Justia Business Law Opinion Summaries

In a dispute between SmartSky Networks, LLC and DAG Wireless, Ltd., DAG Wireless USA, LLC, Laslo Gross, Susan Gross, Wireless Systems Solutions, LLC, and David D. Gross over alleged breach of contract, trade secret misappropriation, and deceptive trade practices, the United States Court of Appeals for the Fourth Circuit ruled that the district court did not have the jurisdiction to enforce an arbitration award. Initially, the case was stayed by the district court pending arbitration. The arbitration tribunal found in favor of SmartSky and issued an award, which SmartSky sought to enforce in district court. The defendants-appellants argued that, based on the Supreme Court decision in Badgerow v. Walters, the district court lacked subject matter jurisdiction to enforce the arbitration award. The Fourth Circuit agreed, noting that a court must have a basis for subject matter jurisdiction independent from the Federal Arbitration Act (FAA) and apparent on the face of the application to enforce or vacate an arbitration award. The court concluded that the district court did not have an independent basis of subject matter jurisdiction to confirm the arbitration award. As such, the court reversed and remanded the case to the district court for further proceedings. View "Smartsky Networks, LLC v. DAG Wireless, LTD." on Justia Law

In this case, Plaintiff-Appellant Lazy S Ranch Properties, LLC (Lazy S) filed a lawsuit against Defendants-Appellees Valero Terminaling and Distribution Company and related entities (collectively, Valero), alleging that Valero's pipeline leaked and caused contamination on Lazy S's property. The United States Court of Appeals for the Tenth Circuit reversed in part and affirmed in part the district court's grant of summary judgment in favor of Valero.Lazy S runs cattle operations on a large property in Oklahoma, beneath which several pipelines transport hydrocarbons. In 2018, a representative of the ranch noticed a diesel fuel odor emanating from a cave near a water source on the property. Samples were taken and tested, and these tests revealed trace amounts of refined petroleum products in soil, surface water, groundwater, spring water, and air on the ranch.Lazy S brought several claims against Valero, including private nuisance, public nuisance, negligence per se, and negligence. The district court granted summary judgment in favor of Valero, holding that Lazy S did not present sufficient evidence to establish a legal injury or causation.On appeal, the Tenth Circuit found that Lazy S had presented sufficient evidence to create a genuine issue of material fact as to legal injury on its claims of private nuisance, public nuisance, and negligence per se. The court noted that Lazy S had presented evidence of a strong odor emanating from a cave near a water source on the property, headaches suffered by individuals due to the odor, and changes in behavior due to the odor. As such, a rational trier of fact could conclude that the odor injured the ranch.The Tenth Circuit also found that Lazy S had presented sufficient evidence to create a genuine issue of material fact as to causation. The court noted that the pipeline was a major source of potential contamination beneath the ranch, that it had leaked in the past, and that a pathway existed for hydrocarbons to travel from the pipeline to the water source.The Tenth Circuit affirmed the district court's grant of summary judgment on Lazy S's claims of constructive fraud and trespass, finding that Lazy S had not presented sufficient evidence to support these claims.The court remanded the case to the district court for trial on the issues of negligence per se, private nuisance, and public nuisance, including Lazy S's claims for damages. View "Lazy S Ranch Properties v. Valero Terminaling and Distribution" on Justia Law

In the case before the Court of Chancery of the State of Delaware, the plaintiff, West Palm Beach Firefighters' Pension Fund, filed a lawsuit against Moelis & Company on behalf of itself and other Class A stockholders of Moelis & Company. In 2014, Moelis & Company had entered into a stockholders agreement with three entities controlled by its CEO, Ken Moelis. The plaintiff argued that certain provisions in that agreement, which granted expansive rights to Ken Moelis, violated Section 141(a) of the Delaware General Corporation Law (DGCL).The Court found that the plaintiff's claims were not non-justiciable due to the plaintiff both suing too late and too early. The Court rejected the defendant's arguments that the plaintiff waited too long to file the lawsuit under the doctrine of laches, as the plaintiff's challenge to the legality of the provisions in the stockholders agreement was not time-barred. The Court also rejected the defendant's argument that the plaintiff sued too early, stating that the plaintiff could bring a facial challenge to the legality of the provisions in the agreement.The Court denied the defendant's motion for summary judgment on the basis of laches and ripeness. The Court held that the plaintiff's claim was ripe for adjudication and was not barred by the equitable defense of laches. The Court concluded that neither the passing of time nor the act of purchasing shares could validate a provision that is void as a violation of statutory law. The Court's decision is significant in affirming that claims challenging the validity of provisions in a corporate document that are contrary to statutory law are justiciable and cannot be barred by laches or ripeness defenses. The case now continues for further proceedings. View "West Palm Beach Firefighters' Pension Fund v. Moelis & Company" on Justia Law

A fatal car crash led to a lawsuit against two Indiana restaurants that had served alcohol to the intoxicated driver responsible for the accident. The estate of the deceased sued the restaurants for negligence, arguing that they should have known the driver was visibly intoxicated and should not have allowed him to drive. The restaurants argued that the Indiana Dram Shop Act, which provides civil liability for establishments that serve alcohol to visibly intoxicated individuals who later cause injuries, eliminated any independent common-law liability. Therefore, they contended that the negligence claim should be dismissed.The Indiana Supreme Court held that the Dram Shop Act did not eliminate common-law liability, but rather modified it. The court ruled that claims against establishments that serve alcohol must still satisfy the requirements of the Dram Shop Act, namely that the server must have actual knowledge of the individual's visible intoxication, and that the individual's intoxication must be a proximate cause of the injury or damage. The court found that the estate's negligence claim met these requirements and therefore, the negligence claim was valid and could proceed. The court affirmed the lower court's decision to deny the restaurants' motion to dismiss the negligence claim. View "WEOC v. Adair" on Justia Law

The City of Richmond Heights, Missouri filed a claim with Mt. Hawley Insurance Company under a commercial property policy for losses of tax revenue due to government-mandated COVID-19 closures. Mt. Hawley denied the claim and sued for a declaratory judgment that it was not obligated to cover the losses. Richmond Heights counterclaimed with five counts: (1) breach of contract, (2) vexatious refusal to pay, (3) fraudulent inducement and misrepresentation, (4) negligent misrepresentation, and (5) breach of fiduciary duty. The United States District Court for the Eastern District of Missouri dismissed the counterclaims, denied amendments to two of them, and granted declaratory judgment to Mt. Hawley. On appeal, the United States Court of Appeals for the Eighth Circuit affirmed the decision of the lower court.The appellate court held that the insurance policy required "direct physical loss of or damage to property" for coverage which was not met by the COVID-19 shutdowns. The court also rejected the city's argument that the Additional Covered Property Endorsement in the policy removed the "physical damage or loss" requirement for losses of sales tax revenues. Furthermore, the court found that the city's claims of fraud, misrepresentation and breach of fiduciary duty were not distinct from its breach of contract claim and thus were properly dismissed by the district court. Lastly, the court affirmed the district court's denial of the city's motion to amend its breach of contract and vexatious refusal claims, concluding that the proposed amendments would not have survived a motion to dismiss. View "Mt. Hawley Insurance Company v. City of Richmond Heights" on Justia Law

In this case, BioCorRx, Inc., a publicly traded company engaged in providing addiction treatment services and related medication, was involved in a dispute with VDM Biochemicals, Inc., a company specializing in chemical synthesis and distribution. The dispute arose from a business relationship in which BioCorRx intended to partner with VDM to develop and commercialize a compound for treating opioid overdose, known as VDM-001. BioCorRx issued several press releases, allegedly making misrepresentations and improperly disclosing confidential information about the development of VDM-001. VDM filed a cross-complaint against BioCorRx and its president, Brady Granier, for breach of contract, fraud, and violation of trade secrets among other claims. In response, BioCorRx and Granier filed a motion to strike the allegations based on the anti-SLAPP statute, arguing that the press releases were protected speech under the statute.The Court of Appeal of the State of California, Fourth Appellate District, Division Three, ruled that the press releases fell within the commercial speech exemption of the anti-SLAPP statute, as they were representations about BioCorRx’s business operations made to promote its goods and services to investors. As such, these statements were not protected by the anti-SLAPP statute. Consequently, the court reversed the portion of the trial court’s order granting the anti-SLAPP motion as to the press releases. However, the court affirmed the portion of the order granting the anti-SLAPP motion as to Brady Granier, BioCorRx’s president, due to insufficient argument presented against this part of the ruling. View "BioCorRx, Inc. v. VDM Biochemicals, Inc." on Justia Law

The United States Court of Appeals for the Fifth Circuit reviewed a case involving the Cenikor Foundation, a nonprofit drug rehabilitation center. The foundation had been sued by a group of its rehabilitation patients for alleged violations of the Fair Labor Standards Act (FLSA). The patients contended that they were effectively employees of the foundation, as they were required to work as part of their treatment program without receiving monetary compensation. The foundation contested the lawsuit and appealed a district court's decision to certify the case as a collective action under the FLSA.The Court of Appeals found that the district court had applied the incorrect legal standard in determining whether the patients were employees under the FLSA. Specifically, the court should have applied a test to determine who was the primary beneficiary of the work relationship, rather than a test typically used to distinguish employees from independent contractors.The appellate court remanded the case back to the district court to apply this primary beneficiary test and to consider the foundation's defense that any benefits provided to the patients offset any requirement to pay them a wage. The court emphasized that the question of whether the foundation's patients were employees under the FLSA was a threshold issue that needed to be resolved before the case could proceed as a collective action. View "Klick v. Cenikor Foundation" on Justia Law

In this case before the United States Court of Appeals for the Eighth Circuit, Jet Midwest International Co., Ltd. (Jet Midwest International) sought attorneys’ fees and costs from Jet Midwest Group, LLC (JMG) and other defendants (collectively referred to as the Ohadi/Woolley defendants). The request was made in connection with a fraudulent transfer action filed under the Missouri Uniform Fraudulent Transfer Act (MUFTA), following a term loan agreement between Jet Midwest International and JMG which JMG failed to repay. The district court awarded attorneys’ fees and costs against the Ohadi/Woolley defendants, who were not parties to the term loan agreement, based on its finding that they conspired with JMG to violate the MUFTA.On appeal, the Eighth Circuit found that the district court erred in awarding attorneys’ fees and costs against the Ohadi/Woolley defendants based on the term loan agreement since they were not parties to that agreement. However, the court held that the district court's finding of "intentional misconduct" by the Ohadi/Woolley defendants in conspiring with JMG to violate the MUFTA could justify an attorneys’ fees award under the "special circumstances" exception to the American Rule (which generally requires each party to bear its own attorneys’ fees).The court vacated the award and remanded the case back to the district court to calculate a reasonable attorneys’ fee using the lodestar method (multiplying the number of hours reasonably expended by the reasonable hourly rates), and to determine the extent to which the claimed costs are recoverable under the relevant statute. The court's holding did not limit JMG’s ultimate responsibility for attorneys’ fees and costs under the term loan agreement. View "Jet Midwest International Co. v. Ohadi" on Justia Law

In this case, employers M&K Employee Solutions, LLC and Ohio Magnetics, Inc. withdrew from the IAM National Pension Fund during the 2018 plan year. The Fund assessed withdrawal liability for each entity based on actuarial assumptions. Both employers challenged their respective assessments and won in arbitration, with the arbitrator ruling that the Fund's actuary erred in setting actuarial assumptions for a given measurement date after the measurement date based on information available at that date. The Fund appealed and the district court vacated the arbitration awards, ruling that an actuary may indeed set actuarial assumptions for a given measurement date after the measurement date based on information available "as of" the measurement date.The Court of Appeals for the District of Columbia Circuit affirmed the district court's decision. The court held that it would be contrary to the legislative intent of the Multiemployer Pension Plan Amendments Act to require an actuary to determine what assumptions to use before the close of business on the measurement date. The court also ruled that M&K was entitled to a “free-look” exception because it partially withdrew from the Fund within a period of less than five years, meaning it could withdraw without incurring liability. View "Trustees of the IAM National Pension Fund v. M & K Employee Solutions, LLC" on Justia Law

In this case before the United States Court of Appeals for the Second Circuit, the plaintiffs were U.S. investors who purchased Mexican government bonds. They alleged that the defendants, Mexican branches of several multinational banks, conspired to fix the prices of the bonds. The defendants sold the bonds to the plaintiffs through non-party broker-dealers. The defendants moved to dismiss the case for lack of personal jurisdiction, and the District Court granted the motion, concluding that it lacked jurisdiction as the alleged misconduct, price-fixing of bonds, occurred solely in Mexico.Upon appeal, the Second Circuit vacated and remanded the case. The court found that the defendants had sufficient minimum contacts with New York as they had solicited and executed bond sales through their agents, the broker-dealers. The plaintiffs' claims arose from or were related to these contacts. The court rejected the defendants' argument that the alleged wrongdoing must occur in the jurisdiction for personal jurisdiction to exist, stating that the defendants' alleged active sales of price-fixed bonds through their agents in New York sufficed to establish personal jurisdiction. The court remanded the case for further proceedings consistent with its opinion. View "In re: Mexican Government Bonds Antitrust Litigation" on Justia Law