Justia Business Law Opinion Summaries

The Second Circuit affirmed the district court's grant of summary judgment for defendants in an action alleging that defendants conspired to boycott Anderson and drive it out of business, in violation of section 1 of the Sherman Act. The court reviewed the evidence in light of the totality of the circumstances and under the "tends to exclude" standard under Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 588 (1986), and held that the district court correctly ruled that Anderson failed to offer sufficient evidence from which a reasonable jury could infer that defendants entered into such an unlawful agreement. In this case, defendants refused to pay Anderson's proposed delivery surcharge and found other wholesalers to deliver their magazines. The court also held that the district court correctly ruled that defendants did not suffer an antitrust injury and thus lacked antitrust standing to pursue counterclaims. View "Anderson News, LLC v. American Media, Inc." on Justia Law

Lester and William Lee created LIA in 1974 as a public company. William’s sons (Lester's nephews) later joined the business. LIA subsequently bought out the public shareholders, leaving Lester owning 516 shares; William owned 484. William created the Trust to hold his shares. The nephews served as trustees. Lester encountered difficulties with another company he owned, Maxim. He proposed that Maxim merge with LIA; William rejected this idea. Lester told the nephews, “I will screw you at every opportunity,” and made other threats, then, as majority shareholder, approved a merger of LIA and another company. The Trust asserted its rights under Indiana’s Dissenters’ Rights Statute. Lester gutted LIA to prevent the Trust from collecting the value of its LIA shares. He bought property from LIA on terms favorable to him and realized substantial profits. LIA subsidiaries were transferred for little or no consideration to Lester’s immediate family. Lester also perpetrated a collusive lawsuit, resulting in an agreed judgment that all LIA assets should be transferred to him and his companies. Lester did not disclose these actions to the nephews. In 2008, the Jennings Circuit Court conducted an appraisal in the dissenters’ rights action. Between the trial and the judgment, Lester dissolved LIA. The court entered a $7,522,879.73 judgment for the Trust. In 2012, Lester petitioned for Chapter 7 bankruptcy. The Trust initiated a successful adversary proceeding to pierce LIA’s corporate veil and hold Lester personally liable for the judgment. The Seventh Circuit affirmed, noting the facts were undisputed. View "William R. Lee Irrevocable Trust v. Lee" on Justia Law

The Supreme Court affirmed the declaration of the district court that the fair market value of Fred Assam’s ownership interest in the law firm of Fredericks Peebles & Morgan LLP (FPM) was $590,000.After Assam voluntarily withdrew from the firm, FPM filed this suit seeking a declaration of the parties’ rights under a governing partnership agreement. The Supreme Court affirmed the district court’s order declaring Assam’s interest in FPM to be $590,000 and that FPM should pay Assam that amount according to the terms of the agreement, holding that the district court did not err by (1) finding there was no conflict between District of Columbia and Nebraska substantive law governing the determination of Assam’s equity interest; (2) finding FPM did not breach the partnership agreement; (3) adopting the opinion of FPM’s expert in determining Assam’s equity interest; and (4) failing to award Assam a money judgment and attorney fees. View "Fredericks Peebles & Morgan LLP v. Assam" on Justia Law

In 2017, the Oregon legislature enacted a law that imposed a tax imposed on each vehicle dealer "for the privilege of engaging in the business of selling taxable motor vehicles at retail in this state.” The issue in this case was whether that tax was subject to Article IX, section 3a, of the Oregon Constitution. As relevant here, Article IX, section 3a, provided that taxes “on the ownership, operation or use of motor vehicles” “shall be used exclusively for the construction, reconstruction, improvement, repair, maintenance, operation and use of public highways, roads, streets and roadside rest areas in this state.” Petitioners AAA Oregon/Idaho Auto Source, LLC (Auto Source), AAA Oregon/Idaho, and Oregon Trucking Associations, Inc. argued the Section 90 tax fell within paragraph (1)(b) because it was a tax “on the owner- ship *** of motor vehicles.” Specifically, petitioners contended that taxes “on the ownership *** of motor vehicles” included taxes levied on the exercise of any of the rights of ownership, including the rights to sell and use. Petitioners posited that the voters would have understood “the concept of ownership” to include “multiple segregable rights or incidents, principal among which were the rights to sell and to use,” and, therefore, it is likely that the voters would have understood taxes levied “on the ownership *** of motor vehicles” to include taxes levied on the sale or use of motor vehicles. The Oregon Supreme Court disagreed with petitioners' contention: the Section 90 and Section 91 taxes worked together, so that the Section 91 privilege tax could be imposed on in-state vehicle dealers without placing them at a competitive disadvantage to out-of-state vehicle dealers, which supported the conclusion that the Section 90 tax was a business privilege tax. Therefore, the Court held the Section 90 tax was not a tax “on the ownership, operation or use of motor vehicles,” as that phrase is used in Article IX, section 3a. View "AAA Oregon/Idaho Auto Source v. Dept. of Rev." on Justia Law

Gianino Plastering operated in St. Louis for over 30 years but abruptly closed in 2012. Gianino’s son, Curt, who had worked at Gianino Plastering for over a decade, founded his own company, CWG, taking on some of Gianino’s customers and employees. CWG completed jobs that Gianino had begun. Curt went into business on the same day that a $196,940.73 judgment was entered against Gianino, arising out of Gianino’s 2009 collective bargaining agreement, which obligated the company to make regular contributions to the Welfare and Pension Funds. The Funds were blocked from collecting on their judgment because Gianino filed for bankruptcy. The Funds then sued CWG, asserting that CWG is Gianino’s successor and alter ego, liable for the judgment and for other ongoing violations of the collective bargaining agreement. After discovery, the district court ruled that the Funds had not produced enough evidence to proceed to trial. The Seventh Circuit reversed. The Funds proffered considerable evidence that a trier of fact could use to support its case against CWG. A reasonable factfinder could find both common ownership and control between the two entities; CWG’s capitalization, common equipment, and shared clients remain disputed matters for trial. The Funds have strong evidence of intent and undisputed evidence of knowledge. View "McCleskey v. CWG Plastering, LLC" on Justia Law

This appeal involved an Idaho district court’s denial of a jury trial under Rule 39(b) of the Idaho Rules of Civil Procedure and the decision to pierce the corporate veil. The dispute stemmed from a transaction between Kym Nelson, who acted on behalf of KDN Management Inc., (“KDN”), and WinCo, Foods, LLC (“WinCo”), for concrete floor work that KDN performed in several WinCo stores. The district court found that KDN had overcharged WinCo for the work, and awarded WinCo $2,929,383.31 in damages, including attorney fees. The district court also held Nelson and two entities associated with her, SealSource International, LLC, and KD3 Flooring LLC, jointly and severally liable for WinCo’s damages. Nelson, SealSource and KD3 argued on appeal to the Idaho Supreme Court that the trial court erred in concluding: (1) Nelson was personally liable for damages relating to this dispute; and (2) that KDN, SealSource and KD3 were alter egos of one another. Nelson and the corporate co-defendants also argued the district court abused its discretion by denying their motion for a jury trial under Rule of Civil Procedure 39(b). Finding no reversible error in the district court’s judgment, the Idaho Supreme Court affirmed the judgment and award of attorney fees to WinCo. View "KDN Management, Inc. v. WinCo" on Justia Law

Hildene filed suit against Bannister and Arvest, alleging that the asset purchase transaction between Bannister and Arvest breached the "successor obligor" term of an indenture agreement between Bannister and U.S. Bank National Association as trustee and that Arvest tortiously interfered with the Indenture. The Eighth Circuit affirmed the district court's grant of summary judgment, holding that the asset purchase transaction did not violate the Indenture. The court held that the plain meaning of the word "property" in this context was property directly owned by Bannister, the "company" that signed the Indenture; and Bannister's "property and capital stock" did not include assets of Bannister subsidiaries. The court also held that the district court did not err in dismissing plaintiff's tortious interference claim against Arvest because Bannister did not breach the Indenture's successor obligor provision. View "Hildene Opportunities Master Fund, Ltd. v. Arvest Bank" on Justia Law

Donna Taylor appealed a district court’s judgment regarding her Series A Preferred Shares in AIA Services Corporation (AIA). In 1987, Donna received 200,000 Series A Preferred Shares in AIA as part of a divorce settlement. Between 1987 and 1996, Donna, AIA, and other relevant parties entered into various stock redemption agreements with differing terms and interest rates. One such agreement was challenged in Taylor v. AIA Servs. Corp., 261 P.3d 829 (2011). While the Taylor case was being litigated, AIA stopped paying Donna for the redemption of her shares, prompting her to file suit. Donna alleged several causes of action against AIA, with the primary issue being whether Donna was entitled to have her shares redeemed at the prime lending rate plus one-quarter percent. AIA contended any agreement providing that interest rate was unenforceable, and instead Donna’s redemption was governed by AIA’s amended articles of incorporation, which provided the interest rate as the prime lending rate minus one-half percent. The district court determined Donna’s share redemption was governed by AIA’s amended articles of incorporation, and as such, all but 7,110 of Donna’s shares had been redeemed. After review, the Idaho Supreme Court reversed the district court’s dismissal of Donna’s breach of contract claim as it related to a 1995 Letter Agreement, and remanded for further proceedings. The Supreme Court also reverse the district court’s dismissal of Donna’s fraud claims. The Court affirmed the district court’s dismissal of Donna’s unjust enrichment claim, and the dismissal of AIA’s counterclaim against Donna. View "Taylor v. Taylor" on Justia Law

In March 2016, soon after The Fresh Market (the “Company”) announced plans to go private, the Company publicly filed certain required disclosures under the federal securities laws. Given that the transaction involved a tender offer, the required disclosures included a Solicitation/Recommendation Statement on Schedule 14D-9 which articulated the Board’s reasons for recommending that stockholders accept the tender offer from an entity controlled by private equity firm Apollo Global Management LLC (“Apollo”) for $28.5 in cash per share. Apollo publicly filed a Schedule TO, which included its own narrative of the background to the transaction. The 14D-9 incorporated Apollo’s Schedule TO by reference. After reading these disclosures, as the tender offer was still pending, plaintiff-stockholder Elizabeth Morrison suspected the Company’s directors had breached their fiduciary duties in the course of the sale process, and she sought Company books and records pursuant to Section 220 of the Delaware General Corporation Law. The Company denied her request, and the tender offer closed as scheduled on April 21 with 68.2% of outstanding shares validly tendered. This case calls into question the integrity of a stockholder vote purported to qualify for “cleansing” pursuant to Corwin v. KKR Fin. Holdings LLC, 125 A.3d 304 (Del. 2015). In reversing the Court of Chancery's judgment in favor of the Company, the Delaware Supreme Court held "'partial and elliptical disclosures' cannot facilitate the protection of the business judgment rule under the Corwin doctrine." View "Morrison, et al. v. Berry, et al." on Justia Law

Professional golf caddies filed suit against the PGA Tour after it required them to wear bibs containing advertisements at professional golfing events. The Ninth Circuit affirmed the district court's dismissal of all claims with prejudice, holding that the caddies consented to wearing the bibs and that they did not do so under economic duress. Therefore, the caddies failed to state claims for breach of contract and quasi-contract relief, California state law publicity claims, a Lanham Act false endorsement claim, or a plausible economic duress claim. The panel also held that the caddies failed to allege plausibly that the Tour secured their consent through economic duress, and thus the district court properly dismissed the antitrust claims for failure to state a relevant market and the California unfair competition claims for failure to plead that any of the Tour's conduct was unlawful, unfair, or fraudulent. The panel remanded to allow the district court to reconsider whether to grant the caddies leave to amend their federal antitrust and California unfair competition claims. View "Hicks v. PGA Tour, Inc." on Justia Law