Justia Business Law Opinion Summaries

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

The case involves Santa Fe Natural Tobacco Company (Santa Fe), a New Mexico corporation that sells branded tobacco products to wholesalers, who then sell to retailers in Oregon. The primary issue is whether a federal statutory limit on a state’s ability to impose income tax on out-of-state corporations, 15 USC section 381, precludes Oregon from taxing Santa Fe because its business in Oregon is limited. The Oregon Department of Revenue concluded that Santa Fe’s various actions in Oregon had taken it outside the safe harbor of Section 381, thus rendering Santa Fe liable to pay Oregon tax. The Tax Court agreed with the department that Santa Fe’s actions had made it subject to taxation in this state.The Tax Court agreed with the Oregon Department of Revenue that Santa Fe Natural Tobacco Company's actions in Oregon had made it subject to taxation in the state. The court found that Santa Fe's representatives had exceeded the scope of "solicitation of orders" when they obtained "prebook orders" from Oregon retailers. These orders, bolstered by incentive agreements with wholesalers, facilitated sales on behalf of wholesalers, who were effectively committed to accept those sales. This activity went beyond the protections of Section 381(a)(2), which limits a state's ability to impose income tax on out-of-state corporations whose in-state activities are limited to the solicitation of orders.The Supreme Court of the State of Oregon affirmed the judgment of the Tax Court. The court concluded that Santa Fe's pursuit of prebook orders in Oregon, invoking incentive agreement contractual provisions used by Santa Fe to ensure that wholesalers treated each one of those orders favorably, exceeded the scope of permitted "solicitation of orders" under Section 381(a)(2). The court further agreed that Santa Fe's activities were not de minimis. Accordingly, Santa Fe was subject to Oregon income tax. View "Santa Fe Natural Tobacco Co. v. Dept. of Rev." on Justia Law

The case revolves around a dispute between MAK Technology Holdings Inc. (plaintiff) and Anyvision Interactive Technologies Ltd. (defendant). The defendant, an Israeli company selling facial-recognition software, engaged the plaintiff in 2017 to arrange introductions with potential customers in exchange for referral payments based on revenues generated from any resulting product-license agreements. The parties formalized their agreement in a written Referral Agreement with a defined "Effective Date" of November 23, 2017, and a term of three years. The agreement was amended twice in 2018 to include a compensation arrangement for equity investments in the defendant, separate from their arrangement with respect to product licenses.The plaintiff initiated a lawsuit to recover compensation allegedly owed under the amended Referral Agreement, claiming that a nonparty made an investment in the defendant in July 2021 for which the plaintiff is owed a $1.25 million fee under the Second Amendment. The defendant moved to dismiss this claim on the ground that the transaction occurred eight months after the Term of the Referral Agreement expired in November 2020. The Supreme Court denied the motion, and a divided Appellate Division affirmed, both concluding that the error-infected language in section 2 of the Second Amendment creates an ambiguity with respect to the length of the Term.The Court of Appeals of New York disagreed with the lower courts' decisions. The court held that the plaintiff is not entitled to a $1.25 million fee for a transaction consummated eight months after the "Term" of the parties' agreement expired. The court found that minor syntactic and spelling errors in the preamble of an amendment to the contract cannot reasonably be read as modifying the length of the Term. The court also rejected the plaintiff's argument that the amendment is a separate agreement with a distinct term. Therefore, the court reversed the order of the Appellate Division, granted the defendant's motion to dismiss the first cause of action for breach of contract to the extent based on the July 2021 transaction, and answered the certified question in the negative. View "MAK Tech. Holdings Inc. v Anyvision Interactive Tech. Ltd." on Justia Law

The case revolves around an employment dispute between Nelida Soltero and Precise Distribution, Inc. Soltero, who was placed at Precise Distribution by a temporary staffing agency, Real Time Staffing Services, filed a class action complaint against Precise Distribution for alleged failure to provide required meal periods and rest breaks to employees, among other claims. Precise Distribution sought to compel arbitration based on an arbitration agreement between Soltero and Real Time. However, Real Time was not a party to the lawsuit.The Superior Court of San Bernardino County denied Precise Distribution's motion to compel arbitration. Precise Distribution argued that it should be able to compel arbitration under the agreement between Soltero and Real Time, despite not being a party to it, based on theories of equitable estoppel, third-party beneficiary, or agency.The Court of Appeal, Fourth Appellate District Division One State of California, affirmed the lower court's decision. The court concluded that Precise Distribution was not a party to the arbitration agreement between Soltero and Real Time and could not compel arbitration based on the theories it proposed. The court found that Soltero's claims against Precise Distribution were not dependent upon or founded in the underlying contractual obligations of the agreement containing the arbitration clause. Furthermore, Precise Distribution was not an intended third-party beneficiary of the arbitration agreement, and there was no evidence of an agency relationship between Precise Distribution and Real Time. Therefore, the court affirmed the order denying Precise Distribution's motion to compel arbitration. View "Soltero v. Precise Distribution" on Justia Law

The case involves PB Legacy, Inc., a Texas-based shrimp breeding company, and American Mariculture, Inc., a Florida-based company that operated a shrimp breeding facility. PB Legacy had a contract with American Mariculture to breed shrimp. However, PB Legacy failed to fulfill its contractual obligations, including removing its shrimp from the facility on time. When American Mariculture threatened to harvest the abandoned shrimp, PB Legacy sued in state court. After a failed attempt to resolve the dispute, American Mariculture used the shrimp to launch a competing company, American Penaeid, Inc. PB Legacy then sued American Mariculture, Penaeid, and their CEO, Robin Pearl, in federal court, alleging conversion, defamation, trade secret misappropriation, breach of contract, unfair competition, and unjust enrichment.The case proceeded to a jury trial in the United States District Court for the Middle District of Florida. During the trial, the district judge had to leave before the jury returned its verdict. The parties agreed to have a magistrate judge receive the verdict. However, the magistrate judge also responded to several jury questions and rejected a request for clarification about the verdict. The jury awarded $4.95 million in damages to PB Legacy on each of their federal and state trade secret claims. Post-trial motions were filed and denied.The case was appealed to the United States Court of Appeals for the Eleventh Circuit. The defendants argued that the magistrate judge lacked authority to preside over the last three days of trial because the parties did not consent to the magistrate judge’s exercise of Article III authority. The court agreed, stating that while the parties had consented to the magistrate judge receiving the verdict, they had not consented to the magistrate judge performing non-ministerial duties such as responding to jury questions and rejecting a request for clarification about the verdict. The court vacated the judgment, remanded for a new trial, and dismissed the cross-appeal as moot. View "TB Foods USA, LLC v. American Mariculture, Inc." on Justia Law

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