Justia Business Law Opinion Summaries

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

After RAC Acceptance East, LLC swore out a warrant for Mira Brown’s arrest for theft by conversion of furniture that she had rented from RAC, Brown filed a lawsuit against RAC alleging malicious prosecution and other torts. The trial court entered an order granting RAC’s motion to compel Brown to arbitrate her claims pursuant to the arbitration agreement incorporated into the parties’ rental agreement. The Court of Appeals affirmed that order, concluding that whether RAC had waived its right to demand arbitration by its conduct in initiating the related criminal proceeding against Brown was a matter for the court to decide and that the trial court had correctly ruled that RAC did not waive arbitration. The Georgia Supreme Court granted certiorari, and affirmed the Court of Appeals’ judgment on the ground that the delegation provision in the parties’ arbitration agreement clearly gave the arbitrator, not the courts, the authority to determine that RAC did not waive by prior litigation conduct its right to seek arbitration, and the arbitrator’s decision on the waiver question could not be properly challenged as legally erroneous. View "Brown v. RAC Acceptance East, LLC" on Justia Law

After RAC Acceptance East, LLC swore out a warrant for Mira Brown’s arrest for theft by conversion of furniture that she had rented from RAC, Brown filed a lawsuit against RAC alleging malicious prosecution and other torts. The trial court entered an order granting RAC’s motion to compel Brown to arbitrate her claims pursuant to the arbitration agreement incorporated into the parties’ rental agreement. The Court of Appeals affirmed that order, concluding that whether RAC had waived its right to demand arbitration by its conduct in initiating the related criminal proceeding against Brown was a matter for the court to decide and that the trial court had correctly ruled that RAC did not waive arbitration. The Georgia Supreme Court granted certiorari, and affirmed the Court of Appeals’ judgment on the ground that the delegation provision in the parties’ arbitration agreement clearly gave the arbitrator, not the courts, the authority to determine that RAC did not waive by prior litigation conduct its right to seek arbitration, and the arbitrator’s decision on the waiver question could not be properly challenged as legally erroneous. View "Brown v. RAC Acceptance East, LLC" on Justia Law

In this action arising out of a reclassification of the shares of NRG Yield, Inc. (“Yield”), a stockholder alleged that members of the Yield board breached their fiduciary duties by approving the reclassification and that NRG Energy, Inc. (“NRG”), which managed Yield’s daily affairs, breached its fiduciary duty by causing Yield to undertake the reclassification. The Court of Chancery dismissed the complaint for failure to state a claim for relief, holding (1) the reclassification was a conflicted transaction subject to entire fairness review; (2) the analytical framework articulated in Kahn v. M&F Worldwide Corp., 88 A.3d 635 (Del. 2014), applied to the reclassification; and (3) that framework was satisfied in this case from the face of the pleadings. View "IRA Trust FBO Bobbie Ahmed v. Crane" on Justia Law

A “pickle line” processes hot rolled steel coil through acid tanks to remove impurities. In 2006, Toll purchased a used pickle line, in need of repair. Kastalon had previously serviced the machine. In 2008, Kastalon agreed to move and store the machine, at no cost, until Toll could order reconditioning. Both parties believed that Toll would move the equipment within months; they did not discuss a specific timeframe. For two years, Kastalon stored the equipment indoors. Toll negotiated with various companies, to run or sell the equipment, but was not in communication with Kastalon. Kastalon eventually greased and wrapped the equipment before moving it to outside storage under tarps. Toll employees with whom Kastalon had communicated were laid off. Kastalon thought that Toll had gone out of business and that the equipment had been abandoned. Kastalon had the equipment scrapped, without inspecting it, and received $6,380.80. In June 2011, Toll requested a price for reconditioning and learned that they had been scrapped. Toll obtained quotes for replacement: the lowest was about $416,655. Toll sued. The Seventh Circuit reversed, in part, summary judgment entered in favor of Kastalon. A reasonable jury could conclude that Toll’s prolonged silence, alone, did not constitute unambiguous evidence of intent to abandon. The court did not consider whether Kastalon had an extra-contractual duty not to dispose of the equipment or Kastalon’s evidence that the loss was not due to Kastalon’s failure to exercise reasonable care. Affirming rejection of a contract claim, the court stated the parties’ oral agreement was not sufficiently definite as to duration. View "Toll Processing Services, LLC v. Kastalon, Inc." on Justia Law

A “pickle line” processes hot rolled steel coil through acid tanks to remove impurities. In 2006, Toll purchased a used pickle line, in need of repair. Kastalon had previously serviced the machine. In 2008, Kastalon agreed to move and store the machine, at no cost, until Toll could order reconditioning. Both parties believed that Toll would move the equipment within months; they did not discuss a specific timeframe. For two years, Kastalon stored the equipment indoors. Toll negotiated with various companies, to run or sell the equipment, but was not in communication with Kastalon. Kastalon eventually greased and wrapped the equipment before moving it to outside storage under tarps. Toll employees with whom Kastalon had communicated were laid off. Kastalon thought that Toll had gone out of business and that the equipment had been abandoned. Kastalon had the equipment scrapped, without inspecting it, and received $6,380.80. In June 2011, Toll requested a price for reconditioning and learned that they had been scrapped. Toll obtained quotes for replacement: the lowest was about $416,655. Toll sued. The Seventh Circuit reversed, in part, summary judgment entered in favor of Kastalon. A reasonable jury could conclude that Toll’s prolonged silence, alone, did not constitute unambiguous evidence of intent to abandon. The court did not consider whether Kastalon had an extra-contractual duty not to dispose of the equipment or Kastalon’s evidence that the loss was not due to Kastalon’s failure to exercise reasonable care. Affirming rejection of a contract claim, the court stated the parties’ oral agreement was not sufficiently definite as to duration. View "Toll Processing Services, LLC v. Kastalon, Inc." on Justia Law

In this case, the plaintiff, a stockholder of C&J Energy Services, Inc. (“C&J”), was precluded from targeting a particular stockholder to pay a fee award when the alleged benefit redounded to the benefit of all stockholders.Here, Plaintiff sought an award of attorneys’ fees for Plaintiff’s alleged role in reducing the amount of cash that C&J needed to pay Nabors Industries Ltd. in connection with a certain transaction. The beneficiary of the price reduction was C&J and, indirectly, all of its stockholders. Plaintiff asked the court to require that the estate of Joshua Comstock, who was C&J’s CEO and chairman of the board, to pay the full amount of any fee award. The Court of Chancery denied Plaintiff’s application because (1) Defendants successfully rebutted the presumption that Plaintiff’s litigation efforts caused the price reduction; and (2) Plaintiff’s demand that Comstock’s estate - or any of C&J’s other directors - pay a fee award would be inequitable and was inconsistent with the rationale of the corporate benefit doctrine. View "City of Miami General Employees' & Sanitation Employees' Retirement Trust v. C&J Energy Services, Inc." on Justia Law

In this case, the plaintiff, a stockholder of C&J Energy Services, Inc. (“C&J”), was precluded from targeting a particular stockholder to pay a fee award when the alleged benefit redounded to the benefit of all stockholders.Here, Plaintiff sought an award of attorneys’ fees for Plaintiff’s alleged role in reducing the amount of cash that C&J needed to pay Nabors Industries Ltd. in connection with a certain transaction. The beneficiary of the price reduction was C&J and, indirectly, all of its stockholders. Plaintiff asked the court to require that the estate of Joshua Comstock, who was C&J’s CEO and chairman of the board, to pay the full amount of any fee award. The Court of Chancery denied Plaintiff’s application because (1) Defendants successfully rebutted the presumption that Plaintiff’s litigation efforts caused the price reduction; and (2) Plaintiff’s demand that Comstock’s estate - or any of C&J’s other directors - pay a fee award would be inequitable and was inconsistent with the rationale of the corporate benefit doctrine. View "City of Miami General Employees' & Sanitation Employees' Retirement Trust v. C&J Energy Services, Inc." on Justia Law

P&P Industries, LLC, d/b/a United Oilfield Services, and Pauper Industries, Inc., appealed a judgment entered in favor of Continental Resources, Inc., after a jury returned a verdict finding United and Pauper's conduct constituted fraud but they did not breach their contracts with Continental. Continental was an oil producer; United and Pauper provided transportation, water hauling, and related services and materials to Continental in North Dakota. Pauper signed a Master Service Contract with Continental, and United signed a Master Service Contract. Continental sued United and Pauper, seeking damages for claims of breach of contract, tortious breach of contract, breach of fiduciary duty, fraud, and deceit. Continental alleged United and Pauper violated state and federal limits and regulations on the number of hours a truck driver may drive; they violated Continental's employee policies, and engaged in improper and fraudulent billing. After a hearing, the district court denied United's motion for summary judgment on Continental's claims; denied Continental's motion for summary judgment on United's breach of contract, promissory estoppel, and tortious breach of contract counterclaims; and denied Continental's motion for summary judgment on its fraud and breach of contract claims. The court granted Continental's motion for summary judgment against United's breach of fiduciary duty and constructive fraud counterclaims. The court also granted summary judgment on Continental's motion related to damages and ruled, if United prevailed at trial, its damages would be limited to the net profits it could have earned during the 30-day termination notice period, overall expenses of preparation, and its expenses in pursuit of reasonable efforts to avoid or minimize the damaging effects of the breach. United unsuccessfully moved for reconsideration of the damages issue. A jury trial was held. In deciding Continental's claims, the jury found neither United nor Pauper breached its contract obligations to Continental, both United and Pauper's conduct was fraudulent or accompanied by fraud, both United and Pauper's conduct was deceitful or accompanied by deceit, and the jury awarded Continental $2,415,000 in damages for its claims against United but did not award Continental any damages for its claims against Pauper. In deciding United's counterclaims, the jury found Continental breached its contract with United, but Continental was excused from performing based on United's prior material breach, United's failure to perform a condition precedent, United's fraud or deceit, and equitable estoppel. Judgment on the jury's findings was entered against Pauper. Continental was awarded its costs and disbursements against United and Pauper, jointly and severally. United and Pauper argued on appeal to the North Dakota Supreme Court that the verdicts were inconsistent and the district court erred in limiting the amount of damages United could seek on its counterclaim. The Supreme Court reversed, finding the "verdict is inconsistent and perverse and cannot be reconciled." The matter was remanded for a new trial. View "Continental Resources, Inc. v. P&P Industries, LLC I" on Justia Law

P&P Industries, LLC, d/b/a United Oilfield Services, and Pauper Industries, Inc., appealed a judgment entered in favor of Continental Resources, Inc., after a jury returned a verdict finding United and Pauper's conduct constituted fraud but they did not breach their contracts with Continental. Continental was an oil producer; United and Pauper provided transportation, water hauling, and related services and materials to Continental in North Dakota. Pauper signed a Master Service Contract with Continental, and United signed a Master Service Contract. Continental sued United and Pauper, seeking damages for claims of breach of contract, tortious breach of contract, breach of fiduciary duty, fraud, and deceit. Continental alleged United and Pauper violated state and federal limits and regulations on the number of hours a truck driver may drive; they violated Continental's employee policies, and engaged in improper and fraudulent billing. After a hearing, the district court denied United's motion for summary judgment on Continental's claims; denied Continental's motion for summary judgment on United's breach of contract, promissory estoppel, and tortious breach of contract counterclaims; and denied Continental's motion for summary judgment on its fraud and breach of contract claims. The court granted Continental's motion for summary judgment against United's breach of fiduciary duty and constructive fraud counterclaims. The court also granted summary judgment on Continental's motion related to damages and ruled, if United prevailed at trial, its damages would be limited to the net profits it could have earned during the 30-day termination notice period, overall expenses of preparation, and its expenses in pursuit of reasonable efforts to avoid or minimize the damaging effects of the breach. United unsuccessfully moved for reconsideration of the damages issue. A jury trial was held. In deciding Continental's claims, the jury found neither United nor Pauper breached its contract obligations to Continental, both United and Pauper's conduct was fraudulent or accompanied by fraud, both United and Pauper's conduct was deceitful or accompanied by deceit, and the jury awarded Continental $2,415,000 in damages for its claims against United but did not award Continental any damages for its claims against Pauper. In deciding United's counterclaims, the jury found Continental breached its contract with United, but Continental was excused from performing based on United's prior material breach, United's failure to perform a condition precedent, United's fraud or deceit, and equitable estoppel. Judgment on the jury's findings was entered against Pauper. Continental was awarded its costs and disbursements against United and Pauper, jointly and severally. United and Pauper argued on appeal to the North Dakota Supreme Court that the verdicts were inconsistent and the district court erred in limiting the amount of damages United could seek on its counterclaim. The Supreme Court reversed, finding the "verdict is inconsistent and perverse and cannot be reconciled." The matter was remanded for a new trial. View "Continental Resources, Inc. v. P&P Industries, LLC I" on Justia Law