Justia Business Law Opinion Summaries

In 2014, Traci Salinas and Sharon Lee Stark, as shareholders of Sterne Agee Group, Inc. ("SAG") filed a shareholder-derivative action, on behalf of nominal defendant SAG, against James and William Holbrook and the nonHolbrook directors, who together composed the SAG board of directors. Salinas and Stark alleged that the Holbrooks had breached their fiduciary duty to the SAG shareholders by misusing, misappropriating, and wasting corporate assets and that the non-Holbrook directors had knowledge of, and had acquiesced in, the Holbrooks' alleged misconduct. In 2015, while Salinas and Stark's action was pending, SAG entered into a merger agreement with Stifel Financial Corp. ("Stifel") pursuant to which Stifel would acquire SAG ("the merger"). As a result of the merger, each share of certain classes of SAG stock was to be converted into a right of the shareholder to receive a pro rata share of merger consideration in cash and/or shares of Stifel common stock. The Holbrooks moved for summary judgment in which they argued that, under Delaware law, when a plaintiff in a shareholder-derivative action ceases to be a shareholder of the corporation on whose behalf the action was brought, the shareholder was divested of standing to continue prosecuting the derivative action. Thus, the Holbrooks argued, because Salinas and Wainwright were no longer SAG shareholders following the merger, they lacked standing to prosecute their derivative action and, the argument continued, the Holbrooks were entitled to a judgment as a matter of law. In response, Salinas and Wainwright amended their complaint to allege that a merger "cannot absolve fiduciaries from accountability for fraudulent conduct that necessitated the merger." Rather, they maintained, "such conduct gives rise to a direct claim that survives the merger, as the injury caused by such misconduct is suffered by the shareholders rather than the corporation, and thereby supports a direct cause of action." Subsequently, the parties filed a stipulation of dismissal in which they dismissed Salinas from the action, leaving Wainwright as the sole plaintiff. The Alabama Supreme Court determined that a May 2017 trial court order did not come within the subject-matter-jurisdiction exception to the general rule that the denial of a motion to dismiss or a motion for a summary judgment was not reviewable by petition for a writ of mandamus. “The petitioners have an adequate remedy by way of appeal should they suffer an adverse judgment. Accordingly, we deny the petitions.” View "Ex parte Jon S. Sanderson et al." on Justia Law

The New Hampshire Banking Department (Department) initiated an adjudicative proceeding against CashCall, Inc. (CashCall), WS Funding, LLC (WS Funding), and John Paul Reddam, for violations of RSA chapter 399-A (2006 & Supp. 2012) (repealed and reenacted 2015). Reddam is the president and chief executive officer of CashCall, a lending and loan services corporation headquartered and incorporated in California. Reddam owned all of CashCall’s corporate stock. Reddam was also the president of WS Funding, a wholly owned subsidiary of CashCall. WS Funding was a Delaware limited liability company with a principal place of business in California. CashCall appeared to be engaged in the business of purchasing and servicing small loans or “payday loans” in association with Western Sky Financial. Neither Reddam, CashCall, nor WS Funding was licensed under RSA chapter 399-A to issue small loans in New Hampshire. In June 2013, after analyzing and reviewing CashCall’s responses to an administrative subpoena duces tecum and reviewing the business relationships among CashCall, WS Funding, and Western Sky Financial, the Department issued a cease and desist order to CashCall, WS Funding, and Reddam. In the cease and desist order, the Department found that either CashCall, or WS Funding, was the “actual” or “de facto” lender for the payday and small loans, and that Western Sky Financial was a front for the respondents’ unlicensed activities. Reddam challenged the Department’s denial of his motion to dismiss for lack of personal jurisdiction. The New Hampshire Supreme Court determined the Department made a prima facie showings that: (1) Reddam’s contacts related to the Department’s cause of action; (2) he purposefully availed himself of the protection of New Hampshire law; and (3) it was fair and reasonable to require him to defend suit in New Hampshire. The Court therefore found no due process violation in the Department’s exercise of specific personal jurisdiction over Reddam. View "Petition of John Paul Reddam" on Justia Law

The plaintiffs were four companies with common owners and operators: Halifax-American Energy Company, LLC; PNE Energy Supply, LLC (PNE); Resident Power Natural Gas & Electric Solutions, LLC (Resident Power); and Freedom Logistics, LLC d/b/a Freedom Energy Logistics, LLC (collectively, the “Freedom Companies”). The defendants were three companies and their owners: Provider Power, LLC; Electricity N.H., LLC d/b/a E.N.H. Power; Electricity Maine, LLC; Emile Clavet; and Kevin Dean (collectively, the “Provider Power Companies”). The Freedom Companies and the Provider Power Companies were engaged in the same business, arranging for the supply of electricity and natural gas to commercial and residential customers in New Hampshire and other New England states. The parties’ current dispute centered on a Freedom Company employee whom the defendants hired, without the plaintiffs’ knowledge, allegedly to misappropriate the plaintiffs’ confidential and proprietary information. According to plaintiffs, defendants used the information obtained from the employee to harm the plaintiffs’ business by improperly interfering with their relationships with their customers and the employee. A jury returned verdicts in plaintiffs’ favor on many of their claims, including those for tortious interference with customer contracts, tortious interference with economic relations with customers, tortious interference with the employee’s contract, and misappropriation of trade secrets. The jury awarded compensatory damages to plaintiffs on each of these claims, except the misappropriation of trade secrets claim, and included in the damages award attorney’s fees incurred by plaintiffs in prior litigation against the employee for his wrongful conduct. Subsequently, the trial court awarded attorney’s fees to the plaintiffs under the New Hampshire Uniform Trade Secrets Act (NHUTSA). On appeal, defendants challenged: (1) the jury’s verdicts on plaintiffs’ claims for tortious interference with customer contracts and the employee’s contract; (2) the jury’s award of damages for tortious interference with customer contracts and tortious interference with economic relations, and its inclusion in that award of the attorney’s fees incurred in the plaintiffs’ prior litigation against the employee; and (3) the trial court’s award of attorney’s fees to plaintiffs under the NHUTSA. Finding no reversible error, the New Hampshire Supreme Court affirmed. View "Halifax-American Energy Company, LLC v. Provider Power, LLC" on Justia Law

In this dispute between retailers and direct competitors in the gas station and convenience store market, the circuit court correctly determined that W. Va. Code 47-11A-6(a) does not include taxes in the calculation of a retailer’s cost under the West Virginia Unfair Practices Act.Plaintiff filed suit against Defendants alleging that Defendants had violated the Act by selling gasoline below cost. Both parties moved for summary judgment seeking a determination as to whether section 47-11A-6(a) includes taxes within the calculation of a retailer’s cost. The circuit court concluded that the calculation of a retailer’s cost does not include tax and awarded summary judgment to Defendants. The Supreme Court affirmed, holding that the statute does not include taxes in the calculation of a retailer’s cost. View "Alan Enterprizes LLC v. Mac's Convenience Stores LLC" on Justia Law

In this dispute between retailers and direct competitors in the gas station and convenience store market, the circuit court correctly determined that W. Va. Code 47-11A-6(a) does not include taxes in the calculation of a retailer’s cost under the West Virginia Unfair Practices Act.Plaintiff filed suit against Defendants alleging that Defendants had violated the Act by selling gasoline below cost. Both parties moved for summary judgment seeking a determination as to whether section 47-11A-6(a) includes taxes within the calculation of a retailer’s cost. The circuit court concluded that the calculation of a retailer’s cost does not include tax and awarded summary judgment to Defendants. The Supreme Court affirmed, holding that the statute does not include taxes in the calculation of a retailer’s cost. View "Alan Enterprizes LLC v. Mac's Convenience Stores LLC" on Justia Law

Purchasers of egg products accused suppliers of conspiring to reduce the supply of eggs and increase the price for egg products in violation of the Sherman Act, 15 U.S.C. 1. Plaintiffs alleged that the producers conspired to reduce the population of egg-laying hens, resulting in a reduced supply of eggs and, given the inelasticity of demand, supra-competitive prices. A trade association coordinated a certification program under which participants had to increase their cage sizes and not replace hens that died. Plaintiffs alleged that the proffered animal welfare rationale was a pretext to reduce supply. The district court, citing a bar on indirect purchaser actions, concluded that the purchaser-plaintiffs lacked standing. The Third Circuit reversed. As a matter of first impression, a direct purchaser of a product that includes a price-fixed input has antitrust standing to pursue a claim against the party that sold the product to the purchaser, where the seller is a participant in the price-fixing conspiracy, but the product also includes some price-fixed input supplied by a third-party non-conspirator. The direct relationship between the purchasers and their suppliers and the fact that the suppliers are alleged price-fixing conspirators, not merely competitors of those conspirators, are key factors. Regardless of who collected the overcharge, the purchasers’ econometric analysis purports to show the “difference between the actual [supracompetitive] price and the presumed competitive price” of the egg products they purchased. This purported difference, and the purchasers’ resulting injury, was allegedly a direct and intended result of the suppliers’ conspiracy. View "In Re: Processed Egg Products Antitrust Litigation" on Justia Law

While Beebe and Lucas Roh were at Starbucks on Rush Street in Chicago, with their sons, five-year-old Alexander and three-year-old Marcus, a wood and metal stanchion, part of a grouping intended to direct customers, fell onto Marcus’s finger, which had to be amputated that same day. Beebe sued. The district court granted summary judgment in favor of Starbucks. The Seventh Circuit affirmed. Any duty Starbucks may have owed Marcus was abrogated by his parents’ presence with him in Starbucks at the time of the accident. The boys were playing on the rope and stanchions. HIs parents had the duty to protect them from the obvious danger posed by playing on the unsecured stanchions, even if the parents were unable to foresee the particular injury that resulted. View "Roh v. Starbucks Corp." on Justia Law

While Beebe and Lucas Roh were at Starbucks on Rush Street in Chicago, with their sons, five-year-old Alexander and three-year-old Marcus, a wood and metal stanchion, part of a grouping intended to direct customers, fell onto Marcus’s finger, which had to be amputated that same day. Beebe sued. The district court granted summary judgment in favor of Starbucks. The Seventh Circuit affirmed. Any duty Starbucks may have owed Marcus was abrogated by his parents’ presence with him in Starbucks at the time of the accident. The boys were playing on the rope and stanchions. HIs parents had the duty to protect them from the obvious danger posed by playing on the unsecured stanchions, even if the parents were unable to foresee the particular injury that resulted. View "Roh v. Starbucks Corp." on Justia Law

Meyer, a disbarred lawyer, owns JHM, which installed and maintained laundry machines in apartment buildings; Dolphin, which sold commercial laundry equipment to JHM and others; and JH Meyer, which operated a laundry facility. In 2012-2013, Firestone financed JHM’s business with loans totaling about $250,000. Because JHM obtained its equipment from Dolphin, the loans actually financed Dolphin’s purchases from the manufacturer. Firestone retained a security interest in JHM’s assets. Dolphin, JH Meyer, and Meyer guaranteed JHM’s loan obligations. In 2013 Firestone sued JHM for default and sued Meyer, Dolphin, and JH Meyer under the guarantees. The defendants raised the affirmative defense and counterclaim of promissory estoppel, asserting that after Firestone issued JHM two loans, Firestone’s Vice President McAllister told Meyer that Firestone would set up a $500,000 line of credit for JHM and that, until the line of credit was established, Firestone would finance “any” equipment that JHM needed on “identical terms” to the first two loans. Firestone subsequently issued the third loan. After McAllister left Firestone, Firestone’s CEO approved the final loan. The defendants assert that Firestone’s refusal to issue further loans harmed them. The Seventh Circuit affirmed summary judgment in favor of Firestone. Meyer’s allegations were implausible because no financial firm would commit orally to loaning substantial sums to a startup. Meyer conceded that he “made no payments” to Firestone. A reasonable jury could not conclude that Meyer has satisfied any of the elements of promissory estoppel. View "Firestone Financial Corp. v. Meyer" on Justia Law

Petitioner Apple, Inc. (Apple) is the defendant in a putative class action filed by plaintiffs and real parties in interest Anthony Shamrell and Daryl Rysdyk. In their operative complaint, plaintiffs alleged that Apple's iPhone 4, 4S, and 5 smartphones were sold with a defective power button that began to work intermittently or fail entirely during the life of the phones. Plaintiffs alleged Apple knew of the power button defects based on prerelease testing and postrelease field failure analyses, yet Apple began selling the phones and continued to sell the phones notwithstanding the defect. The trial court granted plaintiffs' motion for class certification but expressly refused to apply Sargon Enterprises, Inc. v. University of Southern California, 55 Cal.4th 747 (2012) to the declarations submitted by plaintiffs' experts. The trial court believed it was not required to assess the soundness of the experts' materials and methodologies at this stage of the litigation. The Court of Appeals determined that belief was in error, and a prejudicial error. “Sargon applies to expert opinion evidence submitted in connection with a motion for class certification. A trial court may consider only admissible expert opinion evidence on class certification, and there is only one standard for admissibility of expert opinion evidence in California. Sargon describes that standard.” The Court of Appeal directed the trial court to vacate its order granting plaintiffs' motion for class certification and reconsider the motion under the governing legal standards, including Sargon. View "Apple Inc. v. Superior Court" on Justia Law