Justia Business Law Opinion Summaries

Plaintiffs sued Dentsply, Cavitron's manufacturer and marketer, on behalf of California dentists who purchased the Cavitron ultrasonic scaler for use during oral surgical procedures, under the Unfair Competition Law (UCL) (Bus. & Prof. Code, 17200) and for breach of express warranty. Plaintiffs claim that the Directions for Use indicate Cavitrons can be used in “[p]eriodontal debridement for all types of periodontal diseases,” which by implication included oral surgery; in fact, they cannot because the device accumulates biofilm in its waterlines and is incapable of delivering sterile water during surgical procedures. Following a remand, the trial court certified the class, conducted a bench trial, and rejected all claims. The court of appeal affirmed, agreeing that plaintiffs, as licensed dentists, were well aware that biofilm forms in all dental waterlines and that Cavitrons do not produce sterile water. The evidence failed to establish that the class was likely to be misled. The weight of the evidence established that dental professionals did not understand the warranty that the Cavitron was suitable for use in “[p]eriodontal debridement for all types of periodontal diseases,” as a statement that the Cavitron delivered sterile water or water without biofilm. View "Patricia A. Murray Dental Corp. v. Dentsply International., Inc." on Justia Law

The district court erred in ruling that the coguarantors of a loan were not entitled to contribution from other guarantors of an underlying debt because the funds used to make the payments on the debt were provided to them by their respective parents.Here, the parents of the coguarantors provided funds to their children to pay part of the underlying debt. The funds were placed in accounts owned or co-owned by the coguarantors, who then paid down a debt with funds drawn from these accounts. The coguarantors sought contribution from the other guarantors of the underlying debt. The district court and court of appeals ruled against the coguarantors. The Supreme Court vacated the decision of the court of appeals and reversed the judgment of the district court, holding that the coguarantors were entitled to contribution from other guarantors on the undisputed facts of this case. View "Shcharansky v. Shapiro" on Justia Law

Crystallex, a Canadian gold producer, owned the rights to Venezuela's Las Cristinas gold reserve. In 2011, Venezuela nationalized its gold mines and expropriated Crystallex’s rights. Crystallex initiated arbitration before the World Bank, claiming that Venezuela had violated a bilateral investment treaty with Canada. Venezuela was the sole defendant. The arbitrators found that Venezuela had breached the treaty and awarded Crystallex $1.202 billion. The district court confirmed the award (Federal Arbitration Act, 9 U.S.C. 1). Venezuela owns 100% of Petróleos de Venezuela, (PDVSA). PDVSA is allegedly Venezuela’s alter ego, a “national oil company through which Venezuela implements government policies.” PDVSA owns 100% of PDVH, which owns 100% of CITGO Holding, which owns 100% of CITGO Petroleum (Delaware corporations). Crystallex sued PDVH in Delaware, alleging that PDVH had violated the Delaware Uniform Fraudulent Transfer Act’s (DUFTA) prohibition against fraudulent transfers. The complaint alleged Venezuela orchestrated a series of debt offerings and asset transfers among PDVSA, PDVH, CITGO Holding, and CITGO Petroleum so that $2.8 billion in “dividends” ended up with PDVSA (Venezuela) outside the U.S. and could not be reached by Venezuela’s creditors. The court denied PDVH’s motion to dismiss, concluding that there had been a transfer “by a debtor.” The Third Circuit reversed, stating that it did not condone the debtor’s actions but that a transfer by a non-debtor (PDVH) cannot be a “fraudulent transfer” under DUFTA. View "Crystallex International Corp v. Petroleos de Venezuela SA" on Justia Law

In a letter opinion, the Delaware Court of Chancery denied a motion for reargument regarding the court's decision on HC's motion for partial summary judgment. The court held that Myers failed to demonstrate that the court misapprehended the law or facts because its arguments rehashed arguments it raised in its opposition to HC's motion; raised entirely new arguments; or raised arguments that reflected a misapprehension of the court's decision. The court rejected Myers' argument that the court "inexplicably" and incorrectly concluded that Myers' objection to HC's first claim did not apply to items that overlap in HC's first and second claim notices; that once Myers objected to an indemnification claim, HC could not "override" Myers' objection by making another claim; and that even if Myers "irrevocably waived the right to contest distribution" of the escrow property, it may still raise "defenses" to prevent "distribution of the entire escrow amount." View "The HC Companies, Inc. v. Myers Industries, Inc." on Justia Law

Plaintiff filed a verified complaint against West to inspect its books and records under Section 220 of the Delaware General Corporation Law (DGCL). The Delaware Court of Chancery held in this post-trial opinion that plaintiff has demonstrated, by a preponderance of the evidence, a credible basis from which the court can infer that wrongdoing related to the merger may have occurred. The court rejected West's argument that the Corwin doctrine would stand as an impediment to an otherwise properly supported demand for inspection under Section 220. The court explained that any contrary finding would invite defendants improperly to draw the court into adjudicating merits defenses to potential underlying claims in order to defeat otherwise properly supported Section 220 demands. Furthermore, the court should not prematurely adjudicate a Corwin defense when to do so might deprive a putative stockholder plaintiff of the ability to use Section 220 as a means to enhance the quality of his pleading. Therefore, the court ordered a judgment entered in favor of plaintiff and directed West to allow inspection of the books and records at issue. View "Lavin v. West Corp." on Justia Law

In a memorandum opinion, the Delaware Court of Chancery held that the Stock Purchase Agreement allowed Vestcom to claim the full amount of the transaction tax deductions (TTDs) pre-closing. The TTDs in this case arose from the sale of a manufacturer of retail shelving labels between sophisticated financial actors. After reviewing the evidence presented at trial, the court held that the Agreement allowed only one objectively reasonable meaning, namely that Vestcom was free to claim 100% of the TTDs to reduce pre-closing taxable income, but VPH would have to remit 50% of the value of any post-closing refunds or reductions in taxable income to LSVC. View "LSVC Holdings, LLC v. Vestcom Parent Holdings, Inc." on Justia Law

Debra Sands appealed the grant of summary judgment in favor of Menard, Inc. Sands and John Menard, Jr., were involved in a romantic relationship from late 1997 to April 2006. Sands alleged that from 1998 until 2006 she cohabitated with Menard and they engaged in a "joint enterprise" to work together and grow Menard's businesses for their mutual benefit. Menard and his affiliated entities argued that by failing to comply with Supreme Court Rule 20:1.8(a), which regulated business transactions between lawyers and their clients, Sands was precluded from seeking an ownership interest in any of Menard's various business ventures. As to the claim she characterized as a “Watts” unjust enrichment claim, the Wisconsin Supreme Court concluded Sands failed to allege facts which, if true, would support her legal conclusion that she and Menard had a joint enterprise that included accumulation of assets in which both she and Menard expected to share equally. Furthermore, the Court held SCR 20:1.8(a) could guide courts in determining required standards of care generally; however, it could not be used as an absolute defense to a civil claim involving an attorney. Finally, the Court concluded the court of appeals properly granted summary judgment to Sands on Menard, Inc.'s counterclaim for breach of fiduciary duty, and to the Trustees on their motion for summary judgment dismissing Sands' claim. View "Sands v. Menard, Jr." on Justia Law

After the dissolution of Gentix, a biotech research company established as a Delaware LLC with headquarters in Boston, Johnson and Rose, former Gentix board members and investors were found personally liable under G. L. c. 149, 148 (Wage Act), for failing to pay wages owed to the former president of Genitrix, Segal. On direct appellate review, the Massachusetts Supreme Judicial Court reversed, concluding that the Wage Act does not impose personal liability on board members, acting only in their capacity as board members, or investors engaged in ordinary investment activity. To impose such liability, the statute requires that the defendants be "officers or agents having the management" of a company, G. L. c. 149, 148. The defendants were not designated as company officers and had limited agency authority. The only officer having the management of the company was the plaintiff, not the defendants. View "Segal v. Genitrix, LLC" on Justia Law

Lincoln Land Company, LLC (“Lincoln Land”) appealed a district court’s judgment which dismissed Lincoln Land’s complaint. LP Broadband cross-appeals the district court’s denial of LP Broadband’s motion for attorney fees. The dispute arose over LP Broadband’s placement and use of antenna equipment on the rooftop of a grain silo owned by Lincoln Land, but leased to General Mills. General Mills had allowed MicroServ Computer Technologies, Inc., (“MicroServ”) (which merged with LP Broadband in 2013) to utilize the rooftop space on the property since March 2000, in exchange for $50 per month. Lincoln Land subsequently purchased the grain silos and, in 2010, executed a lease agreement with General Mills, which specifically prohibited a sublease of the property without prior written consent from Lincoln Land. Notwithstanding the lease provision, General Mills continued to sublease the rooftop space to LP Broadband. Upon discovering that LP Broadband was using the rooftop space, Lincoln Land filed a complaint against LP Broadband for unjust enrichment. Therein, Lincoln Land argued that it had conferred a benefit to LP Broadband and that it would be inequitable for LP Broadband to retain such a benefit without compensating Lincoln Land. The district court dismissed the complaint after concluding that Lincoln Land failed to establish that it, not General Mills, had conferred the benefit to LP Broadband. Finding no reversible error in the district court judgment, the Idaho Supreme Court affirmed. View "Lincoln Land Co v. LP Broadband" on Justia Law

The oral agreement at issue in this appeal was made in connection with a transaction by which three companies, of which Albert Kanno was the majority shareholder, were sold to two Delaware corporations. The transaction was documented principally by three writings, each of which had an integration clause. A jury found in favor of Kanno and against Marwit Capital Partners II, L.P. (Marwit Capital) and Marwit Partners, LLC (Marwit LLC) on Kanno’s claim for breach of the oral agreement. After the jury rendered its verdict, the trial court concluded the parol evidence rule did not bar Kanno’s breach of contract claim and that the oral agreement was enforceable. Marwit Capital and Marwit LLC (together, Marwit) appealed. The Court of Appeal concluded the three written agreements were at most partial integrations, and, therefore, the oral agreement was enforceable if its terms did not directly contradict and were consistent with those three agreements, and the Court found no direct contradiction or inconsistency. View "Kanno v. Marwit Capital Partners II" on Justia Law