether warrantless inspections are reasonable under the Fourth Amendment. The court found that the boarding or training kennel industry was not clearly closely regulated, and the government had not shown that warrantless searches were necessary. The court also held that the regulations did not impose burdens beyond those commonly borne by owners of businesses who travel away from the locations of their businesses, and thus did not violate the plaintiffs' right to travel. View "Johnson v. Smith" on Justia Law